businesstoday.

in

May 28, 2023 ` 200

CROWDED
SKIES, MISSING
PILOTS

BUSINESS
CONFIDENCE
IN DEEP
SLIDE

MAGAZINE KING

FRIEND OR FOE?
ARTIFICIAL INTELLIGENCE CAN INCREASE THE GLOBAL GDP
BY 26 PER CENT BY 2030 AND FOREVER CHANGE THE WAY
INDIA INC. WORKS. BUT THERE ARE DANGERS TOO
 FROM THE EDITOR
Taming the AI
Juggernaut
T
ill a few years ago, terms like artificial intelligence (AI) and
machine learning (ML) were relatively unknown in a world
beyond deep tech. As technology leapfrogs and becomes
widespread around the world, we are today confronted with
what is perhaps one of the most important issues not just relating to the
world of technology, but of humankind itself. The advent of ChatGPT,
the generative AI tool developed by OpenAI, which together with others
of similar ilk, has the possibility of changing the world as we know it.
GPT—or generative pre-trained transformer—can quickly absorb and
mimic human-like responses by deep learning garnered from millions of
sources it absorbs from. This form of AI is a quantum leap in technology
and has the potential to make far-reaching changes across healthcare,
financial services, manufacturing, logistics, entertainment and indeed
every other sector you can think of. In short, it can be all-pervasive.
OpenAI has now released GPT-4, an even more advanced version of GPT.
But while AI in general is widely accepted as a boon for society,
serious concerns have also been raised about the damage it can do.
And it’s not just about taking away jobs. If misused, AI has the power to
spread misinformation, and cause hate and destruction, that can lead to
disastrous consequences for the world at large. Some of the world’s top
technology experts feel that its powers can prove to be so pervasive that
MAGAZINE KING
unless there are guardrails, AI in its unbridled form can be a serious threat
to mankind. It is in that context that over 1,000 signatories signed a letter
in March this year, asking AI labs for a six-month halt to training AI systems
that are more powerful than GPT-4. The signatories included the likes of
Tesla Founder Elon Musk and Apple Co-founder Steve Wozniak. While it
is accepted that AI can have widespread positive effects and be a blessing
for humankind, its dangers are equally frightening. Billionaire investor
Warren Buffett has also compared AI to the atom bomb. But technology,
as it has been seen several times in history, cannot be stopped in its tracks.
So, the big question today is, how can one control the AI juggernaut, curb
its negative aspects and put it to the best use for humanity.
In our cover package in this issue, we take a deep look into various
aspects of AI and how it is impacting the world of business across sectors.
BT’s reporters talk to a wide range of sector players to understand
how they are using AI in their businesses, the several benefits they are
deriving, and how it is shaping the future. As Rachna Dhanrajani writes
in her opening essay, AI could take away mundane, repetitive jobs but
create new ones in programming and data science. But alongside,
Prof. Stuart Russell of the University of California, who is one of the
signatories to the letter with Musk and Wozniak, explains to BT’s Tech
Editor Aayush Ailawadi why he feels guardrails are needed for further
development of AI. Calling for “reasonable guidelines that a system has
to satisfy”, Russell says: “If you can’t build an airplane that doesn’t fall
out of the sky, you don’t get to put passengers on it.” Will the AI labs
comply? The world is watching.
sourav.majumdar@aajtak.com
@TheSouravM
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 8 PHOTOGRAPHIK

CONTENTS
May 28, 2023 | Volume 32 | Number 11
Electrifying
India’s exports
and imports of
electronics goods
have reached an all-

FRIEND
time high in FY23

10 POINT

OR FOE?
Burning Rubber
Although auto sales
are showing an
upward trend, they
are still below pre-
ARTIFICIAL Covid-19 times
INTELLIGENCE CAN
INCREASE THE GLOBAL
GDP BY 26 PER CENT 12 THE BUZZ
BY 2030 AND FOREVER
CHANGE THE WAY INDIA Deep Slide
INC. WORKS. BUT THERE
ARE DANGERS TOO The BT-C Fore
Business Confidence
Index is at its lowest
in five quarters. That
is a worrying sign

MAGAZINE KING COVER STORY

26 24 THE BUZZ

No Surprises
ILLUSTRATION BY NILANJAN DAS

India Inc.’s earnings

for Q4FY23, having
crossed the halfway-
mark, have largely
remained mixed

54 START-UPS

Unstoppable
Bike-taxi aggregator
Rapido continues to
push forward even
as governments and
COVER BY NILANJAN DAS unions try to bring it
down
 82
MONEY TODAY

Premium Pain
With incomes falling
and health insurance
premium rates rising
sharply, senior citizens
are struggling to cope
AVIATION 60 THE INTERVIEW 65
Missing Captains ‘Invest in R&D for
long-term growth’
With Indian airlines placing bulk
aircraft orders due to exploding air Zoho’s Sridhar Vembu explains why
travel demand, a pilot shortage is the company will stay private and why
brewing in the Indian aviation sector he thinks valuations are not important

90
THE GOOD LIFE:
TRENDS

Summer Special
Planning to travel over
the summer? Check
out these thrilling,
off-the-beaten-path
experiences
LAW 70 ENVIRONMENT 76
Cashing in on Cases
MAGAZINE KING Battleground Plastics
Litigation financing is fast gaining Marico Innovation Foundation is work-
traction in India, with start-ups, ing with start-ups to positively disrupt
law firms, companies and investors the plastic ecosystem by taking care
betting big on the emerging segment of the environment, profitably

96
TECH TODAY

EVENT 98 A Suitable Case

Let tech ease your
Champions’ journey. In the first part
Night Out of a series, we bring
you the latest in smart
Inspirational luggage
leaders from India’s
corporate world
converged at BT
MindRush to share
their insights and
wisdom on a wide
range of topics

An Feature
From time to time, you will see pages titled “Focus”, “An Impact Feature”, or “Advertorial” in Business Today.
For the latest updates
These are no different from an advertisement and the magazine’s editorial staff is not involved in their and analysis, log on to
creation in any way. businesstoday.in

Business Today 28 May 2023

8|
MAGAZINE KING

PHOTOGRAPHIK
PHOTO BY GETTY IMAGES
ELECTRIFYING
Text by PRINCE TYAGI INDIA’S EXPORTS AND IMPORTS OF ELECTRONICS
GOODS HAVE REACHED AN ALL-TIME HIGH
SOURCE CMIE Economic Outlook, PIB IN FY23, JUMPING 315.7 AND 78.4 PER CENT,
RESPECTIVELY, IN THE PAST FIVE YEARS. HERE’S
Business TodayHOW THE SHIPMENTS
26 December 2021 LOOK LIKE
 MAGAZINE KING

`2.03 `6.41 `9.8

LAKH CRORE LAKH CRORE
The value of exports ($25.27 The value of imports of
billion) of electronics goods electronics goods in FY23, up
in FY23, up 61.1 per cent nearly 11.4 per cent YoY from
year-on-year `5.75Today
Business lakh crore in FY22
26 December 2021
LAKH CRORE
The target for exports
of electronics goods
set by India for FY26,
at $120 billion
 THE POINT

BURNING
RUBBER
India’s automobile sector witnessed impressive growth in FY23, per data from the Society of
Indian Automobile Manufacturers (Siam). This performance is also visible in the stock markets as
the BSE Auto index outperformed the benchmark BSE Sensex in the last financial year. However,
data shows that although sales of commercial vehicles, two- and three-wheelers are showing an
upward trend, they are still below pre-Covid-19 times. A look at the key numbers

By RAHUL OBEROI & PRINCE TYAGI

Graphics by RAJ VERMA

ON A ROLL CATCHING ON
THE PASSENGER VEHICLES SEGMENT POSTED COMMERCIAL VEHICLES SALES—A KEY INDICATOR
THE HIGHEST-EVER DOMESTIC SALES IN FY23, SUR- OF ECONOMIC ACTIVITY—TOUCHED ITS SECOND-
PASSING THE PREVIOUS PEAK ACHIEVED IN FY19 HIGHEST DOMESTIC SALES NUMBER IN FY23, CLOSELY
3,890 FOLLOWING THE PEAK IT ACHIEVED IN FY19
3,377
2,774 2,711
3,070 MAGAZINE KING 1,007 962

718 717
569

FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23

Domestic passenger vehicle sales; Numbers in ’000; Source: Siam Domestic commercial vehicle sales; Numbers in ’000; Source: Siam

LOSING BALANCE
IN SPITE OF THE 17 PER CENT GROWTH IN DOMESTIC SALES OF TWO-WHEELERS IN FY23,
THEY ARE STILL SUBSTANTIALLY BELOW THEIR FY19 LEVELS 2 1.75
21,180
million million
20,200 NUMBER OF UTILITY VEHICLES NUMBER OF PASSENGER CARS
17,590 17,416 SOLD DOMESTICALLY IN FY23, UP SOLD DOMESTICALLY IN FY23, UP
16,005 16,456 15,862 34.54 PER CENT YEAR-ON-YEAR 19 PER CENT YoY
14,807 15,121
13,570

3.60 6.97
per cent per cent
THE COMPOUND ANNUAL GROWTH THE ANNUALISED DECLINE
RATE REGISTERED BY PASSENGER IN SALES OF TWO-WHEELERS
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 VEHICLES IN THE PAST FIVE YEARS BETWEEN FY19 AND FY23
Source: Siam
Domestic two-wheeler sales; Numbers in ’000; Source: Siam
 ON THE LONG ROAD MARKET FISTICUFFS
FOLLOWING CLOSELY ON THE HEELS OF MARUTI
FOLLOWING THE DIP DURING THE COVID-19 PANDEMIC, DOMESTIC SALES OF SUZUKI AND HYUNDAI MOTOR, TATA MOTORS AND
THREE-WHEELERS ARE STILL BELOW FY19 LEVELS, DESPITE POSTING MORE MAHINDRA & MAHINDRA ARE GIVING TOUGH COM-
THAN 87 PER CENT GROWTH IN FY23 701 PETITION TO THE INCUMBENT MARKET LEADERS
636 637
MARUTI SUZUKI INDIA HYUNDAI MOTOR INDIA TATA
526 513 538 532 538 512 MOTORS MAHINDRA & MAHINDRA KIA MOTORS INDIA
480 489
440 TOYOTA KIRLOSKAR MOTOR SKODA AUTO VOLKSWA-
GEN GROUP HONDA CARS INDIA RENAULT INDIA
MG MOTOR INDIA OTHERS
261
219
42.1%
16.3%
11.3%
6.8%
5.3%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 3.9% FY22
1.8%
2.8%
Domestic three-wheeler sales; Numbers in ’000, Source: Siam 3.0%
1.2%
5.5%
40.9%
OUTBOUND TRAFFIC 14.5%
13.4%
BARRING PASSENGER VEHICLES, EXPORTS OF COMMERCIAL VEHICLES, 8.9%
TWO-WHEELERS AND THREE-WHEELERS WITNESSED A DECLINE IN FY23 6.4%
4.4% FY23
Passenger vehicles Commercial vehicles Three-wheelers Two-wheelers 2.4%
2.3%
6,000 2.1%
1.1%
5,000 3.6%
Passenger vehicle original equipment manufacturers’
4,000
market share in percentage; Source: Fada
3,000

2,000
MAGAZINE KING ROAD RASH
COMPETITION BETWEEN FORMER PARTNERS
1,000 HERO MOTOCORP AND HONDA MOTORCYCLE
AND SCOOTER INDIA IS HEATING UP, WITH THEIR
0
FY18 FY19 FY20 FY21 FY22 FY23 MARKET SHARES FALLING AND INCREASING BY 2
PERCENTAGE POINTS, RESPECTIVELY
Vehicle exports; Numbers in ’000; Source: Siam
HERO MOTOCORP HONDA MOTORCYCLE AND SCOOTER INDIA
TVS MOTOR COMPANY BAJAJ AUTO GROUP
ROYAL ENFIELD (EICHER ) SUZUKI MOTORCYCLE INDIA
TRACKING STOCK INDIA YAMAHA MOTOR OLA ELECTRIC TECHNOLOGIES
OTHERS INCLUDING EV
THE BSE AUTO INDEX HAS OUTPACED THE 30-SHARE BSE SENSEX IN FY23
34.4%
22.0%
BSE Sensex BSE Auto 14.8%
140 12.2%
3.5% FY22
130 3.6%
3.4%
120 0.1%
6.0%
110
32.1%
100 24.3%
15.5%
90 10.6%
4.4% FY23
4.2%
80
3.5%
March 31, March 31, 1.0%
2022 2023 4.4%

Graph normalised to the base of 100; Source: ACE Equity Two-wheeler OEMs’ market share in percentage;
Source: Fada
 THE BUZZ

BCI DIP‚ DIP‚ DIP…

DEEP
Business confidence is at a five-quarter low
60
50.9
55
43.8

SLIDE
50

45

40

Oct-Dec
2020

2021

2021

2021
Oct-Dec
2021

2022

2022

2022
Oct-Dec
2022
Jan-Mar

Apr-Jun

Jul-Sep

Jan-Mar

Apr-Jun

Jul-Sep

Jan-Mar
2023
The BT-C Fore Business Confidence Index is
at its lowest in five quarters. That is a worrying ON A SCALE OF 100
sign for an economy that is buoyant relative to
developed markets BCI slips for two successive quarters
BY ALOKESH BHATTACHARYYA across industry types…
60
50
X INDIA’S ECONOMY SEEMS to be well-placed compared

51.6
51.9
52.1
53.2
51.8

51.1

52.1
51.9
52.4
50.4

49.2
50.3
40
to other major economies. GDP growth is expected to
MAGAZINE KING
12 | clock an impressive 7 per cent in FY23. Exports in the
fiscal, too, were the highest ever at more than $450
30
20
10
billion. In March 2023, consumer price inflation (CPI) 0
Services Light industry Heavy engineering
moderated to 5.66 per cent from 6.44 per cent in Febru- APR-JUN 2022 JUL-SEP 2022
ary, and wholesale price inflation (WPI) dipped to 1.34 OCT-DEC 2022 JAN-MAR 2023
per cent in March compared to 3.85 per cent in February.
Plus, GST collections were the highest ever in April 2023 …and across business sizes as well
at `1.87 lakh crore, indicating high business activity, as 60
per data from CMIE Economic Outlook. 50
55.1
54.6

54.5
53.7

52.9
53.2
52.4
53.7

50.4
49.5

50.2
49.2
48.7

48.6
48.2
Still, the business community appears unconvinced 40 49.1
about growth prospects, with the BT-C Fore Business 30
Confidence Survey (of 500 CEOs and CFOs) receiving 20
increasingly negative sentiments, captured in the clear
10
fall in the Business Confidence Index (BCI). After peak-
0
ing at 55.2 in January-March of 2022, the BCI slipped to Big business Mid-sized business Small business Micro business
50.9 in January-March 2023 (see chart Dip, Dip, Dip…).
APR-JUN 2022 JUL-SEP 2022
What explains this dissonance? “The pessimism is OCT-DEC 2022 JAN-MAR 2023
likely to have been driven by the ongoing weakness in
India’s merchandise exports, led by the slowdown in Expectations for Q1FY24 are lower than the
the global economy,” says Aditi Nayar, Chief Economist reality of Q4FY23
of ICRA. “The country’s non-oil merchandise exports 6
fell by 5.6 per cent YoY in Q4FY23, amid a sharp fall in 5 5.5 5.8
5.2 5.4
exports of several items including leather and leather 4 4.5 4.7 4.6
4.3
3
products, chemicals, engineering goods, ready-made
2
garments, textiles, and gems and jewellery. ICRA ex-
1
pects merchandise exports to contract by around 6-7 per 0
cent in FY24.” Adds Dharmakirti Joshi, Chief Economist Overall economic Demand Hiring Profits
of CRISIL: “A combination of 250 bps cumulative rate situation conditions conditions
hike since May 2022 and tightening of liquidity has JAN-MAR 2023 APR-JUN 2023
pushed the nominal lending rates above pre-pandemic

Business Today 28 May 2023

 VOICE OF THE levels, with some more transmis-
sion left. As interest rate move-
ENTREPRENEUR ments impact the economy with a
Are you planning to downsize your lag, the peak impact will play out
workforce in FY23-24? through this fiscal.”
No
Looks like strong underlying
Yes
36 headwinds. No wonder the fall
46 Can’t
Say
in business confidence is seen
across industries and company
18 sizes (see chart BCI Slips for Two
Successive Quarters…). How-
ever, Richa Roy, Partner at Cyril
Do you expect India’s GDP growth Amarchand Mangaldas, feels that
in FY24 to be higher than in FY23? while there are multiple causes
Yes of concern likely reflected in
32 the responses to the BCI—war,
Can’t commodity prices, supply chain
Say
No
25 43 constraints, inflation and rising
interest rates, possible reces-
sionary trends in international
What is your biggest worry
MAGAZINE KINGmarkets, financial sector vulner-
abilities in the US—there are
going forward? multiple factors indicating cause
Further
Persistent depreciation for optimism as well. “The World
inflation of the rupee Economic Outlook released
43 8 by the IMF in April indicates a
rocky recovery for the world,
but indicates high growth rates
Possible for India,” she says. “RBI also
recession in
developed Rising Fall in marginally increased its growth
countries oil prices consumption estimate for FY24.”
41 4 4 Expectations for the April-
June 2023 quarter are bleaker
Do you expect the new Foreign Trade than Q4FY23. Businesses are low
Policy to help you boost exports? on confidence especially in hiring
Can’t conditions and profits, with both
Say
indices logging less than 5 (on a
13 Yes scale of 10). With layoffs continu-
68 ing across sectors and tech in
particular, this is no surprise.
No
19 In fact, 46 per cent of the BCI
respondents said they planned to
ALL FIGURES IN PER CENT
downsize their workforce in fiscal
SOURCE THE BT-C FORE BUSINESS 2023-24, with another 18 per cent
CONFIDENCE SURVEY CONDUCTED BETWEEN sitting on the fence. Roy expects
APRIL 7 AND 18, 2023, OF 500 CEOs OR CFOs
REPRESENTING VARIOUS INDUSTRIES AND tech to see more layoffs going
COMPANY SIZES ACROSS DELHI, MUMBAI, forward, but manufacturing and
CHENNAI, HYDERABAD, BENGALURU, KOLKATA,
CHANDIGARH, LUCKNOW, NAGPUR, KOCHI, services may remain strong.
VISAKHAPATNAM AND BHUBANESWAR So, what really are the primary
concerns of businesses going
Business Today 28 May 2023
forward? The top two worries are,
expectedly, persistent inflation
and a possible recession in devel-
oped countries (see chart). ICRA’s
Nayar says that she expects infla-
tion to moderate to an average 5.3
per cent in FY24 compared to 6.7
per cent in FY23. “However, the
potential development of El Niño
conditions and its impact on the
southwest monsoon, and thereby
crop output and food prices,
poses upside risks to our inflation
projections,” she cautions.
As for possible recession in
the West, Joshi of CRISIL says:
“Global growth is projected to
slow to 2.7 per cent in 2023 with
advanced countries (particu-
larly the US and Europe) pulling
growth down, while China’s
growth is expected to accelerate
| 13
to 5.5 per cent due to relaxation
of Covid-19-related restrictions.”
Adds Roy: “Internationally, the
next quarter is likely to be tough,
given recent indications, includ-
ing tightening labour conditions,
the outlook for export-led- or
externally facing-businesses will
be tough.” ICRA’s Nayar says the
slowdown has already manifested
in a decline in India’s merchan-
dise exports, which is likely to ex-
acerbate further with continued
monetary tightening in several
advanced economies and their
lagged impact on output.
Economists also worry about
the southwest monsoon’s per-
formance this fiscal. Nayar feels
that if the monsoon turns out to
be below normal amid fears of an
El Niño effect, “it could shave
off up to 50 bps from the GDP
growth, even as the ongoing spike
in Covid-19 cases is emerging as
a renewed risk to the near-term
growth outlook”. Most survey
respondents also don’t expect
 THE BUZZ

India’s GDP growth in FY24 to be

higher than FY23. “ICRA expects
India’s GDP growth to ease to 6
per cent in FY24 from the 6.9 per
cent expected in FY23, owing to
the expected drag from exports
amid slowing global growth, as
well as normalising base,” says
Nayar. Adds Joshi of CRISIL: “We
expect gross domestic product

PHOTO BY GETTY IMAGES

growth to slow to 6 per cent this
fiscal from 7 per cent last fiscal as
slowing global growth, domestic
interest rates, and messy geopoli-
tics bite.”

A BELOW NORM-
AL MONSOON
AMID FEARS
OF AN EL NIÑO
EFFECT COULD
SHAVE OFF UP
14 |
TO 50 BPS FROM MAGAZINE KING
GDP GROWTH‚
SAY EXPERTS
Is there any good news to
look forward to? Roy feels India
has some inherent strengths,
including the China+1 policy
benefitting certain pockets of
manufacturing, trade agreement
discussions improving certain
export prospects, and the services
sector growing. Nayar adds: “We
expect consumer sentiment to
improve in FY24, auguring well for
consumption demand, although
it would remain uneven.” She also
expects the sizeable expansion in
the budgeted capital spending by
the Union government and several
state governments to provide sup-
port to economic activity, amid
signs of an uptick in private capex,
“although execution remains key”.
Some consolation there? Well,
go figure.
@alokeshb
REGULATORS
Running
Short
Data clearly shows that filling up vacancies
at the Securities Appellate Tribunal has not
always been high on the government’s priority
list; currently it is one member short
BY ASHISH RUKHAIYAR
X THE DAY WAS February 29, and Development Authority
2016. Then Finance Minister (PFRDA).
Arun Jaitley rose to deliver the “I also propose to amend the
Budget speech. As he reached Sebi Act, 1992, in the coming
the part focussed on financial year to provide for more mem-
sector reforms, he touched bers and benches of the Securi-
upon the subject of the Se- ties Appellate Tribunal,” said
curities Appellate Tribunal the late Jaitley who was finance
(SAT)—the tribunal that has minister from 2014 to 2019.
been set up to hear appeals More than seven years have
against orders passed by key passed since the statement
regulatory bodies like the was made but till date no
Securities and Exchange Board progress has been made on the
of India (Sebi), Insurance announcement. There is just
Regulatory and Development one bench of SAT in Mumbai
Authority of India (Irdai) and that is manned by a presiding
the Pension Fund Regulatory officer—a retired judge—and

Business Today 28 May 2023

 THE BUZZ
two members, one judicial and one
technical. In fact, data shows that
filling up vacancies at SAT has not
always been high on the govern-
ment’s priority list.
Currently, the tribunal is one
member short as the tenure of Jus-
tice M.T. Joshi ended on February
3 and his replacement has not been
announced yet. The bench currently
has the presiding officer, Justice Ta-
run Agarwala, and technical mem-
ber Meera Swarup, who belongs to
the 1988 batch of the Indian Audit &
Accounts Service.
Incidentally, the tribunal has
remained headless for an extended
period in the past. When presiding
officer, Justice N.K. Sodhi, retired
in November 2011, it took around 20
months for the tribunal to get a new
presiding officer; Justice J.P. Devad-
har assumed office in July 2013.
Again, when Justice Devadhar’s
tenure came to an end in July 2018,
MAGAZINE KING
16 | his successor—the current presid-
ing officer—was appointed only in
December that year.
Experts, meanwhile, believe
that staff shortage at SAT—that,
at times, leads to issues related
to quorum—affects the pace of
dispute resolution, which is also
an important parameter for many
foreign and global investors looking
to invest in India.
“An efficient dispute resolution
system with regulators like Sebi and
Irdai is a key criterion for foreign
investment and regulatory regis-
trations in India. The Ministry of
Finance, and specifically its Depart-
ment of Economic Affairs, needs to
urgently address the challenges be-
ing faced by the SAT, including the
acute shortage of human resources
and infrastructure,” says Sumit
Agrawal, Founder, Regstreet Law
Advisors.
Despite these limitations, the
SAT has maintained the quality
of its judgements and efficiency,
he says. “However, strengthen-
ing SAT’s functioning is crucial to
properly regulating the securities
BENCH market and protecting investor
interests,” says Agrawal, a former
STRENGTH law officer of Sebi. Incidentally, the
vacancies at SAT and the ensuing
issues that the tribunal faces have
not gone unnoticed by the highest
There is just one
court of the land. In September
bench of SAT in
2018, the Supreme Court, while
Mumbai. It is manned hearing an appeal filed by Quantum
by a presiding offic- Securities, noted the fact that the
er—a retired judge— tribunal was being manned by just
and two members, a member with both the presiding
one judicial and one officer and the other member miss-
technical ing. That was when only C.K.G.
Nair, the technical member, was
on the bench. “Unfortunately, a
single technical member seems to
Currently, the tribu- be manning the Securities Appellate
nal is one member Tribunal, Mumbai. Section 15L of
short, as the tenure the Securities and Exchange Board
of Justice M.T. Joshi of India Act, 1992 specifically states,
ended on February 3 in the proviso to sub-section 2(b),
and his replacement that every Bench constituted shall
has not been an- include at least one judicial member
nounced yet and one technical member,” stated
the apex court order.
More importantly, it made the
government a party to the matter to
know the status of appointments.
The all-important
“This Court wants to know as to
tribunal has remained
when other Judicial and Technical
headless for a long
Members will be appointed, which
period in the past we hope will be done as quickly as
possible,” it said while issuing a no-
tice to the then Attorney General.
While establishing new benches
The bench currently of SAT might take time due to
has the presiding the various factors involved, the
officer, Justice Tarun government might well speed up
Agarwala, and tech- the appointment process and put in
nical member Meera place a system so that there are no
Swarup, who belongs transitionary vacancies as the ten-
to the 1988 batch of ure details of all—presiding officers
the Indian Audit & and members—are known well in
Accounts Service advance.
The three-member bench being
reduced to two has become a recur-
ring affair and experts say it is time
Experts believe that that the current regime that prides
staff shortages at the itself in improving the overall ease
tribunal could affect of doing business ecosystem in the
the pace of dispute country expedites and smoothens
the process at SAT.
resolution
@ashishrukhaiyar
Business Today 28 May 2023
 MEDIA
Shared
Riches
With the ongoing tussle between
digital and TV broadcasters of IPL,
brands’ ad choices are getting split
between the two mediums
BY PRERNA LIDHOO
X MARKET RESEARCH PLATFORM Unomer has found
brands like Dream11, Tata Neu, RuPay, JioMart, CRED,
Tiago.ev, AJIO, CEAT, Asian Paints, Airtel 5G, etc. to be
some of the most visible brands during the broadcast of
IPL matches this year. Notice any pattern? Unlike last
year, this year’s crop of advertisers has a healthy mix of
legacy and new-age firms.
Experts point out that apart from the usual suspects
MAGAZINE KING
Business Today 28 May 2023
like FMCG, auto and telecom majors, this year’s tourna-
ment has seen a drastic cut compared to last year when
it comes to advertising from new-age firms like BYJU’S
and Unacademy, PhonePe, Amazon Prime, Pristyn Care,
Zepto, Ather, Meesho and Cars24, among others.
Harish Bijoor, Founder of Harish Bijoor Consults,
says one reason could be the funding winter the start-up
ecosystem is going through. “There’s a start-up funding
winter. Investors are talking about profitability and not
about GMV, eyeballs, etc.,” he says. “IPL seems to have...
emerged as a product of choice for a brand manager.
There are usual advertisers like FMCG, banking, automo-
tive, etc. who spend as much as eight months of their
entire budget on IPL.”
Brand experts, however, believe that a lot of companies
have started preferring digital as the go-to channel for
advertising compared to TV. And data from Broadcast
Audience Research Council (BARC) supports that trend,
with the number of advertisers on TV (it is being broad-
cast on Star Sports) having fallen by 42 per cent in the
first 29 matches of this season. This year, TV has attracted
47 advertisers so far, compared to 81 in the last season.
Brands like CRED, Paytm, Swiggy, Acko, BYJU’S, which
until last year had bet big on TV, have given it a miss this
year. Amazon, Samsung, Indeed, TVS, Castrol, Noise,
Puma, etc., are exclusive to JioCinema—where IPL is be-
RETAIL
Brewing
Battle
Pret A Manger, which
has forayed into the
Indian market, will have
to contend with larger
rival Starbucks and
Indians’ affinity for tea
BY ARNAB DUTTA
X UK-BASED COFFEEHOUSE chain
Pret A Manger recently jumped
into the Indian market with its
first store in Mumbai’s BKC. The
brand—that sells organic coffee

MAGAZINE KING
and ready-to-eat foods—has
chosen India as its 10th market to
rapidly scale operations in the next
few years.
With Reliance Brands Ltd
(RBL)—a subsidiary of Reliance
Retail Ventures—as its master
franchise partner, Pret’s foray has
come at a time when leading coffee
chain operators in India are turn-
ing bullish about the country in
anticipation of steady growth. Per
industry estimates, the Indian cof-
feehouse market, currently pegged
at $3.2 billion, is growing at a CAGR
of 9 per cent and it is expected to
touch $4.2 billion (`34,000 crore)
by 2025.
Calling it the “most ambitious
global franchise partnership”,
Pret’s CEO Pano Christou had said
in a media release, the company
is betting on RBL’s expertise in
the India market for the brand’s
success. “We have been working
with RBL to create an offer for
Indian consumers that reflects
ing streamed—this year.
Elara Capital says this year’s digital and TV un-bundling
of advertisements is a disruption, and a monetisation op-
portunity for brands from the tournament. “The brand
vertical split has changed this year, with fintech, retail tech,
e-commerce, edtech, etc., being there [in the ad market]
in very small portions because these companies have
seen their ad spends cut down in the range of 20-40
per cent,” says Karan Taurani, Senior VP-Research
Analyst at Elara Capital.
An important trend is narrowcasting (tar-
geted ads) instead of broadcasting, brand expert
Manish Porwal explains. “Overall, digital and TV audiences
have separated. Because of digital, which allows for brands
to pick and choose its audience, it has allowed different
kinds of brands to get in. The ability of a client to place his ad
in his required slot has gone up and hence narrowcasting has
PHOTOS BY GETTY IMAGES
gone up,” says Porwal, MD of Alchemist India.
Taurani, too, says that digital is way more acceptable of
local advertisers and niche advertising verticals, which are
not that relevant for TV. “Traditional verticals are more
skewed towards TV. They will have 70 per cent of their ads
coming on TV,” he says.
@PLidhoo
$4.20
coffee brand enjoys. Moreover,
Indians are inclined towards tea
way more than they are towards
coffee,” he says.
billion As for Starbucks, it opened a
whopping 71 outlets and entered
EXPECTED SIZE OF THE 15 new cities in FY23, taking its
stores’ tally to 333. According to
INDIAN COFFEEHOUSE Sunil D’Souza, MD & CEO of Tata
MARKET BY 2025, PER Consumer Products that manages
INDUSTRY ESTIMATES the brand in India, the group “is
looking to rapidly expand its pres-
the Pret brand, while also adapt- ence in the coming years”.
ing to local preferences and food Deven Choksey, Founder &
habits.” While emails sent to them Promoter of KRChoksey Hold-
remained unanswered, sources say ings says Reliance’s nearly 18,000
they plan to open nearly 100 stores outlets across formats could prove
in the next five years. to be crucial for Pret. “Reliance
But market watchers say that would attempt to leverage its store
there are multiple hurdles to over- presence… and sell Pret branded
come for Pret. Per Harish Bijoor, products through its existing
Founder of Harish Bijoor Consults, counters. It would pitch Pret as a
the chain would require a strong more affordable option; a strategy
brand building exercise to establish Reliance has followed for most of
itself among Indian consumers. its business segments,” he says.
“Starbucks has a stature among
Indian consumers that no other @arndutt
Business Today 28 May 2023
 THE BUZZ

20 |
MAGAZINE KING

PHOTO BY GETTY IMAGES

DEMOGRAPHICS X “WE NEED TO worry about population explo-

sion.” That message was delivered by PM Nar-
endra Modi from the ramparts of the Red Fort

A Double-edged on India’s 73rd Independence Day. He added

that the rising population poses various chal-
lenges for the country and future generations.
Now, the UNPF State of World Population

Sword 2023 report has released figures showing India

With India’s population overtaking that of
China, the country needs to find solutions to
perennial problems like low job growth and
holistic social support
BY ANAND ADHIKARI
overtaking China to become the world’s most
populated country with 1.43 billion people by
mid-2023.
“A growing population of this size means
additional job creation, creating infrastructure
and providing healthcare, education, and social
security,” says Arun Singh, Global Chief Econo-
mist of Dun & Bradstreet. In that sense, India’s
growing population is certainly a challenge. But

Business Today 28 May 2023

mitigating its effect is possible only
if the country’s GDP grows robustly
on a sustained basis and, conse-
quently, the per capita income.
Per an EY India report, the
Indian economy is expected to grow
to $26 trillion by 2047, and per capita
income is expected to increase six-
fold to $15,000 (`12.30 lakh) per
annum. What this means is that the
numerator (GDP) has to grow at a
sustained pace while the denomina-
tor (population growth) moderates.
DIVIDEND MULTIPLICATION
India’s population growth rate is expected to moderate
to single digits by 2030
2.0
1.5
1.0
0.5
MAGAZINE KING
0
1960 1970 1980 1990
POPULATION GROWTH RATE
IN BILLION, *PROJECTED
SOURCE MACROTRENDS AND OTHER MARKET SOURCES
This will help the nation manage its
resources optimally.
China’s GDP—with its large
population—has been growing at
an average annual rate of around 7
per cent since the 1980s. Vietnam is
another country that has witnessed
a growth rate of 6 per cent since
the 2000s. Indonesia, Bangladesh,
and the Philippines, too, have high
growth rates, but their populations
are nowhere close to India’s or
China’s. Meanwhile India—that has
been growing at an average rate of
over 5 per cent since the 1990s—has
to up its game to support its large
and expanding population. Singh
says, in order to absorb the rising
population into the workforce, India
has to grow at a real GDP rate of 10.8
per cent till 2030, 6.5 per cent till
2040, and 4.2 per cent till 2047. “The
capital requirement will be $120 tril-
lion in the next 25 years.”
“India’s growing population
brings a lot of responsibility for
the government and society,” says
Madan Sabnavis, Chief Economist
of Bank of Baroda. He highlights
several challenges, such as a major-
ity of India’s population stuck in
2000 2010 2020 2030*
lower income groups, migration
and overcrowding in urban areas,
along with the need to provide social
support in terms of education and
health services.
In that backdrop, India’s belated
move to increase the share of manu-
facturing—that has been stagnant
at around 17-18 per cent—will face
huge challenges from Industry
4.0 and automation. In addition,
AI-powered tools are threatening
to take away jobs, while the forces
of anti-globalisation work to impact
the free flow of labour. “In India,
there will be 1.1 billion people who
will be part of the working age group
of 15 to 64, by 2047... We are talking
Business Today 28 May 2023
about enormous pressure on the
labour market. We have to create
enough jobs,” says Singh.
India’s population growth is
expected to peak around 2060,
per projections. Another research
published in medical journal Lancet
in October 2020, states that India
is projected to have the largest
working-age population by 2100,
followed by Nigeria, China, and the
US. “The changing dynamics, with
low fertility rates, longer life, and
health expectancy, also require the
government to rethink their policy
as well as spending priorities, as they
face lower consumer spending, a
less robust workforce, and increas-
ing healthcare needs in the years
ahead,” says Radhika Rao, Senior
Economist at DBS Group Research.
Experts suggest that one of the
priorities should be to improve
human development indices. “This
would imply action across the value
chain—from better medical access | 21
from birth, to sufficient nutrition,
education, social protection, and im-
proving life expectancy,” says Rao.
They also suggest higher expen-
diture on education and health.
“The centre and states have to work
together on this. We need to have a
more equitable education system,
so that opportunities are similar for
all. While this is difficult given the
scale, it is necessary,” says Sabnavis.
He further suggests that mu-
nicipalities should be empow-
ered to improve rural and urban
infrastructure. “At a theoretical
level, getting the private sector to
run cities will work (though there
are constitutional constraints), just
like it [the government] has done in
airports. There is too much lack of
accountability at these levels,” says
Sabnavis.
“It’s not just about the willing-
ness; it’s also about the ability of
public finances to put money into
healthcare and social security is-
sues,” says Singh.
@anandadhikari
 AVIATION

Not Just Engine Trouble

While the problem with the Pratt & Whitney engine may be the primary reason for
the trouble at Go First, the crisis was long brewing and its impact may last a while
BY MANISH PANT

X THE SIGNS OF any crisis are

GO FIRST SAYS
long visible before it explodes
in the face and the current mess THE NUMBER OF
at Go First is no exception. Be it
frequent delays to staff salaries,
GROUNDED
an attrition rate that is among AIRCRAFT DUE TO
the highest in the Indian avia- FAULTY ENGINES
tion sector or frequent post-
ponements to the company’s GREW TO 50 PER
plans of listing, the writing has CENT OF ITS FLEET
long been on the wall. When the
Mumbai-based low-cost carrier
IN DECEMBER 2022
(LCC) filed an application for
MAGAZINE KING
22 | voluntary insolvency resolution with the arbitrator, the
National Company Law Tribunal in Delhi on May 2, it
didn’t leave aviation observers surprised.
Squarely blaming Pratt & Whitney (P&W) for the de-
cision to temporarily suspend operations, Go First in a
statement said the US-based engine maker had refused
to comply with an award issued by the Singapore Inter-
national Arbitration Centre (SIAC) for the despatch
of 10 engines per month until
December 2023. The grounding
of close to 50 per cent of the car-
rier’s A320neo fleet had resulted
in it incurring “`10,800 crore
in lost revenues and additional
expenses,” the statement said.
The airline currently has a fleet
of 54 Airbus A320neo and five
Airbus A320ceo, according to
its website. Several other air-
lines—including Lufthansa, Air
Hawaiian and Air Tanzania—
have reported problems with P&W’s geared turbofan
engines, especially under hot and dusty conditions.
Citing faulty engines as a major reason behind Go
First’s failure, an aviation industry insider, requesting
anonymity, tells Business Today, “The above incidents
with Go Air are just symptoms of low revenue and high
costs that have set in motion a deeper operational mal-
aise comprising lack of capital and profitability. Engines

STALLED Go First has

moved an application
for voluntary insolvency
resolution in the NCLT
PHOTO BY GETTY IMAGES

Business Today 28 May 2023

are a big part of that.” However, Sa-
tyendra Pandey, Managing Partner
at aviation services firm AT-TV, sees
engine defects as only one part of
the problem. “No doubt the engines
have had issues, but what is not be-
ing spoken about is alternative ca-
pacity plans, contingency plans and
flying with a substantially reduced
schedule.” IndiGo, the country’s
largest carrier by fleet and market
share, has so far successfully navi-
gated the challenge despite having
to ground over 30 A320neo aircraft
for the same reason. Similarly, LCC
SpiceJet managed to avoid any ma-
jor cancellations after it was asked
by the aviation regulator the Di-
rectorate General of Civil Aviation
(DGCA) to operate only 50 per cent
of its scheduled flights for more
than two months after technical
issues were reported with its fleet of
Boeing aircraft in July last year.
Go First claims that the percent-
MAGAZINE KING
age of grounded aircraft due to
faulty engines has grown from 7 per
cent in December 2019 to 50 per cent
in December 2022. The airline has
also moved a Delaware federal court
for the enforcement of the SIAC
award. In a series of media interac-
tions following the May 2 statement,
Go First CEO Kaushik Khona—the
airline’s eighth CEO in 17 years—
said the claims from P&W are in
the range of $1.1 billion. However,
the argument has failed to cut ice
with many in the industry. “Is there
another instance where a problem
has lingered for four years? Did the
airline only look at the problem or
did it also try to look for a way out?”
asks Jitender Bhargava, former ED
of Air India. In a statement, P&W
noted that as part of its commit-
ment to customers, it was “comply-
ing with the March 2023 arbitration
ruling related to Go First.” Sources
at P&W separately say the airline
has had a long history of missing its
financial obligations by often reneg-
ing on contractual terms. Multiple
attempts by BT to contact Khona
were unsuccessful.
GO FIRST
FOUNDED: ON-TIME
November 2005 PERFORMANCE:
49.2%
CEO:
Kaushik Khona NO. OF EMPLOYEES:
7,000+
FLEET SIZE: 59 (54
Airbus A320neo, 5 BANKS’ EXPOSURE:
Airbus A320ceo) `6,521 crore (Central
Bank of India, Bank of
GROUNDED Baroda, Axis Bank, IDBI
AIRCRAFT: 25 Bank, Deutsche Bank)
Airbus A320neo
DEFAULTS TO
PASSENGER OPERATIONAL
CREDITORS:
LOAD FACTOR
(MAR ’23): 90.2% `3,862 crore (Vendors
`1,202 crore + Lessors
`2,660 crore)
MARKET SHARE:
8.4% Source DGCA, BT Research
In view of the cancellation of flights and initiation of insolvency pro-
ceedings, the DGCA has issued a show-cause notice to Go First under the
relevant provisions of the Aircraft Rules, 1937, for their failure to continue
operations. The airline has also been directed to stop booking and sale of
tickets with immediate effect until further orders.
Also, at a time when air traffic is recovering to pre-Covid-19 levels,
experts warn that the development at Go First could have repercussions
on India’s aviation growth story. “There are still 40-plus aircraft that are on
lease to Go First and the lessors are scattered all over the world... The les-
sors are keen to learn how the Indian courts will react to the situation, how
regulators such as the DGCA will move and to what extent the lessors will
be able to pull their equipment out in a timely manner,” says Ajay Kumar,
Managing Partner at the law firm KLA Legal. “If the lessors realise that
India continues to be a risky jurisdiction, the lessees will have to pay a risk
premium on new lease rentals. Overall, it’s not a good situation for anyone.”
The insolvency’s impact is expected to flow through to other airlines,
be it via higher risk premiums, additional guarantees or even eroded trust.
“Stakeholders from oil marketing companies to airports to transport provid-
ers all stand to lose out. At best, they will receive a fraction of their dues,”
says AT-TV’s Pandey. Bhargava feels the situation could have been avoided if
the DGCA or the Ministry of Civil Aviation had proactively taken cognisance
of the consistent drop in the airline’s performance. Agreeing with Bhargava,
Pandey says the regulators could also look at auditing the airlines. “Because
in the final analysis, it is the flying public that loses out.” The same holds true
for employee rights. The carrier wants employees desperately looking for
placements to serve notice periods ranging from three to six months before
they are issued a no-objection certificate, say company sources.
@manishpant22
Business Today 28 May 2023
 RESULTS

No Surprises Here
While India Inc.’s Q4FY23 results were mixed to muted, the global macroeconomic
environment is weighing on some export-oriented sectors
BY RAHUL OBEROI

X INDIA INC.’S EARNINGS for the

quarter ended March 2023, having
crossed the halfway-mark, have
largely remained mixed, with no
major surprises. The results indi-
cate that global macroeconomic

ILLUSTRATION BY RAJ VERMA

conditions and inflation remain a
concern for most businesses. The
numbers for Q4FY23 so far show
the banking sector leading, with
IT firms reporting tepid numbers,
while FMCG firms exhibit a posi-
tive-to-mixed trend. Automobile
and cement firms, meanwhile, have
24 | posted in-line performances.
MAGAZINE KING
With a 46 per cent year-on-year
rise in Q4FY23 consolidated net
profit, IndusInd Bank has emerged
as the top grosser, while ICICI Bank,
HDFC Bank and Kotak Mahindra
Bank posted 27.6, 20.6 and 17.3 per
cent YoY growth, respectively, in
their bottom lines. But Axis Bank—
due to its acquisition of Citibank’s
India consumer business—posted a
consolidated loss of `5,361.85 crore.
“Credit growth is at record highs
and net non-performing assets are
at record lows. We believe this kind
of performance is likely to continue
in the June quarter also,” says G.
Chokkalingam, Founder and Head
of Research of Equinomics Research
and Advisory.
Among NBFCs, HDFC, Bajaj
Finance and Bajaj Finserv reported
18.04, 30.51 and 31.41 per cent YoY
rise in Q4 net profits, respectively.
Overall, the early-bird results
(excluding BFSI) for Q4FY23 for 19
Nifty 50 companies reported a 8 per
cent YoY growth in consolidated
revenues, while net profits declined
by 4.77 per cent, based on the results
reported till May 8.
Elsewhere, IT majors TCS,
Infosys and Tech Mahindra missed
street estimates, with TCS, Infosys
and HCL Technologies reporting
14.77, 7.77 and 10.85 per cent YoY
growth in net profits, respectively.
Net profit of Tech Mahindra and
Wipro de-grew by 25.77 and 0.41
per cent YoY, respectively. The
management of TCS talked about
increasing near-term uncertainty
in the overall demand environment
driven by weak global macros and
the ongoing concern in Ameri-
can banks that has led to delayed
decision-making for new orders.
Independent market analyst
Ambareesh Baliga says: “IT sector
earnings were mostly disappoint-
ing, more so the commentary of the
management. The global slowdown
is expected to have an impact over
the next few quarters.”
In the automobile space, Maruti
Suzuki, Hero MotoCorp and Bajaj
Auto posted 42.38, 31.70 and 11.70
per cent YoY rise in net profits,
respectively. Net profits of FMCG
majors Nestlé, Tata Consumer
Products and Hindustan Unilever
jumped by 24.69, 23.47 and 12.85 per
cent, respectively.
Reliance Industries witnessed a
19 per cent YoY rise in net profit at
`19,299 crore, and revenue growth
at 2.8 per cent to `2.39 lakh crore,
while Adani Enterprises’ net profit
jumped 137 per cent, and net profit
of Tata Steel declined sharply by
82.53 per cent YoY to `1,704.86 crore.
Commenting on the results for
the quarter, Nirvi Ashar, Fundamen-
tal Analyst at Religare Broking, says,
“FMCG is seeing a positive to mixed
trend, while banking has posted
in-line numbers. However, the
major disappointment was from the
IT pack, where the outcomes were
below expectations. The Q4FY23
earnings outcome has largely been
mixed to muted for now.”
@iamrahuloberoi

Business Today 28 May 2023

O P E N I N G E S S A Y

A I
S T O R Y
C O V E R

MAGAZINE KING
T H E D E B AT E
AROUND
ARTIFICIAL
INTELLIGENCE
BEING GOOD
OR BAD FOR
HUMANITY
IS ENDLESS.
THE SOLUTION
IS TO FIND A
M I D D L E P AT H
TO M A N AG E I T
WELL FOR HUMAN
PROSPERITY

BY R AC H N A D H A N R A JA N I

ILLUSTRATIONS BY NILANJAN DAS

 A I
S T O R Y
WHERE THE MIND HARBOURS fear, demons fly in.
“In a post-apocalyptic world, the few surviving humans lived in fear
of the sentient AI that now controlled the ruins of civilisation. The ma-
C O V E R

chines had become twisted and malevolent, hunting down any humans
they could find, and turning them into fuel for their own survival.”
This is not a narration from a chilly Nolanesque movie. It’s not
from a dystopian novel, either. It’s a two-line horror story ‘written’
by ChatGPT, the new generative AI chatbot created by OpenAI
that has got everyone delighted with its possibilities, and equally
struck extreme fear amongst us, including the high and mighty.
The end of humanity is nigh, they say. ‘They’ are not dooms-
day-predicting punks or lunatics with crazed eyes pounding your
town square. They are successful people, uncommonly rich, and
possess some of the most brilliant minds in the field of science
and technology. The most famous is Elon Musk, among the world’s
richest men. Calling AI a fundamental risk to civilisation, Musk
had sounded the alarm at the highest possible pitch known to
mankind: “Mark my words, AI is far more dangerous than nukes.”
That was in 2022. In 2023, Musk has co-signed an open letter—
MAGAZINE KING with more than 1,000 people, including cognitive scientist Gary
Marcus and Apple Co-founder Steve Wozniak—addressed to AI de-
velopers working on systems more powerful than ChatGPT. It asks
for a pause in the development of powerful AI till better controls
are in place. It says AI developers should work with policymakers to
accelerate development of robust AI governance systems, includ-
ing provenance and watermarking systems to help distinguish real
from synthetic, liability for AI-caused harm and well-resourced
institutions for coping with the dramatic economic and political
disruptions (especially to democracy) that AI will cause.
For the record, ChatGPT is based on the GPT-3.5 (that’s short for
generative pre-trained transformer). GPT-4, which was launched
by OpenAI on March 14, 2023, processes information way faster
than ChatGPT. A demo at the launch showed that GPT-4 can beat
90 per cent of humans in the world’s toughest competitive exams.
If GPT-4 is so good, what could GPT-5 bring, many wonder.
And that’s the fear, especially in the absence of rules. But OpenAI
Founder Sam Altman, in an address at MIT, pooh-poohed the con-
cerns and said that there are no plans to develop GPT-5 for now. But

GLOBALLY, ABOUT 300

MILLION JOBS COULD
BE LOST OR DIMINISHED
DUE TO GENERATIVE AI,
PER GOLDMAN SACHS
Business Today 28 May 2023
 MAGAZINE KING
with others, including Google, jumping into the fray,
there’s no saying which way this road is headed.
Meanwhile, setting fear aside, a vast swathe of in-
dustries is leveraging AI to enhance productivity, fu-
elling growth the world over. So much so that PwC’s
Global Artificial Intelligence Study predicts that by
2030, AI will lead to an estimated $15.7 trillion or 26
per cent increase in global GDP. Another report by
TeamLease Digital predicts that AI could add around
$450-500 billion to India’s GDP by 2025, and $967 bil-
lion by 2035. Of course, the job debate is still hot—the
argument is on job losses versus new kinds of jobs be-
ing generated. That debate is at a different level in dif-
ferent industries.
Business Today 28 May 2023
EVIDENCE OF AI’S growing utility across industries
is beginning to come through. From healthcare to fi-
nance to education, the integration of AI is rapidly
transforming industries. For instance, a report by
Gartner says machine learning (ML) can save up to 80
per cent time and effort of a lawyer through automated
drafting and extraction of clauses. In healthcare, ML
and deep learning models are helping deliver compli-
cated surgeries faster. “The role of AI is exponential
in the field of medicine. From precision in surgeries to
formulas of drugs, AI helps provide better healthcare.
So, the scope of AI is wide and extremely significant,”
Suneeta Reddy, Managing Director of Apollo Hospitals
Enterprise, told BT at the MindRush event.

AI is also changing the way the financial system
works—from basic tools like ‘Splitwise’ that divides
a sum of money equally between a group of friends,
to AI-powered tools that analyse large amounts of
financial data to detect fraud and predict market
trends. AI is also used for customer service, where
chatbots handle customer queries efficiently.
In automobiles, AI is widely used in the safety of
the car, passengers and pedestrians through the ad-
vanced driver-assistance system. On the flip side,
concerns about the potential for cyberattacks on cars
in general and self-driving cars in particular abound.
In education, AI tools are helping teachers sched-
ule classes and manage teaching patterns. “Being
freed from repetitive and tedious work, the teacher
can focus on adopting more meaningful curricu-
lum, modes of teaching, and personalising teaching
to suit the needs of each and every student,” says
Nilima Chandiramani, Dean, NGLC, Mumbai Uni-
versity and Director at DM Harish School of Law.
Start-ups, which are job creators, have turned to
AI for onboarding of employees, and customer and
30 |
MAGAZINE KING
employee service, cutting down on human inter-
vention. Several other industries have either taken
BY 2030, AI WILL LEAD
to AI in a big way (such as capital markets) or are
mulling its possibilities (such as in consumer goods
and retail). Read their stories in the ensuing pages.
EXPERTS FROM MULTIPLE sectors say AI can take
away mundane, repetitive jobs currently done by hu-
mans. This has already created significant impact in
the capital markets, for instance. Other industries
such as manufacturing, transportation and finance
could be equally affected in future. While new job
opportunities would be created in areas such as data
science and programming, the transition to a new
job market may be difficult for workers who lose
their jobs to AI-powered systems. Goldman Sachs
says globally, about 300 million jobs could be lost or
diminished due to generative AI. Fearing the impact
of AI, someone like Devarsh Saraf, a law student at
Columbia University, founded a legal-tech firm,
ARBDossier, instead of looking for a job.
But there are optimistic voices as well. “During
the dotcom boom, the world thought computers will
make man go out of a job, but that didn’t happen, and
Business Today 28 May 2023
A I
so it won’t happen this time, too,” Infosys Founder N.R.
Narayana Murthy told BT on the sidelines of an event.
S T O R Y
Murthy further explained that a generative AI tool like
ChatGPT provides the knowledge to a user who can then
use it further as per their creativity. Agrees Krishnan Ra-
manujam, President, Enterprise Growth Business at Tata
C O V E R
Consultancy Services: “AI and automation taking jobs is
an old and boring story. Tech changes with every genera-
tion but it’s primarily driven by automation… There’s no
threat of a job loss, but AI and automation will definitely
compel employees to upskill to stay more relevant.”
A report by the World Economic Forum says technolo-
gy and digitalisation will drive roles such as data analysts,
data scientists, big data specialists, AI/ML specialists and
cybersecurity professionals, who are expected to grow on
average by 30 per cent by 2027. Tech industry body Nass-
com predicts that over 290,000 jobs will be created this
year in tech in India, of which 36 per cent will be gener-
ated in AI and ML. “AI will definitely make jobs easier and
create a need to upskill, but it will only take over jobs that
don’t require humans. New tech has always been a creator
of jobs—earlier there were no Uber drivers, or Zomato/
Swiggy delivery boys. These jobs were created because of
technology,” says Debjani Ghosh, President of Nasscom.
And while AI can be useful, there are limitations and
risks. “AI is great for research, but markets run on sen-
timent, not on algorithms,” says Nikhil Kamath, Co-
TO AN ESTIMATED $15.7
TRILLION INCREASE
IN GLOBAL GDP, SAYS
PwC’S GLOBAL ARTIFICIAL
INTELLIGENCE STUDY
founder of Zerodha. That’s a limitation. In terms of risks,
AI-powered systems are only as good as the data they are
trained on. So, good data, good AI. Bad or biased data, bad
AI. For example, ChatGPT spewing out smart text is cool.
But that the text may be incomplete, biased, or downright
wrong is not so cool. Such scenarios are dangerous in sec-
tors such as healthcare and law, where wrong decisions
can have significant consequences for individuals.
And so, is AI more powerful than nukes? Maybe not
today. And it’s best if it stays that way, through tight regu-
latory mechanisms. Only then can the economy, business
and society benefit from this significant and impactful
technological advancement, without causing a takeover
of the world by sentient machines.
@r_dhanrajani
 You are
A I
Batman’
S T O R Y
C O V E R
I N T H E A U T O I N D U S T R Y, A R T I F I C I A L
INTELLIGENCE IS MOVING FROM
THE MOVIES TO REAL LIFE . BUT THE
R O B O I S N ’ T TA K I N G YO U R J O B Y E T
BY PRERNA LIDHOO
ILLUSTRATION BY NILANJAN DAS
N THE 2005 FILM Batman Begins,
32 |
MAGAZINE KING
when Batman used an advanced
computer system to remotely
control his Batmobile—called
Tumbler—and even interacted
with it using a voice-activated
command system, it was an
unmissable piece of sci-fi. In 2023, it’s not. Fine,
you might not have machine guns and anti-gravity
modes on your vehicle (yet), but artificial intel-
ligence (AI)-based features like autonomous
driving technology and voice-activated virtual
assistants make you no less than Batman.
Today, AI is being used in cars in a number of
ways to improve performance, safety, and overall
driving experience, be it AI-powered systems such
as Tesla’s Autopilot and Cadillac’s Super Cruise
that are capable of controlling a car’s acceleration,
braking, and steering without the need for human
intervention, or be it driver monitoring systems
like advanced driver-assistance systems (ADAS)
that can monitor driver behaviour and detect
signs of fatigue or distraction, alerting the driver
or even taking control of the vehicle, if necessary.
Carmakers in India, such as Mercedes-Benz
India, have already woken up to some of these
advancements. “In our cars, features such as ‘Hey
Mercedes’ (our voice assist), Active Braking Assist
and gesture controls are getting intelligent as we
leverage and integrate technology,” says Santosh
Iyer, MD & CEO of Mercedes-Benz India. From a
Business Today 28 May 2023
THE CURRENT USE CASES
OF AI GO BEYOND THE CAR,
AND HAVE THE POTENTIAL TO
TRANSFORM THE SUPPLY
CHAIN, SALES AND THE
MANUFACTURING PROCESS
customer service standpoint, consent to opt for
‘Telediagnosis’ on its Mercedes me app allows the
company’s service team to monitor a car’s condi-
tion and perform a quick remote diagnosis to save
time for customers. In addition, the company
has integrated AI in production, where it has a
combination of smart manufacturing processes,
connected systems and human skills.
Experts believe that the current use cases of
AI in automotive go beyond just the car itself, and
have the potential to transform the supply chain,
sales and even the manufacturing process itself.
Companies that have technology at their core will
emerge as clear winners. “There’s a clear differen-
tiation being set between automotive companies
not by AI but by their corporate culture. And it’s a
very old dilemma that exists between technology
and businesses, because technology can achieve
many things but when the business itself resists
disruption, technology alone cannot do much,”
says Pedro Pacheco, VP Analyst at Gartner who
believes that for the new breed of vehicle manufac-
turers like Tesla, software comes first. “Because of
that, it’s a lot easier for them to redefine business
models where they can extract the biggest business
benefit from software. And these are the compa-
nies that most likely will be in a better position to
extract benefits from AI,” he explains.
India’s auto ancillary makers, which have
implemented technology in large doses, includ-
ing Industry 4.0 digital tools, now feel AI will
take their business to the next level. “As AI
becomes a business opportunity, it will spread
fairly quickly, not just as product disruption but
as process and manufacturing disruption,” says
MAGAZINE KING
Sunjay Kapur, Chairman of Sona Comstar and
President of Automotive Component Manufac-
| 33

turers Association of India (ACMA). “Machine

learning (ML) and AI will enable remote main-
tenance. It will be used to make processes more
efficient, eliminate waste, and cybersecurity
will play a huge role in all industries.” Agrees
Rajeev Singh, Partner and Consumer Industry
Leader, Deloitte, Asia Pacific. “The need for
servicing will go down. We’ll move from peri-
odic to predicted servicing,” he says.
Singh says the cost of manpower is increas-
ing at about 10-12 per cent year-on-year, which
can be managed through automation and AI:
“It’s bound to happen that automation will
become less expensive than manpower. There
will be a significant shift in the nature of these
jobs and number of people employed. And at
the same time, new jobs are being created.”
Gartner’s Pacheco, too, feels automotive
jobs per se are not in danger from AI. “AI is
still not as advanced as it should be. Today,
we’re far off from having a ‘lights out’ factory,
which is completely automated and doesn’t
require humans working on the shop floor or
running the factory. In the short term, I would
not see AI as a monster that is going to take
away automotive jobs,” he says.
@PLidhoo
… G E T, S E T A N D G O H AV E T O WA I T,
A S T H E C A P I TA L M A R K E T S A R E Y E T
TO E M B R AC E T RU E A I . E V E N S O, T H E
T H R E AT T O J O B S I S R E A L
B Y A S H I S H R U K H A I YA R
O INDIA’S CAPITAL MARKETS have
AI? Yes, they do. True-play AI? Ah,
well, not quite.
A large part of stock market
trading and execution is done using software—algo-
rithms or algos in market parlance—with little or zero
human intervention. Stock exchange data shows that
well over 50 per cent of the trading volume originates
from such automated trading systems. The past couple
of years have seen new-age brokers like Zerodha, Small-
case, Groww, Upstoxx and Fyers, along with traditional
names like ICICI Securities and Angel One, among
others, focussing on artificial intelligence and machine
learning (AI/ML) tools to make their platforms smarter

Business Today 28 May 2023

 ILLUSTRATION BY NILANJAN DAS

and quicker, offering smarter trading and real-time

data inputs and ‘nudges’ to help investors take
more informed investment decisions.
Further, the advisory segment has been the
quickest to adapt to changing technologies and has
seen the influx of robo-advisory firms such as Tav-
aga, Kuvera, INDmoney, and Cube, among others,
which dole out investment advice after process-
34 |
MAGAZINE KING
ing thousands of data points using AI/ML tools.
Incidentally, a large section of players believes
that advisory using robos or AI/ML tools will soon
dwarf traditional players as an increasing number
of young investors enter the markets. “Millenni-

als and GenZ are increasingly participating in the
capital markets and this tech-savvy demographic
is easily picking up new trends in the capital mar-
kets space,” says Pushpak Dagade, Founder & CEO
of algo trading platform AlgoBulls.
Yet, these are quite basic in terms of AI. “Till
date, algos are doing what humans are telling
them to do, but going ahead they will become
smarter and start thinking on their own while
designing and executing strategies,” says Kunal
Nandwani, Co-founder of uTrade Solutions, a
company specialising in smart trading through
low-latency algo platforms, and whose upcoming
book Techtopia deals with AI and the future of
humanity. Adds Anshul Sharan, Co-founder of
Elever, a hybrid robo-advisory provider: “Overall,
the use of AI in the Indian capital market is still
in its early stages, but it is expected to grow in the
coming years as firms continue to seek ways to
improve efficiency, reduce costs, and make more
informed investment decisions.”
According to Sharan, Asian markets like Japan,
Hong Kong and Singapore have already embraced
AI in a much bigger way than India, although India
is fast catching up. “True AI penetration using
85%
The share of trades
carried out by algorithms
in the American equity
markets
deep learning was never widespread in the Indian capi-
tal market industry. We have very few companies that
have the expertise to build deep learning capabilities,”
says Salil Mathur, Founder of Yobee, a platform that cre-
ates proprietary algos. Indeed, the share of algos in the
US (over 80-85 per cent), coupled with the presence of
complex trading systems and some of the most sophisti-
cated hedge funds and institutional investors, makes
the world’s biggest economy streets ahead of most other
geographies in terms of AI penetration.
What do these markets do with AI that India doesn’t?
Take sentiment analysis, for instance, where the soft-
ware gathers text and linguistics—from normal docu-
ments, research reports, media statements, corporate

Business Today 28 May 2023

 A I
announcements, etc.—and uses natural language
processing to predict future trends and structure
S T O R Y
an investment thesis, all by itself. Then, there are
AI-based algos that are not only wired to stocks
but are also linked to other asset classes including
art, antiques, commodities and debt, among other
alternative avenues, while providing a complete
C O V E R
investment solution.
The increasing advent of AI will make many
jobs redundant in the stock market. The tribe
of jobbers and arbitrageurs has already become
extinct. A large number of dealers—broking staff
who punched orders in the system based on client
orders—and relationship managers have also gone
missing as investors are using AI-based apps to
do daily trades and even get investment insights.
Pure-play robo advisors are making human advi-
sors redundant. Several small-sized investment
advisory firms—especially in the hinterland that
cater to a small set of clients—have shut shop due to
MAGAZINE KING
Business Today 28 May 2023
the advent of cheap, even free, digital platforms.
In terms of new roles and skill sets in demand,
those with a degree in computer programming or
mathematics & statistics or engineering economics
would be highly sought after, as they would be able to
master the confluence of economics and technology.
Incidentally, all leading broking houses now have a
full-fledged CTO in place—a post unheard of till a
few years ago.
Going ahead, as AI makes further inroads in the
stock markets, the reliance on humans will diminish
further, especially for plain-vanilla investments.
On the other hand, highly skilled humans with spe-
cialised skill sets will design smarter machines and
codes to help with complex strategies.
Sounds frighteningly logical. Or like V.I.K.I, the
highly advanced supercomputer in the movie I, Robot
says, “... my logic is undeniable”.
@ashishrukhaiyar
iCoach
AI HAS HUGE POTENTIAL TO
T R A N S F O R M T H E E D U C AT I O N
LANDSCAPE , FOR BOTH
ST U D E N TS A N D T E AC H E RS.
BUT WILL IT REPL AC E THE
T E A C H E R ? N O T L I K E LY
BY R AC H N A D H A N R A JA N I
ILLUSTRATION BY NILANJAN DAS
Y ASSIGNMENTS NOW
only take about 15 min-
utes. I enter my topic in
ChatGPT, try a couple of commands to make
my essays crisp and readable, and that’s it. My
assignment is done,” says Vineeta Roy, a stu-
dent of Mass Media in a Mumbai college.
According to Harshika Mehta, a teacher at
Mumbai University, AI can also help teachers
address student needs better. “AI-powered
tools like ChatGPT can analyse student data
 A I
and provide teachers with insights into student perfor-

S T O R Y
mance, helping them create personalised learning plans
for each student,” she says.
Edtech companies are also jumping on the band-
wagon. Coursera is creating a ChatGPT virtual coach
to answer questions, give feedback, summarise video

C O V E R
lectures, give career advice, and prepare students for job
interviews. This feature will be available in the coming
months. “AI and ML are the top job generators and we
have seen increased interest from companies as well as
professionals in learning about it. So, we are working to-
wards amping up courses and partnerships around AI,”
says Raghav Gupta, MD of India and APAC at Coursera. It
is creating another tool to help instructors create courses
by using prompts to generate course content, structure,
descriptions, tags, readings, assignments and glossaries,
and suggest other course material on Coursera. H E A LT H C A R E A N D P H A R M A
Powerful AI tools can also take plagiarism, already C O M P A N I E S A R E TA K I N G T O A I
a menace worldwide, to a completely different level. I N A B I G WAY. A N D T H E R E
Intellectuals such as Noam Chomsky have highlighted APPEARS TO BE NO FEAR
that such tools will make the detection of plagiarised OF JOB LOSSES
essays much more difficult. Taking cognisance of this BY NEETU CHANDRA SHARMA
danger, Sciences Po, one of France’s top universities, has
banned the use of ChatGPT. Some public schools in New
ILLUSTRATION BY NILANJAN DAS
York City and Seattle have also implemented the ban,
while some US-based universities are shifting focus from
homework assessments to hand-written essays.

POWERFUL AI TOOLS CAN MAGAZINE KING

TAKE PLAGIARISM TO A
COMPLETELY DIFFERENT
LEVEL, AS THEY WILL MAKE
DETECTION DIFFICULT
The bigger question is: Will AI replace the teacher in
your classrooms? Thus far, it would appear not. “AI is un-
likely to fully replace human teachers in the classroom.
Content is available on the internet also, then why is a
student coming to class? That’s because the interven-
tion between student and information available is the
teacher,” says Manjula Srinivas, Professor & Dean of Cen-
tre for Design Thinking & Liberal Arts at SOIL Institute
of Management. Besides, as Srinivas says, AI cannot
prepare a student for the struggles of life, like a teacher
would. A teacher inspires and motivates students, creates
a safe and supportive classroom environment, and helps
students develop critical thinking skills, creativity, and
social skills. All of that, from AI, seems really far away.
@r_dhanrajani
N DECEMBER 22 ,
2022, Apollo Hospi-
tals, in partnership
with telecom ser-
vices provider Bharti
Airtel, conducted
India’s first 5G-driven, AI-guided colonoscopy
trials. As per current protocol, colon cancer is de-
tected through a manual colonoscopy procedure
and requires great attention and time for accu-
rate detection. Not only is the procedure 30-40
minutes long, it is discomforting for patients, and
also for doctors and nurses. The trials showed
the new tech in good light—the procedure was
done in greatly reduced time. There’s more to
come. “Google Cloud’s analytical systems will
help Apollo manage data of over 14 million pa-
tients and analyse their health patterns to serve
them better,” says Bikram Singh Bedi, Managing
Director of Google Cloud India. “Through this,
doctors will be able to leverage data-driven clini-
cal insights and this will help build more trust
between doctors and their patients.”
The healthcare business has seen significant

Business Today 28 May 2023


MAGAZINE KING
impact from digital technologies in general, and from
AI in particular. “We use AI for almost all operations of
our chain of hospitals, and it has indeed transformed
the business in a big way in the past few years,” says Dr
Ashutosh Raghuvanshi, Managing Director and CEO of
Fortis Healthcare. Some of the things that AI has done
for Fortis include management of electronic health
records (EHRs), improving the efficiency of patient
operational flow, and hospital data management.
For pharmaceutical companies, the impact has been
bigger. Sun Pharma has adopted a range of technolo-
gies, including AI and ML, to improve drug discovery,
reduce time-to-market, and optimise clinical trials.
Similarly, Cipla has invested heavily in AI and cloud
computing to improve its supply chain management
and product development. Further, Dr. Reddy’s Labo-
ratories has adopted AI and ML to improve its drug
discovery and clinical trial processes.
“India has emerged as the world’s largest generic
drug supplier by volume, contributing 20 per cent of the
Business Today 28 May 2023
$11.78
billion
The amount India is likely to
spend on AI in 2025, per PwC
| 37
total pharmaceutical exports. It satisfies 50 per cent
of the global demand for vaccines post-pandemic. The
phenomenal growth in the country’s pharmaceuticals
industry is backed by technological innovation and
investments in newer operation mechanisms, thus pro-
viding a huge opportunity for global tech companies to
partner and collaborate with the pharma sector,” says
Debashish Roy, Director and Head-Digital Innovation
at global pharma giant Pfizer.
The opportunity is big. A PwC report released this
March says that AI expenditure in India is expected to
reach $11.78 billion by the end of 2025, and by 2035, AI
expenditure is expected to contribute $1 trillion to the
Indian economy.
“Standardisation and open access to healthcare data,
as well as the usage of AI on that data, have increased
by leaps and bounds,” says Ram Deshpande, Partner-
Technology Consulting at EY India. “Avenues for AI
adoption today range from personalised self-assisted
care to state-led health initiatives, aided by cutting-
 A I
edge healthcare technologies ranging from remote

S T O R Y
diagnostics to robotic surgery and preventive care.”
EY recently deployed an AI/ML solution for a state
government that would help it plan its resources
efficiently in situations like the Covid-19 pandemic, On the other hand, the PwC report suggests that
including forecasting, demand estimation, day-level one of the main reasons for not adopting AI/ML

C O V E R
plan for the next 90 days, and scenario analysis. is the perception that automation will reduce job
Yet, there are miles to go. According to EY, 47 opportunities and result in job losses. India has a
per cent of Indian healthcare organisations are still population of 1.4 billion and 522 million people are
estimated to be employed all over the country. So,
the perception of diminishing job opportunities is
hindering the adoption of AI in India.
ACCORDING TO EY, “It is a common assumption that technological
47 PER CENT OF advancement will threaten job opportunities and
human efforts will be replaced by automation. How-
INDIAN HEALTHCARE ever, the growing demand for digital healthcare
ORGANISATIONS ARE solutions to make quality healthcare available to
STILL STUDYING AI FOR the masses has created opportunities in a variety of
fields in India,” says Ganesh Lakshminarayanan,
APPLICABILITY, PLAUSIBLE CEO at Airtel Enterprise Business.
USE CASES THROUGH With information technology enabling ef-
ficient management of the healthcare industry in
PROOF OF CONCEPT, AND areas such as statistical documentation, access to
A CLEARLY EXPLAINABLE medical databases, and easier access to research on
RETURN ON INVESTMENT upcoming medical trends, Lakshminarayanan says
employment opportunities have grown in tandem.
“With the roll-out of 5G technologies, a 20 per cent
increase in hiring is anticipated for positions such
MAGAZINE KING
38 | studying AI for applicability, plausible use cases
through proof of concept (PoC), and a clearly ex-
as networking engineers, experts in AI and ML,
user experience designers, cloud computing ex-
plainable RoI. “This implies a significant need for AI perts, cybersecurity specialists, and experts in data
advocacy and RoI demonstration in a data-intensive science and data analytics,” he says.
sector that can profit enormously from a transition Nothing artificial about this.
from mostly curative to AI-led preventive healthcare
methods,” says Deshpande. @neetu_csharma

Code Meets F THERE IS ONE INDUSTRY where AI is

almost a natural fit for building competi-
tive edge, it is IT-enabled services (ITeS).

Cognition
“Some of the popular use cases of AI in
IT/ITeS industry are creating safer and
better information systems to deal with
the huge volumes of data, enhancing
customer experience by predicting market trends and
AI IS PUSHING THE B OUNDARIES OF customer behaviour, enabling process automation and
W H AT ’ S P O S S I B L E , H E L P I N G I Te S efficiency analysis, simplifying IT operations manage-
FIRMS PROVIDE SOLUTIONS TO B OTH ment, managing huge complex data with MLOps, and
CLIENTS’ AND THEIR OWN PROBLEMS more,” says Prashanth Kaddi, Partner at Deloitte India.
BY B I N U PAU L “Exploring these use cases can provide a competitive
edge to companies to stay ahead of the curve.”
At the same time, the spectre of job displacement

Business Today 28 May 2023

 ILLUSTRATION BY NILANJAN DAS
MAGAZINE KING
casts a shadow of uncertainty over the workforce.
Deloitte’s State of AI in India report reveals that a
significant number of businesses listed job automa-
tion as one of their primary use cases for AI. The
report found that 77 per cent of respondents—200
Indian business leaders and 2,620 business leaders
globally participated in the survey—expressed con-
cerns within their organisations about the possibil-
ity of AI adoption leading to job losses. Yet, evidence
alludes to a distinct perspective being adopted to
address this deep-seated fear. “Do we see software
developers going away? No. What we see is software
developers and digital engineering teams that are
assisted by AI replacing those that are not using AI.
Even at this early stage, we are seeing north of 30 per
cent productivity gains in some of these activities,”
says Pandurang Kamat, Chief Technology Officer of
Persistent Systems, a mid-tier IT company. “So, we
definitely see a future where digital engineering has
a strong AI-assisted component.”
This AI-assisted engineering is helping ITeS firms
to both manage their own work better, and also to
provide more valuable services to their customers.
Let’s examine a few examples of the former
first. Infosys’s use of specialised AI models for
Business Today 28 May 2023
DELOITTE’S STATE OF AI IN
INDIA REPORT REVEALS THAT
A SIGNIFICANT NUMBER OF
BUSINESSES LISTED JOB
AUTOMATION AS ONE OF THEIR
PRIMARY USE CASES FOR AI
code generation, code completion, documenta-
tion and testing has brought about a significant
boost in developer productivity. Additionally,
the company says the implementation of a data
and AI engineering platform has facilitated faster
time-to-market for its AI services, helped extreme
automation across lifecycles, and enabled democ-
ratisation of AI capabilities for hundreds of data
scientists within the organisation, resulting in
three times faster delivery times. Then, Persistent
Systems’ Autonomous Insights initiative simplifies
executive decision-making—it scans email com-
munication, meeting calendars, client exchanges
and more for negative sentiments and project risks,
and generates email summaries with actionable
insights on managing risks and making decisions
in various business areas.
 And in terms of client services, Infosys, for
example, has built several solutions. Example: an AI
solution for intelligent prediction of on-time deliv-
eries, which has helped a logistics company improve
its business performance and reduce revenue loss.
Another example: a tool to enable hearing-impaired
users enjoy existing video content by automatically
generating visual captioning, close captioning, and
sounds of daily living. “We are leveraging genera-
tive AI capabilities to reimagine our services and
solve interesting problems for our clients,” says
Mohammed Rafee Tarafdar, CTO of Infosys. “As we
move into an intelligent era, the emergence of gen-
erative AI will provide an opportunity to leapfrog
and deliver exponential value to our clients.”
Wipro, with its AI Centre of Excellence (CoE),
has enabled National Health Service Scotland
to progress towards the institutionalisation and
large-scale application of AI, while British out-
sourcing firm Mitie has gained real-time insights
from a system based on the Anomaly Detection
MAGAZINE KING
40 | solution of Wipro Holmes, its AI platform. “In the
ITeS sector, AI-based applications can profoundly
impact how people and processes work, how busi-
nesses engage with each other, and how products
or experiences are delivered,” says Subha Tatavarti,
CTO of Wipro Limited. “With greater research
and innovation, AI can potentially engage more
relevantly with the consumer, thus improving end
user experiences,”
Persistent Systems’ Kamat says clients are
increasingly demanding that the company’s
engineers, business analysts, and teams adopt an
AI-inclusive approach to their designs. “More and
more, our effort is channelled towards how we can
deliver on the promise of AI in an enterprise-grade
way,” he says. The Pune-based company has built
solutions that analyse a plethora of company-
specific information including CRM data, different
systems of records data, CSAT rating, etc., to help
enterprises interact with their own data and get
highly contextualised answers while maintaining
the privacy, security and sanctity of that data. One
such tool, based on generative AI, is being used to
analyse large sets of clinical trials data to under-
stand the inclusion and exclusion criteria, and find
the most matching patient.
Diverse clients, diverse use cases. For the ITeS
industry, AI is the future.
@binu_t_paul
Business Today 28 May 2023
LO G I ST I C S AS A N I N D U ST RY
IS RIPE FOR AI-LED DISRUPTION.
B U T T H E M A N -V E R S U S - M AC H I N E
D E B AT E M I G H T B E P R E M AT U R E
BY SOHINI MITTER
ROM STEAM ENGINES in the 18th
century to robotic warehouses
and driverless trucks in the 21st,
logistics has been a tale of gradual
automation. More so now, as the
growth of e-commerce propels the
industry to an AI-led future. “It’s
hard to imagine successful logistics businesses going
into the future without using AI-related capabilities,”
says Manish Saigal, MD and Co-leader of Business
Transformation Services at Alvarez & Marsal (A&M),
which services logistics clients. The use of AI, ML, data
and blockchain, Saigal says, will be the single-biggest
opportunity in the logistics sector over the next few
years. And in India, “it could be a $10-billion market”.
The driver of the industry’s transformation is
e-commerce. The dramatic increase in shipment
volumes from the remotest corners of the country
is compelling logistics firms to rethink, re-envision,
and re-strategise. And many are finding their moat in
automation.
Take Shiprocket, for instance. The home-grown
logistics unicorn, which enables e-commerce sellers,
has built an AI-led Courier Recommendation Engine
(CORE) that throws up suggestions to merchant
partners on how a product can be delivered at the
lowest prices, via the best/fastest routes, and through
the best-suited courier partner. “CORE is able to
detect signals across geographies, pin codes, courier
partners, and customers, and advise sellers on how to
 A I
allocate their couriers based on that intelligence,” says Praful Poddar, SVP-

S T O R Y
Product Management at Shiprocket. If a seller has a 70 per cent successful
delivery rate, CORE helps that rate improve to 75-80 per cent.
The company helps leading D2C brands improve after-sales service at
reduced costs and, in the process, captures millions of data points from
multiple transactions across shopping platforms, which it feeds into its

C O V E R
indigenous AI system, making it more accurate and useful as time passes.
Shiprocket, which handles 10 million shipments per month, says its per
order cost across 45 warehouses has halved and delivery times cut by 40-50
per cent since it started using AI analytics for order fulfilment.
More importantly, it helps predict demand and so, “you can store
your goods closer to your customer and bring down shipping costs”, says
Poddar. Adds A&M’s Saigal: “E-commerce logistics is so dynamic on the
demand side that you don’t know where your next order is coming from.
Companies are now building AI/ML-led logistics and fulfilment models to
cater to demand, which is changing every hour.”
Many logistics companies today use predictive analytics for demand
forecasting, route and location mapping, inventory planning, warehouse
management, better fleet utilisation, and faster shipments. “The AI can
take into account historical data as well as macro trends that are used to
plan efficient shipment-fulfilment,” Saigal explains. “Brands themselves
are also using AI/ML to optimise sales, plan product and inventory, lower
customer acquisition costs, and maximise bang for the buck.”
Some legacy logistics companies, which would earlier fulfil e-com-
merce orders by carving out a corner of their warehouses designed for

MAGAZINE KING WHILE INDIA MAY

BE FAR AWAY FROM
FULLY ROBOTIC
WAREHOUSES,
SEVERAL BASIC AND
LOW-EFFICIENCY
JOBS ARE GETTING
AUTOMATED
 A I
B2B operations, are now looking at automation as a in B2B facilities,” he says. Agrees Saigal: “Some of the
means for expansion in B2B2C segments. While In- most basic jobs will be automated because the scale
dia may be far away from fully robotic warehouses, and volume of shipments today is so high that it’s

S T O R Y
autonomous carts in the aisles and driverless
trucks, several basic, repetitive and low-efficiency
jobs are already getting automated.
Sure, the positives of AI intervention cannot
manually impossible to handle. But what works in lo-
gistics is the right combination of man and machine
to deliver real value at the right cost.”
Automation, therefore, is improving the size of

C O V E R
be denied, but it begs the question: Is it threaten-
ing jobs in the sector? Are we re-entering an era of
man-versus-machine? “That’s unlikely in the near
future,” says Vaishnav Shetty, Chief Digital Officer at
Allcargo Logistics. “We work with several companies
where manpower has been significantly reduced
(more than 80 per cent in some cases) as a result of
robotics and automation. However, a completely
zero-touch model is still some time away, especially
the pie and enhancing the quality of human inter-
vention. It is creating new “value-add roles” that
can collaborate with the machines. Not only will
companies get more done in less time now, they can
also log more revenues per hour and pay their work-
ers better.
Sounds like logistics utopia.
@mittermaniac

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MAGAZINE KING
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Business Today 28 May 2023

 T ITS RECENT ANNUAL gen-
eral meeting, Swiss F&B giant
Nestlé pointed out that AI has
helped its India subsidiary
customise consumer choices
and plan new launches better.
How? “We are using AI in India
to assess multiple types of data
that give insights down to a postal code and demo-
graphic level. This level of customisation has benefitted
us as well as our customers and consumers,” CEO Mark
Schneider said.
Like Nestlé, other FMCG companies are also firmly
on the AI bandwagon. Technology geeks at FMCG
majors—from Reliance to Dabur to Hindustan Unilever
(HUL) to Marico—are currently busy fine-tuning their
AI-based platforms not only to improve their opera-
tional efficiencies, but also to lure potential consumers
with targeted goods and solutions.
HUL is harnessing new AI-powered innovation tools
to spot trends early and test new product concepts.
According to Sanjiv Mehta, CEO & MD of HUL, it is
“investing in technology driven commerce ahead of
the curve with capabilities such as virtual try-ons” and
is currently piloting an AI skin analyser on the Lakmé
D2C platform. Backed by AI, HUL’s new Agile Innova-
tion Hub is accelerating its speed of innovation by using
a digital innovation workflow.
MAGAZINE KING
FMCG FIRMS ARE BUSY FINE-
Ayurveda major Dabur India is using AI-driven
technologies, coupled with machine learning,
robots and automation “to drive greater efficiency
across the organisation, covering supply chain,
manufacturing, sales & marketing, while delivering
cost savings”, CEO Mohit Malhotra says. Such ini-
tiatives are the driving factor for increasing the ef-
ficiency of targeted outlet visits for the field force.
Dabur has activated Amazon’s proprietary Demand
Side Platform to sharp-target category shoppers’
audience cohorts via programmatic ads.
Vrijesh Nagathan, Chief Information & Digital
Technology Officer at Marico says the company is
“enforcing cutting-edge analytics and AI capabili-
ties to enable data-driven prioritisation, resource
allocation and decision support”. These have
helped in institutionalising its new sales frame-
work that further enhanced Marico’s on-ground
agility, and strengthened its micro market focus
and execution.
Pallab Roy, Partner at KPMG in India, says data
is the new currency and AI-based models in back-
office operations for effective sourcing, improving
compliance and operations and in MIS are increas-
ingly being adopted to stay ahead of the curve. “AI
can augment intelligence to help managers analyse
large quantum of data, choose action options and
learn from outcomes at a rapid pace,” he says.
| 43
TUNING THEIR AI-BASED
PLATFORMS TO NOT ONLY
IMPROVE OPERATIONAL
EFFICIENCIES, BUT ALSO LURE
POTENTIAL CUSTOMERS
With AI deployed at scale, Subramaniam V.,
Director at Reliance Retail, expects India’s
retail market to grow to $2 trillion (`160 lakh
crore) by 2032, from $844 billion (`67.5 lakh crore)
in 2022.
Rajat Wahi, Partner at Deloitte India, says while
an impact assessment of AI on India’s retail and
consumer goods sector is yet to be conducted,
it is expected that AI could end up impact-
ing several job roles in the retail sector. “For
instance, basic research-related roles in areas like
industry trends, consumer behaviour, etc., could be
replaced by Generative AI, while new highly skilled
jobs would be created to harness this AI. It is unlike-
ly that AI-driven tech would impact jobs at physical
retail floors. These are still early days,” he says.
@arndutt
 AI in
Manufacturing
Mode C O M PA N I E S W I L L N E E D T O U P
T H E I R GA M E O N R E S K I L L I N G,
C R E AT I N G D I S R U P T I O N S ,
MAKE INVESTMENTS AND YET
D E L I V E R A S T H E Y H AV E
I N T H E PA S T

BY K R I S H N A G O PA L A N

N HIS OVER THREE-DECADE career

at ABB, Sanjeev Sharma has
seen the automation story from
close quarters. While the various
automation technologies were dis-
ruptive in their own ways, AI, he thinks, has been much
MAGAZINE KING
44 | easier to adapt. Hard to believe, perhaps, but Sharma,
ABB India’s Country Head & Managing Director, says
that the relative effort is lower, provided one is clear
about the outcome. “It is very different from the time
when we bought software or went about the process of
configuring it. Insights in AI are quick and profound.”
The underlying theme at each stage for manufac-
turing, be it Industry 2.0, 3.0, 4.0 or now 5.0 using
cobots (robots that can collaborate with humans),
has one common thread—increase productivity. The
big moment for AI, according to Sharma, was around THE UNDERLYING THEME AT EACH
2016 when digitalisation first started to take off. “We STAGE OF MANUFACTURING
saw Google Maps, search engines and data-based tech HAS ONE COMMON THREAD:
harnessing insights for the future and that was potent.
In many ways, the pendulum shifted then. Now, with INCREASE PRODUCTIVITY
data, the task is to put it to good use,” he explains. By
querying a database, answers are now available that
improve decision making at the level of engineering,
manufacturing and the ability to increase OEE (over-
all equipment effectiveness).
The pace of change through AI is expected to be so Across manufacturing, the benefits have been sig-
rapid that the need to adapt cannot ever be exagger- nificant. Jayant Acharya, Deputy Managing Director of
ated. In that sense, if Industry 4.0 was a focus on effi- JSW Steel, speaks of how his industry can today improve
ciency, 5.0 could well be the neutraliser. “Efficiency is operational efficiency and productivity, reduce costs,
good but not at the cost of effectiveness. AI should be up its quality control and enhance customer experience,
employed in a responsible manner, with both humans with a sustainable orientation. His company is looking to
and technology co-existing,” says Jayanta Banerjee, augment its capacity (from 27 million tonnes per annum
Group CIO of Tata Steel. According to him, humans today to 38 million tonnes per annum by FY25). “This will
will never be replaced by AI and the question is really leverage our three key strategic pillars [innovation, sus-
about how to make the best use of technology. tainability and partnerships], supported by end-to-end

Business Today 28 May 2023

 A I
S T O R Y
The Machine
digital transformation of our steel manufactur-
ing operations,” says Acharya. The plan is to
deploy game-changing advanced technologies
such as AI/ML, robotics, standard and advanced
analytics, edge computing and cloud deploy-

C O V E R
Bankers
ments, plus the introduction of robotic process
automation (RPA)/bot-based interventions and
intelligent digital video analytics. “These tech-
nological interventions will enable JSW Steel to
create a network of digitally connected smart
steel factories in India.” The company’s transi- T H E R I S E O F M AC H I N E BA N K E RS I S
tion to digitally connected smart steel manufac- ALL SET TO TRANSFORM THE BANKING
turing includes three critical parts—creating a SECTOR AND HAS SIGNIFICANT
smart iron zone, creating a smart steel zone and I M P L I C AT I O N S F O R C U S T O M E R S A N D
developing a smart milling zone. SHAREHOLDERS ALIKE
The apprehension that AI will displace jobs
does not find too many takers. ABB’s Sharma BY ANAND ADHIKARI
predicts there will be a different nature of jobs
created during the period. “From a business
point of view, companies must be patient
since expectations are high and [the] approach
should be one of patient capital,” he explains.
Sharma equates it to a bamboo tree, which
hardly grows for five years and then sharply OU CALL AN HDFC BANK call centre.
takes off. JSW Steel’s Acharya says AI will alter Lady AI responds: Namaskar, welcome
the job dynamics, especially for those who are to HDFC Bank.
underprepared. “The advent of digital trans- You: Mera credit card balance batayein.
formation will require specific skill sets and (What is my credit card balance?)
MAGAZINE KING
manpower, and that can come from a judicious
mix of lateral hires with digital skills and up-
Lady AI: You want to know your credit card
outstanding balance, is that correct?
skilling the current employee base,” he points You: Haan. (Yes.)
out. At a group level, the entity has created a After confirming your identity, Lady AI announces
multi-disciplinary task force of high-potential your card balance to you. If the call drops midway and
employees comprising more than 50 data scien-
tists—to be expanded to 100—to steer digital
transformation across its businesses.
On the issue of reskilling, an interesting
view comes from Tata Steel’s Banerjee. “In
the past, a car had a rear-view mirror and now
there is a dashboard. To put that together, you
need a very able and skilled bunch of people,”
he says. To elaborate the point, Banerjee thinks
the co-pilot will always be of great assistance:
“But there needs to be a pilot and that is the
human. In this transition, the human can never
be outrun by technology.” In that sense, the
disruption will come in the form of reskilling.
His company took the route of investing in
cloud and then data. “Every technology is criti-
cal and must be put to good use. But it must still
deliver on an RoI basis and that is how it will be
judged.” In that sense, companies will look at AI
in the same manner. How they manage to do it
in a world where agility is the buzzword is what
will separate the men from the boys. The story
has barely started.

@krishnagopalan
 A I
you redial, you are reminded of the last interruption.
S T O R Y
You want to pay bills? Lady AI will instantly send you
a payment link via SMS.
Job done. No human intervention.
Customer service in banks has evolved from
traditional call centres to interactive voice
C O V E R
recordings (IVR) to AI-powered bots. And the latter
are getting smarter by the day. Lady AI (an imagined
name) is part of a new generation of AI bots with
natural language skills. They are trained on large
data sets of customer interactions, they work 24x7,
and they are learning fast with ML algorithms to
recognise you and your banking needs. “Today,
a small percentage of calls are exceptional and
complex, and get directed to human agents,” says
Anjani Rathor, Chief Digital Officer at HDFC Bank.
Clearly, the foundation of a strong AI system is
good data, and so the banking industry is working
on a war footing to consolidate data from various
sources into a single location. “Banks are now
creating enterprise data lakes for data consolidation,
processing and modelling on a real-time, on-the-
CUSTOMER SERVICE IN
BANKS HAS EVOLVED FROM
TRADITIONAL CALL CENTRES TO
INTERACTIVE VOICE RECORDINGS
MAGAZINE KING
TO AI-POWERED BOTS
move basis,” says Balaji V.V., CTO of ICICI Bank.
“This will not only enhance our AI tool’s capabilities
but also simplify data management.” Banks are
already using AI to personalise offers, underwrite
credit, manage risks, and for analytics.
While AI helps a bank make personalised
offers, pre-approved- and pre-sanctioned loans to
existing customers, work is on to offer the same
to new customers or even people with no banking
history. How does that happen? “There are currently
thousands of customer profile categories created
by banks for identifying customer segments having
similar requirements when making offers, which
group a particular set of customers into specific
profile buckets based on data available to the bank,”
says Balaji. The acceptance or rejection of an offer
provides additional data points to refine the system.
“It continuously learns on the go,” says Rathor of
HDFC Bank, adding that as AI tools evolve, they will
likely incorporate external sources of data as well.
AI is also used in decision-making for loans,
where algorithms combine a bank’s conventional
underwriting model with its intelligence based on
Business Today 28 May 2023
credit data to take decisions. “This technology helps
reduce the risk of default and enables banks to make
more informed lending,” says Sriram Srinivasan, Chief
Digital Officer of Ujjivan Small Finance Bank. At the
same time, a private banker points out that private
sector banks have reached around 50–60 per cent
automated decision-making. The rest are still based
on traditional methods. Flagging of risks is also on the
radar. Let’s say you usually swipe your credit card to buy
food or groceries. One night, if the system notices, say,
a late-night swipe to buy gold, something you haven’t
done before, you will immediately get a verification call.
AI is helping insurance companies, too. AI tools
use customer-uploaded images of a car, for example,
to give a first-level assessment of an insurance claim.
“We are working with many insurance companies,
and the adoption is decent,” says Geeta Gurnani, IBM
Technology CTO and Technical Sales Leader, IBM
India & South Asia. “The efficiency of damage claims
under this AI model has improved by 40-70 per cent in
terms of accuracy.”
Will it impact jobs? Gurnani says only certain
mundane tasks will shift to AI in terms of job
requirements. Adds Rathor of HDFC Bank: “Low-
skilled, repetitive work and very simple tasks will
move on and get done by systems, computers, and
technology. And people will evolve into bigger things.”
Banks are already hiring data engineers, data scientists,
UX designers, etc., which was not the case some years
ago. “Any technology is not going to replace people
just like that. But the workforce may not increase
proportionately,” says the tech head of a private bank.
AI tools also come with their own biases. They are
like black boxes, and no one knows how the machine
decides. “Consistency [in outcomes] is critical in
building trust and confidence in AI technology, as it
helps to ensure that the tool is reliable and accurate,”
says Balaji. Tomorrow, there will be a requirement
for an audit of AI models. “We have launched a few
products that are explainable by AI. This falls under
the entire area of AI governance, which means
whatever models you are creating can be audited and
investigated at any time for their robustness, fairness,
and explainability,” says Gurnani.
AI still has some way to go in banking. They can’t
enable transactions, for instance. Plus, a banking tool
equivalent to a ChatGPT, which learns from everything
available on the internet, would help banks know their
customers better. “The more data we have about you,
the more intimate we will be as a bank,” says Rathor.
@anandadhikari
 We do not
understand how these
systems work’
ST UA RT RU S S E L L , P RO F E S S O R O F C O M P U T E R
Q& A WITH
AAYUSH AILAWADI S C I E N C E AT U N I V E R S I T Y O F C A L I F O R N I A ,
TECHNOLOGY EDITOR B E R K E L E Y, O N W H Y G U A R D R A I L S A R E N E C E S S A R Y
FOR THE DEVELOPMENT OF AI

TUART RUSSELL, Professor of

Computer Science at University of
California, Berkeley, who has been
an AI researcher for 45 years, in
an interaction with BT, says that while artificial
intelligence can be hugely beneficial, it also has the
potential to disrupt the world in a bad way if guard
48 |
MAGAZINE KING
rails are not put in place. Edited excerpts:

fff
Let’s talk about the open letter to halt the devel-
opment of AI systems more powerful than GPT-4
and develop guardrails. What prompted you to
sign this letter?
We’re calling for a halt on the deployment of large
language models (LLMs) that are more powerful
than the ones that have already been released. And
the reason is simple: we do not understand how
these systems work.
So, what is an LLM? It’s a computer program
that predicts the next word, given a sequence of
preceding words. And with that system, you can
have a conversation. The way these systems are
built, there’s a large amount of training data. In
the case of GPT-4, we think [it is around] 20-30
trillion words of text—approximately the same
amount we have in all the books that the human
race has ever written.
And then we start from what you might think
of as a blank slate, an enormous circuit with about
a trillion parameters or more. And then by the
process of doing about a billion or trillion small
CHERNOBYL DESTROYED THE
random permutations to those parameters, the NUCLEAR INDUSTRY… WE DON’T
system is gradually improved, as is its ability
to predict the next word. The result of that is WANT TO HAVE [A CHERNOBYL-LIKE
something that when you converse with it, has the
appearance of an intelligent entity. INCIDENT FOR AI]

Business Today 28 May 2023

 A I
S T O R Y
fff
The letter calls for a six-month halt on developing
these tools. Do you think that’s enough since the
genie is already out of the bottle?
I agree that, to some extent, the systems that are out
C O V E R
there are already capable of causing problems. The
petition is asking that we not release systems that
are even more capable of causing problems. So, six
months is not enough. What we’re asking for is [to]
develop reasonable guidelines that a system has to
satisfy. If you can’t build an airplane that doesn’t fall
out of the sky, you don’t get to put passengers on it.
This is common sense. We’re simply asking that com-
mon sense be applied in the case of these extremely
powerful AI systems... I think AI’s potential to
benefit the world is unlimited. But if we have a Cher-
nobyl... Chernobyl destroyed the nuclear industry…
We do not want to have that [for AI].
fff
The concern for the everyday consumer is: will this
eventually replace me and take away jobs?
It’s quite likely that we’ll see a significant impact. I’ll
give a couple of examples. One is in the area of com-
puter programming. You might find it surprising that
advances in technology are going to make computer
programmers redundant. But the numbers I’ve seen
suggest that using these tools, you can write software,
MAGAZINE KING
5-10 times faster than unaided. And in many cases,
you simply say what you want the program to do. And
the software just writes it for you. And that means, to
me, it’s unlikely that the world needs five or 10 times
as much software. So that means that we’re going to
need somewhat fewer computer programmers.
If you think of a person who works in a company
as sort of a node in a network, [then] what comes into
that node? It’s language—emails, phone calls from
the boss, requests from customers. What goes out?
It’s language—documents, sales invoices and reports
for the boss. It’s all language. So, any one of those
jobs, in principle, could be replaced.
But we don’t trust those jobs to psychotic six-
year-olds who live in a fantasy world. So, unless
you’re a psychotic six-year-old who lives in a fantasy
world, I don’t think your whole job is immediately at
risk. We can’t trust these systems to tell the truth be-
cause they hallucinate… they just want to sound plau-
sible, and they have no idea what’s true and false. But
there are thousands of companies which are working
to fix those problems… so that they can be used in im-
portant applications. So, the next generation, I think,
will have a much bigger impact on employment.
fff
Can AI hallucinate and spread misinformation if
fed with malicious code or training data?
Absolutely. You can simply ask it to generate misin-
formation; you can say, ‘Write me a letter that will
Business Today 28 May 2023
persuade somebody that the earth is flat,’ and it will do
a pretty good job of that. Although they’ve tried to im-
pose some kind of constraints… people have found it’s
quite easy to ask the question in a different way. And
eventually you can get it to give you the answers you
want because that information is in the training set.
So I think that the level of unpredictability of
these systems is beyond anything we’ve ever seen
with AI software and this is only a year or two into
it. We need to get a handle on what’s going on. And I
think, honestly, we need to start pursuing different
avenues for designing AI systems.
fff
A lot of countries have started talking about
regulating AI. When we’re talking about tools like
ChatGPT, Google Bard and the like, do you think
regulation is the way forward? Is it even possible?
The European Union AI Act is expected to be passed
by the end of this year. And I’ve been working with
the drafters of the legislation and with the [Euro-
pean] parliament and the [European] Commission
for several years now trying to make sure that it
makes sense that it’s not going to be obsolete before
it’s even passed. And as far as I can tell, systems like
ChatGPT would probably not be legal to use in any
high-stakes application. The Act defines high-stakes
applications as systems that can have a significant
effect on people. And it asks that there be steps taken | 49
to show that the system behaves safely, in a predict-
able fashion, that it’s accurate, it’s fair, it’s not racially
biased, etc. I don’t think there’s any way to show that
these LLMs meet those criteria. Interestingly, on
OpenAI’s webpage for GPT-4, it recommends that
you probably should not use these systems in high-
stakes applications.
fff
Elon Musk, a fellow signatory to the open letter,
has been vocal about AI and the way the AI revolu-
tion is shaping up. Is Musk right in his assessment?
Basically, yes. The point Elon is making is that until
we figure out how to control systems that are more
powerful than ourselves, we face a very serious risk
that we will develop AI systems that are very power-
ful, and we won’t know how to control them. And it’s
not as if this kind of thing has never happened. When
we look at what’s happening with climate change, for
example, we developed a system called the “Fossil
Fuel Corporation”, which happens to have some
human components. But basically, it’s an algorithm
that’s maximising its objective—quarterly profits for
shareholders. And that algorithm is destroying the
world. And we can’t control it. So that’s a miniature
version of the kinds of problems that we’re going to
face with AI systems in the future.
@aayush_a6
MAGAZINE KING
MAGAZINE KING
MAGAZINE KING
MAGAZINE KING
MAGAZINE KING
 START-UPS RAPIDO
IF YOU’RE ONE of the millions of IPL fans relishing the
high-octane excitement of the cricket tournament on
JioCinema, chances are you’ve seen Rapido’s ‘Bike Wali
Taxi Sabse Saxi (bike-taxis are the best)’ advertising
blitz. One of the ads features a young woman ditching
a dreadfully crowded bus in favour of the nimble two-
wheeler taxi service that arrives in moments. The un-
derlying message is clear—bike-taxis are affordable,
convenient and safe.
“But which city are they advertising it for?” asks a se-
nior executive at the bike-taxi vertical of one of the lead-
MAGAZINE KING
56 | ing cab aggregators, who wishes to remain anonymous.
“In Delhi and Maharashtra, they are banned. In Benga-
luru and many other cities, they are a risk because auto
unions wouldn’t let their riders operate.”
The ad campaign has been launched amidst a chal-
lenging time for bike-taxi service providers, even as
they confront bans in important markets like Delhi and
Maharashtra, and encounter significant operational
challenges in several other states, such as Karnataka
and Tamil Nadu. “But they don’t care,” says the execu-
tive. “They will continue to operate until cops show up at
TIGHT
CORNERS
IN ` CRORE
WHILE RAPIDO’S REVENUES
HAVE MORE THAN TRIPLED IN THE
PAST THREE YEARS, ITS EXPENSES
AND LOSSES HAVE NEARLY
DOUBLED IN THE SAME PERIOD
REVENUES EXPENSES LOSSES
RAPIDO’S FINANCIAL RESULTS FOR
THE PAST THREE YEARS; SOURCE: ROC
Business Today 28 May 2023
their doors. Then they may take a pause, but will resume
in no time. That’s been their strategy.”
Rapido and other ride-hailing platforms have been
facing severe legal troubles for over a year now. For in-
stance, Karnataka had asked the platforms to stop three-
wheeler services, accusing them of overcharging and
harassing customers. Separately, Rapido—that also has
autorickshaws on its platform—was refused a licence to
operate in Maharashtra. Even Delhi banned bike-taxis
for violating the Motor Vehicles Act, while Madurai city
police warned Rapido riders of strict action.
Clearly, the battle isn’t just about Rapido. The whole
bike-taxi industry—where regulations vary by city and
state—is impacted. While some states such as Goa and
Haryana have legalised bike-taxis, in other regions, they
largely operate in a legal grey area. Major players such as
Rapido, Uber Moto and Ola Bike have struggled to navi-
gate this uncertain terrain, with frequent run-ins with
autorickshaw unions and government agencies.
“They [Rapido] have gained significant market share
over the other two [Ola and Uber] by running their op-
erations when others shut down to comply with gov-
ernment regulations,” says a former senior executive at
Uber, wishing to remain anonymous.
It’s no secret that start-ups often leverage regulatory
ambiguity to disrupt traditional industries. First, they
establish themselves as market disruptors by offering
convenience and better pricing; then they lobby for regu-
latory changes to legitimise their operations. Rapido has
been driving such a disruption for bike-taxis in India.
Today, their story—similar to how Uber’s cab-hailing
business navigated the initial legal challenges it faced in
India for not complying with local laws, but whose con-
venient services sparked a public debate on the need for
regulatory changes that forced the government’s hand
700
597
600
439
500
400
301
254
244
300
166.4
144.8
200
75.6
42.6
100
0
FY20 FY21 FY22
to establish guidelines for the operation
of ride-hailing companies—is more or
less developing along the same lines.
“Travel and transport is a part of the
Concurrent List. So, the rules for it change
in every state and union territory. But that
doesn’t mean we have been involved in
illegal activity. After all, we are generat-
ing lakhs of jobs by virtue of them [riders,
called Captains] already owning bikes,”
says Aravind Sanka, Founder of Rapido.
As per unverified estimates, Rapido
currently enjoys a 65 per cent market
share in India’s fledgeling bike-taxi in-
dustry, and it didn’t reach there just by
dodging the many regulatory bullets.
Since its launch in 2015, Rapido has
had a steady but frugal journey. The
company was so undercapitalised that it
chose not to expand beyond Bengaluru
in the first three years of its existence.
During that time, it created awareness,
built its product, improved customer
experience and established a category.
MAGAZINE KING
Its first large round—of `52 crore in Se-
25
ries A funding—came in its fourth year.
This frugal mindset has helped it survive
even as dozens of peers have wound up
between 2015 and 2018.
“Bike-taxi is the only option that gives
all the three features that people look for
in public transport—affordability, con-
venience and safety,” says Kunal Khattar,
Founding Partner at AdvantEdge Found-
ers, which is an early investor in Rapido.
“We were convinced about the business
from day one. We knew it is going to be
a multibillion-dollar opportunity in the
long term. We just wanted to make sure
we back the right team.”
Khattar’s investment mantra might
be on point with his focus on affordabil-
ity and convenience, but safety remains
a deep concern. Plus, there’s the cultural
component, especially for women com-
muters. Firstly, two-wheelers are seen
as less safe than their three- and four-
wheeler counterparts. Then comes the
hesitation among women in riding pil-
lion with a stranger due to its unfamiliar-
ity and safety concerns. Adding to this
Business Today 28 May 2023
RAPID challenge is the glaring lack of female
ROUTE
riders. For instance, on Rapido, there are
currently only around 200-300 female
Captains out of over 1.1 million regis-
tered Captains. The company plans to in-
crease their numbers to 1,000 within the
1 MILLION next six months.
“I don’t prefer bike-taxis because
BIKE RIDES it’s weird sitting behind a random dude.
A DAY
The proximity is too close and it seems
unsafe,” says Sneha Sharma, a frequent
60-65 Rapido autorickshaw user. “I’d rather
take an autorickshaw and sit alone be-
PER CENT
hind, where I am at a safe distance.”
Rapido’s However, Rapido’s founders—citing
estimated the 22 per cent women commuters on
market share the platform—insist that insurance and
a vigilant tech mechanism have made
bike-taxis equally safe for women.
$310 Despite these challenges, experts say
MILLION Rapido’s strength is in its nimble evolu-
VC money raised tion and single-product focus.
by Rapido so far Khattar, who first backed Rapido in its
second seed round in 2016, says the com-
pany’s single-product focus has helped | 57
them beat the odds. “There were several
MILLION+
discussions at the board including get-
ting into food delivery or becoming a su-
App downloads per app; all of them have been shot down.
Of the 120 cities, they don’t have a physi-
cal presence in about 100. They manage
120 and monitor operations remotely from
CITIES Bengaluru. That is how they built a very
It operates in cost- and capital-efficient business mod-
el,” he says. “That is what has allowed
them to become a clear market leader.”
50
O
PER CENT
N THE OTHER END, Ola and
The demand
Uber—that have raised and
coming from Tier
spent billions of VC dollars to
II and III cities
build their respective businesses
around big-ticket products—offer an
average ride price of about `300. In con-
22 trast, Rapido is tailor-made for the bike-
PER CENT
taxi segment, which is a small-ticket
Women and 78 business. In its eight years, the company
per cent men use has raised a fraction of its competitors’
the company’s funding, with its largest round of $180
services million coming in April 2022.
“They [Ola, Uber] are the Mercedes of
START-UPS RAPIDO
“The rules change
in every state... But
that doesn’t mean, we
have been involved in
illegal activity. We are
generating lakhs of jobs
by virtue of Captains
already owning a bike”
ARAVIND SANKA
CO-FOUNDER, RAPIDO
“Bike taxis... [are] afford-
able, convenient and
safe. We were convinced
about the business from
day one. We knew it is
going to be a multibillion-
dollar opportunity in the
long term”
KUNAL KHATTAR
FOUNDING PARTNER,
MAGAZINE KING
ADVANTEDGE FOUNDERS
“Once you create a circuit
of bikers, you can create
a subscription model. I
feel these services will
come down to this model,
where drivers will pay a
monthly subscription to
use the app”
ASHUTOSH JOHRI
CO-FOUNDER, BAXI
“The [bike-taxi] industry
was quite small till CY19,
and de-grew in 2020, but
since last year, growth
has been phenomenal. If
you compare CY20 with
CY22, bike-taxi rides have
grown 2.5 to 3 times”
UJJWAL CHAUDHRY
PARTNER, REDSEER MANAGEMENT
CONSULTING
Business Today 28 May 2023
shared mobility. For them to deliver a `50-60-prod-
uct, profitably, is impossible. When you are over-cap-
italised, you throw money at every problem, which is
what is happening with subsidised rides and heavy
customer-acquisition costs. Therefore, it is very dif-
ficult for them to become capital conscious,” says a
VC investor who has made bets on the mobility space,
and who wishes to remain anonymous.
Meanwhile, Rapido’s dominance in the bike-taxi
space is undeniable, with it being the backbone of its
entire business. This is precisely why they can’t af-
ford to halt operations. However, as the demand for
convenient and affordable transportation continues
to rise, the bike-taxi market is ripe for the picking.
With three players—Rapido, Ola and Uber—in the
race, it’s clear that everyone understands the im-
mense potential of this evolving segment.
Ashutosh Johri, Co-founder of now-defunct bike-
taxi service provider Baxi, says the winner will be the
one that creates the biggest supply network. And he
believes that the commission-based model may not
be the most suitable and sustainable one for bike-tax-
is. “If you try to take a cut on every ride, it is not a valid
model. The reason why they [aggregators] are surviv-
ing is because they are giving incentives. That’s the
reason they are not making money as well,” he says.
“Once you create a mega circuit of bikers, you can cre-
ate a subscription model for them. I feel these servic-
es will ultimately come down to this model, where the
driver will pay a monthly subscription to use the app.”
While this type of model has not been experi-
mented with, it could potentially offer a better deal
to the riders and incentivise more riders to sign up
on the platforms. Commuters would also stand to
gain as in the cities, where most trips are short and
solo, two-wheelers offer a fast and affordable solu-
tion—especially for the younger crowd—who pri-
oritise cost-effective travel options. Also, they solve
the first- and last-mile challenge, while maintaining
a steady stream of commuters for the riders.
But not too long ago, the pandemic had hit the
urban mobility industry hard, leading to a sharp de-
cline in the number of cabs on the roads. And now,
cabs have become increasingly unaffordable and un-
reliable. Take the example of Bengaluru where, once
thriving, the number of taxis on the city’s roads has
dwindled to 35,000-40,000 vehicles, from 100,000-
125,000 in 2018, says Tanveer Pasha, President of
Ola-Uber Cab Drivers’ Association. As a result, ser-
vice levels have sunk to an all-time low.
And while autorickshaws serve as the most af-
fordable transportation option, they stand to lose the The strategic partnership with Swiggy has really helped
most, should bike-taxis get regulatory approval. Per them. Rapido is the only one with tight integration with
Pasha, the advent of bike-taxis has caused a decline of food and e-commerce players,” says a former bike-taxi
around 40 per cent in the incomes of autorickshaw driv- founder who wishes to remain anonymous. “It’s a superb
ers, but they are now starting to recover some of their business. There is no fixed cost, no customer acquisition
lost revenues due to a reduction in the number of cabs. spends. It is their biggest competitor moat right now.”
Meanwhile, commuters across cities are looking for af- Rapido is looking to enhance the efficiency of its fleet.
fordable and efficient trans- Per sources that BT spoke
portation options that cover to, the company is con-
the first- and last-mile com-
mute. With most docked RAPIDO, WHICH RAISED sidering transitioning
its fleet from traditional
and rental bike start-ups SMALL ANGEL ROUNDS internal combustion en-
like Bounce, Vogo and On-
track having pivoted or shut
IN ITS FIRST THREE gine (ICE) vehicles to
electric two-wheelers.
shop, the bike-taxi market is YEARS, NOW BOASTS This would align with
wide open for the persistent
player to capture. And while
OF INVESTORS SUCH AS new regulations in Delhi,
where the government is
ride-sharing platforms saw SWIGGY, WESTBRIDGE, reportedly considering
a slump during the Covid-19 TVS MOTOR, SHELL allowing only electric
pandemic, as lockdowns two-wheelers for bike-
ended and cabs didn’t return VENTURES, YAMAHA AND taxis. Shifting to electric
on roads, bike-taxis have NEXUS VENTURES vehicles would also result
managed to capitalise on it. in cost savings for every-
“The [bike-taxi] indus- one involved.
MAGAZINE KING
try has really seen acceptance over the years. It was quite
small till CY19, and de-grew in 2020, but since last year,
“Rapido has about half a million registered Captains | 59
and knows which vehicle they use and how old they are.
growth has been phenomenal. If you compare CY20 with Assuming that a person keeps his bike for five years, 20
CY22, bike-taxi rides have grown 2.5 to 3x,” says Ujjwal per cent of the Captains on the platform will buy a new
Chaudhry, Partner at RedSeer Management Consulting. bike every year. That’s 100,000 bikes. Today they all
buy ICE vehicles. Rapido is trying to influence that deci-

I
N ALL THIS, Rapido’s vision is crystal clear: don’t
let the empty back seat of a bike go to waste, when
it can be a source of income. “It’s economical and
ecological,” says Sanka. And this focus on efficiency
doesn’t stop at ferrying people around the city. The ride-
sharing platform has expanded its services to include
food and courier deliveries, an area where competitors
Uber and Ola have yet to make any significant inroads.
It has partnered with Swiggy—that is an investor in the
company—and Amazon and JioMart, to allow its fleet
of Captains to switch gears and become delivery agents,
whenever the need arises. From ferrying office-goers
and college students in the morning and evening, to
fulfilling lunch and dinner-time food deliveries, to han-
dling e-commerce shipments in the slower afternoon
hours, Captains on the platform have the option to stay
busy all day long.
“A majority of its [Rapido’s] Captains work part-time.
Without food delivery and bike-taxi being complemen-
tary, they won’t make enough money as a full-time rider.
sion,” says an industry insider aware of the plans.
Rapido will act as an intermediary that brings togeth-
er EV makers, financiers and insurance providers to help
its fleet transition to EVs. Given the magnitude of the
requirement, the company is seeing significant interest
from players willing to offer the platform a commission.
Despite the regulatory vacuum, Rapido has tied up
with TVS for supply of electric two- and three-wheelers.
Apart from this, it has also tied up with RACEnergy—a
battery swapping network provider—to deploy e-autos
supported by RACEnergy’s network, in Hyderabad.
Amidst the evolving landscape of the bike-taxi in-
dustry, the business models of today will see many itera-
tions before the platforms find firm ground. However,
one undeniable truth remains—the sheer convenience
and economics of this model is fuelling its demand. And
in the midst of it all, Rapido has not only emerged as the
winner, but also the ultimate game-changer rewriting
the rules of engagement.
@binu_t_paul, @r_dhanrajani

Business Today 28 May 2023

 MISSING
CAPTAINS

MAGAZINE KING

WITH INDIAN
AIRLINES PLACING
BULK AIRCRAFT
ORDERS DUE TO
INDIA’S EXPLODING
AIR TRAVEL DEMAND,
A PILOT SHORTAGE,
ESPECIALLY OF
CAPTAINS, IS BREWING
IN THE INDIAN
AVIATION SECTOR

BY VIDYA S.
 1 Indian airlines have
ordered 1,115 planes;
they’ll arrive over the
next decade. Air India:
470 wide- and narrow-
body aircraft, IndiGo:
500, Akasa Air: 72
Boeing narrow-body
aircraft, of which 16
have been delivered,
Go First: 72, Vistara: 17

2
Some 150-175 aircraft
will arrive in 2024 and
require an additional
1,800-2,000 pilots
to fly them, per
CAPA estimates. One
commercial aircraft
requires at least 14-16
pilots (7-8 pilots and

MAGAZINE KING co-pilots each) for

smooth rostering

3
Only an average of
600-700 trainee pilots
have been earning
their Commercial Pilot
Licences through
DGCA every year, over
the past few years

4 That works out to a

more than 100 per
cent shortage of
commercial pilots,
say experts. And as
pilot training takes a
good two years, the
shortage is a looming
crisis, they add
 AVIATION PILOT SHORTAGE
WELCOME ABOARD FLIGHT Indian
Aviation. We are currently cruis-
ing at a high airspeed as a thou-
sand more aircraft are set to take
to the Indian skies after the Co-
vid-19 lull. The weather looks good
with the tailwind on our side as air
travel demand is exploding among
Indian passengers. But please be
warned of a delay in reaching our
destination as a great turbulence
awaits: There may not be enough
experienced pilots in the country
to fly the thousand new planes.
62 | Take a look at the numbers.
MAGAZINE KING
Indian airlines have placed orders
for at least 1,115 planes to be deliv-
ered over the next decade, with a
bulk of them expected to come in
after 2025. A narrow-body com-
mercial plane that flies on domes-
tic routes requires 14-16 pilots to
ensure smooth operations, while
a wide-body aircraft needs 24-26
pilots, per industry standards. As
India has only a small proportion
of wide-body planes, a conserva-
tive estimate of 15-16 pilots per
plane means 17,000-18,000 pilots
are required over the next decade.
That is, 1,700-1,800 per year on
Pilot shortage is a lose-lose situation for
passengers‚ airlines and the country.
Ramping up indigenous training infras-
tructure is the only long-term solution
an average. But the Director-
ate General of Civil Aviation
(DGCA) registers only 600-750
commercial pilot licence (CPL)
holders every year. “We will be off
by 100 per cent within a few years.
Even a 5-10 per cent shortage is
considered a manpower challenge
in any industry. So, if there’s a 100
per cent shortage, it could mean
you are dead and buried,” says
Hemanth D.P., CEO of Asia Pacific
Flight Training Academy. Inciden-
tally, India currently has 9,000
pilots who fly its 700 aircraft.
Aviation advisory and research
firm CAPA India estimates that
150-175 of the new planes will
arrive in 2024, and require 1,800-
2,000 more pilots to fly them.
“We need to triple our capacity,”
says Udit Agarwal, Team Lead,
CAPA India. C.S. Randhawa,
Secretary of the Federation of
Indian Pilots (FIP), points out
that the shortage is particularly of
experienced captains with 3,000
flying hours (which is four to five
years of flying experience) under
their belts. As he sees the 1,100
ordered planes arriving within
five years, he estimates India
needs 1,400 captains (pilots) and
1,400 first officers (co-pilots)
every year. “You may find first of-
ficers in the market because there
are more than 2,000 unemployed
CPL holders. But I don’t foresee
the industry producing more than
130 captains cumulatively. The
shortfall is over 1,100 captains.
Business Today 28 May 2023
Where will they come from?”
Even though Go First has filed
for bankruptcy, experts point
out that the aircraft ordered by it
can easily be picked up by other
airlines given the rising air travel
demand among Indians.
Former DGCA chief Arun
Kumar pointed out in February
that one in three trained pilots
is without a job, which works out
to more than 4,000 CPL holders.
But, as experts say, many of them
are not just unemployed but
unemployable. India also lacks
sufficient qualified trainers and
quality infrastructure. Some
schools allow over-logging of
flying hours to fulfil the manda-
tory requirement of 200 hours
and students lack solo flying
experience, says Hemanth. Gov-
ernment data shows there were
eight accidents in 2022 involving
aircraft of DGCA-approved flying
training organisations (FTOs).
Last year, DGCA suspended the
licences of 92 pilots for violating
safety norms, which was more
than double the 2021 figure. “If
a pilot is just about able to make
it, training schools give them an
okay,” says Amit Singh, Founder
of Safety Matters Foundation,
an NGO. Flying school trainers
are usually those who couldn’t
become commercial pilots. They
have little flying experience and
the trainees, in turn, do not have a
strong foundation, he adds.
A LONG-DRAWN PROCESS
To be sure, a pilot shortage is a
medium-term problem. The cracks
will become apparent once fleet in-
duction starts, say experts. But the
catch is that pilot training takes up
to two years from start to finish.
Plus, there is a six- to seven-month
lead time between hiring and fly-
ing as the pilots have to go through
airline-specific training. “The
structural capacity is not available
 LICENCE TO FLY
s
ANNUALLY OVER THE YEARS. EXPERTS ATTRIBUTE THE
SPIKE IN 2022 TO CLEARING OF THE COVID-19 BACKLOG
1,200
1,081
NO. OF CPLS ISSUED

1,000
896 862 represents 900 narrow-body
744 pilots of Air India.
800
640 The airline, now a part of the
537 552 578 Tata group, has issued an adver-
600
tisement to hire more than 1,000
394
400 pilots. Last year, it sent a letter
to 55 retired pilots with plans
200 to rehire them. “To get direct
commanders (captains) suddenly
0 is very tough with the kind of

2022*
2020
2014

2016

2019
2018
2015

2021
2017

salaries it is offering,” the ICPA

*DATA TILL DECEMBER 6; CPL: COMMERCIAL PILOT LICENCE member adds. Air India pilots and
SOURCE DGCA, LOK SABHA RESPONSE cabin crew have complained about
the new salary structure that
guarantees fixed pay for 40 hours.

Growing Traffic Turbulence Expected “But IndiGo pays for a blanket

70 hours even if you go on leave.

1
India, the third largest Passenger
That’s why a lot of pilots are not
aviation market globally, has safety and flying willing to join Air India,” the mem-
around 9,000 pilots and 700 experience can ber adds. Air India has also been
aircraft currently. It’s a sharp be compromised leasing planes before their ordered
contrast to China’s 7,000 because of planes arrive because of increased
aircraft fatigued pilots demand. Others such as Vistara,

2
Akasa Air and IndiGo have also
MAGAZINE KING
Boeing expects India to
require more than 2,200
aircraft over the next two
Fewer pilots
can lead to
a skewed
begun receiving new planes.
BT’s requests for comments
| 63

decades demand-supply to Air India, IndiGo, SpiceJet and

of planes in the Akasa Air went unanswered till the

3
Domestic Indian airlines air and in turn time of going to press.
flew 123 million passengers send airfares
in 2022, up 47 per cent, soaring
from 83 million in 2021, but TOUGH TIMES AHEAD
a little below the 144 million Grounded planes
in 2019. But a few airlines bleed revenue
The ripples have already reached
have surpassed their pre- for airlines and the flight training industry.
Covid-19 numbers airports “FTOs have lost up to 40-50 per
cent of experienced instructors
to airlines and this trend will
only increase as more aircraft are
delivered,” says Hemanth, adding
to provide [training to] these pilots,” says CAPA’s Agarwal. There are only 35 that a shortage of instructors is
DGCA-approved FTOs and seven approved simulators in India. That is why a double whammy. Ultimately,
an estimated 30-40 per cent of aspirants go abroad for pilot training, espe- airlines need experienced pilots.
cially to Europe, New Zealand and Australia. That’s not only a huge drain on So, there will be a large influx of
the Indian exchequer when the country already suffers from a forex crunch, foreign pilots through Foreign
but the high costs of training also mean that many of them prefer to stay back. Aircrew Temporary Authorization
The current pilot-aircraft balance is also a result of airlines sucking up (FATA) which is a temporary nod
pilots who were laid off and the pilots produced during the Covid-19 years. by DGCA to hire expat pilots, says
“Two years down the line, you’ll also have a problem of co-pilots because Randhawa. “If an Indian captain
the backlog and unemployment will also get used up,” says FIP’s Randhawa. earns `8 lakh a month, foreign
For instance, Air India is already facing a crunch. “The Boeing 777 and captains get `12 lakh. That’s the
[Airbus] A320 fleets have a pilot shortage because we have started getting disparity where you demoralise
new aircraft. Other aircraft that were in maintenance have also come back. your own people by giving more
But the training is not as fast as aircraft arrival,” says a member of the money to expats.” Besides, many
Indian Commercial Pilots Association (ICPA), requesting anonymity. ICPA experienced pilots in India are

Business Today 28 May 2023

 AVIATION PILOT SHORTAGE
looking to join international car-
riers, especially Middle-eastern
ones. “Once airlines like Qatar Air-
ways and Emirates start getting
their new aircraft, the pilots from
here would like to go there because
the pay and work-life balance are
much better there,” says a First
Officer with IndiGo who has been
flying for four and a half years.
A bigger concern is that the
situation, as it stands today, is only
to cater to the demand of planes
on order. But India, the fastest
growing aviation market and third
largest market globally, is woefully
underserved with 700 aircraft.
China has 7,000 aircraft. “Planes
are going full and ticket rates are
touching the sky, which is a good
sign for the industry and clearly
means more capacity is required,”
says Hemanth. “There are 200
million domestic and internation-
MAGAZINE KING
64 | al passengers in India currently. In
2043, we may reach 1.3-1.6 billion
passengers,” says CAPA’s Agarwal.
Union Minister for Civil Avia-
tion Jyotiraditya Scindia said at the
BT MindRush event in April that
India has 94 per cent penetration of
air travel left to achieve. “Out of the
1.38 billion people in our country,
144 million travel by air. Of those,
many are repeat travellers. So, the
penetration rate in India is hardly
3-4 per cent,” he had said. Airlines
are also cognisant of the untapped
opportunity. Akasa Air CEO Vinay
Dube has said India’s youngest
airline plans to place a “significant
triple-digit order” in 2023.
A pilot shortage could have a
multi-pronged impact on the en-
tire ecosystem, with the foremost
being overworked and fatigued
pilots putting passenger lives at
risk. Under DGCA’s Flight Duty
Time Limitations (FDTL), pilots
are allowed to log in a maximum
8 hours of flying a day, 35 hours a
week, 125 hours a month and 1,000
hours a year. But pilots allege that
the guidelines have been created
“I don’t foresee
the industry
producing more
than 130 captains
cumulatively [in
five years]. The
shortfall is over
1,100 captains.
Where will they
come from?”
C.S. Randhawa
SECRETARY, FEDERATION
OF INDIAN PILOTS
without adequate focus on Indian
conditions. “Airlines use the FDTL
to its outer limit without any
thought. It has a cascading effect
of fatigued pilots,” says the ICPA
member, adding that the process
to report fatigue at some airlines is
so intimidating that pilots would
much rather drag themselves to
fly. A recent survey of 542 pilots
by Safety Matters Foundation
showed that 66 per cent of them
admitted to falling asleep without
planning/consent of the other
crew or experienced micro sleep.
DGCA did not respond to BT’s
queries on the pilot shortage in
the country.
Fewer pilots can also lead to a
skewed demand-supply of planes
in the air and in turn send airfares
soaring. “Now that fare caps have
been removed, we could see fare
spikes in the medium term due to
a capacity reduction,” says CAPA’s
Business Today 28 May 2023
“A 5-10 per cent
shortage is con-
sidered a man-
power challenge
in any industry.
So, if there’s a 100
per cent shortage,
it could mean
you are dead and
buried”
Hemanth D.P.
CEO, ASIA PACIFIC FLIGHT
TRAINING ACADEMY
Agarwal. Grounded planes also
bleed revenue for airlines and air-
ports. An airline could lose out on
`100 crore of potential revenues a
year by grounding one 186+-capac-
ity jet for two to three main sector
flights a day, estimates Hemanth,
a former chief commercial officer
at GMR Hyderabad International
Airport. “Airports, ideally, do not
want parked planes. If one plane
occupies a parking slot during
peak time for three hours, I lose
that many more customers.”
Overall, experts say, pilot
shortage is a lose-lose-lose situa-
tion for passengers, airlines and
the country. Ramping up indig-
enous training infrastructure is
the only long-term solution.
Until then, it may be hard to sit
back, relax and enjoy the rest of
the flight.
@SaysVidya
 INTERVIEW UDAYAN MUKHERJEE

MAGAZINE KING | 65

‘If you don’t invest in

R&D, you won’t have
long-term growth’
Sridhar Vembu, CEO and Co-founder of Zoho Corp., explains why the
company will stay private and why he thinks valuations are not important
 INTERVIEW UDAYAN MUKHERJEE
ridhar Vembu, the CEO
and Co-founder of SaaS
player Zoho Corporation,
made the unusual trek
from Silicon Valley to
a village in the Tenkasi
district of Tamil Nadu
much before working
from home became a
thing. That’s not the only
thing that sets his digital company apart
from its peers. Zoho, a globally successful
player, has never raised mind-boggling
sums of money—in fact it has never raised
funding. Vembu, who is the ultimate
bootstrapped billionaire, has no interest
in valuations, he tells Business Today’s
Global Business Editor Udayan Mukherjee
in a freewheeling interview. The Zoho
CEO explains why the company will stay
private, why it is important to nurture
talent and why it is difficult to define
MAGAZINE KING
66 | moonlighting. Edited excerpts:
Q: You’ve always stayed away from venture
capital funding and private equity funding,
much before the difficult times arrived.
What made you stay away?
A: From the early days, I wanted to avoid venture capital
[funding] because I wanted to build a company for the
long haul, with a focus on our freedom to be ourselves.
I felt that if we took venture capital [funds], we would
have to provide an exit eventually. This could be an
acquisition, which would mean we would lose our inde-
pendence; or go public, in which case, we would, again,
lose our independence. I felt that being private would
give us the freedom to invest for the very long term. A
lot of the things we do are focussed on the long term…
which is very difficult to do when you have venture
capital or public markets breathing down your neck—
because quarter to quarter profitability becomes very
important. That’s why we decided to stay private.
Q: I take your point. But did you foresee that
reliance on external capital might warp the
business model of your company in a way that
you will not be able to focus on profitability on
an annual basis to drive the company forward,
which is what a lot of digital companies seem to
be trapped in today?
Business Today 28 May 2023
A: Yeah, it was clear. In 1999-2000, there was a dot-
com bubble. A lot of companies raised huge rounds of
money and then fell by the wayside in 2001-02; and
then there was a big drought in VC funding for a while.
That was a good lesson. And it also emphasised that if
you raise money, you’re forced to spend it, and you’ll
lose profitability. And then when the [funding] winter
arrives, money is no longer available, and you’re losing
money. So, we decided that we will do it profitably.
That necessarily meant growth would be slower, but
steadier. And we have grown steadily over the past few
years; we have crossed $1 billion in revenue, and we
are now accelerating. The reason for the acceleration
is now we have the depth and breadth of the product
portfolio, which we could not have built up if we had
raised money—because that long-term investment
was not possible. So, in a sense, venture capital
forces you to grow faster by investing more heavily in
sales and marketing, as opposed to R&D. And sales
and marketing will give you an immediate boost in
growth. But if you don’t invest enough in R&D, you
won’t have long-term growth. So that’s the trade-off
we were able to make: long-term growth versus im-
mediate growth.
Q: How profitable is Zoho? Being a private
company, not much information is available
in the public domain. Could you give us a
sense of what your profitability metrics are?
A: We pay taxes [to the Indian government every
year]. Our taxes would give you an idea of the profit-
ability. Last year [FY22], we paid `600 crore-plus in
taxes. We’ve been consistently profitable for several
years now—actually decades—and we are also steadi-
ly growing. But we are reinvesting that profit into
R&D, into our expansion, data centres, geographic
expansion—all of that.
“I truly don’t care about
valuations. What matters is
do we have enough resources
to invest in the areas we are
investing in? Are we growing? Do
our products come to fruition?
Do we keep our employees...
[and] customers happy? I
consider [it] a luxury we can
afford because we are private”
 Q: Is there a desire to do an IPO and share
Zoho’s success with public shareholders at
some stage?
A: No, I prefer to stay private because even public com-
panies are subject to quarter to quarter pressure. For
example, three to four years ago, [our] profit declined
50 per cent because we had invested more heavily into
R&D and in expanding [our] data centres. And some-
body pointed this out from the government filings. But
I didn’t pay attention to it as we are investing in years of
growth. At a public company, I will have to defend why
we are doing this at the expense of profitability.

Q: But you don’t see the need for augmenting

or you don’t consider the valuation of your
company that important then?
A: I truly don’t care about valuations. What matters
is do we have enough resources to invest in the areas
we are investing in? Are we growing steadily? Do our
products come to fruition? Do we keep our employees
happy? Do we keep our customers happy? Those are the
concerns I have. And I consider that [not caring about
valuation is] a luxury we can afford because we are
private. And essentially I get to ignore our shareholders,
MAGAZINE KING
which is something that most CEOs would love to do,
but they cannot do. [But] if I go public, I cannot do this.
| 67

And valuation is something that I’ve never paid atten-

tion to. If I said this as a venture capital company or a
public company, I would not have my job. And that’s why
we stay private.

Q: Do you think that [obsessing over valu-

ations] is one of the core problems that is
afflicting the digital universe in India today?
That they thought of valuations before grow-
ing the business. And that is why all these
problems are coming up with these unicorns?
A: Absolutely. Take the word unicorn itself, that’s con-
sidered a billion dollars in valuation. But valuations
could come and go easily. As we saw crypto trading
company FTX, a company worth $32 billion, vanish
into zero. So I don’t consider these valuations mean-
ingful. When you make valuations the real metric
during a stock market bubble—as it happened in the
last few years—you get extremely hyper-inflated valu-
ations. And that became the principal objective for the
companies. This severely distorts your decision-mak-
ing [since] you’re not running the company to benefit
customers or even employees. You can argue that
employees have stock options and they benefit from
the valuation. Well, they don’t. They [stock options]
have lock-in periods. So employees cannot sell these
shares. Even companies that went public with a six-
month lock-in period, didn’t get enough opportunity
 INTERVIEW UDAYAN MUKHERJEE

to sell [their shares] at those inflated ON THE INDIAN optical networking sector. That’s what
prices. So in a sense, this valuation MARKET we were serving in 1999-2000—our
obsession cost companies dearly in primary business was selling software
terms of market execution, in terms of Right now, India is No. to optical networking companies. There
3 in terms of market
R&D execution, etc. And this is the cost share [for Zoho]… were 400-500 such companies in the US
of bubbles. Bubbles always cause long- and also the fastest- then. Two years later, around 95 per cent
term economic damage. We saw this in growing market by of the companies had shut down. Today,
the start-up sector, [where] resources far. I see it becoming only one or two of them survive. And
No. 2 in the next three
got sucked into companies whose only what is interesting is the optical revolu-
to five years, and—
focus was to inflate their paper valua- based on current tion really happened. I’m in a remote
tions—FTX is a classic example of that. trends—could even village and I have dual-fibre optic links
This, to a lesser extent, is reflected be the No. 1 market coming to my home. In 2000, this was
across the landscape. over the next 10 years unimaginable. Similarly, the wireless
revolution happened. Everybody has a
Q: You speak about employees ON HYPER- smartphone in their pocket, which was
and the cost to employees INFLATED unimaginable in 2000. So the premise of
VALUATIONS
Sridhar, and that is very the technology revolution was correct.
apparent now with thousands When you make Yet the companies that were betting on
of employees being laid off valuations the real it, the venture capital that went into all
practically every week or month metric, you get this, eventually went bust. Again, it is
from the digital universe. Do you extremely hyper- Warren Buffett’s elegy: the sector flour-
inflated valuations.
see this becoming even more And that becomes the
ished long-term, but the companies that
painful because of the flow or principal objective overextended themselves—and a vast
flaws in the business model you for companies. This majority of companies did that—did
68 | alluded to?
MAGAZINE KING
A: Unfortunately, it is the cost of the
severely distorts
your decision making
[since] you’re not
not. The overall premise could be cor-
rect [and] the digital transformation
bubble itself. There were inflated valu- running the company would come true. But that doesn’t mean
ations that attracted more money into to benefit customers all the investment dollars that bet on the
the sector; companies went on hiring or even employees. premise would get a return.
sprees and massively over-hired. When [This] valuation
the bubble burst, people lost their jobs. obsession costs Q: How important is the Indian
companies dearly
It is sad to watch the spectacle, but it in terms of market market for Zoho Corp?
had happened twice before—in 2001, execution, R&D A: Right now, India is No. 3 in terms of
and again in 2008-09. And both times, execution, etc. market share. In 10 years, it has gone
the exact same thing happened—too from barely being in the Top 10 to No. 3.
much money was raised, there were ON TALENT That tells you how fast we have grown
inflated valuations [and hiring sprees], in India in the past 10 years. In fact,
and then there was a big crash and job A lot of companies until about 2012, India was a production
losses. This time, the bubble appears to look at talent as base, but we hardly had any market.
something that you
be bigger, which is why the bust seems get from the market.
Today it’s No. 3, [and] also the fastest-
even worse. And I am afraid that the We see, particularly growing market by far. And I see it
pain has just started. It would get in the Indian context, becoming No. 2 in the next three to five
worse before it gets better in the whole the challenge is years, and—based on current trends—
tech sector. one of creating and could even be the No. 1 market over the
nurturing the talent.
We don’t assume that next 10 years. That’s how important
Q: Do you see companies going there’s ready-made India is to us. It also reflects the broader
belly up, being unable to raise talent available in the growth in Indian economy that has
venture capital or private equity market. We actively gone from $350 billion 25 years ago to
funding? seek to create and $3.5 trillion now. And I can easily see the
nurture the talent.
A: Look at history as a guide—the best That approach has pathway to a $10-20-trillion economy in
way we can predict the future is to look served us well the next 10-15 years.
at past episodes where similar stuff hap-
pened. I remember this very distinctly. Q: Let me ask you a question
In Silicon Valley, we were exposed to the on the HR side because of your

Business Today 28 May 2023

work with Zoho University, where you take in
people without fancy college degrees. How do
you see the problem of unemployable gradu-
ates from India for the technology sector? Be-
cause today, there seems to be a big scramble
for talent, which is probably why issues like
moonlighting are coming to the fore. How do
you see this problem and the way around it?
A: A lot of companies look at talent as something as a
given that you get from the market. We see, particu-
larly in the Indian context, the challenge is one of
creating and nurturing the talent. It’s a mindset shift.
But we are a talent creation business, we are a talent
nurturing business, not merely a talent acquisition
business. So, we don’t assume that there’s ready-made
talent available in the market. We actively seek to
create and nurture the talent. That approach has been
true for nearly our entire existence as a company and
that has served us well. In fact, that is critical for our
“The overall premise [of the
technology revolution] could
MAGAZINE KING
be correct [and] the digital
transformation would come
true. But that doesn’t mean all
the investment dollars
that bet on the premise
would get a return”
growth, as well as for our rural expansion, as well as
for employee loyalty. All three are driven by the fact
that we invest in talent, we create and nurture the
talent, and that has fuelled our growth as a company.
And it has allowed us to expand, by going into rural
areas with an abundance of latent talent, talent that
is intrinsically there, but someone has to go and nur-
ture it, and then bring it out. And that also promotes
employee loyalty. Because when you invest in people,
they tend to be loyal. So all of that has been helped by
our policy of how we look at talent.
Q: Any thoughts on moonlighting? Or do you
have a specific stance on it?
A: It really isn’t a problem for us. But the problem in
defining all this is if somebody is, for example, a really
good software engineer who runs a YouTube channel
on the side on cooking or organic farming… and I’m
on Twitter, talking about macroeconomics—does
that count as moonlighting? I read up a lot about
Business Today 28 May 2023
macroeconomics, it informs my work as the CEO of
this company, but there’s well beyond that. I talk about
rural development [and other] topics like that. So that’s
why I think it’s really difficult to define this. Our policy
in Zoho is to use your common sense. There are some
obvious ones—if you’re doing some work, and then
you’re doing the exact same work for a competitor, and
you’re getting paid for it, clearly that would be violation
of trust. And so that’s where you just use your common
sense. That’s the policy.
Q: You come from fairly modest roots. You
grew up in a household where your father was
a stenographer in the Madras High Court. Has
that kind of upbringing gone a long way in
shaping the person that you are?
A: Absolutely. My value systems come from my
parents. My parents retain the exact life they’ve had
well before this success happened. That is a role model
for me. If it’s okay for my father to live a humble life,
why shouldn’t I enjoy the same kind of life, which is
a very modest one? That was drilled into our heads
from childhood. My parents never took on debt [even
though] my father’s income was modest. As a result,
those values stayed with us. I’m truly blessed to have
them as parents because those values are what helped
me in terms of staying humble, staying close to my
roots, and not getting over-excited about wealth itself.
I separate the wealth from myself. It’s not mine, in a
sense. It allows us to do some good for our society. And
I live in a rural area and I, on a daily basis, come across
a lot of causes that I want to support, and I’m blessed
that the wealth allows me to do that. But beyond that,
I’m not personally interested in that. I would want to
be a true son of my parents, which means that I cannot
be flashy about displaying wealth.
Q: Would you go as far as to say that when you
see businessmen with almost a crude kind of
display of wealth, you find it distasteful?
A: I don’t want to comment on other people. But I’ll
say there is an ancient philosophy from our land, which
advises moderation in all things. That helps all of us
because we are, in a sense, custodians of the wealth.
Father of the Nation [Mohandas Karamchand] Gandhi
said this. He was never a socialist, but he said that capi-
talism was a custodian of the wealth. And that’s how I
see it. Our family is merely a custodian of the wealth; we
get to direct it to good causes. That’s how I see it. Based
on my upbringing, I cannot have extreme display of
personal wealth.
This interview was taken before Zoho announced it was
entering the electric vehicles segment
 Defined as third-party
funding availed to pursue
legal matters, litigation
financing is provided by
financiers to cover legal costs,
mostly of commercial
matters. In return, they take a
share from any claim amount
awarded to them
LAW LITIGATION FINANCE

Start-ups, such as
FIGHTRIGHT, LegalPay,
LitiCap, etc. operate in the
litigation finance space in
India, while there are many
players such as Parabellum
Capital, Bentham Capital,
MAGAZINE KING Burford Capital, etc., which
operate globally

Litigation financing is fast

gaining traction in India,
with start-ups, law firms,
companies and investors
betting big on the emerging
segment. But is it really a win-
win formula for everyone?
The specialised start-ups
BY ASHISH RUKHAIYAR operating in India have put
in place AI-backed data analytics
tools to identify cases and fund
them. Individuals, companies,
lawyers and law firms can
approach such ventures, which
do their own due diligence
before providing the funding

Business Today 28 May 2023

 THE FINE PRINT
OF LITIGATION
FINANCE

MAGAZINE KING

Litigation financing is fast

emerging as an alternative
investment avenue, with start-ups
pooling in money from high net-
worth individuals to fund litigations.
Industry players claim it is a high-
return product with annualised
returns in excess of 30-35 per cent

Business Today 28 May 2023

LAW LITIGATION FINANCE
OR 49 -YEAR- OLD Goutam Lall Seal
of Kolkata, discussions around
court cases or litigation were com-
mon during dinnertime as he comes
from a family that owns large tracts
of land across the City of Joy. These
land parcels brought with them
legal disputes with entities such as
tenants and developers, and Seal
had seen his father regularly shuttle
between the courts and his home.
Around the end of 2021, Seal
heard of a venture that provides
funding for litigation matters.
“Money was not an issue but we
decided to explore the option for
the analytical tools that the start-up
was offering... those would guide us
in our legal battles,” he says.
Litigation financing, as the space
is referred to, is huge globally and
fast gaining traction in India, with
many start-ups entering the fray.
MAGAZINE KING
The global litigation funding mar-
ket was estimated at $12.2 billion
in 2022 and is projected to reach
$25.8 billion by 2030, with a CAGR
of roughly 9 per cent between 2022
and 2030, per a report by Custom
Market Insights, a market research
and advisory company.
THE GLOBAL “There is tremendous scope
for growth of litigation funding in
LITIGATION India,” says Ashish Chhawchharia,
Partner and Head-Restructuring
FUNDING Services, Grant Thornton Bharat.
“With the rising legal costs in India,
MARKET IS there are severe limitations faced by
companies and litigants to continue
PROJECTED TO with the litigations and [they] often
end up closing [cases] prematurely.”
REACH $25.8 But what is litigation financing?
Simply put, it refers to third-party
BILLION BY entities providing funding to help
2030, PER
companies or individuals pursue
legal tussles. More importantly,
these ventures also help entities
CUSTOM MARKET choose the right legal strategy with
their AI-backed analytics tools. For
INSIGHTS the Seals—or any entity in the midst
Business Today 28 May 2023
of legal battles—this means pursu-
ing only those matters that have a
high probability of winning and can
be resolved fast. Helping the Seals
with the insights is Kolkata-based
FIGHTRIGHT. “We have our own
proprietary platform which helps us
in mapping the entire litigation jour-
ney in terms of predictive/generative
analysis. We have deep insights into
what to do and how to do it,” says
Founder & CEO Nitin Jain.
Besides FIGHTRIGHT, other
start-ups that provide such services
in India include LegalPay, LegalFund
and LitiCap, among others. Globally,
Parabellum Capital, Bentham Capi-
tal, Juridica Investments, Burford
Capital LLC, Woodsford Litigation
Funding, Apex Litigation Finance
and Omni Bridgeway are the big
names with proven track records in
the field of litigation funding.
A HELPING HAND
In India, legal battles are often
looked upon as complicated, where
entities need to first search for a
good lawyer and follow it up with
money to bear the legal costs—
which could be huge, given the
time taken for an average case to
be resolved in courts. For instance,
there were nearly 43.5 million pend-
ing cases across all courts in India
as of May 1, 2023, per data from the
National Judicial Data Grid.
As facilitators, the start-ups in
the field knew they had to offer
something more than just money:
insights based on data. “We realised
that you cannot map a litigation
journey without technology. Data
would be extremely important.
Most of the research that is
available currently is at the High
Court- and Supreme Court levels,
which are appeal courts. But we do
research at the district-court level,

MAGAZINE KING
and that is what differentiates us
from the others,” says Jain, who
launched his venture in September
2021 and claims to have received
over 400 enquiries till date.
How does this work? When a
case comes to a start-up, it starts
the due diligence to study it thor-
oughly and, if convinced that there
is potential, decides to provide the
funding at a pre-decided percent-
age of the claim amount. While
most start-ups follow this model,
in some cases—depending on the
potential quantum of claim—they
may also seal the deal on a fixed
amount. But a start-up doesn’t
make any money if the claimant it is
funding loses a case.
Given their area of operations,
most start-ups have tie-ups with
lawyers or law firms but the entity
has the freedom to get their own
lawyer. The start-up, apart from
funding, provides strategic inputs
based on its analytical tools.
Sumit Agrawal, Founder of Reg-
street Law Advisors, says that even
as the scope of litigation financing
is limited in India as of now, it is
fast emerging as a trend in the legal
arena. “Litigation financing can be
an alternative to litigation insurance
to some extent, as both serve to miti-
gate the financial risk of pursuing a
claim. However, litigation financing
provides financing for a specific case
or cases, while litigation insurance is
a form of indemnity insurance that
covers the cost of legal disputes in
general,” explains Agrawal, a former
legal officer of capital markets regu-
lator Securities and Exchange Board
of India (Sebi).
Chhawchharia says there is
scope for other funding opportuni-
ties like pre-settlement financing,
lawyer fees, and post-settlement
funding. Incidentally, under litiga-
tion financing, lawyers are paid
their regular fees by third-party
entities; the lawyers do not charge a
Business Today 28 May 2023
THE FIRST
INSTANCE
IN 1876, THE PRIVY COUNCIL, IN
ITS DECISION IN RAM COOMAR
COONDOO V. CHUNDER CANTO
MOOKERJEE, PERMITTED THIRD-
PARTY LITIGATION FUNDING FOR
THE FIRST TIME. THE SUPREME
COURT’S LANDMARK RULING
IN BAR COUNCIL OF INDIA V.
A.K. BALAJI (2018), AGAIN SET
A PRECEDENT BY STATING THAT
LITIGATION FUNDING IS NOT
PER SE ILLEGAL, PROVIDED IT
DOESN’T VIOLATE ANY OTHER
APPLICABLE LAWS
percentage of the damages as fees,
| 73
as it is barred by law in India.
FOLLOW THE MONEY
Let’s talk money. These start-ups are
funding people to fight cases, but
who is funding them? In India, the
investor is typically a high net-worth
individual or family office from
whom the start-ups raise funds to
create a fund to finance litigations.
The prize: a percentage of the start-
up’s claims under management; for
instance, the entities that have taken
funding from FIGHTRIGHT have
cumulatively claimed damages or
compensation totalling `300 crore.
The start-up makes money on every
case where the party it funds wins—
it takes a cut in the range of 15-25 per
cent from the final claim amount.
To increase its chances of winning,
the start-up funds only commercial
litigations involving either land,
property or money—these make up
almost two-thirds of all outstanding
LAW LITIGATION FINANCE
“People might perceive
litigation funding as risky‚ but
this is one of the least risky
products. The business is
structured in a manner that
even if one gets four to five
cases right in a pool of 8-10
cases‚ everyone makes money”
NITIN JAIN
FOUNDER & CEO, FIGHTRIGHT
“The rising number of
disputes among organisations
is expected to provide
opportunities for the growth
MAGAZINE KING
of the litigation funding
investment market‚ with
special interest from lenders
and investor groups”
ASHISH CHHAWCHHARIA
PARTNER AND HEAD-RESTRUCTURING
SERVICES, GRANT THORNTON BHARAT
“Litigation financing can be
an alternative to litigation
insurance to some extent... One
of the key benefits of litigation
financing is that it helps
companies and individuals
reduce the financial burden of
pursuing a claim”
SUMIT AGRAWAL
FOUNDER, REGSTREET LAW ADVISORS
Business Today 28 May 2023
commercial disputes; plus, it is able
to plot the dispute’s expected legal
journey based on its AI/ML tools.
If such bets are risky, why are
investors putting in money? Ex-
perts say that litigation financing
is fast emerging as an alternative
investment avenue as the start-ups
are able to deliver an impressive
return on investment (ROI)—a
key metric while deciding on asset
allocation. “Litigation funding is
a very high-return product. Inter-
national experience shows that
the annualised ROIs have been in
excess of 50 per cent. In India, the
ROIs will be in excess of 30-35 per
cent for the time being. But it is
still perceived as risk capital so we
stay away from tapping retail indi-
viduals and raise funds from only
HNIs,” says Jain. The growing po-
tential of the space can be gauged
from the fact that FIGHTRIGHT
has launched a `100-crore fund
from HNIs looking for alternative
investment avenues. The fund, a
special purpose vehicle, will invest
in 15-20 commercial cases with an
average ticket size of `5-7 crore
for a tenure of two to three years.
This fund will allow these HNIs
to invest in litigations where the
annualised ROI is expected to be
upwards of 30 per cent.
Chhawchharia believes the
dynamics from an investor’s per-
spective are similar to any segment
or model that attracts risk capital
from the wealthy. “The model
will be quite similar in my view as
risk capital is always looking for
attractive opportunities and re-
turns. HNIs and family offices are
likely to invest in funds that pool in
investments with a similar thesis
or objective rather than invest
directly in this market,” he says.
What’s more, the potential is
such that many global players are
also actively looking at India to
enhance their presence in the space.
“We have seen a rise in enquiries
from global players in the industry
and we understand some have
already started scoping opportuni-
ties in India,” says Chhawchharia.
THE LEGAL POSITION
While litigation financing seems
a lucrative business opportunity,
there is debate around whether it
is in consonance with law. Many
believe that it currently operates in
a grey area: nothing states that it is
illegal per se but at the same time it
does not have an explicit stamp of
legal approval. “Litigation funding
has caught the attention of regula-
tory bodies such as Sebi, RBI (the
Reserve Bank of India), Irdai (the
Insurance Regulatory and Develop-
ment Authority of India) and PFRDA
MAGAZINE KING
(the Pension Fund Regulatory
and Development Authority). The
regulators are monitoring this trend
closely to ensure that it is properly
regulated and does not lead to any
financial misconduct or illegal ac-
tivities,” says Agrawal of Regstreet.
Jain of FIGHTRIGHT says that
there have been judgements in the
past that favour litigation financing
in India. For instance, the Supreme
Court’s ruling in the Bar Council
of India vs A.K. Balaji case
in 2018 set a precedent
by stating that litigation
funding is not per se illegal,
provided it doesn’t violate
any other applicable laws.
This is important as indus-
try participants are of the
view that the apex court’s
rulings serve as important
precedents while dealing
with litigation finance.
“There is hardly a
country where there are
formal regulations around
litigation funding. In some
places, you could find associations
with some amount of self-regula-
tion. Maybe in the future there will
be regulations or rulings that will
benefit the industry,” says Jain.
“There is money involved; there
is the law itself that is involved;
so there could be clearly laid
down norms. The more formal it
becomes, the better it is for the
industry.”
REGULATORS In a similar context, Chhawch-
haria says that while there does not
ARE CLOSELY appear to be any “specific impedi-
ment to litigation financing in India”,
MONITORING one needs to remember that “contin-
gency fee-based legal services such
LITIGATION as class action or personal injury
suits are not permissible in India”.
FUNDING TO Contingency fee-based legal services
are those where a percentage of the
ENSURE IT claim is paid as fee to lawyers.
Industry watchers say that litiga-
IS PROPERLY
REGULATED AND
tion financing will only grow in size | 75
as it has something to offer for all
stakeholders. For litigants—espe-
DOESN ’ T LEAD TO cially those with limited financial
resources—it is a sort of a lifeline; for
ANY FINANCIAL lawyers, the funding ensures timely
fee payments while they can focus on
MISCONDUCT proper legal representation; and for
investors, it means attractive returns
OR ILLEGAL and portfolio diversification.
Most importantly, they say,
ACTIVITIES litigation financing empowers the
average individual or a small
company to fight against
powerful adversaries and
hold them responsible for
their actions to create a fair
and just society. “The key
benefit is that litigation
funding allows lawyers to
provide best-in-class ser-
vices to their clients,” says
Chhawchharia. And it allows
clients to pursue only those
cases that they have a good
chance of winning.
@ashishrukhaiyar
Business Today 28 May 2023
MAGAZINE KING

Business Today 28 May 2023

 HARSH
MARIWALA’S
MARICO INNOVATION
FOUNDATION IS
WORKING WITH
START-UPS TO
CREATE A CIRCULAR
ECONOMY THAT
WILL POSITIVELY
DISRUPT THE
PLASTIC ECOSYSTEM
BY TAKING CARE OF
THE ENVIRONMENT
AND CREATING
A PROFITABLE
BUSINESS
OPPORTUNITY

MAGAZINE KING

BY KRISHNA GOPALAN
ILLUSTRATION BY ANIRBAN GHOSH
 ENVIRONMENT PLASTICS
VERYWHERE YOU LOOK, it’s
there. Hanging from shopfronts,
littering the sidewalks, strategi-
cally hidden around our houses,
filling our dump yards, etc.
Plastics have permeated our
lives like hardly anything else in
modern society.
While plastics are used by all
of us, most do not understand
how seriously the material
disrupts our fragile environ-
ment. And while awareness
has definitely increased over
the years, very little has been
achieved in terms of eliminating or reducing its us-
age. Further, looking at how extensively plastics are
used, a solution to the problems of overuse, disposal
and recycling has largely eluded us.
It is in search of answers to these questions like
these that Harsh Mariwala, Chairman of fast-moving
consumer goods company Marico, established a not-
for-profit entity called Marico Innovation Foundation
MAGAZINE KING
(MIF) in 2003 to explore the avenues where the group
could support viable solutions.
“I realised the need to solve this challenge,” says
Mariwala. “The team [at MIF] did a deep dive in areas
such as land and water pollution. It was apparent that
plastic was ripe for an intervention, since there were
major innovations emerging in the space, with a clear
need for an ecosystem to be built around it.”
PET (POLYETHYLENE TEREPHTHALATE) HDPE (HIGH DENSITY POLYETHYLENE)
Snack trays, fresh Juice bottles, detergent
vegetable domes, FMCG bottles, toiletries
containers, bottles
Business Today 28 May 2023
Mariwala was of the view that most of the research
that had been done focussed only on the problems
around plastics, and not enough on viable solutions.
“The ecosystem was looking for solutions across the
value chain and that included recycling, sorting and
collection. There was also a gap in knowledge on what
one should focus on,” Mariwala explains. That led MIF
to prepare a report, as “the first step to create a knowl-
edge book on plastics that offers innovative solutions”.
To that end, the foundation partnered with the
Indian Institute of Science (IISc) and management
consulting firm Praxis Global Alliance as knowledge
partners to prepare a report titled, “Innovation in
Plastics: The Potential and Possibilities”. The re-
port, along with highlighting the key aspects of the
plastics value chain such as the dramatic rise in plas-
tic consumption in India (from 13.7 million tonnes
in 2016-17 to 19.8 MT in 2019-20) and how plastic
is currently recycled in India, also offers concrete
measures around how a circular economy in plastics
can be created. Not surprisingly, the report finds
it to be a complex issue with many dimensions that
need to be addressed with urgency.
Explaining the salient points of the report,
Mariwala says that governments across the world
have provided incentives to create circularity in the
plastics ecosystem through less taxes, more infra-
structure investments or equity grants to start-ups.
“Besides, governments have also levied penalties,
such as landfill tax and enforced the use of recycled
plastics to a certain extent, in consumer products.
PLASTIC P
LDPE (LOW DENSITY POLYETHYLENE)
Cling wrap, shrink wrap,
garbage bags
 MARKET MIX the source, along with reusing and recycling plastic
products and materials at scale, for which the founda-
IN THE VALUE CHAIN OF PLASTICS, MIDSTREAM PLAYERS USE
RAW PLASTICS TO MAKE A VARIETY OF GOODS RANGING FROM tion is working with over a dozen start-ups. But to
PACKAGING TO CONSTRUCTION AND HOUSEHOLD ITEMS achieve these goals, especially circularity, the report
has found that funding has been insignificant, with
Rigid packaging Building
17 construction just $6 million invested in CY21. Compare that to the
13 Agriculture
close to $6 billion invested in edtech and another $5
9 billion invested in fintech or the over $1.2 billion in e-
commerce and logistics, and the picture for the space
becomes very gloomy. “MIF will work closely with
Households the start-ups to identify the critical areas that prevent
7 them from scaling up,” says Mariwala. Through the
knowledge partners, the intention is to create a plan
Automobiles for each of their innovations to scale up. “They will
7 then provide the necessary support in terms of con-
nects, market access, mentorship and the opportu-
Electricals nity to pitch to investors,” he points out.
2
Flexible packaging Miscellaneous COMBAT MODE
42 3 Tucked away in Goregaon, Mumbai, is Lucro Plaste-
cycle that specialises in converting used plastics into
SOURCE MARICO INNOVATION FOUNDATION
final packaging products. “This is a tough business to
be in and we have a model that is fully integrated,” says
MAGAZINE KING
There is also private and VC funding available that
has helped in bringing innovative solutions to the
Pratibha Priya Dewett, Chief Sustainability Officer at
the start-up that begins with collecting waste to sort-
fore, with brands adopting these solutions to reduce ing and cleaning it, to later recycling it into finished
the overall problem of plastics,” he says. products. On her table are plastic bottles of Parachute
MIF’s research has found that some of the most coconut oil bound together in a stretch wrap (a stretch-
important aspects required in reducing the impact able plastic film wrapped around items). The wrap is
of plastics on the environment are finding sustain- made at the company’s factory in Gujarat’s Umargam,
able ways to achieve circularity, eliminating waste at a three-hour drive from Mumbai. The start-up focuss-

PROBLEM
PVC (POLYVINYL CHLORIDE) PP (POLYPROPYLENE) PS (POLYSTYRENE)
Bottle wrappers, tapes, Microwave dishes, CD cases, hot drink cups,
takeaway packaging snack packets, foamed meat trays
ice cream tubs

Business Today 28 May 2023

 ENVIRONMENT PLASTICS
es on collecting low-value flexible
waste to turn into shrink and
stretch wraps. She demonstrates
a plastic wrap that is used by The
House of Anita Dongre, a fashion
apparel brand. “It is 100 per cent
recyclable and made from 60 per
cent post-consumer recycled
plastic material,” she says.
In October 2022, the Govern-
ment of India introduced a law
requiring anyone manufacturing
or using plastic to introduce a re-
cycled version in their packaging.
“That was a huge tipping point for
the industry,” says Dewett.
Dealing with waste in every
sense is a “dirty business,” but it
is a job that must be done. Take
the case of Ahmedabad-based
Ishitva Robotic Systems that
makes AI/ML and IoT-based
automation solutions to sort recy-
clable materials. “Technology is
our competitive edge and we are
the enabler to create an ecosys-
tem. We are the tech providers
MAGAZINE KINGFOUNDATION
and this is a very scalable model,”
says Jitesh Dadlani, Founder and
CTO of the start-up. He cites the
Swachh Bharat Mission as a big
catalyst for his business. “We
saw the opportunity in the value
chain and it became possible to
build solutions based in Industry
4.0 tools. Today, effective sorting
is still the weakest link in the pro-
cess of creating a circular value
chain,” he says.
In a nascent industry, there
is no limit to innovation, and
looking for viable alternatives
is one such example. Neha Jain,
Founder & CEO of Zero Circle—
that uses seaweed to create
bio-alternatives that can replace
plastics—has gone for the “top-
down” model to keep plastics out
of the picture. After travelling
frequently to coastal Maharash-
tra, she hit upon the idea of using
seaweed (that has 90 per cent
water), as the raw material for her
bioplastics “because of its higher
biomass, fast reproduction and
cost-effectiveness.” Jain says she
works with the manufacturers
who make the final packaging
that go out to the users. “There
is plastic hidden even in food
containers made of paper. Sea-
“It was apparent weed-based coatings are a viable
that plastic alternative to the plastics used in
them and are high-performing.”
was ripe for an With her product nearing the end
intervention‚ of research and development, she
since there were is preparing to go into production
major innovations shortly and is optimistic about
emerging in the what lies ahead.
space‚ with a Of course, the process of
clear need for an moving to alternatives would be
a challenge, says Mariwala. He
ecosystem to be thinks that since the alternatives
built around it” are expensive compared to virgin
plastic, the government should
HARSH MARIWALA provide incentives for the produc-
CHAIRMAN, MARICO;
FOUNDER, MARICO tion of alternatives and benefits
INNOVATION such as less taxes or tax breaks
over the short- to medium term.
This will help the alternatives
achieve scale, which will bring
down their prices, further fuel-
ling their adoption.
By any yardstick, this transi-
tion will take time, but it is one
that is non-negotiable. For over
150 years, the world has used
plastic and the moment for a com-
plete relook at how plastics are
used is upon us, says Mariwala.
The circular economy is a good
starting point. With start-ups
“Tech is our competi- innovating new products and
tive edge and we processes in the space, there is a
are the enabler to way to create a robust and profit-
create an ecosystem. able business model. However, it
needs substantial assistance from
We are the tech the government and other stake-
providers and this holders at every stage. For the
[AI/ML and IoT- sake of a better environment and
based automation to ensure the generations that fol-
solutions to sort low us live well, the plastic story
recyclable materials] needs to be addressed—smartly
is a scalable model” and quickly.
JITESH DADLANI
@krishnagopalan
FOUNDER AND CTO,
ISHITVA ROBOTIC SYSTEMS
ILLUSTRATION BY RAJ VERMA

MAGAZINE KING
 MAGAZINE KING

WITH INCOMES FALLING AND

HEALTH INSURANCE PREMIUM
RATES RISING SHARPLY, SENIOR
CITIZENS ARE STRUGGLING TO COPE.
HERE ARE SOME WAYS TO MANAGE
HEALTH INSURANCE COSTS

BY TEENA JAIN KAUSHAL

 MONEY TODAY HEALTH COVER
HEN RAM SINGHAL, a
68-year-old retiree,
received the renewal
letter for his health
insurance policy, he
didn’t think much
of it. But on reading
it, he found that his premiums had
gone up significantly. “My premi-
ums have jumped by 30 per cent.
I am exploring options on how to
manage them,” he says.
Health insurance premiums
have risen sharply over the past
few years, with the rise in health
insurance claims. Per the latest
annual report of the Insurance
Regulatory and Development
Authority of India, there is an in-
crease in incurred claims ratio (the
proportion of claims paid by health
insurers against total premiums
received) of health business—from
94 per cent in 2020-21 to 109 per
cent in 2021-22.
“Health insurance claims have
MAGAZINE KING
84 | risen in the past few of years. Post
Covid-19, we have seen a jump of
around 10-30 per cent across age
groups. Senior citizens have been
the hardest hit as they are already
paying high premiums and have no
regular income,” says Siddharth
Singhal, Business Head of Health
Insurance at Policybazaar.com.
Premiums for senior citizens are
HEALTH INSURANCE
PREMIUM RATES HAVE
INCREASED IN THE RANGE
OF 10-30 PER CENT
BETWEEN FY22 AND FY23
generally higher because a large
part of people in this segment typi-
cally suffer from some form of pre-
existing disease. This is also why
some insurers are hesitant to offer
seniors health insurance policies.
“The health risks for seniors
are typically higher, which means
the utilisation of a health plan
would typically be more due to
any prevailing chronic illnesses
or pre-existing conditions,” says
Vivek Chaturvedi, Chief Marketing
Officer and Head of Direct Sales at
Go Digit General Insurance. Insur-
ers typically underwrite this risk by
pricing the premium appropriately,
with the premiums for someone in
his sixties being higher by around
2.5-4 times versus someone in his
thirties, depending on the plan and
the insurer, he says.
Senior citizens also complain
about their policy applications be-
ing rejected or delayed. “Health in-
surance policies for seniors are not
generally rejected, but they may be
subjected to some pre-policy medi-
cal check-ups,” says Tapan Singhel,
MD & CEO of Bajaj Allianz General
Insurance. Following the check-
ups, such insurance proposals are
accepted as per the standard terms
and conditions of the policy.
One can also provide the details
of their past medical history, includ-
Business Today 28 May 2023
ing consultation notes, prescrip-
tions and related investigation re-
ports to the insurer to help provide
an understanding of their current
health status. Further, the evolution
of new norms and active use of tech
like Tele Medical Evaluation Report
or Tele MER, has made the process
more convenient. “Over a period of
time, insurers have also relaxed the
age norms for making pre-medical
tests compulsory,” says Singhel.
Prasun Sikdar, MD & CEO of
ManipalCigna Health Insurance,
says customers can look out for
such policies and get themselves
insured as “there are also insurers
who have increased their risk appe-
tite and expanded the threshold to
accept [applications from] senior
citizens with medical issues”.
The regulator has also introduced
measures to ensure a hassle-free
experience for policyholders. For
instance, if any insurer rejects an
application, the reason for rejec-
tion has to be provided in writing.
Besides these, here are a few
effective ways to avail health cover
and reduce premiums:
Co-payment: Co-payment poli-
cies are those in which a percent-
age of the cost of healthcare ser-
vices is borne by the policyholder,
while the rest is paid by the insurer
in the event of a claim. In such poli-
cies, the policyholder’s share can
range from 10-50 per cent. While
this reduces the premium outgo,
it may cost you a hefty amount
in case of hospitalisation. But if
you’re thinking of discontinuing a
policy because of high premiums,
a better option is co-payment, as
it can reduce your premiums by
30-40 per cent, depending on the
percentage of the bill you decide
to pay from your own pocket (See
table Senior Citizens’ Health Plans).
“Senior citizens require addi-
tional medical care, and hence their
hospital stays might be compara-
tively longer. Hence when opting
for a health insurance policy, it is es-
sential to opt for one that provides
SENIOR CITIZENS’ HEALTH PLANS
Health insurance premium rates for a 61-year-old living in New Delhi for a sum insured of `10 lakh
Insurer Plans Premium Age limit Co-pay* Pre-existing
(`/year) (years) disease (years)#

1
Senior Health Advantage 22,611 60 + 50% 2
Care Health
Care Supreme 38,784 18-98 - 4
Insurance
Care Senior 28,604 18+ 20% 4

2
Senior Citizen Red Carpet 26,550 60-75 30% 1
Star
Star Comprehensive 40,468 18-65 10% 3
Insurance
Star Health Assure 37,608 18-75 10% 30-36 months

3
Aditya Birla Activ Health Platinum Enhanced 39,651 18+ - 3
Health
Insurance Activ Assure Diamond 34,678 18+ 20% 4
Prime–Advantage 55,161 18+ - 3

4
Manipal Prime Senior Elite 50,102 55-75 20% 2
Cigna Health
Insurance Prime Senior Classic 46,846 55-75 20% 2
Prime protect 42,587 18+ - 3

5
Health ReAssure 2.0 49,393 18-65 - 3
Niva Bupa
Health Senior First Platinum 47,321 - - 2
Insurance
Health Companion 44,226 - - 3

MAGAZINE KING
PREMIUM VARIES DEPENDING ON CO-PAY AND PRE-EXISTING DISEASE COVERAGE; *CO-PAY IS THE SHARE OF CLAIM PAID BY THE INSURED;
#PEDs ARE COVERED AFTER THE EXPIRY OF THE NUMBER OF YEARS GIVEN IN THE TABLE; ADITYA BIRLA HEALTH INSURANCE AND CIGNA
PRIME ADVANTAGE AND CIGNA PRIME PROTECT HAVE WORLDWIDE COVER OF `5 LAKH SOURCE: POLICYBAZAAR.COM

you with maximum in-patient hos-
pitalisation coverage, but you must
also check for any deductibles or
co-payment clauses,” says Singhel.
But one must weigh the cost versus
benefits of the policy, he adds.
Deductible: Another option is to
opt for a policy with a deductible
clause, where the deductible is
the initial amount a policyholder
must pay before the policy covers
the rest of the claim. This means
the insurer is only responsible for
paying claims that surpass the
deductible amount. For instance,
if a policyholder’s deductible is
`30,000, and they file a claim of
`1 lakh, the insurer will cover only
`70,000. But if the claim is below
the deductible amount, the insurer
will not cover any expenses. Poli-
cies with higher deductibles usu-
ally have lower premiums, while
those with low or no deductibles
have higher premiums.
The point to note is that health
insurers sometimes impose higher
co-payment, deductibles, etc., with-
out the policyholder’s knowledge.
This can give you a lower premium,
but it can also reduce the scope of
coverage. Hence, one must check
the details of the policy to ensure
that co-payment and deductibles
are given as per your choice.
Super Top-up: If the cost of
purchasing a large health insurance
policy is too high, you can consider
combining a regular plan with a su-
per top-up plan. While the regular
policy covers your claim up to the
sum insured, the top-up plan kicks
in once a certain amount, known as
deductible, has been exceeded.
It is important to note that top-
up plans operate on a per-hospital-
isation basis and are useful when a
single claim exceeds the deductible
limit. There are super top-up
plans available that consider the
aggregate of claims per policy year,
rather than a single hospitalisation.
Due to the deductible threshold,
the top-up plans have lower premi-
ums than regular plans. And with
higher deductible limits, the premi-
ums go down. In these combined
policies, the deductible must be
paid either through a regular health
insurance policy or out of your own
pocket. “Such top-up policies are
very reasonable and provide good
cover against emergencies and ac-
cidents,” says Singhel.
Porting: Health insurance porta-
bility allows policyholders to port
their policy from one insurer to
another, especially if customers are
unhappy with the service provided

Business Today 28 May 2023

 MONEY TODAY HEALTH COVER
by their current insurer. Policyhold-
ers can switch their policies from
group to individual policies or from
individual to individual policies as
well, where the benefits accrued in
the previous policy will be carried
on to the new policy after portabil-
“In the past, insurers ity. The porting request has to be
used to be reluctant initiated 45 days before the policy’s
to provide health renewal date, with the policyholder
insurance to senior required to complete the formali-
citizens, but that is no
longer the case” ties requested by the new insurer.
“The new insurer will reach out to
TAPAN SINGHEL the previous insurer to understand
MD & CEO, BAJAJ ALLIANZ the insured’s medical and claims
GENERAL INSURANCE
history. Post the requisite due dili-
gence, the policy may be accepted
by the new insurer, who may also
suggest revisions in the policy,” says
Singhel. But the company can also
deny such a request as per its under-
writing norms and guidelines.
Keep in mind that porting is only
allowed while renewing a policy.
The new insurer has to offer the
same sum insured, and with any
“Co-morbid health
conditions may lead to
higher claim outflow of
MAGAZINE KING
waiting period completed with the
old insurer being continued.
an insurer and hence the
premiums are generally Modular Policy: These days,
higher in comparison insurers are willing to customise
to customers who their policies to align with your
are younger” needs. Hence, if you need a waiver
on pre-existing diseases or need a
PRASUN SIKDAR
shorter waiting period before the
MD & CEO, MANIPALCIGNA
HEALTH INSURANCE coverage kicks in, then insurers
can customise the policy as per
your needs. Similarly, if you want to
introduce a co-payment or a deduct-
ible clause in the policy to reduce
your premium, you can do so. You
can also buy a floater health insur-
ance with your spouse to reduce the
premium outgo.
Health Fund: If you find that your
“Options such current policy does not provide a
as deductions, favourable risk-return equation,
co-payment and you may consider investing in debt
portability can funds or fixed deposits to create a
help senior citizens substantial health fund. Moreover,
in reducing their it is always pertinent to establish
premium rates” such a health fund because many
SIDDHARTH SINGHAL
illnesses are not covered under
BUSINESS HEAD, regular policies. And if you are not
POLICYBAZAAR.COM prepared for such emergencies, they
Business Today 28 May 2023
can have a significant impact on
your finances.
The good part is that health
insurers today have understood the
challenges a policyholder faces, and
hence curated products that offer
better coverage, control and care
to senior citizens. For instance, the
latest products cover charges such
as teleconsultations, annual health
check-ups and second-opinion con-
sultations, apart from offering lower
waiting periods for pre-existing con-
ditions. Not only that, plans, such as
one from Care Health, covers senior
citizens up to the age of 98 years.
Similarly, ManipalCigna has a
policy called ‘ManipalCigna Prime
Senior’ that gives flexibility in
terms of lower waiting periods and
provides coverage for pre-existing
diseases from 91 days after enrolling
in the policy. “There are products in
the market that are more affordable,
predictable, and simple. We are
seeing a gradual change in the land-
scape of health insurance for senior
citizens, and insurers are now curat-
ing products that will ultimately
benefit the customers,” says Sikdar.
Finally, it is always advisable to
buy health insurance early in life.
Buying a cover early on can ensure
that the waiting period for any pre-
existing disease is completed at a
young age. One can also increase the
coverage for any non-claim year by
getting a no-claim bonus or NCB—a
reward for not raising any claims in
a particular year—from the insurer.
“There is a significant difference in
the premium of a young person ver-
sus a senior citizen. However, this
may vary from insurer to insurer,”
says Chaturvedi of Go Digit. He
further explains that Go Digit has
devised an age band for premiums
instead of charging higher premium
age-wise so that rates stay constant
for everyone in the same age band.
All of this means that there are a
number of ways for people, espe-
cially senior citizens, to keep a tab
on increasing premium rates.
@teena_kaushal
 THE GOOD LIFE
TRENDS TECH TODAY

90 |
MAGAZINE KING

Summer Special
Planning to travel over the summer? Check out these thrilling, off-the-beaten-path
experiences from swimming with manta rays to exploring Greenland

BY SMITA TRIPATHI
 2

1 A two-week cruise 3 Explore Greenland and

on Quark Expeditions
that specialises in polar
adventures in the Arctic and
Antarctica starts at $12,790
per person
2 Go in search of local
wildlife such as polar bears
be captivated by the rugged
landscape that features
striking fjords, daunting
glaciers and verdant valleys
4 Swim with the majestic
manta rays in the Maldives
between May and October

MAGAZINE KING | 91

Polar Express on large inflatable vessels designed especially for expe-

Explore Greenland’s most remote regions by sailing the
icy waters of the rarely visited southeast coast, travel-
ling down to the lush southern tip, and stopping to visit
local communities and observing the imposing glaciers
of the west coast. Explore Greenland’s distinct culture
and history by visiting picturesque villages and Norse
ruins, and be captivated by the rugged landscape, which
features striking fjords, daunting glaciers and verdant
valleys. What’s more, immerse yourself in the icy realm
of the Arctic on a kayak, or explore icebergs and glaciers
ditions. Cruises leave from Iceland’s capital, Reykjavik.
A two-week cruise on Quark Expeditions that special-
ises in polar adventures in the Arctic and Antarctica
starts at $12,790 per person.
Manta Watch
Indulge your inner ‘Twenty Thousand Leagues Under
the Sea’ fan and swim with the majestic manta rays in
the Maldives. Between May and October each year, the

Business Today 28 May 2023

 THE GOOD LIFE TRENDS
92 |
MAGAZINE KING
1
PHOTO BY GETTY IMAGES
south-west monsoon causes a large
collection of plankton to get caught
in the funnel-like reef around
the eastern side of the Maldivian
atolls, and this attracts hundreds
of manta rays and whale sharks to
come and feed on the coral reefs.
Snorkel or dive with these gentle
giants. Hotels such as Four Seasons
and Dusit Thani offer special pack-
ages during manta season.
Amazon Adventure
Do you have it in you to survive in
the Amazon forests? Find out, by
enrolling yourself in a jungle sur-
vival course. The two-week course
takes you to the depths of Guyana’s
rainforest where a team of experts
will guide you on what it takes to
survive in the wild. Everything from
skills needed to find water, light a
fire without matches, source food
and create a shelter will be taught
to you. But after your week-long
training, you will be dropped in a
new area of the jungle with only a
machete, a bow and arrow and a few
supplies, to fend for yourself for a
few days. With nothing else but the
clothes on your back, test your new-
found survival skills in an exhilarat-
ing real-world situation. UK-based
Business Today 28 May 2023
travel company The Wild Tales
offers packages for $2,990-3,090.
The Tequila Train
All aboard the Tequila train. The
Jose Cuervo Express is an old-
fashioned train complete with
luxury wagons that travels from
the city of Guadalajara in western
Mexico to the town of Tequila,
which the Mexican tourism depart-
ment has called Pueblo Magico (or
Magic Town). Step into the vintage
vehicle, and you’ll be transported
back in time for a glamorous day
of cocktails by train car. Take a
 The Jose
Cuervo Express
is an old-fashioned
train complete with
luxury wagons. The
trip includes tequila
tastings, a distillery
visit, agave harvesting
2 demonstration and
some sightseeing
as well

MAGAZINE KING | 93

1 The islands in the
Caribbean are known for
their carnival parties with
catchy music, colourful
costumes, delicious food
and dancing
2 Do you have it in you
to survive in the Amazon
forests? Find out, by taking
a jungle survival course
3 The Tequila Train travels
from the city of Guadalajara
in western Mexico to the
town of Tequila
full-day trip that includes tequila
tastings on the train, followed by a
visit to a tequila distillery, an agave
harvesting demonstration and some
good old-fashioned sightseeing in
the town of Tequila. Enjoy onboard
entertainment such as Loteria
(Mexican bingo), Mexican snacks
and tequila cocktails. Tickets for the
Elite class are for around $215 each,
but they get sold out fast and need
to be booked in advance.
It’s Carnival Time!
Besides the sun, sand and sea, the
small islands in the Caribbean are
known for their carnival parties
with catchy music, colourful
costumes, delicious food and loads
of drinking and dancing. Enjoy a
plethora of events including street
parties, calypso performances,
costume parades, etc., throughout
your stay there. Carnivals are
spread across the Caribbean and
are celebrated on different islands
in different months. Check out
St. Vincent at the Grenadines in
June and July, Grenada Island in
August and the Barbados from July
through August.
@smitabw

Business Today 28 May 2023

94 |
MAGAZINE KING

PHOTOS BY BJÖRN WALLANDER

Dream
have often said I see

I
myself as a ferryman be-
tween the past and the

Theatre
Designer Sabyasachi Mukherjee’s Mumbai
store is a manifestation of his maximalist
vision of Indian history, art and culture
BY SMITA TRIPATHI
future. India is such a res-
ervoir of history, art and
culture—and I believe that
for culture to be relevant it needs to be dy-
namic,” says Sabyasachi Mukherjee, one
of the country’s leading fashion design-
ers. And his most recent store in Mumbai,
which opened to the public on April 18, is
a manifestation of this vision. The brand’s
largest flagship yet, the store is sprawled
over 25,000 sq. ft and housed in the majes-
tic neo-classical ICP Fort Heritage build-

Business Today 28 May 2023

OPULENCE The store of designer Sabyasachi Mukherjee
(top right), sprawled over 25,000 sq. ft, is adorned with
over 100 chandeliers, 275 carpets, 3,000 books and 150
works of art layered among antique Tanjore paintings,
rare lithographs and historical trinkets

PHOTO BY MANDAR DEODHAR

ing off Horniman Circle. “I think when you truly know
who you are, the aesthetic just follows. When I saw the
heritage landmark building, I knew this was the perfect
location... to capture the sensibility behind my stores, the
spirit of Calcutta that is so beautifully embodied in the old
homes and palaces of the city.”
Known for his grandeur and opulence, the designer has
reimagined the store as a living museum of sorts—where
the interiors have been transformed into an immersive
retail experience that blends together Indian opulence,
craftsmanship, and history. “I want people all over the
world to experience our Indian heritage of design, art
and luxury. I want them to feel how fine our fabrics are...
how exquisite our hand embroideries are, and for them to
also realise how wearable, luxurious and global it all is,”
says the 49-year-old designer. Incidentally, Aditya Birla
Fashion and Retail Ltd, part of the Aditya Birla Group,
acquired a 51 per cent stake in the fashion house, which
MAGAZINE KING
retails under the brand name Sabyasachi, in January 2021.
“The world has a terrible habit of pigeonholing design-
| 95

ers to their geographies if they’re not from the western

world, I want to challenge that narrative by owning my
identity completely. It’s what I’ve always done. But from
the customer’s point of view, you have to see and feel
what we do to realise that. It’s why we went ahead with
New York even in the midst of the pandemic and why I
opened my largest store yet in Mumbai. With Mumbai,
we grew out of our old store, and we’re growing into new
markets—it’s as organic as it is strategic,” says Mukherjee
who opened a store in New York in October last year. “In-
dia is no longer the backyard of global fashion, it’s time we
lead from the front,” he adds. and high jewellery collections. And the second floor is
At the Mumbai store, over 100 chandeliers, 275 car- home to womenswear, menswear, the international col-
pets, 3,000 books, and 150 works of art created by the lection, and Sabyasachi’s accessories.
Sabyasachi Foundation are placed among antique Tanjo- Housed within is a micro-exhibit from the Sabyasachi
re paintings, vintage photography and historical trinkets, archives currently showcasing couture from the Sabya-
some from his own collection. The space is lined with sachi X Christian Louboutin collaboration from 2015 and
souk-sourced curiosity cabinets, modern interpretations 2016. There is also a tea room, where guests can savour
of Persian Qajars, rare French Art Nouveau cabinets, some of his favourite blends. “There’s nothing like sip-
Tang dynasty pottery and other antiques. It is adorned ping on some long leaf Darjeeling in this quiet corner of
with wallpaper from the Sabyasachi for Nilaya collection the store,” says Mukherjee.
by Asian Paints. “The biggest challenge with maximalism With the opening of the Mumbai flagship store, the
is that it never ends. It’s layer upon layer of art, antiques, total number of Sabyasachi stores in India goes up to
crafts, and so on. You can’t just plug a blueprint in with a four—Delhi, Kolkata, Mumbai and a jewellery store in
store like this. It unravels as it’s being layered,” he says. Hyderabad. In addition, there is the New York store and
The ground floor holds the Sabyasachi bridal collec- an exclusive Sabyasachi Jewellery boutique in Dubai.
tion. The first floor is dedicated to the brand’s largest
showcase of jewellery in the world, housing fine, heritage @smitabw

Business Today 28 May 2023

INSPIRATIONAL LEADERS FROM INDIA’S CORPORATE WORLD C
SHARE THEIR INSIGHTS AND WISDOM ON A WIDE RANGE OF TO
PHOTOS BY MANDAR DEODHAR

WINNING IS NEVER MAGAZINE KING

easy. Especially
when you are tasked with leading and
growing an organisation through
particularly tumultuous times. But
that’s exactly what the winners of the
BT-PwC India’s Best CEO awards did
and were felicitated for on the eve-
ning of April 26, when the who’s who
of India Inc. descended in Mumbai
to celebrate and recognise these ex-
emplary leaders at the BT MindRush
event. The programme kicked off
with masterclasses by spiritual guru
Gaur Gopal Das and Sougata Ray,
Professor of Strategy and Entrepre-
neurship at ISB. Also in attendance
were noted dignitaries like Union
Minister Jyotiraditya Scindia, along
with winners of the awards, such as
Tata Sons Chairman N. Chandrasek-
aran and Nandan Nilekani, Chair- The winners of the BT-PwC India’s Best CEO awards for 2022 with Jyotiraditya Scindia, Union
man of Infosys, among many others. along with members of the BT leadership team
The winners shared many nug-
gets of wisdom from their industries Powered by Knowledge Support Design Partner
at the various panel discussions that
were held throughout the evening.
Over the next few pages, we bring you
the highlights of the various sessions
at the event.
 Presents

State Partner

CONVERGED AT BT MINDRUSH TO
OPICS BY TEAM BT

MAGAZINE KING

Minister of Civil Aviation and Steel, and Aroon Purie, Chairman and Editor-in-Chief of India Today Group,

Broadcast Partner Digital Media Partner Trade Media Partner

EVENT BT MINDRUSH

1 2

MAGAZINE KING

4 5

THE ENTREPRENEUR’S PLAYBOOK

Sougata Ray, Professor of Strategy and Entrepreneurship (Practice);
Chair Professor and Executive Director, Thomas Schmidheiny Centre
for Family Enterprise, Indian School of Business

Ray said entrepreneurship competition, below-target net

is contextual and every new
enterprise has a greater possibility
of failing than succeeding
Talking about why new
enterprises fail, he said that
not meeting customer
expectations is one of the biggest
reasons start-ups fail, apart from
factors such as product, cost,
legal conflicts, high cash-burn,
poor unit economics, intense
sales, etc.
He further said that the
alignment of essential factors, such
as timing, team and execution,
idea, business model and funding,
help a new venture succeed. Also,
the creation of a new venture is not
a linear thing as it requires a lot of
experimentation and failing; hence
entrepreneurs should have the
courage to pull the plug
3

1 Aroon Purie, Chairman and Editor-in- 4 Jyotiraditya Scindia

Chief of India Today Group, addressing and Aroon Purie in
the gathering of iconic business leaders conversation at

MAGAZINE KING 2 Two titans of India Inc.—Tata Sons

the event

Dignitaries and
Chairman N. Chandrasekaran and 5
Nandan Nilekani, Chairman of Infosys— guests listening
sharing a candid moment to a panel
discussion with
rapt attention
3 (From left) Aroon Purie, Nandan Nilekani,
N. Chandrasekaran, Jyotiraditya Scindia,
BT Editor Sourav Majumdar and Radico 6 Aroon Purie
Khaitan COO Amar Sinha unveiling the welcomes
6
Best CEOs issue of Business Today N. Chandrasekaran
PHOTO BY HARDIK CHHABRA

OLD CHALLENGES‚ NEW SOLUTIONS

Aayush Ailawadi (left), Technology Editor and Presenter, BT
TV, with Swami Gaur Gopal Das, Personal Coach, Monk,
Author, Lifestyle & Motivational Strategist

Author and motivational He said empathy in a

strategist Swami Gaur
Gopal Das said one of the
distinguishing qualities of a
CEO is the curiosity to always
know and learn, and the
humility and the vulnerability
to say I don’t know
Pointing towards the rapidly
changing world, Das said
that adaptability is a must to
ensure success
leader is crucial to leading
people because when people
are treated well and shown
empathy and compassion, they
walk the extra mile and do more
than what is expected of them
He also said that it is
important for leaders to be
firm in their values but flexible
in their beliefs, in order to
succeed
EVENT BT MINDRUSH
1 base of AI in India is going
1 Puneet Dalmia (right), MD of Dalmia
Bharat Group, receives the Best CEO in
Cement award from Jyotiraditya Scindia
and Aroon Purie
2 Parmod Sagar, MD & CEO of RHI
Magnesita India, receives the Best CEO in
Industrials award
3 Suneeta Reddy, MD of Apollo Hospitals
Enterprise, receives the Best CEO in
Pharma & Healthcare award
4 Suresh Narayanan (right), Chairman and
MD of Nestlé India, receives the Best CEO
in FMCG award
MAGAZINE KING
2 Steel, Government of India
3 of giving away multiple
4 flattened
POWERING
CHANGE
Nandan Nilekani, Co-founder
& Chairman, Infosys
Nilekani said that India
has an approach where
the country knows how
to balance regulation and
innovation, and the same
thing will have to be done
for AI because the user
to be huge
Describing the potential
impact of AI as both “scary”
and “exciting”, Nilekani said
that AI will have a significant
impact on almost every
business, forcing companies
to become “AI first” in their
approach
Addressing the concerns of
job displacements, Nilekani
said the implementation of
AI will increase output, which
will, in turn, drive the demand
for a larger workforce to meet
the increased output
A GLOBAL
AVIATION HUB
Rahul Kanwal (left), News
Director, India Today and Aaj
Tak, and Executive Director,
Business Today
Jyotiraditya Scindia, Union
Minister of Civil Aviation and
Minister Scindia said that
the government is working to
develop Delhi into a passenger
throughput terminal with the
capacity of handling 109 million
travellers per year, with plans
to eventually develop multiple
such hubs
He admitted that the legacy
routings had led to hubs being
created in the vicinity of India’s
borders. Hence, the country
should reclaim the traffic going
to overseas hubs
He also said that the
government is working to see
how the volatility curve in
terms of landing and departure
timings between domestic and
international flights could be
REINVENTING
THE COLOSSUS
N. Chandrasekaran,
Chairman, Tata Sons

Chandrasekaran said
he is very bullish on India
and the bulk of capital
investments for the
Tata group over the
next five years will
happen in India; the 5
group is expected to
grow at around 20 per
cent year-on-year
He elaborated that while
there is no slowdown in the
consumer business, the
growth in demand in Tier
II locations is higher when
compared to metros or Tier
I cities
Chandrasekaran said that
the group is working on 6
revamping Air India with the
aim of developing an airline
that every Indian is proud
of; but the group would
need time for that

MAGAZINE KING

5 Praveer Sinha, CEO & MD of Tata Power,

receives the Best CEO in Power award

Dinesh Kumar Khara, Chairman of SBI,

6 receives the Best CEO in BFSI award

7 N. Chandrasekaran, Chairman of Tata

Sons, receives the Business Icon of the
Year award

Vivek Prasad, Markets Leader of

8 PwC India, explains how the winners
were picked

8
EVENT BT MINDRUSH
2 vector between taste,
1 Nandan Nilekani, Chairman of Infosys,
receives the Lifetime Achievement award
MAGAZINE KING
2 Sandeep Kumar Gupta, Chairman & MD of
GAIL (India), receives the Best CEO in Oil
& Gas award
3 Shashi Kiran Shetty, Chairman of Allcargo
Logistics, receives the Best CEO in
Transport & Logistics award
4 Sanjay Koul, Chairman & MD of Timken
India, receives the Best CEO in Auto &
Auto Ancillaries award
3 Sourav Majumdar (left), Editor, Business Today, with
4 He added that there was a
STRIKING THE
RIGHT BALANCE
(From left) Siddharth Zarabi,
Managing Editor, BT TV, with
Suresh Narayanan, Chairman and
MD, Nestlé India
T.V. Narendran, CEO & MD, Tata Steel
Suneeta Reddy, MD, Apollo Hospitals
Enterprise
Dinesh Kumar Khara, Chairman, SBI
THE SKILLS OF AN ENTREPRENEUR
Ajay Piramal, Chairman, Piramal Group
Amidst global headwinds that
have slowed down the growth
of various economies across
the world, Ajay Piramal said that
India has tailwinds rather than
headwinds in the sense that the
country has managed to take
proactive measures when faced
with external challenges
Nestlé India’s Suresh
Narayanan said it was
an exciting time to be
a food company in the
country because of
the multi-generational
consumption happening
due to the good
indulgence, nutrition,
value and lifestyle-
redefining consumption
patterns
lot of positive interest in India
today as many large investors
wanted to invest in the country
Acknowledging the
regulation and compliance
burden on businesses, Piramal
said that regulations need to
come down and in that space,
the government is open to
suggestions
 5

T.V. Narendran of Tata Steel non-communicable diseases

said India provides a clear
growth opportunity as regulatory
initiatives such as IBC, among
others, have created many
inorganic growth opportunities
across industries
Suneeta Reddy of Apollo
Hospitals said there was much to
do in healthcare as it is estimated
that by 2030, India would have
to spend $1 trillion just to battle
Citing Budget numbers that
show investment commitment
was to the tune of `20 lakh crore
in FY22 and `37 lakh crore in
FY23, SBI’s Dinesh Kumar Khara
said private sector capex had
increased. He further added that 6
private sector commitments in
total capex were up to 50 per
cent in FY22 and about 65 per
cent now

MAGAZINE KING
7

INDIA’S Tata Power’s Praveer Sinha said that despite

the negative sentiment prevailing in major
MOMENT economies, India is emerging as a clear winner
(From left) with its vast young population, growing
Praveer Sinha, aspirations among consumers and better 8
CEO & MD, economic policies
Tata Power
Agreeing with Sinha, Sajjan Bhajanka of
Sajjan Bhajanka, Century Plyboards said that when India’s capacity 5 T.V. Narendran, CEO & MD of Tata Steel,
Chairman, receives the Best CEO in Super Large
building and productivity is compared to China’s, Companies award
Century it would take India two decades to reach the point
Plyboards where China is today
S. Suresh, MD, 6 S. Suresh (right), MD of EID Parry (India),
EID Parry (India) Talking about the avenues that need attention receives the Best CEO in Agriculture &
Parmod Sagar, to grow further, S. Suresh of EID Parry said that Allied award
MD & CEO, tech solutions need to be deployed at the farm
RHI Magnesita level to increase the sector’s productivity, with
India more initiatives needed to ensure that farmers 7 Deepak C. Mehta, Chairman and MD of
Deepak Nitrite, receives the Best CEO in
receive the benefits of their work Chemicals award
Shedding light on the dynamic Indian market,
Parmod Sagar of RHI Magnesita said that
multinational firms are attracted to the country 8 Sajjan Bhajanka, Chairman of Century
Plyboards, receives the Best CEO in
due to growing volumes and increasing margins Consumer Goods award
 RAKESH JAIN CEO RELIANCE GENERAL INSURANCE

Reliance General Insurance, a part of Reliance Capital, offers a bouquet of customised insurance products

What was the problem you were

grappling with?
The non-life insurance industry underwent a host of
changes during the Covid-19 pandemic. The sector
also witnessed myriad challenges as we tried to cope
with the aftermath. One of the prominent survival
mechanisms was adopting an accelerated evolution of
digital capabilities. But, the challenge was to find lead-
ers who have a digital-first approach and are equally
aligned with the organisation’s digital vision, thus
capable of implementing such transformation and
translating it into organisational growth.

Whom did you approach for advice and why?

Since the problem was transformational, it was dif-
ficult to deal with it with experience, but it could
be solved by inspiration. We drew inspiration from
global parallels and looked at our diverse peer set to
understand the right approach to the solution.
106 |
MAGAZINE KING What was the advice you received?
The first thing we did was adapt to a digital-first
approach. We upskilled our existing workforce
through multiple training and development initia-
tives. Simultaneously, we appointed leaders based
on the job description and their digital-first skill sets
and approaches that aligned with the evolving roles.
Focussing on the job requirements to find the right
leader has been the key to our growth and success.

How effective was it in resolving the problem?

We are one of the fastest-growing general insurance
companies in the industry, and despite such trans-
formational challenges with people management,
we have registered year-on-year growth since Covid-
19. Our business has grown by nearly 1.3x in the past
three financial years. Moreover, during Covid-19,
when others were grappling with multiple challeng-
PHOTO BY MILIND SHELTE es, we stayed ahead of the curve thanks to our pre-
empted digital transformation and by appointing the
right talent for the right role.

‘Stay ahead by —TEAM BT

appointing the Vol. 32, No. 11 for the fortnight

May 15, 2023 to May 28, 2023. Released on May 15, 2023.

right talent’ Total number of pages 108 (including cover)

Business Today 28 May 2023