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OPINION 11
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VOLUME XXX NUMBER 306


ILLUSTRATION: BINAY SINHA
NEW DELHI | WEDNESDAY, 10 APRIL 2024

Reforming judiciary
ministry has already begun internal preparations
Reserving judgments adding to delays and backlogs for the full Budget for 2024-25 the new government

I
ndia’s clogged justice system has acquired global notoriety, which plays would have to present after the elections. Even the
Reserve Bank of India (RBI) was gently told by Mr
no small part in the investment decisions of multinationals. On Monday,
Modi that it should engage in internal deliberations
Chief Justice of India D Y Chandrachud sent a wakeup call to the higher for the next few weeks, because soon after the for-
judiciary by flagging the proclivity of high-court judges to reserve judg- mation of the new government, a series of steps
ments for a long time after completing the hearing. Seeking information would have to be taken.
from chief justices on details of cases where judgments had been reserved Why do these initiatives appear to be unusual?
for three months, he said he had discovered there were cases where judgments They do appear unusual because no government in
the past initiated the process of policy making for
had been reserved for as long as 10 months. Worse, he noted, several judges
its next tenure even before going in for elections.
partly heard the matters before releasing them, requiring parties to have the Not even Mr Modi attempted such an exercise before
case heard all over again. As the chief justice pointed out, reserving a judgment the general elections of 2019. Clearly, this is an out-
for 10 months amounts to wasting judicial time since the judge concerned is come of the ruling party’s supreme confidence in
unlikely to remember the oral arguments. This is not the first time the apex its electoral prospects. The formation of a govern-
court has urged the high courts to speed up. In 2022, a two-judge Bench
hearing a criminal case observed it was advisable for the high court concerned
to deliver the judgment at the earliest after the arguments were concluded.
Reserving judgments adds to the legendary backlog of court cases in India,
A question of spirit ment led by the Bharatiya Janata Party (BJP) in June
2024 is a foregone conclusion that even Opposition
parties do not question. So, the government is not
losing any time in finalising its 2024-29 action plan
during the pre-election days.
a symptom of the established institutional problems embedded in the judicial Busy civil servants preparing a five-year plan for the next But two sets of questions arise over these initia-
system. The government’s records show that there are over 40 million cases tives. The first set is about the convention a govern-
pending in district and subordinate courts. Of those, more than 100,000 are
government raises questions about convention ment should follow. It is the same convention that
over 30 years old. A key contributory factor in these delays is the large number obliges a government to present only five full

M
embers of India’s fabled steel frame, or civil Not that civil servants do not work in similar mis- Budgets in its five-year tenure. That’s why last
of vacancies on the Benches. Though the Supreme Court currently enjoys one of
servants belonging to the Indian sion mode after general elections are called. In 2009, February the finance minister presented only an
its rare moments of a full quorum, the high courts have 329 vacancies. No Administrative Service (IAS), have been for instance, the civil servants worked hard on how Interim Budget and not a full Budget despite its
surprise, the pendency of cases in the high courts has risen over time. Given that experiencing something quite unusual this summer. to rescue information-technology (IT) firm Satyam belief even then that the BJP would return to power
the high courts and subordinate courts constitute the first line of justice in the Lok Sabha elections have been announced. The from financial fraud, to which its owner had con- after the elections. Thus, if there is no emergency
Indian system, this state of affairs amounts to the denial of justice for the bulk of Election Commission of India (ECI) has enforced fessed in January that year. Civil servants in the situation, can a government in the runup to the elec-
the Indian citizens. Indeed, the fear of being embroiled in long-pending court the Model Code of Conduct. Yet, senior civil servants, finance ministry and the corporate affairs ministry tions ask the civil servants to prepare an action plan
cases tends to encourage the culture of graft and corruption. who usually heave a sigh of relief from their routine spent many a sleepless night helping an indepen- that it wants to implement once it gets re-elected?
work for a few weeks before a general election, are dent committee of professionals to complete the Should there be a pause in government planning or
Increasingly fractious arguments between the executive and judiciary over
under even greater pressure to work overtime. In process of finding a buyer for financially beleaguered decision making once elections are called, provided
judicial appointments have not helped matters. But a shortage of judges is part the past, most bureaucrats, apart from those entrust- Satyam and, as many would argue, to save the rep- there is no crisis to handle?
of the story. The entire judicial ecosystem appears to be shambolic, especially at ed with election duties, would treat this pre-election utation of India’s famed IT industry. Indeed, a new The second set of questions pertains to how the
its lowest level. By the government’s own admission, the lack of physical infras- period as an occasion for recharging buyer for Satyam was found in Tech ECI should view such policy plans being prepared
tructure and support staff in courtrooms and the efficiency and capabilities of their batteries through some relaxed Mahindra through an auction by by the civil servants. The key question here is
investigative agencies and stakeholders (litigants, witnesses) to understand and work and training. But that has not April, much before the elections were whether there is a change in the character of the
follow court rules all contribute to the poor picture of the Indian judiciary. been their experience this time. concluded and a new government government when the ECI notifies the election
Frequent adjournments and appeals have added to the burdens of courts already How different has 2024 been so was in place. schedule. Once the Model Code of Conduct is
far for civil servants? The reality this There is, however, no such crisis enforced by the ECI, should the government of the
weighed down by a notable expansion of central and state legislation. year is that even those not on election or scandal that should have driven day refrain from taking an active interest in policy
The consequences of this can be seen in the total rejection by India’s major duty have been burning the prover- the Narendra Modi government into making for the next five years and let that be the
economic partners of the model Bilateral Investment Treaty (BIT) document, bial midnight oil to prepare an action overdrive in 2024. The urgency of function of the new government?
which requires foreign investors to exhaust all legal remedies within the Indian plan for implementation by the gov- work among civil servants has arisen There is yet another sensitive issue. It is only
system before applying for arbitration. The 13 years it took Vodafone to appeal ernment that would be formed in from a different set of factors. Mr natural that if central ministries are asked to prepare
its retrospective tax case in Indian courts stands as a cautionary tale. Justice June 2024. This is no ordinary action Modi has already told voters that they their action plans for the next five years, some of
Chandrachud’s observation on high-court judges’ practices points to just one plan. It will contain measures and RAISINA HILL should expect a series of new mea- those details may come out in the public domain
policies that the new government sures to counter corruption in the even while elections are being held. Doesn’t the
element of the problem. But it offers a reminder that judicial reform should be
should take and implement during A K BHATTACHARYA first few days of the formation of the ruling party, therefore, enjoy an advantage over the
an urgent item on the reform programme for both the Centre and states. India its five-year tenure. Not just that. The new government. There are also other contesting parties, which can rely only on
will soon be the third-largest economy in the world. It needs a world-class justice plan should also include a series of steps that the reports of the Modi government’s decision to put their election manifestos? Isn’t that why the RBI
system to maintain sound economic, social, and political order. government could take in the first 100 days of its this plan out in the public domain to ensure that sought in 2014 permission from the ECI before
fresh term. Why 100 days? Presumably, the 100-day everyone is aware of the new government’s vision announcing the names of those who would be
deadline is meant to induce a sense of the speed and road map to achieve its goals of making India a granted bank licences?

Challenges for ECI and focus with which the newly elected government developed country by 2047.
would be implementing those decisions. Or, per- Some news reports are talking about a renewed
haps, the idea is to recreate the excitement that the push for infrastructure building, while others are
Of course, most of these questions are in the grey
area. But they do trigger thoughts about the fine
distinction between the letter and spirit of gover-
Young voters must be encouraged to vote 100-day blitzkrieg of policy action taken by the P V referring to economic policy reforms like notifying nance and the electoral code of conduct. And a
Narasimha Rao government had created more than the four labour codes that were passed by Parliament debate over such issues can only strengthen India’s

A
s the world’s largest democracy gears up to vote, starting later
three decades ago! a few years ago. It would appear that the finance democracy and its institutions.
this month, the Election Commission of India (ECI) must effec-
tively manage its numerous responsibilities to uphold electoral
integrity for ensuring the conduct of free and fair elections. None
of the challenges faced by the ECI is novel but they have taken newer forms
in recent years. While some amount of bickering is expected in competitive
elections, the narrative can quickly take a dangerous turn in response to alle-
Retail rush: Keeping faith in markets
gations and counter-allegations of politically motivated fake news. The acri-

R
etail participation in Indian capital markets ous market correction might make newcomers leave since then. The markets have grown much bigger and
mony in the country can be attributed to the ready mix of a teeming internet has exploded since 2020-21. The number of the markets for good. This could have disastrous con- retail participation has sky-rocketed. An idea whose
population, poor digital literacy, and caste, community, and religious senti- demat accounts, at over 150 million, is 275 per sequences for the evolving capital markets. time had not perhaps come in 2017 has come now.
ments that threaten to boil over small provocations. cent higher than the figure as on April 1, 2020. The So how to sustain the retail participation, harness Brokers need to be brought on board. They could use
With the emergence of social media bots and deep fakes, the ECI must proportion of individuals’ trading on the stock the investment potential, and address the challenges? clients’ information disclosed in their tax returns.
stay one step ahead of the problem. The new face of misinformation and the exchanges in the cash segment is around 40 per cent. The regulatory framework in India, as in most oth- Another important matter is to effectively regulate
The individuals hold about 10 per cent of market cap er jurisdictions, is essentially based on the philosophy investment advisers. There are about 1,300 Sebi-reg-
availability of digital content in dozens of Indian languages make it harder in listed companies. This translates into wealth of of “caveat emptor”, which translates into “let the buyer istered investment advisers at present. It is difficult
to monitor and stop bad actors before the damage is done. To combat the about ~40 trillion. In addition, the individuals have beware”. Realising that relying on this principle alone to estimate the number of unregistered advisers,
misinformation menace, the ECI has done well to launch the “Myth and substantial holdings through mutual funds. may not be sufficient to protect the interests of indi- including finfluencers, in today’s digital age and
Reality” project, which entrusts various state authorities with the powers to The reasons for this sudden interest in capital mar- vidual investors, Sebi has proactively taken a number social-media era. Sebi’s efforts to rein them in haven’t
request the removal of false news under different Sections of the Information kets include unusually low interest rates during 2020- of meaningful steps to instill their confidence in the helped much. One of the reasons is the limited out-
Technology (IT) Act. Recently, Google partnered the ECI to offer critical poll- 22, resulting in negative real returns on bank deposits, market. Two areas need intervention. reach of the regulator in a vast and diversified country
related information on Google search and YouTube. This comes along with making people explore other invest- The increased proportion of retail like India. The right beginning to address this problem
ment opportunities; booming capital investors trading in the futures and would be to have a first-level regulator below Sebi
Google’s verification of political advertisers through ECI-provided certificates
markets; the digitisation of processes; options (F&O) segment is worrisome. exclusively to regulate investment advisers. This will
and in-ad disclaimers to show who sponsored the advertisement. ease of going on board using e-KYC; Sebi has been issuing cautionary pub- require an amendment to the Sebi Act. Notably, the
Election officials are also trying their best to address the problem of mushrooming digital platforms offer- lic statements from time to time, concept of first-level regulator exists for stockbrokers,
voter apathy by encouraging voting in areas that drag down the overall poll ing discount brokerage services; suc- bringing out the complexity of this who are regulated by the stock exchanges under the
percentage. In this regard, the ECI has identified nine states and two Union cessful marketing campaign by mutu- market segment and highlighting the Securities Contracts (Regulation) Act, 1956.
Territories that exhibited a voter turnout rate (VTR) lower than the national al funds; and investors’ trust in the possible downside risks. It went to As for the challenges arising out of the digital age
average of 67.4 per cent in the 2019 Lok Sabha elections. A total of 266 parlia- regulatory framework. the extent of issuing a report last year, and social media, there should be a standing com-
There is every reason to celebrate stating that nine of 10 individual mittee to coordinate among the market regulator, the
mentary constituencies or PCs (215 rural and 51 urban) with a low VTR have
the increased retail participation in the traders in the equity F&O segment Ministry of Electronics and Information Technology
been identified for the preparation of a booth-wise action plan so that people Indian capital markets — after all, AJAY TYAGI incurred an average loss of ~1.1 lakh (MeitY), the Telecom Regulatory Authority of India,
are self-motivated to vote. While it is commonly believed that voter apathy more and more individuals are becom- during FY22. These efforts don’t seem and self-regulatory bodies of the media. The govern-
plagues major urban and metropolitan areas (17 of the top 50 PCs with the ing part of India’s growth story. A significant proportion to have had much impact on the investors’ behaviour. ment should notify Sebi as one of the agencies under
least turnout in the 2019 elections), it is also increasing in rural areas. Most of of domestic investors’ participation, by individuals and A few months ago, the media reported that Sebi Section 79(3)(b) of the Information Technology Act,
the PCs with low turnouts are in rural areas. Interestingly, most states in east, institutions, adds to market resilience and reduces for- was planning to link the value of retail investors’ F&O 2000, to direct the intermediaries to remove objec-
northeast, and south India had above-average VTRs. Additionally, the ECI eign portfolio investors’ influence. The people moving trades to their income and net worth, and making tionable content from their sites under Rule 3(1)(d) of
to the capital markets have woken up banks, which stockbrokers responsible for reporting the net worth the Information Technology (Guidelines for
must also look into better ways of engaging with young and first-time voters.
were hitherto used to taking for granted bank deposits. and income of individual traders to the exchanges. Intermediaries and Digital Media Ethics Code) Rules,
To this end, the ECI is leveraging social media to nudge young voters to come The surge in retail participation, combined with Trading activities could then be limited to a specific 2021. Sebi could exercise such powers in consultation
to the polling station to vote through the “Turning 18” campaign. increasing market complexity, poses new challenges threshold relatable to the investors’ net worth. with MeitY.
Unfortunately, India’s youngest voters appear hesitant to exercise their for the Securities and Exchange Board of India (Sebi), Such a proposal was attempted earlier too. Sebi in In conclusion, retail participation in capital mar-
electoral rights. Less than 40 per cent of all 18- or 19-year-olds who are eligible the market regulator. Protecting investor interests is 2017 had come up with a discussion paper “Growth kets in India needs to be facilitated, encouraged, and
to vote have registered for the 2024 elections. Around 18 million new voters in the primary, statutory responsibility of Sebi. Many of and Development of Equity Derivatives Market”, bring- nurtured on a sustainable basis. Much would depend
this age bracket have been recorded on the electoral rolls, while the population the new participants lack awareness, do not receive ing out, inter alia, the need to introduce a product- on the extent to which people keep faith in the regu-
size of this age group stands at approximately 49 million. Such problems require proper advice, and are disadvantaged due to infor- suitability framework for investors in India. The idea latory architecture.
mation asymmetry. Not much attention is paid to was abandoned due to brokers expressing difficulty
targeted interventions and an expanded voter outreach, the results of which these aspects when the markets are booming and one in evaluating their clients’ net worth. Also, some viewed The writer, formerly in the Indian Administrative Service,
will be visible only in the first week of June, when the mammoth exercise ends. has only seen the upside. The blame game starts when the proposal as a bit intrusive and as one that could was chairman, Securities and Exchange Board of India, and
the tide goes out. Some experts apprehend that a seri- harm F&O market sentiment. Times have changed is distinguished fellow, Observer Research Foundation

A destiny in Aligarh playful cautionary note in the beginning:


That storytellers from Aligarh exaggerate.
There’s a lightness to this that goes on to
meet the details the author offers about
memories we try to forget, lie in wait like
dormant volcanoes ready to erupt,
simmering beneath the surface of time,”
the author writes. “As I carefully placed a
city whose admiration for you as a
journalist soon transforms into
suspicion when you reveal your name.
Hurt doesn’t erase itself. It lingers to
removed from the highest place
in heaven.”
As we’re introduced to the author’s
boyhood, the dramatically changing
people are escaping to avoid meeting the Farsh Manzil, his ancestral home. Its decade of my existence in three heartless tell a story. And Zeyad Khan is one of the Indian landscape on the cusp of the
inevitable. The scene involves the principal storyteller, however, is Badi cartons,” he writes, as he finds himself master storytellers. In this engrossing millennium when its liberalised
author’s elder brother, who is “more Ammi, the author’s aunt, his father’s leaving after the riots in northeast Delhi, memoir not only does he recount each economy is interspersed with seminal
excited than afraid” as a bullet misses his eldest sister and his “favourite relative”. where I live, “a truth was forever incident, rumour, and story poignantly, events such as 9/11 and the attack on the
“ear by a few inches”, his terrified, eight- Not only does she tell him stories imprinted in my consciousness: The reminiscent of Joan Didion’s who-I-am- Indian Parliament. The prose here is
month pregnant sister, and his mother like a “witness on a payroll”— notice the only thing we should and-where-I-was tense with mixed feelings one
BOOK REVIEW determined not to allow her home to be metaphor the writer employs —but she leave behind was the CITY ON FIRE: A
BOYHOOD IN
writing oeuvre — experiences with everything new. In this
“used for rioting”, while his father is away also becomes his source of outlining illusion of a belief albeit stylistically part, Mr Khan graduates from cassettes
SAURABH SHARMA “at his office at the university on the other their family history, involving that we can leave ALIGARH different. But he and comics, and starts getting fascinated
side of the town.” Bricks. Bullets. Blood. supernatural figures, too. One of them is things behind.” Author: Zeyad also laces them with by Osama Bin Laden, finds himself
Masroor Khan

U
par Kot in Aligarh, a city in Uttar They witness it all. Words are inadequate Sayyed Baba. Aligarh is my hometown But is it possible dollops of humour. attracted to girls, and recognises himself
Pradesh, is where journalist, when it comes to encapsulating the as well, but I come from a Hindu family. to leave behind your Publisher: There’s another to be an arrogant young adult who tries
writer, and documentary film- immensity and fragility of this situation However, we, too, worship Sayyed memories? Try this: HarperCollins remarkable quality to negotiate with his identity by being a
maker Zeyad Masroor Khan spent his facing these people and its lifelong Baba—a fact I learnt after my father’s As a four-year-old Pages: 312 about his use of member of the Tablighi Jamaat,
childhood. It is a “place where small impact on their psyche. death when my grandmother asked me you press a harmless language. It’s as witnesses friendships blossoming and
Price: ~599
houses pack into each other to a point As it happens, this was an everyday to buy one ladoo for Hanuman and one button only to find innocent as a child’s failing, and, most importantly,
of annoyance amid grand mosques that thing in this Muslim ghetto. for Sayyed Baba for the Diwali puja. that it is an alarm, when he describes confronts loss. Meticulous, visceral, and
dot its dense neighbourhoods,” he notes Divided into three parts—Childhood, In a society where hate is increasingly alerting your neighbourhood to an his childhood days. Sample this “oft- soul-baring, City on Fire is a passageway
in this classic memoir City on Fire: A Boyhood, and Manhood—and 20 inspiring purchase, this patchwork of impending mob attack. Or perhaps used joke in Aligarh” that had me in to understanding how divisive India has
Boyhood in Aligarh. chapters, this book elevates Aligarh’s coexistence is lost on its people. Had the place yourself in a school bus splits: Is this Tala or is it Allah Tala? For a become but offers hope despite the
In general, one’s childhood is a association beyond its almost routine author been consumed by it as well, he’d surrounded by a Hindu mob, pelting city famous for its locks, it’s a layered joke. worrisome reality facing it.
scintilla of emotions, but in the author’s linkage with news regarding the have believed that India was not his stones at it, baying for Muslim blood, Then, when his Badi Ammi tells him
case it appears to become a handy guide imposition of Section 144 and riots that country, that Aligarh was an unsafe and find yourself identified as Muslim that it’s a sin if one who had remembered The reviewer is a Delhi-based writer and
to survive a riot. That’s how City on Fire have plagued this beautiful, messy place for him from where he shouldn’t by your neighbour. Or imagine the look the Quran forgets it as his father did, he freelance journalist.
begins—in the middle of a riot in which cobweb of a city. The book also offers a return but leave . “People, traumas and in the eye of a neighbour in the capital imagines his “grandparents being On Instagram/X: @writerly_life
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10 WEDNESDAY, 10 APRIL 2024
NEW DELHI LONG STORY LIVEMINT.COM

VISTARA’S STAFF CAUGHT


IN merGer TurbuleNce
As Vistara merges with Air India, some employees aren’t sure about their future in the group

File photo of a Vistara aircraft. The airline, a joint venture between Tata Sons and Singapore Airlines, commenced operations in 2015. PTI

Anu Sharma & Mihir Mishra unhappy pilots negotiated with the man- Later that year, the Tata group announced being made (to Vistara employees) will be a majority stake in 1953); between employ-
mint
anu.sharma@livemint.com agement but an ultimatum came in mid- a merger between Air India and Vistara. SHORT completely based on merit,” he said. ees who want to delight customers and
NEW DELHI March to agree to the new structure. Vistara is currently a 51:49 joint venture STORY While Vistara employees feel that they nat- employees who for decades may not have
“The problem is not so much with senior of Tata Sons and Singapore Airlines and urally merit a space in the merged entity cared about market share growth.

A
round 2017, two years after pilots or commanders. It is mainly with jun- commenced operations in 2015. Post the because they launched a full-service airline “Vistara created a stronger brand with
Tata SIA Airlines Ltd, which ior pilots like us. Also, there is no clarity on merger, Singapore Airlines will hold a WHAT and grew the business in a fiercely competi- strong customer loyalty. They don’t want to
operates the airline Vistara, our career progression, or upgrading to fly- 25.1% stake in the merged entity. tive market, Air India’s executives do not play second-fiddle at Air India,” said an
began operations, a board ing long-haul on bigger aircraft,” said a first A transformation team, set up by Air Vistara is merging with Air India. quite agree. “Vistara and its employees have industry executive who has previously
member brought up an unu- officer who did not want to be identified. India, is facilitating the merger. The team Not all employees are happy done a great job of starting an airline from headed airline operations. He didn’t want to
sual matter. In a meeting at the airline’s Senior pilots are more in demand because has three executives each from Vistara and with the roles and salary they scratch and establishing it but the require- be quoted. Air India, the executive added,
headquarters in Gurugram, he pointed out there is a shortage in the industry. They can Air India, besides consultants from the Bos- would receive in the merged ments at Air India are different,” the executive cannot implement the Vistara style of work-
that the airline’s cabin crew members easily do more flying hours unlike first offi- ton Consulting Group, an American man- entity. Some pilots, for instance, quoted above said. He explained that Air India ing without clearing out some factions, and
weren’t comfortable enough in the shoes cers, where currently there is no shortage. agement consulting firm. It is headed by have been protesting. is already an established airline and now, the learning about people who genuinely create
they wear during flights. India produces about 500 pilots a year, Vistara CEO Vinod Kannan, who has also company needs expertise so that it can com- value versus those who manage bosses well.
In the aviation industry, the issue of according to industry estimates. After train- been designated as the chief integration pete with the best airlines in the world. For “The Vistara style came from focusing on
uncomfortable crew shoes is not a Vistara- ing, they all join as junior pilots. officer. Other members from Vistara NOW instance, Air India wants to aggressively the basics, and finding ways to delight cus-
specific problem. All airlines face it but dress “Many of us have concerns about joining include the airline’s heads of flight opera- expand operations internationally. Vistara’s tomers. Today’s Air India is not J.R.D. Tata’s
code requirements prevent most airlines from Air India since we feel that the new system tions and human resources (HR). Repre- While Vistara employees feel employees don’t have much experience in Air India. Vistara came closest to inheriting
looking for alternatives. Vistara, whose female may not be fair to Vistara employees,” the sentatives from Air India include its HR that they naturally merit a space international operations. Second, because it and following the great man’s legacy,” the
cabin crew members wear aubergine-and- pilot quoted above added. head and Nipun Aggarwal, the chief com- in the merged entity because was government owned, Air India has legacy executive further added. Basics, he
gold trouser suits designed by fashion house “The way we are being treated now has mercial and transformation officer. Several they launched a full-service headaches to deal with, and many operational explained, include things like keeping the
Abraham & Thakore, too, couldn’t make led to a lot of anxiety. Many of us are already department-specific sub-teams report to airline and grew the business, Air issues to resolve. As a government entity, cost plane tidy, making sure the seats and that
changes because it would have compromised looking for a job,” an employee who is not the transformation team. India’s executives don’t agree. of operations wasn’t much of a bother for Air seat belt straps are not tainted. Not every-
the design and colour scheme of the uniform, a pilot said. This employee, too, didn’t want Together, they have the difficult task of India but under the Tatas, streamlining one agrees with that view.
the executive recalled. to be identified. Vistara, in a statement finding suitable placements for Vistara expenses—which may include renegotiating “Air India is a behemoth that has seen off
“Normally, such issues are not raised at issued on 6 April, said that 98% of the pilots employees in the new Air India. The trans- WHY supplier contracts—is a priority. incompetent government management
the board level. However, any employee have agreed to the new pay structure. So, formation team is also facing the brunt of Vistara, being a startup, may not have exec- and ridden over the difficulties of the
issue was taken up very seriously back then only a minority are still resisting. employee angst. The two airlines are at different utives with experience in handling such com- Indian Airlines merger. Vistara, on the
with an intent to address Vistara currently has stages of growth. For instance, plexity, he said. other hand, is an airline
it,” said a former Vistara over 6,000 employees, SIZE MATTERS Vistara’s employees don’t have “Air India’s challenges that never lived up to
Vistara had a share of 6.9% much experience in handling While Vistara generated
executive who didn’t
want to be identified. The
airline did not comment
in February 2021. The share
including more than
1,000 pilots. Nonethe-
less, the question is if this
T o be fair, the Tata Group did try to calm
the nerves. In early 2023, Bhaskar
Bhat, Vistara’s former chairman, held a
international operations, where
Air India wants to expand.
and path to growth are
going to be very different
and all Vistara employees
revenue of ₹11,784 crore in
expectations,” said Vir
Sanghvi, television pre-
senter and columnist
on Mint’s query regard- inched up to 9.9% in February discontent and anxiety town hall for employees. He said that may not fit the bill at the 2022-23, Air India is nearly 3 who writes regularly on
ing this board meeting. 2024. In comparison, IndiGo will impact Air India’s employees need not worry about their levels they are at today,” times bigger—it generated food and travel. Air India
Cut to 2024. There is a operations, going ahead. future in the merged entity since they have as ground services, revenue and corporate he added. and Indian Airlines
sea-change in how has gained more in the Will it add to a host of a proven track record of establishing an air- communications have already quit, point- “We have mentioned ₹31,377 crore during the year, merged in 2007. Until
employee concerns are other integration chal- line that is admired by many. ing to the lack of desired roles or role over- earlier as well that the then, Air India mostly
now being handled, sev- same period. lenges the Tata Group “This town hall addressed most of the laps in the merged entity. Like we men- integration of Air India- regulatory filings show. operated on interna-
eral people Mint spoke to faces? Any integration concerns and employees were hopeful that tioned earlier, pilots started resisting the Vistara is a merger for tional long-haul routes
alleged. Some employees, particularly pilots, has finance, legal and cultural threads that all of us would be absorbed in the merged uniform pay structure since February. growth and presents immense future pros- while Indian Airlines operated on domestic
have been offered a ‘take it or leave it’ deal as need to be connected. entity,” said an employee, who did not want pects for the workforce of the merged air- and international short-haul routes.
Vistara merges with Air India, the airline the “In any integration, whether it is steel, to be identified. Nonetheless, some THE VIEW FROM AI line. As we proceed with the process, we are “With Singapore Airlines, one of the
Tata Group took over in January 2022. What aviation, motor, chemicals, there are cul-
we found was significant discontent and anxi- tural issues. When I was in service 15 years
ety about the future among a section of the ago, when we were doing a lot of interna-
employees couldn’t find roles that match
their current designation.
Recently, an executive from Vistara met
W hat does Air India think of employ-
ees joining them from Vistara?
Air India has embarked on a five-year
committed to offering fair and equitable world’s best airlines, and the Tatas behind
opportunities to all employees of both air- it, there was every expectation that it would
lines and ensuring that employees of Vistara be one of Asia’s great airlines. Instead, it has
staff. The issue came to the fore earlier this tional acquisitions, there was financial due the transformation team and requested transformation plan titled ‘Vihaan.AI’. It is find meaningful and relevant roles in the been curiously underwhelming, not even
month after Vistara had to cancel nearly diligence, legal due diligence and we also that a deputy general manager (DGM), one centred around five key pillars—customer integrated entity,” a spokesperson from Vis- as good as Jet Airways was at its peak; and it
30-50 flights per day—pilots started to report prepared a kit for cultural due diligence,” R. of the better performers, be given a similar experience, robust operations, talent tara said in response to queries from Mint. has none of the excuses available to Air
sick, in protest against a new pay policy first Gopalakrishnan, a former director at Tata designation and role in the merged entity. development, industry leadership and “Although the transition may involve India to explain its shortcomings,” he
announced in February this year. Sons and the current non-executive chair- “He was told that a DGM in Vistara can’t be commercial efficiency. Clearly, the airline adjustments, our priority remains the pro- added. Going by market share gains, Vis-
The Tata Group is seeking to implement man of Castrol India, said. compared with a similar ranking officer in needs talent who can execute plans around fessional development and well-being of our tara’s performance does seem under-
a uniform pay structure, which effectively “Cultural issues come out of people, Air India. That the same designation won’t these pillars. A year ago, in March 2023, employees. Our commitment to our staff whelming. According to data from the
reduces the salaries of Vistara pilots by financial issues out of transactions and legal happen,” said an employee in the know Mint quoted Campbell Wilson, the CEO remains unwavering as we move ahead in Directorate General of Civil Aviation, Vis-
bringing them at par with Air India. Under issues out of structures. Structures, people, who didn’t want to be identified either. and MD of Air India, in a report: “We are this transformative phase, offering ongoing tara had a share 6.9% in February 2021. The
the new structure, already followed at Air and transactions are what constitute the The roles aren’t comparable because Air looking at what we do differently moving support and guidance to ensure a seamless share inched up to 9.9% in February 2024.
India, the pilots of Vistara will get a fixed three cables that need to be connected,” he India is a far bigger airline. While Vistara forward. One, we need to attract and retain transition for all,” the spokesperson added. In comparison, IndiGo, the current market
salary for 40 hours a month, instead of 70 added. We will circle back to the culture currently has a fleet of 70 aircraft, Air India talent to support our growth and improve leader of Indian skies, has gained more in
hours they received earlier. In addition, clash at Vistara-Air India a bit later. First, a has double the number at 142, as per air- our capability. We need to adopt a more CULTURE CLASHES the same period—from 54.2% in February
pilots will receive payment in lieu of extra quick peek at people leading the integration.
flying hours and rewards based on the years
of service. The new structure would result A TOUGH TASK
craft tracking website Flightradar24.
While Vistara generated revenue of ₹11,784
crore in 2022-23, Air India is nearly three
performance-oriented culture with clear
objectives, and consequences for under-
performance.” A senior Air India executive,
O ne of the executives quoted above 2021 to 60.1% in February this year.
hinted at two different cultures. The While employee discontent and protests
culture clash is between a new company can result in short-term disruption, things
in a monthly pay reduction between
₹80,000 and ₹1.4 lakh for first officers or A ir India was acquired by the Tata Group
under a government-led strategic dis-
junior pilots, they estimated. Some investment programme in January 2022.
times bigger—it generated ₹31,377 crore
during the year, regulatory filings show.
Some executives from departments such
who did not want to be identified, reiter-
ated this view. “Attempts will be made to
bring everyone on board but the offer
and an old corporation (Air India was will eventually settle down for the merged
founded by J.R.D. Tata as Tata Airlines in entity, experts said.
1932 and the government of India bought mihir.mishra@livemint.com
14 WEDNESDAY, 10 APRIL 2024
NEW DELHI VIEWS LIVEMINT.COM

OUR VIEW THEIR VIEW


ISTOCKPHOTO

We need urgent global talks on


the EU’s carbon import charges
The CBAM could unfairly hit industries in countries like India as it ignores differential obligations

same for making a tonne of steel, CBAM Panel on Climate Change has under-
charges will apply based on the carbon scored inadequate transfers, weak adop-
price gap between the exporting coun- tion of low-emission technologies and
try and the EU. For example, the trading low funding as challenges. Both the
price for a tonne of carbon dioxide UNCTAD and ADB note the adverse
emissions is about $100 in the EU, $34 impact on EU imports from developing
in Australia and $7 in China. So, Austra- nations. The World Bank’s Relative
lian exporters will pay a CBAM charge Carbon Exposure Index has also mapped
of at least $66 per tonne, while the likely the negative impact on developing-
R.V. ANURADHA & impact on Chinese imports will be $93. country exports.
AJAY SRIVASTAVA India has no direct system for pricing One should also not be complacent
are, respectively, a partner at Clarus Law carbon and there is no methodology yet about the CBAM’s limited initial cover-
Associates, and founder of Global Trade to derive a carbon price from measures age of five sectors. Given its basic objec-
Research Initiative. such as energy conservation, manda- tive to level the playing field for EU pro-

Can the rupee go global


tory renewable purchase obligations ducers, its expansion to semi-finished
and fossil fuel taxes. It will, therefore, or finished products will be considered

T
he idea was simple: To meet pro- be left to EU-certified auditors to make in a review planned for 2025. Down-
gressively higher carbon emis- that assessment based on data provided stream industries in the EU like auto-
sion-reduction targets in line with by individual plants in India on the cost manufacturing would perhaps require

without convertibility? its climate-action commitments under


the Paris Agreement and the UN Frame-
work Convention on Climate Change
(UNFCCC), the EU needed to impose
of carbon in the context of a set of frag-
mented domestic regulations.
National carbon prices reflect a vari-
ety of factors, including the level of eco-
the CBAM’s scope to widen soon to
their own sectors so as to secure their
competitiveness, especially those that
rely on CBAM-covered inputs like steel.
higher obligations on its own industrial nomic development, per capita income In its final avatar, the CBAM will have
activities in carbon-intensive sectors. As and each country’s nationally deter- implications for the entire production
An e-rupee may hold an edge in pursuit of an ambitious aim set by India’s PM, but we need a result, it had to tackle two challenges. mined contributions to climate action. cycle of all traded products. Its UK
One, it had to safeguard the competi- The International Monetary Fund, for replica is expected to be enforced from
to grapple with how capital controls could be eased to enable the currency’s globalization tiveness of its domestic industry amid instance, has recommended differential 2027. In the US, both Republican and
cheaper imports from countries where carbon pricing for countries at different Democrat senators have introduced
emission reductions or the carbon price stages of economic development—a different versions of laws that will
for emissions are lower because of dif- 2030 price floor of $75 a tonne for impose charges on imports based on

L
ast week, Prime Minister Narendra of converting large sums restricted to regulated fering reduction obligations; and two, it advanced economies, $50 for high- their environmental impact in compari-
Modi asked the Reserve Bank of India entities. Yet, if we expect our currency to hold had to prevent carbon leakage through income emerging economies such son with US-made alternatives. These
the relocation of its own industrial as China, and $25 for lower-income could render differential climate targets
(RBI) to prepare a 10-year strategy liquidity appeal around the world, like the US activity to countries with lower carbon emerging markets such as India. By under the UNFCCC meaningless. Fur-
to make the Indian rupee a globally dollar does, capital controls would have to be prices or emission targets. aiming for “equalization” with the EU, ther, the tariff reductions and market
“accessible and acceptable” currency. dropped entirely. Whether this can be done Thus was born the EU’s Carbon Bor- CBAM charges would run against the access promised in free trade agree-
Since the Indian economy is expected safely was examined by a panel set up by RBI in der Adjustment Mechanism (CBAM)—to reality of differential carbon pricing ments that India is negotiating will also
to be among the world’s three biggest national 1997, and some of its advice for a prudent switch equalize the carbon price of imported and emission reduction obligations. likely be nullified by border taxes and
products with its carbon price. From 1 The EU’s new mechanism could be carbon charges. Small producers will be
economies in less than a decade, with only to a fully convertible rupee remains relevant. January 2026, EU importers of products valuable if it were to have an impact on hit far more, not only by the burden of
China’s and America’s larger than ours, it is easy For one, our currency must not keep losing its in five categories—iron and steel, alu- emission reduction by forcing imports to paying carbon price differentials, but
to grasp why such an aim might beckon. It’s internal value to inflation. This calls for fiscal minium, cement, fertilizers, electricity decarbonize. But that is unlikely. Both also because of sheer compliance costs,
more than a matter of prestige. A globalized discipline. For another, we need a banking sys- and hydrogen—will need to buy CBAM the UN Conference on Trade and Devel- including of data collection, auditing
currency confers major advantages. Above all, tem that’s resilient in the face of shocks and certificates priced at the price difference opment (UNCTAD) and Asian Develop- and certification of emissions.
of embedded emissions between the EU ment Bank (ADB) have concluded that Substantive talks are needed to craft
overseas demand for it—particularly for trade backed by transparency and efficiency across and the exporter country. the CBAM will not have any significant solutions at the UNFCCC and under
and reserves—would cheapen credit within the the financial sector. Plus, our external balances The CBAM’s thrust is on the quantum impact on lowering emissions. They also World Trade Organization/ FTA nego-
country. More rupee bonds being bought will need sustainable stability; our trade gap must of emissions in production processes in highlight the importance of the sharing tiations. Not doing so in a timely and
push their yields down, so we’d effectively have not get cleaved apart by events beyond our con- each of the five sectors, as well as how and transfer of decarbonization technol- effectively way will cost industries of
foreigners lending us funds at lower rates. The trol. To these, add clarity on the external value these emissions are priced at home. ogies, which is not happening effec- developing countries dearly.
Even if the quantum of emissions is the tively. A report of the Intergovernmental These are the authors’ personal views.
US has long had a clear edge on cost-of-capital, of the rupee being set by the market, with RBI
thanks to its dollar being the globe’s dominant resolutely playing a non-distortive role.
currency, with even the euro unable to dislodge The list of asks is daunting. Technology, how-
it. A global rupee would also be convenient for ever, could yet lend RBI’s e-rupee an edge as a
Indian economic agents; who wants foreign central bank digital currency (CBDC) for global
exchange risk? For the currency to actually go use if it is designed not just for minimal cost, but
global, though, our economy would also have also utmost privacy. Initial diaspora use for low- www.livemint.com
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Thursday, April 10, 2014 Vol.8 No.85 `4.00 in Delhi-NCR/`5.00 outside Delhi-NCR 24 PAGES

to globalize: Not only will we need a surge in cost cross-border transfers could conceivably AUTO:Toyota recalls 6.4 million
vehicles worldwide >24
ENERGY: RIL says new gas rates to
be effective 1 April >3

demand abroad for what we produce, we would expand to sundry other purposes, commercial CONTENT PARTNER
AVIATION: Etihad may not have to
make open offer to Jet shareholders >11
MARK TO MARKET: Odds are stacked
against TCS’s ‘FY15 > FY14’ statement >14
Our carbon emissions
have to turn the rupee fully convertible. needs included, should it be kept free of geo-
SENSEX 22,702.34 Æ 358.89 NIFTY 6,796.20 Æ 101.15 DOLLAR `60.14 Æ `0.01 EURO `82.95 Æ `0.44 GOLD `28,615 Æ `126 OIL $107.80 Æ $0.13

have to eventually go to zero.


AMIT DAVE/REUTERS
RACING AHEAD EC now says it QUICK EDIT

Markets hit a can’t enforce AAP’s

So far, US-style capital account convertibility political sanctions (and Swift-type disruptions). new high, but
its guidelines
on manifestos
forgiveness
F orgiveness is not a
common idea in Indian

We have to. Otherwise we’re


B Y A NUJA & U TPAL B HASKAR politics. In fact, the need
························· for it rarely arises as cor-

will rally last?


NEW DELHI
ruption, caste and winna-

has been a non-starter of an idea. It gave policy- As a direct liability of RBI, with no risk of an
T he Election Commission of
India (EC) has admitted
that it will not be able to scru-
bility are its dominant
themes.
There is one exception.
tinize manifestos and act In recent times, Aam Aad-
against political parties that mi Party (AAP) leader
have not disclosed the finan- Arvind Kejriwal has en-
Sensex ends at a record following year, from 4.4% in cial implications and fiscal dured slaps and assaults
22,702.34 points even 2013-14. burden of their promises— with equanimity. He has

never going to have a stable


“It is evident that investors something it had highlighted forgiven his assailants.
as concerns emerge

makers shudders after the Asian currency crisis intermediary failure, the e-rupee might also
are buoyant,” said Jayant in an earlier order. Why are leaders of AAP
whether the market Manglik, president of retail dis- The Commission's position being assaulted to a far
tribution at Religare Securities should bring some relief to greater extent than those of
gains are sustainable Ltd. parties that are already chafing any other party? Have Indi-
Even the bears are smiling. under the restrictions imposed ans discovered a taste for
B Y A MI S HAH & Shankar Sharma, vice-chair- by its so-called model code of hitting their leaders? Not
R AVINDRA S ONAVANE man and joint managing direc- conduct. really.
························· tor of First Global Securities “With the polling already The trouble with AAP, as
MUMBAI
Pvt. Ltd, a man generally kicking off, it would not be this paper has pointed out

of 1997, which saw several open economies find international takers if it assures its users an B enchmark stock indices known to be contrarian, said possible to look into the mani- frequently, is its raising of

climate and that’s what our


closed at new highs on India is better placed than oth- festos of all the political parties citizens’ expectations, at
Wednesday on foreign er emerging markets because of and take relevant action on it,” least to a degree far greater
fund inflows, prospects of a sta- the improvement it has shown said a senior EC official who than any other party. The
ble and business-friendly gov- in economic indicators such as spoke on condition of ano- resentment it breeds when
ernment emerging from the the current account deficit. nymity. hopes are not fulfilled is
general election and an upbeat The country will continue to Over the past month, all par- equally high. The autorick-
forecast of economic growth by attract foreign funds as long as ties have released their mani- shaw driver who slapped
the International Monetary the elections do not throw up a festos with great fanfare, but Kejriwal on Tuesday was

battered by capital flight and short-sellers like easy way to program it (say, for routine pay-
Fund (IMF), although some fractured mandate, according none have charted out the fis- upset that he wasted his
doubts persist whether the re- to Sharma. Signing in: The Bharatiya Janata Party’s prime ministerial candidate cal roadmap for their big-ticket hard-earned `500 on AAP.
cent market gains are sustaina- Yet, some have begun to Narendra Modi signs his nomination papers to contest the Lok Sabha promises. While the Congress Maybe this is unfair on

goal is for human civilization


ble. sound warnings. election from Vadodara on Wednesday. Modi’s nomination was promised the right to health, AAP. But the party should
The BSE S&P Sensex closed In an 8 April research note, preceded by a roadshow, which saw his cavalcade crawl its way through pension and housing for all, now evaluate the conse-
1.61%, or 358.89 points, up at Kotak Securities Ltd struck a the streets of Vadodara as supporters cheered. Modi’s major opponents broadband connectivity to 2.5 quences of making promis-
22,702.34 and the National note of caution, saying inves- for the seat are Congress general secretary Madhusudan Mistry and the es it can’t deliver.
Stock Exchange’s CNX Nifty tors are ignoring potential risks Aam Aadmi Party’s Sunil Kulkarni. TURN TO PAGE 6®
added 1.51%, or 101.15 points, to the economy.

George Soros accused of betting on currencies ments), a unique feature of CBDC software.
to end at 6,796.20. “The reward-risk balance is
Both indices also surpassed quite unfavourable in general,
their lifetime highs in intra-day
trading.
based on the binary outcome of
national elections alone. Other MCX decides FAIR DEAL
not to issue Political parties yet to move beyond
The Sensex has thus far risks such as potential weak

to thrive, a stable climate.


gained 7.4% since 1 January, monsoons and growth chal-
backed by $4.5 billion of in- lenges are simply being ignored
flows from foreign institutional
investors; much of this, $4.1 bil-
in the general euphoria,” Kotak
Securities analysts wrote in the preferential symbols on women’s empowerment

crashing. Since then, India has stuck with an old Right now, the e-rupee is only an experiment,
lion, has come in since 1 note, adding that it saw limited
March.
Stocks have run up on antici-
pation of the Bharatiya Janata
upside in most large-cap stocks.
Indeed, in recent days, the
likelihood of the El Nino weath-
shares B Y N AMITA B HANDARE
A SHWAQ M ASOODI
&
HINDUSTAN TIMES

Party (BJP) coming to power af- er phenomenon that could lead ·························
NEW DELHI
ter the elections conclude on 12 to lower monsoon rainfall has B Y S UNIL B .S .
May. On Wednesday, buyers
were also responding to IMF’s
belief that the Indian economy
increased.
The Kotak note also said that
the two major parties—the
sunil.s@livemint.com
·························
MUMBAI
W ho would have imagined
that the roar of the angry
crowds at India Gate in Decem-

ban on anyone limitlessly converting rupees with online bank-to-bank UPI transfers being T
would rebound this year, ena- Congress and BJP—have been he board of Multi Com- ber 2012 would echo all the way
bled by a stronger world econo- silent on their stance on ongo- modity Exchange of India to the general elections 18
my, improving export competi- ing reforms such as fuel subsidy Ltd (MCX) on Wednesday decid- months later? Who could have
tiveness and investment- cuts and the direct benefit ed not to go ahead with a prefer- predicted the ferocity of raw
friendly policies. transfer scheme, and added ential allotment of shares, a emotion spilling over Rajpath
IMF predicted on Tuesday that the election manifestos of move that had aroused the ire of right up to the grand vistas that
that the Indian economy will India’s regional political parties its parent Financial Technolo- lead up to Parliament House?
expand by 5.4% in 2014-15 and (some of which will be a part of gies (India) Ltd, which is in the Looking back at that winter,
accelerate to a pace of 6.4% the the next government) does not process of cutting its stake in it’s hard to say exactly what that

into foreign money, with an annual cap on con- hyped, but it’s also RBI’s best bet for a global K ATHA R IN E HAY HO E
inspire confidence. MCX. raw emotion was all about. Jus-
In another report, also dated The decision was announced tice, said the slogans, but un-
8 April, Standard Chartered after a meeting of the directors of derlying it was a young, restless Leaving a mark: While the protests after the Delhi gang-rape petered out
Bank said that in the past, In- MCX, who said in a statement India’s articulation against mis- as promises of stricter laws were made, the discourse on gender did not.
dia’s equity markets had react- that the board had decided management of the economy
ed strongly to unexpected elec- against proceeding with the pref- and a lack of avenues for ist accused her editor of rape. ment on the first rape case to be
tion outcomes while the cur- erential allotment of shares for growth. Hang rapists, said the Elsewhere, a young intern tried under the new law. Death,
rency market reaction has been the time being. placards but there was equal spoke about sexual harassment ruled the judge for three repeat
muted. The board had met last Thurs- anger against a non-responsive by a retired judge. Stories once offenders who were finally ar-

version and special channels for the settlement play. Of course, RBI will have to earn itself the
“Markets are likely to react day and had deferred the consid- government struggling under relegated to measly column rested after a journalist was
eration of the preferential allot- the weight of scams. A defen- centimetres lost in the raped at Shakti Mills.
TURN TO PAGE 4® ment until Wednesday. Jignesh
Shah-controlled FTIL had op-
sive Congress-led United Pro-
gressive Alliance (UPA) locked
folds of the newspa- 20
per now stayed on 14 NEW It’s too early to see
whether political par-
NOTE TO READERS posed the plan.
“Such a move is vindictive in
down India Gate, making it out
of bounds for the protesters.
front pages for days.
Each charge renewed
INDIA ties will sniff out the
opportunity to score
GENDER
The Media Marketing Initiative on nature to support certain vested And slowly, as a commission the debate, stirring brownie points
Page 18 is the equivalent of a paid- interest and deprive FTIL of its was set up and promises of ideas of empowerment, fanning against each other. Will the
level-playing field to sell its stricter laws made, the protest old resentments, fuelling new Congress use this to validate

of commercial trades deemed okay. The rupee reputation of a worthy issuer. And that would
for advertisement, and no Mint
journalists were involved in shares,” FTIL had said a state- petered out. desires. legislation that it brought un-
creating it. Readers would do well ment on 31 March. The company What didn’t was the dis- Days before the first phase of der its watch? Will the Bharati-
Mint is also available for R8 with to treat it as an advertisement. course on gender. polling began, a sessions court
Hindustan Times in Delhi-NCR only TURN TO PAGE 4® Somewhere a young journal- in Mumbai pronounced judg- TURN TO PAGE 9®

is thus partially convertible, with the privilege call for the macro stability outlined in 1997.

THEIR VIEW

IPL cricket is a fine example of free-market capitalism


audience. Audiences get what they want, time (actual match performance). The media burger, an India-centric creation, players get best to ensure that retail investors are not
MADAN SABNAVIS and as long as they are willing to pay for will pass snide remarks, while supporters substituted during the match to enhance the misinformed, there are no such rules once
match tickets (which can go up to ₹20,000 take umbrage, but nothing can be done for team’s performance. we cross this boundary. Hence, a former
a seat), there can be no counter-argument. the season. Again, it is the market at work. Just as analysts and economists pontifi- cricketer of the Indian team who also runs a
Players are like employees in the capitalist The movement of players from one team to cate on how one should read markets and school for children seems to see nothing
world. All of us get entertainment on a daily another is more like staff attrition, with bet- the economy, there are experts who analyse amiss in doing surrogate ads for a tobacco-

T
he auctions for Indian Premier League basis as we go home and watch IPL matches ter terms making one migrate. Of course, every over that is bowled. This is on a sports based mouth freshener. Such products are
(IPL) stars drew a collective exclama- after office hours. These players play contin- some players are dropped and not business channel, also endorsed by two ‘great’ former Indian
tion when Mitchell Starc was taken by uously for almost two months and burn out for alternatives. though; that’s the differ- team members, as well as a West Indian bats-
one of the franchises for ₹24.5 crore, the easily, just as employees do at work. Their A free-market economy Jaw-dropping ence. Newspapers have at man. Not to mention two Bollywood stars.
highest paid for any cricketer. Was this burn-out is through injury more often than is open to foreign investors least one full page dedi- As determined by the market, we have
shocking? Yes. Was there something amiss? not. But all are paid very well, which is what pitching their products to bids for players cated to what transpired also seen the rise of gaming apps, where any-
No. That’s because it is the market that motivates them to play. The same happens consumers. That’s how we the previous day, with one can create an imaginary team and hope
decided the price of the player. This is what in the corporate world, where employees are got McDonald’s, Nike, Adi-
are driven by descriptions and analyses, for financial rewards. The law takes a view

is chief economist at Bank


happens in any market where forces of
demand and supply meet. Ten team owners
made to work endlessly and compensated
with bonuses and stock options. There is a
das, Pizza Hut and so on.
IPL has the same model.
market forces, just like we follow articles
on GDP growth or infla-
that this is not gambling, but gaming, as it
involves skill! Hence, we see captains of IPL
of Baroda and author of
‘Corporate Quirks: The Darker
were part of an open and transparent auc-
tion that involved a price-discovery process.
lot of travel involved for executives across
cities and countries, where they reside in the
This form of capitalist
cricket also gets the best
just as the mass tion. The forward-looking
guidance given by experts
franchises appearing on TV screens every
few overs to encourage viewers to partici-
Side of the Sun’. Welcome to IPL, which epitomizes Adam best hotels. The same holds for cricketers, foreign names. Think of enthusiasm for for a match to be played the pate and win big on another pitch, online.
Smith’s theory of free-market capitalism. who need to travel every second day from Williamson, Warner, next day is similar to the There are cautionary riders for the attentive,
The set-up is analogous to how the corpo- one city to another. This is the free market Boult, Starc, Cummins, etc. gaming apps is market forecasts we see on but the impact has been tremendous, as mil-
rate sector operates. Just like we have share- place at work, as no one forces anyone to Old brands like Ponting, business pages. lions are hooked on to these games.
holders who repose faith in a company, so it play the game. Sangarakara and Rhodes Free-market capitalism Hence, IPL best exemplifies capitalism.
is with the people who form audiences in At times, bidding for a team player can have also been with the IPL—first as players also gives birth to advertising, which can be The market decides everything. Those who
stadiums or watch matches on TV screens resemble an initial public offering (IPO). A and now as coaches or commentators. extreme at times. As long as the broad rules are not in favour can drop out, as there is no
and hand-held devices. They do not own new entrant to a team (either fresh or from A twist is the introduction of an ‘impact are followed, like no overt advertising for compulsion. The stakes are high and much
teams, but their presence is essential for another side) fits the bill. The franchise pays player,’ much like how multinational corpo- tobacco or liquor, everything is acceptable value is created along the way, as food-deliv-
these tournaments to take place, as this eco- a huge sum (the share premium over the rations (MNCs) operating in India customize in the world of double standards. While we ery services, bars, hotels, travel services, gar-
system exists for them. Sponsors are willing minimum bidding price) to get the player, products to serve domestic preferences. have the Reserve Bank of India and Securi- ments and other businesses boom.
to sponsor as they have a committed home but the cricketer could still misfire at listing Hence, like the famous McAloo Tikki ties and Exchange Board of India trying their These are the author’s personal views.
LIVEMINT.COM VIEWS WEDNESDAY, 10 APRIL 2024
NEW DELHI 15

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

China will confront the dreaded Tesla must launch cheap EVs
but Musk’s talking of robotaxis
middle-income trap this decade Autonomous cars are still a dream but Tesla’s sales slump is real

Lofty statements and reform mantras mean little for its troubled economy. What matters are the actual policies it pursues

BLOOMBERG

LIAM DENNING
is a Bloomberg Opinion columnist covering
energy.

NOURIEL ROUBINI
is professor emeritus of economics at New York
University’s Stern School of Business and
author of ‘MegaThreats: Ten Dangerous Trends
That Imperil Our Future, and How to Survive
Them’

T
he great thing about X, the
rebranded Twitter owned by Elon
Musk, is its frictionless capacity for

A
t this year’s China Development escalation. Let’s back up to several hours Tesla boss Elon Musk hasn’t been clear
Forum (the highest-level annual before that post on what was a bizarre Fri- about the EV-maker’s game plan REUTERS
meeting between senior Chinese day even by the standards of Tesla and its
policymakers and top CEOs, current chief executive officer. Late that morning, Bloomberg, tees up not just a poor set of
and former policymakers, and a Reuters story, citing several unnamed first-quarter results but also, potentially,
academics like me), the discussion sources and internal messages, reported a year where sales either barely grow or
focused squarely on the risk of China falling into that Tesla has scrapped plans for a cheaper actually drop—a big problem for a growth
the dreaded ‘middle-income trap.’ After all, few electric vehicle (EV) dubbed ‘Model 2.’ stock. Musk, in his own way, forewarned
emerging economies have successfully joined the Tesla’s stock dropped by more than 5% in of the miss by previously announcing a big
ranks of high-income countries. short order. Soon after, Musk replied to a push on upselling buyers to Tesla’s full
Will China be an exception to this pattern? tweet noting the story, accusing the news self-driving (FSD) system; signalling a
Following 30-plus years in which China achieved agency of “lying (again).” The stock made need to support sagging margins, explain
annual growth rates close to 10%, its economy has back some lost ground, but still ended the slower sales and, perhaps above all, keep
slowed sharply this decade. Even last year, with day down 3.6%. Less than an hour after investors focused on the company’s
a strong rebound from the “zero-covid” era, that, Musk tweeted again with an touted artificial intelligence chops.
officially measured growth was only 5.2%. Worse, announcement. Tesla’s stock jumped in The mooted robotaxi unveiling is in
the International Monetary Fund estimates that after-hours trading. keeping with this. Musk has been claiming
China’s growth will fall to 3.4% per year by 2028, I cannot speak to the accuracy of the that a Tesla robotaxi—meaning a vehicle
and, given its current policies, many analysts Reuters piece; Musk’s accusation of lying that can safely drive itself while the user
expect its potential growth rate to be only 3% by came with no specifics. His reaction as a snoozes or tweets or whatever—is around
the end of this decade. If that happens, China will whole is interesting, though. the corner since at least 2016, including a
indeed find itself in the middle-income trap. Tesla walking away from the low-priced rousing analyst day dedicated to the
Moreover, China’s problems are structural, EV model would be a bombshell; hence theme in 2019.
rather than cyclical. Among other factors, its slow- the immediate drop in the stock. Only on It is 2024 now and full self-driving,
down is due to rapid ageing, a burst real-estate Tesla’s last earnings call, in late January, despite the name, is decidedly not that;
bubble, a massive overhang of private and public China’s excess supply (relative to domestic ence following the recent National People’s Con- Musk had provided a tentative date for Musk even felt the need to caveat it with a
debt (now close to 300% of GDP), and a shift demand) is already producing deflationary pres- gress, nor met with the full foreign delegation at first production in the second half of 2025, “supervised” in the recent tweet announc-
from market-oriented reforms back towards state sures, heightening the risk of secular stagnation. the latest China Development Forum. Instead, Xi saying of the low-cost project that “this is ing the big push on sign-ups. However,
capitalism. Credit-fuelled investment has grown When China was smaller and poorer, a sharp himself hosted a smaller delegation of foreign really going to be profound, not just in the idea that Tesla will crack autonomous
excessive as state-owned banks lend to state- increase in its exports was manageable in global business leaders. [the] design of the vehicle itself, but in the driving is the key to having its stock trade
owned enterprises (SOEs) and local governments. markets. But now that it is the world’s second- The most charitable interpretation of these design of the manufacturing system.” on a tech-like earnings multiple north of
Also, Beijing has been bashing China’s tech sector largest economy, any dumping of its excess pro- signals is that Xi now realizes he needs to engage Moreover, gathering evidence of a 50 times, rather than closer to a Detroit-
and other private enterprises, eroding business duction will be met by more draconian tariffs and the private sector and international multinational slowdown in Tesla’s sales, culminating in like 5 times. That is especially so when
confidence and private investment. protectionism targeting Chinese goods. corporations to restore their confidence and boost shockingly weak figures for the first quar- Tesla is doing distinctly Detroit-like
In this new period of de-globalization and pro- China therefore needs a new growth model FDI, private sector-led growth and private con- ter released last week, points to the need things, such as offering discounts to clear
tectionism, China appears to have hit the limits concentrated on domestic services (rather than sumption. Since Li is still around, perhaps he is for a cheaper model that could expand the a swelling backlog of inventory.
to export-led growth. The West’s geopolitically goods) and private consumption. Services as a pushing quietly for “opening-up and reforms,” company’s market meaningfully. Any I have no doubt that something will be
motivated technology sanctions are constraining share of GDP are too low by global standards, and while keeping a low profile to show deference to Xi. other company faced with a media report unveiled on 8 August. As with Musk’s
the growth of its high-tech sectors and reducing though Chinese policymakers continue to talk But many observers have a more pessimistic calling into question one of its biggest riposte to the original story on Friday, his
inflows of foreign direct investment (FDI); and the about boosting domestic demand, they seem interpretation. They note that after sidelining strategic initiatives might be tempted to after-market announcement lacked
combination of a high domestic household savings unwilling to adopt the fiscal and other policies market-oriented technocrats such as Li, former issue a detailed rebuttal rather than just a details. Perhaps, finally, despite all the
rate and low consumption rate (owing to weak required to boost private consumption and Premier Li Keqiang, former People’s Bank of one-line tweet from the boss, but Tesla is false starts and missed deadlines, Tesla
social insurance and the low share of household reduce precautionary household savings. The China Governor Yi Gang, advisers like Liu He and different. will reveal a car that can actually drive
income) is further hampering growth. situation demands larger pension benefits, Wang Qishan, and a variety of financial regula- More intriguing was Musk’s upping the itself from Los Angeles to New York and
The old Chinese growth model is broken. greater health-care provision, unemployment tors, Xi has created new party panels on economic ante with that later tweet promising a then park itself—a vision Musk touted
Initially, China’s low (and thus internationally insurance, permanent urban residency for rural and financial affairs that supersede government robotaxi reveal in 125 days. For one thing, when Barack Obama was still US presi-
competitive) wages meant it could rely on light migrant workers who currently lack access to bodies. He has surrounded himself with advisors the Reuters story reported that a big rea- dent. Perhaps not. Maybe it will be some-
manufacturing and exports, before pursuing public services, higher real (inflation-adjusted) like He Lifeng, the vice-premier for the economy, son for ditching the low-cost EV was to thing else. Unveiling the physical design
massive investments in infrastructure and real wages, and measures to redistribute SOE profits and Zheng Shanjie, the new head of the National focus resources on developing a Tesla for a robotaxi—pending the actual roll-out
estate. Now, Chinese authorities are advocating to households so that they can spend more. Development and Reform Commission, who robotaxi. I like to think that if I wanted to of fully autonomous capabilities and regu-
high-quality growth based on technologically While China obviously needs to boost private- are sympathetic to the obsolete dogma of state demonstrate that a story claiming I had latory approval, you understand—is also
advanced manufacturing and exports (electric sector confidence and revive growth with a more capitalism. ditched my plans for a cheap EV in order one potential outcome.
vehicles, solar panels and other green- and high- sustainable economic model, it is not clear that Lofty statements and mantras about reforms to build a robotaxi was incorrect, I would For the Tesla faithful, that could be
tech products) led by financial incentives to Chinese leaders fully appreciate the challenges and attracting foreign investment mean little. avoid that same day suddenly announcing enough. For everyone else, it might be
already-bloated SOEs. But without a matching they face. While President Xi Jinping has over- What matters are the actual policies that the imminent unveiling of a robotaxi. worth remembering that Elon Musk has
increase in domestic demand—especially private seen the move back to state capitalism over the China pursues over the next year, which will There is much context to consider. Fri- been known, at a moment of stress on
consumption—over-investment in these sectors last decade, Premier Li Qiang, a known market- show whether it can circumvent the middle- day’s drama closed out a bad week for Tesla and himself, to tweet the odd gran-
could lead to over-capacity and the dumping of oriented reformer, appears to have been side- income trap and return to the path of more Tesla. The big miss on sales, below even diose, less-than-concrete claim. Robotaxis
these products in global markets. lined. Li neither held the customary press confer- robust growth. ©2024/PROJECT SYNDICATE the lowest analyst forecast tracked by secured? ©BLOOMBERG

MY VIEW | EX MACHINA

Aadhaar-based age tokens can solve a privacy problem


ideally a document that has been issued by children are being exposed to has been sharing any other personal information. all the website needs is the token of a parent
RAHUL MATTHAN the government. Which seems to suggests mounting. Many countries have already This will allow us to verify the age of internet who is provably above the prescribed age.
that in order to comply with their obliga- begun to enact laws to address this—some of users while still preserving privacy. While the solution I have presented uses
tions under the DPDP Act, online services which, like the UK’s Children Online Harms Aadhaar is a digital system that offers a Aadhaar, the same functionality can be built
will have to ask everyone who uses their ser- Act, have even put in place age-gating obli- unique identity to everyone in India. The using just about any digital identity system
vices to first produce identity documents gations similar to those in the DPDP Act. All system includes an age field that, even that offers proof of age.

A
mong the more worrisome provi- before they can proceed. of which is to say that, as extreme as it though not intended to serve as canonical Token-based solutions address privacy
sions of India’s new Digital Personal This, as you can imagine, will break the sounds, Section 9 is not as proof of age, could be used concerns around age-gating. Set up right,
Data Protection (DPDP) Act, 2023, is internet as we know it. Today, we think much of an outlier as we for age-verification. All we they can also reduce the friction implicit in
Section 9 that imposes an obligation on all nothing of flitting from one website to might have thought. Age-gating need is for the Unique any age-gating implementation. If ZKP
data fiduciaries to obtain a parent’s verifiable another by simply clicking on hyperlinks There is almost univer- Identification Authority of tokens are designed in a way so that they can
consent before they process the personal that allow us to navigate wherever our fancy sal agreement on the need under India’s India (UIDAI) to generate a easily be uploaded to one’s internet browser,
data of a child. What this means is that, takes us. In the age-verification future that to protect children online. token for each Aadhaar- all a data fiduciary would have to do is run
before collecting any personal data, busi- Section 9 describes, each such click will To do that, we must iden-
new privacy law holder that could, when the browser token through the ZKP system

is a partner at Trilegal and the


nesses will have to ascertain whether the
person to whom it relates is a child or not.
shunt us into an age-verification pit-stop
where we will have to confirm our identity
tify them as children. But
how do we do so in a way
needn’t mean passed through a suitable
ZKP system, confirm
to ascertain whether the user is of an appro-
priate age. This could take place in the back-
author of ‘The Third Way:
India’s Revolutionary Approach
This, if you think about it, is an onerous
obligation that will likely have far greater
before being allowed to view whatever it is
that website has to offer.
that protects not only their
personal privacy, but
websites asking whether or not the posses-
sor of that token is above
ground, so that the data fiduciary not only
gets to verify the user’s age without access-
to Data Governance’. His X consequences than legislators intended. In Yet, as bad as this friction is, that is not everyone else’s as well? for our personal the prescribed age. ing her personal information, it can do so
(formerly Twitter) handle is order to know whether or not the personal what worries me. What I am really con- One answer might be to It should be possible to without affecting the user experience.
@matthan. data they are processing pertains to a child, cerned about is the fact that in the process of use zero-knowledge proofs documents generate this ZKP token on While India’s digital identity system gives
data fiduciaries will have to verify the age of protecting our children from harm, we (ZKPs), which are crypto- the UIDAI website in much it a relative advantage over other countries,
every person they interact with. In an might have given data businesses something graphic computational the same way as we gener- allowing us to implement this sort of a
entirely online world, there is no way to do they have sought for a really long time—an techniques that mathematically confirm a ate virtual IDs today. Once in possession of tokenized solution at scale, ZKP tokens can
this without introducing friction and excuse to legally collect information on us given fact without disclosing the personal such a token, all a user needs to do is present be used to address age-verification problems
exposing more personal information than that can, better than anything else, uniquely information that would otherwise have been it whenever access is needed to a new web- anywhere in the world. In their search for
is advisable. target us with their algorithms. necessary for that purpose. All it will take is site or online service, so that one’s age can be solutions to fulfil obligations under India’s
The best way to assure oneself of the age It is probably worth pointing out at this for us to generate a digital token that, when proven as appropriate without having to new data protection law, Indian companies
of the person is by validating it using some stage that, around the world, concerns over processed using a ZKP, will confirm that the reveal any other identifying information. could well find answers to a problem that the
form of reliable identity documentation— the amount of inappropriate information person is above the prescribed age without Where a child is looking to access a service, whole world is eager to solve.

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