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12 pages in 1 section BACK PAGE P12 WORLD P9

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VOLUME XI NUMBER 29

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INDIAN EXPORTS
MAY MISS GLOBAL
TRADE REVIVAL Govt bats for rate cut Unified regulator
for GIFT City
to revive growth on the cards
Officials say lower RBI also recommends full-fledged
interest rates needed to arbitration centre
Global trade growth is expected to rebound
boost manufacturing RAJESH BHAYANI
in 2017 but India may not be able to take Mumbai, 23 September WHAT IS A UNIFIED
advantage of this in the US and China
major markets where consumer and
ARUP ROYCHOUDHURY
New Delhi, 23 September The Union finance ministry
REGULATOR?
industrial demand is set to drive trade is finalising norms for a unified
TOUGH CALLS

forward. On Thursday, the World Trade
Organization (WTO) raised the estimate for
growth in world merchandise trade volume
for 2017 to 3.6 per cent from 2.4 per cent it
had projected earlier. The revision is due to
positive economic trends in North America
and China that are leading to a resurgence of
industrial and consumer demand.
However, exporters and trade experts said it
would be difficult for India to tap this
demand in the near term.
BS SPECIALS
Living in harmony
T
he government has regulator for the International
started advocating With economic activityslowing down, Financial Services Centre
another rate cut from some in the governmentfeel a ratecut (IFSC) situated at GIFT City
the Reserve Bank of can boost manufacturing and trade in Gandhinagar, Gujarat, which
Indias six-member Monetary has clocked $7 billion of business
Policy Committee (MPC) to LASTCUT in banking, insurance, and capital
spur lending and consumption, and The Reserve Bank of Indias markets so far.
revive the economy. six-member Monetary Policy The move is expected to
There is scope for monetary easing Committee cut repo rates for the first provide a further push to the
because of inflation projections. time in 10 months by 25 bps in August IFSC. The Reserve Bank of India Acommonregulator for banking,
6> Inflation last month picked up but our (RBI) had written a detailed note insurance, and capital markets
analysis has taken that into WHATGOVERNMENTWANTS to the finance ministry to consid-
consideration We had based it on a | Cutratestoboostlending,consumption er one common regulator for FOR WHOM?
mid-term inflation of 4 per cent, said a | Measures needed across sectors to banking, insurance, and capital The International Financial
senior official on Saturday when asked boost manufacturing markets with all powers to issue Services Centre, situated at GIFT
what the Centre thought of another rate approvals required for doing busi- City in Gandhinagar, which has
cut. The next meeting of the MPC is on ness in the IFSC.

CEA SUBRAMANIAN GETS

The Garo Hills in Meghalaya are emerging
as a fine example of balancing human
needs and wildlife conservation. But not
without the strenuous efforts of various
stakeholders, writes AVANTIKA BHUYAN 7>
COMPANIES P3
Infy to take Indian
start-up tech global
EdgeVerve Systems, the financial product
unit of IT major Infosys, is tapping into
the expertise of Indian start-ups to
step up its digital offering as part of its
Finacle platform for financial service
customers globally. This month, the
company (a fully owned subsidiary of
Infosys) firmed up two partnerships with
local start-ups to take their solutions to
customers globally.
BACK PAGE P12
Task force seeks public
opinion on AI
A government task force is seeking
public opinion on deploying artificial
intelligence (AI) in manufacturing,
health care, agriculture and the
Aadhaar programme. The task force,
set up in August, has been asked to draw
up a policy for the accelerated deployment
of AI and a five-year road map for its
use in government and industry
research programmes.
ECONOMY P5
SBI: Extra provisioning for
stressed telecom sector
The countrys largest lender State Bank of
India (SBI) on Saturday reiterated that the
telecom sector was under stress and the
bank was doing extra provisioning for this.
SBI Chairman Arundhati Bhattacharya said
the telecom sector was under a lot of stress
and the bank was making extra provisions.
October 3-4.
The MPC has cut rates only once this
financial year (2017-18, or FY18), in its
bi-monthly policy meeting in August.
But, it maintained a neutral outlook,
citing uncertainties in inflation
trajectory. The rate cut was the first
in 10 months and brought rates to
a near seven-year low.
Consumer price index (CPI)-based
inflation rose to a five-month high of
3.36 per cent in August, from 2.36 per
cent in July, as food items, particularly
vegetables, turned costly, after
prices fell between April and June.
Gross domestic product (GDP)
growth for the April-June quarter fell to
5.7 per cent from 7.9 per cent in the
corresponding quarter of 2016-17. This is
the lowest since the Narendra Modi
government came to power in 2014 and
India has now lagged China in growth
for the second consecutive quarter.
Turn to Page 4 >
PM promises homes for all in 5 years, jobs
Prime Minister Narendra Modi performing shramdaan for the construction of
a twin pit toilet at Shahanshahpur village in Varanasi on Saturday PHOTO: PTI
A YEARS EXTENSION
ARUP ROYCHOUDHURY
New Delhi, 23 September
Chief Economic Advisor (CEA) Arvind
Subramanian (pictured) will continue in his
current role for at least a year beyond his
tenure, which ends on October 16, Finance
Minister Arun Jaitley said on Saturday.
This ended weeks of speculation on
Subramanians future in the government;
there were reports that he would quit before his
tenure was over.
A senior official said the discussions regarding
Subramanians tenure had been going on for
some time now, and he had briefly considered
not continuing for a second term because
of personal commitments.
Turn to Page 4 >
ARCHIS MOHAN & PTI
New Delhi/Shahanshahpur (Uttar Pradesh),
23 September
Amid expectation that the Centre might
soon announce a booster shot for the econ-
omy, Prime Minister Narendra Modi on
Saturday reiterated his governments
promise of providing every poor person,
whether living in rural or urban areas, a
house by 2022. The PM said his govern-
ment and partys agenda was develop-
ment, not merely votes.
When crores of houses are built across
the country, it will require bricks, cement,
iron and wood. It will generate jobs for
thousands and open up new avenues of
income and employment, the PM said at
a public rally in his Lok Sabha constituen-
cy Varanasi. He inaugurated the first
Pashu Arogya Mela (cattle health fair)
on the second day of his two-day visit.
Indications are the Modi government
might announce a package for power,
housing and social welfare programmes
to generate jobs and perk up demand.
Officialssaid24x7powersupplytoallcould
be among the big-ticket announcements.
On the whole, discussions have been held
on a stimulus package of ~40,000-50,000
clocked business worth $7 billion
The finance ministry has taken in banking, insurance, and
the RBIs proposal for a unified
capital markets, so far
regulator seriously because of the
high potential of the IFSC.
The central bank had also said
WHAT WILL IT DO?
The regulator will have the
some of the successful Asian
IFSCs such as Hong Kong, Dubai,
power to give approvals
and Singapore had one regulator required for doing business in
for all decision-making, which the aforementioned sectors
should be the model applied in
WHY IS IT NEEDED?
India. The proposed name for the
regulator is the GIFT Financial Sebi had to approach the
Sector Regulatory Authority. finance ministry to allow FPIs
The task force consists of senior to operate in commodity
officials from different ministries. derivatives in the IFSC. Though
The move follows concerns that the approval was granted, a
domestic regulators would con- unified regulator would
sider the domestic implications of make the decision-making
the IFSC rules, which ideally
process faster
should not be the case because the
IFSC operated like a foreign coun- OTHER UNIFIED REGULATORS
try in Indian territory.
Hong Kong, Dubai, and Singapore
Turn to Page 4 >
have a unified regulator
Amazon picks
crore after gross domestic product (GDP) 5% in Shoppers
Stop for ~180 cr
growth plunged to a three-year low of 5.7
per cent in the first quarter of 2017-18.
There is expectation that the PM
might announce the stimulus package
during his speech at the Bharatiya Janata ALNOOR PEERMOHAMED
Party (BJP) national executive meeting Bengaluru, 23 September
in New Delhi on Monday. The speech will
be open to media and televised live. The US online retail giant Amazon has picked up
PMs Mann ki Baat address is scheduled a 5 per cent stake in Shoppers Stop for
for Sunday morning. The PM will also ~179.26 crore, its first foray into Indias
give a report card of the various social offline retail space as it looks to beat rivals
welfare schemes launched to commem- Flipkart and Paytm Mall.
orate the birth centenary of Jan Sangh E-commerce is estimated to make up only
leader Deendayal Upadhyaya, whose 2 per cent of Indias overall retail sector, with
birthday falls on Monday. nearly half of the sales coming from smart-
In his pubic address on Saturday, the phones. Amazon is looking to expand its pres-
PM said: If Modi will not take up such an ence in the country beyond online retail. It has
arduous task, who else will, noting that got a licence to operate food retail, offering cus-
crores of families were still homeless. The tomers grocery. Last week, Amazon tied up with
PMsaidthatby2022,whenthecountrycel-
ebrates 75th year of Independence, every
ShoppersStoptoopenexperience storesatretail
outlets. K Raheja Groups Shoppers Stop retail
poor, whether in urban or rural area, will outlets for fashion have a national presence. It
get a home. The PM also distributed also owns offline hyper mall, HyperCity, and
Pradhan Mantri Awas Yojana certificates to Crossword Bookstores.
some beneficiaries. Turn to Page 4 > Amazon and Shoppers Stop have signed a
pact that will allow the offline retailers 400
BACK PAGE 12 > brands to be sold on the Jeff Bezos-promoted
> Village that gave shelter to Humayun e-commerce marketplace. Amazon will get
plays host to PM Modi space to set up experience centres at Shoppers
Stop outlets to promote its fashion products on
its online platform.
The Shoppers Stop stock closed at ~414.65 on

Alibaba and Tencent set fast pace in mobile-payments race
MobilepaymentsappealinemergingmarketsbecauseconsumersneedonlyasmartphonetotransferfundsviaQRcode
NEWLEY PURNELL
New Delhi, 23 September
SiliconValleyishometotheworldsmost
influentialconsumer-techfirms,butChinas
onlinecorporatetitansarewayaheadintherace
tobuildmobile-paymentservicesinmanyofthe
worldsfastest-growingconsumermarkets.
Chinasdigital-paymentsmarket,byfarthe
worldslargest,isdominatedbye-commerce
giantAlibabaGroupHoldingLtd.andsocial-
mediachampTencentHoldings Ltd.Nowthe
twoareimpartingmoneyandknow-howto
mobile-moneystartupsinotherAsianmarkets,
fromIndonesiatoIndia.
As people across Asia increasingly move
from cash to smartphone apps for buying
goods and transferring money between
individuals, US firms are still very focused on
their home market, trying to increase usage
there, said Shiv Putcha, an analyst at research
firm IDC in Mumbai.
InChina,QRcodesareusedwidelybysmartphone
ownerstopaybillsandmakepurchasesinshopsandat
vendingmachinescontributingtoa$9trillion
mobile-paymentmarketlastyear,accordingto
iResearch.Thatisalmost90timesthesizeoftheU.S.
mobile-paymentmarketof$112billion,accordingto
datafromresearchfirmForrester.
TwopaymentplatformsAlibaba-backedAlipay
andTencentsTenpayhandlesome90%ofChinas
onlinepaymentsbytransactionvalue,
iResearchsays.AsChinasmarketmatures,
AlibabaandTencentarechasinggrowth
overseas,helpinglocalstartupsinemerging
SPECIAL marketsrunmobile-moneysystemsthatdont
requireplastic.
Chineseinvestorssuppliedthebulkof$2.7billionin
fundingtoAsianfinancial-technologystartupsinthe
secondquarterof2017,accordingtoresearchfirmCB
Insights.TheirexperienceinChinaandtechnicalsavvy
mayproveevenmorevaluable.AsinChina,merchants
inmanyemergingmarketslackpoint-of-salemachines
neededtoprocesspaymentsvia Apple Inc.s Apple
Payand Alphabet Inc.s AndroidPay.Meanwhile,
fewconsumersinthesemarketshavecreditordebit
cardstomakepayments.
ExecutivesatIndiaslargestmobile-paymentapp,
Paytm,drewinspirationfromAlibaba,oneofitsmain
funders.Paytmschieffinancialofficer,MadhurDeora,
saidhiscompanybenefitsfromfrequentmeetingswith
seniorAlibabaexecutives.Paytmstafftravelto
AlibabasofficesinChinaandviceversa.
Weexchangethoughtsondesignandproduct,Mr.
Deorasaid,referringtothewayappsappeargraphically
onsmartphonescreensandhowservicescanincrease
userengagement.Itisinvaluable,hesaid,tohavea
backerwhoknowsthatifanewfeaturetakesoff,you
couldhave100millionpeopleusingit.
Mr. Deora and his colleagues had noted that
Alibaba was offering users of its app access to
online money-market funds, so the Indian firm
decided to riff on that product. Our takeaway was
that it had to be an instrument people could relate
to, Mr. Deora said. Turn to Page 4 >
Source: The Wall Street Journal
Friday on the BSE.
Investors have ploughed around $6 billion
into Flipkart, while Amazon has so far com-
mitted to investing $5 billion in India. E-com-
merce is expected to become a major driver of
retail in India over the next decade, targeting
users from tier-II and -III cities, who do not have
access to large offline retail stores.
Globally the trend of online retailers going
offline has begun picking up. Amazon has
acquired US-based offline retail chain Whole
Foods for $13.7 billion in June. In China, Alibaba
has opened three massive Hema supermarkets,
where customers can order groceries for home
delivery and even eat in.
Amazon has also opened its own bookstores
in major US cities and has even piloted a
self-checkout grocery store in its hometown
of Seattle.
Indias largest online retailer, Flipkart, has
begun experimenting with offline stores
through its fashion subsidiary, Myntra. In
March, Myntra opened its first store in
Bengaluru to promote its largest private label
brand, Roadster. Unlike previous attempts by
online retailers to open offline experience cen-
tres, customers will be able to buy products
directly from Myntras store. Turn to Page 4 >
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2 COMPANIES
>
Subsidiary rule to restructure firms
Government move to limit number of subsidiaries to help regulators track illicit transactions
VEENA MANI
New Delhi, 23 September
restructuring drive may be in
A the offing for corporate India
following the recent govern-
ment decision to bring down the
number of subsidiaries in a company
to two layers. The corporate affairs
ministry on Friday issued a notifica-
tion in this regard.
The move by the government is
seen as part of its effort to crack down
on shell companies. Experts say the
limited number of layers will ensure
that a company does not use shell
structures to launder money and
evade taxes. Indian companies will
have to restructure themselves to fall in
line with this amendment.
The existing companies having
more than two layers shall only require
to report the same within three
months from the date of enforcement
of the rules. However, such companies
cannot have any additional layer of
subsidiaries over and above the layers
existing on the date of enforcement,
said Sumit Naib, associate director,
Nangia and Co.
Experts say even for unlisted com-
Toyota to wait for charging infra before e-vehicle call
Toyota has no plans to launch
an electric vehicle in India and
would wait for the charging
infrastructure to develop
before taking a call on launch-
ing such models, says a senior
official of Toyota Kirloskar
Motor (TKM). We have no
plans to go electric, vice-chair-
man and whole-time director
panies, there could be heavy cost
involved in shifting all the assets to the
holding company as transferring is
time-consuming. There could be third-
party rights and obligations that may
lead to hurdles in complying with
these changes in structuring of com-
of TKM, Shekar Viswanathan
told PTI over buzz around EVs
(electric vehicles) in the
domestic auto industry with
the government's aggressive
push for e-mobility.
TKM is a joint venture
between the Japanese auto
major and Kirloskar Group.
Toyota
TRACKING SHELL FIRMS
 The government decision to bring
down the number of subsidiaries
in a company to two layers is
likely to see corporate India
going for restructuring
 The corporate affairs ministrys
notification is aimed at
identifying and tracking shell
companies
 Regulators have been finding it
difficult to track down illicit
transactions with no limit on the
number of subsidiaries
panies. There could also be a loss of
capital gains for these companies, say
experts.
While this might pinch India Inc
in the short term, it will be beneficial
for everyone, including banks, as
they will also be able to track loans
Corporation) does have an
electric vehicle (in its portfolio
and has a few vehicles in over-
seas markets) but we (TKM)
will wait for the charging
infrastructure to come up in
India before we ask Toyota
Motor Corporation to give us
(TKM) electric vehicle prod-
(Motor ucts, he said.
MUMBAI | 24 SEPTEMBER 2017
etc, say experts.
Experts point out that multiple lay-
ers of subsidiaries have been used in
many of the cases the corporate affairs
ministry has identified for money
laundering. In many cases, loans have
been diverted to subsidiaries and have
later on come back to the hands of the
promoters, they said.
Regulators have been finding it
difficult to track down illicit trans-
actions with no limit on the number
of subsidiaries. With fewer sub-
sidiaries, it will improve the govern-
ments ability to track down such
transactions.
Currently, a cap on layered sub-
sidiaries an investment company can
have is already in place. The cap will
now be exempt for non-banking
finance companies, banks and state-
run firms. These rules will not be
applicable to foreign firms and acqui-
sition of overseas companies.
Global investors to infuse
nearly $840 million in
power projects
Tata Power has stepped up its focus on the renewables business, evaluating both greenfield and
PTI
inorganic acquisitions. ANIL SARDANA, managing director and chief executive officer, Tata Power, tells
Nirmalya Behera and Jayajit Dash how the company is looking at increased digitalisation
and disruptive technologies to cut costs of thermal and solar power, and its efforts to tide
over underrecovery at its 4,000-Mw Mundra power project. Edited excerpts:
What are your plans to build
a green energy portfolio?
How will the additional
investments be funded?
We have ambitious plans to
keep fuelling multifold
growth across the value
chain. We have gross
generation capacity of 10,613
Mw, of which clean energy is
3,141 Mw, making us one of
the largest non-fossil-based
energy players in India. To
aggregate its clean and
renewable energy portfolio,
Tata Power has initiated the
process of carving out 500
Mw of clean energy assets
from its books into Tata
Power Renewable Energy.
This is a 100 per cent
subsidiary and has an
operating capacity of 1,959
Mw, comprising 907 Mw in
wind, 932 Mw in solar and
120 Mw of waste heat
generation capacity.
We have reiterated our
commitment to clean
energy and have announced
our non-fossil fuel energy
output to be 35-40 per cent
by 2025.
Is solar power a key growth
driver?
Solar power is a focus area
of the government, with
100 Gw installation being
targeted by 2022. In line
with the target, Tata Power
will also focus on solar.
New technologies like third
generation photovoltaic
have reached incremental
efficiencies in lab tests. We
wish to increase our solar
businesses significantly
over time, as the govern-
ment is expected to bid out
large scale projects to meet
its target.
For wind energy, we will
continue to look at
opportunities as and when
these come. The company is
exploring multiple options,
both new projects and
acquisitions, to capture the
market for both solar and
wind-based generation. As
of now, we are able to fund
the proposed renewables
growth from internal
resources. The company is
also in the process of
acquiring land parcels in
Maharashtra, Rajasthan,
Gujarat, Andhra Pradesh
and Karnataka to develop
solar and wind projects.
Solar power rates tumbled
to record lows at recent
bids. Will these be
sustainable?
The falling rates are a result
of falling solar module
prices, easier availability
and competitive capital, and
excess capital chasing
limited capacity, resulting in
developers willing to take
greater risks and perhaps
with lower return. It will be
unfair for us to comment on
price bids of others and
whether those are
sustainable. Each bid has its
unique parameters (solar
park costs, location, solar
resource, scale, offtaker, etc)
and renders the
comparability difficult.
Central projects offer greater
payment security and ease
of approvals, which only
https://telegram.me/PDF4EXAMS
First phase of Navi Mumbai
airport by 2019-end: Fadnavis
PRESS TRUST OF INDIA
Hyderabad, 23 September
Stating that the first phase of
the much-delayed Navi
Mumbai airport project will
commence by December 2019,
Maharashtra Chief Minister
Devendra Fadnavis
Saturday said his government
on
would issue a letter of intent
(LoI) as awarding the contract
is a matter of time now.
He also said the pre-
developmental works for the
ambitious project will be
completed by May next year.
The CMs statement assumes
significance as award of the
LoI is considered as an
important step in taking the
project forward, which is
dogged by inordinate delays
since its conception in 1997.
Infrastructure major GVK
group had bagged the finan-
cial bid to build and operate
AS POWER PLANTS TAKE A LONG TIME TO BE
COMMISSIONED, IT IS IMPORTANT TO KEEP
INVESTING IN THE SECTOR, SO THAT ENERGY
IS READILY AVAILABLE WHEN THE COUNTRY
BECOMES HUNGRY FOR IT IN 2019-2020
AND BEYOND
some states can offer.
How does Tata Power plan
to cut costs of both thermal
and solar power generation?
We operate both at
benchmark costs and will
continue to pursue
digitalisation and other
disruptive technologies, to
optimise cost and efficiency.
Are you evaluating buyouts
of any stressed power
projects to boost your
inorganic growth?
We have partnered global
investors to invest as much
as $840 million in projects.
The platform has
commitments from
Canadas Caisse de Dpt et
Placement du Qubec,
Kuwait Investment
Authority, Omans State
General Reserve Fund and
ICICI Bank to take over
troubled power plants that
have regulatory
uncertainties, fuel supply
disruptions, low demand
and high debt. Mostly, the
collaborations intend to buy
out power plants that are
stressed.
After the Supreme Court
order disallowing
compensatory rates, you
were looking to cut debt.
Any progress?
After the order for CGPLs
(its Coastal Gujarat Powers
plant at Mundra, Gujarat)
4,000 Mw plant, we are
pursuing all alternative
options to tide over the
underrecovery on fuel,
including sourcing of
competitive coal and use of
low grade and blended coal
options.
Efforts are also on to
optimally refinance debt
and minimise the total cost
incurred on servicing.
The combined
investments in Indonesian
coal mines, along with
1
the second international air-
port in the Mumbai metropol-
itan region at an investment of
~16,000 crore earlier this year,
beating rival GMR group.
However, the project could-
nt make any progress as the
state government has not yet
approved and finalised the
finance deal won by the GVK.
Once the government gives its
nod, a letter of award will be
given to the contractor, after
which a special purpose vehi-
cle (SPV) can be set up to exe-
cute the project.
There are two phases of
Navi Mumbai airport. One
phase is the pre-works in
which you have to level the
land, cut a hill and you have
to change the course of the
river. So these are the prede-
velopment works which we
have awarded the contract
and they have already started
the work.
investment in coal logistics
and CGPL, when considered
together, provide a natural
hedge towards future
fluctuation in coal prices.
For long-term sustainability
of the power station,
however, the company is
exploring all options to so
structure the investment
that it earns reasonable
return.
What is Tata Power's total
debt to equity ratio? What
options are you considering
for deleveraging?
The ratio is 3.09 and needs to
be lowered to below sector
normative levels of 2.33. We
are evaluating options for
sale of non-core
investments.
Your take on power demand
in the country?
The power ministry recently
estimated that India won't
need any new power plants
for the next three years, with
the present capacity of 330
Gw. These are operating at
60 per cent capacity because
of poor offtake by
distribution companies.
Indias per capita
consumption of 1,000 Kwh
is a third of the global
average. If we have to
improve consumption,
it is the distribution sector
that has to ensure it caters
to consumers on a
24x7 basis.
Its predicted that
demand is likely to pick up
after 2019, as the Ujwal
Discom Assurance Yojana
and village electrification
programmes start yielding
results. However, as power
plants take a long time to be
commissioned, it is
important to keep investing
in the sector, so that
energy is readily available
when the country becomes
hungry for it in 2019-2020
and beyond.
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.
MUMBAI | 24 SEPTEMBER 2017 COMPANIES 3 <

Infosys to take Indian start-up Ministry criticises

tech to global financial clients SAIL for lack of rails
NEHA DASGUPTA
New Delhi, 23 September

AYAN PRAMANIK
Bengaluru, 23 September FINTECH CATCH across the globe are seeking artificial
intelligence, machine learning and
The Indian government has
criticised state-run Steel
EdgeVerve Systems, an Infosys subsidiary, has other digital technology-based offer- Authority of India (SAIL) for

E
dgeVerve Systems, the financial
product unit of IT major Infosys,
is tapping into the expertise of
Indian start-ups to step up its digital
offering as part of its Finacle platform
for financial service customers globally.
This month, the company (a fully
owned subsidiary of Infosys) firmed up
two partnerships with local start-ups to
take their solutions to customers glob-
ally. On Friday, it said it would take near-
field communications, payments and
location-based services of ToneTag, a
Bengaluru start-up that is backed by
former Infosys director T V Mohandas
Pai, to its customers as part of Finacle.
ToneTag also counts among its
investors Facebook product director
Anand Chandrasekaran, co-founder
of i-Flex Solutions Deepak Ghasias,
and former Wipro chief executive T K
Kurien.
Last week, Infosys Finacle joined
hands with Ratan Tatas Unilazer
Venture-backed Niki.ai to build a joint
solution and provide a smart-pur-
chasing chatbot by using natural lan-
guage processing and machine learning
to speak to customers and perform
online transactions. Niki.ai can also
said it would offer near-field communications,
payments and location-based services of
ToneTag, a Bengaluru start-up backed by former
Infy director T V Mohandas Pai, to its customers
Earlier, Infosys Finacle joined hands with Ratan
Tatas Unilazer Venture-backed Niki.ai to build a
joint solution and provide a smart-purchasing
chatbot to speak to customers and perform
online transactions
The firms were recognised at Finacle FinTech
Connect, an initiative that focuses on
alliances and uses the Infosys Innovation
Fund programme to identify promising
fintech start-ups
deliver personalised suggestions for These start-ups were recognised at
customers of Infosys banking and oth- Finacle FinTech Connect, an initiative
er financial service client analysis. that focuses on alliances and uses the
ToneTag will offer flexible payment Infosys Innovation Fund programme
solutions at banks using contactless to identify promising financial tech-
technology, with the help of biomet- nology start-ups.
rics authentication capabilities at Such partnerships, analysts say, will
Infosys Finacle. This combination will primarily help Infosys build smart
help consumers approve a transaction offerings for financial service sectors
on their phone without sharing the at lower cost, using available expertise
card or account information with the from start-ups.
merchant, said Infosys. Customers of IT service companies
ings that can bring down the cost of
operations and ensure better customer
experience. This has resulted in small
deal sizes for these IT companies, long
dependent on large and long-term soft-
ware service deals.
The Niki.ai chatbot solution should
help banks to enhance their revenues
and improve customer stickiness, said
Sanat Rao, chief business officer at
Infosys Finacle. The services offered
using ToneTag would provide banks a
significant opportunity to gain control
of the last-mile payment experience,
without making substantial capital
investment.
Nitin Babel, co-founder of Niki.ai,
said it would gradually go global with
the Infosys client base, once use of
its chatbot becomes popular at Indian
banks.
The utility of the Niki chatbot is
multifold. It can support any digital
transaction, be it a banking one or an e-
commerce payment. Hence, it can be
adopted in different markets. First, our
focus is to gain a significant foothold in
the domestic (India) market and with
this partnership, we can plan to go glob-
al within a year, he said.
its failure to supply rails to
Indian Railways, according
to a letter seen by Reuters.
Indias mammoth state
railways, hit by a spate of
accidents, is trying to mod-
ernise its ageing tracks, but
steel shortages have stymied
progress. The steel ministry
has asked SAIL, the only sup-
plier of rails to Indian
Railways, to make sure it
meets its target of 1.14 million
tonnes of supplies in 2017/18,
according to the letter.
It is once again reiterated
that the ongoing track renew-
al and capacity augmentation
programme of railways is an
important national project
and the supply of rail by SAIL
is a very critical component
for the success of this project,
the letter, dated September 19
and addressed to SAIL chair-
man P K Singh, said.
Stung by a string of acci-
dents on the worlds fourth-
biggest rail network, Prime
Minister Narendra Modi
Between April and August, SAIL could supply only 70 per cent
of its monthly targets set for Indian Railways, a letter said
recently named a new minis-
ter for the railways, which is
grappling with chronic
under-investment and over-
crowding. Reuters earlier
reported the upgrade for the
countrys accident-prone
network was at risk because
of rail shortages from SAIL.
Between April and
August, SAIL could supply
only 70 per cent of its month-
ly targets set for Indian
Railways, the letter said.
For 2017-18, SAIL has com-
mitted to providing only 1.14
million tonnes, against a
requirement for 1.46 million
tonnes.
For the remaining
300,000 tonnes, Indian
Railways is likely to float a
tender in the next two to three
months, said a railways offi-
cial familiar with the plan.
Jindal Steel and Power
Ltd, which has for years tried
to bag a rail supply contract,
will bid for the tender, a sen-
ior company official said.
SAIL, which has posted
losses for nine straight quar-
ters, is targeting capacity
additions of 2 million tonnes
a year thanks to a new mill
in eastern India.
The steel ministry and
Indian Railways did not com-
ment for this article.
REUTERS

Exceptional circumstances Thyssenkrupp to set

for waiver in Mistry case
Court notes ~6 lakh-cr Tata Sons valuation vs ~291-cr investment in preference shares
DEV CHATTERJEE
Mumbai, 23 September
The National Company Law
Appellate Tribunal (NCLAT)
has said the combined equity
and preference shares share-
holding of Tata Sons in future
would leave only two share-
holders of the Tata group
holding company eligible to
file a complaint of oppression
and mismanagement against
the firm, reducing the rest to
mute spectators.
Tata Sons, valued at ~6
lakh crore, came out with a
~291-crore preference share
issue which was subscribed
mainly by Ratan Tata and
Narotam Sekhsaria the two
beneficiaries in question
and other Tata group veter-
ans, while keeping out
the Mistrys.
We find that except Tata
having issued shareholding
of 31.43 per cent and
Sekhsaria, having 17.01 per
cent shareholding capital of
the company, none of the 49
members are eligible to file
an application under Section
241, individually having less
than 10 per cent of the share-
holding. That means except
that the minority sharehold-
ers join together, i.e. either six
in number or such number of
ILLUSTRATION: AJAY MOHANTY
members whose joint share-
holding will come up to 10
per cent of the issued share
capital of the company, which
will be also not less than three
to four members, none of the
49 shareholders can file an
application under Section 241
alleging oppression and mis-
management, the order by
Justice S J Mukhopadhaya,
retired judge of the Supreme
Court, said. The order was
uploaded on the courts site
on Friday.
Thus, the order noted that
only two major shareholders,
Tata and Sekhsaria, have the
right and prerogative to file
such applications. One or the
other minority shareholder
cannot be asked or directed to
form a group of 10 per cent of
the members, that means six
BALANCE OF SHARE
Shareholder
Tata Trusts
Tata firms
Mistry family
Ratan Tata
Narotam Seksharia
N A Soonawala
Others
As of December 21, 2016
persons in the present case, as
it will be dependent on the
prerogative of the other mem-
bers. We are of the view that
this is one of the exceptional
and compelling circum-
stances, which merit the appli-
cation for waiver subject to
the question, whether (pro-
posed) application under
Section 241 relates to oppres-
sion and mismanagement,
the order said.
When contacted, a Tata
Sons spokesperson declined
to comment.
Appellants (the Mistrys)
have pleaded and not disput-
ed by respondents is that the
valuation of the company
being in the region of at least
~6 lakh crore. The interest of
the appellants in the overall
value of the company would
Articles 121 and 121A of the
Memorandum of Association
of Tata Sons, and said Tata
Equity Pref Equity + Pref
Sons has some control over
65.89 0 7.95 the affairs of Tata group com-
12.87 0 1.55 panies such as Tata Steel,
18.4 0.68 2.82 Tata Motors, Tata
Teleservices, Tata Power and
0.83 35.63 31.43
AirAsia India, and rejected
0 19.34 17.01 the argument of Tata Sons
0 8.82 7.76 that the complaints raised by
2.01 35.53 31.48 the appellant firms were on
unrelated companies.
Source: Company Meanwhile, on Thursday,
Tata Sons shareholders in the
be over ~1 lakh crore. annual general meeting
Therefore, the interest of the passed a resolution giving vot-
appellants in the overall value ing rights to preference share-
of the company is 1/6th of the holders in the company if the
total value of the company. company defaults to pay div-
On the other hand, the value idend for two years or more.
of the preference share hold- When combined with equity
ing would be only ~291 crores, shares, Ratan Tata would
who do not carry voting emerge as the largest share-
rights other than in the holder in the company by
exceptional circumstances, investing just ~105 crore while
the order said. reducing the Mistry family
The interest of the appel- stake valued at ~1 lakh crore
lants to the extent of ~1 lakh to below three per cent.
crore of the overall value of Another resolution passed
the company whose valua- by the shareholders on
tion being in the region is Thursday was to make Tata
about ~6 lakhs crore is anoth- Sons a private limited com-
er factor, which we have kept pany that would make trans-
in our mind to answer the fer of shares difficult for the
application for waiver in Mistrys apart from reducing
favour of the appellants, the the regulatory disclosures
order said. that the company would have
The NCLAT also reviewed to provide.
up group with unions
Honeywell
eyes AI space
over Tata Steel merger
in India
by 2018
REUTERS visory board of Thyssenkrupp ARNAB DUTTA
Frankfurt, 23 September AG and Oliver Burkhard, New Delhi, 23 September
member of the executive
Thyssenkrupp AG is to set up board of Thyssenkrupp AG, Commercial products major
a joint working group of board where he is chief human Honeywell is coming up with
members and labour repre- resources officer, it said. artificially intelligent consu-
sentatives to help implement Thyssenkrupp AG chief mer good products next year.
the plan to merge with Tata executive Heinrich Hiesinger The firm, known for diverse
Steel, it said in a statement on depends on the support of enterprise products and solu-
Saturday, issued after a super- labour representatives, who tions globally and in India, is
visory board meeting. hold half of the 20 seats on the now focusing on increasing
The meeting was held groups supervisory board and its brand recognition among
after Thyssenkrupp have fiercely consumers by leveraging its
top managements Opposition from opposed the deal expertise with specific need-
move this week to Thyssenkrupps with Tata Steel. based offerings in developing
sign a memoran- workforce could On Friday, sever- markets like India.
dum of under- mean long al thousand steel Dino Asvaintra, vice-pres-
standing with Tata negotiations workers took to the ident and general manager
Steel for a 50-50 and delay any streets of Bochum in for Honeywells homes busin-
joint venture. approval of the Germanys industri- ess in the Greater China/high-
If approved, it merger plan by al heartland to growth regions, says the firm
would create the supervisory protest against the will be bringing in consumer
Europes second- board deal, which would products to India. It has iden-
biggest steelmaker include up to 4,000 tified categories such as solu-
after ArcelorMittal, with com- job cuts, about eight per cent tions for air pollution, water,
bined sales of about 15 billion of the combined workforce. food safety and security as
euros ($17.93 billion). Opposition from potential growth areas.
The working group will Thyssenkrupps workforce While we are known for
consist of members of the could mean prolonged nego- our enterprise offerings, we
executive boards of tiations with management decided to market our prod-
Thyssenkrupp AG, and delay any approval of the ucts with focus on the con-
Thyssenkrupp Steel Europe, plan by the supervisory board, sumer market, which gave
which is the unit for the steel scheduled for early next year. birth to the home business
activities within the wider If all labour representa- division. Now we are working
group, representatives of Thy- tives on the supervisory board on pulling together all rele-
ssenkrupps works councils vote against the plans, its vant technologies from our
and the works councils of the chairman Ulrich Lehner could diverse businesses and com-
steel sites, the statement said. still push them through with ing up with integrated solu-
The working group will be his casting vote but it is tions for consumers, he said.
headed by Markus Grolms, Hiesingers declared goal to
deputy chairman of the super- get labour leaders to agree. More on business-standard.com

Over 250
insolvency
cases settled
ABHIIJIT LELE
Mumbai, 23 September

The Insolvency and Bankruptcy Code (IBC) is

beginning to show its effect on defauting bor-
rowers who are preferring amicable resolution
with creditors to facing legal proceedings.
Till date, over 25O cases have been settled
under IBC by the Mumbai bench of the National
Company Law Tribunal (NCLT) even before
admission stage, according to Mukul Shrawat,
judicial member, NCLT, in Mumbai.
The positive effect of IBC is being felt. The
message is quite clear to borrowers if they
have taken debt, it has to be repaid. Many have
preferred settlement with creditors even before
admission of cases at the forum, Shrawat said in
an insolvency summit here.
Shrawat said that earlier a chalta hai atti-
tude to keep pending payment of dues to
lenders was the norm. Now, the need to settle
dues and close litigation is becoming clear. He
blamed lack of due diligence before granting
loans for the bad loans. Bankers often drew com-
fort by creating collateral security of property.
Banks have to examine the profitability of
businesses to which loans are being granted.
There is need to revise the checklist (norms) for
carrying out due diligence to cure the menace of
non-performing loans, he said.
IBC is a new legislation. The roll-out of the
code, till date, shows it will have a beneficial
effect on the system. Yet, there could be con-
cerns over day-to-day problems in its imple-
mentation. Insolvency professionals should form
a nationwide organisation to take up such mat-
ters for early solutions, he said.
The NCLT member also batted for a panel
on the lines of the committee formed for the
goods and services tax to expeditiously
address problems.
 https://telegram.me/TheHindu_Zone https://telegram.me/PDF4EXAMS
4 ECONOMY
>
MUMBAI | 24 SEPTEMBER 2017 1

TAX
BS TUTORIAL

Employees may have to bear Jayant Pai

Financial literacy
1. Which bank did Reserve Bank of India classify as a Too

the GST burden on benefits

Many employee benefits are likely to fall under the ambit of GST. The final cost of these levies may have to be borne
by the employees, as employers are likely to pass them on
ANITA RASTOGI
A
garment manufacturer
rejects defective goods and
then gives his employees a
chance to pick them up at throw-
away prices. Many organisations
offer laptops to employees to
enable them to work on the go.
Should transactions such as these
attract the goods and services tax
(GST)? So far, companies have
analysed the impact of GST largely
on their outward and inward sup-
plies. Most are still grappling with
the mammoth task of making
themselves fully GST-compliant. In
the process, they may have over-
looked the impact of GST on
employee benefits such as health
check-up facilities, mediclaim,
mobile handsets, house lease, long
service awards, employee welfare
schemes, and so on.
Should employee benefits
attract GST?
The first question that arises is
whether employee benefits should
attract GST at all. Tax is to be levied
on supplies of all goods and services
made or agreed to be made for a con-
sideration by a person in the course
or furtherance of business. Under
the GST, employer and employee are
considered as related parties. If the
employer supplies something to the
employee, and payment, albeit sub-
sidised, is received by the former,
such a transaction may attract GST.
If an employer gives a gift of value up
to ~50,000 in a financial year to an
employee, such gifts are specifically
excluded from taxation. Hereafter,
businesses will need to keep a record
of the gifts they give to employees
and their value.
Certain broad principles will
have to be kept in mind while exam-
ining transactions between employ-
er and employee. These are not
defined under the GST but emerge
largely from interpretation of vari-
ous provisions of law. Typically, any
facility that is common to all
employees (and not extended to
only one identifiable employee/cus-
tomer), such as free tea, coffee, etc,
in an office may not attract GST.
Also, any facility provided for official
usage by an employee in the normal
course of employment, such as
office laptop, parking, etc, may not
be exigible (chargeable) to the GST.
However, any other supply by the
employer that is not in the normal
course of employment will have to
be analysed on a case-by-case basis.
Clearly, purchase of second-hand
garments or of old laptops will be
exigible for GST as there is supply of
goods by the employer to the
employee.
A plethora of transactions
between employers and employees
come to mind once one starts listing
these: Club membership, data card
reimbursements, cab facility,
employee engagement, relocation
benefits, recovery on account of loss
of identification cards, and so on.
Each one will have to be scrutinised
for whether they qualify as supply of
goods and services. One might need
to see the employment contracts and
company human resource policies
to figure the answers.
Arriving at right valuation
Interestingly, if the conclusion
emerges that some transactions are
indeed taxable, the next critical
aspect to be looked at is the valua-
tion of employee benefits. Normally,
GST is payable on the transaction val-
ue. But, transactions between related
parties, such as employer and
employee, attract the valuation rules.
The first principle that would apply is
that if the open market value of such
supply is available, then tax should be
paid on such value. If the open mar-
ket value is not available, the value of
supply of goods or services of similar
type and quality should be used. If
neither of the two is available, then
the value should be taken as 110 per
cent of the cost of production or man-
ufacture, or cost of acquisition of such
goods. Finally, if this is also not avail-
able, the value should be determined
using reasonable means, consistent
with the principles and general pro-
visions of valuation rules. No doubt,
valuing employee benefits appropri-
ately will pose challenges. Hence,
businesses need to do proper analy-
ses of these issues, document these
properly, and maintain those docu-
ments for the future.
Club membership and data card
reimbursements might not trigger
GST, as they might be considered as
expenses for an official purpose. But,
a subsidised cab facility or sub-
sidised food subsidy would be
charged to GST. Valuation rules
would need to be applied to these
benefits to determine their correct
value on which tax has to be paid.
Often, companies sell used lap-
tops to employees at subsidised
rates. Company cars used by
employees are sold to the latter at
the end of four or five years at writ-
ten-down values. Now, valuation
rules will have to be applied to all
such transactions and tax will have
to be paid on the appropriate value
that is determined.
Small business owners and
start-ups will need to examine care-
fully each of their transactions with
employees from the standpoint of
GST. Human resource policies will
need to be scrutinised to ensure no
POINTS TO REMEMBER
| GST has to be levied on any
transaction where there is sup-
ply of goods or services in the
course of business
| Going by this definition, many
benefits offered to employees
will fall under the ambit of GST
| Generalised benefits, that are
offered to all employees, are
unlikely to attract GST
| Gifts of up ~50,000 will also
be excluded
| Appropriate valuation of
employee benefits will have
to be arrived at using valuation
rules for paying this tax
transaction is missed. Clearly, if GST
is paid, its impact will finally fall on
employees, as employers will tend to
pass on the burden to them. This
might not be a very attractive propo-
sition. Tax planning will become all
the more crucial in the future.
Considering that GST is such a
mammoth transformational reform,
and trade and industry are still inun-
dated with GST issues, it would be
ideal if the government were to go
slow for the first six to 12 months. In
other words, if businesses have not
paid tax on employee benefits that
are considered as supply, no interest
or penalty should be levied. Just
imagine the list of activities that
needs to be looked at: Gym facili-
ties, notice pay recovery, support
towards corporate education, leave
support, conferences, training, ori-
entation programs, entertainment
allowances, and so on. Initially, the
governments focus should be on
taxing outward and inward supplies
and it should go soft on transactions
between employers and employees.
The writer is partnerGST and indirect
tax, PwC
big to fail earlier this month?
A. State Bank of India
B. HDFC Bank
C. ICICI Bank
D. Citibank
2. _________ was the first Nobel Laureate for Economics.
A. Elanor Ostrom
B. Peter Diamond
C. Ragnar Frisch
D. David Baltimore
3. _________ holds the title of the busiest airport by
passenger traffic for 2016.
A. Chicago O'Hare Airport
B. Heathrow Airport
C. Beijing Capital International Airport
D. Atlanta International Airport
4. ____________ was India's first private sector mutual
fund scheme.
A. Franklin Prima
B. ICICI Value Discovery
C. Zurich Top 200
D. Taurus Starshare
5. Which financial crisis is the film The Big Short based on?
A. The Great Depression of 1929
B. The 1980s US Savings & Loan crisis
C. The Mexican Peso crisis of 1994
D. The 2007 US housing bubble
5. D.
Bluechip.
4. A. It was launched on December 1, 1993, along with Franklin
second with 94 million.
3. D. It handled over 104 million passengers in 2016. Beijing was
economic processes".
developed and applied dynamic models for the analysis of
2. C. He shared it in 1969 along with Jan Tinbergen "for having
in 2015.
Bank. State Bank of India and ICICI Bank were classified as D-SIBs
1. B. It is classified as a D-SIB or Domestic Systemically Important
Solutions
The quiz master is head - marketing, PPFAS Mutual Fund
Send your queries and feedback at yourmoney@bsmail.in

> FROM PAGE 1

Govt bats for... was stuck. Instead of dropping the fiscal

Experts have attributed the slowdown
to the note ban in November last year
and destocking by companies before the
goods and services tax (GST) roll-out on
July 1 this year.
With the criticism of the slowdown
gaining in volume, top policymakers in
the government have held a number of
meetings to brainstorm on ways to revive
the economy, boost exports, spur invest-
ments, and create jobs for the millions
entering the workforce every year.
The officials have deliberated on
ways to raise resources to finance high-
er capital spending beyond the budget-
ed ~3.10 lakh crore for 2017-18. This could
be through higher borrowing or higher
disinvestment receipts. Methods of non-
fiscal stimulus have also been discussed;
these include more infrastructure bonds
issued by central agencies such as the
National Highways Authority of India
and recapitalising banks through either
issuing bonds or paring the govern-
ments stake in state-owned lenders fur-
ther. Debates have also taken place on
whether to spend within the budgeted
means or to let the red line of the fiscal
deficit target slip. This is a marked depar-
ture from the Centres previous stance;
analysts and economists across the
board have said the government should
choose in favour of the former, as private
sector investment still remains subdued.
The official quoted above told
Business Standard that some spending
room was already provided for in the
Budget. We knew when we were mak-
ing the Budget that we were perhaps
cyclically weak. That is why a balance
deficit from 3.5 per cent of GDP to 3 per
cent, we went for a target of 3.2 per cent.
Any change in tack in the middle of the
year could affect the decision-making
credibility of the government. The
expert committee on fiscal responsibil-
ity and budget management had rec-
ommended a 3 per cent fiscal deficit tar-
get for the current financial year.
At an interaction with media, offi-
cials said some measures to boost eco-
nomic activity would be announced
soon. Asked about the slowdown in
manufacturing, the officials said a num-
ber of sectors within manufacturing
should pick up once the effects of the
demonetisation and the GST roll-out
dissipated. What has happened is that
a number of sectors have been affected.
Where that manifests itself is that in
past two of three quarters, manufactur-
ing imports have increased substantial-
ly. Once the effect of the demonetisation
and the GST substantially reverses we
should expect those sectors picking up.
Also these sectors have been affected
by the appreciation of currency, the
official said. Any response has to be
across the board to boost manufacturing
in the economy, like in interest rate and
lower exchange rate. One good news is
that the world exports volume has
increased significantly. So, hopefully,
these one-off effects veering off manu-
facturing will pick up, he said. Growth
in manufacturing declined to 1.2 per
cent in April-June, from 5.3 per cent in
January-March. Mining and quarrying
contracted 0.7 per cent during the quar-
ter, after growing 6.4 per cent in the pre-
vious quarter.
CEA...
A senior fellow at the Peterson Institute
for International Economics, Subramanian
was appointed CEA in October 2014. After
his extension was confirmed on Saturday,
he said, India is a country where there is
never a shortage of issues... It is true that
growth slowdown poses an extra challenge.
I think that this is a good opportunity for
me personally, to try and contribute to the
debate and the solutions.''
He also said the economy was facing
multiple headwinds and there was a need
to attack them on various fronts. We have
seen growth slowing down and investment
not picking up. We have to attack this prob-
lem on many fronts exchange rate, pub-
lic investments while maintaining
macroeconomic stability.
Asked about the appreciation of the
rupee, he said, All countries struggle with
this challenge. Different countries take
measures based on their trade-offs and
objectives. What the RBI (Reserve Bank of
India) has been doing is to stem apprecia-
tion of the rupee. The appreciation in the
rupee-dollar exchange rate, between
January and April this year, has impacted
both exports and imports, he added. Over
the years, his Economic Surveys have stood
out for starting debates and discussions
on a number of issues, including targeted
government services through the JAM
trinity (Jan Dhan-Aadhaar-mobile), a
state-owned bad bank to take over ~7
lakh crore of toxic assets in the banking
system, and Universal Basic Income for
the poor. The CEA has also been a member
of a high-profile panel tasked with recom-
mending a medium-term fiscal road map.
The Fiscal Responsibility and Budget
Management panel had recommended a
fiscal deficit target of 2.5 per cent of gross
domestic product (GDP), revenue deficit of
0.8 per cent, and a combined Centre-state
debt ceiling of 60 per cent of GDP for the fis-
cal year 2022-23. Other recommendations
include setting up of a fiscal council and
giving the government tightly defined
escape clauses to deviate from the road
map. Subramanian had authored a lengthy
dissent note to the committees recom-
mendations, suggesting the focus of poli-
cymakers should be on reducing primary
deficit rather than fiscal deficit. The other
members of the panel drafted a rejoinder to
Subramanians dissent note. The govern-
ment is examining the report.
He has also been one of the most vocal
critics of the RBIs six-member Monetary not for votes, our culture is dif-
Policy Committee, and its inflation mod-
elling. The second part of his 2016-17
Economic Survey released in August said
there was a considerable case for mone-
tary policy easing, given that retail inflation
was at historic lows and there was a wide
divergence between headline numbers
and inflation targets. The Survey said in the
past 14 quarters, inflation had been over-
estimated by more than a 100 basis points
in six quarters, with an average error of 180
basis points. This was, however, not as
stringent a critique as in the past.
The Survey had been considerably
delayed as some in the topmost rung of
government had objected to Subrama-
nians strong criticism of the MPCs infla- While offline retailers are
tion modelling and monetary policy deci-
sions. In June, Subramanian had reacted
quite strongly when the MPC held rates. In
recent times, seldom have economic con-
ditions and the outlook warranted sub-
stantial monetary policy easing.
PM promises...
He said the Opposition indu-
lges in vote bank politics.
"Some politicians work only
when it fetches them votes.
But we have been brought up
in a different culture. For us,
the nation is above all and it is
our top-most priority, not
votes," he said.
Stressing that his govern-
ment's prime agenda was
development, he said,
"Governance is not about pol-
itics or winning elections. The
priority is the well-being of the
nation." "Our (BJP) politics is
people will be spent for their
ferent. In politics, people do
only that task which yields
votes, but our character is dif-
ferent," Modi said.
Referring to the mega ani-
mal fair spread over 1800 acres
of land here, he said "these ani-
mals don't go to cast their bal-
lot. They are not anyone's vot-
ers." The Prime Minister also
promised to double farm
income by 2022. He said farm-
Amazon...
online was unsustainable
also trying to go online, they
have faced mixed success.
Earlier this week, Aditya
Birla Group-owned online
fashion portal Abof said it
would shut operations by the
ers need to be encouraged to
adopt dairy farming and ani-
mal husbandry as alternative
sources of income.
On corruption, Modi said
his government had "waged a
war" against black money and
graft, for which the poor has
had to suffer because of "the
loot" by the dishonest. "A
common honest man suffers
as the corrupt used to loot
him. The campaign for hon-
esty is now moving forward
like a festival. The way in
which our trader brothers are
associating with GST and
Aadhar, every penny of the
I also congratulate the state
welfare. We are moving for-
ward fast," he said.
He also attacked the pre-
vious Samajwadi Party gov-
ernment in Uttar Pradesh.
"The previous government
had no interest in giving
homes to the poor. After
mounting pressure, they gave
a list of only 10,000. But the
current (Yogi Adityanath) gov-
ernment has given a list of
end of the year. The compa-
ny said doing business
TataCLiQ. However, the
since rivals Flipkart and
Amazon were burning mil-
lions of dollars to subsidise
the cost of products.
Tata, one of the countrys
largest retailers, said it has
lakhs of people to avail bene-
fit," he said. Uttar Pradesh is a
key state if BJP is to return to
power at the Centre in 2019.
The PM also spoke about
his Swachha, or Clean, India
campaign. He quoted a survey
and said toilets at home can
save up to ~50,000 per annum
if hygienic practices are adopt-
ed. Praising the people of the
village, where he laid the
foundation of a toilet, for nam-
ing it as "Izzatghar" (the home
of honour), Modi said "I liked
this word so much. Where
there is Izzatghar, there is hon-
our of our mothers and sisters.
government for recognising it
as Izzatghar. In the days to
come, those who are con-
cerned about their honour, will
construct more Izzatghar."
The PM said many new
projects have been launched
for cleanliness in Varanasi,
including a ~600-crore sewer
treatment plant and a unit to
generate power from
garbage.
seen good traction from cus-
tomers on its online portal
company still has a long way
to go to compete with
Amazon, Flipkart and Paytm
Mall, which together control
an estimated 85 per cent of
Indias online retail market.

Unified regulator...
The need for a unified regulator was felt
recently when the Securities and Exchange
Board of India (Sebi) had to approach the
finance ministry over allowing foreign
portfolio investors (FPIs) to operate in com-
modity derivatives in the IFSC. FPIs are
not allowed in the domestic commodity
derivatives market. Sources said the
finance ministry had approved the pro-
posal for allowing FPIs in IFSC. However,
the decision-making would have been
quicker had there been an independent
unified regulator at Gift IFSC. The RBI
could face similar challenges as well.
Nishith Desai, founder, Nishith Desai
Associates, a global legal advisory firm, said,
There is a need to have a unified regulator
for making the GIFT IFSC successful. It
should be free to prepare regulations that
can create an ecosystem suitable for global
investors. Shah also said such a regulator
should have a global mindset and be able to
understand business for quick regulation
and faster implementations of proposals.
According to the Global Financial
Centres Index (GFCI) developed by two
leading think tanks, the Z/Yen Group in
London and the China Development
Institute in Shenzhen, Indias Gift IFSC fig-
ures 10th among international financial
centres that have huge potential to grow.
Shanghai and Singapore are among the
top three, but GIFT IFSC is above New York,
Seoul and Luxembourg.
The proposals actual implementation
may take time as it may have to cross some
layers and legal amendments are needed.
However, if implemented, business could
multiply manifold in a short span of time.
The RBI has also recommended that if
decisions on a unified regulator and a full-
fledged arbitration centre are delayed,
GIFT IFSC will remain a real estate project.
A unified regulator should also be
empowered to take all decisions without
any pre-determined parameters, includ-
ing tax-related issues, with a single-mind-
ed focus to attract high-quality players. Its
decisions shall follow an open and trans-
parent system and approvals can be non-
precedential. There is a need to attract a
few showcase investors in each area,
Desai said.
Another proposal of the RBI that is
being discussed by the task force is to make
the arbitration centre function like a full-
fledged one. GIFT IFSC has an agreement
with the Singapore International
Arbitration Centre (SIAC) and at present
only case hearing is conducted locally
while case management and passing of
awards takes place in Singapore. There are
some legal issues which can be addressed
if awards are also passed in GIFT IFSC and
made enforceable in India under the
Indian arbitration law and can also be
applicable to overseas investors in GIFT
IFSC, which would be similar to the awards
issued by SIAC.
GIFT IFSC can be the ideal venue for
conduct of arbitration. There is a need for
clarity from the government on how
awards passed in GIFT IFSC can be
enforced in India and/or in foreign coun-
tries in view of the New York Convention,
Desai said.
Alibaba...
The result is a savings product
that Paytms more than 225
million users in India can use
to purchase portions of gold
bars through the platforman
idea designed to appeal to con-
sumers accustomed to storing
wealth in the precious metal.
When Indias government
last year suddenly canceled
86% of currency in circulation
to clamp down on corruption
and tax evasion, Paytm
swooped in. It bombarded
Indias merchantsthe vast
majority of which dont accept
credit cards because they lack
swiping machineswith stick-
ers bearing the Paytm logo and
QR codes. The services user
numbers skyrocketed.
Now, Paytm is used in India
to pay for items from roadside
hawkers, rides from auto rick-
shaws and more. Sellers dont
need special gadgets beyond
the QR code, which transfers
money from a buyers mobile
account into the vendors.
Paytm added to its heft in
May, raising $1.4 billion from
Japans SoftBank Group Corp.
Alphabets Google on
Monday launched its own
mobile-payment smartphone
app in India, which people
can use to transfer money to
individuals and businesses
without the use of a credit or
debit card. Meanwhile, Alibaba
and its affiliate Ant Financial
have invested in Thailand in a
financial-services company
called Ascend Money.
Chinas digital-payment
kings have another incentive
to reach out: Chinese interna-
tional tourists, a fast-growing
consumer group. Alibaba and
Tencent want to build links in
their mobile-payment plat-
forms to ensure their core
services are available to
Chinese consumers wherever
they travel.
Ant Financial has partnered
with Indonesian media con-
glomerate Emtek to launch a
digital-payments service in
that country, and with a finan-
cial-technology firm in the
Philippines. Alibaba has been
helping startups learn to use
new cloud technologies to
handle transactions efficient-
ly in their home market,
according to a person familiar
with the matter. Engineers for
Emtek traveled to Alibabas
headquarters in Hangzhou for
training in cloud technologies,
the person said.
Alibaba processes a huge
amount of payment transac-
tions in peak moments and
that kind of experience is hard
to acquire, the person added.
An Emtek spokesman declined
to comment.
Tencent last year led a $175
million round of fundraising
in Indian messaging app Hike
Ltd. In June, Hike brought a
payments feature to its plat-
form, beating larger competi-
tors.
Hike founder Kavin Bharti
Mittal has said the app draws
upon Tencents experience
running Chinas biggest social
network, WeChat, which is
popular for its messaging,
mobile payments and enter-
tainment features. A Tencent
spokeswoman didnt respond
to requests for comment.
China is a few years ahead
of us and working with
Alibaba is sort of our univer-
sity, said Amit Sinha, chief
operating officer of Paytms e-
commerce marketplace.
 https://telegram.me/TheHindu_Zone https://telegram.me/PDF4EXAMS

.
MUMBAI | 24 SEPTEMBER 2017 ECONOMY 5 <

Govt to soon come out with

panchayat staffing rules
New guidelines likely to
dismantle entrenched
nepotism that provided
members enormous
clout in rural India
SUBHOMOY BHATTACHARJEE
New Delhi, 23 September

o make 239,000 panchayats

T more inclusive and in order to

seek uniform results from the
massive funds being devolved to them,
the Centre will soon release a report to
decide on who should be recruited as
non-elected panchayat staff.
The release of the report is expect-
ed to dismantle entrenched nepotism
that provided panchayat members
enormous clout in rural India and has
made many government programmes
non-starters.
Instead of only insisting on educa-
tion levels to decide who should be
recruited as staff in panchayats and
related bodies, the report is expected
to offer practical solutions.
In 2015, the Rajasthan government
enacted a law mandating minimum
educational qualifications for candi-
dates who contest elections for pan-
chayati raj institutions. But no state
has clear rules on how the non-elect-
ed staff at panchayats should be
appointed.
The reforms we suggest are meant
to improve the core staffing in pan-
chayats. There should be rules to select
employees for these posts across
the country, said a source working on
the report.
While literacy is important for pan-
chayat staff to maintain records, the
bodies suffer more because people are
usually appointed to these posts based
on their proximity to panchayat mem-
bers. This affects outcomes.
For instance, in the National Rural
Livelihood Mission that now embraces
most rural development programmes,
the community resource persons to be
chosen will be healthy adult women
below 45 years of age, preferably with
some education. Such a woman
should be a proven member of a self-
help group with demonstrated leader-
ship qualities and articulation skills.
The ministry of rural development
had appointed an expert committee
on performance-based payments for
better outcomes in rural development
programmes under former finance
secretary Sumit Bose. Secretary in the
ministry of rural development,
Amarjeet Sinha, said he expected the
committee to submit its report by the
end of September.
The report will cover the adminis-
trative structure of the Mahatma
Gandhi National Rural Employment
Guarantee Act, the Pradhan Mantri
AT A GLANCE: PANCHAYAT REGIME In most states, there are no dedi-
cated workers for ensuring complex
WEAKNESS: WAY FORWARD: work like house building, which the
| Multiplicity of cadres not warranted by | A comprehensive social capital policy to be ministry estimates involves nine steps
nature of work or skill sets at the block level, most of which is
formed with:
unsupervised.
| Wide variation in terms of engagement > Essential skill sets to be determined for all It will cost money to bring order
duration, rates of honorarium, travel cadres into the chaos. A committee set up
and other conditions during the United Progressive Alliance
> Core training requirements to be determined
| Performance outputs not clearly government in 2012 and chaired by
for all cadres
defined and not linked to payment of V Ramachandran estimated it would
> Standardisation of community cadres into cost ~12,671 crore in 10 years to transi-
honorariums
3 broad categories: tion the 15,000 DRDA staff to an inte-
| Potential unionisation threats among
grated set-up. The plan was scrapped.
the staff (a) Cadres for discharging mission functions
In addition, there are 119,000 com-
| District administration uses workers for (b) Cadres for supporting management of munity cadres engaged to work on
extra work often at the cost of core community institutions, including livelihood most rural development programmes.
activities collectives While the DRDA staff draw salaries,
the community workers are paid ~250-
| No additional payment paid by other (c) Cadres for delivery of livelihood support
750 a day with an upper limit of ~5,000
departments for additional work services to individual households
per month.
QUIRKS OF PANCHAYAT EMPLOYMENT PATTERN The committee has found that
there is no connection between their
DRDA STAFFING TYPES: TYPE OF ROLES/SKILLS DEMANDED OF PANCHAYAT WORKERS: performance and the salaries they
Deputation, contract, Community facilitators, social mobilisers, accountants, draw. The linkage with outcomes is
pre-1999 types, community auditors, trainers, micro-plan facilitators, bank expected to be resisted as it undercuts
pre-1999 types but mitra, bima mitra, kisan sakhi / krishi sakhi, pasu sakhi, the system of patronage.
absorbed matsya sakhi and udyog sakhi The committee has examined the
ways panchayats spend money and
has come to the conclusion that varia-
Awas Yojana, the National Rural instance, in the DRDAs there are four tion in their performance is mostly
Livelihood Mission and that of the dis- types of employees recruited in each due to lack of trained human
trict rural development agencies state (see table). Also, just as the num- resource, said one of the sources.
(DRDAs). Some age-old practices that ber of schemes for rural development Sinha said under the Fourteenth
guide selection to posts in panchayats has expanded so have the types of Finance Commission award, grants of
will be eliminated. One of these debars employees, which makes it impossi- ~2 lakh crore had been allocated over a
patients with a history of leprosy or ble to either monitor their role or make period of five years (2015-2020) to 26
other communicable diseases. These them obey disciplinary steps. states where these institutions were
are ridiculous in todays world, but As a result, delivery of services is a directly responsible for delivery of
they survive, said a committee mem- mess. The ministry of rural develop- basic services in villages. He said states
ber. Because of these and other restric- ment has found that in Rajasthan, had ignored repeated requests to fur-
tions, the same secretary sometimes anganwadi workers monitor the gov- nish audited reports, statements of
works for up to three panchayats. ernments ambitious Housing For All account and utilisation certificates in
The other problem is the profusion scheme. Anganwadi workers are sup- respect of financial assistance provid-
of ill-organised cadres and temporary posed to be only deployed for health ed to them for strengthening pan-
workers to manage programmes. For activities. chayats.

Telecom sector under Globalisation is here to stay, we

stress: SBI chief proved sceptics wrong: Manmohan
PRESS TRUST OF INDIA
Kolkata, 23 September
The countrys largest lender,
State Bank of India (SBI),
on Saturday reiterated that
the telecom sector was
under stress.
SBI Chairman Arundhati
Bhattacharya said, The tele-
com sector is undergoing a lot
of stress and the bank is mak-
ing extra provisions for this.
She said this when asked
whether the Telecom
Regulatory Authority of
Indias (Trais) decision to
reduce the IUC charges would
affect incumbent operators,
such as Vodafone, Airtel and
Idea, which were already feel-
ing the heat of Reliance Jios
disruptive move.
On the banks non-per-
forming assets outlook for the
rest of the fiscal year,
Bhattacharya said, We have
probably reached the bottom.
Slippages are under control
although new sectors like
telecom were showing stress.
Bhattacharya, who inau-
gurated the State Bank
Institute of Management at
New Town area in Kolkata,
said the merger of the associ-
ate banks with itself was a
deep structural reform.
Results will come over a
period of time. We will deliv-
er them in the next three to
four quarters as promised.
Regarding the outlook of the
economy after demonetisa-
tion and the goods and serv-
ices tax roll-out, Bhattacharya
said the government
would have to do some
heavylifting, like infra-
structure development.
PRESS TRUST OF INDIA
Mohali, 23 September
Globalisation is here to stay
and those who were sceptical
about the success of Indias
new policies 25 years ago
have been proven wrong, said
former prime minister
Manmohan Singh.
It was a matter of pride that
the broad thrust and direction
of economic policies had
remained unchanged in
the last 25 years, added the
renowned economist, consid-
ered to be the architect
of Indias reforms in the
early 1990s.
The senior Congress leader
was speaking at the 15th edi-
tion of the Indian School of
Business Leadership Summit
2017 here on Friday.
All of you know that in
1991, we adopted a new
approach for the management
of the economy, involving pro-
gressive liberalisation of both
the internal and external econ-
Authoritarian
responses cannot
solve the real problems
of the people or make
life worth living
MANMOHAN SINGH
Former prime minister
omy. At that time, there were
many people who were scepti-
cal about the success of new
policies. However, we have
proved them wrong, he said.
It was also a period associ-
ated with significant growth
rate of the gross domestic
product and a decline in the
proportion of people living
below the poverty line.
There are undoubtedly
still many challenges, particu-
larly in areas such as health,
education and environment,
and in the pragmatic meas-
ures to bridge inequalities of
income and wealth. However,
the acceptance of the broad
approach of liberalisation has
come to stay.
China, he added, has also
become a great champion of
globalisation.
Singh said India is a land
of immense opportunities but
does face internal challenges.
It has a vast market to
build long lasting, innovative
and competitive enterprises.
While as a democratic nation
we do face internal challenges
for a variety of reasons,
the particular advantage of
democracies lies in their
ability to handle such situa-
tions with maturity.

Plea in Madras HC Cong questions govt Swaraj attacks Pak

for setting up panel
to probe Jaya death
A petition has been filed in the
Madras High Court for setting
up an inquiry commission,
headed by a retired high court
judge, to find out the truth
behind the death of former
chief minister J Jayalalithaa in
December last year. The
petitioner also sought an
interim injunction, restraining
state ministers from issuing
any statements pertaining to
the death. Chief Minister K
Palaniswami had also
announced a probe into the
death last month, conceding a
key demand of the O
Panneerselvam camp. PTI
over Dawood wifes
Mumbai visit
The Congress on Saturday
demanded answers from
Prime Minister Narendra Modi
and Home Minister Rajnath
Singh over the reported
Mumbai visit of Dawood
Ibrahims wife and asked why
no action was taken against
her by the government.
Underworld don Ibrahims
wife Mehajabin Shaikh had
visited Mumbai to meet her
father last year, police officials
had said on Friday, quoting the
fugitive gangsters brother
Iqbal Kaskar, who has been
held by the Thane police in an
extortion case.
at UN, asks leaders
to introspect
Taking a dig at Pakistan,
External Affairs Minister
Sushma Swaraj on
Saturday asked its
leaders to introspect as
to why India is
recognised as a global
information technology
superpower, while
Pakistan is infamous as
the pre-eminent
export factory for
terror. In her address
to the 72nd UN General
Assembly session,
Swaraj accused Pakistan
of waging a war against
PTI India. PTI
 https://telegram.me/TheHindu_Zone https://telegram.me/PDF4EXAMS

6 ECONOMY
>
MUMBAI | 24 SEPTEMBER 2017 1

PEOPLE IN THE NEWS BINAY SINHA

Exports may miss global trade revival dle class and rising wages, China is
Demand in the US and China will drive trade volumes, says WTO expected to relinquish its dominance
over labour intensive, low-end manu-
SUBHAYAN CHAKRABORTY years to 15.3 per cent in 2016-17. facturing in the near future. This is an
New Delhi, 23 September However, major export categories opportunity the Indian industry is
such as textiles and gems and jewellery hoping to exploit.

Heinrich Hiesinger-led German steel maker
ThyssenKrupp and Tata Steel, part of the
N Chandrasekaran-led Tata group have
agreed to form an equal joint venture to
create Europes second-largest steel firm
G
lobal trade growth is
expected to rebound in
2017 but India may not be
able to take advantage of
this in the US and China major
markets where consumer and
industrial demand is set to drive
trade forward.
On Thursday, the World Trade
Organization (WTO) raised the estimate
for growth in world merchandise trade
volume for 2017 to 3.6 per cent from 2.4
per cent it had projected earlier.
The revision is because of positive
economic trends in North America and
China that are leading to a resurgence
of industrial and consumer demand.
However, exporters and trade
experts said it would be difficult for
India to tap this demand in the
near term.
The US is the largest destination for
Indian exports, earning $42 billion in
2016-17. The share of goods heading to
the US has increased over the past five
have stagnated in the US market.
Indias textile exports to the US,
across categories such as apparel,
made-ups and accessories, have suf-
fered over the last few years due to
cheaper alternatives from Bangladesh,
Vietnam and the Philippines.
Our market share has stagnated in
the low single digits and I do not see a
change anytime soon, either in the US
or in Europe, said SK Jain, chairman of
the Apparel Export Promotion Council.
Indias exports of gems and jew-
ellery, especially rough or processed
diamonds, were $9.7 billion, up 12 per
cent in the last year. But experts said the
trend might be reversed next year.
The US is a major market for Indian
manufacturers of generic drugs, almost
half of which, by volume, reach US
shores. In the US, almost 80 per cent of
generics are sourced from India.
However, the market share has stag-
nated while growth in value terms has
slowed down, said PV Appaji, former
% SHARE OF INDIAS TOP EXPORTS (2016-17)
EXPORTS (2016-17) UNITED STATES
Gems and Jewellery
(rough or processed) 9.73 Cotton 1.34
15.3 3.68
Apparel, textile articles
and accessories
US CHINA Pharma products
executive director at Pharmexil.
This was mainly due to price ero-
sion, he added.
On the other hand, India is ill-
equipped to expand exports to China,
its largest trading partner. Only 3.68
per cent of Indias exports find their
way to China. Facing a $51 billion trade
deficit with China, India is trying to
upgrade its basket of exports to the
country. Cotton, iron ore and copper,
the mainstay of Indian exports to
China, have come under increasing
($ bn)
CHINA
Iron ore 1.44
Organic
6.14 chemicals 0.88
5.09 Source: Commerce
ministry
scrutiny as both the government as well
as exporters try to shift towards value-
added exports in an attempt to cap the
growing trade deficit.
Former Commerce and Industry
Minister Nirmala Sitharaman had ear-
lier said the export focus should shift
away from raw materials. The com-
merce ministry has identified indus-
tries such as hardware, electronics,
pharmaceuticals, textiles and auto-
mobile components to realign and
boost exports. With a burgeoning mid-
Changing consumption patterns
have also shaped greater demand for
consumer goods in China, where over-
all demand in the first half of 2017 was
driven by growth in industry (up 6.4
per cent) and services (up 7.7 per cent).
We are trying to harness our
strength in labour intensive sectors
where India enjoys significant advan-
tage over other developing nations, a
commerce ministry official said.
The top five export categories to
China are all input products. These are
used by China to manufacture goods
that it ships abroad, often back to India.
These, along with other raw mate-
rials like iron and iron ore, constituted
more than 70 per cent of Indias exports
to China, said Ajay Sahai, director gen-
eral , Federation of Indian Exports
Organisations. These export categories
were subject to volatile global com-
modity prices and should be swapped
for products higher in the value chain,
a trade expert based in Delhi said.

Non-life insurance sees robust growth

NAMRATA ACHARYA
Kolkata, 23 September
Backed by a healthy growth
in motor and health insur-
ance, investments of non-life
insurance scheme is likely to insurance sector comes from in higher discounts as they
significantly add to the GROWING BIZ health insurance. The premi- would try and increase the
investable pool of non-life Year-wise total investments um collection in this segment market share. As of now there
insurers. Informal estimates of general insurance firms stood at ~27,457 crore in 2015- is no scope for discounts , but
suggest, total premium col- Total investments (~ crore) 16, against ~22,636 crore of the picture would change once
lected from the first year of 2014-15, a growth of 21.30 per the capital flows in, said K

1,88,126
insurance companies rose by operation of Prime Minister cent. Further, after the IPO of Sanath Kumar, chairman and

99,268

1,60,714
around 128 per cent in the Fasal Bima Yojana (PMFBY), the public sector general managing director, National

82,520

1,39,809
past five years. A majority of launched in February 2016, is insurance companies, the Insurance Company.

the investments got chan-
nelised into government
securities.
According to the data from
the Insurance Regulatory and
Development Authority of
India (Irdai), total investments
of non-life insurance compa-
After their 1995 tie-up ended 12 years ago, nies as of March 31, 2016, stood
Anand Mahindra-controlled M&M and at around ~188,126 crore,
James Hackett-led Ford are collaborating against ~82,520 crore as of
March 31, 2011, a growth of
again, this time to explore joint development 128 per cent.
of electric vehicles In 2017, the premium col-
lected on account of crop
expected to be around
~22,000 crore.
According to Sanjay Datta,
chief underwriting and claims,
ICICI Lombard General
Insurance, much of the growth
of non-life insurance has been
driven by retail participation,
particularly motor and health
insurance. At present, at ICICI
Lombard, retail accounts for
about 65 per cent of the total
premium collection, which
was around 50 per cent about
two to three years ago.
Over the last two to three
years, we have seen a 15-16
per cent growth in premium,
mostly driven by health and
motor insurance, said Datta.
The motor insurance busi-
ness continued to be the
largest non-life insurance seg-
1,22,992
retail penetration of non-life
insurance is likely to increase
due to heightened competi-
tion to grab a market share.
2011 2012 2013 2014 2015 2016 After the successful IPO,
Source: IRDAI the general Insurance compa-
nies in the fray would secure
ment with a share of 43.89 per capital which would enable
cent in 2015-16, against 44.14 them for higher growth.
per cent in 2014-15. It reported Currently, due to solvency
growth of around 13.17 per margin restrictions , growth is
cent in 2015-16, against 10.52 measured and controlled.
percent in 2014-15. This would change as the
However, one of the high- insurers would be free to
est growth in the general expand and this might result
Much of the investment
brought about by growth in
general insurance has flown
into government debt over
the past five years. General
insurance companies are
mandated to invest about 30
per cent of their premium in
government securities.
However, most insurance
companies have been invest-
ing more than required in
government securities.
More on business-standard.com

HEALTH
>
1

FIT & PROPER

Your weekly health guide
Fatal toll of cheap cigarettes Cost of healthy
foods linked
Importance of NICHOLAS BAKALAR
23 September GO UP IN SMOKE
| Researchers found that a cheaper cigarettes at a loss
between 2004 and 2014, which
generally followed increases in
tobacco taxes, were associated to heart risks
choosing the A
new study suggests that $1.18 increase in average so that poor people and with 9,208 fewer infant deaths.
the availability of cheaper, price per pack was young people can still take But if there had been no bargain
off-brand cigarettes is associated with a decline in up smoking cigarettes available, 3,195 more

right footwear
PRADEEP MUNOOT
Orthopaedic surgeon and specialist
in knee, foot and ankle surgery
When walking down a short
aisle, climbing a small flight
of stairs, or going for casual
stroll becomes a dreadful
walking experience, it is time
to have a closer look at your
foot health. While a lot of foot
problems may have more
complex reasons, some could
be simply due to incorrect
footwear. Footwear which is
too small or too big, too tight
or too flimsy, too hard or too
soft, too narrow or too wide
and not in congruence to your
foot shape, length, and arch,
will be categorised as incor-
rect footwear. Such incorrect
or ill-fitting footwear is a
recipe to many foot ailments,
which catapult into bigger
problems if not rectified at
the correct stage.
How to know if the
footwear is incorrect
| Your toes graze the tip of
the shoes
| The little toe and the big toe
both should fit comfortably
in the shoe box
| If you develop corns, callous,
bunions then one of the
reasons could be improper
footwear. Too short, too
tight or high-heeled shoes
cause such problems
| An abnormal gait, incorrect
hip rotation, and heel pain
are signs of improper
footwear
| If the arch of your foot aches
at the end of the day, then
your footwear is not
providing proper support
If your shoes are too big, or
they're not supportive enough,
the muscles on the bottom of
your foot tighten with each step
in an attempt to keep the shoe
from sliding off or slipping out.
It can also set the stage for an
overuse injury, such as Plantar
Fasciitis, where the Plantar
Fascia Tendon that runs along
the bottom of your foot from
toes to heel becomes chroni-
cally inflamed. Poorly designed
footwear for your type of phys-
ical activity, can cause a num-
ber of short- and long-term
health problems that affect
various parts of our bodies.
Hence, it is important to choose
proper footwear to be well-
heeled.
Dos and Don'ts
| High arch people need to
wear cushioned shoes
| The insole and outsole
should provide enough
cushion for shock absorption
| There should be 1.5 cm of
space between your longest
toe and the end of the shoe
| Your heels should fit
comfortably in your shoes
with minimal slippage
| If heels needs to be worn, try
to spend minimum time in
them. The heel height should
be no more than 3-4 cm, if
they are to be worn daily
| Narrow pointed footwear can
lead to bunions
| Since our feel have slight size
difference, always look at
fitting the larger foot first
| Buy stretchable shoes to
decrease joint irritation
associated with an increase in
infant mortality.
Researchers writing in JAMA
Pediatrics studied the link
between cigarette prices and
infant mortality in 23 European
countries from 2004 through
2014. During this time, there were
more than 53 million live births.
After controlling for other fac-
tors, they found that a $1.18
increase in average price per
pack was associated with a
decline of 0.23 deaths per 1,000
babies in the first year of life and
0.16 deaths per 1,000 babies in
the second year.
Sleep deprivation can effectively
treat depression, says study
PRESS TRUST OF INDIA
Washington, 23 September
Sleep deprivation administered
in controlled settings may rapid-
ly reduce symptoms of depression,
a study claims.
Researchers found that partial
sleep deprivation sleeping for
three to four hours followed by
wakefulness for 20-21 hours was
as effective as total sleep depriva-
tion for 36 hours.
Although total sleep deprivation
or partial sleep deprivation can pro-
duce clinical improvement in
depression symptoms within 24
hours, antidepressants are the most
common treatment for depression,
which typically take weeks or longer
to show results.
The first review on the subject in
nearly 30 years, by researchers at
the University of Pennsylvania in
the US, hopes to provide relief for
the estimated 16.1 million adults
who experienced a major depres-
sive episode in 2014.
Previous studies have shown
rapid antidepressant effects from
sleep deprivation for roughly 40-
60 per cent of individuals, yet this
response rate has not been
analysed to obtain a more precise
deaths per 1,000 babies
| When a cheap enough
brand was available, the
number of infant deaths
increased
| Tobacco companies can
load price increases onto
premium brands and sell
But when a cheap enough
brand was available, the number
of infant deaths increased.
A 10 per cent difference between
the median price and the price
Although sleep deprivation can produce clinical improvement in
depression symptoms within 24 hours, antidepressants are the most
common treatment for depression, which typically take weeks or
longer to show results
percentage since 1990 despite
more than 75 studies since then
on the subject.
More than 30 years since the
discovery of the antidepressant
effects of sleep deprivation, we still
do not have an effective grasp on
precisely how effective the treat-
| Average price increase in
2004-2014, and tobacco
taxes were associated with
9,208 fewer infant deaths
| If there had been no cheap
cigarettes available, 3,195
more deaths could have
been avoided
of an off-brand bargain pack was
associated with an increase of
.07 deaths per 1,000 live births,
the researchers found.
Increases in average price
ed over a 36 year period to deter-
mine how response may be affect-
ment is and how to achieve the
best clinical results, said Philip
Gehrman, associate professor at
University of Pennsylvania.
Our analysis precisely reports
how effective sleep deprivation is
and in which populations it should
be administered, said Gehrman.
deaths could have been avoided.
Tobacco companies can load
price increases onto premium
brands and sell cheaper ciga-
rettes at a loss so that poor people
and young people can still take
up smoking, said the lead
author, Filippos Filippidis, a lec-
turer in public health at Imperial
College London.
This is an effective market-
ing practice, but its terrible
for public health. We would In some neighbourhoods with little access
like to see government make to healthy food, people with high personal
increases in price happen across income had fewer heart risk factors than
the board. those with low incomes PHOTO: ISTOCK
2017 The New York Times News Service
SHEREEN LEHMAN
23 September
Living in an area with little access to fresh and
nutritious foods has been linked to high heart
disease risk, but a new study suggests that its
the inability to afford a healthy diet, rather
than access, thats to blame.
Researchers studied Atlanta residents and
found that people living in food deserts,
Reviewing more than 2,000 where there are few places to buy fresh pro-
studies, the team pulled data from duce and other healthy foods, had more heart
a final group of 66 studies execut- risk factors like hardened arteries and inflam-
mation than people with easy access to
healthy foods.
ed by the type and timing of sleep But within food-desert neighbourhoods,
deprivation performed, the clini- people with high personal income had fewer
cal sample, medication status, and heart risk factors than those with low incomes,
age and gender of the sample. suggesting its money, not access, that pre-
They also explored how vents some people from having a healthy diet
response to sleep deprivation may that would lower their heart risk, the study
differ across studies according to team concludes in Circulation: Cardiovascular
how response is defined Quality and Outcomes.
in each study. Food deserts are defined as areas that have
These studies in our analysis below average income together with poor
show that sleep deprivation is access to healthy foods, ie. lack of grocery
effective for many populations, stores (within 1 mile in urban and 10 miles in
said lead author Elaine Boland, a rural communities), lead author Arshed
research psychologist at the Quyyumi told Reuters Health in an email.
Corporal Michael J Crescenz VA We found that area income, and even
Medical Center in the US. more importantly, personal income was asso-
Regardless of how the response ciated with higher cardiovascular risk, and
was quantified, how the sleep dep- that access to food was not that important a
rivation was delivered, or the type risk, said Quyyumi, a cardiologist at Emory
of depression the subject was expe- University School of Medicine in Atlanta.
riencing, we found a nearly equiv- Researchers have known that neighbour-
alent response rate, said Boland. hood factors are important social determi-
Further research is needed to nants of disease outcomes, he added.
identify precisely how sleep depri- For the study, Quyyumi and his colleagues
vation causes rapid and significant examined data on more than 1,400 adults,
reductions in depression severity, averaging about 50 years old, and living in the
the scientists said. The findings Atlanta metropolitan area. Just under 40 per
were published in the Journal of cent were men and about 37 per cent were
Clinical Psychiatry. African American. REUTERS
 https://telegram.me/TheHindu_Zone
.
Living in harmony
A
land of cottony clouds and lashing
rain, Garo Hills is one of the
wettest regions in the world, with
some areas getting more than 11
metres of rainfall a year. No
wonder then that this picturesque landscape,
peppered with waterfalls and streams, is one of
the most biodiverse areas globally. Part of the
rich Indo-Myanmar biodiversity hotspot, the
sacred groves and forests within it are teeming
with diverse species of orchids, medicinal and
ornamental plants, bamboo, and more some
of which are endemic to the region and
extremely rare.
It is one of the few places where the lady
slipper flower is found, which is now getting
rare because of the exploitation. You will also
see a vast variety of butterflies here, including
the birdwing, says conservation expert MK
Ranjitsinh, former director, Wildlife
Preservation, who helped draft the Wildlife
(Protection) Act, 1972.
The Garo Green Spine is critical in
Northeast India, supporting about a 1,000
elephants connecting two treasure houses of
biodiversity the Nokrek and the Balphakram
National Park. However, in the last couple of
decades, rampant urban development,
unsustainable farming practices and human
encroachment have caused significant habitat
loss for a number of species especially for the
Indian elephant and the Western Hoolock
Gibbon. According to surveys, the elephant
population in the area has gone down
drastically, as has the population of the
Hoolock Gibbons, which is said to have halved
in the last 40 years.There are now believed to
be as few as 2,600 of them in the forested
patches in several of Indias north-eastern
states. Also, as wildlife habitats are shrinking,
large animals like the elephants are coming
into direct conflict with humans on their
IMO
Kuldeep Yadav celebrates his hattrick at
the 2nd ODI vs Australia in Kolkata
INDIA GOES TWO UP VS AUSTRALIA
Sachin Tendulkar@sachin_rt
@imkuldeep18 & @yuzi_chahal didnt just
bowl well but actually spun the game in
Indias favour! Superb batting @imVkohli & children in a kindergarten. Children can
@ajinkyarahane88
Gautam Gambhir@GautamGambhir
Colour of ur outfit may hav changed frm
@KKRiders purple to @BCCI blue but d
mystery around ur bowling remains d
same....bravo @imkuldeep18
Sanjay Manjrekar@sanjaymanjrekar
In 2014, in the under 19 WC, two players
caught my eye. Kagiso Rabada & Kuldeep
Yadav. Today both have ODI hatricks to their
name
Virat Kohli@imVkohli
Great effort by the bowling unit last night! Big
up to @imkuldeep18 for becoming the 3rd
Indian to get a Hatrick.
Irfan Pathan@IrfanPathan
Great achievement @imkuldeep18 congrats
for getting a hattrick which doesnt come Dont feel good about this hysteria to drive
often #Hattrick #INDvsAUS
Ashok Gehlot@ashokgehlot51
Congratulations #IndianCricketTeam for 50
run victory over #Australia in 2nd #ODI...
#INDvsAUS #IndiaVsAustralia
Akhilesh Yadav@yadavakhilesh
Congratulations #KuldeepYadav for a
MUMBAI | 24 SEPTEMBER 2017
traditional migration routes.
It is to address these concerns that the
Wildlife Trust of India (WTI) and the World
Land Trust, a UK-based charity whose aim is to
save critically threatened habitats worldwide
and their wildlife, have been working together
in the area to secure a safe passage for
elephants, tigers and other threatened species
away from humans.
According to Project Elephant, there are
five corridors for movement of elephants in the
region. We have secured two of these and
declared them as village forest reserves, says
Sunil Kyorang, Joint Director and Head (Wild
Lands), Wildlife Trust of India. There are also
some areas, which arent officially declared
corridors, but are used for movement by the
Hoolock Gibbon.
This project started in the Garo Hills in 2000,
after WTI got a request from the Meghalaya
Forest Department. It took the team three to
four years to do the ground work and to arrive at
the best option: a village forest reserve.
The corridor will be managed by a
committee of 15 to 20 people, drawn from the
local community, led by a headman. There
will be restrictions such as no hunting, no
urban development or setting up of villages.
The Garo community, with our support, has
now taken upon itself to stitch together this
landscape by demonstrating the finest
example of community-led and community-
owned conservation initiatives, he says.
The Garo Hills project has now become a
part of the World Land Trusts larger initiative,
as part of which it has identified 101 corridors
across India. These have been prioritised
according to the importance of conservation
them. Currently, the Trust is helping safeguard
three priority corridors the Siju-Rewak and
Rewak-Emangre corridors in Meghalaya and
the Tirunelli-Kudrakote in Kerala. It is also in
wonderful hat trick.
ICC@@ICC
Kuldeep Yadavs hat-trick helps India
successfully defend 252 to win the 2nd
#INDvAUS ODI by 50 runs.
DONALD TRUMP-KIM JONG UN QUARREL
Donald J. Trump@realDonaldTrump
Kim Jong Un of North Korea, who is obviously
a madman who doesnt mind starving or
killing his people, will be tested like never
before!
Stephen King@StephenKing
By substituting threat and insult for actual
diplomacy, Trump has descended to Kim Jong
Uns level. Childish, dangerous,
unproductive.
Chelsea Handler@chelseahandler
Trump responds to Kim Jong Un, calling him
a madman. Now Trump is getting hate radio transmitter that sent out a
tweets from Eric Jong Un and Donny Jong
Un Jr.
space, shook up American
Taslima Nasreen@taslimanasreen
Trump & Kim Jong-un are fighting like
probably helped John Kennedy get
press nuclear buttons without knowing the
consequences.
Royce Christyn@ChristynRoyce
So...watching Trump live right now and he
said Rocket Man - Kim Jong Un, should as part of their Air and Space Sale.
have been handled by Pres. Clinton.
ROHINGYA REFUGEE CRISIS DEEPENS
Filippo Grandi@RefugeesChief
Of the scars which Rohingya refugees carry,
the most difficult ones to heal will be those
that violence has caused to their hearts &
minds.
Himanta Biswa Sarma@himantabiswa
We shall not allow any more dilution of
#Assams ethnic & cultural identity. Any
migrants from anywhere not welcome!
Aarti Tikoo Singh@UdayMahurkar
out every Rohingya refugee from India. It
reminds me of horrors of our expulsion from
Kashmir.
Barkha Dutt@BDUTT
Aung San Suu Kyi was my hero, my girl crush,
a woman of amazing grace. And then it all
crashed.
The Garo Hills in Meghalaya is emerging as a fine example of balancing
human needs and wildlife conservation. But not without the strenuous
efforts of various stakeholders, writes Avantika Bhuyan
the process of raising funds for the protection protected more than 17.2 million square
of a fourth corridor, Mudahalli, which connects metres of habitat in Vietnam, Malaysia and
the Western and the Eastern Ghats. Indonesia. According to Mehta, in India, the
Over the years, the corridor project has only initiative seeks to secure 1.8 million square
been increasing in scope. And now, for the first metres of the forest corridor and protect
time in Indian conservation history, an wildlife in the Garo Hills.
international brand has added its support to Ranjitsinh hails the corridor project as one
such a project. of the best initiatives conceptualised and
The Body Shop India, as part of its implemented by the WTI. According to him,
corporate social responsibility initiative, has the Garo Hills presented a number of
just announced a bio-bridge project in the conservation challenges early on. For
region, in partnership with the WTI and the instance, there had been some hunting of
World Land Trust. This adds a new elephants in the past, though not as
dimension to the corridor project, as it relentlessly as in Nagaland. Secondly, the
reaches out to a larger group by involving the private holdings in the area are much more
brands consumers. than the government-owned ones, which
With every purchase, in stores results in problems in securing land
and online, from September till end The Garo Hills for conservation, he says.
of November, we will protect and project has now Forests have also been
regenerate one square metre of become a part of mercilessly hacked for timber and
forest crucial for the survival of the World Land entire logs are floated down rivers
elephants and other threatened Trusts larger and streams all the way down to
species, says Aradhika Mehta, initiative, and Bangladesh. Then there is the slash-
Marketing Head, The Body Shop. has identified and-burn, or the Jhum Cultivation,
The brand has been running bio- 101 corridors which debilitates the land. Weeds
bridges programme successfully across India have taken over and the forests are
worldwide since June 2016 and has gone, resulting in loss of habitat for
animals, says Ranjitsinh. For a
long time, people didnt realise the need to
modify existing crop patterns, so that the
yield was not destroyed.
Elephants have known patterns of
movement. At that time, if you plant banana
outside, its like showing candy to a child and
then saying, you cant have it, explains
Ranjitsinh. If the elephants remain in one
place, they cause damage to crop and forest. It
is vital for them to move within the corridor, so
that impact on human settlement and
agriculture is minimal. It is important to
maintain the ecological integrity of these
corridors for the animals as well as for the
Sputnik for sale, if youll settle for a
beeping replica
NASA/WIKIMEDIA COMMONS
The original Sputnik fell out of orbit and
burned up three months after its launch.
This could be your chance to make Sputnik
beep again, writes Dennis Overbye
I
t was on Oct. 4, 1957, just 60 monkeys that preceded Americas
years ago, that the Soviet Union Mercury astronauts into space.
launched the first Earth The original Sputnik fell out of
satellite, Sputnik. It was little more orbit and burned up three months
than an aluminum beach ball with a after its launch. But test models and
engineering replicas, allegedly from
regular series of radio beeps, but it the laboratory where the legendary
expanded the Cold War to outer Sergei Korolev built them, have
surfaced in museums and
technological smugness and collections in recent years some
more authentic than others, said
elected president in 1960. Robert Pearlman, a journalist and
On Wednesday, just ahead of the space historian who runs the
60th anniversary of its launch, a website Collectspace.
replica of the famous satellite is going Ten years ago, a journalist for
on sale at Bonhams in New York City The New York Times visited one in
the possession of Richard Garriott, a the satellite out of Russia as a pair of
Another item on the block is the video-game designer and son of
harness, complete with camera, and former astronaut Owen K. Garriott.
an oxygen tank for the rhesus He said he had smuggled the shell of
had obtained it through
Replica of Sputnik
satellite going on
sale at Bonhams in
New York City
BONHAMS
https://telegram.me/PDF4EXAMS
IN DEPTH 7 <
(Clockwise from top left) A
woman and a child, part of the
Garo Hills community;
elephants in Meghalaya;
Hoolock Gibbon; the
Nokrek deforestation
community. The local tribal sensitivities are
also important. There is a need to make ecology
sustainable, he adds.
It is, perhaps, in this area that this project
stands out in the fine balance that WTI has
tried to maintain between community
practices and conservation needs. The Garos
still have ancient conservation practices of
keeping sacred forests and not hunting
gibbons. We have taken these as the launching
pad to further boost conservation, says
Kyorang. In its core strategy, the Garo project
is following the community securement
model, wherein community-owned lands are
set aside through easements or bilateral
benefit-sharing models, says Mehta. To
ensure that communities receive equitable
benefit, which is greater than the cost of lost
opportunity of the lands, WTI has created
employment opportunities for the villagers
and helped them strengthen their livelihoods.
Moreover, there is a sense of belonging to the
project as the locals themselves are engaged in
the protection of the village reserve forests.
In Meghalaya, two sets of laws come into
play. One is the set of laws, including those
pertaining to forests and wildlife, laid out by
the Constitution of India. The second set is
laid out by the traditional courts or tribal
councils, which are also extremely effective.
Anyone violating these is disbarred, says
Kyorang. Which is why it is heartening to see
that the corridors are protected both by the
traditional council and by the various Indian
forest and wildlife protection acts. Kyorang
feels that the project has another couple of
years to go. Any project, in which the
community is involved, tends to be long term.
There is a need for hand-holding, he says.
But when we feel that they can sustain this on
their own, we slowly start disengaging with
the project. There is still some time to that.
(Above) A full-scale replica of the Sputnik 1 the first artificial satellite to be put
into outer space stored in the National Air and Space Museum in Washington
are tracking history.
salad bowls. On Friday morning, however, the
This replica now being put on Sputnik was subjected to what might
sale was built for electromagnetic be a crucial test. Mr. Stackhouse,
tests, according to the who had flown in from Bonhams San
documentation that Francisco office for the
comes with it, and Just ahead of the event, turned on the Cold
comes complete with a 60th anniversary War-era radio receiver and
vintage East German of its launch, a pulled a plug that activated
radio receiver to hear replica of the the Sputniks battery.
the iconic beeps. Adam famous Sputnik Within seconds, rhythmic,
Stackhouse, who satellite is going noisy pulses were
organised the Air and on sale at Bonhams emanating from the East
Space sale, said they in New York City German speakers.
All across the world in
an intermediary from a collector in the fall of 1957, especially in America,
Austria. It was checked out by an people tuned into those pulses as a
expert on Russian space hardware, new addition to the heavens passed
Mr Stackhouse said, but he overhead and wondered what the
admitted that they did not have a future would bring.
complete paper trail tracing it back Although our robots have
to Energia, the company that wandered farther and higher since
absorbed Korolevs lab. then, they are still wondering.
You always want more, Mr.
Stackhouse said, but in the end you 2017 The New York Times News Service
 https://telegram.me/TheHindu_Zone https://telegram.me/PDF4EXAMS
8 WORLD
>
MUMBAI | 24 SEPTEMBER 2017 1

May ends impasse in Brexit talks, A LOreal heiress

real arguments can begin now is now the worlds
Moodys downgrades UKs rating on Brexit and growth fears
TIM ROSS, IAN WISHART & SIMON KENNEDY However, May will know that
richest woman
23 September Conservative hardliners wont toler- TOM METCALF &
ate repeatedly delaying Brexit or sign- DEVON PENDLETON
ritain and the European Union ing up for vast financial liabilities.

B
are set to resume Brexit negoti-
ations next week after UK Prime
Minister Theresa May broke the stale-
mate in the hope that the real argu-
ments can now begin.
In a major speech on Friday that
drew guarded praise from Brussels,
May signaled for the first time that
shell be ready to discuss the amount
of money the UK will owe to the EU
when it departs the bloc in 2019.
Her prize is the opportunity to
push talks nearer to the future trading
relationship between the UK and the
EU, and her offer is a two-year transi-
tion phase. The coming round of
negotiations will test Mays ability to
keep both the EU and her own euro-
sceptic Conservatives on side.
Lets talk about trade: Mays wish
and how she hopes to get there.
Theresa Mays offer on the divorce
bill was probably more generous than
anticipated, by hinting at an inclu-
sion of historic liabilities as well as
current budget commitment, said
Mats Persson, head of international
trade at EY and a former adviser to
Prime Minister David Cameron.
Were now in the landing zone of the
significant progress, he said.
Thats what EUs chief negotiator
Michel Barnier is looking for: progress
on the issue of money, citizens rights
and the Irish border. May gave her
most detailed road-map yet for the
divorce in a speech in Florence. In it,
she said Britain will pay to smooth its
departure from the bloc until the end
of the current EU budget in December
2020. That buys her some time.
Praise, caution
Mays words were immediately wel-
comed by key leaders she was trying
to reach. French President Emmanuel
Macron said May had made
advances, and Barnier praised her
constructive spirit. He also warned
the prime minister to craft a a precise
negotiating position for when talks
resume in Brussels on Monday.
The UK will honor commitments
we have made during the period of
our membership, May said in a
much-anticipated speech in the
Italian city. A government official lat-
er clarified that meant she was open to
discussing financial commitments
UK Prime Minister Theresa Mays (pictured) task of balancing the demands of
Europe and those of her own colleagues was made harder by
domestic political woes
beyond the scope of the EU budget,
and that the UK would honor its dues
more broadly.
Transition period
She made the promise while also pro-
posing to pay money and accept the
EUs rules for two years after Brexit
takes effect in March 2019, in return
for a transitional period that mirrors
the status quo of tariff-free, regula-
tion-light commerce and freedom
of movement.
Britains access to the EU single
market and vice versa would remain
unchanged during the transition,
according to Mays plan.
Just hours after May spoke,
Moodys Investors Service cut the
UKs credit rating by one notch to
Aa2, blaming doubts it had over its
ability to land a trade pact and a
likely weakening in the public
finances. The government called the
analysis outdated.
REUTERS
A word analysis of Mays last two
speeches and what the change means
What remains unclear is what
Mays ultimate goal is. Shes eschewed
language about a bespoke deal, but
also rejected the so-called Norway or
Canada models that have been offered
as inspiration.
The cost of such an implementa-
tion phase could run to about ^20 bil-
lion ($24 billion), but the so-called
Brexit bill could stretch to five times
that in gross terms. EU governments
say while they dont need to see a final
sum yet, Britain must help find a way
to calculate it before they sign off on
trade talks.
The Times, citing two people in
Brussels it didnt identify, said May
agreed to pay 40 billion pounds:
about 20 billion pounds from March
2019 through year-end 2020 and
other liabilities of 20 billion pounds
negotiated separately and paid over
many years.
Some ardent Leave campaigners
are already unhappy about her plan
for a two-year transition, during
which free movement migration rules,
budget payments, and the rule of the
European Court of Justice will con-
tinue to apply largely unchanged.
The British people are patient, but
more than two years for a transition
period would test that patience, Tory
lawmaker Andrew Bridgen said in an
interview. We dont want to do that in
the next general election in 2022.
Fellow Tory Jacob Rees Mogg told
the BBC that effectively delaying
Brexit is disappointing and that May
hadnt made clear if the European
Court of Justice will have jurisdiction
in the UK during the transition. To
my mind that is a red line, he said.
Companies rejoice
Many businesses welcomed Mays talk
of a transition that would keep trading
conditions unchanged, having previ-
ously warned of a rupture in 2019. May
said companies should only have to
make one change taking on board
an idea first floated by Chancellor of
the Exchequer Philip Hammond.
She also won the endorsement of
Foreign Secretary Boris Johnson, sev-
en days after he warned her against
going soft on the EU and appeared to
be on the brink of resigning. He tweet-
ed: PM speech was positive, opti-
mistic & dynamic.
The prime ministers task of bal-
ancing the demands of Europe and
those of her own colleagues was made
harder by her domestic political woes.
Mays position is precarious at home,
where her authority was eroded after
Junes botched election cost her par-
ty its parliamentary majority.
Her negotiators will pick up the
baton Monday while she gets ready to
preside over the Conservative Party
conference that starts in Manchester
on October 1. Has she done enough?
Mujtaba Rahman, managing direc-
tor for Europe at the Eurasia Group,
said Mays gone further than he
expected. But, he said, her coded sig-
nal to the EU27 on money means her
speech did nothing to prepare UK
public opinion for the compromises
that lie ahead.
BLOOMBERG
23 September
The death this week of
LOreals founding family
matriarch is putting the
spotlight on a reclusive 64-
year-old heiress who now
finds herself as the richest
woman in the world.
Francoise Bettencourt
Meyers has shunned the glit-
tering social life that her late
mother, Liliane Bettencourt,
once embraced. Bettencourt
Meyers is known for playing
piano for several hours a day
and has written two books --
a five-volume study of the (From left) A file photo of Jean-Paul Agon, LOreals
Bible and a genealogy of the president, Liliane Bettencourt and her daughter,
Greek gods. Francoise Bettencourt Meyers REUTERS
She really lives inside
her own cocoon, said Tom
Sancton, author of The
WOMEN WONDERS
The worlds richestwomen
Bettencourt Affair, who not-
ed that even when she was a
little girl she appeared
uncomfortable in the world 43.3 37.9 31.8 22.5 21.8
of rich people. She lives
mainly with the confines of
her own family.
That kind of seclusion Francoise Alice Jacqueline Susanne Yang
will be harder to maintain as Bettencourt Walton Mars Klatten Huiyan
the head of Europes fourth- Meyers
largest fortune. Through LOreal Walmart Mars BMW Country
family holding company Garden
Holdings
Tethys, she takes charge of
All figures in $ billion Source: Bloomberg Billionaires Index
her familys 33 per cent stake
in the cosmetics maker,
which lies at the heart of a stock back from Nestle or a self in charity work.
net worth the Bloomberg takeover bid for the Paris- The family doesnt
Billionaires Index values at based company. Betten- really mingle with rest of
$43.3 billion. court Meyers has already the rich in France, said
Bettencourt Meyers indicated little will change. Eric Treguier, who has
steps into the spotlight at a The billionaire heiress tracked French fortunes for
time of increasing discus- has shown less interest in Challenges magazine for
sion about the future of the LOreal matters than her more than two decades.
familys stake, as well as mother did, despite her role Twenty years ago they
the 23 per cent of LOreal as a board member for more hosted receptions at their
held by Swiss food-giant than two decades. Shed home that drew politicians,
Nestle. LOreal climbed show up to meetings but bankers and artists but as
2.46 per cent to ^180.95 at unlike Liliane she never was Francoise grew older and
the close of trading Friday hands-on, Sancton said. Lilianes husband died, the
in Paris, after rising as Liliane read tons of docu- circle around the family
much as 6.7 per cent earli- ments, LOreal was her has shrunk.
er in the day. lifeblood. Thats definitely The Bettencourts have
With Bettencourts not Francoise. added 19.6 per cent this year
death Thursday at age 94, In addition to music as LOreals market capitali-
analysts have started to and study, the bookish and sation topped ^100 billion
float a variety of scenarios, austere Bettencourt ($122 billion).
including LOreal buying Meyers has involved her- BLOOMBERG

Protests could derail St Louis Who killed US inflation? Here are the
bid for second Amazon hub suspects in Janet Yellens mystery
BRENDAN OBRIEN companies choose locations for employers depended on how JEANNA SMIALEK product of slow-burning switch to a competitors prod-
23 September new businesses and expansion. companies view such incidents. 23 September demographic changes. If uct if one seller hikes prices, this
Amazon, the worlds biggest Does it suggest a deeply theyre wrong, and some share leaves stores without much
Protests in St Louis over the online retailer, said this month rooted problem thats likely to Was it the seamstress in Bang- of the decline is related to eco- pricing power. Gone are the
acquittal of a white former that it planned to build a $5 bil- make living, working, and ladesh, with her low wages? Or nomic weakness, companies days of buying something off-
policeman who killed a black lion second headquarters that investing in a particular loca- Jeff Bezos, with his low prices? may still be able to tap an addi- the-shelf at a markup because
man could impede the citys could bring 50,000 new jobs to tion less attractive or less prof- Federal Reserve Chair Janet tional pool of potential work- doing so is more convenient
bid to attract Amazon.coms the winning city. An Amazon itable than alternatives? If so, Yellen has labelled this years ers. That could be enabling than shopping around.
second headquarters, academ- spokesman declined to discuss it can have lasting implica- unexpected inflation slowdown them to keep wages low, both Its possible that a more
ics and business exec- the site search. tions, Collins said. a mystery, and there are a few allowing them to maintain globalised labour supply is
utives said. There is no In its call for pro- A September 16 ruling possible suspects. profit margins without raising holding down wages and infla-
Marked by scuf- good timing posals from cities, found former St Louis police- Previously, factors such as prices and reigning in con- tion. The specific title and
fles, teargas and prop- for something Amazon said a com- man Jason Stockley, 36, not labour-market slack, falling fuel sumer demand. country is an oversimplifica-
erty damage, the like this and patible cultural and guilty of first-degree murder in costs and cheap imports Yellen may have Jeff Bezos tion here. From factory work-
protests have been it will have community environ- the 2011 killing of Anthony explained why price gains the billionaire founder of ers in Bangladesh and China
unfolding as the city, an impact ment that included Lamar Smith, 24. werent headed toward the Amazon.com and his con- to coders in Canada, its
which has a history of diversity, a high qual- In August, after clashes in Feds 2 per cent goal. Those Federal Reserve Chair Janet Yellen REUTERS temporaries to thank for 1.4 per become increasingly easy to
social unrest, is vying for the ity of life and stable business Charlottesville, Virginia, over explanations no longer hold as cent price gains. The Amazon- outsource work thanks to tech-
lucrative Amazon deal. climate were key. plans to remove a statue of much water. Joblessness has If inflation is an enigma, isation, technological disrup- inflation theory goes like this: nology and integrated global
There is no good timing for William Collins, a Vanderbilt Confederate General Robert E dropped to 4.4 per cent, the dol- why? Shadow labour-market tion, and demographics, to Online marketplaces have supply chains. That means
something like this and it will University economic historian Lee, regional economic devel- lar is falling and energy prices slack could be causing the delay name a few. Heres the lineup. enabled consumers to buy the that in the face of a labour
have an impact, said Didi who has studied the aftermath opment officials wrote to site have stabilised. A pricing issue by holding down wage and Labour-force participation products we purchase most at shortage, companies could
Caldwell, founding principal of the 1960s race riots in the selection companies saying the with cell-phone plans earlier in price pressures. But other remains depressed relative to the lowest prices possible with choose to move workers over-
with Global Location Strategies United States, said the impact violence did not define the city. the year no longer explains the and more persistent perpe- its pre-crisis norm, but most the click of a button. Because seas before raising wages.
in South Carolina, which helps on a citys ability to draw new REUTERS broader slowdown. trators could be at work: global- economists think thats the consumers can seamlessly BLOOMBERG

Muslim and proud, London mayor wont be cowed by Trump or terror

THOMAS PENNY
23 September
Sadiq Khan, the son of a bus driver
from Pakistan, is on a mission to
ensure London remains a prosper-
ous multicultural melting pot after
Britain completes its retreat from the
European Union.
As the first Muslim mayor of a
western capital, Khan says hes got
too much to prove and improve to be
sidetracked by the adversity thats
beset his 16-month tenure. His four-
year term started just weeks before
the surprise vote for Brexit, which
Khan and most Londoners opposed.
That was followed by a series of ter-
rorist attacks, the citys deadliest fire
since World War II and multiple per-
sonal put-downs from U.S. President
Donald Trump.
Dont think because weve vot-
ed to leave the EU were going to
stop being open-minded and out-
ward-looking, Khan said in a
September 11 interview at the
London offices of BGC Partners, a
New York-based brokerage that was
holding a charity event inspired by
the victims of the 9/11 strikes on
the US. Frankfurt, Paris, Rome,
Dublin theyve each got some
wonderful things, but theyre not
the complete package. Were the
complete package.
Since winning his post, the
proud Muslim has received threats
from both white supremacists and
Islamist extremists. But going from
riding the subway solo to round-the-
clock protection from a police force
he oversees hasnt stopped Khan, 46,
from talking about Islam, which he
said is being unfairly maligned by
Trump. The president, whom hes
called ignorant, is fuelling extrem-
ists claims that Islam and the West
are incompatible, he said.
The West doesnt hate us I am
the West, said Khan, who donated
his Koran to Buckingham Palace
after being sworn in as an adviser
there in 2009.
The fifth of eight children, Khan
joined the Labour Party at 15 and did-
nt move out of his familys council
flat in south London until he got
married at 24. By then, hed learned
to box, as did all six of his brothers,
partly to discourage the racist com-
ments that were common in the
neighbourhood.
Such attitudes havent disap-
peared. The campaign of his may-
oral opponent, Conservative Zac
own party, have accused him of
being a malleable populist, but hes
also earned bipartisan praise.
Conservative Prime Minister
Theresa May, whos locked horns
with the mayor in the press, never-
theless defended him in June after
a mocking tweet by Trump, saying
Londons mayor was doing an
excellent job.
Supporters of hard-left Labour
leader Jeremy Corbyn have vili-
fied Khan since he backed a lead-
ership challenge last year and
made a speech at the partys annu-
al conference arguing that win-
ning is more important than ideo-
logical purity. Touted as a future
leader, he was only handed a last-
minute place on the speaker roster
for this years event, which starts
Sunday, after weeks of behind-the-
scenes wrangling by moderate
party members.
Sadiq Khan is the first Muslim mayor of London and does not shy away from that identity REUTERS While Khans political skills have
been applauded, his aptitude for
Goldsmith, the son of a billionaire, lion inhabitants, almost a million of tive everywhere. Last year, he was economics is still being tested. Brexit,
referred to Khans candidacy as a whom are citizens of other European invited to throw out the first pitch at which is scheduled to happen in
dangerous experiment. Thats the countries. a professional baseball game in New March 2019, is threatening Londons
kind of comment that Khan says He said his path to City Hall, via York, where the Mets gave him a financial industry, the lifeblood of
inspires him to work harder to law school, human-rights advocacy No. 44 jersey in honour of his the economy, and Khan has so far
achieve his main aim, which is to and parliament, is proof that inter- fathers bus route. been denied a seat at Mays negoti-
improve the lives of Londons 8.8 mil- faith integration can be a net posi- Khans critics, including in his ating table.
Many companies are waiting for
clarity on the terms of the divorce
before deciding whether to relocate
thousands of high-paying jobs. And
with inflation outstripping wage
growth, the lack of affordable hous-
ing has become a major concern.
Khan has been aggressive on the
issue, demanding the government
cede control of property-sales tax-
es to fund more apartments.
Khan said that unlike his flam-
boyant predecessor, Boris Johnson,
whos now foreign secretary, hes
committed to making sure every
pound is used wisely. He scrapped
Johnsons plan for a garden-topped
bridge across the Thames, calling it
an ill-conceived boondoggle that
cost taxpayers 40 million pounds
($54 million).
A senior police officer whos
worked under both men said Khan is
more professional, efficient and
results-driven. Nick Spencer,
research director at Theos, a think
tank that studies religion and poli-
tics, said Khan has set a precedent
that some Britons deemed impos-
sible a practising Muslim is serv-
ing in high office in a democratical-
ly accountable way.
BLOOMBERG
 https://telegram.me/TheHindu_Zone https://telegram.me/PDF4EXAMS

.
MUMBAI | 24 SEPTEMBER 2017 WORLD 9 <

Facebook scraps new share China says small

class in rare win for investors
Move would have let Zuckerberg keep voting control even while selling almost all his shares
SARAH FRIER out their interests in mind.
23 September I dont think this was an
enviable position for
acebook scrapped plans Zuckerberg, Stuart Grant, an
North Korean quake
suspected explosion
court documents.
Shareholders were
aggrieved by the plan. It would
have automatically diluted the

F to create a new class of

shares, a rare victory for
outside investors in a battle for
control of the worlds largest
social media company.
The move would have let
Chief Executive Officer Mark
Zuckerberg keep voting control
even while selling almost all his
shares to fund philanthropic
endeavours. On Friday, only
days before he was scheduled
to appear in court over the mat-
ter, Zuckerberg said he will pro-
ceed without the plan.
The decision follows a rash
of technology executives cre-
ating special shares to control
their companies, and may
make similar structures
more difficult to put in place
in the future.
Over the past year and a
half, Facebooks business has
performed well and the value
of our stock has grown to the
point that I can fully fund our
philanthropy and retain voting
control of Facebook for 20
years or more, Zuckerberg
said. As a result, Ive asked our
board to withdraw the propos-
al to reclassify our stock and
the board has agreed.
Another part of the pro-
posal, to change the corporate
charter to let the billionaire
serve in government without
losing control of Facebook,
was also dropped, the compa-
ny said.
Even as he gives up plans
for a new share class,
Zuckerberg is sticking to a goal
of giving away 99 per cent of
the Facebook shares owned by
him and his wife, Priscilla
Chan. To do that, he intends
to sell 35 million to 75 million
Facebook shares in the com-
ing 18 months to fund pursuits
in education, science and
advocacy, according to a blog
he posted on Friday. Thats
equivalent to $6 billion to $13
billion at current prices, and
more than Zuckerberg
planned to sell earlier.
Zuckerberg would have had
to defend the move that some
shareholders said diluted their
power and was decided with-
attorney for plaintiff share-
holders at law firm Grant &
Eisenhofer, said in an inter-
view. He was going to have to
answer some very tough ques-
tions in public.
Appearing in court to
defend his decision to main-
tain control of the company
would have come at a bad time
for the executive. Zuckerberg
is dealing with several political
crises, most notably investiga-
tions into whether Facebook
ads were used by Russia to sow
discord ahead of the US presi-
dential election last year.
The shareholder suit
described unusual communi-
cations between venture capi-
talist and Facebook board
member Marc Andreessen and
Zuckerberg. Facebook set up a
special board committee to
represent shareholders while
weighing the share class pro-
posal. While on the committee,
Andreessen slipped
Zuckerberg information about
their progress and concerns,
helping the CEO negotiate
against them, according to
voting power of existing
investors because every share
with voting power would have
split into three shares one
that has power, and two that
dont. This would have let
Zuckerberg sell his Facebook
shares to fund philanthropy,
but the non-voting shares were
less attractive as currency in
acquisitions and may have
made it harder for the compa-
ny to get tax benefits, among
other issues.
Zuckerberg isnt the only
tech executive to try this.
Alphabets Google issued spe-
cial Class C stock in 2014, and
Snap sold non-voting shares in
an initial public offering this
year. Some operators of equity
indexes have since banned
companies that use multiple North Korean leader Kim Jong Un provides guidance on a nuclear weapons programme in this
share classes. undated photo released by the Korean Central News Agency in Pyongyang on September 3 REUTERS
This case is important in
the ongoing struggle between BEN BLANCHARD & HEEKYONG YANG Two seismic events had increasingly tough UN sanc-
Silicon Valley and the belief Beijing/Seoul, 23 September been detected and it was tions, it has also stressed the
that founders should maintain unlikely they were manmade, need to resume dialogue and
ultimate control, Grant said. China said a magnitude 3.4 CTBTO said. The activity took for all sides to take steps to
Once you ask for public mon- earthquake detected in North place around 50 km (31 miles) reduce tensions.
ey, that changes. Korea on Saturday was a sus- from previous nuclear tests, In a series of meetings this
BLOOMBERG pected explosion, raising fears it added. week at the United Nations,
the isolated state had con- Russias emergency min- Chinese Foreign Minister
ducted another nuclear bomb istry says background radia- Wang Yi has reiterated to var-
test just weeks after its last one. tion in nearby Vladivostok was ious foreign counterparts that

Trump considers Uber tops 500,000 signatures An official at South Koreas

meteorological agency said
they were analysing the
within the natural range. apart from sanctions, the res-
There was no immediate olutions also call for dialogue
reaction from Chinas Foreign to resume and that this needs

restrictions instead on petition to halt London ban tremor, which they put at mag-
nitude 3.0, but the initial view
was that it was a natural quake.
Ministry, but the news was to happen.
widely reported by Chinese Earlier on Saturday, China
state media outlets and on said it will limit exports of

of travel ban ANNA SHIRYAEVSKAYA

23 September
companies must adhere
to high standards of safety
and security.
background checks as black
cab drivers.
While the petition doesnt
A key method is to look
at the seismic waves or seis-
mic acoustic waves and the
social media. refined petroleum products
Tensions have continued from October 1 and ban
to rise around the Korean exports of condensates and
TOLUSE OLORUNNIPA what countries would be Uber Technologies collected I have every sympathy trigger any legal or regulatory latter can be detected in the peninsula since liquefied natural gas
23 September affected or even whether it more than 500,000 signa- with Uber drivers and cus- process, the San Francisco- case of a manmade earth- Pyongyang car- The earthquake immediately to com-
would be fewer or more than tures in less than 24 hours on tomers affected by this deci- based company has a history quake, said the official, who ried out its sixth was detected in ply with the latest
President Donald Trump is the six cited in the presidents a petition to protest Londons sion but their anger really of successfully using petitions asked for anonymity. In this nuclear test, Kilju county in UN sanctions. It will
weighing replacing his ban original travel ban. They said decision to not renew the should be directed at Uber, and loyalty of the public to case we saw none. So as of prompting a new North Hamgyong also ban imports of
on travellers entering the US the decisions would be left to companys taxi licence, a set- Khan said in a response post- pressure city governments. It now, we are categorising this round of UN Province, where textiles from North
from six predominantly the White House. back in one of its most lucra- ed on the website Saturday. succeeded in reversing regu- as a natural earthquake. sanctions. North Koreas Korea.
Muslim nations with a set of Taylor said the Homeland tive markets. They have let down their latory decisions in London The earthquake was North Koreas known Punggyeri Chinas trade with
more specific and tailored Security Department con- The campaign on the web- drivers and customers by fail- and in New York in 2015. Uber detected in Kilju county in Foreign Minister nuclear site is North Korea, mean-
restrictions based, in part, on centrated in its assessment site Change.org asks London ing, in the view of TfL urged customers to sign the North Hamgyong Province, Ri Yong Ho, cur- located while, rose in August
how much information on factors such as terrorist Mayor Sadiq Khan to reverse (Transport for London), to act petition in a tweet posted at where North Koreas known rently in New to its highest since
countries share with the US. and criminal history infor- Transport for Londons Friday as a fit and proper operator. 12:41 pm Friday, about two Punggyeri nuclear site is locat- York for a United Nations December 2016, data showed
The Department of mation each country shares decision, and is being pro- Uber said 3.5 million hours after the London ed, the official said. meeting, warned on Thursday on Saturday, even after the UN
Homeland Security has sent with the US, the security of moted on the companys app Londoners rely on Uber for a agencys decision. Chinas earthquake admin- that Kim could consider a slapped tougher sanctions on
Trump recommendations for passports issued and how in London. safe, reliable and affordable Uber has 21 days after the istration said in a statement on hydrogen bomb test of an Pyongyang in a bid to choke
entry restrictions well each coun- While the ride-hailing app ride and that 40,000 drivers September 30 revocation to file its website that the quake, unprecedented scale over off a third of its $3 billion in
and additional President gets try established is targeting 1 million support- depended on the app for their an appeal. It can continue the which occurred around 0830 the Pacific. annual export revenue.
visa requirements recommendations identity of pass- ers, Khan defended his posi- livelihood. The company said service until the end of the GMT, was recorded a depth of US President Donald The worlds second-largest
based on short- from Homeland port-holders. tion that while he supports its drivers have been appeals process. zero kilometres. Trump called the North economy imported and
comings in the Security; criteria The US notified innovative businesses, all through the same enhanced BLOOMBERG All of North Koreas previ- Korean leader a madman on exported goods worth $604.27
information each for entry may all countries in ous six nuclear tests registered Friday, a day after Kim dubbed million in August, up from
country shares include July of base- as earthquakes of magnitude him a mentally deranged US $456.16 million in July, accord-
with the US and information line standards 4.3 or above. The last test on dotard who would face the ing to data from Chinas
an assessment of shared with US
the risk of terror-
they would need
to meet to avoid
ist infiltration the nation travel restrictions.
SoftBank may be willing to September 3 registered as a 6.3
magnitude quake.
A secondary tremor
highest level of hard-line General Administration of
countermeasure in history. Customs. While the highest
North Koreas nuclear number this year, August
poses, administration offi- While some countries were
cials told reporters. The unable or unwilling to meet
changes could be put in place the guidelines, most provid-
take market price for Sprint detected after that test could
have been caused by the col-
lapse of a tunnel at the moun-
tests to date have all been trade was down from $628.2
underground, and experts million in August last year,
say an atmospheric test, according to data on the cus-
as soon as this weekend, with ed the necessary information ALEX SHERMAN & SCOTT MORITZ previously told SoftBank it felt Sprint shares tainous site, experts said at which would be the first toms website. Trade was up 7.5
a new proclamation from to meet the baseline, Taylor 23 September should be valued at a significant discount to the time. Satellite photos of since one by China in 1980, per cent at $3.61 billion for the
Trump, officials said. said. The State Department their market value, two of the people said. In the area after the September 3 would be proof of the success year to date.
The acting secretary has made clear to countries that SoftBank Group, the majority owner of Sprint, recent months, Deutsche Telekom has told quake showed numerous of its weapons programme. The United States and
recommended actions that they could face penalties if is willing to accept a stock-for-stock merger SoftBank its willing to come up on value for landslides apparently caused North Korea has launched South Korea are technically
are tough and that are tai- they did not provide the nec- with T-Mobile US that values Sprint at or near Sprint, they said. by the massive blast, which dozens of missiles this year, still at war with North Korea
lored, including travel essary information, he said. its current market price, according to people At current market values, a stock-for-stock North Korea said was an several of them flying over because the 1950-53 Korean
restrictions and enhanced The State Department will familiar with the matter. merger would give SoftBank almost 33 per advanced hydrogen bomb. Japan, as it accelerates a conflict ended with a truce and
screening for certain coun- issue guidance to consular While the two sides havent agreed on an cent of the combined company and Deutsche The head of the nuclear weapons programme aimed not a peace treaty.
tries, said Miles Taylor, a offices next week with infor- exact value, SoftBank doesnt expect to receive Telekom about 39 per cent. Deutsche Telekom test monitoring agency at enabling it to target the The North accuses the
counsellor to acting mation about how to imple- much of a premium to Sprints current share plans to consolidate the merged companys CTBTO said on Saturday that United States with a nuclear- United States, which has
Homeland Security Secretary ment the new restrictions, price and may accept a deal that values the earnings by controlling the board of directors, analysts were looking at tipped missile. 28,500 troops in South Korea,
Elaine Duke. said Carl Risch, assistant sec- fourth-ranked US wireless carrier at about its said one of the people. unusual seismic activity of a While China has been of planning to invade and reg-
Taylor and other officials retary for consular affairs at $34 billion market capitalisation, said the peo- Representatives for SoftBank, Sprint and T- much smaller magnitude angered by North Koreas ularly threatens to destroy it
on a conference call for the State Department. ple. Deutsche Telekom, the majority owner of Mobile declined to comment. than the September 3 test in repeated nuclear and missile and its Asian allies.
reporters declined to say BLOOMBERG third-largest US wireless provider T-Mobile, BLOOMBERG North Korea. tests and has signed up for the REUTERS

How electric cars can create the biggest disruption since the iPhone
JESS SHANKLEMAN & HAYLEY WARREN
23 September
Its been 10 years since Apple
unleashed a surge of innovation
that upended the mobile phone
industry. Electric cars, with a little
help from ride-hailing and self-
driving technology, could be about
to pull the same trick on Big Oil.
The rise of Tesla and its rivals
could be turbo charged by com-
plementary services from Uber
Technologies and Alphabets
Waymo unit, just as the iPhone
rode the app economy and fast
mobile internet to decimate
mobile phone giants like Nokia.
The culmination of these tech-
nologies autonomous electric
cars available on demand could
transform how people travel and
confound predictions that battery-
powered vehicles will have a lim-
ited impact on oil demand in the
coming decades.
Electric cars on their own may
not add up to much, David Eyton,
head of technology at London-
based oil giant BP, said in an inter-
view. But when you add in car
sharing, ride pooling, the num-
bers can get significantly greater.
Most forecasters see the shift
away from oil in transport as an
incremental process guided by
slow improvements in the cost
and capacity of batteries and pro-
gressive tightening of emissions
standards. But big economic shifts
are rarely that straightforward,
said Tim Harford, the economist
behind a book and BBC radio
series on historic innovations that
disrupted the economy.
Systemic change
These things are a lot more com-
plicated, he said. Rather than
electric motors gradually replac-
ing internal combustion engines
within the existing model, theres
probably going to be some degree
of systemic change.
Thats what happened 10 years
ago. The iPhone didnt just offer
people a new way to make phone
calls; it created an entirely new
economy for multibillion-dollar
companies like Angry Birds mak-
er Rovio Entertainment or
WhatsApp. The fundamental
nature of the mobile phone busi-
ness changed and incumbents
like Nokia and BlackBerry
were replaced by Apple and mak-
ers of Android handsets like
Samsung Electronics.
Today, as Elon Musks Tesla
and established automakers like
General Motors are striving to
make their electric cars desirable
consumer products, companies
like Uber and Lyft are turning
transport into an on-demand serv-
ice and Waymo is testing fully
A man recharges his Nissan Leaf electric car in Finnoey, Norway in this
picture taken on September 8 REUTERS
autonomous vehicles on the suitable for the heavy use allowed
streets of California and Arizona. by driverless technology,
Combine all three, for example Francesco Starace, chief executive
through an Alphabet investment officer of Enel, Italys largest util-
in Lyft, and you have a new mod- ity, said in an interview. I dont
el of transport as a service that see driverless being pushed into
would be a cheap compelling internal combustion engine vehi-
alternative to traditional car own- cles, he said.
ership, according to RethinkX, a After disassembling General
think tank that analyses technol- Motorss Chevrolet Bolt, UBS
ogy-driven disruption. Group concluded it required
One key advantage of electric almost no maintenance, with the
cars is the lack of mechanical com- electric motor having just three
plexity, which makes them more moving parts compared with 133
in a four-cylinder internal com-
bustion engine.
Competitiveness very much
depends on the utilisation of the
car, Laszlo Varro, chief economist
at the International Energy
Agency, said in an interview. The
average Uber vehicle covers a third
more distance than the typical
middle-class family car in Europe,
amplifying the benefit of lower
running costs to the point that
the oil price at which it makes
sense to switch to electric is $30
per barrel lower, he said.
Uber on steroids
The total cost of ownership of elec-
tric and oil-fuelled vehicles will
reach parity in 2020 for shared-
mobility fleets, five years earlier
than for individually-owned vehi-
cles, according to Bloomberg New
Energy Finance.
Already in London, Uber plans
for its UberX service to be hybrid
or fully electric by the end of 2019.
Its rival Lyft aims to provide at
least 1 billion rides a year in
autonomous electric vehicles by
2025, saying they can be used
much more efficiently than gaso-
line-powered cars.
This combination would be
the Uber model on steroids,
Steven Martin, chief digital offi-
cer and vice president of General
Electrics Energy Connections
unit, said in an interview. Once
you have complete autonomous
operation of a vehicle, then my
desire to own one is going to go
down and Ill be more willing to
sign up to a subscription service.
Autonomous hurdles
The transition to fully
autonomous fleets may not
match the speed of the smart-
phone revolution because of the
many regulatory, legal, ethical
and behavioural hurdles. Self-
driving technology should
become available in the 2020s,
but wont be widely adopted until
2030, BNEF says.
Even so, the shift to electric
cars could displace about 8 mil-
lion barrels a day of oil demand
by 2040, more than the 7 million
barrels a day Saudi Arabia exports
today, the London-based
researcher says. That could have
a significant impact on oil prices
a drop of 1.7 million barrels a
day in global consumption dur-
ing the 2008-2009 financial crisis
caused prices to slump from $146
a barrel to $36.
That doesnt mean oil giants
like BP or Exxon Mobil are head-
ing for an inevitable Nokia-style
downfall. While transport fuels
account for the majority of their
sales, they also have huge busi-
nesses turning crude into chemi-
cals used for everything from plas-
tics to fertiliser. They also pump
large volumes of natural gas and
generate renewable energy, both
of which could benefit from
increased electricity demand.
Even if electric vehicles do
grow as rapidly as BNEF forecasts,
the world currently consumes 95
million barrels a day and other
sources of demand will keep
growing, said Spencer Dale, BPs
chief economist. The London-
based energy giant expects bat-
tery-powered cars to reduce oil
demand by just 1 million barrels a
day by 2035, while also acknowl-
edging the potential for a much
larger impact if the industry has
an iPhone moment.
The sheer breadth of the
potential disruption makes it
hard to predict what will happen.
When Steve Jobs unveiled the
iPhone, few people anticipated
that it meant trouble for makers
of everything from cameras to
chewing gum.
The smartphone and its apps
made new business models possi-
ble, said Tony Seba, a Stanford
University economist and one of
the founders of RethinkX. The
mix of sharing, electric and dri-
verless cars could disrupt every-
thing from parking to insurance,
oil demand and retail.
BLOOMBERG
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10 DEMOCRACY AT WORK
>
MUMBAI | 24 SEPTEMBER 2017 1

DID THEY REALLY SAY THAT? CHECKLIST

CHATTERBOX

Speculation rife about advance Lok Sabha polls

New Delhi is abuzz with speculation that Prime Minister Narendra Modi is like- RAHUL GANDHI IN THE US THIS YEAR
ly to advance the Lok Sabha polls by at least six months, if not a year. Not just the  Most parties in India have that problem. So  Indira Gandhis bodyguards, who shot her
Opposition, but Bharatiya Janata Party (BJP) leaders also are peddling such dont give us stick because Akhilesh Yadav is a 32 times, were my friends. I used to play
theories. Several reasons are being given, the foremost being the BJP would suf- dynast. Stalin is a dynast. (Prem Kumar) badminton with them. So, on one day, I saw my
fer if it were to wait until April 2019. The Modi government has failed to deliver Dhumals son is a dynast, even Abhishek grandmother shot and my friends shot. Violence
on its promise of better days and with each passing day will only lose support, Bachchan is a dynast. That is how India runs. against anybody is wrong, and I condemn it. I
or so the argument goes. Some in the BJP believe that a campaign around Ram  Around 2012, arrogance crept into the Congress absolutely love the (Sikh) community.
Janmabhoomi issue, with the Supreme Court set to start daily hearings on the and we stopped having conversations with people.  What I sense is that he (Narendra Modi) does
case, may not be enough to save the party from the anger among youth because not converse with the people he works with; even
 Theres a BJP machine, 1,000 guys with
of job losses. The speculation ranges from the Lok Sabha polls at the end of 2018, members of Parliament and BJP tell me that.
computers, to abuse me, tell you Im reluctant,
alongside Assembly polls to Madhya Pradesh, Rajasthan, Chhattisgarh and
Im stupid. Here I am. Listen to me. Judge for  Currently, all the attention in India is paid
Mizoram. However, some believe even that would be too late given the sharp shift
yourself Its a tremendous machine. All day they to the top 100 companies. Everything is geared
in the political narrative in the last six weeks. Advancing of polls would also need
spread abuse about me, and the operation is run towards them. Banking systems are
to factor in the possibility of a drought next year. Several of the BJP's allies such
by the gentleman who is running our country. monopolised by them, the doors of government
as Bihar Chief Minister and Janata Dal (United) chief Nitish Kumar and Lok Why are students not taught that before the
 Being a reluctant politician is perspective are always open to them, laws are shaped by
Janshakti Party chief and Union minister Ram Vilas Paswan support the PM's call Wright brothers, an Indian called Shivakar
from 1,000 BJP followers sitting on machines them. Entrepreneurs running small and
for simultaneous polls. Lok Sabha Deputy Speaker and All India Anna Dravida Babuji Talpade was the first to invent the
only spreading rumours about me. medium businesses struggle to get bank loans.
Munnetra Kazhagam leader M Thambidurai has also written to the PM express- airplane? Are our students taught these They have no protection or support. They are the
ing support. Ram Vilas Paswan's son and Lok Sabha member Chirag Paswan has things in IITs or not? They should be  Indira Gandhi was asked whether India bedrock of India and the worlds innovation.
started touring Bihar. BJP chief Amit Shah has been travelling to all parts of the Minister of State for Human Resource Development Satya Pal would switch left or right. She said it will stand Big businesses can easily manage the
country to streamline the party's organisational strength. Singh in New Delhi on September 19 straight and tall. unpredictability of India.

OPINION
JANET YELLEN

Change unlikely
in balance sheet
normalisation plan
Good afternoon. At our meeting that concluded earlier today,
my colleagues and I on the Federal Open Market Committee
(FOMC) decided to maintain the target range for the federal funds
rate at 1 to 1.25 per cent. This accommodative policy should sup-
port some further strengthening in the job market and return to
two percent inflation consistent with our statutory objectives.
We also decided that in October, we will begin the balance sheet
normalisation programme that we outlined in June. This pro-
gramme will reduce our securities holdings in a gradual and pre-
dictable manner. As we expected, and smoothing through some
variation from quarter to quarter, economic activity has been ris-
ing moderately so far this year.
Household spending has been supported by ongoing strength
in the job market. Business investment has picked up and exports
have shown greater strength this year, in part reflecting improved
economic conditions abroad. Overall, we expect the economy
will continue to expand at a moderate pace over the next few years.
In the third quarter, however, economic growth will be held
down by the severe disruptions caused by hurricanes Harvey,
Irma and Maria. Once activity resumes and rebuilding gets under
way, growth likely will bounce back. Based on experience, these
effects are likely to materially alter the course of the national econ-
omy beyond the next couple of quarters. Of course, for the families
and communities that have been devastated by the storms, recov-
ery will take time, and on behalf of the Federal Reserve, let me
express my sympathy for all those who have suffered losses.
In the labour market, job gains averaged 185,000 per month over
the three months ending in August, a solid rate of growth that
remained well above estimates of the pace necessary to absorb new
entrants into the labour force. We know from some timely indicators
such as initial claims for unemployment insurance that the hurricane
severely disrupted the labour market in the affected areas, and pay-
roll employment may be substantially affected in September.
tune with the curriculum of national boards, candidates have to rush from one place to
particularly in science subjects, but many of other, wasting time and money to sit for
them have not fallen in line. exams in some states; theres also the issue of
unethical practices. There was a big differ-
Will a common curriculum solve ence in quality between AIPMT/NEET and
the problem? tests conducted at the state level. But in order
Even if the curriculum design is made uni- to address the fears and concerns of students,
form, unless and until it reflects in the class- can we build a certain flexibility into it? In
room transaction and the assessment India, due to the huge diversity and multi-
process, no uniformity can be achieved in a plicity of boards, a Scholastic Aptitude Test
true sense. There is so much of difference in type of exam as conducted in the US
classroom practices and evaluation patterns may not be feasible and practicable until we
among these boards that uniformity seems to achieve true equivalency in standards among
be a distant dream. Whereas it is more of the boards. There should not be a concentration
same in several boards, the national boards of students from national boards and a few
and some of the state boards have switched enlightened state boards and virtually
over to higher order thinking skills. The no representation from several other
latter are relevant to this type of state boards.
professional exam (NEET). So I will
say that students from some of the What are the necessary changes
state boards are at a disadvantage that should be immediately
vis-a-vis those from progressive made to NEET?
boards. Also, these examinations The immediate need seems to be
do not test the attitude and apti- ASHOK GANGULY that it should be conducted in
ILLUSTRATION: BINAY SINHA tude of the students correctly. It is Former chairman of the English only. One of the eligibil-
the best coached, not the best Central Board of ity criteria for admission in
ASHOK GANGULY, former chairman of the Central Board of Secondary Education (CBSE), tells talent, who cracks such a type of Secondary Education MBBS/BDS is that the candidate
Sahil Makkar that problems and concerns with respect to the National Eligibility cum Entrance exam. Unless we change the typol- must have studied English as a
Test (NEET) need to be addressed. Edited excerpts: ogy of the questions and design the ques- core subject in school. In any case, the can-
tion paper properly, the situation may didate has to study MBBS/BDS only in
not improve. English, hence it is assumed that the candi-

NEET is the best

However, such effects should unwind relatively quickly. date is proficient enough in English to join
Meanwhile, the unemployment rate has stayed low in recent What about students from rural India and the course. Earlier, when states were holding
months, and at 4.4 per cent in August was modestly below the median those studying in government schools? state-level entrance exams, these were con-
of FOMC participants estimates of its longer-run normal level. Given the Students in rural India and those studying in ducted in English and Hindi. Secrecy of tools
underlying downward trend in participation stemming largely from the state government-run schools seem to have adopted in such examinations is of para-

and only option

ageing of the US population, a relatively steady participation rate is a fur-
ther sign of improving conditions in the labour market.
Turning to inflation, the 12-month change in the price index for per-
sonal consumption expenditures was 1.4 per cent in July, down notice-
ably from earlier in the year. Core inflation, which excludes the volatile
food and energy categories, has also moved lower. For quite some time,
inflation has been running below the committees two per cent longer-
run objective. However, we believe this years shortfall in inflation pri-
marily reflects developments that are largely unrelated to broader eco-
nomic conditions. For example, one-off reductions earlier this year in
certain categories of prices such as wireless telephone services are cur-
rently holding down inflation, but these effects should be transitory.
More broadly, with employment near assessments of the max-
imum sustainable level and the labour market continuing to
strengthen, the committee continues to expect inflation to move
up and stabilise around two per cent over the next couple of years
in line with our longer-run objective. Nonetheless, our under-
standing of the forces driving inflation isnt perfect. And in light
of the unexpected lower inflation readings this year, the
Committee is monitoring inflation developments closely.
The Committee is prepared to adjust monetary policy as needed to
achieve its inflation and employment objectives over the medium
term. Let me turn to the economic projections that Committee par-
ticipants submitted for this meeting, which now extend through 2020.
The median projection for growth of inflation-adjusted gross
domestic, or real GDP, is 2.4 per cent this year and about two per cent
in 2018 and 2019. By 2020, the median growth projection moderates
to 1.8 per cent, in line with its estimated longer-run rate. The medi-
an projection for the unemployment rate stands at 4.3 per cent in
How genuine are the concerns of those
protesting NEET?
NEET is the best thing to have happened in
recent times in the professional examina-
tion system in India. The protests are one-off
incidents; one cannot generalise or make an
opinion from such incidents. However, if you
talk to students across the country, there are
concerns and misconceptions that need to be
addressed timely and appropriately.
Is it true that NEET is based on the CBSE
syllabus, although CBSE schools are only a
small per cent of the total number of
schools in the country?
No. NEET syllabus is not based on that of
the CBSE. It is based on a core curriculum
approach, whereby the syllabi of all the
school boards have been taken into consid-
eration. It has been prepared by the CBSE,
Council of Boards of School Education
(Cobse), National Council of Educational
Research and Training (NCERT) and adopt-
ed by the Medical Council of India.
But India doesnt have a common core
curriculum and there are 50 different
boards, with each one of them having a
different syllabus and evaluation process...
There are three national boards, including
the National Institute of Open Schooling and
about 50 other boards situated in the respec-
tive states. There are wide variations with
regard to curriculum design, curriculum
transaction and curriculum evaluation
among these boards. Efforts were earlier
made to bring some sort of uniformity. Some
state boards have prepared their content in
a lesser chance of success mount importance; a ques-
because of their repetitive and Students in rural India tion paper is one of the tools.
stereotypical teaching learn- and those studying in If the tools are handled
ing process. Students of some state government-run by various people, including
of the state boards have this schools seem to have a the paper setter, moderator,
fear that they may not be able lesser chance of success translator, proof-reader,
to crack the exam because because of their there are chances of pilferage
their school boards are repetitive and and leak, which can
addressing mediocrity and stereotypical teaching help mischief-makers.
their curriculum process is learning process Also, the uniform domicile
inferior to that of national rule needs to be adopted in
boards. This mindset needs to be removed. this case and a candidate must claim a seat
The situation can definitely be improved in only in one state against 85 per cent of
three to five years, provided sustained and the seats.
earnest efforts are made. At present, a candidate can claim domi-
cile in more than one state, which makes the
There are allegations that NEET is admission process lengthy and allows scope
infringing upon the state governments for malpractices. In NEET, the upper age lim-
power to hold admissions in the medical it may be fixed to ensure the quality of future
colleges funded by them. doctors. There is also a need to go for central
In no manner is NEET infringing upon the counselling for 100 per cent of the seats, so
powers of the state governments. State inter- that in one go, all the candidates are allotted
ests are fully protected in the form of state seats as per their merit. The basic issue
domicile, reservation, etc. I repeat, NEET is looking at the enormous variety among
the best and only option, considering the boards is, do we need to fill up 100 of the
multiplicity of such exams and the fact that seats through NEET?

On a wing and a message

the fourth quarter of this year and runs a little above four per cent
over the next three years, modestly below the median estimate of
its longer run normal rate. Finally, the median inflation projection
is 1.6 per cent this year, 1.9 per cent next year and two per cent in 2019
and 2020. Compared with the projections made in June, real GDP
growth is a touch stronger this year, and inflation particularly core
inflation is slightly softer this year and the next.
The median projection for the federal funds rate is 1.4 per cent
at the end of this year, 2.1 per cent at the end of next year, 2.7 per
cent at the end of 2019, and 2.9 per cent in 2020. Compared with the
projections made in June, the median path for the federal funds
rate is essentially unchanged, although the median estimate of the
longer run normal value edged down to 2.8 per cent.
As always, the economic outlook is highly uncertain and partici-
pants will adjust their assessments of the appropriate path for the fed-
eral funds rate in response to changes to their economic outlooks and
views of the risks of their outlooks. Policy is not on a preset course.
As I noted, the Committee announced today that it will begin its
balance sheet normalisation programme in October. This pro-
gramme, which was described in the June addendum to our policy
normalisation principles and plans, will gradually decrease our rein-
vestments of proceeds for maturing treasury securities and princi-
pal payments for agency securities. As a result, our balance sheet will
decline gradually and predictably. For October through December,
the decline in our securities holdings will be capped at $6 billion per
month for treasuries and $4 billion per month for agencies.
By limiting the volume of securities that private investors will have
to absorb as we reduce our holdings, the caps should guard against
the outsized moves in interest rates and other potential market
strains. Finally, changing the target range for the federal funds rate
is our primary means of adjusting the stance of monetary policy.
Our balance sheet is not intended to be an active tool for mon-
etary policy in normal times. We, therefore, do not plan on making
adjustments to our balance sheet normalisation programme. But of
course, as we stated in June, the Committee would be prepared to
resume reinvestments if a material deterioration in the economic
outlook would warrant a sizeable reduction in the federal funds rate.
Edited excerpts from US Federal Reserve chair Janet Yellen's statement to the
media after the meeting of the Federal Open Market Committee on September 20
Often called Indias first Dalit rock band, Dhamma Wings doesnt subscribe to the tag. Its songs preach peace, not revolution
ADITI PHADNIS they are the problems of the whole country.
We want to make our country a better place.
Kabir Shakya reacts sharply if your refer to his So we sing about it.
band, Dhamma Wings, as Indias first Dalit Has he heard the music of other libera-
rock band. We dont see ourselves as Dalits. tion gurus? Joan Baez, Bob Dylan, Leonard
I am not Dalit I am a convert to Buddhism, Cohen, Janice Joplin? He laughs. I have
he says. And what is Dalit? We have heard music, a lot of music. If
Marathas and Brahmins, too, in our Michael Jackson sang about racism,
band. We sing about harmony, peace he was not just singing to the blacks.
and equality. We speak of India First He was singing to the entire United
in our songs. They always tag me States. Thats what we want to do.
with people of other mentalities. Shakya says revolution is pass.
Just under 30, Mumbai boy Ambedkarite songs used to be criti-
Shakya was drawn towards rock and
western styles of music because
THE OTHER cal of Hinduism, he says. Words
were used as a tool to agitate the
those had a wide reach among a gen- INDIA masses because that was the need of
eration that desperately needed an the hour, then. Today, people are well
ideology. There is no point in aware of the circumstances and do
appealing to old people, Shakya says. They not need to be provoked to react against social
already know what they want to think. It is injustices. Therefore, we dont name and
the young who are searching. blame anyone in our melodies because we
Shakya became a Buddhist monk for three believe that the past should be treated as such
months, understanding and delving into a and the present is what matters. Our mes-
world where desire has been conquered. The sage to the new generation is: Do not let The song that put Dhamma Wings in the limelight was Jai Bheem se; it had sounds of chanting
search for Pali literature led him to rich sutras social evils prevail now. Set the course for set among the lyrics, making the song exude peace
and he adapted them to his music. He then the future.
started reading B R Ambedkars writings and The song that put Dhamma Wings in the response. He concedes that the bands suc- our music, he says. For me, this is the objec-
the way our people live. Dalits have no limelight was Jai Bheem se; it had sounds of cess is due to social media sites such as tive. After all, we do not play together just for
fixed definition in India, he says. So I dont chanting set among the lyrics, making the Facebook and YouTube, which provide every- the heck of it. We come together and create
believe I am a Dalit. I believe in Buddha and song exude peace. Shakya composed a song one access to their music. Today, many from music with a message, a message we firmly
Babasaheb (Ambedkar). I believe the prob- about the miserable situation of the Koli com- the upper class communities, non-Dalits, believe in and the internet helps us take
lems of our people are not just our problems munity in Maharashtra, which also got a good non-Buddhists all say how much they like this everywhere.
 https://telegram.me/TheHindu_Zone https://telegram.me/PDF4EXAMS

>
OPINION 11
Volume XI Number 29
MUMBAI | 24 SEPTEMBER 2017

of young girls and boys in a sport that consti- istration that Maggi contained high levels of gainsaying that some consumers somewhere

Fit and proper tutes a national passion. As a current player, the

ambit of his influence is wide. His decision,
thus, transmits two important messages. The
In declining to endorse Pepsi, Kohli sets the standard first is on health and wellness grounds, an
invaluable signal, given the depressing evi-
ndian cricket team captain Virat Kohlis Gopichand was the first to decline the lures dence of growing obesity among Indian kids
lead and the banned monosodium gluta-
mate. All three actors had featured in
prominent TV commercials endorsing
Maggi for children as a tasty and healthy
breakfast/snack food. Justified or not, the
controversy raised, for the first time, the
may be influenced by watching their
favourite cricketer or actor endorsing a prod-
uct, only to find it wanting either in terms of
performance or safety standards.
In sophisticated jurisdictions like the
US, there are punitive laws for misleading

I decision not to renew his multi-crore

contract to endorse the cola brand
Pepsi has raised the game for the
booming business of celebrity brand
endorsements. Kohli said his decision was
dictated by the fact that he did not consume
the drink and, therefore, did not think it right
to endorse it. As he explained it to the media,
the drink was taboo in his punishing diet
and fitness regimen and, as captain, he
would not demand of his team-mates any-
thing that he would not do. Kohli is not, of
course, the leader in endorsement-absti-
nence. Indias badminton coach Pullela
of a big-money cola contract in his heydays
as a player and, since then, Sachin Tendulkar
has similarly turned down a liquor endorse-
ment proposal and Amitabh Bachchan sto-
pped endorsing Pepsi after a young girl asked
him why he promoted a drink that had poi-
son a reference to the controversy over
pesticide levels in soft drinks.
These examples are so rare as to make
headlines. Though many say that it took him
six long years to figure out that the beverage
brand was unhealthy (Kohli has been endors-
ing Pepsi since 2011), his stand is significant
because he is a heroic role model to thousands
owing to the indiscriminate consumption of
junk food and sugary drinks.
The second concerns the question of
principles a factor that rarely figures
when it comes to celebrities accepting the
big-money contracts of large corporations.
This issue came front and centre in 2015
when FIRs were filed against Bachchan,
Madhuri Dixit and Preity Zinta for endorsing
various products of international food major
Nestles Maggi brand of flavoured noodles.
This somewhat draconian move took place
against the background of allegations by the
Uttar Pradesh food safety standards admin-
ethics of celebrity endorsements in the pub-
lic discourse.
In India, there are scanty rules governing
this field, which has given corporations and
celebrities a free run. Bachchan, for instance,
is known to endorse almost anything from
childrens garments to cement. The food safe-
ty standards law does contain a fine for any-
one found to be offering misleading infor-
mation on a food brand, but the princely fine
of up to ~10 lakh can hardly be considered a
discouragement to actors who earn in crores.
Whether a celebrity endorsement helps a
brand is a moot point, though there is no
endorsements and oversight rules that
decree that the company concerned should
have proof that the celebrity uses and has
knowledge of the product he or she is
endorsing. In India, a parliamentary stand-
ing committee recommended a rather more
robust punishment: a fine of ~50 lakh and/or
a jail term of up to five years for false
endorsement. This may be tricky ground
since the failure may equally be the compa-
nys or the states. Until (and if ) that
becomes a law, self-restraint of the kind
Kohli has demonstrated should become the
gold standard for other celebrities.

An industry at the crossroads Energising innovation

Policy stability is the most important ingredient for the Indian automobile industrys continued growth in green manufacturing
SUROJIT MITRA SANJAY KUMAR sustainable products by the public sector.
The manual has broadened the value

D
ny evaluation of this governments econom- emand-driven innovation has been for money concept and brought out con-

A ic agenda will indicate that while there is

earnestness of intent and hard work, the
same cannot be said of the outcomes. A case in
point is the below-par performance of the manu-
facturing sector. This is despite the fact that the
government has focused sharply on this sector, in
view of its importance as an engine of economic
growth and job creation.
The government has taken up several high-pro-
file initiatives and programmes such as Make in
India, Skill India, liberalisation of FDI, defence pro-
curement policy, and infrastructure development,
and efforts have been made to improve ease of doing
business, all aimed at giving impetus to the manu-
facturing sector. However, the contribution of man-
ufacturing to Gross Value Added at current prices
remains at 16.6 per cent, similar to what it was in
1979-80 (as per government data), and is among the
lowest for large global economies. At the current
pace, the target for the manufacturing sector of con-
tributing 25 per cent to the national GDP remains a
distant reality.
The continued slow growth can be attributed to
a host of macro-economic issues, ranging from the
ongoing NPA problem that the government inher-
ited to the related issue of the private sectors lower
appetite for debt leading to low private capital for-
mation. However, these issues along with the many
initiatives of the government constitute only
hygiene factors, the resolution of which is neces-
sary but not sufficient for ensuring high manufac-
turing growth.
The important missing ingredients are the soft-
er issues that help create a positive market senti-
ment, facilitate lower investment risk and enhance
confidence in the economy. These include a holistic,
synergised approach to the complex web of govern-
ment policies that transcend various domains and
the importance of stability and continuity of gov-
ernment policy. This aspect is best illustrated by
the automotive sector and the manner in which key
policies pertaining to taxation of cars, the shift to
electric mobility, promotion of alternate fuels and
framing of automotive regulation have been dealt by
the government recently.
The two to six per cent decrease in effective tax-
ation on large cars and SUVs post-GST was an
attempt to rationalise tax rates for cars, which are
among the most highly taxed products in India.
This was a progressive step undertaken after much
deliberation and was in line with the governments
efforts to boost investments. However, an upward
revision just two months after GST implementation
conveyed an impression of policy volatility. It is not
the tax hike per se but the manner in which the
decision was taken that is worrisome for the manu-
facturing sector.
The transport sector is one of the largest con-
sumers of fossil fuels. Hence policies for shifting
this sector towards higher energy-efficiency and
use of greener energy sources are important. While
there can be no dispute about the governments
focus on electric vehicles, the aggressive technolo-
gy pathway that is being adopted is surprising. The
bold announcement that only electric vehicles will
be allowed by 2030 does not reflect the ground real-
ity nor does it consider the impact of such a sudden
shift on Indias large auto component industry.
At present, India lacks the charging infrastruc-
ture, manufacturing ecosystem and market accept-
ance for electric mobility. At this stage it would
have been prudent to adopt a technology-agnostic
a key factor in the success of many temporary concepts of total cost of own-
industries in the US and Japan, espe- ership and life cycle cost to take into
cially in defence R&D programmes, in which account not only the initial acquisition
well-articulated demand was the key to price but also the cost of operation, main-
developing and diffusing technologies. Also, tenance and disposal during the lifetime of
companies are willing to invest, innovate products and services. Further, it has
and scale up when the demand is secure allowed incorporating environmental
and well-directed. characteristics besides quality, price, tech-
In the US, the domestic market for green nical merit, aesthetics, and functional
electronics products took huge strides after characteristics in the procurement cycle
the federal governments executive order from specification to bid evaluation and
on the purchase of greener products in the contract monitoring. Embracing these
early 1990s. Similarly, in Europe, public pro- changes, public procurers would create
curement acted as a catalyst in developing a steady demand for greener products,
market for organic food and drink, fuel-effi- thereby decoupling both resource require-
cient vehicles, and sustainable buildings ment and environmental impacts from
and timber products. GDP growth.
Typically, a government spends 12-30 The implications of this step become
per cent of national GDP on procuring clear when one considers the scale of gov-
products, services, and works, thereby cre- ernment procurement in India, which is
ating significant financial clout for itself about 30 per cent of GDP. Considering the
in the market. It is not only the biggest that Indias GDP is about $2.3 trillion, the
institutional consumer, but also regulates government has, in a bid to incentivise the
and influences the allocation of resources market for innovation in design, develop-
by demanding sustainable products and ment and manufacture of sustainable prod-
services. Governments, especially in devel- ucts, created a market of about $700 bil-
oped economies, have leveraged this com- lion for such products, works and services.
bination of purchasing and regulatory In addition to challenging traditional man-
powers to shift investments towards the ufacturers to scale up their efficiency, it will
manufacture of innovative also force them to innovate
Car bodies on an assembly line: Only a well-thought-out road map will ensure progress low-carbon products. There is Our policymakers continuously to retain market
no reason why India cannot must move ahead competitiveness.
approach of supporting all technologies, such as plagues the introduction of a number of automo- take the same path. quickly and This tweaking of purchase
hybrids and plug in hybrids. This would have tive regulations. In todays interconnected aggressively if we, policy will attune our busi-
addressed the existing limitations, reaffirmed In such a scenario industry faces increased world, consumers are savvy like China, are to nesses to the new success
Indias commitment to the national road map as investment risk due to the high degree of ambigu- and sensitive to environment unlock public paradigm and make them
outlined in NEEMP 2020 and, more importantly, ity in policy direction. A holistic approach to pol- and health hazards. Several procurements aspire to capture a small
helped the Indian auto parts industry to migrate to icy-making and policy stability is essential if India studies have concluded that power of the piece of the ^4.2 trillion cake.
these new technologies while avoiding dependence is to compete with other countries for investment. despite high unemployment purse to trigger It will also help us achieve
on China for battery and other electric vehicle parts. For the auto sector, policy stability is the single rates and low wages after 2008, innovation in multiple sustainable devel-
It will take time to fully assess the impact of this dis- most important ingredient for continued growth. millennials in European coun- low-carbon opment goals, mitigate cli-
ruptive approach on a sector as complex as the Without it no amount of other interventions can tries are willing to spend more manufacturing mate change, foster sustain-
automotive industry; however, it will not contribute really make a big difference. on environment-friendly prod- able development, besides
to higher growth, as the potential losses simply Consistent long-term supportive government ucts. The European Commission estimated creating a market for voluntary sustain-
outweigh the likely gains. policies and implementation of measures outlined the rapidly growing global market for low- ability standards and labelling.
A key reason for the policy disconnect is that in the Automotive Mission Plan (AMP) 2006-16 were carbon environmental goods and services However, the manual will remain unno-
while auto sector policy matters are complex issues key to the growth of the Indian auto sector. Any ad at ^4.2 trillion in 2012. Indian businesses ticed unless its provisions are embedded
involving multiple departments, in most cases hoc measures or a disruptive transformational can either seize the opportunity and capi- into procurement practices. To start with,
inter-departmental deliberations seem ineffective; approach will only cause irreparable harm to this talise on this trend by internalising sus- the government can set up a task force to
the dominant departments sector. Therefore, the growth trajectory of the tainability in their value chain, or face the analyse its spend, identify hotspots in pro-
Auto sector tend to push for options Indian auto sector, including the manufacture of danger of becoming obsolete in the modern curement, bring out comprehensive sus-
policy matters evaluated from their own automobiles, will depend largely upon the govern- consumer-driven market. tainable products procurement guidelines
are complex isolated perspective. There ments ability to build effective institutional frame- The objective of the Make in India ini- and action plans for prioritised products,
issues involving is a lack of holistic assess- works and capacity creation that can bring about a tiative to transform India into a global man- and set up a monitoring and review mech-
multiple ment of issues from a broad- holistic approach to policy making. ufacturing hub will not succeed unless our anism. This would send a clear signal to the
departments. er perspective and no clear The National Automotive Board conceived by businesses adopt the new competitive market that it means business.
Yet, dominant long-term road map for the the government in 2013 was to play such a role but mantra of reducing carbon emissions as well The capacity building of stakeholders
departments industry emerges. has not taken off. It would be appropriate for the gov- as materials and energy usage over the and preparing of businesses (especially
push for options Often long-term road ernment to create this body at the earliest, possibly whole life-cycle of products. SMEs) for such transformation can progress
evaluated from maps that do exist, like the under the NITI Aayog, on a priority basis. In addi- Businesses, by adopting this low-car- simultaneously. Industry in China realised
their own NEMMP 2020, are easily lost tion, a well-thought-out long-term road map for the bon manufacturing philosophy, have long ago that efficiency in energy usage,
isolated sight of. This is evident from auto sector, such as an AMP (II) 2017-27, needs to be transformed their manufacturing and been waste generation, and water consumption,
perspective the fact that for lowering finalised to ensure long-term policy stability and reaping the benefits of consumers willin- along with the use of recycled materials,
petrol/diesel consumption, consistency. For growth to recover in the near future, gness to pay a premium for sustainable was vital for reducing cost and becoming
while Road Transport Minister Nitin Gadkari advo- the government should immediately undertake a products. This leads us to the question competitive in the long run. Our policy-
cates bio-fuels, Petroleum Minister Dharmanand course correction and desist from ad hoc policy how can we transform the Make in India makers must move aggressively if we are to
Pradhan is predisposed towards CNG/LNG, for- measures such as flip-flops in taxation, unrealistic initiative to a low-carbon manufacturing unlock public procurements power of the
mer Power Minister Piyush Goyal supports electric targets for electric mobility and apparent vacillation initiative? purse to trigger innovation in low-carbon
vehicles and NITI Aayog Member V K Saraswat in the selection of alternate fuels. In May, the government took a small step manufacturing.
believes methanol blending is the answer. This in this direction by releasing the Manual for
only creates confusion, as adopting multiple The writer, a former Secretary to the government, Procurement of Goods 2017, which has made The writer is a railway officer on deputation with
options is not possible. Such uncertainty also formulated Indias Automotive Mission Plan 2006-16 key changes to facilitate the procurement of Dedicated Freight Corporation

> OTHER VIEWS

Govt must focus on education Encouraging scientific talent Targeted killing?
and stimulating investment Complete systemic overhaul required Tripura scribes death needs swift probe
It should let the market take care of Policy-makers and scientists not be nurtured without The murder of Santanu It would be a blow against the
have repeatedly expressed money. Most of the funds and Bhowmik, a television freedom of the press if
skilling the workforce their concern about the the high salaries are drawn reporter, in Mandwai in Bhowmiks death is not inves-
absence of research of the off by the various scientific Tripura on Wednesday has tigated, keenly and expedi-
Not even a tenth of the 30.67 lakh youth who had received or highest standards in India's institutes in which predictably drawn the tiously, for what it is: because
were undergoing training under the Pradhan Mantri Kaushal many universities. It may be researchers need bother least Communist Party of India first reports indicate that he
Vikas Yojana (PMKVY) as on early-July have obtained job true that the ambience of with students. Certainly not (Marxist) and the Bharatiya did not die in the crossfire, he
placement offers, according to a report in this newspaper. most universities does not with undergraduate students, Janata Party into a blame was targeted.
So, can this be seen as a failure of the Narendra Modi gov- encourage rigorous scientific where the nurturing must be game. While the CPI(M), The inhibitory effect of
ernments flagship skills training and certification scheme? research, neither is it con- intensive.This puts university which is in power in the state, such killings is obvious and it
Jobs are not simply a function of the countrys workforce ducive to the nurturing and departments at a serious dis- is calling this an ideologically is welcome that mediapersons
acquiring formal skills making them employable. More fun- steady mentoring and guid- advantage: Neither teachers motivated murder by BJP- around the country are
damental to job creation is a vibrant economy, in which ance that talent demands. But nor students can hope to con- backed forces, the BJP in turn demanding a swift follow-up
investment and consumption fuel demand for labour, skilled to dismiss the problem at this duct the best research in the is keen on casting the killing to punish his killers. But in a
and unskilled. Todays crisis is not one of employability, but level is to ignore its deeper circumstances under which as purely a law and order fail- democracy such tragic deaths
of investment and economic activity leading to shrinking job and quite complicated roots. they work. Developing talent ure of the Manik Sarkar gov- need more than just the rally-
opportunities, whether for IT service professionals, The basic sciences do not in the sciences has to be ernment. Bhowmik, who was ing of colleagues in the pro-
draughtsmen, masons or fitters. up the infrastructure and course content in 2,284 govern- draw much interest from achieved by long-term plan- in his late-20s, was brutally fession. There is a clear line
The problem with PMKVY is not its poor job placement ment ITIs. The government would do a great job by just con- Indian politicians; India has ning, a thoughtful allocation attacked while in the line of that connects intimidatory
record. Ideally, the governments focus should be on provid- centrating on basic education, labour reforms and improving taken to priding itself on its of funds and a comprehen- duty covering clashes tactics against a journalist
ing decent education. That would mean ensuring minimum the ease of doing business. The market has ways to address the technological expertise sive rehauling of the system. between the Indigenous whether by physical violence
standards in schools, colleges, polytechnics and industrial skills gap: You dont need PMKVY or a ministry of skills devel- instead. The expenditure on Patchwork solutions will Peoples Front of Tripura or in other coercive ways
training institutes (ITI). The ~12,000-crore outlay for PMKVY opment for that. university science depart- not do. (IPFT) and the CPI(M)s tribal and the health of a democracy.
mainly towards training modules of 150-300 hours dura- ments is far from adequate wing, the Tripura Rajaer
tion, whose utility is doubtful can instead be used to beef The Indian Express, September 22 and scientific research can- The Telegraph, September 22 Upajati Ganamukti Parishad. The Hindu, September 22
 https://telegram.me/TheHindu_Zone https://telegram.me/PDF4EXAMS
12
>
MUMBAI | 24 SEPTEMBER 2017 1

With $217 mn, Dangal Task force seeks public opinion on AI

becomes Bollywoods
ALNOOR PEERMOHAMED
Bengaluru, 23 September
A government task force is
seeking public opinion on
SMART MOVES
The Ministry of Commerce set
up a taskforce on artificial
provides a mechanism to
amplify these digitisation
schemes.
Kamakoti said a key job of
the task force would be to
The government faces a
difficult choice in keeping up
with the rest of the world in
AI development while mak-
ing sure it does not add to

most successful export deploying artificial intelli-

gence in manufacturing,
healthcare, agriculture and
the Aadhaar programme.
The task force, set up in
URVI MALVANIA August, has been asked to
Mumbai, 23 September draw up a policy for the accel-
erated deployment of AI and
intelligence in August
The taskforce will create a
policy for accelerated
deployment of AI by industries
It will also study the
potential social impact of
deploying AI across sectors
Experts say AI led economies
will drive global GDP growth in
study the social impact of AI.
He added AI should replace
hazardous jobs while the
government should skill peo-
ple for working in the era of
AI.
AI has been accused of
being a technology that will
unemployment.
Elon Musk, the founder of
Tesla and SpaceX, has stated
AI could become a threat to
humanity if not kept in check
and has sought a ban on
drones in war zones. Until
people see robots going down

A
mid the gloom that Bollywood
finds itself in, one film is making
waves more than six months after
its release. Disneys penultimate pro-
duction in Bollywood, Dangal, is going
strong in the overseas market, zooming
past competition, having collected $217
million. The biopic about the Phogat sis-
ters released in India in December 2016,
and collected ~388 crore at the domestic
box office.
Dangal has grossed four-and-half
times the overseas business of PK, the
most successful Bollywood film ever
before this.
As is the norm with overseas distribu-
tion, the Aamir Khan-starrer was released
abroad in tranches, beginning with tradi-
tional overseas territories (UK, US and
West Asia) and then was taken to non-
traditional territories such as Turkey and
China, et cetera. Dangal also entered a
fairly new territory in the form of Hong
Kong, where Disneys local team spear-
headed the distribution.
We knew Dangals story had the
power to resonate with people across the
globe. We are so very proud about how
the movie continues to connect with the
audience all over and dominate at the box
office even after its third week in a new
market like Hong Kong, says Amrita
Pandey, vice president studios, Disney
India. What makes this special is that
the Disney theatrical team in Hong Kong
has given the movie the right marketing
and distribution platform.
The film released in 46 screens in
Hong Kong and Macau, almost four times
more than the regular screen count for a
Hindi mainstream release. The local
audiences overwhelming response reaf-
firms that an inspiring story backed by
the right team, distribution planning,
superior storytelling with such strong per-
formances can win hearts and transcend
boundaries. Dangal exemplifies that,
adds Pandey.
China is the biggest earner for
Dangal at $178.3 million. The film
released in China earlier this year in
May, along with Taiwan. Aamirs films
have done well in China before this as
well, with PK making $19.3 million and
3 Idiots making $3 million. North
TOP GROSSING BOLLYWOOD
FILMS OVERSEAS ($ MN)
Baahubali 2 has collected
close to $38 million
overseas, but is not
considered a Bollywood
film, which is why it
isnt a part of the list
217.17 47.86 31.0 27.0 27.0
Dangal PK Dhoom 3 Bajrangi
3 Idiots Bhaijaan
Source: Industry estimates
America is the second-highest earning
territory for Dangal with $12 million fol-
lowed by the Gulf at $8.5 million.
With this, Dangal has raced ahead of
previous overseas blockbusters like PK
(2014), 3 Idiots (2009), Dhoom 3 (2013) and
this years biggest hit, Baahubali 2 (see
chart). While S S Rajmoulis sequel con-
tinues to be the most successful Indian
film at the domestic box office, Dangal
has emerged as the leader in the overseas
market by a huge margin.
This also solidifies Aamirs popularity
in the overseas market. Of the top five
films in the international market, four
feature Aamir in lead roles. While Shah
Rukh (Khan) and Salman (Khan) are pop-
ular in pockets of the international mar-
ket, Aamirs popularity is more universal
and it has a lot to do with the kind of films
he does. In Southeast Asia, Aamirs pop-
ularity can be traced back to 3 Idiots. The
film resonated well with audiences there
since the educational system in those
markets is similar to Indias. That made
people curious about Aamir as an actor
and his movies started getting visibility in
theatres and on the small screen, says
a distributor.
a five-year roadmap for its
use in government and
industry research pro-
grammes.
The job of the task force
is to look at how we can use
AI and the topic is so big we
thought the public should
also participate in it, said V
Kamakoti, professor of IIT
Madras, who is chairing the
task force.
The task force includes
Gautam Shroff, vice-presi-
dent and chief scientist at
TCS Research; Ashwini
Asokan, co-founder and chief
executive officer of AI startup
Mad Street Den; GH Rao,
Village that gave shelter to
Humayun plays host to Modi
PRESS TRUST OF INDIA
Shahanshahpur, 23 September
Four centuries ago, an emper-
or stopped by, giving the vil-
lage its name.
Today, Shahanshahpur had
another brush with fame when
it hosted Prime Minister
Narendra Modi.
The village, some 30 km
from Modis Lok Sabha con-
stituency Varanasi, has had its
tryst with history.
Legend has it that the village
was named after Shahanshah
Humayun, who had taken shel-
ter in the hut of an elderly
woman here after his battle with
Sher Shah Suri more than 450
years ago.
Today, Shahanshahpur
played host to the prime min-
the future
AI has the power to augment
government schemes such
as Aadhaar
head of engineering and R&D
services at HCL
Technologies; and represen-
tative from various min-
istries.
The government has
embraced digitisation
through Aadhaar, India Stack
and UPI in payments, and is
turning to technology to pro-
vide aid, education and
healthcare to the poor. AI
ister, who inaugurated the
Pashu Arogya Mela (cattle
health fair), being organised
for the first time in the village,
on 1,800 acres.
The prime minister, who
addressed a public meeting,
also laid the foundation stone
for a toilet under Swachh
Bharat Abhiyan in the village.
Uttar Pradesh Governor
Ram Naik, Chief Minister Yogi
Adityanath, Minister of State
for Rural Development
Mahendra Singh and BJPs UP
President Mahendra Nath
Pandey were also present on
the occasion.
The residents of the village
take pride in the lore about the
Mughal emperors visit.
The prime ministers visit
has given the villagers a rea-
take jobs away from humans
but experts believe it will cre-
ate new types of jobs. AI
could create high-end tech-
nology jobs while replacing a
large number of low-end
tasks that can be automated.
Plucking coconuts from
a tree is hazardous. Imagine,
I build a robot to climb a tree.
It is equipped with a sensor
and a machine learning
engine that can tell if a
coconut is ripe. Now while
that hazardous job is elimi-
nated, it is not as if the robot
will come to your house on
its own, it will need an oper-
ator, Kamakoti added.
son to relive the tale, said Apna
Dal (S) local MLA Neelratan
Patel Neelu. Apna Dal (S) is an
ally of the BJP.
The story goes that
Humayun reached the quiet vil-
lage after crossing the Ganga
the street killing people, they
do not know how to react,
because it seems so ethere-
al, he said in July.
Bill Gates, co-founder of
Microsoft, has suggested gov-
ernments begin to charge a
robot tax once AI and mech-
anisation replace the human
workforce.
Union Transport Minister
Nitin Gadkari recently said
the country would ban self-
driving cars as these would
add to unemployment. How
can we allow such vehicles
when we already have a large
number of unemployed peo-
ple? he had said in July.
late at night after Sher Shah Suri
defeated him in the battle of
Chausa. That was when the eld-
erly villager gave him shelter in
her hut without knowing that
her lodger was none other than
Humayun, say locals.

How GST is changing the ad printing

business during Durga Puja
AVISHEK RAKSHIT
Kolkata, 23 September

The goods and services tax

(GST) is threatening to
change the face of West
Bengals biggest festival,
Durga Puja, from next year.
For the numerous small-
scale printers involved in
the advertising space, but
under the ambit of GST, the
next pujas will just mean
less work and less cheer.
After the implementa-
tion of GST, companies have
become more conscious
about the input tax credit
that can be claimed in full
as compared to the partial
tax claim under the Value
Added Tax (VAT) regime.
Previously, advertisers were
able to claim service tax
credit for advertisements in
print media, outdoor bill-
boards, television and other
forms of electronic media.
However, now the entire 18
per cent tax can be claimed
back by the advertisers.
This has been replicated
even in case of advertise-
ments during the Puja sea-
son. Sponsors are now keen
to get the work done by DTP
(desktop publishing) com-
panies for the billboards
and other advertising agen-
cies who fall under the GST
ambit, said Surojit
Sadhukhan, owner of Om
Enterprises.
Sadhukhan is one of the
numerous DTP and flex
printing makers who have
been left outside the GST
ambit as his annual
turnover is less than ~20
lakh. As a result, although
he lost around 10 per cent of
the Puja seasons business
this year, he expects the
next Durga Puja to wreak
havoc on his business.
A similar concern is
shared by Ramakanta
Mondal of Progress
Enterprises who gets
around 20 per cent of his
annual revenue by design-
ing advertising artwork and
printing banners & flex dur-
ing the Puja season. Most of
this order comes in from the
Puja organisers of Ajeya
A painter at a Durga Puja pandal in New Delhis Chittaranjan Park SANJAY K SHARMA
Sanghati Club, one of the Srijan Chakraborty, own- Pitch Madison Advertising
popular pujas in South er of Perfect Offset Printers, stated that the advertising
Kolkata. which has a GST registra- market in the country is
An organiser from the tion number and enjoys poised to grow 13.5 per cent
Singhi Park Durga Puja patronage from clients such this year to touch ~56,152
Committee said: The unor- as Tata Motors, Star crore from the earlier years
ganised sector, ranging from Cement, Fortune Group and market size of ~49,480 crore.
the idol makers to decora- others, sees it as a positive Industry officials estimate
tors to print companies, trend, as eventually, in the that Kolkata contributes
takes up the majority of the long term it will help his around 5-8 per cent of the
Puja budget. However, I feel business grow. national market and the
that gradually, next year Amritanshu Khaitan, Puja season alone accounts
onwards, sponsors will managing director at for 20-25 per cent of
aggressively seek input tax Eveready Industries, who the annual advertising
credit and thus started his revenue.
the organised Most of these maiden Puja With no available data to
sector, coming printing companies advertising segregate this advertising
within the GST that do not possess campaign for market into organised and
fold will play a GST registration the lights and unorganised sectors, the
the biggest role have other lines of small appli- general perception is that
in the Puja sea- business such as ances range this 40 per cent of the market
son. Singhi photocopiers, year, explained falls under the organised
Park Durga photography and that input tax category.
Puja is a medi- designing studios credit claim is Most of these printing
um-budget very important companies that do not pos-
puja in South Kolkata. and crucial when placing sess a GST registration have
Another organiser from the orders with the advertis- other lines of business such
the Barisha Club Durga Puja ing and printing compa- as photocopiers, photogra-
Committee, which has won nies and Durga Puja phy and designing studios
numerous accolades in the sponsorship is no and related businesses.
past, opined that next year exception. Many opined that next year
onwards companies would This year during the onwards, if they lose the
prefer to sponsor those Puja Durga Puja, Eveready is run- printing business during the
committees that can attract ning a television ad cam- Puja season, they will have
crowds in the first place, paign and has come up with to fall back on these other
and secondly, can ensure a contest for housing soci- lines of business.
better GST-complaint eties and associations for Nevertheless, next year
invoices for the various the best puja. onwards, Pujas are going to
sponsorships. A recent report from become more organised.