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210

MONDAY, AUGUST 31, 2020

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mint primer
QUICK EDIT
Forecasts seem A proposal
to take the form to toy with
of propaganda That Prime Minister Narendra
Modi has the country’s ear, or at
least the attention of a large part
BY VIVEK KAUL of India’s population, has been
clear ever since his Mann Ki
Forecasts are an important part of decision making and setting agenda
for the future. Margaret Heffernan, writing in Unchartered—How to Baat began airing on national
Map the Future Together, says that when it comes to forecasts, there has radio. More often than not, he
been a shift from predictions to propaganda. Mint takes a deep dive. strikes a popular chord with the
everydayness of the concerns
Automation predictions RAMESH PATHANIA/MINT
he voices. On Sunday, he talked
9% of jobs are automatable, according to a about toys and their role in the
study published in 2016 by the Organization development of our children’s
for Economic Co-operation and Development. creative faculties. He cited
38% of the jobs in the US are at high risk of Rabindranath Tagore, who had
disruption due to automation, according to a said that a toy should be imper-
PWC report published in 2017. fect, so that a child can exercise
60% (Three-fifths) of the occupations face a creativity to plug the gap.
looming threat of automation, according to But Modi had more than that
McKinsey.
in mind. He asked startups to
75 million jobs would be destroyed globally work towards making India a
on the back of automation, according to the
World Economic Forum (WEF). global hub for toy production.
133 million jobs would also be created due As of now, the country has only
to increased automation, a sliver of a market worth more
WEF noted. than $90 billion globally. China
Source: Unchartered—How to Map the Future Together by Margaret Heffernan
dominates the business. But an
opportunity has been spied in
What is the problem What happened after the world’s turn towards eco-
1 with many forecasts?
Heffernan feels that of late, a rising
2 the outlook was made?
The precision of the forecast
friendly alternatives to plastic
and other non-biodegradable
number of forecasts are made to essentially ensured that it was materials used in Chinese toys.
seek media attention. She gives the soon picked up by the media. True, India has a tradition of
example of the famous forecast Everyone from striking workers to handicrafts that’s worth pre-
made by two researchers at Oxford Bill Gates talked about it, with no serving. Yet, cottage industries
University in 2013 which noted one really having read the full will not be able to scale up and
that by 2035, 47% of US jobs would study that gave such an estimate.
achieve the bulk output needed
disappear on the back of Interestingly, similar studies were
automation. Heffernan questions carried out, with many different to keep unit costs low and cap-
this. “Twenty-three years hence, results. These precise forecasts ture the imagination of kids
exactly 47% of jobs could be were all over the place. They across the world. For this, other
known to have disappeared?” she ranged from McKinsey saying that ideas will have to be put in play.
asks. The precision and the around 60% of overall occupations
inevitability of the forecast puzzled were at risk to the World
her. How could any researcher be Economic Forum (WEF)
so sure about something that predicting that 75 million jobs
would happen two decades later?
She wonders how there was no
would be destroyed as a result of
automation, even as 133 million
MINT METRIC
skepticism around such precision. jobs would be created. by Bibek Debroy
BLOOMBERG

A new German law under way,

3 In which sector can we see
such predictions the most?
As Heffernan writes in her book:
Pet dogs must walk twice a day.
“Nowhere has this subtle shift from
In North Korea a master plan,
prediction to propaganda been more With food shortage, a pet dog ban—
prominent than in the marketing of
autonomous vehicles. The driverless car,
Canines to head for the frying pan.
we have been told for years now, is
inevitable. There’s no point even learning
to drive… so immediately will the
liberating technology be upon us.” QUOTE OF THE DAY
Every business is recalibrating
4 What’s with estimates
hinting inevitability? 5
The inevitability of the forecasts
What makes these
forecasts inevitable?
Heffernan feels that “a simplistic
in the context of newly relevant
makes people refrain from asking commercial view of the future is
consumer behaviours that are
questions. The idea of driverless being forced onto a world” coming in, that is, what
cars casts many doubts, including because of these forecasts and this
what will happen to individuals is leading to a situation where “the
innovations we should go
who make a living by driving more we believe, the less we with, what innovation
vehicles. Another important question and the more probable
question that arises from such a the forecast becomes”. There is a
should be left out.
forecast is who will be blamed in problem with that. However, it is
case a driverless car is involved in hardly surprising given that
an accident and injures or kills automobiles are the largest
someone? As Hector Macdonald manufacturing business in the
writes in Truth, if driverless cars world and there is a lot of money SURESH NARAYANAN
“lead to the deaths of a few involved in this activity. Nestlé India chairman
hundred people on our streets, it Vivek Kaul is the author of
may be politically unacceptable”. Bad Money.

m MINT SHORT

BP plans to sell its central London headquarters

BLOOMBERG
Bloomberg move to a mixture of home and office
feedback@livemint.com working. The plan highlights the uncer-
tainty the property market is facing as

B
P Plc plans to sell its headquarters the coronavirus sent office workers to
in central London as it cuts jobs set-ups in their kitchens or living rooms,
and adopts flexible working, The emptying towers across London.
Times reported on Sunday. Only 13% of people were back to their
The oil major, which employs 6,500 offices this month in London. Across the
office staff in the UK, plans to rent back BP will be moving towards a mixture of nation’s 63 biggest urban centres the
the building on St. James’s Square from home and office working. number was 17%, the newspaper said,
the new owner for as long as two years citing analysis of mobile phone data.
before leaving for good, the newspaper changing their work styles after many The building, which BP bought for
said, without citing anyone. BP declined employees began working at home due £117 million ($156 million) in 2001, could
to comment on the report. to the coronavirus pandemic. CEO Ber- be priced at more than £300 million
BP joins other employers that are nard Looney has said the company will today, the newspaper said.
 FLIP SIDE
T
U RA L E
O
Y SV
N E W m
Mint Lite
A daily wrap of news and views, opinions and talking points to start your day

INDIA CONFIRMED 78,761 new covid-19 cases on Sunday, the health ministry said. It’s the world’s highest single-day
spike in cases since the pandemic began. The US had set the previous highest number for a single day at 77,638 on 17 July.
India has the world’ fastest growing caseload, though the recovery rate has nearly touched 76.5%. Fatalities, however, con-
tinue to rise and are at about 1,000 a day. Though India’s total covid-19 deaths of 63,498 is far lower than the US and Brazil,
its toll is inching toward being the world’s third highest. For more on national and world news, here’s Mint Lite.

TIKTOK: CHINA’S ‘SMART’ MOVE

CHINA HAS imposed new restrictions on export of AI techno-
logies, indicating it might try to block ByteDance from selling
TikTok’s US operations. Technologies such as speech and text
recognition and data analytics for personalized content recom-
mendations were added to a list of export-control products,
Bloomberg reports. Government permits will be required for
overseas transfers to “safeguard national economic security,”
the site said. It can take up to 30 days to get approval to export
tech. TikTok’s secret weapon is its recommendation algorithm
that analyses behaviour, pushes videos and keeps users glued to
screens. Without this tech, the app would be worth far less.
Microsoft and Oracle have submitted bids for TikTok’s US arm,
while Centricus and Triller made a last-minute pitch on Friday.
In India, where TikTok has only a sales and marketing team and
not a tech one, Reliance is said to be making a pitch.

COVID DENIERS OUT IN EUROPE

THE ARMY of covid-19 deniers seems to be gaining strength.
Following months of demonstrations in the US by those
protesting against restrictions and mandatory mask-wearing,
Europe and the UK are now seeing anti-corona rallies where
people say the rules violate their fundamental freedoms. Over
the weekend, thousands of covid-19 deniers gathered in Berlin,
London, Paris, Vienna and Zurich, calling for the end of “covid
hoax” measures, and terming the disease “a conspiracy” and the
restrictions a form of “new facism”. Police in Berlin arrested
300 demonstrators as over 38,000 people took to the streets
protesting against the restrictions. Later, BBC reports,
“hundreds of protesters, many from the far right”, tried to storm
the German Parliament, the Reichstag. Counter-protests
against the main anti-corona march also took place, with
participants accusing the other side of being “Nazis and facists”.

FALL AND RISE OF LUXURY What matters in luxury

Sustainability is critical for youth, while materials are more
THE LUXURY industry is under pressure: a slump in important to older luxe buyers.
equity markets, slowing regional economies, younger (in %)
generation’s preference for sustainability (see chart), Transparency Ethical Animal Environmental
and covid-19. More than 40% of global luxury-goods of materials manufacturing care care
production happens in Italy, which grappled with one 12 14 18 22 19
of the world’s worst outbreaks. Bain & Company
18 18
estimates luxury sector revenue will contract 20-35% 23
in 2020, but luxury also rebounds quickly. During the 32 27
2009 crisis too, sales fell 25% but heritage luxury 36 26 25
brands held up. This year, Hermes, LVMH, Ferrari and 23 27
others, have reported Q2 sales declines, ranging 38-
44%, but analysts are optimistic. China has begun to 35 42 34 23 26
lead the way toward a recovery as it did post 2009.
Online sales have risen and the web channel could Gen z Millennial Gen. X Baby boomer Silver
represent 30% of the market by 2025, predicts Bain. Source: BCG Altagamma True Luxury Survey 2019

YOU CAN NOW SAY GOODBYE

BUENOS AIRES has passed a law allowing relatives to attend
bedside vigils for patients dying of covid-19. The move by the
Argentine capital is seen as a breakthrough in the care of dying
coronavirus patients. Buenos Aires has had a majority of
Argentina’s 8,000-plus deaths from the disease. The law allows
one family member, between the ages of 18 and 60, to keep vigil
with the dying patient, with the exception of pregnant women
or people with underlying medical conditions. Around the
world, hospitals have prohibited families from visiting
terminally ill covid-19 patients because of the risk of contagion,
and rules for funerals are strict. In India too, the final days of
most covid-19 patients are lonely with healthcare workers
standing in for family, and final rites being restricted. Several
Indian states have started introducing rules to allow families of
the deceased to see the body though touching is prohibited.

IT’S AN ALL-BOY TENNIS UNION

TENNIS WORLD No.1 Novak Djokovic has resigned as
president of the ATP player council to form a players’ union to
address issues like revenue sharing, player pensions, travel and
insurance. Women are not being included. Rafael Nadal and
Roger Federer have not joined and called for unity in the tennis
world even as the US Open begins Monday, while Andy Murray
has said he’s not in favour of the breakaway Professional Tennis
Players’ Association. Djokovic first raised the idea of a players’
union at the 2018 Australian Open, and has been demanding a
greater share of the revenue generated by the Grand Slams. On
Saturday, after he won the Southern and Western Open final,
becoming the first player to win all Masters titles twice,
Djokovic described the new association as “a project for many
players and many different generations over the last 20-plus
years”. About 60-70 players have signed up for the association.

Curated by Shalini Umachandran. Have something to share with us?

Write to us at businessoflife@livemint.com or tweet to @shalinimb

PEANUTS by Charles M. Schulz

 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 210 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR) 20 PAGES

FM TO MEET BANKERS ON 3 SEP TO GLOBAL SLOWDOWN HURTS

MONDAY, AUGUST 31, 2020
LIVEMINT.COM
DISCUSS STRESSED LOANS uP3 INDIA’S SMALLER EXPORTERSuP8

PTI

Unlock 4 puts
India’s Q1 may rank livelihoods
DON’T MISS
CBDT DIRECTS BANKS TO REFUND
CHARGES ON UPI TRANSACTIONS
in spotlight
among G20’s worst
CBDT warned banks of penal action if they
levy any transaction charge on unified
payment interface transactions. It has

U
nlock 4 has brought the directed banks that have collected such
focus back on the lives vs charges from 1 January 2020 to refund the
livelihood debate, with same to customers. >P3
Economy may shrink between 25.5% and 15.2% in June quarter the country trying to restart
large swathes of the economy to
m MINT GRAPHITI stave off a devastating eco- VEDANTA PLEDGES HOLDINGS IN
Asit Ranjan Mishra nomic crisis that could push HINDUSTAN ZINC TO RAISE FUNDS
asit.m@livemint.com
NEW DELHI
BRACE FOR IMPACT Banks may urge retail borrowers to make ad hoc payments towards
dues that accrued during the moratorium and pare their liability.
millions of migrant workers
back into poverty.
Vedanta has pledged its entire shareholding
of 64.92% in subsidiary Hindustan Zinc Ltd to
The National Statistical Office is expected to release GDP data for Apr-Jun Reflecting the trade-off, the help fund its proposal to delist from the stock

I Focus shifts to recast

ndia’s gross domestic product today. Projections point to a severe contraction in India’s economic growth. National Democratic Alliance exchanges. The transaction includes about 2.1
(GDP) is set to report a record JUNE QUARTER GDP GROWTH (Year-on-year change, in %) (NDA) government on Satur- billion shares by non-disposal undertaking
contraction in the fiscal first quar- US -9.5 NUMBER day eased restrictions on a host and 6.26 billion shares in pledge. >P5
ter, more severe than most G20
nations, as the strict lockdown to
curb the spread of covid-19 weighed
UK -21.7
France
Germany
-19
-11.7
CRUNCHING
SILVER LINING
as moratorium ends of activities such as social, cul-
tural, religious and political
congregations from 21 Septem- GOVT TO FILL TOP POSITIONS IN
heavily on the economy. THE farm sector, ber, and green flagged metro KEY REGULATORY BODIES SOON
The GDP data for the three Italy -17.3 which was relatively Shayan Ghosh borrowers who have lost jobs rail operations from 7 Septem-
Key bodies such as RBI and Trai,besides State
months ended 30 June, which is Japan -10 insulated from the shayan.g@livemint.com and wages amid the pandemic ber in a graded manner. Bank of India, are set to have new people in
scheduled to be released on Mon- China 3.2 impact of covid-19, MUMBAI and the ensuing lockdown. As the covid count raced past top positions at a time financial
day, is expected to be the worst may register a “It is not like the entire stress the 3.5 million mark on Satur- and sectoral regulations are increasingly
INDIA GDP GROWTH PROJECTION FOR Q1

B
since India started reporting quar- growth of 3-4% on a ankers and borrowers will be visible on day one after day and deaths neared 65,000, becoming crucial for the survival of
(Year-on-year change, in %)
terly data in 1996. Seven economists good monsoon alike are weighing their the moratorium ends. There the new guidelines opened up businesses grappling with the pandemic.>P14
Nomura SBI CARE Ratings HDFC RBI Icra Barclays
surveyed by Mint forecast GDP to options as a six-month will be a staggered rise in bad more activities in areas outside
shrink in the range of 25.5% to DATA DEFICIENCY moratorium on loan repay- loans, depending on their over- containment zones, in sync
15.2%, with a median of 21%. A majority of ments ends on Monday, due status before the defer- with the government’s strategy PM MODI PUSHES FOR SOCIAL
So far, the UK has reported the factories were shut restarting the recovery process ment became effective,” a sen- to allow economic activities to DISTANCING IN MANN KI BAAT
biggest slump in GDP among the during the lockdown for an estimated 18% of their ior banker said on condition of resume in phases.
-15.2 Prime Minister Narendra Modi cautioned that
world’s top 20 economies with a -16.5 and the lack of data loan books. anonymity. He said the first set “State/UT governments the start of the festive season requires an
21.7% plunge in the June quarter, its -20 on this may mar the Even as they expect a steady of bad loans will come from shall not impose any local lock- even greater need among people to maintain
-21 -21.5
deepest contraction on record. credibility of the increase in bad loans, lenders special mention account down (state/ district / sub-divi- discipline and follow social distancing
-25 -25.5
Widespread restrictions imposed GDP numbers are unlikely to use coercive (SMA-2) accounts that are over- sion / city level), outside con- guidelines to protect themselves and also
Source: OECD, Mint Research
during India’s nationwide lock- methods that reflect poorly on due between 61-90 days and tainment zones, without prior those around them from covid-19. >P14
SARVESH KUMAR SHARMA/MINT
down, which began on 25 March them amid widespread distress, then from SMA-1 with repay- consultation with the central
and continued till end May, are June quarter. “Manufacturing is farm activity in Q1 FY2021,” he said. preferring instead to urge retail ment delays of 31-60 days. government,” the guidelines
being gradually lifted. While April likely to see the sharpest slowdown, However, State Bank of India, in a borrowers to make ad hoc pay- Under RBI’s guidelines, stipulated, articulating its shift. TRADE IS KEY TO RECOVERY: WTO
and May are considered wipeouts followed by services, based on high- report released last week, said June ments towards dues that banks can use the new recast It builds on a decentralized D-G CANDIDATE OKONJO-IWEALA
for most businesses, pent-up frequency indicators. On the other quarter GDP could positively sur- accrued during the moratorium window only for loans that do strategy, adopted earlier, in
Trade will play a critical role in helping the
demand somewhat boosted con- hand, the only support to growth is period and reduce liability. not have more than 30 days of view of the varying progress of world recover from the recession induced by
sumption in June, though well likely to come from the agricultural TURN TO PAGE 3 The Reserve Bank of India overdue as on 1 March, essen- the disease across the country. the coronavirus pandemic, says Nigeria’s
below the pre-covid-19 levels. sector that was relatively insulated (RBI) has permitted debt tially meaning that over ₹5.7 Another important context to Ngozi Okonjo-Iweala, one of the eight
Abheek Barua, chief economist at from the impact of the virus. We This could be India’s worst
restructuring by a maximum of trillion of stressed assets are the evolving strategy is the fact candidates competing to be the next
HDFC Bank Ltd, expects GDP estimate the contraction in GDP two years, and bankers think it is director-general of the WTO. >P11
economic crisis >P12
growth to contract by 21% in the will be close to 25% if we exclude ideal for a large number of retail TURN TO PAGE 3 TURN TO PAGE 6

Gradual road to recovery

The shares of Phoenix Mills, whose ₹1,100-crore qualified
institutional placement issue was lapped up by investors this
How Future fits in Govt charts GST Pay cuts reach c-suite
month, have recovered smartly from their May lows.
120
110
Phoenix Mills Nifty 500 Reliance’s retail biz borrowing plans as covid hits earnings
100 97.66 Kalpana Pathak Gireesh Chandra Prasad Nasrin Sultana &
that suits it best.
90 kalpana.p@livemint.com gireesh.p@livemint.com The letter assured that the Ashwin Ramarathinam
80 MUMBAI NEW DELHI government stood by the com-
70
mitment of supplementing the MUMBAI

T T
78.13 he acquisition of Future he Union government compensation fund pool by a
60

T
group’s flagship busi- on Saturday outlined the scheme decided by the GST he economic turmoil
50
31 Dec 2019 28 Aug 2020 nesses gives wings to details of borrowing Council as former Union finance caused by the coronavirus
Base value taken as 100 Source: Capitaline
Reliance Retail Ltd’s (RRL) options that states could use to minister and council chairman pandemic has adversely
grand retail ambitions cur- make up their goods and servi- Arun Jaitley had stated at a hit remuneration of top manag-
PARAS JAIN/MINT
rently pursued through offline, ces tax (GST) revenue short- council meeting in 2016. ers, with their pay plunging by

We’re all at home, online and ‘new commerce’

channels, especially in tier-I
cities. The acquisition of Future Retail’s
fall, assuring the availability of
top finance ministry officials
to clear states’ doubts in this
The council had on Thurs-
day offered states two borrow-
ing options to tide over their
as much as 44%, as companies
cut expenses amid a squeeze on
earnings. HDFC Bank’s Aditya Puri was

but this mall stock

As part of the transaction network of stores will strengthen respect. GST revenue shortfall as the The median remuneration the highest-paid executive in
announced on Saturday, Reliance Retail’s expansion. MINT A letter addressing state GST cess collected from items of the top bosses of 30 firms in FY20 at ₹180.49 crore. MINT
debt-laden Future Group will finance secretaries said Union like cars and tobacco was not the Nifty index declined 5.56%
merge five group firms— crore. FEL will retain the man- finance secretary Ajay adequate to compensate them in the year to March, against a as chairman, chief executive offi-

is in huge demand Future Retail, Future Lifestyle

Fashions, Future Consumer,
Future Supply Chains and
ufacturing and distribution of
FMCG goods, integrated fash-
ion sourcing and manufactur-
Bhushan Pandey and expendi-
ture secretary T.V. Soma-
nathan will on Tuesday clear
this fiscal.
As per the terms of borrow-
ing options described to states
rise of 4.81% in the previous
year, according to a Mint analy-
sis based on data compiled by
cer or executive director. The
data also added stock options to
the total compensation figure
Future Market Networks—into any queries states may have on in the Centre’s communica- primeinfobase.com, part of wherever it is available.
Pallavi Pengonda premium to the QIP price. What Future Enterprises Ltd (FEL), TURN TO PAGE 6 the two borrowing options tion, the amount of debt that Prime Database group. The salary cuts came as
pallavi.p@livemint.com explains the rush for shares of a which will transfer the retail, offered to them, said a govern- states can raise under a special The analysis considered the aggregate net profit growth of
mall at a time when social dis- wholesale, warehousing and RIL deal protects banks
ment official, who spoke on window of the Reserve Bank of single-highest remuneration these companies dropped

W
hen Canadian actor tancing has become the norm? logistics businesses to Reliance from a $2.2-bn hit >P6
condition of anonymity. Each paid in the year by a company,
Cobie Smulders “The macro view is India is Retail Ventures Ltd for ₹24,713 state can choose the option TURN TO PAGE 11 irrespective of designations such TURN TO PAGE 6
sang the covid-19 underserved from a formal
version of the hit, Let’s Go To retail perspective and quality
The Mall, it was glumly titled, realty-led retail will see upsides
Let’s All Stay At Home. It was just as the consumption story
another reminder that mall vis- unfolds,” says Rachit Mathur,
its will be the last thing on any- managing director and partner
one’s mind for a long time.
Indeed, a survey by KPMG in
at Boston Consulting Group.
Indeed, the government of
Hackers claim data South stars
tap streaming
Trouble in India’s toy town
India to analyse the change in Singapore, which was the largest
consumer sentiment owing to investor in the QIP, and other
the pandemic institutional
breach at Paytm Mall platforms
Sharan Poovanna
sharan.p@livemint.com
MINT

our buyers, but there is no

response so far,” said Subba
showed that pref- B E H I N D investors, bought BENGALURU Rao, a senior sales and market-
erence for online
m T H E N E W S Phoenix Mills Tarush Bhalla Lata Jha ing official at Maya Organic.

A
shopping has shares at a 35% tarush.b@livemint.com lata.j@livemint.com round this time last Supported only by a frag-
increased materially. Within the discount to its pre-covid highs. BENGALURU NEW DELHI year, toymaker Maya ment of online sales, the com-
set of customers willing to brave “Investors will focus on Organic had an export pany has kept its workers away

E- P
physical stores, 67% of those sur- potential, and not just current commerce platform opular actors from Tamil, order for around 20,000 of from factory floors and raised
veyed said they prefer standal- scenario. Malls are a big draw in Paytm Mall has suf- Telugu and Malayalam its Channapatna wooden donations to fund their basic
one stores to malls. a country that lacks most other fered a massive data cinema are beginning to toys. expenses.
Against this grim backdrop, it means of entertainment that breach after a group of hackers take their new films to stream- The shipments normally go In Channapatna, the number of The plight of smaller toy-
was interesting that a qualified many developed countries take targeted and acquired unre- ing platforms instead of waiting out by the first week of Septem- workers fell from 3,500 in the manufacturing units that oper-
institutional placement (QIP) by for granted,” says Anuj Puri, stricted access to the com- for theatres to reopen, follow- ber to European nations and in 1990s to about 2,000 this year. ate as feeders to large distribu-
Phoenix Mills Ltd was lapped up chairman, ANAROCK Property pany’s complete database. ing in the footsteps of their other countries where demand tors and retailers is worse.
by investors. The ₹1,100 crore Consultants. “Global capital According to US-based counterparts in Bollywood. is high around Christmas and luru and Mysuru. Samiullah, who goes by one
issue received bids for five times wants to have a pie in this con- cyber-risk intelligence plat- Paytm Mall said it is verifying the Uncertainty over reopening of New Year for the lacquered and Not so this year, as Karna- name, a 40-year-old toymaker,
the number of shares on offer. sumption growth story—either form Cyble Inc., a cybercrime matter, with internal teams cinemas, and fears that many hand-crafted wooden products taka’s toy story appears to slide said some workers from his fac-
Promoters took advantage of the directly or through partners,” group under the alias ‘John detecting no data breach. HT patrons will stay away even after from Karnataka’s famous ‘toy into tragedy.
pent-up demand and sold shares Wick’ has demanded a ransom reopening, are driving the town’ that lies between Benga- “We have sent feelers to all TURN TO PAGE 6
worth ₹833 crore at an over 10% TURN TO PAGE 11 in exchange for data. funding, through other aliases change, in a market still domi-
Cyble said ‘John Wick’ has such as ‘South Korea’ and nated by single-screen cinemas. For short takes on the news Listen to Mint Evening
NOTE TO READERS The Media Marketing Initiatives on broken into multiple Indian ‘HCKINDIA’. Last week, Tamil superstar before you start your day, Market Wrap for Nasrin
page 5 and the four-page supplement being distributed with this companies, collecting ransom “‘John Wick’ was able to Suriya announced the October follow our daily podcast Mint Sultana’s detailed analysis of
edition are the equivalent of paid-for advertisements, and no from companies such as OTT upload a backdoor or Adminer release of his action drama Soor- Lite Morning Shot with the day’s news from Dalal
Mint journalists were involved in creating it. Readers would do Shalini Umachandran on Street and other markets on
platform Zee5, fintech startups, htsmartcast.com htsmartcast.com
well to treat these as advertisements.
Stashfin, Sumo Payroll, and i2i- TURN TO PAGE 6 TURN TO PAGE 6
02 MONDAY, 31 AUGUST 2020
NEW DELHI DEALS
PLAIN
FACTS

MISSING WOMEN IN COVID-19 COUNT

From testing for coronavirus to mortality, India’s official statistics on the covid-19 pandemic have cracks through which its women could be slipping
Rukmini S. the gender differences in social interactions, with They found a large difference in the likelihood of population research centre, Institute of Economic medically certified deaths, according to data from
feedback@livemint.com women typically going out for household needs, to men and women coming to the OPD. For every visit Growth, Delhi, and others, found that the risk of the office of the Registrar General of India. Women
CHENNAI buy things from the market and intermingling by a woman, 1.7 men visited. dying—ratio of deaths to recorded cases—was made up 47% of all deaths in 2016, according to esti-
more with others.” The other possible explanation It’s also possible that women are less likely to higher among women than among men. mates from the Global Burden of Disease study,

T
he popular belief is that women are far is that there could be an underlying biological develop serious forms of the disease, particularly as “There can be various underlying factors for such suggesting that the ratio of missing women in offi-
less likely to be affected by covid-19. explanation, Kolthur-Seetharam said. men outnumber women in terms of total recorded patterns in India,” the researchers said in an email. cial death counts is significant. Even if the high
However, mounting evidence points to The question then is: are we seeing fewer cases in all large countries globally. This issue has “Men suffer from several lifestyle risk factors. How- focus on covid-19 keeps accurate medical certifica-
the hidden toll that covid-19 could be women in the official case counts because fewer not been well examined in India so far. ever, at the same time a large propor- tion high during the pandemic, the risk of women
taking on women in India. women are being tested, or because fewer women The consensus that women are less tion of women in India have poor nutri- getting left out remains elevated (see chart 6).
When the results of the second round of Delhi’s are developing serious enough symptoms to war- likely to contract severe forms of the
The risk of dying tional status. This includes both under- Ultimately, this isn’t just a question of statistics.
SARS-CoV-2 sero-prevalence survey were released rant testing? The evidence thus far suggests that disease also stems from the fact that —ratio of deaths weight and overweight prevalence, as Recent research has highlighted the likelihood of
last week, one finding stood out. The prevalence of both might be true. fewer women than men have died of to recorded cases well as micronutrient deficiencies.” even asymptomatic patients or those with mild
infections was higher among women than among In May, the Indian Council of Medical Research covid-19 in India and worldwide (see —was higher Additionally, access to healthcare forms of the disease contracting lung and heart
men. This is not the first sero-survey to have found published its analysis of more than one million chart 4). among women may be different across genders, the conditions, Giridhar Babu, epidemiologist with the
this. The Mumbai and Ahmedabad surveys had diagnostic tests for covid-19 conducted between 22 However, there is some evidence than among men, researchers suggested. “Among other Public Health Foundation of India, pointed out.
similar findings, the magnitude of the gap being January and 30 April. They found that while men now that the risk of dying might not say experts factors, the circumstances of health- In one German study, whose findings have been
higher in Mumbai. However, the Pune sero-survey made up the majority of positive cases, women actually be lower for women in India. care access and affordability are also echoed by several others, scans revealed that a
did not find such a gap (see chart 1). were slightly more likely to test positive than they While international evidence points important issues, which are shaped by majority of patients continued to show heart
The reason this finding is unusual is because in were to be tested (see chart 3). to potential biological advantages for contextual factors such as household inflammation well after being declared recovered,
terms of officially counted cases—persons con- This is consistent with earlier evidence that women, this could be blunted by gender disadvan- socioeconomic status and gender roles. However, even if they had been asymptomatic throughout.
firmed as covid-positive after an RT-PCR or antigen women were less likely to access healthcare. Econ- tages women in India face, resulting in a higher risk it will be important to obtain quality data to verify Other studies have shown how lung damage in
test—women trail men significantly (see chart 2). omist Mudit Kapoor, now associate professor of of mortality in India. In a paper published in June these concerns,” they said (see chart 5). asymptomatic patients continued well after they
“I don’t think we expected this,” said Ullas Kol- economics at the Indian Statistical Institute, Delhi, in the peer-reviewed Journal Of Global Health Sci- Additionally, there is a concern that women are tested negative.
thur-Seetharam, one of the two scientists from the and others, looked at data on all out-patient depart- ence, a team of researchers led by S.V. Subramanian, less likely to be accurately counted in death statis- Getting left out of India’s covid-19 count can have
Tata Institute of Fundamental Research who led ment (OPD) visits in 2016, excluding those for professor of population health and geography, Har- tics in “normal” times. As in 2018, women made up very real consequences for women’s health.
the Mumbai sero-survey. “This could be because of gynaecology and obstetrics—over 2.3 million in all. vard University, William Joe, assistant professor, just 40% of total registered deaths and just 38% of Rukmini S. is a Chennai-based journalist.

PTI
m MINT GRAPHITI
Chart 1

Three out of four recent sero-surveys have found higher sero-positivity among women

DELHI MUMBAI PUNE AHMEDABAD

August 2020 July 2020 July-August 2020 June-July 2020
Sample
size 15,000 6,936 1,664 30,054
52.8
50.1 Sero-prevalence among
42.7 Women Men (in %)
38.3
32.2
28.3

18 17.3

A sero-survey involves testing of blood serum of a group of individuals for the novel coronavirus to monitor trends in its prevalence at the district level.

Chart 2

Men outnumber women in official covid-19 statistics

Share in total cases (in %) in different age groups Females Males
0-4 yrs
5-19 yrs
20-29 yrs
30-39 yrs
40-49 yrs
50-59 yrs
60-69 yrs
70-79 yrs
80+ yrs
All
30 40 50 60 70

Chart 3 Chart 4

Women were slightly more likely to test India, like most countries globally, has many
positive than they were to be tested more reported covid deaths among men
(in %) % share of total deaths
67
65 Women Men
Females
Males Peru
India
China
36 Iran
33
Italy
UK
Spain
US
South Korea
Share among Share among those South Africa
those tested testing positive 20 30 40 50 60 70

Chart 5 Chart 6

Women have a higher risk of mortality Women have been undercounted in

than men, age-based fatality rates show death statistics in the past in India
Case fatality rate (CFR) is the ratio of recorded deaths to % share in deaths for men and women
recorded cases, expressed as a percentage
Males Females
CFR among males CFR among females
Total Medically
0-4 yrs Total registered
deaths certified
5-19 yrs deaths deaths
(2016)
(2018) (2018)
20-29 yrs
30-39 yrs
40-49 yrs
50-59 yrs
60-69 yrs 53 47 60 40 62 38
70-79 yrs
80+ yrs
Total deaths refer to an estimate of the actual number of deaths. Deaths that have
All been registered officially are counted as total registered deaths. Registered deaths
0 6 12 18 24 30 where the cause of death was specified are counted as medically certified deaths.

Source: Sero-survey results (till 28 Aug); ‘Equal risk, unequal burden? Gender differentials in COVID-19 mortality in India’, by William Joe and others, JGHS, June 2020; ICMR testing data
until 30 April, published in IJMR; health ministry briefing, 25 August; Global Health 50/50. COVID-19 Sex-disaggregated Data Tracker; Global Burden of Disease study, Institute for
Health Metrics and Evaluation (2016); Vital Statistics Based on the Civil Registration System, Office of the Registrar General of India (2018); Report on Medical Certification of Cause of
Death, Office of the Registrar General of India (2018)
AHMED RAZA KHAN/MINT

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 NEWS MONDAY, 31 AUGUST 2020
NEW DELHI NEWS
03 MONDAY, 31 AUGUST 2020
NEW DELHI 03

CBDT warns
of penal action FM to meet bank
for charges on
e-payments
Gireesh Chandra Prasad
officials on 3 Sep
gireesh.p@livemint.com
NEW DELHI
Meeting will review resolution plans for stressed loans
T
he Central Board of
Direct Taxes (CBDT) on Shreya Nandi
Sunday warned banks of shreya.n@livemint.com
penal action if they levy any NEW DELHI
transaction charge on elec-

F
tronic payment modes speci- inance minister Nir-
fied by the government to mala Sitharaman will
encourage a cashless econ- meet top officials of
omy. It has directed banks that scheduled commer-
have collected such charges cial banks and non-
from 1 January 2020 to refund banking financial companies
the same to customers, (NBFCs) on 3 September to
according to a circular issued review the implementation of
by the CBDT. a resolution plan for loans
The apex direct tax policy- stressed due to the coronavi-
making body said it has rus pandemic.
received information that “The review will focus on
some banks are imposing enabling businesses and
charges on Unified Payment households to avail the revival
Interface (UPI) transactions. framework on the basis of via-
Some banks allow a specified bility, necessary steps like
number of transactions free of finalizing bank policies and
charge, beyond which they identifying borrowers, and ’The review will focus on enabling biz to avail the framework on
impose a charge, which CBDT discussing issues that require the basis of viability,’ the FinMin statement noted. PTI
said was a violation of the law. addressing for smooth and
CBDT said that such prac- speedy implementation,” the ments ends on Monday, Mint loan book may be eligible for a
tice by banks was a breach of finance ministry said in a state- reported on Saturday. State one-time debt recast. The
the Payment and Settlement ment on Sunday. Bank of India (SBI) chairman state-run bank hopes to get a
Systems (PSS) Act as well as the This meeting will happen Rajnish Kumar had also said clearer picture by September,
Income-tax Act and that it ahead of the K.V. Kamath-led that the bank is readying to when guidelines from the
would attract penal provisions panel’s recommendations on deal with a higher volume of Kamath committee on debt
under both statutes. The the eligibility parameters for personal loan requests after recast are expected to be
Income-tax Act says that any restructuring of loans hit by the end of the mor- released.
person who is required to pro- the covid-19 crisis. Earlier this atorium. RECAST IN In March, RBI
vide the facility of electronic month, the Reserve Bank of Kumar said he WORKS had allowed a mor-
payments through specified India (RBI) governor Shaktik- does not expect atorium on the
modes and fails to do so is lia- anta Das had said that a resolu- many debt recast RBI governor had repayment of term
ble to a penalty of ₹5,000 a day tion framework for all covid-19 requests from large said that a resolution loans to provide
for all covid-related
during the period of such fail- related stressed accounts will companies as most stress accounts will relief to borrowers
ure. be finalized by 6 September. large stressed be finalized by 6 Sep for three months,
Last year, the government Restructuring some loans will assets have gone which was further
amended the Act to require support economic recovery through several BANKS are worried extended by
about the unsecured
businesses with more than ₹50 and help businesses tide rounds of clean-up. loan portfolio once another three
crore sales to compulsorily through the crisis. M e a n w h i l e , the moratorium on months.
offer electronic payment While the Kamath commit- banks have also debt payments ends Thereafter, the
methods. It also amended the tee recommendations are started an exercise central bank said
PSS Act to ban the levy of any expected to focus on corporate to identify borrow- debt recast for both
charge on a person making or loan portfolio, bankers are ers eligible for one-time debt corporate and retail borrowers
receiving payment through worried about the unsecured restructuring. will be allowed and lenders can
electronic modes specified retail loan portfolios once the Last week, Punjab National extend the repayment period
under the Act. moratorium on debt repay- Bank (PNB) said 5-6% of its by a maximum of two years.

mint

SHORT TAKES Q1 contraction may

ABB Power raises open offer price be worst among G20
slightly after investor complaints
FROM PAGE 1 port to farm sector growth.
Mumbai: ABB Power Products and Systems India Ltd on Satur- However, data unavailabil-
day informed exchanges that it is increasing the offer price for prise the market on better- ity could mar the credibility of
shares it plans to buyback through an open offer. The move than-expected corporate per- GDP numbers. NSO didn’t
comes after investor complaints that the offer price was not fair formance. “In principle, the rev- officially publish factory out-
to minority investors. “The Acquirers and the PAC (person acting enue decline of listed firms has put figures for April and May
in concert) have decided to revise the offer price upwards from been far outstripped by cost citing data issues as a majority
₹865.92 per Offer Share to ₹872.68 per offer share...” said ICICI rationalization, thereby not of industrial establishments
Securities, merchant banker of ABB Power’s open offer. impacting margins. According did not operate.
JAYSHREE P. UPADHYAY to our estimates, Pranjul Bhan-
Read more on livemint.com Q1 FY21 real GDP UK has reported dari, chief India
degrowth would the biggest slump economist at
be now around in GDP among the HSBC, advised
Tech firms leverage AI for –16.5%,” it added. world’s top 20 caution in inter-
High-fre-
drug R&D as pandemic lurks economies with a preting GDP data
quency indicators as the absence of
REUTERS such as the Index 21.7% plunge in informal sector
of Industrial Pro- the June quarter data could result
duction (IIP), in overestimation.
manufacturing “The pandemic is
PMI and auto sales contracted likely to have hurt the informal
sharply. The only silver lining sector more acutely as it com-
could be the performance of prises small firms with limited
the farm sector, which may see economic buffers to withstand
a growth of 3-4%. Favourable shocks. And if formal sector data
monsoon, increased availabil- is taken to proxy informal activ-
ity of water in reservoirs for ity at such a time, GDP can
irrigation may provide sup- potentially be overestimated.”

New Delhi: Over eight months into the covid-19 pandemic,

with no completely effective medicine available, technol-
ogy companies are stepping up leveraging artificial intelli-
gence to discover and develop new drugs. Globally, artifi-
cial intelligence is used by Novartis, Pfizer, AstraZeneca
and a number of other pharmaceutical giants. However, the
Lenders stare at asset
trend is just picking up in India. LEROY LEO & PRASID BANERJEE
Read more on livemint.com quality deterioration
Mauritius-based PE firm invests FROM PAGE 1 Having witnessed banks
going on a loan recast spree in
₹250 crore in Shriji Polymers outside its ambit. While even the last round of regulatory
New Delhi: Malaysia-based private equity firm Creador, which these can be recast, they will forbearance, the Reserve Bank
manages $1.5 billion worth of assets, has invested ₹250 crore in turn non-performing and has tightened the regulations
Indian pharmaceutical packaging firm Shriji Polymers (India) attract higher provisions. this time. Still, experts believe
Ltd, said Creador. “With this investment, Creador acquires what “The restructuring can be that as much as half of all the
it called a ’significant minority stake’ in the company,” Anand anything between 5% and 6% of restructured loans could fail
Narayan, managing partner, Creador Advisors India LLP, said in the book. But when I say and add to the existing pool of
a statement. NEETU CHANDRA SHARMA restructured books can be 5% non-performing assets (NPAs).
Read more on livemint.com to 6%, we are also factoring in a “We believe non-perform-
good number of personal loans; ing loans from restructured
but, then, it can be quite lower loans would mainly depend on
Centricus’s 11th-hour bid adds than what we estimate,” said the pace of a potential eco-
Rajkiran Rai G., chief execu- nomic recovery. Our base case
intrigue to waiting game on TikTok tive, Union Bank of India. is for a roughly 30-50% relapse
Less than two days after Microsoft Corp. and Oracle Corp. sub- Like other banks, Union rate in non-performing loans
mitted rival bids to China’s ByteDance Ltd to acquire TikTok’s Bank also expects retail loan from the restructured pool,
US business, a dark-horse possible third bidder emerged as the recasts to surpass the average of leading to 1.5-5% in additional
two software makers waited for a response to their offers. On Fri- all other buckets. Rai told ana- non-performing loans in
day, Centricus Asset Management Ltd and Triller Inc. made a lysts on 21 August that the bank FY22,” analysts at UBS Securi-
pitch to buy TikTok’s operations in several countries for $20 bil- expects 7-8% of its ₹1.3 trillion ties India Pvt. Ltd said in a note
lion, according to a person familiar with the matter. BLOOMBERG retail loan book to be recast. on 27 August.
04 MONDAY, 31 AUGUST 2020
NEW DELHI

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%) CLOSE 1-WEEK CHANGE (%)

39,467.31 2.69 11,647.60 2.43 9,641.05 2.31 28,018.75 0.89 11,791.50 2.22 15,238.14 1.90 14,990.55 2.50
1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%)

2.53 22.57 3.07 22.73 5.46 24.69 6.50 19.25 3.54 22.21 11.48 31.11 16.05 39.20
6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%)

3.06 5.38 3.98 5.45 4.38 7.47 5.80 7.63 4.20 5.71 4.37 14.09 9.35 19.84

NMDC’s steel unit hive-off likely to

mint

SHORT TAKES
Bailey says negative rates
are part of BoE’s toolbox
The Bank of England has plenty of room to add
more monetary stimulus to fight the UK’s eco-
unlock value but execution counts
nomic slump, including negative interest rates if
needed, Governor Andrew Bailey said. “We are Clifford Alvares Hence, the hiving off is being seen
merges steel assets, it’s a positive,
not out of firepower by any means,” he said at the clifford.a@livemint.com as a value-unlocking proposition foralbeit a limited one, as one needs to Covid-19 Revenues ( crore) (Left-hand scale) Ebitda (/tonne)

Federal Reserve’s annual policy symposium. “To NMDC’s shareholders. “If pursued in benchmark its capital intensity vs plunge 3,500
3,263.7
2,500

N
be honest it looks from today’s vantage point that MDC Ltd’s stock was all industry benchmarks; also, one needs
a time-bound manner, this can lead to NMDC’s revenues
we were too cautious about our remaining fire- fired up on Friday soar- separate avenues of fund-raising forto factor the pending capex to ensure were hit due to
Sensex, 2,800 2,200
power pre-covid.” Since the pandemic struck, the ing nearly 12%, though its commissioning of the plant,” said
the government of India, and allowing lower sales and
Nifty: Key realizations in Q1
BoE has unleashed a raft of measures, including things to
June quarter results were free-cash-flow yield and correspond-Ritesh Shah, analyst, Investec Capital 2,222.0
slashing the benchmark rate to a record-low 0.1% hit hard by the covid-19 ingly the dividend yield of NMDC to Services. taking a toll on
watch out 2,100 1,900
and raising its asset purchase target to £745 bil- for next lockdown. The management’s Meanwhile, NMDC’s June quarter
increase substantially,” said analysts at operating profits. 1,937.5
lion. Economists expect bond purchases to be week announcement to hive off its upcom- numbers show the impact of lower
ICICI Securities Ltd in a client note.
raised, and investors are betting on interest rates bit.ly/3gGF0d3 ing steel plant in iron ore offtake and 1,400 1,600
be lowered to zero by September 2021.BLOOMBERG Nagarnar, Chhattis- POTENTIAL GAIN realizations. Iron ore
garh, into another unit, sales volumes declined
could alleviate the NMDC plans to EXPERTS say the BUT, hiving off could 28% year-on-year 700 1,300
pressures on cash create a separate demerger, if done in a take about nine (y-o-y) last quarter. As a
Size differential listed entity with a time-bound manner, months and delays
flows of the company. similar shareholding could raise dividend may put a strain result, the impact on its 1,203.0
Larger companies are seeing earnings hit less
than their smaller counterparts. But further upside may as the parent entity yield of NMDC on the cash flows Ebitda per tonne has 0 1,000
Source: Motilal Oswal Q1 Q1
S&P 500 blended Russell 2000 Nasdaq 100
be capped. been stark showing a Financial Services FY20 FY21
12-month blended 12-month blended 12-month NMDC plans to drop of nearly 46%
expected EPS* expected EPS expected EPS SATISH KUMAR/MINT
demerge the steel unit and create a Even so, the sharp jump in the stock y-o-y. However, the company has
10
(in %) -3.05 separate listed entity with a similar price on Friday seems a bit overdone. been hiking iron ore prices lately. Glo- bally, we see substantial scope for highs in January.
0
shareholding as the parent entity. The Some analysts said it will not be an easy bally, iron ore prices are at a significant price increases,” said ICICI Securities. Its price-to-earnings multiple has
-10 steel plant has seen delays in commis- road. The process of hiving off could premium to domestic prices. Further, Still, a further increase in domestic increased to about nine times FY20
-20 -13.6 sioning, which has led to a strain on take about nine months, according to steel production is steadily picking up demand is crucial, as demand for steel earnings, which appears stiff. Inves-
-30 -36.7 NMDC’s cash flows. Given all the the management. However, delays and is nearing pre-covid levels. “Given from end-user industries is still slow. tors will now take cues on the progress
-40 expansions, NMDC’s cash per share may put a strain on the cash flows. The the current steel spreads, the slow Despite NMDC stock’s 26% apprecia- of hiving off the steel unit and
-50 depleted to single digits in FY20, steel plant has already seen some cost ramp-up of iron ore production in tion in the past one month, the shares ramp-up of domestic iron ore produc-
-60
according to analysts. overruns in the past. “If NMDC de Odisha and high iron ore prices glo- are about 23% away from its pre-covid tion.
31 Dec 2019 28 Aug 2020
*Normalized by % from start of 2020
Base value taken as zero Source: Bloomberg

SATISH KUMAR/MINT

Winners taking everything

in relentless Nasdaq surge
After a muted June qtr, pace of Maruti Suzuki, Hero may lead sales in
For a clear lens into how investors see the covid
crisis reordering the economy, consider how they
are dividing the stock market’s bounty during
volume recovery is key for IGL Aug but long-term demand is in doubt
what is fast becoming the rally’s most powerful
stretch. The Nadaq 100 climbed almost 4% in the
five days ended August 28, rising for a fifth week, Pallavi Pengonda R. Sree Ram tinue the strong run. come back to pre-covid levels in
the longest streak since January. A five-month pallavi.p@livemint.com
Pandemic woes Sreeram@livemint.com Industry leaders Maruti Suzuki passenger vehicles, albeit on a low
Indraprastha Gas’ volumes took a sharp beating in Q1FY21
surge in the Nasdaq 100 just pushed one valuation owing to the restrictions imposed to curb the pandemic.
India Ltd (MSIL) and Hero Moto- base. However, two-wheeler retail

C T
measure—the index’s price relative to the com- ity gas distributor he recovery in automobile Corp Ltd are expected to lead the sales are still at ~80% levels. We
Volumes (in mmscmd)
bined sales of its companies—above 5 times, a Indraprastha Gas Ltd’s sales is likely to continue in recovery. Maruti is estimated to expect the momentum to continue
level comparable to the dot-com bubble. “Win- (IGL) June quarter 6.6 6.7 August even as concerns over clock double-digit sales growth. in September as well, but the base
6.3 6.3 6.2
ners continue to win. That will continue to be the earnings were depressed as 5.9 long-term demand persist. Compa- Hero is expected to post 8-10% will be much higher, especially for
case as long as the virus is the dominant story,” covid-19 disruptions adversely nies are not only meeting demand growth, while domes- passenger vehicles,”
said economist Lauren Goodwin. BLOOMBERG impacted performance. Reve- but are also building inventories in tic two-wheeler sales Social-distancing Nomura analysts said
nues declined by 59% year-on- 2.7 retail networks for the upcoming of Bajaj Auto Ltd, TVS norms and limited in a note.
year (y-o-y) to ₹639 crore. This festive season. Motor Co. Ltd and availability of Many people fear
Empty hotels may be next was driven by the sharp 57% The passenger vehicle industry is Eicher Motors Ltd are public transport that once the pent-up
y-o-y fall in sales volumes to expected to return to the growth estimated to mimic the
big short for hedge funds are driving sales demand ebbs, struc-
Q3 Q4 Q1 Q2 Q3 Q4 Q1
FY19 FY19 FY20 FY20 FY20 FY20 FY21
2.72 mmscmd (million stan- path in August after falling sharply sector trends. tural issues that had
Hedge funds and other short sellers are beginning dard cubic metres per day). Its
Source: Company, Jefferies India Pvt. Ltd
in the last couple of months. Nom- Social-distancing of personal impacted sales in FY20
to set their sights on a US credit-derivatives index compressed natural gas (CNG) SATISH KUMAR/MINT ura Research and Motilal Oswal norms and limited vehicles could return to haunt
with outsized exposure to hotel debt as the pan- sales were hurt more than the than about 65% of normal lev- while IGL trades at nearly 20 Financial Services Ltd analysts have availability of public the industry. “At the
demic sinks the hospitality industry into distress. piped natural gas (PNG) seg- els clocked by Mahanagar Gas times. Investors are willing to projected double-digit growth in transport are driving moment, demand is
The firms are starting to build up wagers against ment. Ltd (MGL) with similar volume assign higher valuation multi- passenger vehicle sales, partly aided personal vehicles’ sales. Hero Moto- very strong. However, beyond the
the synthetic index, known as CMBX 9, shifting While IGL’s gross margins mix,” said Pratik Chaudhuri, ples to IGL because of better by a favourable base. Corp and MSIL have a wider pres- next six months or so structural
attention from a high-profile bet against US’s expanded y-o-y, Ebitda mar- analyst, Jefferies India Pvt. volume performance, though Two-wheeler sales are projected ence and larger share of low-priced problems would come to the fore,”
challenged malls. The shift, which market partici- gins contracted because of Ltd, in a report on 26 August. some analysts are cautious on to almost reach the year-ago levels products in their portfolios and are R.C. Bhargava, chairman, MSIL,
pants say is beginning to show up in some trading negative operating leverage. Even so, covid-19 will keep the stock given the high valua- with the industry estimated to clock witnessing faster recovery. said at an investor meet.
flows, comes as delinquencies on hospitality Ebitda is earnings before meaningful volume recovery tions. low single-digit decline or growth. “Our industry interactions indi- Transmission to Bharat Stage-VI
property loans surge and even begin to exceed interest, tax, depreciation, and at bay for the near-term. Jef- “We think (valuation) prices Tractor sales are expected to con- cate that retail sales have largely (BS-VI) emission norms and the rise
those in retail. In the last month there has been amortization. feries builds in an in the robust earnings outlook in insurance and state levies drove
more selling pressure on the CMBX 9 than any of Lower other Revenues 18% y-o-y decline but does not leave much cush- Easing pressure up vehicle acquisition costs for con-
the other CMBS indices. BLOOMBERG income and high declined by 59% in IGL’s volumes ion for any regulatory risks,” sumers. Income levels have also
Maruti Suzuki and Hero MotoCorp are expected to see faster recovery in
depreciation y-o-y to ₹639 cr. for FY21 and 25% said Chaudhuri. sales, with the two companies projected to clock growth in August.
dropped and this poses a threat to
costs further This was driven by decline for MGL. “We remain wary of medi- June July % change in domestic sales of passenger vehicles and two-wheelers (year-on-year)
medium-term sales. “Household
weighed on prof- Note t h a t um-term risks to (1) CNG mar- income growth has slowed down
Recovering faith itability, leading
the sharp 57%
shares of IGL and gins from imminent enabling Mahindra & Maruti Hero Bajaj Auto TVS Motor Eicher Motors
considerably due to investment and
Euro area economic sentiment continued to
to 85% y-o-y y-o-y fall in sales M G L h a v e of open access for city gas dis-
Mahindra Suzuki MotoCorp Co. (motorcycles)
job challenges,” Kotak Institutional
improve in August. volumes 1.3
decline in net declined by about tribution networks and (2) Equities said in a note. “Automobile
Economic confidence
profit to nearly 20% from their CNG volumes from plausible -0.9 volume growth will require contin-
120
-11.0 -9.0
₹32 crore. respective pre- shift towards electric mobility uous increase in affordability over
110 The situation is expected to covid highs in January-Febru- for buses and three-wheelers -26.0 -22.9 time through higher household
-28.4
improve, but how quickly vol- ary. Even so, based on Bloom- segment as targeted by the -34.0 -36.0 -37.7 income,” it said.
100
umes recover will be crucial. berg data, MGL trades at a rela- recently notified Delhi electric In short, these concerns may
90
88 “IGL volumes have recovered tively cheaper valuation of vehicle policy,” said analysts -53.8 weigh on sentiments for auto
92 -57.0
to about 80% of normal levels about 12 times estimated from Kotak Institutional Equi- Source: Companies, Emkay Global Financial Services
stocks, which have appreciated
80 in August, which is higher financial year 2022 earnings, ties in a report. quite a bit lately.
SATISH KUMAR/MINT
70

60
31 Jan 2012 31 Aug 2020
Source: Bloomberg

Euro-area eco confidence

SATISH KUMAR/MINT

Subdued govt capex may leave investors in capital goods sector in despair
rises; job worries remain Harsha Jethmalani during this pandemic crisis, ana- High fiscal stress the economy from the pain. seem relatively cheap compared
Economic confidence in the euro area continued harsha.j@livemint.com lysts said. Increased focus on June quarter earnings also to historic averages at a time
to improve in August, with companies from man- cash conservation has further The debt/revenues metric for India is already inching up from its FY17 indicate the road to recovery when a meaningful earnings
lows and is likely to revisit FY02-03 peaks when India was rated junk.

T
ufacturing to services benefiting from higher he S&P BSE Capital Goods delayed private capex revival. would be painfully slow. Man- revival is still away. According to
Debt ( tn) (Left-hand scale) Debt/revenues (in times)
demand following the end of pandemic curbs. A index has rallied by 12% in These factors make the capital 300 6
agement commentaries high- Bloomberg data, shares of key
European Commission sentiment index rose for the past month. Expecta- goods sector’s growth prospects light challenges on order inflows capital goods companies are trad-
250 5.5
a fourth month, exceeding all but three estimates tions of an infrastructure revival unappealing. and execution. The ABB India ing at a price-to-earnings multi-
200 5
in a Bloomberg survey, and registered sustained package by the government India’s capacity to support Ltd management told analysts ple range of 13-33 times, based on
gains in industry, retail trade and particularly ser- could be a reason for this opti- high levels of debt is constrained 150 4.5 that uncertainty is expected to estimated FY22 earnings.
vices. Companies’ employment expectations rose, mism. This is more so as recently by its ability to raise revenues, 100 4 continue on the demand front for “Obviously the impact on visi-
but job cuts in recent months across the continent some members of the prime min- according to an analysis of India’s 50 3.5 next two quarters amid possible bility of earnings and elongated
meant consumers remain worried about the ister’s Economic Advisory Coun- fiscal stress done by Emkay 0 3 order cancellation. recovery cycle to FY22 will keep
FY 1991 FY 2025E
labour market. Even with the latest gains, opti- cil have been rooting for a mas- Global Financial Services Ltd. Source: Emkay Global Financial Services
Further, analysts at Motilal these capped,” said Dolat Capital
mism hasn’t fully recovered. BLOOMBERG sive infrastructure stimulus. “We estimate India’s debt/reve- Oswal Financial Services Ltd Market Pvt. Ltd analysts, com-
SATISH KUMAR/MINT
Even so, despite the recent nues to reach/exceed about five caution of an elongation in work- menting on valuations of EPC
For more reports and analysis jump, the BSE Capital Goods times by FY23E, which was last overhang is not transient, and lections and reduced revenue ing capital cycles for the sector companies in its coverage uni-
on the markets, follow our index is almost 20% lower than witnessed in FY03 when the sov- may haunt until fiscal year 2025, allocation from the Centre, because of payment delays and verse. “We do not see any lead
Mark to Market podcast with its pre-covid high of 17,726.61 in ereign rating was junk,” it said in according to Emkay. As such, the would also keep infra spending extended support measures to signals for higher visibility over
Pallavi Pengonda and Aparna January. The government’s tight a report on 18 August. brokerage house expects infra- by states muted. Thus, counter- vendors. Staggered return of the next couple of quarters at the
Iyer on htsmartcast.com fiscal space makes it challenging India’s debt/revenue is at structure spending to stagnate. A cyclical spending on infrastruc- labour is another challenge. least,” said the broking firm in a
to boost infrastructure spending about four times and the debt double whammy of lower tax col- ture may not be able to bail out Meanwhile, valuations may report on 17 August.

Mark to Market writers do not have positions in the companies they have discussed here
 NEWS MONDAY, 31 AUGUST 2020
NEW DELHI 05
MINT MEDIA MARKETING INITIATIVE

Vedanta pledges HZL Digital transformation and its

stake to fund delisting implication on financial services
Financial services has always been a
leader in adopting technology to improve By analysing transaction data and
customer experience and employee customers’ operating behaviour using
efficiency. Pre-COVID-19, many fintech data science enabled artificial intelligence
business models evolved and attracted and machine learning algorithms,
The firm has created an encumbrance on its entire shareholding of 64.92% significant investments due to their ability financial institutions would be able to
to quickly connect wide and deep. It generate leads for better cross selling and
caused disruption and was successful in upselling opportunities that will improve
Tanya Thomas addressing the needs of the young the conversion for frontline sales people
tanya.t@livemint.com population and providing a different and will augment fee income.
MUMBAI customer experience. Demonetisation
propelled the adoption of digital This will make a positive impact on business

M
etals and mining con- transactions, but COVID-19 redefined
glomerate Vedanta Ltd operations and will require transformation of
many of the ‘usual ways of working’ in the the front, middle and back offices using
has pledged its entire
shareholding in subsidi- financial services business ranging from digital technologies such as big-data
ary Hindustan Zinc Ltd branch banking, lending and underwriting platforms powered by data science-based
(HZL) to help fund its proposal to delist to insurance claim settlement etc. algorithms and will yield in the reduction of
from the stock exchanges. operating cost and the risk associated to the
An exchange filing by HZL on Satur- Today, the sector is operating in a operations, resulting in enhanced operational
day showed that Vedanta, the majority challenging and turbulent environment excellence.
owner of the company, had created an with pressures on margins, increasing
encumbrance on its entire shareholding stress on the loan portfolio, increase in Post COVID-19, customer expectations in
of 64.92% through the share pledge and customer expectations and ever-increasing
non-disposal undertaking in favour of the form of enhanced user experience
risk of cyber attacks and fraud. would lead towards a unified approach to
SBICap Trustee Co. Ltd. The transaction
includes about 2.1 billion shares by non- customer interaction across business
disposal undertaking and 6.26 billion At the same time, the emergence of units thereby requiring a digitally enabled
shares in pledge, according to the filing. digital and emerging technologies is omni-channel experience with reduced
The covid-19 pandemic and the result- creating opportunities for lending time to market for new product releases.
ing economic slump that sent stock pri- institutions and insurance companies to
ces plummeting has brought on a wave of The company said the delisting of Vedanta from the BSE and the NSE will simplify its transform their business and operating Financial institutions are also redefining their
voluntary delisting proposals as promot- corporate structure and give it more financial and operational flexibility. models. The success of ‘work from home’
REUTERS
operating models by establishing a
ers try to buy back shares cheap. In the during the lockdown has challenged the
last three months, majority owners of tiered corporate structure. On 20 The company said the delisting of collaborative digital way of working, which
age old concept of working from office. creates a strong foundation for an
Adani Power and Hexaware Technolo- August, Vedanta Resources said it raised Vedanta from the BSE and the NSE will
gies have also proposed buying out all $1.75 billion through bridge loans and simplify its corporate structure and give Digital has been a significant enabler in organisation’s digital transformation with the
publicly-traded shares of their compa- another $1.4 billion through the sale of it more financial and operational flexibil- ensuring that customer service in banking creation of a digital workplace ensuring data,
nies, while delisting rumours have bonds earlier in the month. ity. Earlier this year, Vedanta was looking and insurance continues without any tools and applications are integrated. This
swirled around Diageo’s for an energy partner to sell a major disruption. enables an organisation to keep its
United Spirits, the Indian FUNDRAISING PLANS minority stake in Cairn India, employees more engaged, productive and
arm of US-based IT firm Ora- but the plans were shelved To grow in this new environment, financial adaptable through various learning and
cle. THE mortgage is via DEAL includes 2.1 ON 20 Aug, Vedanta after the crash in global institutions need to embark on large-scale development opportunities, enabling them to
On 12 May, Vedanta Ltd the share pledge and billion shares by non- raised $1.75 billion via crude oil prices in the after- digital transformation by unlocking the
non-disposal under- disposal undertaking bridge loans and adapt to changes and thrive in a new digital
had announced its holding taking in favour of and 6.26 billion another $1.4 bn via math of the coronavirus out- potential of the digital wave that is
company’s intention to delist SBICap Trustee Co. shares in pledge the sale of bonds break brought down Cairn’s workplace in today’s financial world.
enabled by artificial intelligence and
the Indian business. The valuations of its oil blocks.
holding company, Vedanta In FY20, Vedanta Ltd cognitive computing. It is therefore,
Resources Ltd, has proposed to acquire Agarwal has a track record of merging reported a net loss of ₹4,743 crore, com- essential for financial institutions to create
fully paid-up equity shares of the com- and delisting companies. In 2012, he pared to the net profit of ₹9,698 crore a cross-functional digital transformation
pany that are held by public shareholders merged mining firms Sterlite and Sesa that it reported in the previous fiscal. The team that works in a collaborative and
at an indicative offer price of ₹87.5 per Goa Iron Ore to form Vedanta. After buy- company took a massive write-off of agile manner across the value chain to
share. ing out Cairn, Vedanta set in motion the ₹17,132 crore on impairment of assets in deliver tangible benefits to the client, Feroz Khan Sanjay Doshi
The proposed delisting is part of bil- delisting of the cash-rich Cairn India in oil and gas, copper, and iron ore busi- Partner and Head, Partner and Head,
while simultaneously meeting the Digital Advisory, Financial Services Advisory,
lionaire and Vedanta Resources founder 2016, and merging it with itself. In 2018, nesses in the fourth quarter because of a demands from stakeholders for greater KPMG in India KPMG in India
and chairman Anil Agarwal’s plan to sim- Vedanta Resources was also delisted commodity market slump due to the cov- trust and transparency.
plify his investments across a multi- from the London Stock Exchange. id-19 pandemic.
06 MONDAY, 31 AUGUST 2020
NEW DELHI NEWS

How FEL fits

in Reliance’s Future-RIL deal protects Toymaking industry in
Channapatna on the
retail venture
FROM PAGE 1
banks from a $2.2-bn hit brink as orders dry up
ing business, and its insurance FROM PAGE 1
joint ventures. Reliance Retail
will then buy a minority stake There will likely be no haircut for lenders who gave loans for Future’s biz operations tory, which has shut down for
in FEL. the time being, have taken up
Experts said the addition of temporary work as mechanics
Future’s assets such as Big Gopika Gopakumar in garages and welding shops,
Bazaar, fbb, Foodhall, Easyday, gopika.g@livemint.com and as agriculture labourers.
Nilgiris, Central and Brand Fac- MUMBAI Natraj C., who used to have
tory stores vastly expands Reli- sales of around ₹8,000 per day,

F
ance Retail, already India’s uture Group lenders have now refuses to take calls from
largest offline retail company, been saved from a $2.2 bil- As IPO looms, unknown numbers, fearing they
All you need
helping RRL capture a large lion hit on their exposure to to know about
could be from debt collectors.
chunk of India’s $1.32 trillion the conglomerate after the Jack Ma’s Ant Channapatna’s toy industry,
retail market. company announced a Group lining the narrow lanes of the
“Future Retail’s businesses stake sale of its businesses to Reli- bit.ly/3lAnrz8 small town, has faced multiple
are a good fit in RIL’s retail ance Industries Ltd (RIL) for ₹24,713 hardships in the past, from The state’s toy industry is
business. It will help RIL crore on Saturday. cheaper Chinese replicas of the valued at around $160 mn. MINT
expand offline retail presence Post the deal, Mukesh Ambani’s trademark wooden figurines to
and would see further Reliance Retail Ventures (RRVL) the Karnataka government’s bought it for just ₹35,” Natraj
improvement in margins due will hold a 13.14% stake in Kishore enthusiasm for a new and big- said.
to improving scale,” an analyst Biyani’s Future Enterprises Ltd ger toy cluster in Koppala. As Left to fend for themselves,
with a foreign brokerage said (FEL) and will assume debt of business shrank, the number of the toymakers face a challenge
on the condition of anonymity. ₹12,500 crore. traditional artisans in Channa- that threatens to wipe out the
Despite its recent retail Lenders have a total exposure of patna declined from around smaller players. Their niche
expansion through JioMart, ₹16,000 crore to the conglomerate. 3,500 in the late 1990s to just skills put these artisans at a dis-
RRL is keen to expand its off- A consortium led by Bank of India around 2,000 earlier this year. advantage, unable to attract
line presence. RRL’s retail has an exposure of ₹5,750 crore; The state’s toy industry is val- relief from the government to
strategy could be divided into Axis Bank holds ₹1,250 crore, and ued at around $160 million. help mitigate the impact of the
three—offline, online and new Bank of Baroda holds ₹750 crore, On Sunday, chief minister covid-led lockdown. “Construc-
commerce, where it is working according to data collated by ICICI Kishore Biyani-led Future Group is currently a standard asset on the books of banks, having availed of the loan B.S. Yediyurappa tweeted that tion workers, carpenters, bar-
with local stores in a B2B2C Securities. There is likely to be no repayment moratorium, which ends on 31 August. MINT the proposed toy cluster in bers...everyone got some finan-
model. RRL has 11,784 stores haircut to lenders who have lent for Koppala has the potential to cial relief, but we got nothing,”
across its formats of consumer business operations, said analysts, Future Group had a consolidated the USO Notes provide for an addi- advanced discussions to acquire create 40,000 Samiullah said.
electronics, fashion and lifes- offering a huge relief to the banks. debt of ₹12,778 crore as of Septem- tional period of 30 days for payment these businesses from the debt- jobs and attract CM Yediyurappa Similarly, toy-
tyle and grocery. However, promoter-level debt ber 2019, as per the company’s pub- of interest from the due date, in case laden Future Group. The deal is sub- over ₹5,000 crore tweeted on Sunday makers in Saha-
According to BofA Securi- worth ₹11,900 crore will remain lic records. Its flagship company, the same could not have been paid ject to adjustments as set out in the in investments. that a proposed ranpur, Uttar Pra-
ties, retail contributes 24% of with the promoters, said a person Future Retail, had a gross debt of on the original due date,” according composite scheme of arrangement. “In line with toy cluster in desh have been
RIL’s (sum of the parts) valua- close to Future Group on the condi- ₹2,657 crore as of March 2019. to a filing by Future Retail. As a part of the acquisition, Future PM @narendra- absorbed by furni-
tion. Three analysts Mint spoke
Koppala has the
tion of anonymity. Lenders may The company said it was origi- Future Retail’s 30-day grace Group will first merge certain com- modi’s vision of ture businesses.
to believe this deal could also have to take a hit on this debt, ana- nally due to make the interest pay- period to make the payment of panies carrying on these businesses #VocalForLocal potential to create A senior Karna-
help Reliance Retail speed up lysts believe, after a discussion with ment on its 5.6% 2025 dollar notes interest will end on Monday. into FEL. & boosting toy 40,000 jobs taka government
its plans for an IPO in the next the promoters next week. on 22 July, which it missed. “Due to As part of the deal, the retail and RRFLL also proposes to invest manufacturing, official acknowl-
three-five years. Big Bazaar is Future Group is currently ₹1,200 crore in the prefer- Koppala will have edged toymakers
the flagship brand of Future a standard asset on the DEBT WOES ential issue of equity shares India’s first toy manufacturing have been “pretty much left to
Retail, and one of the largest books of banks, having of FEL to acquire 6.09% of cluster. With the ecosystem to fend for themselves”, even
hypermarket chains with 290 availed of the loan repay- POST the deal, RRVL BOI-led consortium FINANCIAL woes at FUTURE Group post-merger equity and support toy cluster in place, this though authorities have drawn
stores across 150 cities. ment moratorium, which will hold a 13.14% stake holds an exposure of
in Future Enterprises ₹5,750 crore, Axis
FEL escalated since the had a consolidated
lockdown, worsening debt of ₹12,778
₹400 crore in a preferential 400 acres SEZ will have top- up grand plans to connect them
FBB or Fashion at Big Bazaar ends on 31 August. An exec- and will take over holds ₹1,250 cr and its already strained crore as of issue of equity warrants class infrastructure and gener- to global value chains.
is the fashion brand under FR. utive director at a state-run debt of ₹12,500 crore BoB holds ₹750 cr financial health September 2019 which, upon conversion and ate 40,000 jobs in five years,” Though government offi-
The brand has 95 standalone bank said according to the payment of balance 75% of Yediyurappa said on Twitter. cials say that the new toy cluster
stores across 50 cities. It also original plan discussed with the issue price, will result in This approach has left a sig- will focus on a different seg-
operates an online fashion plat- lenders, there was no haircut the lockdown imposed to restrict wholesale undertaking is being RRFLL acquiring further 7.05% of nificant chunk of toymakers of ment, toymakers in Channa-
form ‘fbbonline’. Neighbor- involved as Future Group will repay the spread of the pandemic and con- transferred to Reliance Retail and FEL. Channapatna at the mercy of patna fear further erosion of
hood store network: These some of the outstanding dues from sequently restricted operations of Fashion Lifestyle Ltd (RRFLL), a Future Retail’s profit fell to exploitative local distributors already dwindling sales.
include small-format grocery the proceeds and the rest of the lia- the company, the liquidity position wholly-owned unit of RRVL. The ₹164.56 crore on a consolidated and large retailers who are The triple impact of demon-
stores—Heritage Fresh store bilities will be taken over by RIL. has been affected causing us to miss logistics and warehousing under- basis in Q3FY20 from ₹197.60 crore often accused of short-chang- etisation, goods and services
network in South India and Financial woes at the retail giant the service of the payment of inter- taking is being transferred to RRVL in the year-ago period. Revenue ing the smaller business units. tax (GST) implementation and
Easyday in North India. There escalated since the nationwide lock- est due on the USO Notes (listed on directly. from operations declined to “A toy I made was sold for now covid-19 have had a crip-
are 892 such stores across over down was imposed, worsening its Singapore Stock Exchange) on 22 Mint, in its 11 June report, was the ₹5,193.19 crore in Q3FY20 from ₹558 in Coimbatore (Tamil pling impact on the small and
300 cities. already strained financial health. July 2020. The terms of issuance of first to say that Reliance Retail was in ₹5,368.46 crore in Q3FY19. Nadu) but the distributor medium industry.

South stars tap streaming sites Hackers claim data India Inc bosses see cut in pay hikes
FROM PAGE 1 Cinemas will need three to four
weeks after reopening before
breach at Paytm Mall FROM PAGE 1 Puri who saw their remunera-
tion increase last fiscal despite
arai Pottru, that he has also pro- they can accommodate a high- sharply to just 0.98% in FY20 the pandemic-induced disrup-
duced, on Amazon Prime Video. profile project. FROM PAGE 1 taken measures to verify the from a 21.5% increase in the tions.
Amazon has also snapped up V, Independent trade analyst matter, with no data breaches previous year. Overall staff Remuneration of Rajeev Jain
a Telugu language action Sreedhar Pillai said a direct on the Paytm Mall application detected by its internal cyber- costs for these companies grew (MD-Bajaj Finance), Salil
thriller starring Nani. Malaya- release on a streaming platform website and was able to gain security teams as of Sunday 11.2% in FY20 from a 15.9% Parekh (MD-Infosys), CP Gur-
lam actor Tovino Thomas’ Kilo- would ordinarily spell doom for unrestricted access to their evening. increase in the previous fiscal. nani (MD-Tech Mahindra) and
metres and Kilometres is said to a south Indian star’s career. entire databases […] According “We would like to assure that Companies have cut fixed Sanjiv Bajaj (chairperson, MD,
have been acquired by Disney+ “They have cultivated their to the messages forwarded to us all user, as well as company costs, especially high staff Overall staff costs grew 11.2% Bajaj Finserv) surged 28-44% in
Hotstar while Fahadh Faasil, fan bases like political parties do by the source, the perpetrator data, is completely safe and expenses, as profits and sales in FY20 from a 15.9% increase FY20.
touted as one of the most Tamil star Suriya’s Soorarai and believe in concepts like first claimed the hack happened secure. We invest heavily in our took a hit in the March quarter. in the previous fiscal. MINT Meanwhile, L&T MD S.N.
dependable names in the Mala- Pottru releases in October. day and first show,” Pillai said. due to an insider at Paytm Mall. data security, as you would During the quarter, companies Subrahmanyan and JSW Steel
yalam fraternity, has just “However, post-covid, not only The claims, however, are expect. We have been investi- fired workers and cut salaries to nies took sharp cuts of nearly chairman and MD Sajjan Jindal
announced a film called CU single screens have shut in the will their remunerations come unverified, but possible,” said a gating the claims of a possible control costs. 44%. Puri who is set to retire in saw the highest pay cuts of
Soon, shot during the lockdown south Indian industry, even as down by at least 50%, the way Cyble blogpost on Sunday. hack and data breach, and Data showed top earners in October earned an additional 43-44% during the year. Data
that will stream on Prime Video. larger multiplexes are holding films are marketed will change.” According to Cyble, its sour- haven’t found any security companies such as JSW Steel, ₹161.56 crore by exercising showed that among Nifty firms,
“It is true that south Indian on. In June, two iconic inde- Johar said like Bollywood, ces also forwarded messages lapses yet. We also have a bug Larsen and Toubro, Cipla, Tata stock options during the year. Hero MotoCorp CMD and CEO
stars have always been keen on pendent theatres in Chennai— which started its direct-to-digi- where the perpetrator claimed bounty program, under which Consultancy Services, Titan In FY19, he earned ₹55.87 crore Pawan Munjal received ₹84.59
theatrical releases; they work AVM Rajeswari and Maharani— tal run with more urban-cen- to have demanded 10 we reward responsible disclo- Co., Kotak Mahindra Bank took as remuneration. The payout crore, Shree Cement MD Hari
with a traditional mindset that shut. In June, Sapna, a popular tric, niche narratives like Ethereum (ETH), equivalent to sure of any security risks. We pay cuts in FY20. was higher than the ₹143.80 Mohan Bangur was paid ₹41.76
way, where they feel fans would theatre in Kerala’s Thrissur, was Gulabo Sitabo and Shakuntala $4,000, and will be receiving extensively work with the secu- Though the highest-paid crore paid to the bank’s erst- crore, JSW Steel’s Sajjan Jindal
best enjoy watching them on sold to a business group. Devi, south Indian films taking the ransom from Paytm Mall. rity research community and executive in FY20 was HDFC while deputy managing received ₹40.03 crore, and
the big screen,” said film indus- Johar said these actors expect the plunge now are also more Paytm Mall has denied the safely resolve security anoma- Bank managing director Aditya director, Paresh Sukthankar, in Bajaj Auto MD Rajiv Bajaj
try expert Girish Johar. the tough times to continue and concept-driven and not hard- claim made by Cyble. The lies,” said a Paytm Mall spokes- Puri at ₹180.49 crore, some top FY19. received ₹39.86 crore as remu-
Amid the pandemic, many old are possibly getting restless. core commercial ventures. online retailer said it has under- person. bosses in other Nifty compa- There were a few others like neration last fiscal.

Unlock 4 puts the lives versus livelihoods debate back in the spotlight
FROM PAGE 1 action against people who vio- often thousands of kilometres jobs,” said Arup Mitra, a health This comes at a time when Some experts support the
late the rules under the Epi- from home—are the bulwark of economist and professor of eco- the economic crisis that sur- move toward further easing after
that most Indians are still wary of demic Diseases Act, India’s informal economy. nomics at Delhi University. faced much before the pan- over five months of lockdown.
stepping out of their homes five 1897…Weekend lockdown is They were also the worst hit by The International Monetary demic has already started to “As compared to an earlier
months into the pandemic, which being strictly enforced,” said the pandemic. Fund has estimated that India bite, with massive job losses and stage, right now India may have
points to the long and difficult Akash Tomar, senior superin- Many experts believe while will contract by 4.5% in the cur- industry-wide lay-offs. Cash- a better-prepared healthcare
path to economic recovery. The tendent of police, Etawah, add- the lockdown was necessary, it rent fiscal, while Goldman strapped states have turned to system. So even if the opening
issues assume importance given ing that authorities are ensur- was unplanned, which is what Sachs expects the June quarter the Centre for up of mass trans-
that, according to the finance ing that livelihoods are not sparked a mass exodus of to be the worst hit, with the compensation of Many experts port system leads
ministry, economic recovery will impacted during the exercise. migrants from cities. gross domestic product shrink- goods and servi- believe that while to some flare-up,
depend on how the pandemic The nationwide lockdown, “The unlock intervention ing by 45%. As Unlock 4.0 ces tax revenue the lockdown the healthcare
behaves in the coming days, espe- the world’s largest and strictest, must be tempered based on starts, the government will shortfalls. The was necessary, it system may be
cially in industrialized states. was the focal point of India’s emerging evidence. Labourers, likely face a fresh challenge in Centre has able to cope up
was unplanned,
States such as Uttar Pradesh strategy to contain the virus. It especially migrant labourers, terms of migrants’ livelihoods. responded by with it,” NR Bha-
have been continuing with the affected supply chains, resulting need to be given livelihood and “Should the migrant popula- offering borrow- resulting in the numurthy, vice-
strategy of weekend lockdowns. in a massive disruption to eco- resumption of their jobs, with The new guidelines opened up more activities in areas outside tion travel back to cities, the ing options. This, migrant exodus chancellor, Dr BR
State police officials said the aim nomic activity and employment. the government contributing to containment zones. RAJ K. RAJ/HINDUSTAN TIMES preparation needs to be made in in turn , has Ambedkar School
is to prevent the spread of the The Centre drew criticism lost salaries,” said Sakthivel Sel- a tangible way to strengthen the sparked wide- of Economics
virus in rural areas and to stop for what was seen as a harsh varaj, director, health econom- the economy, favouring demand the Pradhan Mantri Awas Yojana. functioning of the urban spread criticism by states, who University said.
people from moving around. lockdown, in particular for ics, financing and policy, Public boosting initiatives among “Large cities which with informal economy and the slum- allege the action is unconstitu- Shreya Nandi, Prashant
“Majority of covid cases are overlooking the plight of Health Foundation of India, a labourers, rural areas, etc.” agglomeration benefits are able living which would mean consid- tional and goes against the spirit K.Nanda, Gireesh Chandra
in urban areas and we don’t migrants. People from rural public-private initiative. The government, on its part, to offer livelihood to natives as erable overlaps among housing, of the landmark tax reform Prasad, Neetu Chandra Sharma
want the disease to spread in areas who live and work in cit- “Demand-side incentives has offered free foodgrain and well as millions of migrants com- employment and health inter- agreed between the Centre and and Utpal Bhaskar contributed
rural areas. We take strict ies and other urban centres— must be put in place to kick-start affordable rented homes under ing from far and wide in search of ventions,” Mitra said. the states. to the story.
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08 MONDAY, 31 AUGUST 2020
NEW DELHI

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

INDIA’S EXPORTERS
ARE ON THE EDGE
Stung by muscular trade policy and the global slowdown, smaller exporters are hurting. Many jobs are at stake.

In July, gems and jewellery exports

declined by 50% year-on-year and
leather and man-made yarn by
about a quarter BLOOMBERG

Rahul Jacob the sectors with the highest quantum of bad economics at the Indian Institute of Man- icy initiatives succeeded in South Korea and
mint BLEAK OUTLOOK
feedback@livemint.com loans, about 25%. agement in Ahmedabad. SHORT Singapore a few decades ago because incen-
BENGALURU STORY The ongoing export slump is the worst tives and tariff protection were “conditional
SELF-RELIANT INDIA THE FTA PUZZLE since at least the 1960s and time-bound” and were withdrawn if

W A F
hen Sunit Jain heard gainst this backdrop, the Narendra or Rajendra Gupta, a supplier of glass (Year-on-year change in %) companies missed the prescribed goals, says
about a virus ravaging Modi-led government’s push for a self- vases and platters to retailers such as WHAT 50
Total exports
5-year moving average
Anu Madgavkar, a partner at McKinsey &
Wuhan in late January, reliant India is potentially the most compli- Armani’s home division and Crate & Barrel, 40 Company and co-author of a study on out-
he booked a ticket to see cated problem of all for small and mid-sized the good news has been the return of US Businesses worldwide are reeling performers in per capita income growth
potential clients in the exporters. Changing import regulations and buyers who had been lost to Chinese manu- from the covid-19 pandemic, but 30 over 50 years. The top seven were all from
US, Chile and Peru. The Jaipur-based tariffs effectively push up the price of facturers six years ago. A US buyer told him for export-oriented firms in East Asia. India belonged to the next cohort
sectors ranging from jewellery to 20
exporter of home linens, garments and imported inputs, often needed for export recently that glassware from India is more of countries where per capita GDP growth
paper products sensed an opportunity as items. From 21 September, just as firms “creative”. Yet, the win over China is tem- garments and leather, these are had grown rapidly over a shorter time
10
Chinese factories closed due to a strict lock- complete shipping crucial Christmas orders pered by having to deal with the higher cost the worst of times period—between 1995 and 2015. Those two
down. “I was hopeful that the pandemic in this calamity of a year, they will start fac- of compressed natural gas needed for his 0 decades coincided with a period of trade lib-
would benefit us in India, but that is not how ing the compliance nightmare of having to Firozabad factory as well as the high cost of eralisation in India.
it panned out,” Jain said. certify the origin of imported inputs. soda ash, a principal ingredient for glass- AND -10
The problem for labour-intensive export-
He is glad he didn’t go as he would have The new rules are similar to those of the making. -20 ers in India is that their relatively small size
been stranded in Latin America, but that is Trump White House. They may be legiti- “Soda ash is much cheaper in other coun- The larger problem is that for the 1960-61 2019-20
means they are overlooked by successive
the only good fortune his business has had mately aimed at preventing Chinese goods tries. The US is a major producer,” said past five years or so, the Indian governments when decisions are
country’s most labour-intensive Labour-intensive sectors have, in
in 2020. US retailers such as Neiman Mar- from being routed in via Asean countries, Gupta. “But the government wants to boost particular, plateaued or fallen made on the merits of, for example, a free
cus, Saks Fifth Avenue and Pier 1 Imports but India’s companies could face sourcing the domestic market (for soda ash). That is export industries have either not trade agreement with the European Union,
(Value of export goods in $million)
have all filed for bankruptcy. Jain’s Ratan problems. The combination of a Modi gov- the only thing the government is thinking grown appreciably or have which, along with the US, is India’s largest
FY2009 FY2014 FY2019
Textiles now finds itself competing against ernment focused on import substitution of.” In a classic example of small, labour-in- actually declined trading partner. An FTA with the EU, a
Gems & jewellery
deeply discounted prices—set at liquidation and the continual rethink of the strategy on tensive factories being disadvantaged in work-in-progress from 2007 till discussions
29,010.5
sales—of such companies. For Jain, it some- free trade agreements, while the rupee order to protect large companies, the major stalled in 2013, would benefit garment
times feels as if the skies have fallen in. remains overvalued, could result in the liq- producers of soda ash in India happen to be NOW 41,244.1
35,844.5
exporters competing against Bangladesh,
Speaking the day after a huge downpour uidation of many labour-intensive export Tata Chemicals, Gujarat Heavy Chemicals but is deadlocked in part because it would
brought Jaipur to a standstill, he said, “It’s firms this year. In the past five years, leather Ltd. and Nirma. In March, the commerce The Modi government’s push for Textiles and readymade garments hurt automotive companies and, absurdly,
been quite an unfortunate year. My personal exports have declined from $6.2 billion to ministry launched an investigation into a self-reliant India is potentially wine producers in India.
19,862.8
goal is to keep the team intact. And to sur- $4.8 billion, textiles and garments from whether Turkey had been subsidising its the most complicated new “The government has to map why busi-
problem. Changing import tariffs 34,854.9
vive till March.” $34.8 billion to $32.3 billion and gems and soda ash exports to India. 32,309.4 ness is going to other countries,” says Ratan
Businesses worldwide are reeling from jewellery from $41.2 billion to $35.8 billion. The trade liberalisation that started in the would effectively push up the Textile’s Jain. Panagariya, a renowned trade
the collateral damage of the covid-19 pan- These trends remained broadly in place 1990s ushered in 25 years of steady reduc- price of imported inputs Source: CMIE
economist, told BOOM last week that India
demic, but for export-oriented firms reliant in July, the most recent month. Gems and tion in tariffs and regulations. India, it should pursue an FTA with the EU.
on a narrow band of commodities—ranging jewellery exports declined by 50% year- seemed, had turned its back on the export IIM’s Morris is more pessimistic. He
from jewellery to garments and leather— on-year and leather and man-made yarn by pessimism of the 1950s and 1960s, which sives and sanding paper. Furniture maker advantage. In India, meanwhile, garment believes the lacklustre export performance
these are the worst of times. These goods about a quarter, though cotton yarn and had painted the global environment as one Jaswant Meel says, “We are confused.” But exporters are facing delays in routine reim- over the past few years is because India’s
also happen to be primarily produced by handloom products grew by 7%. The irony stacked against exports from developing Meel reports better than expected demand bursements from New Delhi to compensate smaller exporters have been squeezed
India’s labour-intensive small and medium- is that India desperately needs these indus- nations. But over the past couple of decades, for end tables and writing desks in the US as for fuel taxes and other central and state gov- between China and Asia’s new export-led
sized industries. tries to flourish, along with construction India signed a number of free trade agree- more people are starting to work from ernment levies. “Bangladesh will only get economies. This daunting challenge has
In textiles and apparel, which has been and tourism. These industries use much ments (FTAs), including with Asean. How- home. A shortage of trucks has meant that stronger,” predicts Elangovan, who is open- been made worse by a succession of tariff
among India’s top 10 export items, the dwin- more labour than a chemical plant or a ever, India’s tariffs still remain the highest freight carriers have hiked charges from ing a buying office in Dhaka. increases in the past four budgets and new
dling number of large retailers in the US has machine manufacturer. among major economies in Asia. ₹28,000 to ₹34,000 per truckload to get his Even though the Modi government is non-tariff barriers.
left domestic firms heavily dependent on In a 2018 article, former NITI Aayog Over the past year or so, the Modi govern- firm’s products from Rajasthan to the port in alert to the challenge that exports need to In Surat, jewellery manufacturer Dinesh
contracts from discount chairman Arvind Pana- ment has questioned whether regional free Mudra. His negotiations with US buyers increase at a time when Navadia, buoyed by a
stores and the exacting gariya compared Reli- trade agreements work at all. In November, have been difficult because they know “the domestic consumption is pick-up in demand in
demands of fast fashion From 21 September, just as ance Industries Ltd.’s India abruptly decided it would not join the domestic Indian market is asleep. Exports anaemic, the belief that According to a global August for products
companies. Unexpected firms complete shipping employees and total Regional Comprehensive Economic Part- are the only game in town.” governments can micro- database on trade actions, in priced between $300 and
local challenges have assets with those of Shahi nership, a grouping that will account for Across the country in Tirupur, garment manage industrial devel- $500, dismisses the huge
amplified the pain. Christmas orders, they will Exports, India’s largest 40% of global trade. Japan and Australia, factories are struggling to substitute opment never goes out of the past two years, India has drop in India’s gems and
Freight containers have start facing the compliance apparel manufacturer. He seeking to balance China, reportedly sought imported textiles made of man-made fibre, fashion in India. On 26 made 233 protectionist jewellery exports in July
been in short supply found that for an equiva- to draw India back into the RCEP discussion labels and lace trimmings with local varia- August, the Centre as an aberration, but
because the huge drop in nightmare of having to certify lent investment, Shahi this year, but without success. Commerce tions. “China’s are definitely cheaper and released a report that interventions via new reports that production
imports has meant fewer created 252 times as minister Piyush Goyal recently criticised the quality is better,” reports V. Elangovan, assesses the export pre- costs have gone up by
containers are arriving at the origin of imported inputs many jobs as RIL did. many of the FTAs reached between 2009 a buyer based in Tamil Nadu. paredness of different licensing rules and tariffs 20-25%.
Indian ports. Production India needs to create jobs and 2011 as having left India open to foreign “I don’t know if we can manage without states. This month, the Perennially struggling
costs have also gone up as factories grapple at a record pace to arrest the growth of what goods but “without reciprocal entry”. (imports) when we are already being ham- government said smartphone giants Fox- with ever-changing Indian government
with a shortage of skilled migrant workers. is already the largest cohort of under-em- According to a global database on trade mered by Bangladesh.” In June, China conn, Winstron and Samsung as well as regulations, inflation and an overvalued
The larger problem is that for the past five ployed labour in the world; according to a actions, in the past two years, India has made allowed tariff exemption for 97% of goods component makers are likely to shift about rupee as well as severe competition from
years or so, the country’s most labour-inten- McKinsey & Co. report released last week, 233 protectionist interventions in the form from Bangladesh, drawing the two coun- a tenth of global production to India over the Vietnam and Bangladesh means that
sive export industries have either not grown India needs as many as 90 million to 145 mil- of licensing rules, tariffs or other barriers. tries closer together. Elangovan cites a next five years with about 60% slated for “medium and small businesses are always
appreciably or have actually declined. Capi- lion additional non-farm jobs by 2030. South Korean garment manufacturer with exports. Electronics products such as com- firefighting; they have little money to
tal-intensive exports, from engineering “One of the salient characteristics of MUSCULAR MERCANTILISM 50,000 workers in Bangladesh as an exam- puters and phones often have components upgrade,” worries IIM’s Morris. He credits
goods to electronics to refined petroleum Indian economic policy is that while Reli-
products, have done somewhat better. The ance may enjoy a terms-of-trade advantage,
Reserve Bank of India recently estimated labour-intensive industries are ‘dis-pro-
T his muscular mercantilism creates
problems for most exporters who need
imported components or inputs. Furniture
ple of the economies of scale its gigantic fac-
tories offer relative to India’s much smaller
units. Bangladesh’s FTA with the European
that cross borders multiple times, however. them with resilience, but his conclusion is
This could prove a challenge for customs sombre. “They are on the decline,” he says.
clearances and ports in India. Rahul Jacob is a former Hong Kong bureau
that gems and jewellery and real estate are tected’,” said Sebastian Morris, a professor of makers, for instance, rely on China for adhe- Union and lower wage costs are also an Still, such government-led industrial pol- chief for the Financial Times
 BUSINESS OF LIFE MONDAY, 31 AUGUST 2020
NEW DELHI 09
STARTUP INC.
The cloud-based system has subscrip-
tion plans for both retailers and distribu-
tors. Getting orders and collecting pay- RETAIL'S
ments digitally saves costs significantly for
a distributor. Besides, it minimizes feet on DIGITAL SHIFT
the street at a time when social distancing Traditional retail, which dominates trade, is inefficient;
has become the norm. e-commerce is 10X more productive, says McKinsey’s
Tarnea’s aim is to be a digital platform, recent report on growth and jobs. The good news is
not just a SaaS (software-as-a-service) startups are figuring out ways to use data and
product, says P.G. Ponnapa, an angel inves- technology to make retailers more productive.
tor and mentor to the startup. Retailers howindialives.com
have a growing need for credit as distribu-
tors by have become tight-fisted after the RACE FOR A SHARE
pandemic. The platform ropes in banks
Everyone from Amazon and Reliance to local startups
that can offer credit based on billing data.
are chasing Indian retail because of the size of the
“If I have a retailer network in place, I can market and its scope for growth.
aggregate orders for companies that don’t
have pharma distribution in specific geo- Indian retail market, FY2012 to FY2026
2000
graphies. Multiple revenue streams Market size (in $ billion)
become possible once you onboard a suffi- 1600
cient number of retailers,” says Ponnapa. 1200
In Andhra Pradesh and Telangana, 800
where Tarnea made its first foray, it has a
400
footprint larger than those of the leading
pharma retail chains Apollo and Medplus 0
2011-12 2017-18 2020-21 2025-26
combined, says Satyamurthy. It wanted to
prove its value in one geography before Source: Deloitte, Retail FDI in India, January 2020
expanding across the country, he explains.
BRINGING IN ORDER
OVERCOMING SCEPTICISM Indian retail is largely unorganized, but that is
It didn’t come easy. One of the first to come changing. The share of organized retail is expected
aboard, a large pharmacy in a small town of double to 18% by 2021.
(From left) Tarnea’s CTO and co-founder Madhav Sitaram, CEO and co-founder Suresh Satyamurthy, and VP of sales Vivek Madhavan. Andhra Pradesh, was sceptical initially. “He Change in share, by categories
told me his turnaround time for a customer

Covid pushes
E-commerce Organized Traditional
nies decided the easy way to add to their was 15 minutes which was as good a service (in %)
turnover was to appoint more distributors as anything you would get in a big city,”
in a sprawling, diverse market as India. The recounts Satyamurthy. “As the discussion FY19
upshot is a noodle soup of distribution, progressed, we realized he didn’t have bar-
unlike Western markets where pharma coding in his legacy billing system. When
FY21

local pharmacies
companies operate with a handful of large we introduced barcoding with our system,
distributors. It’s hard to untangle this. his turnaround time came down to six min- 0 20 40 60 80 100
Tarnea decided early on in its eight-year utes. That meant he could serve twice the Source: Indian Brand Equity Foundation
journey to work with the given structure in number of customers.”
the industry. So what it tries to do with digi- Satyamurthy had a 26-year corporate
ONLINE TO OFFLINE

to try tech cure

tization and information flow is bring value career in India and abroad before becom-
to all stakeholders, including retailers, dis- ing an entrepreneur, his last stint being the Consumers’ use of technology is forcing retail to change.
Studies show that even shoppers in stores are now influenced
tributors and manufacturers. head of Siemens’ telecom business. His by digital, and this influence is consistent across age groups.
Take the problem of expired medicines: exposure to retail distribution came in his
High digital influence factor across categories
the Tarnea system tracks the batch number very first job for a company that launched
of every product that sits on a retailer’s frozen vegetables in India. This was in the Electronics (in %) 24
shelf. It can alert the retailer well before pre-internet era of the early nineties. Apparel 24
expiry date to return a prod- In the absence of a cold
uct to the distributor and chain, he had to optimize the Books/Music/Entertainment 22
Online medicine retailers are breathing down the necks claim a full refund. The dis-
Tarnea’s aim is delivery of insulated contain- Furniture/Home furnishing/ 21
tributor can in turn send it to be a digital ers with frozen vegetables in Home improvement
of neighbourhood drugstores, forcing them to digitize back to the pharma company
platform, not the summer heat of Delhi. If Food/Beverages 21
and get reimbursed. he sent out too many, there
Health/Wellness/Beauty 20
The pharma company does just a SaaS would be an unacceptable
Sumit Chakraberty online pharmacies,” says Suresh Satyamur- incur losses for unsold medi- Automobiles 19
thy, CEO and co-founder of Bengaluru- cines, but it’s a better out-
(software-as- level of wastage given the
short shelf life. If he sent out Baby/Toddlers 19

H
ealthcare has been in the spot- based Tarnea, which has been bringing come than huge potential lia- a-service) too few, his sales team would
Miscellaneous supplies 19
light post covid-19. So it’s not automation to the last mile of pharma dis- bilities from expired medici- chew him out.
surprising that big tech is tribution. Even a small retailer can use cus- nes getting into the hands of
product, He came up with a hack Note: Digital influence factor is the % of in-store retail sales influenced by
shopper's use of any digital device (laptops, desktops, smartphones, tablets,
making moves to disrupt the tomer data in the Tarnea system to create customers and causing harm. for the entire where salespeople went on wereables) and in-store devices (i.e. kiosk, mobile payment device)
pharmacy business. loyalty programmes, launch promotions, Stockouts are another
Earlier this month, Amazon launched a and send prompts to replenish medicines recurring problem in the
pharma retail motorcycles to every retail
outlet twice a day. They
Source: Disruptions in Retail through Digital Transformation

pharmacy service in Bengaluru that takes or make diagnostic lab visits. pharma sector. Typically the sector would collect information on
orders for both over-the-counter and pre- It enables a medical store to take orders sales engine of a pharma com- sales and stocks, go to the STARTUPS IN B2B RETAIL
scription medicines. Days later, Reliance and receive payments online. Medicines pany will pitch to doctors to prescribe its nearest phone booth and call HQ. “The The coronavirus pandemic has strengthened the move
Retail announced acquisition of online can be delivered home or picked up. “This brand. But it has no way of ensuring the information would go into a Lotus 1-2-3 towards digital, and has turned the spotlight on
pharmacy Netmeds. At the same time, two is especially useful in a post-covid world prescribed brand is available with the local spreadsheet (before the advent of Excel). startups that are taking technology to kirana stores.
other leading e-pharmacies, Pharmeasy where people are reluctant to step into retailer. That’s because distributors work There was no internet or mobile phone,
56.4 Total funding ($ mn)
and Medlife, decided to merge. crowded shops,” says Satyamurthy. with multiple brands competing with one but that spreadsheet became invaluable to
But the action is not limited to online another. When a distributor’s salesman us because over time we were able to pre-
players. More than 85% of pharma sales in BRIDGING GAPS goes to a local retailer, he’s not looking for dict demand at each retail outlet. I experi-
India happen in over 850,000 pharmacy Apart from the front end, digitization a particular brand. enced the power of information and ana-
stores that operate cheek by jowl with solves multiple issues in the supply chain. Here the Tarnea system can give pharma lytics first hand,” recalls Satyamurthy. 25.4
FMCG and grocery kirana stores. They are Pharma retail is highly fragmented in companies alerts on pincodes where stock Today he’s bringing that to another sec- 24
waking up to the reality that either they go India, with over 80,000 distributors apart has run out. It’s up to the pharma company tor with unique needs. And the post-covid
digital too or get disrupted. from the scattering of small medical stores. to take corrective action. “In both cases of consolidation of e-pharmacies has made it 8.9
5.7
“One of the fundamental changes we’re This wasn’t always the case. Time was expiry and stockout, we’re not upsetting an opportune time for Tarnea’s expansion.
seeing is that small and medium pharma when a pharma major would have a rigor- the structure of the industry as it exists. But ShopX Jumbotail Yellow SnapBizz Shopmatic
retailers are becoming more discerning ous process of testing and interviewing to we’re still able to provide information to Sumit Chakraberty is a consulting Messenger CloudTech
Source: Crunchbase
about using data for customer relation- onboard a distributor. solve the problems for all constituents in editor with Mint. Write to him at
SARVESH KUMAR SHARMA/MINT
ships because they perceive a threat from Then the bean counters at these compa- the supply chain,” says Satyamurthy. chakraberty@gmail.com

For more stories on how startups

PROBLEM, More than 85% of pharma sales in India Bengaluru-based Tarnea is automat- What Tarnea tries to do with digitization are changing the way we work
happen in 850,000 small medical ing the last mile of pharma distribu- and information flow is bring value to all and the way we live, follow our
CHALLENGE weekly podcast Startup Inc
shops. They have realized they either tion by helping medical stores take stakeholders, including retailers, distrib-
& SOLUTION have to they go digital or get disrupted. orders and receive payments online. utors and manufacturers.
hosted by Shalini Umachandran
on htsmartcast.com

Startups, MNCs are rushing to collect data from ‘kirana’ stores

Sumit Chakraberty extended by distributors. But this tures, which has provided seed
is mostly ad hoc, based on rela- investment to Dropshop.

D
espite the rise of ecom- tionships, without the tech and
Retail is a multi-layered merce and hypermarkets, data for underwriting the credit. AHEAD OF THE TIMES
business that has always been kirana stores account for Thus a platform like Dropshop, One of the first to attempt this was
90% of FMCG retail sales in India. where transactions are recorded German multinational SAP which
done in an ad hoc manner. Their last-mile connection to con- digitally, creates an alternative started Project Ganges a decade
Asutosh Upadhyay sumers became even more pro- channel for rating and credit from ago. It deployed PoS (point of sale)
HEAD OF PROGRAMS, AXILOR VENTURES nounced amid lockdowns. They NBFCs and banks, which could machines in kirana stores and
remain pivotal to India’s estimated open up more favourable terms hooked them to SAP Hana on the
$100 billion FMCG retail market. for many small retailers. “We are cloud for data crunching and net-
If you can’t beat them, join able to give credit to 90% of our working with brands and distribu-
them, goes the old adage. Amazon, retailers just by leveraging the tors. But this pilot in Bengaluru
Flipkart and Reliance are busy fig- data we have built on them,” says fizzled out after a few years.
uring out online-to-offline models Dhawan. Wider access to credit “We were taking on too many
to hook up with kirana stores for helps brands as well, because it’s problems without the ecosystem
last-mile connectivity. But for the financing that often deter- being ready for it,” recalls Neelak-
Multiple revenue streams many retailers, that would be like mines what’s put on the shelf. antan Padmanabhan from the SAP
become possible once you making a pact with the devil. Ganges team, who is now with
This is where smaller startups GREATER VISIBILITY sales tech startup Lucep. Padman-
onboard enough retailers. offer an alternative route to digiti- Retailers also get more choice. abhan saw startups tackle differ-
PG Ponnapa zation for mom-and-pop stores Just over a year into its startup ent parts of this value chain over
ANGEL INVESTOR AND MENTOR, TARNEA that ostensibly gives them more journey, Dropshop serves 11 the years after leaving SAP Labs in
control over their destinies. Ben- brands, six of which are among the Smaller startups like Dropshop, led by (from left) Rohit Fernandes, Ravi Teja and Udit Dhawan, offer an 2015. But the closest to the plat-
galuru-based Dropshop provides top 10 FMCG brands in the coun- alternative route to digitization for mom-and-pop stores, giving proprietors more control over their destinies. form approach of SAP Ganges,
a platform for retailers to order try and five are smaller, challenger according to him, is that of Reli-
their supplies. For FMCG manu- brands, says Dhawan. “If you take on the retail side. “Even in urban identify the right retailers where in supply chain management from ance’s “new commerce” initiative
facturers, it’s an online distribu- mosquito repellents, you can get areas like Bengaluru, brands are their products will have takers and Nottingham University and ran a which aims to digitize kirana
tion platform that allows them to everything from Goodknight to not reaching many retailers in not waste time in areas where logistics startup called Shippr. stores with PoS machines.
serve more nooks and corners. patches for kids from Dropshop,” time. We bring real-time visibility demand is less. The data also helps The problem Dropshop is tack- The ecosystem is ripe for it with
The potential transformation says Preethi Shetty from Arun on what’s selling where and what’s a retailer decide whether to put a ling is multi-pronged, with ele- Reliance Jio’s huge investments to
We are able to give credit to from a platform such as this, for Cosmetics in Kalyan Nagar, Ben- not selling,” says Dhawan. new product on the shelf. ments of logistics, demand-supply boost internet usage and the push
90% of our retailers just by both manufacturers and retailers, galuru, which now gets almost all For brands, it not only means Predicting consumption based linkage and credit, where data can from GST and covid for retailers to
is from the data that’s captured, its supplies from Dropshop. reaching more retailers and on orders creates other possibili- have an impact on each of the ele- go digital. Now, with biggies like
leveraging the data we have. explains Udit Dhawan, co-founder At the other end of this chain increasing sales, but also insights ties as well. “We have been experi- ments. It’s a multi-layered busi- Reliance and upstarts like Drop-
Udit Dhawan and CEO of Dropshop, who was are the brands that operate on their products and consumers menting with some outlets to ness that has been done in an ad shop going after retailers, you can
CEO AND CO-FOUNDER, DROPSHOP earlier a research scientist for Intel through multiple distributors and in a range of micro-markets. This auto-replenish their stock,” says hoc manner historically,” points expect your neighbourhood kir-
Labs. Retailers grapple with cash wholesalers and have little visibil- is vital especially for emerging Dropshop co-founder Rohit Fer- out Asutosh Upadhyay, invest- ana store to start resembling a
flow and depend on credit ity on the demand and inventory brands for whom it’s crucial to nandes, who has a master’s degree ment professional at Axilor Ven- hypermarket.
10 MONDAY, 31 AUGUST 2020
NEW DELHI PERSONAL FINANCE

As variable part of salary rises, POWER

POINT
manage your cash flows better TA R U N B I R A N I

Respond to this column at

mintmoney@livemint.com

FOUR WAYS TO DEAL

Make sure your non-discretionary expenses such as EMIs are taken care of by the fixed part of your pay
ISTOCK
WITH LAGGARDS IN
Renu Yadav
renu.yadav@livemint.com
increased to reduce the EMIs.
Generally, we don’t recommend
it, as an increase in tenure leads to
YOUR PORTFOLIO

A C
s companies struggle a rise in the overall cost of the loan. Five financial learing laggards from your portfolio is like cleaning your
mistakes you
to survive and reduce But if you are finding it difficult to should avoid messy, unorganized closet. All those spare clothes and
costs amid the cov- service the current EMIs, this can accessories that have been lying there taking up space
bit.ly/32v2QDC
id-19 crisis, a lot of be an option,” said Dhawan. need to go, to make room for the new. It looks like a daunting task,
them are changing but all you need is the intent and a plan to get started.
the salary structures of employees MIND RETIREMENT KITTY In times of a bull market, the opportunities to make quick gains
by increasing the variable compo- Some companies are giving incre- often entice even long-term investors, causing them to stray away
nent linked to performance. This ments in the variable component from the basic principles of investing. Herd mentality and greed
may result in cost savings for the of the salary. However, this will kicks in when they pick stocks for short-term gain, without ana-
companies, but may increase not translate into any increase in lyzing its growth prospects. No sooner do the market sentiment
uncertainty in terms of cash flow the contribution towards the turn, these investors find themselves holding penny stocks with
for the employees. Employees’ Provident Fund (EPF) a minuscule probability of gains. Often investors tend to hold on
According to the 2020 Work- as the basic pay will remain the to these in the hope of an upturn. However, after a while, these
force and Increment Trends sur- same. This may affect your target stocks harm the portfolio. As per the Buffalo Theory, a herd of
vey conducted by Deloitte Touche corpus for retirement. buffalo can only move as fast as the slowest buffalo. The same is
Tohmatsu India, which took into “Retirement planning calcula- true for your portfolio, the laggards can slow down its growth.
account 350 companies across 25 tions should be looked into again. There are four ways to deal with laggards in your portfolio.
sub-sectors, around 24% of the Though the statutory contribu- Cyclical patterns: As investors, we tend to forget that mar-
companies said they are planning tions to retirement funds may kets are cyclical in nature. Recognizing these cycles for every
to change their pay mix, tilting it you may get. “We have seen that Generally, variable component non-discretionary expenses have gone down in case of salary asset class requires an in-depth analysis and understanding of the
more towards variable pay. people are able to reasonably pre- is paid quarterly, half-yearly or should not exceed the fixed por- reduction by way of increasing the different phases of the market. Consider the comparison of
At present, the variable compo- dict the amount of variable they annually. This means that this tion of the salary. If the fixed com- variable component, it can be equity versus debt market over the past decade, debt has been
nent accounts for around 15% of are likely to get depending on how portion cannot be used for recur- ponent is not enough for all non- made up by ensuring that addi- outperforming equity.Take IDFC Nifty Fund which has provided
employees’ salaries across various much they have received in the ring deposits or investments such discretionary expenses, including tional investment is continued in 8.06% returns over a decade, while IDFC Government Securities
levels but this percentage is likely past,” said Vishal as systematic invest- EMIs, a relook at planning is other voluntary retirement prod- Fund - Investment Plan has returned an approximate of 10.20%
to go up, said experts. “We expect Dhawan, founder, Plan your ment plans (SIPs) of needed,” said Renu Maheshwari, ucts such as National Pension Sys- over the same decade. Most investors would look at these past
this to gradually trend up to 20% Plan Ahead Wealth finances better mutual funds. CEO and principal advisor at Finz- tem and Public Provident Fund,” 10-year results and consider their equity investments as laggards.
of the pay,” said Anandorup Advisors. For 2020 as the trend of “Investors can park scholarz Wealth Managers LLP. said Maheshwari. But considering a cyclical asset class performance with a long-
Ghose, partner, Deloitte India. and 2021, people the variable the variable compo- Ensure that you are not funding “Whenever there is extra cash term view, equities are bound to perform as there is no single
High variable component may have conservative nent in a debt fund your discretionary expenses at the flow, one can contribute it asset class that has remained a constant winner or loser. Insight
component being
make it difficult to manage cash estimates, he added. and opt for a system- cost of non-discretionary ones. towards retirement savings to into cyclical performance of each asset class can save you from
flows as it could vary depending However, some higher in salaries atic transfer plan to Check interest rates you are pay- bridge for the gap,” said Dhawan. booking your losses at “bottom-out”, just before a rise.
on the performance of the busi- planners consider is here to stay invest regularly,” said ing on your loans. If it’s higher Experts believe that the trend Emotional investments: Investors often prefer choosing
nesses and individual employees. only the fixed part of Dhawan. than the market rate, get it of the variable component being stocks or assets that they are familiar with. These are usually
“In some years, cash flows may the salary when Sunder advises reduced or transfer the loan bal- higher in salaries is here to stay. So investments recommended by friends and family or the ones
take a hit if the company does not drawing up a financial plan. “This that this part be used for upfront ance to other bank. The last option plan your finances better and take keenly followed due to past perform-
meet targets, whereas in other makes the overall plan more con- expenses such as education costs, is restructuring the loan if you are on liabilities based on your fixed The safest way ances. Some may hold assets that have
areas, employees may earn signifi- servative, but the plan will hold vacations or for reducing liabili- struggling to pay EMIs. “Connect pay. Have an emergency corpus to ensure your sentimental value. But past perform-
cantly more if the company per- good even if the variable part does ties. “Otherwise, the money can be with your lender to get the tenure and insurance in place.
forms better,” said Ghose. not come in. When it does, it’s a invested in line with the client’s portfolio is in a ance is not a great yardstick for future
returns. Unfortunately, investors end
We tell you what you can do to positive outcome, which asset allocation,” she added. good shape is up holding on to such investments due
organize your cash flows, enhances overall wealth. But even For more stories about how to manage your to commit to to deep emotional connect in the hope
expenses and investments. if it does not come, we have FIXED EXPENSES FIRST money life, listen to the podcast Why Not Mint regular reviews that some day it will reap gains. Cutting
planned for the worst,” said Priya When the variable component Money with Mint’s Personal Finance team on out sentiment is the key. As Warren
ANALYSE CASH FLOWS Sunder, director and co-founder, goes up, use your fixed pay to bud- htsmartcast.com. Invest smartly to make every Buffett says, “If you cannot control
The first step is to estimate the PeakAlpha Investments, a finan- get for your fixed expenses such as penny count. your emotions, you cannot control your money.”
amount of variable component cial planning firm. EMIs. “Ideally, the sum of all the Asset trap: Once you have done your due diligence in ascer-
taining the laggards in your portfolio and have weeded them out,
your decision to invest in new instruments must be independent
of what you had. A disconnect between buy and sell will ensure
you do not fall into an underperforming asset class trap and
return to where you began in the first place.

Maharashtra stamp duty cut a shot in the arm for real estate sector For instance, if you sold a real estate holding that has been
dragging your portfolio down as the sector has been stagnant,
reinvesting in another real estate holding would be futile consid-
ISTOCK ering the future seems dim from an investment point of view.
Renu Yadav the fact that many developers property as per government), revive the demand in the sec- ferent view. “The property Rebalancing: Booking profits in your top-performing assets
renu.yadav@livemint.com have rolled out or planning to whichever is higher. tor. Australia announced a registration in Mumbai Metro- to reinvest it in laggards is a good strategy to sell high and buy
roll out festive discounts, the So, for a person buying a house subsidy of $25,000. politan Region (MMR) and low, considering you have done your homework on the assets you

T
o revive demand in the move is likely to incentivise house worth ₹50 lakh in Mum- Similarly, the UK announced Pune has shrunk around 30% hold. It makes sense to hold laggards that have the probability to
realty sector, the Maha- some of the fence-sitters to bai, a 3% reduction in stamp an eight-month stamp duty of their pre-covid-19 levels. grow in the future and sell those with an uncertain future. Con-
rashtra government last buy houses. “The reduction is duty will result in a saving of waiver. Therefore, the deci- The government needed to sider opportunity costs while rebalancing.
week reduced the stamp duty technically like an instant flat ₹1.5 lakh, while for a property sion to reduce stamp duty by bring in certain incentives to Acknowledging that some of your investment decisions were
on property registration by 3% discount on the cost of the worth ₹1 crore, the savings will Maharashtra government is a revive the demand. But stamp not in your best interest, is the first step to working around lag-
from 1 September to 31 Decem- property. A 2-3% reduction is be around ₹3 lakh. move in the right direction,” duty reduction alone may not gards. Rebalancing helps keep your portfolio on track ensuring
ber 2020, and by 2% from Jan- significant if we consider the Given the fact that interest said Tanuj Shori, founder, be enough given the grim situ- you focus on good quality stocks of effectively managed organiza-
uary 2021 to March 2021. Ear- usual ticket size of a property rates are at almost a decade SquareYards, a tech-led real ation around jobs and incre- tions. The safest way to ensure your portfolio is delivering con-
lier, stamp duty charges were purchase in a hyper-expensive low, reduction in stamp duty estate brokerage platform. ments. Maybe, a higher tax sistent risk-adjusted returns is to commit to regular reviews, and
5% in key cities such as Mum- city such as Mumbai,” said paid to registrar. It is a fixed will further bring down the However, Pankaj Kapoor, exemption against the interest periodical exercise of risk profiling. Diversifying your invest-
bai, Pune, Nagpur and Nashik, Anuj Puri, chairman, Anarock percentage levy and is charged cost for homebuyers. managing director, Liases payment coupled with dis- ments based on geographies, asset classes and fund sizes can also
while 6% in others. Property Consultants. on the transaction value or cir- “Globally, governments are Foras, a Mumbai-based real counts from developers may help you make the most of the cyclical nature of the market.
According to experts, given Stamp duty is a state levy cle rate (minimum price of a coming out with incentives to estate research firm, has a dif- attract buyers,” said Kapoor. Tarun Birani is founder and CEO, TBNG Capital Advisers

Best home loan rates Advance tax isn’t applicable to senior citizens
A home loan is probably the biggest loan that one takes. Not only in terms of the loan

pays can be double of what was borrowed. But a home loan is among the cheapest loans
with no income from business or profession
available, and usually it is the only way a person can buy a house. A home loan is called
a ‘good’ loan because it helps you acquire a tangible asset that can appreciate over the ISTOCK
long term. It makes sense to buy a house if you plan to live in it. Given the fact that the Parizad Sirwalla The tenant, according to the
ASK MINT
construction of several housing projects in India continues to be delayed or stalled by m tax status, may deduct tax at
I had gifted some shares to TA X AT I O N source (TDS) on rent paid.
look at the lowest home loan interest rates of some leading banks. my husband five years ago. Payment of advance tax will
Loan amount = 30 lakh. Tenure = 20 years If he wants to sell them computation of LTCG shall be depend on various factors like
now, how will the gains be the highest listed price of the the quantum of overall income
Lender Interest EMI ( ) Processing fee (excluding taxes) taxed and how much? shares as on 31 January 2018 (including this income) and tax
rate (%) —Priyanka Aditi (in place of the actual cost of liability, TDS withheld, age of
Union Bank of India 6.70-7.15 22,722-23,530 0.50% of loan (maximum ₹15,000) + tax as applicable We have assumed that the purchase as incurred by you), the tax payer, among others .
shares are listed on a recog- provided the listed price as on Advance tax is applicable if
Bank of India 6.85-8.35 22,990-25,751 Up to 0.25% of loan (minimum ₹1,500, maximum ₹20,000) nized stock exchange in India. 31 January 2018 is less than the your tax liability (net of taxes
Central Bank of India 6.85-9.05 22,990-27,088 Up to 0.50% of loan (maximum ₹20,000) The gains from the shares sale value. However, where the deducted or collected at
gifted by you shall be clubbed sale value is less than the listed source) on your total income
Punjab & Sind Bank 6.90-7.25 23,079-23,711 Full waiver of processing charges during festival campaign period
as taxable income in your price as on 31 January 2018, (including income from prop-
Canara Bank 6.90-9.40 23,079-27,768 0.50% of loan (minimum ₹1,500, maximum ₹10,000) hands and not your husband’s. the cost shall be the higher of erty) for FY21 is ₹10,000 or
HDFC Bank 6.95-7.85 23,169-24,814 For salaried and self-employed: Up to 0.50% of loan or ₹3,000 However, income generated the sale value or actual cost. more. Such tax is to be paid in
from any investments made by A roll-over exemption can advance, as per the four pre-
ICICI Bank 6.95-8.05 23,169-25,187 1-2% of loan or ₹1,500 (₹2,000 for Mumbai, Delhi, Bengaluru) your husband from capital be sought by you against this hands under the head “income scribed instalments. Advance
gains or dividends from such LTCG under Section 54F of from house property”. A stan- tax is not applicable for a resi-
Nainital Bank 7-7.25 23,259-23,711 0.50% of loan (minimum ₹500, maximum ₹10,000) + service tax shares need not be clubbed the Income-tax Act by pur- dard deduction of 30% of the dent senior citizen who does
with your taxable income and chasing or constructing a resi- annual rental value (gross rent not derive any income from
Punjab National Bank 7-7.60 23,259-24,352 Up to 0.35% of loan (minimum ₹2,500, maximum ₹15,000)
would be taxable in his hands. dential house property in received less actual municipal business or profession.
State Bank of India 7-7.85 23,259-24,814 Up to 0.50% of loan + applicable GST As the shares were held by India, subject to the prescribed taxes paid), actual municipal Any delay or deferment in
Bank of Baroda 7-8.85 23,259-26,703 Up to 0.50% of loan (minimum ₹8,500, maximum ₹25,000) both of you for more than 12 conditions and timelines. taxes paid and interest on loan payment of advance tax will
months from the date of allot- taken for acquiring the prop- have interest implications and
Indian Bank 7-9 23,259-26,992 As applicable ment, the gains would be taxa- I started receiving rental erty can be set off from the the same would need to be
Indian Overseas Bank 7.05-7.30 23,349-23,802 0.50% (maximum ₹20,000) for loans up to ₹75 lakh ble as long-term capital gains income in June 2020. gross rental income to arrive at paid along with self-assess-
(LTCG). Currently, LTCG on Should I pay advance tax on the taxable income. In case you ment tax payable by you, prior
Bank of Maharashtra 7.05-8.45 23,349-25,940 Up to 0.25% of loan (maximum ₹25,000) the sale of shares listed in India this income, or should I pay have loss from any other prop- to filing your ITR for FY21.
UCO Bank 7.15-10.45 23,530-29,851 0.50% of loan (minimum ₹1,500, maximum ₹15,000) is taxable to the extent it at the time of filing my erty owned by you or any Parizad Sirwalla is partner
exceeds ₹1 lakh in a given tax income tax return (ITR)? brought forward property and head, global mobility servi-
Data taken from banks' website as on 27 August 2020. EMI range is indicative and calculated on the basis of interest rate range; it may include other charges year at 10% (plus applicable —Sunil Joseph losses, the same can be set off ces, tax, KPMG in India. Que-
surcharge and cess). Rental income from a house against this income, within ries and views at mint-
PARAS JAIN/MINT Source: MyMoneyMantra.com
The cost for the purpose of property will be taxable in your prescribed limits. money@livemint.com
 NEWS MONDAY, 31 AUGUST 2020
NEW DELHI 11

‘Trade is vital to help recovery C A P I TA L

C A LC U LU S

from covid-induced recession’

A N I L PA D M A N A B H A N

Read Anil Padmanabhan’s earlier columns at

livemint.com/capitalcalculus

Elizabeth Roche &

Asit Ranjan Mishra
are these different views—the world is get- and regional agreements is because the play through the recovery. We have seen
ting more polarized in some senses. But WTO has fallen a bit behind, it is not up to around 90 countries impose export
there are also common views, things that speed. When I talk of 21st century issues, restrictions on medical supplies and
THE IDEA OF ONE
NEW DELHI these countries are doing in common and I am talking about the digital economy. equipment. And we have seen an accelera-
I think the appropriate way to look at it is You have seen how the pandemic has just tion of the digital economy because of the NATION, ONE TAX
T
rade will play a critical role in what are those things that you can AFP pandemic. So the key issue is, what
helping the world recover from build on. I am talking in the con-
the recession induced by the text of the WTO now because you
coronavirus pandemic, says need to be careful to separate other
are the rules for this new period,
how do we agree rules to govern
trade—not just for the next one or
IS UNDER SIEGE
Nigeria’s Ngozi Okonjo-Iweala, political issues from WTO issues. If two years but for the long-term.

L
one of the eight candidates competing to you focus on WTO issues, there are Trade will be important to help the ast week the country was witness to one the most acrimoni-
be the next director-general (DG) of the some areas where members have global recovery from the pandem- ous Goods and Services Tax (GST) Council meeting ever.
World Trade Organization (WTO). Okon- seemingly difficult disagreements ic-induced recession. WTO rules Unfortunately, the outcome, far worse than anticipated, is
jo-Iweala, a former finance and foreign but they also work together. should continue to guarantee a sta- such that the idea of ‘One Nation, One Tax’ is at risk.
minister in her country, says WTO rules Take for example fisheries sub- ble, predictable and fair multilat- It is still early to estimate the costs. But at the least, it will for-
should continue to guarantee a stable, pre- sidies’s negotiations that are going eral trading system that can help Asteroid over sake the trust and goodwill—without which it would have been
22 and 49
dictable and fair multilateral trading sys- on now. It is a multilateral negotia- world economies survive and metres in
almost impossible to undertake such an ambitious indirect tax
tem that can help world economies sur- tion. India is there, China is there, thrive. diameter to reform—so carefully cultivated through mutual give-and-take
vive and thrive. In her view, the WTO’s the US is there. So, I think it is a Many developing nations feel pass by Earth between members of the Council ever since GST was launched
consensus-driven approach has worked in good beginning to think that it can

‘
the past, but now, lack of trust among all come together around one table WTO guidelines must continue
members seems to have become a stum- to discuss the sustainability of our to guarantee a stable and fair
bling block. In an interview before the sec- oceans, as well as at the same time,
ond phase of the selection process ends on help small-scale fisheries. So, this multilateral trading system that
‘
existing issues, such as the
Doha Development Agenda,
need to be resolved first before
taking up new issues like
e-commerce. Has that
on September
1: NASA
bit.ly/2QDIbH
S
on 1 July 2017.
Without political intervention at the highest level, one of
India’s boldest economic reform experiments—which for the
first time economically unified the country—is likely to go
kaput. It will be a disruption the economy in its current state will
7 September, Okonjo-Iweala, one of the is a good thing to deliver.
three women candi- If you look at
can help world economies thrive. approach failed, do we need to
have a broader mind to accom-
not withstand.
Worse, it is also jeopardizing the idea of “cooperative federal-
dates in the fray, speaks China and the NGOZI OKONJO-IWEALA modate emerging issues? ism” championed by Prime Minister Narendra Modi; ironically
about her priorities.
Edited excerpts:
mint US, and the issue Former finance and foreign minister, Nigeria
of the dispute
Let’s separate these into two
sets. First, many developing mem-
at a time when the nation, under external (unwarranted military
aggression by China) and internal threats (from the covid-19
You are one of the CONVERSATION settlement system that accelerated this, there was already a trend ber countries are feeling let down by the pandemic), needs to stick together.
candidates from NGOZI OKONJO-IWEALA has remained paralysed towards this. But covid-19 has accelerated non-completion of the Doha Develop- Tragically, things have come to this pass exactly in the week
Africa. Are you confi- for some time, one thing this and now everything is done digitally. ment Agenda. There are some specific of the first death anniversary of Arun Jaitley—the man who is
dent of getting selected for the job? is very clear – the US wants it, China wants There is e-commerce. But as we speak, the mandates like public stockholding for rightly credited for seeing the complex GST experiment home.
I think I have the wind behind my back. it, India wants it. Different members want e-commerce negotiations are ongoing and food security which could be made perma- Several finance ministers had earlier tried to roll out GST but
I have had constructive conversations all it reformed in different ways, but one they are not multilateral but plurilateral— nent with greater transparency around it. failed, precisely because they lacked his ability of carrying peo-
around. Of course, one can never be sure commonality is they want it, they think it’s which means not every member is partici- So, we can work on some of those. The ple together. Jaitley knew the art of bargaining: you have to give
till the last minute. It is with humility that important. pating in those meetings. So, that means issue of digital economy is somewhat dif- some to get some.
I say this. The WTO is facing a lot of chal- So, if you start building from these com- the WTO has fallen behind. ferent. There are different reasons why A principle that is sorely required to be embraced by every-
lenges and I think members are looking monalities that bridges some of the gaps So, what I am advocating is that the some members have not embraced it yet. one at the moment. To begin with the bureaucrats (with all due
for people capable of taking on those chal- and get agreement around things that can WTO needs to embrace these new issues They have a point. India talks a lot about respect to them) have to be jettisoned from the conversation.
lenges and helping members to solve bring members together. So, I would build because if it doesn’t, you have bilateral digital divide and it is a very fair point. Their rule book approach is precisely the reason we have
them. from that and, once you show one success, agreements of countries or regional agree- There are many developing countries that missed the wood for the trees. It is beyond them to understand
What about conversations with you can build on that because it builds ments. The other is the green economy. feel “why I am participating in this negoti- that the principles of federalism outweigh the need to be right
Indian government representatives? confidence among members. The WTO also needs to look at the trade ation as I don’t have the basic infrastruc- by the rules in such a once-in-a-century situation.
Yes, I have had a conversation with the There is a fear that there may not be rules that can support sustainability. And ture, I don’t have regulatory framework, I The core of the problem is the GST dues owed to states—
Indian ambassador to the WTO which was consensus on any one candidate and that is why the fisheries negotiations is may go there and make commitments and computed on the basis of the 14% annual growth that was guar-
constructive and I have also had a conver- WTO may not see a DG anytime soon. exciting because it does support sustaina- later on I might not find it appropriate”. I anteed by the Union government
I don’t know what mem- bility and bio-diversity of our oceans but think we should assist them to bridge that Challenges ahead of inking the GST compact
MINT bers would decide or not we need more—the WTO needs to be cog- digital divide. If I were to be chosen as DG, before the GST (Jaitley had called it the price the Cen-
decide, but I hope there is nizant of the circular economy and the I will make it a point to embrace that issue.
an ability to bring consen- micro, medium and small enterprises elizabeth.r@livemint.com Council can only tre had to pay for GST). The matter
has been simmering and it was only
sus as soon as possible on a which are very important in India and be resolved by a time before matters came to a boil, as
DG because WTO needs elsewhere in the developing world. These strong political they did last week.
leadership of a DG. So, I am are what create most of the employment. leadership In addition, the covid-19 pandemic-
hopeful. And most of these are operated by women. induced lockdowns have caused eco-
Now, there is an appetite So, I think WTO rules need to be more nomic havoc—one of which is mani-
for reform and a recogni- inclusive of MSMEs as well as women. festing in a massive tax revenue shortfall, both for the central
tion that things need to Let me also speak about covid-19. I am and state governments. It was only natural that the FMs saddled
reform, to portray a posi- the World Health Organization envoy on with empty coffers and increasing demand for bailouts from
tive image because the covid (for accelerating availability of vac- various constituencies afflicted by the pandemic would be on
media is writing that it is cines, therapeutics and diagnostics) and a short leash.

‘
WTO rules need to be more
inclusive of women as well as
MSMEs, which create the most
‘ dysfunctional and that the African Union envoy on covid-19. And
WTO is not working. The trade rules that govern the availability of
WTO is too important. I am access to things like vaccines need to
passionate about how be looked at. So, this can be an
trade lifts millions from opportunity for WTO to actually
poverty. I have seen trade help solve a key problem by looking
Similarly, the Union government, which has had to step up
spending to protect lives, and now has to generate funds for an
economic stimulus, too, had its back to the wall.
The situation required calm political heads to be put together
to address the challenge at hand. Presume if the Union govern-
ment had come clean on the grim fiscal numbers before the
jobs in the developing world. do that. WTO has to under- at accessibility and affordability, for GST Council even while it assured members that it would not
pin that. So, I believe and countries to license the production of renege on its commitment, matters may not have precipitated.
sation with the minister of trade (Piyush hope that members will come to some drugs or things like vaccines under Instead it was left to the bureaucracy, who further compounded
Goyal) and it has been very constructive. conclusion. WTO rules while still protecting the message with their muddled solutions and claims.
India is a powerhouse in the WTO and Countries are now going in for intellectual property rights so that It could also be that such delicate negotiations cannot be con-
India is a powerhouse in the world. It is regional and bilateral trading pacts. research and innovation can continue. ducted without actual face time. Jaitley, as insiders often relate,
very active and, many times, it spearheads Does that make the WTO irrelevant? WTO has a lot to say about that but it had a stock solution to defuse an inclement situation—break for
or champions the causes of developing I think the WTO is pretty relevant has to be vocal and visible. I bring the tea, where he would engage in informal parleys. At present, the
countries. It is active in the policy space for because the multilateral trading system issues of public health and trade negotiation is being conducted through a video conversation
developing countries, especially the least that we all believe in is still very relevant, together. which precludes the personal touch.
developed countries, according them spe- notwithstanding all the bilateral and What is the future of world trade and In short, the immediate task before the GST Council is three-
cial and differential treatment in order for regional agreements. The multilateral WTO given the covid-19 scenario? fold.
them to develop. India is a frequent user of trading system is a platform from which all There is an intersection between One, a medium-term desirable, it needs to fix the flawed GST
the dispute settlement mechanism of the members, all 164 countries can come public health and trade—the pan- architecture drowning under the weight of myriad rates.
WTO. It is active in the ongoing fisheries around for negotiations and they have a demic is here to stay and the Second, more immediate, it has to address the monumental
negotiations as well. So, for that reason, it’s dispute resolution mechanism to WTO has a vital role to challenge posed by the covid-19 pandemic-induced economic
very crucial to reckon with India and I which they can bring disputes. This is meltdown on GST collections. If the economy is projected to
have been very pleased with the con- unique and we are going to have the contract 5-10% in the full year, imagine how the tax revenues
structive conversations I have had. multilateral system because trade is are performing.
The US and China have major disa- an essential part of the 21st century. Third, related to the above, the issue involving states’ dues
greements on trade. They have other So, WTO will continue to be rele- needs to be resolved amicably. Especially before it reaches the
disagreements as well. How will you vant as a rules-based organization judicial clutches.
get the two nations to back you? but the WTO needs to move up to All three challenges require a strong political leadership and
People often talk of the difficult rela- take cognisance of 21st century resolve. Seemingly insurmountable. But then politics is the art
tions between the US and China or differ- issues very quickly in order not to fall of the impossible.
ent views among members. I take a slightly too behind. I think that one of the rea- Anil Padmanabhan is managing editor of Mint and writes
different approach. And I know that there sons why you are seeing so many bilateral every week on the intersection of politics and economics.
Comments are welcome at anil.p@livemint.com
REUTERS

We’re at home, but this mall stock is in demand Centre charts borrowing plans for states
FROM PAGE 1 horizons. In the near term, there rentals being a significant cost of picked up in the past five FROM PAGE 1 the principal will be paid back
is expected to be considerable sales, most brands and tenants months. “The pandemic has pro- by extending the levy of GST
says Parikshit D. Kandpal, an pain. Mall owners have a battle will look to variabilize this cost vided motivation for consumers India (RBI) will not be counted cess beyond 2022, but states
analyst at HDFC Securities Ltd. on their hands on two fronts. On head to manage their P&L,” says to engage in online shopping, as state debt for any norm to be will have to service the debt
In Phoenix’s case, its prime the one hand, the fear of the Mathur. “As long as there is a cap (with) safety and hygiene being a prescribed by the Finance from their own resources.
property in central Mumbai is a virus is keeping shoppers away; on the profitability of retailers, non-negotiable requirement,” a Commission. This would be States will be granted higher
clear draw. While malls, in gen- on the other, a rentals will remain note authored by Harsha Raz- over and above any other bor- borrowing permission to avail
eral, will face challenges, those drop in income While malls will under pressure,” dan, partner and head, con- rowing ceiling notified by the of this facility. However, only
present in certain key locations levels and the face challenges, says Puri. sumer markets and retail at Centre. The total debt states the amount of revenue shortfall
and with a proven proposition increased uncer- those in certain At its June KPMG in India said. can collectively raise under that can be attributed to the tax
are expected to do better. tainty is resulting key locations and quarter earnings The meaningful correction this option is ₹97,000 crore, reform will be excluded from
“Malls with quality real estate, a in a drop in discre- announcement, of over 30% in the Phoenix Mills which, according to the cen- The offer of subsidy is meant to pacify states arguing that their Finance Commission calcula-
with a proven
strong traffic base, consumer tionary spending. multiplex firm stock suggests investors are still tral government, is the state borrowing cost would be higher than that of the Centre. PTI tions. The Centre said the Con-
experience and upkeep orien- As a result, mall proposition are Inox Leisure Ltd wary and are not convinced GST revenue shortfall, that stitution as well as the preamble
tation will be at an advantage,” rentals have prac- likely to do better said that once about the expected post-covid can be attributed to the 2017 government securities yield, that their borrowing cost to the law governing GST com-
says BCG’s Mathur. And the tically evaporated operations start, it consumption boom; the stock tax reform. and in the event of the cost would be higher than that of pensation had made provisions
fundraising will help fund cash and the pace of is looking to sale by the company’s promot- Under this scheme, funds being higher, the Centre will the Centre. for the Centre to make up only
burn for several quarters—cash recovery is slow. And given the negotiate a revenue share ers is a bit of an eyesore, too. will flow to states every two bear the margin between gov- Under the second option, for states’ revenue gap from
burn was estimated at ₹65 current financial situation of model instead of a fixed rent. But for long-term investors, months the same way GST ernment securities and the states can collectively borrow GST rollout. However, the
crore in the June quarter. retailers, the component of fixed Also note that mall revenues this may well be an opportunity compensation was paid. average of state development upto ₹2.35 trillion from the operating provisions related to
But clearly, investments in rentals is expected to reduce were under pressure even before to lock into quality real estate at The Centre also informed loan yields up to 50 basis market, which also would calculating the compensation to
shares of mall companies aren’t with a shift towards revenue- the pandemic, with the increas- affordable prices. As Mark Twain the states that this was its points through a subsidy. cover the revenue shortfall due be paid did not make such a dis-
for the faint-hearted or for those sharing. “With profitability ing penetration of e-commerce famously said, “Buy land, they endeavour to keep the cost of The offer of subsidy is to the coronavirus pandemic. tinction and made states’ entire
with relatively short investment under pressure and real estate in the country. This trend has are not making it anymore.” borrowing at or close to the meant to pacify states arguing Under this arrangement, GST revenue shortfall payable.
12 MONDAY, 31 AUGUST 2020
NEW DELHI VIEWS

OUR VIEW MY VIEW | PARALLAX VIEW

SONU MEHTA/HT

Bengalis and the Maharashtrian

whose words warped their fate
A dispatch from the grand old city of Kolkata and why Bengalis should not pardon G.K. Gokhale

ously cannot think of a city that I would angered and quickly appeased has
prefer to die in. expanded over 34 years of Communist
How did I even get here? All Delhi- rule, and nine years of Mamata Banerjee
Kolkata flights have been stopped. deserves a book by itself. Page 2 of all
We went to Guwahati and took another Bangla newspapers feature seers—both
flight from there. Of the 200 people Hindu and Muslim—who guarantee
flying Delhi-Guwahati, at least 120 were solutions in 24 hours. All offer “bashi-
going to Kolkata. The people at Guwa- karan”—controlling a person, usually
hati airport were kind, and pointed us an unsatisfactory wife or unresponsive
SANDIPAN DEB to a special queue for those going to object of love. Salvation and peace of
is a former editor of ‘Financial Express’, and Kolkata. mind are available for all Bengalis, but
founder-editor of ‘Open’ and ‘Swarajya’ On the Guwahati-Kolkata flight, we only through spells and amulets placed
magazines were given a West Bengal government secretly under pillows.
form to fill up, where we had to give our My best friend in Kolkata is a private

This could yet be India’s

Kolkata addresses and cellphone num- tutor, whose observations of the Bengali
bers. These were to be deposited at middle class tell me more than any jar-

K
olkata. Why can’t any non-Ben- Kolkata airport. But we couldn’t find gonized sociologist could. How do you
gali pronounce it correctly? And I anyone there to give the form to. We answer this simple question that he
am not going to help you either. walked out with our luggage. Travel as often asks the parents of his students:

worst economic crisis But we Bengalis will look down on you

because you can’t get your tongue
around a simple three-syllable name. I
am sure most of you can do so with
usual. This is a ridiculous tomfoolery.
Other cities and other airports are
collecting details of every arriving pas-
senger. And the state governments are
Why are you so desperate to send your
child for undergrad studies outside
Bengal, but still vote for Mamata Baner-
jee? From him, I learn many things that
Vadodara and Thiruvanthanthapuram, following up. are a way of life in Kolkata. If you
however Anglicised and deracinated My mother lives in a middle-class haven’t ever heard of a three-wheeler
GDP for the past quarter is expected to mark a low point for an economy that could yet see you are. That’s only one of the many apartment building, which is, against all auto mafia and cartel, come to Kolkata
reasons Bengalis think of themselves as logic, located in one of the poshest part and try to reach Gariahat from Chetla.
its sharpest annual setback since 1947. We need well-focused interventions to avert that fate superior to other Indians. of the city. But it is also the only building What about the covid situation? It’s
The principal reason for that came in a two-kilometre radius that houses as good or bad as in any other Indian
from a Maharashtrian, Gopal Krishna Bengalis. The entire area, which used to metropolis, except that one hardly ever
Gokhale, who, perhaps in a fit of irra- house chiefs of British companies, and gets to know any authentic news from

O
ur editorial of 2 February on beyond 2021-22. By way of covid relief, India’s tionality, said, about a century ago: the Calcutta mansions of princely the media. In a state that has no thriving
this year’s Union budget, ‘The central bank has eased credit vastly, while the “What Bengal thinks today, all of India states, have been replaced by Amazon- private enterprise, all media, electronic
thinks tomorrow.” That really ruined carton houses. No balconies, and every or print, is dependent on government
big fiscal stimulus that could Centre has rolled out a big package aimed at things for us. We clutched our bolsters window has awesome grills. They have advertising for survival. So there’s no
have been’ had warned of addressing multiple pain points. These have and slept secure in the knowledge that made their money from scrap metal bad news; not allowed. If you feel
“unknowns” that could get in had some effect, clearly, though not nearly millions of other Indians, for all of and other residues of industrialization anxious, you may buy a Hanuman-
the way of India’s economy, enough, given the scale of the crisis. Efforts whom we had a dismissive name, would that actual industrialists did not pay blessed ring or consult Baba Sarfaraz
among them “a virulent virus” which “could go are now being made to extricate businesses be lining up at our door in the morning. attention to. Khan, who has already published his
But I digress. Kolkata. Due to a family Meanwhile, the Bengali life goes on. monthly itinerary.
viral across the world and warp trends”. This from a maze of curbs. Supply chains may be emergency, I have been staying here for People walk around without masks. The Gokhale should take the blame.
unknown has not just bared its spikes since able to restore some of their broken links. the last 20 days, which is the longest high point in many Bengali men’s lives He cannot be forgiven. But the only
then, it has flared into what could be our worst Both the availability of money and restoration stretch in 30 years. I have no roots. I is jostling and haggling over fish in the recourse seems to be a mass Bengali
economic crisis since 1947, one that threatens of production are crucial, no doubt. However, have no village or home town to go to, morning; the rest of the day is a steady takeover of Pune. And there lies the
the dream of lifting our multitudes out of pov- no real normalcy can be attained without like most of my friends, since that will downhill. This is a genetic trait that no problem—Pune doesn’t have fish
mean getting a visa for Bangladesh, and lockdown can suppress. The astrology markets where cultural and social
erty. Millions have been pushed into depriva- squashing corona risks, a process that could I’m not interested. I have spent only channels on TV, a Bengal speciality I exchanges can happen through the pre-
tion. This fiscal year could see the economy take an entire year even after a vaccine arrives. about one-eighth of my life in Kolkata, love to watch, are thriving. Babas are tence of haggling and pressing the fish’s
contract by anything from 3% to 10%, as current And then, there’s the gloom over our policy my teenage years in Bombay, and most solving complicated life issues and gullet to see if any blood is still oozing.
estimates range. Its first quarter might have lost response so far. Not only has it raised chances of my adult life in Delhi. I cannot call peddling rings and pendants with two- Punekars really have to get their act
about a fifth of last year’s April-to-June output. of a debt crisis ahead, its efficacy has been any of these places home. At best, I am a for-one offers. In fact, the speed with together. They need to get ready for
tourist; at worst, serving my time. I seri- which the Bengali pantheon of easily what Bengal thought yesterday.
The statistics ministry’s quarterly estimate of constrained by its over-emphasis on supply.
gross domestic product (GDP) is due out on Missing in action has been a stimulus shot that
Monday. This is a figure awaited keenly, for it would empower people with money and
shall serve as the Centre’s first official indicator jump-start demand.
of how grim the scenario is. As it would cover Lack of fiscal space has kept a lid on treasury
our lockdown period, it can be assumed to spending. Even with only modest rescue out-
mark the year’s lowest point. Hopes of a quick lays, the national deficit and debt burden could www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Chandigarh*, Pune* Tuesday, August 31, 2010 Vol.4 No.207 `3.00 32 PAGES
+ 8 PAGES MARKETING FEATURES

bounce-back, though, seem dismal. For one, overshoot their danger marks. Without a Biocon set to enter
CORPORATE:
new therapy segments >7

What has happened

PHARMA: Piramal promoters transfer
stake to save dividend tax >8

coronavirus is still not under control. The growth upturn, however, our prospects would EXCLUSIVE PARTNER
POLITICS: National Advisory Council a step
closer to food security law >3
MARK TO MARKET: Will the demographic
dividend lead to higher stock prices? >18

country’s count of daily cases is the world’s surely worsen. This makes it imperative for
SENSEX 18,032.11 Æ 33.70

Reliance turns
white knight,
NIFTY 5,415.45 Æ 6.75

DIRECT TAXES CODE

More questions, few

DOLLAR `46.92 Æ `0.02 EURO `59.55 æ `0.05 GOLD `18,930 Æ `20 OIL $76.10 æ $0.58

QUICK EDIT
Unlocking
to businesses? Lockdown
highest, and the blow dealt by covid-19 to the Centre to explore novel ways to fund a big buys EIH stake
B Y A VEEK D ATTA
M ANISH B ASU
·························
MUMBAI/KOLKATA

P
&

rithvi Raj Singh Oberoi,

chairman of EIH Ltd
answers for individuals
secrets
B lack money, like
cricket and politics,
is one subject on which
every Indian has an
opinion. The Bharatiya is lifted, but the demand
demand is likely to last long after the initial direct dose of stimulus. It could, for instance,
Janata Party’s L.K. Advani
—which runs India’s second has previously claimed
biggest hotel chain—an- The Bill brings down the linked incentives and the in-
THE DIRECT TAX MENU: 1 APRIL 2012 that there is around
nounced on Monday that he tax rate for companies, troduction of tax rates in the `25,000 trillion (around

doesn’t exist. What you are

and his family had sold 55.4 legislation to provide the gov- INDIVIDUAL half of India’s GDP) of
million shares, a 14.12% stake especially foreign firms, ernment with flexibility and
 Concessional rate for women withdrawn; rates fixed at such money—typically
in the company, to an invest- but for individuals the taxpayers a sense of stability
10% for R2-5 lakh
ill-gotten gains that are
ment arm of Reliance Indus- on rates. not declared—stashed
tries Ltd (RIL), for `1,021 implications are mixed “The attempt in the first 20% for R5-10 lakh abroad in countries with

shock. For another, both annual and quarterly pledge shares with the central bank for a mega
crore. draft of the code was to almost 30% above R10 lakh strict norms regarding
The move came six days after B Y S ANJIV S HANKARAN rewrite the entire Income-Tax  Deduction limit raised to R1.5 lakh secrecy of bank accounts.
Oberoi indicated at a press sanjiv.s@livemint.com Act of 1961,” said Dinesh Some of that money may
conference in Kolkata that his ························· Kanabar, deputy chief execu- R1 lakh deduction for provident fund, pension fund and any other
now be within reach,
son Vikram Oberoi and nephew NEW DELHI tive officer and chairman (tax) approved fund with India signing a deal

T
Arjun Oberoi, both joint man- he direct taxes code at audit and consulting firm R50,000 for tuition fees, life and health insurance premiums with Switzerland which

going to see is a bloodbath

aging directors of EIH, might (DTC) Bill introduced KPMG.  Rationalized capital gains tax will give the former
not work together after him. on Monday in the Lok “The approach followed in access to information
No tax on long-term capital gains
RIL arm Reliance Industries Sabha brings down tax rates the Bill today tabled before that wasn’t previously
Short-term capital gains tax at 5%, 10% and 15%

growth had been droopy anyway. These two loan. No less urgently, we must reverse a multi-
Investment and Holding Pvt. for companies, but does not Parliament is to simplify the accessible (see Page 10).
Ltd paid `184 a share, 22% clearly signal a similar move current law, rationalize it and  Dividend distribution tax on equity-linked mutual funds/life The logical denouement
higher than EIH’s closing price for individuals, with the scope deal with certain new concepts insurance policies at 5% of this deal should be
on Monday. of some tax exemptions for the  All assets above R1 crore to attract 1% wealth tax investigations similar to
The transaction, which won’t latter yet to be decided. TURN TO PAGE 3® the one where the US
lead to any change in manage- The Bill, to be made opera- Internal Revenue Service
ment control, gives P.R.S. tional from 1 April 2012, large- ALSO SEE CORPORATE
sought, and received,
Oberoi the financial strength to ly sticks to the revised draft  Minimum alternate tax (MAT) only on book profits in 2009, information on

among [micro, small and

thwart any takeover bid by cig- circulated in June, which dilut- > Decoding the Bill >P4
>Expert Views >P5&6  Foreign companies biggest gainers; to pay lower taxes 4,450 UBS customers who

factors suggest we might be staring at a GDP ple-year downtrend in capital formation, a

arette and consumer goods ed key provisions of the first evaded tax. But given the
Industry can look forward to an efficient  Transition plan to investment-linked incentives
maker ITC Ltd, which has draft introduced in August tax regime almost universal belief in
amassed a 14.98% stake in EIH. 2009.  IT companies discouraged from operating in SEZs India that at least some
Prudent rationalization of optimism
“We are happy to encourage The key features of Mon- Income-tax implications of the proposed  20% MAT on book profits of SEZ developers/units of those with Swiss bank
their (Reliance’s) investment,” day’s Bill are tighter norms for regime  For tax sops, SEZs to be operationalized by FY 14 accounts are politicians,
P.R.S. Oberoi said in a media international taxation, eventu- >Capital gains on jewellery, paintings and would that be hoping for
statement, while RIL said “it al replacement of profit-linked art to get indexation benefit >P6 too much?
has full faith in and would sup- incentives with investment- >SEZs get a breather until early 2014 >P6
port the management of EIH”.

setback worse than the 5.2% lost in 1979-80. decline that had foreshadowed our pre-covid
To be sure, ITC chairman

medium enterprises]. Do
Y.C. Deveshwar has main-
tained for the last 10 years that HEMANT MISHRA/MINT
his company would not make a
hostile bid to seize control of ONGC claims
EIH, and has stopped buying
shares from the market. Indian
takeover laws would have
pre-emptive
forced ITC to make an open of- rights to

Recovering a GDP loss of 5% would take growth slump. To enthuse private investment,
fer for at least 20% more if its
stake in EIH exceeded 15%.
ITC refused to comment on Cairn’s assets

we need stimulus? Yes!

the share sale by the Oberoi
family.
“ITC will not challenge the fi-
nancial muscle of RIL,” said
S tate-run Oil and Natural
Gas Corp. Ltd (ONGC)
seems to have finally decid-
Himani Singh, an analyst at the ed to exercise its “pre-emp-
Mumbai office of UK-based
BlackBerry tive rights” in the Vedanta-

growth of more than 5%, as the base would we need a reform agenda that broadly aims to
Elara Capital Plc. Cairn deal and has written
Spurred by Monday’s an- to the stock exchanges to
nouncement, EIH’s shares wins reprieve this effect.
In a letter to the Bombay
TURN TO PAGE 2® Stock Exchange and National

ALSO SEE A voiding an immediate

ban, BlackBerry maker
Research In Motion Ltd
Stock Exchange on Monday,
N.K. Sinha, ONGC’s compa-
ny secretary, wrote: “ONGC
> MARK TO MARKET: What the stake (RIM) finally agreed to give has, inter-alia, pre-emptive

have shrunk. Unless a revival is strong enough decentralize authority, grant market forces
acquisition means for Reliance group >P18 Indian security agencies ac- rights in relation to Cairn’s
cess to its messenger servic- participatory interest under
es, but it isn’t off the hook the various agreements with
yet as it still has to find a way the government of India and
to allow monitoring of its en- ONGC, and Cairn Energy
terprise servers. Plc and/or its affiliates re-
The development came a quire consent of ONGC, be-

to defy pre-covid drags on growth, just getting greater leeway, and let the economy allot
day before the deadline for
RIM to allow security agen-
cies full access to all its serv-
ices or face a ban.
The home ministry has
given RIM another 60 days to
open access to its BlackBerry
enterprise services. India
sides other governmental
approvals to consummate
the proposed transaction.”
Earlier this month, Vedan-
ta Resources Plc had an-
nounced its decision to en-
ter the oil business by pay-
ing up to $9.6 billion
P RON A B SE N
fears militant groups can use (around `44,930 crore to-
BlackBerry’s highly encrypt- day) for a majority stake in
ed services to plan or con- Cairn India Ltd, a subsidiary

back to 2019-20’s level of national income resources more efficiently. But first, let’s
duct terror attacks. >P2 of Cairn Energy. >P3

Mint is also available for R5.50 with Hindustan Times under a combo offer

could prove an arduous haul that stretches boost the purchasing power of people.

MY VIEW | MODERN TIMES

Ordinary people are a lot smarter than made out to be

only to suggest he was not claustrophobic. they are naive, and that the capitalism of the cinema and dim books, and that without vio- ment made confused and unreasonable
MANU JOSEPH Indians associate even a visit to Nasa as a sign news business is merely serving up a product lent cops the whole nation would collapse demands of them. Also, most third-rate
of intelligence, and intelligence in India that has wide acceptance. into barbaric anarchy. Yet, every time Indi- commercial films in all Indian languages
includes sanity. This is not true. People are smarter than ans were offered a high-quality service, they have failed miserably. The success of the few
News channels that have a reputation of those whose job it is to predict what people have respected and cared for it. Like the hits among them have been analysed poorly.
being more sophisticated and are watched want. The world is smarter than the media. Delhi Metro system, where Delhi behaves A commercial film succeeds not because of

I
hope young Indian celebrities who are by people who eat asparagus, were not above It may appear that most of the nation has with very different civic values than in the its lack of intelligence, but because of its
considering suicide will drop the idea the farce. On one, when Rhea promoted the been taken in by news Delhi outside the transit other qualities.
after watching the ongoing feeding frenzy idea that “Me-Too” allegations against him about Rajput, but that is tunnels. Even so, I accept that it is naive to be too
around the death of Sushant Singh Rajput. I may have pushed him off the brink, the because the garrulous News hysteria Also, it is India’s vast infatuated by the virtues of crowds. As this
do not have clinching arguments about why anchor was not comfortable with this angle make a disproportionate semi-literate masses that column has earlier argued, any idea that
those who wish to die must instead live, still and kept steering the conversation towards contribution to the noise. around Rajput’s have sustained electoral overrates human intelligence will fail. In the
I am on the side of life, even if life includes drugs. One has to marvel at handlers of the Ordinary people are far democracy, simply by ongoing media farce around Rajput’s death,
television news. “Me-Too” campaign. Several depressed men more rational and intelli-
death is based going out to vote during there is some complicity of a crowd of ordi-

is a journalist, and a novelist,

Over the past few weeks, some actors, pro-
fessional gossipers and alleged news chan-
have killed themselves after stating that false
allegations of sexual predation were the rea-
gent and even wiser than
they are made out to be.
on a false view the years when the elite
longed for “a benign dicta-
nary people. But even these large numbers
are a small part of the world. Even in these
most recently of ‘Miss Laila,
Armed And Dangerous’
nels have been trying to frame the actor’s
death as murder. They have unearthed black
son for their action. But a whole nation in
search of a “cause” for an actor’s death is
They are, of course, enter-
tained by the defamation of
of society’s tor”; and India’s masses, for
all their electoral flaws,
times, the most common attributes of the
sane are silence and invisibility.
magic, drugs, and even the role of his former somehow herded by a cosmic hand away a beautiful young woman. collective have constantly improved In any case, it is the sophisticates who
girlfriend, actor Rhea Chakraborty, whom from the fact that Rajput was a “Me-Too” But then, people have the politics. In fact, if it were taught others the power of ascribing spuri-
they accused of manipulating him in super- accused, and that he had claimed it was a capacity to be entertained intelligence not for the outsized influ- ous reasons to a suicide when they con-
natural and scientific ways. false allegation, and that such an allegation and simultaneously dis- ence of India’s middle class verted the deaths of farmers and a Dalit stu-
At first glance, it may appear that the Raj- against a suicidal man is deadlier than black card the news. over the media, the poor dent into political movements. The foolish-
put news cycle is further evidence that most magic or professional marginalization. The abstract fields of media, academics may have improved the quality of politicians ness of the Rajput news cycle that places
of the world is not very smart. After word got You may say it is futile to search for sense and art constantly make assumptions that even more. And it is the vast masses who qui- excessive importance on “the cause” of sui-
out that Chakraborty had said Rajput’s men- in most of what the world does. There seems the collective intelligence of humanity is etly bore the brunt of “demonetization” cide is no different from frequent claims that
tal illness included claustrophobia, some to be civilizational wisdom in the view of the very low. For example, we are told that Indi- without breaking into riots even when their Indian farmers could not have died of
people circulated images of him in the cock- mainstream modern world that this nonsen- ans don’t deserve swanky public utilities own money was denied to them for many depression. All too often, what is frivolous
pit of a plane, and of him in a space suit. Peo- sical cycle of news about Rajput has come because they are so poor they will deface or weeks. And, years later, when covid broke and wrong evolves out of what was once seri-
ple also posted news of his visit to Nasa. Not about because most humans lack sense, that pilfer them; that most people like mindless out, they maintained order even as a govern- ous and wrong.
 VIEWS MONDAY, 31 AUGUST 2020
NEW DELHI 13

MY VIEW | THE INTERSECTION M I N T C U R AT O R

The US-China tech war is being

fought across a bamboo curtain
The flexibility and porosity of the rivalry’s battle lines make space for interchanges that India could leverage to its advantage

AP

Variation in our immune response to the virus is under study ISTOCKPHOTO

Scientists try to crack corona immunity puzzle

A new effort is under way to understand how the immune system responds to
coronavirus. Scientists from 17 UK research centres are attempting to answer
questions such as how long immunity lasts and why disease severity varies so much.
The new UK Coronavirus Immunology Consortium (UK-CIC) says learning about
NITIN PAI immunity will help to fight the virus. It has received £6.5m from UK Research and
is co-founder and director of The Takshashila Innovation (UKRI) and the National Institute for Health Research (NIHR). Mala
Institution, an independent centre for research Maini, a viral immunologist from University College London, who is leading one
and education in public policy of the UK-CIC teams, said: “Our immune response to a virus is really what dictates
how we respond when we get infected, how ill we get when we get an acute infec-
tion... and how well we might respond to a vaccine.
BBC

I
t is becoming clear that the ongoing “tech war” Stones at Stonehenge served to amplify sound
between the United States and China is taking
place along five fronts: semiconductors, net-
work infrastructure, operating systems, plat-
forms and content. While it was Beijing that
S cientists have succeeded in recreating the soundscape of the inner sanctum of
Stonehenge. The main phase of the monument was built in around 2500 BC.
.. At some stage, half of the great temple was destroyed (today only around 50% of
first erected a defensive Great Firewall around the larger stones survive). As a result of that partial demolition, the original acous-
its internet users over 25 years ago to censor con- tics were destroyed. But now, scientists have succeeded in accurately recreating
tent, it is now Washington that is on the offensive the monument’s original soundscape. The new research—carried out by acoustics
on all fronts. The ostensible reason for this, as cited engineers from the University of Salford in Greater Manchester—has revealed that
by officials of the Donald Trump administration, is the 20-40tn stones acted as a giant amplifier, which increased the decibel count
national security—to prevent espionage, surveil- of various sounds potentially produced in the monument’s inner sanctum by
lance and influence operations by the Chinese gov- between 10 and 20% (up to 10 decibels), compared to a more open environment.
ernment, as also its corporate proxies and agents. The Independent
The deeper and less-articulated reason is strate-
gic: the US wants to increase its relative technolog-
ical advantage over China. It is doing this by con- Barter has become trendy as a way to get by
taining China’s progress and by rejuvenating its
own high-technology industrial base. Both sides of
the partisan divide in Washington have recognized
that three decades of globalization resulted in the
L ondon-based nurse Marjorie Dunne joined Barter United Kingdom after spend-
ing five days in hospital with coronavirus in April. The group, which she origi-
nally joined to get rid of a few unwanted items unearthed during spring cleaning,
relocation of high-tech industrial capacity away ended up helping Dunne through one of the toughest times of her life... Members
from its soil, and that even if American firms and of Barter United Kingdom swapped curries, roti and cakes for Dunne’s dresses and
investors reaped the benefits of free trade, the DVDs. Around the world, people have been turning to swapping, trading and bar-
strategic consequence has been the empowerment tering during the coronavirus pandemic, whether to do their bit for the local com-
of an economic competitor and political adversary munity, save money or simply source hard-to-find baking ingredients. With eco-
in the form of China. Nation-states are sensitive to nomic uncertainty looming and anxiety levels soaring, barter is becoming an
changes in relative power, and the US has decided emerging alternative solution to getting by—and staying busy—amid covid-19.
that China is too close for comfort. BBC
China will not be easily contained, but has pre- connects to Taiwan and Philippines. For its trans- Moreover, companies and individuals do not swing
maturely turned the US against it. Take the semi- pacific connection, the Chilean government chose for geopolitical or nationalistic reasons alone. If
conductor industry, for instance, where China a Japanese company to link to New Zealand and semiconductor sales to China are banned, who Covid desperation heightens illegal migration
heavily depends on imports from Taiwan, South Australia instead of Huawei and Shanghai. As will plug the $300 billion hole in industry reve-
Korea and Japan, all of which are US allies. Despite
massive state-led investments in semiconductor
manufacturing, China’s SMIC has only just
many of the cables built in the late 1990s and early
2000s reach the end of their economic lives, the
topography of their replacements will be subject to
nues? Will Japanese and European firms decline
lucrative contracts to build wafer fabs in China?
To what extent can countries afford to reject
I n a year of tragedies, Europe’s shores are seeing some of the most horrifying
scenes: bodies washing up on beaches as desperate families make hazardous jour-
neys in search of a safe home. Coronavirus has left countries such as Tunisia facing
become capable of producing chips using 14nm intense geopolitical contestation. Beijing will have Chinese 5G equipment or fibre-optic cable sys- serious economic hardship and unemployment, while others, including Libya, are
processes, while the Taiwanese TSMC’s 5nm chips to fight to avoid being restricted to projects such as tems? China is wooing chip designers in South dealing with the effects of war. That’s led to an increase in sea arrivals this year in
are already in mass production. My colleague Pra- the one connecting Pakistan’s Gwadar Port to Korea, Taiwan, Japan and India with lucrative countries including Italy and Malta, according to figures from the United Nations
nay Kotasthane, an analyst of high-technology Mombasa in Kenya, as Washington seeks to limit pay packages, but would they relocate at the cost High Commissioner for Refugees (UNHCR)... But European responses have often
geopolitics, believes that SMIC will find it almost the size and extent of the cyberspace Sinosphere. of losing a US visa? A lot is uncertain. What is been brutal. Humanitarian organizations say pushbacks at borders in countries
impossible to get these advanced levels on its own. As much as this is the year when Chinese apps clear though is that political leaders, CEOs and such as Greece, an absence of sea rescues in the Mediterranean and unhealthy quar-
With the US tightening export restrictions on sales and platforms were restricted in India and the US, technology professionals will confront tough antine arrangements have created huge challenges.
of semiconductor technologies to Chinese compa- it is also one which saw the launch of Chinese choices in the coming years. CNN
nies, the silicon gap is likely to reduce China’s operating systems for desktops, smart phones and It is unwise to lapse into 20th century meta-
competitiveness at the upper end of the electronics other devices. The software and content fronts of phors, for the battle lines of the US-China tech war
value chain, and ripple across it. Chinese authori- the tech war are more easily contested, but to pre- are more in the nature of a flexible, porous Bamboo The use of earth’s own heat for a nice warm soak
ties and firms like Huawei are putting on a brave vail, the Chinese state will have to create massive Curtain, rather than an impregnable iron one.
face, but the silicon setback they face is not only
real but fundamental.
It’s a similar story on the infrastructure front.
network effects within and outside its borders.
Chinese nationalism and Beijing’s diktat might
drive domestic adoption of operating systems like
India must develop its own positions along the
five fronts, without jumping to the comforting and
illusory conclusion that self-reliance is the answer
T he UK’s first lido to be heated by geothermal energy has opened. The Jubilee
Pool in Penzance, Cornwall uses underground heat to keep the sea water pool
at 35°C. Engineers behind the project said while the pool is the first lido in the UK
That Washington is cajoling, pressuring or incen- Unity, Harmony and Kylin, but users in other to all of them. It is not. The correct answer is some to be geothermally heated, “the Romans beat us to it by 2000 years in Bath”. Jubilee
tivizing governments away from Chinese vendors countries are less likely to switch. form of interdependence, with both the US and Pools boss Nicola Murdoch said the pool will be open all year round, although it may
of 5G equipment is well known. A similar game is Unlike the Cold War, the challenge for the US China, that ground realties and interests permit. not be possible this winter due to covid-19 restrictions. First to swim at the reopened
taking place in the world of international subma- and China is to take not only countries, but also Relations with China being what they are, New lido were the family of local swimmer and project supporter Joyce Cooper.Ms
rine cables that connect the world and carry almost companies and professionals along. Global supply Delhi’s foreign policy goal must be to create circles Cooper had been at the opening of the lido 85 years ago but died before the project
all of its data traffic. Earlier this year, Google and chains are complex: economies of scale have of trust with the US, Japan, Taiwan, Australia, could be completed. The geothermal pool is the last part of a £1.8m upgrade, partly
Facebook had to ditch their Chinese partner and resulted in some parts of it being concentrated in a Singapore and South Korea that will help Indian funded by a community public share offer...
Hong Kong landing point in order to be able to few companies and locations, and Washington and companies, professionals and consumers find BBC
activate their cable to East Asia, which now only Beijing cannot influence them beyond a point. themselves in circles of opportunity.

MY VIEW | GENERAL DISEQUILIBRIUM

A dreaded D-word has become an elephant in the room

reversed growth impulses in a recovering rare events like the covid-19 pandemic could into the breach, speed up existing projects government to account for the mammoth
RAJRISHI SINGHAL Indian economy. It can be argued that these have lasting effects on risk perceptions and and launch fresh mega investments. If the dividend it squeezed out of the central bank
events happened almost four years ago and investment activity. end-game is a revival of consumption in August 2019; this could erode market con-
that it might be time to move on. While it is The RBI annual report recognizes the demand through investment in new labour- fidence in RBI and eventually impact bond
true that these events have acquired an risks: “…the appetite for investment is anae- intensive projects, selling railways, ports or interest rates adversely.
almost historical hue, it is equally true that mic and in need of more reforms.” RBI also steel plants is unlikely to generate new jobs. RBI paid ₹1.76 trillion as dividend to the

T
he D-word is generally dreaded, their malign shadow continues to darken acknowledges that the private sector used The government’s investment initiative must government after months of bullying and
though for different reasons across dif- India’s prospects for economic growth. last September’s tax breaks be coupled with a fiscal some rather unseemly behaviour by bureau-
ferent groups. Among children, it First, the deeply embedded fear of sudden to pare debt, stock up cash stimulus programme that crats, leading to the premature resignation
relates to stomach related troubles. In India’s and random government decisions has balances and “other cur- Acceptance of incentivizes private invest- of former governor Urjit Patel (perhaps the
law and order machinery, the D-word signi- already jinxed investment activity in the rent assets”, instead of ment (such as reviving the second time after Benegal Rama Rau in
fies a certain underworld empire with cross- economy. Data from RBI’s latest annual using the windfall for capi- the D-word will old investment allowance 1957). This bonanza created a wellspring of
border tentacles wrapped around multiple report shows that the economy’s gross tal expansion. And while in scheme, perhaps). This col- optimism that the money would be put to
illicit and terror activities. Among econo- domestic investment rate, as a percentage of one breath RBI backs fiscal
let RBI ask the umn has been advocating a some productive use. But RBI has asked no

is a policy consultant, journalist

mists, it is shorthand for depression (contin-
uous contraction of economic growth), or for
gross domestic product (GDP), stood at
32.2% for 2018-19, significantly lower than
sops for “productive
labour-intensive compa-
government fiscal stimulus for the past
18 months to revitalize busi-
pointed questions, nor has it sought any
detailed explanation. This is odd, given RBI’s
and author. His Twitter handle
is @rajrishisinghal.
deflation, a state of falling prices. At the
Reserve Bank of India (RBI), the mention of
the average of 38% achieved during the five-
year period between 2009-10 and 2013-14;
nies”, it contradicts itself
the next moment with plat-
tough questions ness sentiment; this finally
seems to have struck a
role as banker to the government: with the
Centre shifting its federal fiscal responsibili-
a particular D-word is studiously avoided in indications are it weakened further in itudinous suggestions that and propose chord even among initial ties to states, which includes forcing states to
conversations or discussions about the econ- 2019-20. World Bank data shows India’s investment sentiment be doubters. borrow in lieu of their legitimate share of
omy. In reality, only a public avowal of the gross capital formation slipped from 34.02% revived through the sale of better solutions A word against sudden GST proceeds, the central bank is expected
D-word and its associated phenomena will of GDP in calendar 2013 to 30.21% in 2019. government assets in steel, unilateral decisions like to ask trenchant questions that relate to rev-
allow RBI to sincerely create a framework of This slack has been playing out in slow coal, power, land, railways demonetization might enue, expenditure, borrowings and bond
solutions that finds wide acceptance. motion over the past few years, and the or ports. This neglects the fact that the pri- have also helped. Economist Kaushik Basu’s rates.
RBI’s annual report for 2019-20 is inexpli- inflexion point of 2016 may have seeded vate sector will need much more than access Long Story on Friday in Mint posits that the RBI doesn’t have to butt heads with Delhi
cably silent on the economic shock from investment sentiment with a permanent bias to government assets or to commons before sudden lockdown without adequate prepa- constantly; nor should it appear as the gov-
demonetization in late 2016 and the hasty that may get further entrenched with the it can truly shed its risk-averse behaviour and ration could have contributed to the high ernment’s handmaiden. But it must hold the
implementation of a flawed goods and servi- pandemic. A paper (bit.ly/3hz2SAF) pre- start investing capital. infection rate and perhaps weakened the government accountable and its annual
ces tax (GST) soon thereafter. These twin sented at the recent annual Jackson Hole RBI should have instead exhorted the gov- economy disproportionately. report is the appropriate platform. All cen-
shocks from unilateral executive decisions symposium shows that “belief-scarring” by ernment and public sector companies to step Moreover, RBI’s annual report fails to ask tral banks walk that fine line.
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 14 NO. 210 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR)

‘TRADE IS KEY TO REVIVAL FROM VEDANTA PLEDGES HZL STAKE TO

MONDAY, AUGUST 31, 2020 COVID-LED RECESSION’ uP11 FUND DELISTING uP5
LIVEMINT.COM

DON’T MISS
Govt to soon fill top posts Modi pushes for
social distancing
with onset of
TWITTERVERSE

in key regulatory bodies festive season

Gyan Varma
Ravi Shankar Prasad
@rsprasad
gyan.v@livemint.com
To strengthen the
NEW DELHI Armed Forces, the DAC
approved capital acqui-
The appointments will have a bearing on the trajectory of India’s economic recovery
P
rime Minister Narendra sition of platforms and
Modi on Sunday cau- equipment worth
MINT tioned that the start of the ₹38,900 cr including 12
Stop charging for Gireesh Chandra Prasad & RBI governor, and the financial ser- festive season requires an even
e-payments: CBDT Su-30 MKI & 21 MiG 29s.
Shreya Nandi vices secretary, interviewed the can- greater need to maintain disci-
CBDT warns banks of didates. The responsibility of finan- pline and follow social distanc-
penal action if they levy NEW DELHI cial regulation falls on the now ing guidelines, not only to pro-
any transaction charge vacant post of deputy governor. tect themselves but also those

K
on electronic payment Tamil Nadu ey bodies such as the Search is also on for a new chair- around them from covid-19.
modes. See Page 3 CM
Palaniswami
Reserve Bank of India man for Trai, as the incumbent, R.S. Modi said despite the covid-
orders (RBI) and the Telecom Sharma, is expected to demit office induced challenges, kharif crop
opening of Regulatory Authority of on 30 September. The applications acreage increased this year.
FM to meet top three dams Hardeep Singh Puri
India (Trai), besides the for the job include current and “The sowing of kharif crop has
bankers on 3 Sep from Sept 1 @HardeepSPuri
State Bank of India (SBI), are set to former secretaries to the govern- increased by 7% in comparison
The finance minister will bit.ly/2Db7fCP have new people in top positions at ment of India, senior officials from to last year. The sowing of rice Civil aviation sector
meet officials of banks, a time that financial and sectoral public sector undertakings, and increased by 10%, dal increased continues to emerge
NBFCs to review the regulations are increasingly becom- experts from the private sector, Mint by 5%, coarse cereals increased stronger. Domestic ops
resolution plan for stre- began on 25 May, the
ing crucial for the survival of busi- had reported on 23 July. by 3%, oilseeds increased by
ssed loans. See Page 3 number of daily passen-
nesses grappling with the crisis. Sharma, 65, was appointed Trai 13%, and cotton by 3%. It is the
The appointments are being chief in July 2015 and had got a two- time to honour the farmers of gers today has reached
keenly watched as financial regula- year extension just a day before he the country who have worked 112630 on 1044 flights.
One Nation, One tion, calibration of the bankruptcy Former RBI deputy governor N.S. Vishwanathan demitted office in March. was to retire on 10 August 2018. He hard during these challenging
Tax is under siege framework, ensuring that the bene- before this led the creation of Aad- times,” he said in his monthly
The last GST meet has fit of the policy rate cuts passes on to credited with completing the ernors, demitted office in March cit- haar as the director-general and radio show Mann Ki Baat.
put idea of ‘cooperative the borrower, and policies govern- merger of SBI with its five associate ing health reasons, just before his mission director of the Unique Iden- Modi said there was a sense
federalism’ at risk, writes ing the telecom sector are likely to banks and Bhartiya Mahila Bank. tenure was to end. tification Authority of India (UIDAI) of euphoria during festivals,
Anil Padmanabhan. have a bearing on the trajectory of Before becoming during 2009-2013. but people have shown greater
See Page 11
India’s economic recovery. the MD, Khara was LEADERSHIP OVERHAUL The telecom sec- self-control, as they celebrated
On Friday, the Banks Board the chief executive tor is going through Ganesh Utsav through online
Bureau recommended the elevation of SBI Funds Man- THE results of SBI MD Dinesh Khara SEARCH is on for a a turbulent phase means and in an eco-friendly Joe Biden
Future-RIL deal is of SBI’s managing director Dinesh agement Pvt. Ltd. interviews for RBI’s will take over as the new Trai chairman, as with the Supreme manner. “Normally this is the @JoeBiden
good for lenders deputy governor, chairman of India’s the incumbent, R.S.
Kumar Khara as the chairman of the Results of inter- held earlier this largest lender from Sharma, will demit Court of India on time of celebration and there Secretary Betsy DeVos
Future Group lenders country’s largest lender. Khara will views for RBI’s dep- month, are awaited Rajnish Kumar office on 30 Sept Monday reserving will be festivities. While people and President Trump
have been saved from a take over from Rajnish Kumar, who uty governor, which its order on the are in a celebratory mood there refuse to take this pan-
$2.2 bn hit after the firm will step down on 7 October, as per a took place earlier recovery of adjusted is a sense of discipline. People demic seriously—our
announced a stake sale
statement released on Friday. this month, are awaited. The post The Financial Sector Regulatory gross revenue (AGR) dues of insol- are aware that there should be children are paying the
to Reliance. See Page 6
Khara, 59, who had joined SBI as became vacant after N.S. Vishwa- Appointment Search Committee, vent telecom players. a sense of responsibility,” he price.
a probationary officer in 1984, is nathan, one of the four deputy gov- comprising the cabinet secretary, gireesh.p@livemint.com added.
 MONDAY, 31 AUGUST 2020 | DELHI, MUMBAI, BENGALURU, HYDERABAD, CHENNAI, KOLKATA, AHMEDABAD, CHANDIGARH, PUNE 1 | MINT MEDIA MARKETING INITIATIVE

‘Atmanirbhar’ Banking through Digital SBI

State Bank of India has been powering a paradigm shift in customer convenience online by providing safe, intuitive and nimble
solutions to elevate the user experience during digital transactions, says RAJNISH KUMAR, CHAIRMAN, SBI
working relentlessly every day to amongst its peers by having one just banking services? What is
serve the customers. All of our of the most powerful IT suites. During the ongoing crisis, all our 22500+ the scope for extending this
digital channels like Net Banking,
Mobile Banking, YONO, UPI, IMPS,
This has been possible as the branches, 58000+ ATMs, 60000+ CSP concept still further?
Bank has been consistently in- The uniqueness of YONO lies in
etc. are working seamlessly, ena- vesting in IT over the past decade. points are working relentlessly every day the name itself, YOU ONLY NEED
bling the customers to do trans-
actions from the ease of their
Today around 90% of the total
transactions are going through al-
to serve the customers. ONE. From the design phase it-
self, we were very clear that we
home. The branches have been ternate channels with 57% of the are not aiming to launch just an-
functioning with required staff to transactions through digital chan- other banking or financial app. It
meet the customer demands en- nels. With our frontline staff We have also adapted an agile solely on the application of is a one stop solution to fulfil the
suring no disruptions. working tirelessly, it was a task method of project delivery, where emerging technologies as well as customers banking, financial as
In these trying times we are for our Global IT Centre to ensure the IT team and the business unit fostering partnerships with well as lifestyle needs. Today, the
also highly thankful to our service that there are no system disrup- of the organisation comes to- start-ups and fintechs for part- customer has a choice of several
providers for ATMs / Recyclers tions and the normal functioning gether to solve a problem. This al- nership and co-creation. We also banks and all the banks have Core
and Business Correspondents of the branches is assured. lows a wider acceptance of the adopt the practice of first going Banking, Internet Banking, Mobile
who have also been working to We have been providing safe, solution across the organisation. through some use-cases to fig- Banking, etc. With digital prod-
keep the ATMs / Recyclers and intuitive and nimble solutions as The pace at which technologies ure out the best fit for the tech- ucts of all banks have more or
CSP network up and running, pro- well as world class experience to are evolving, there cannot be a nology within the organisation or less the same features and at par
viding a great degree of comfort the customers, government and sure shot strategy or mantra for rather deciding whether adopting interest rates and charges, it is
to our customers including small ecosystem partners. The guiding developing revenue streams and of the technology adds some- the digital experience of the cus-
SBI has been enabling Indians to in the Indian economy and more ticket customers at rural and semi principles of our Bank’s digital promoting innovation. thing of value to the customer or tomer which has ultimately be-
be truly ‘Aatmanirbhar’ even specifically during all the critical urban areas. transformation strategy are: In order to leverage the rapidly not. The only success mantra in come the major differentiator.
during the COVID-19 situation times in the past. The significant • Omni-channel Customer Experi- changing technology and the today’s dynamically changing The launch of YONO defines
with ‘Ghar Se Banking’; how role of SBI during the period of What are the differentiators that ence evolving start-up culture, we world is to be open to changes the paradigm shift in terms of
would you describe the bank’s demonetisation and now during set SBI apart from other banks • Simplified business processes have adopted the two pronged and keep on experimenting even customer convenience through
pioneering role in this regard? the ongoing Covid-19 crisis is when it comes to embracing • Data and Analytics driven indi- strategy of partnering and co- at the cost of failures. efficient deliveries at lower costs
State Bank of India being the central to the country’s ecosys- advances in technology and vidualised products and services creating with FinTechs and pro- and greater reach for the Bank.
largest bank of the country with tem. During the ongoing crisis, all implementing them across the • Adoption of new technologies moting internal innovation by our In what way does the YONO app YONO is steadily strengthening in
more than 20% market share, has our 22500+ branches, 58000+ board? • Securing IT assets and customer employees. We have a dedicated facilitate the requirements of
always been playing a pivotal role ATMs, 60000+ CSP points are SBI is positioned itself strongly information department which focusses SBI customers over and beyond Continued on Page 2...

Driving Digital Transformation with a Proactive Approach

How important is IT to the of our key strategic objectives. The With the recent COVID-19 epi- How do you see the current interconnected systems expose Additionally, Banks need to im-
business strategy of SBI & how most important objective, of course demic, empowering employees in a landscape from a Cyber-security organisations to a high degree of plement adequate technical and
the technology-related is Customer Engagement and Better different manner has become a ma- point of view? systemic risk. Newer technologies organisational controls and identi-
accomplishments make SBI a Customer Experience. Projects like jor strategic goal not only for us but With more and more digitisation of often result in newer threat mod- fy the practices they have in place
preferred banking institution/ SIVA (State Bank Intelligent Voice As- for organisations at large. The Bank processes, it has become impera- els & varying threat perceptions. and test them to see if they are
partner? sistant), CHAPDEX (Customer Happi- introduced the concept of Work tive for organisations to secure While process innovation is aimed strong, relevant and effective.
With the aim of providing useful, ness Index), AI Based Email Segrega- From Home a few years ago. We their information and data assets. at increasing efficiencies and effi- Banks need to be compliant and
nimble & secure solutions to our tion System etc. are a few steps in made additional technological en- Cyber security has become one of cacy of systems and procedures, understand what data is acquired,
customers, SBI has been a pioneer this direction. hancements which helped us in tid- the most important concerns for Banks need to adopt innovation in maintained and processed, and the
among Banks in designing its IT so- The second objective is to im- ing over these unprecedented times. any financial institution today. In security processes to safeguard legal basis for it.
lutions. IT has been at the centre of prove our risk management capa- The fourth objective is to rede- such a scenario it becomes imper- customers’ information & data. Securing IT assets is a key prior-
our Business strategy right from bilities, operational excellence and sign business models and rethink ative for organisations to protect Cyber incidents are increasingly ity for SBI and the Bank’s security
the days when we started imple- productivity enhancement. We are our way of working. Apart from us- their information assets, safeguard shifting towards targeting of finan- framework is aligned to leveraging
menting the core-banking solution. embedding technology in our op- ing the latest technology this can customer data and ensure a robust cial institutions instead of end us- technology for fraud detection &
With digitisation of the financial erations in order to improve poli- be achieved by innovating, in col- and secure platform. ers. Data loss incidents reported management. SBIs security prac-
landscape as well as emergence of cies and processes to ensure that laboration with partners. We are With the increase in digitalisa- globally have unfortunately be- tices follow the protocol of IPDRR
digital touchpoints, IT has assumed we are effective in meeting cus- partnering with Fintechs/Startups ARIJIT BASU tion and ease of banking services, come commonplace. There is need i.e. Identify, Protect, Detect,
an even more important role in the tomer expectations. Simultane- and actively leveraging emerging Managing Director the instances of ransomware at- for continuous enhancement in op- Respond & Recover. A GRC (Gov-
changing times. ously, use of the latest technology technologies like AI, NLP, Block- (Commercial Clients tacks and other cybercrimes are erational capabilities to be put in ernance, Risk & Compliance)
We have been adapting and imple- to enhance our risk mitigation pro- chain etc. in order to maintain our Group & IT) increasing exponentially. Technol- place in the area of client data pri-
SBI Continued on Page 2...
menting technologies to fulfil some cess is a key objective. leadership edge. ogy based Intra- and Inter-Bank vacy and protection.

Newer IT Strategies for Digital Lending: Rule-Engines & Analytics

the Changing World I
n July 2015, Digital
India campaign
was launched by
available in online mode 24 * 7.
Not just limiting to the deposits
services, SBI has digitised the
date, the portal emerged as the
largest online lending platform, as
per a report by global financial
turnaround time of processing a
proposal from 20-25 days is now
reduced to 59 minutes. On ap-

F
Govt. of India with credit delivery process as well, firm Credit Suisse. MSMEs and In- proval & completion of documen-
or more than 200 banking transactions. With the boom the aim of making ranging from Personal & Auto dividuals use this web-based ap- tation and other formalities, the
years, State Bank of in the mobile technology, use of our Nation empowered in the field Loans to Home & MSME loans. plication to avail quick and hassle- loan is disbursed in 7-8 working
India has played a key technology by the rural population of technology. The soul of Digital free loans from 20+ banks as well days by the Bank. SBI was
role in maintaining the has taken reach of Banking to new India is centred around three key Digital Lending: the as NBFCs. The appraisal is done amongst the first bank to inte-
stability of, and public heights. As a result, use of mobile ap- areas – Digital Infrastructure as a solutions we invented and by a rule engine on the portal grate with CLP wherein the data/
confidence in, Indian Financial Sys- plications, UPI payments, IMPS etc. is utility to every citizen, Governance re-invented based on the data points of the information keyed by the cus-
tem. This system has become in- on the rise among rural citizens as & Services on demand, and Digital The first link in the chain was customer viz. IT returns, Bank tomers in the website flows
creasingly dependent on technology, well. SBI has recognised that a truly Empowerment of citizens. Our “Contactless Lending Platform statements, CIBIL check and ad- seamlessly in its credit process-
with consumers relying upon the differentiated strategy is required as country has seen a sea change in (CLP)” through the fintech portal ditionally GST returns for MSME ing applications. Through CLP, SBI
ease and immediacy of online, mo- the industry’s economics have come the past three decades in all the psbloansin59minutes.com customers. The eligibility is calcu- is offering a whole range of Per-
bile and doorstep banking services. under pressure from new technology possible aspects ranging from in- launched in Nov 2018 by the lated based on analytics and in- sonal Loans, Auto Loans, Home
In the recent past, the concept of In- and Fintechs with disruptive busi- crease in GDP, Export-Import, Fo- Hon’ble Prime Minister. In just principle sanction is awarded in Loans and MSME Loans at com-
dustry 4.0 has revolutionised the ness models. The key enablers for rex Reserves, per capita Income, three months from the launch real time. SBI has been in petitive rates while maintaining
way companies are conducting busi- SBI’s future IT vision and strategies Standard of living, Consumer the forefront in making CLP a their pole position.
ness. The applications of Industry are technologies like Artificial Intelli- choices, Travel, Education, and so huge success wherein the usual With the fruits of digital credit
4.0 are rapidly rising in the financial gence, Blockchain, Robotic Process on, the list is endless. appraisal in its basket, SBI went a
sector as well. SBI has already taken DHANANJAYA A TAMBE Automation, Internet of Things, 5G, step further in inventing a
measures to fine tune it’s IT Vision DMD & CIO Infrastructure as a Code, Containeri- So what did SBI do? web-based application
and Strategy in the journey of adopt- SBI sation, Software Defined Data Cen- In olden times, a customer called “SBI e-Mudra”. It
ing Industry 4.0. tres, security from the start of devel- had to struggle running is an application for
As the largest bank in India, we are Cash Recyclers, new AML/CFT solu- opment and operations (DevSecOps), through the branches, fill- general public to
integral to thousands of commercial tion, NAC implementation for en- mixed-reality, analytics using next ing-up forms and arranging avail Mudra loan of
entities and millions of personal lives. hanced security control, Software generation data ware house, smart for a long list of the requi- Shishu category up
State Bank of India has always been defined LAN & WAN for infrastruc- infrastructure, predictive security site documents for availing to Rs 50,000/-
a pioneer in the banking and finance ture security and better manage- controls with next generation Secu- banking services. Against through an end-to-
sector for embracing technology and ment. Bank has always focussed on rity Operation Centre etc. which now the customer end digital journey
innovation to fulfil the customer exploring innovative solutions for In response to the evolving forces has comfort of accessing with no manual in-
needs. As the digital economy flour- improvement in processes, enhance- of customer expectations and to ca- practically every banking tervention. The basic
ishes, SBI has grown its technology ment of customer experience, new ter to the need of supporting multi- facility over his phone, at a tenets of SBI e-Mudra
and channel platforms proportion- business opportunities etc. Bank has ple languages, Bank’s customer fac- place and time of his are providing simple,
ately, and in some cases, is ahead of also invested in a big way in private ing applications are able to provide comfort and conveni- intuitive & automated
the curve. We have always evolved Cloud infrastructure to facilitate vir- better customer experience and in ence. State Bank of In- credit delivery journey
with the times to embrace new con- tualised computing infrastructure the choice of language selected by dia has migrated a thereby giving control
sumer attitudes and be aligned as a environment. the customer. Doorstep banking us- plethora of banking of the whole process
“Smart” Bank with the service levels Technology is evolving at an un- ing simple responsive mobile appli- services onto the in- to the applicant. The
that the new age consumer de- precedented rate, and so are cus- cation and through CSPs are also be- ternet for the benefit entire loan jour-
mands. Some of the technological tomer expectations. There is huge ing emphasised because of demand of all- from opening ney viz. loan ap-
solutions launched during the past potential of integration of digital for such solutions. SBI is continu- an account to making plication, pro-
few years are YONO, YONO Cash, Mi- technology with financial services. ously exploring and leveraging new a fixed deposit to re- cessing, sanction,
cro ATM, National Common Mobility Consumers are increasingly using mittances to tax pay-
Continued on Page 2... ments, all the services are Continued on Page 3...
Card, CRM, Passbook Printing Kiosks, mobile technology to perform their
 MONDAY, 31 AUGUST 2020 | DELHI, MUMBAI, BENGALURU, HYDERABAD, CHENNAI, KOLKATA, AHMEDABAD, CHANDIGARH, PUNE 2 | MINT MEDIA MARKETING INITIATIVE

NUMERO UNO IN BANKING TECHNOLOGY

SBI at your Door : REGISTERED

DSB Services MOBILE NUMBER
BASED SERVICES
S
BI has always been
committed to adher-
ing to the highest

S
standards of custom-
er convenience and BI has continuously been (RMN) based services at the Contact Centre. and provide an alternative to not- so popular
regulatory compliance. Pursuant to exploring ways to move to- This functionality enables customer to & cumbersome “phone banking services”.
the RBI notification in 2017, SBI has wards automation & har- avail a variety of services through contact Further, these services are available on IVR
rolled out Door Step Banking (DSB) nessing the potential of digi- centre. It may be noted that the customer itself without the intervention of CC agent
services in 100 cities across the tal technology, so that time should call from his registered mobile num- which not only saves time of customer but
country. These services will eventu- and energy are saved at both custom- ber to avail these types of services. These also manpower & expenses for the bank as
ally be rolled out pan-India. er and staff’s end. Of late, bank has services will improve customer satisfaction well. The details of the services are
While RBI suggested that the ser- taken various customer centric initia-
vices be made available to the cus- tives like CEEP (Customer Experience
tomers above the age of 70 years, dif- Excellence Project), CRM and YONO to S. Details of Process flow Usage
ferently abled and infirm persons, the cater to customers efficiently and ef- No. services
Bank has decided to roll out these ser- fectively. One such initiative taken is 1 Balance & The customer will call contact centre The customer can hear his
vices to all customers across all seg- strengthening the Bank’s Contact Last 5 from his registered mobile number and “Balance & last 5
ments subject to some basic condi- Centre so that majority of the banking Transactions input last 4 digit of his account number transactions of his account
tions such as KYC compliant status etc. services are made available with zero on IVR on IVR. System will validate and check on “Interactive voice
DSB service is a paradigm shift in cost to customers. The contact centre various conditions and pass on the response(IVR)”.
the way basic financial & non-finan- services give freedom to the custom- details to IVR.
cial services are availed by the bank ers to get served anytime, anywhere.
customers. This move will bring us This has gained immense importance 2 Balance & The customer will call contact centre The customer can receive
one step closer to having “virtual particularly in the background of un- Last 5 from his registered mobile number and his “Balance & last 5
branch at your home” a reality, thus precedented COVID pandemic the transactions input last 4 digit of his account number transaction” of his account
moving away from the need to visit a world is battling today. on SMSs on IVR. System, after checking and on SMS by calling our
branch for services such as cash de- By availing DSB services, a lated with cash i.e. cash pick up/cash India is a country where majority of validating various conditions triggers contact centre from his
posit/withdrawal, A/c statement etc. customer can save on delivery & recovery of service charges people still live in areas with limited SMS to customer. registered mobile number.
These services will travel time, expenses and will be effected on real time basis by availability of internet connectivity 3 Door Step The customer will call contact centre The customer can register
be delivered through the hassles involved in crediting/debiting customer’s account. and do not have access to digital Banking from his registered mobile number and for DSB services through
outsourced DSB visiting a bank branch. DSB agent shall pick up cheque/cheque channels like internet/mobile banking. (DSB) input last 4 digit of his account number IVR i.e. by calling our
agents at the regis- He need not wait in a book requisition slip from customer and Thus, it becomes imperative to registration on IVR. System, after validating/ contact centre from his
tered address of the queue in a crowded deposit the same at designated branch strengthen the Contact Centre chan- via IVR checking various conditions enables registered mobile number.
customer. Customers branch and get the for processing. Term Deposit advice & nel due to it’s simplicity. through RMN DSB and passes on the details of
registered for the services at the time statement of account shall be dis- In this backdrop, SBI undertook an successful registration
DSB services at their chosen by him. Fur- patched through post/courier to cus- analytical study wherein it was found
home branch can re- ther, the risk of theft tomer’s registered address. that approximately 50 Lakh calls are
quest for the same of cash is also miti- Going forward, customers will be received every month at the contact
GOING FORWARD, BELOW MENTIONED RMN SERVICES WILL ALSO BE ADDED
through the 24*7 gated. Customers can able to register & request for DSB centre ; the majority pertaining to bal-
Contact Centre. The avail the services by call- services through YONO, YONO Lite & ance enquiry, card blocking etc. These a) Blocking of debit card
DSB agent will visit ing a dedicated toll- free Internet Banking as well. were normally diverted to branches
b) Reissue of debit card
the customer at his/ number 1800111103 Bank will keep on adding to the list due to unavailability of CBS system at
her convenient time from their registered of services under Door Step Banking CC agent’s end. With the aim to ad- c) Green PIN generation
and deliver the request- mobile number. facility on a continuous basis to enrich dress this peculiar problem, bank has d) Housing & Education Loan interest certificate on registered email id
ed services. All the transactions re- and enhance customer experience. rolled out Registered Mobile Number

‘Atmanirbhar’ Banking through Digital SBI Driving Digital Transformation with a Proactive Approach Newer IT Strategies for the Changing World
... Continued from Page 1 tificial Intelligence and RPA technolo- ... Continued from Page 1 challenges are pushing banks to con- ... Continued from Page 1 tions. With Meghdoot, Bank has been able
gies to minimise human intervention stantly reinvent and modify their digital to build efficiencies within its datacenter
terms of reach as well as value. YONO and contact in our processes as well as framework is also in place for monitor- strategy. Integration of the customer- technologies to rollout innovative solu- by consolidating required server, network
has achieved 45.8 million downloads providing self-service avenues to the ing and addressing key risk indicators facing digital offerings with back-end tions by actively engaging with the Start- and storage infrastructure. The future
with daily logins of around 5.5 million. customers. We already have a chatbot for IT & Cybersecurity. Asset manage- operations and processes are impera- up ecosystem and through collaboration roadmap of Meghdoot is to make it a Soft-
And, with 24 million accounts, it’s also available whose capabilities we are go- ment tools, incident analytics, log moni- tive to help ensure the success of a digi- with Fintechs with a special focus for rural ware Defined Data Centre (SDDC) to pro-
the world’s largest digital bank. We en- ing to revamp and expand. Our pre-ap- toring, Security Operation Centre are in tal strategy. customer base. vide on-demand services like PaaS (Plat-
visage to gradually move most of our proved digital loans for the personal place for centralised monitoring of secu- Non-bank challengers, ranging from SBI’s current IT Vision and Strategy plan form as a Service), BaaS (Backup as a
banking processes/ offerings to YONO, segments and SME segments are al- rity events & incidents for applications, large telecommunications companies to provides a clear, reliable, and up-to-date Service), NaaS (Networking as a Service)
bringing a “Brick to Click” paradigm ready very popular. Adding the insights servers and databases. small and nimble technology players, and secure IT path towards increasing our and SaaS(Software as a Service) etc. like
shift ushering a complete transforma- from data analytics has also brought The thrust now is on proactive securi- are defining the standards for digital IT capabilities and modernising our servic- any other public cloud services.
tion from “Traditional Branch Banking” improved efficiencies to our systems ty techniques, such as the use of AI, to banking. Emergence of payment banks, es and protecting our people, processes As the RBI direction has now provided
to a “Digital Bank Experience”. YONO and procedures. Video KYC facility will move from passive monitoring of threats fintechs, micro banks and para banking and information against increasingly so- scope for leveraging public and hybrid clouds,
caters to various Banking and Financial provide a digital touchpoint to the cus- to active neutralising of threats. Analyt- activities of telcos and retail chains phisticated cyber threats. Most important- we at SBI realigned our cloud strategy to be
services as well as lifestyle require- tomers, for submission and updating of ics and behaviour-based detection to have blurred the line between indus- ly, this plan ensures that our IT systems future ready. A hybrid approach is a way to
ments and delivers world class en- their KYC documents. Our RMS (Regis- predict, detect and prevent breaches and tries. The newer business models are are aligned with the SBI’s Vision, Mission take advantage of public cloud while protect-
hanced customer experience through tered Mobile No. based) service is an- frauds is extremely important. Using AI disrupting the traditional financial eco- and Values. ing sensitive data on the private cloud. Hy-
distinctive, omni-channel and seam- other step in the direction of fulfilling for cybersecurity enables understanding systems. Traditional Banks need to re- brid cloud solution, which involves a mix of
less customer journeys. It is envisaged the non-financial services related of threat patterns to identify new ones. program their own systems and proce- Enterprise Architecture on-premises, private and public cloud ser-
on the founding pillars of customer needs of our customers without physi- This leads to an overall reduction in time dures to stay relevant in the rapidly State Bank of India has embarked on a vices, in order to achieve greater scalability
centricity, superior user experience cal branch visit. and effort to identify incidents, investi- changing ecosystem. very important initiative of implementing and integrated communication between dis-
and analytics. gate them and remediate the threats. Enterprise Architecture (EA) principles and parate systems. Innovations where new
SBI has always been committed to Do you see more SBI customers Blockchain is one of the buzz words in practices to achieve the goals of effective- technologies and capabilities need fewer and
provide an enhanced customer experi- opting for non-branch banking in How important is trust in SBI’s IT? the financial technology space. What ness, efficiency, agility, durability, reduce niche infrastructure requirements can be the
ence and we continuously strive to of- future? How is SBI gearing up to Success of an IT initiative depends on the has been the experience of SBI in this development costs, manage lifecycles of early uses of public cloud.
fer new, secure, convenient, respon- handle the evolving ‘new normal’ in Trust of the stakeholders on Technology. sphere? technology infrastructures effectively, We realise that adoption of public cloud
sive and innovative financial solutions banking? Since IT forms the backbone on which The blockchain is a digital distributed create and update IT inventory (applica- is a “Business Model Transformation” and
to our customers. With the same spirit SBI has been consistently investing in the Bank runs, it is vital that our custom- ledger which has all the information tions, data, technologies, middleware), brings in business agility for the next level
we have introduced different variants IT over the past decade. Today, around ers and other stakeholders have full faith related to the transaction. All this in- manage legacy IT resources and to sim- of growth. However, considering the con-
of YONO viz. Global, Business, Krishi, 90% of the total transactions are going in our technological capabilities and our formation is time-stamped and hence plify the current complex IT landscape in cerns around security, regulation/compli-
etc. with tailor-made solutions and of- through Alternate Channels with 60% ability to manage them. is easily trackable. Moreover, all the order to respond more effectively to con- ance and control in a public cloud, SBI has
ferings to cater to the customers of of the transactions through digital data is encrypted, and thus, it be- stantly changing market conditions. SBI is decided to follow an incremental approach.
these segments. channels. With increased penetration What are the challenges and comes difficult for anyone to change it uniquely applying the methodology to fine We are applying public cloud computing to
of digital technologies and mobile in- opportunities in adopting newer or alter it. The blockchain has huge po- tune and standardise various processes few non-core operations first and then
Going forward, what would be the ternet in the India hinterland, we shall banking technologies? How has State tential in financial services and this and technologies in order to align business scaling up as we see the benefits. Bank has
key challenges and opportunities for soon see the time where the entire Bank of India approached the same? was recognised by SBI. We have im- and technology and creating a common already ventured into public cloud SaaS by
the banking sector in India in light of value chain has been digitised. The returns of investing in digital trans- plemented blockchain in Supply Chain platform for both business and technology using email services from Microsoft Office
the COVID-19 pandemic and resultant With more and more dependency on formation are not immediate and require Finance (SCF). that facilitates efficient teamwork and in- 365 platform and SharePoint online for
restrictions/ advisories? How does digital and technology for providing a considerable gestation period. Many Supply Chain Finance application is ter-organisation communication. collaboration and document storage.
SBI plan to leverage technology for seamless services to our customers, financial services firms which have pro- being used for financing vendors and This initiative is further being enhanced While cloud-only strategy may be the
managing the banking needs of we are focussing on making our IT gressed on their digital journey, struggle dealers of Industry Majors (IMs). Dedi- by implementing an industry recognised ultimate goal, it’s often easier for large or-
Indians during this crucial phase? more resilient. When the pandemic cri- to see early financial results. Maintaining cated team of subject matter experts, EA tool which will not only give us various ganisations to start with a commitment to
If we think of demonetisation as the sis had struck all of a sudden, and the the current business and IT capabilities user friendly IT application and customer architecture views but also customised implement cloud-first strategy. A cloud-
step that truly kicked off the era of a attendance in office had thinned out, while investing in new technologies and friendly product helped our bank acquire dashboards and reports to take strategic first strategy is an organisational commit-
cashless society, the current COVID-19 providing the necessary IT support to creating new revenue opportunities is a leadership position in Supply Chain Fi- and tactical decisions by the leaders in the ment to evaluate cloud-based solutions
pandemic can be considered as the our front line staff became a challenge. difficult balance. nance. Today we are catering to more Bank. This is a journey that will mature before considering alternatives. Unlike a
start of the digital economy. Most of However, prompt measures and Incumbents not only need to con- than 500 Industry Majors and 45,000 over a period of years. cloud-only strategy, it doesn’t eliminate
the banks already had a lot of digital change-planning implemented by our stantly keep reinventing and innovating plus dealers / vendors. other solutions, thereby allowing for
solutions available for small ticket pay- Global IT Centre enabled the Bank to but also to put legacy systems in use. In Repayment in SCF for dealers of auto Cloud Policies greater flexibility.
ments and transfers, but as an Industry handle the situation swiftly without a diverse country like India we need industry should be tracked on the basis SBI has been an early adopter of cloud and Faster innovation and lower costs are key
we had not emphasised much on bank- causing any disruptions in our busi- unique solutions such as chatbots in of sanctioned credit period or sale of ve- had launched its own private cloud “Megh- considerations for any technology adop-
ing with zero physical interaction. In ness. Immediate strategies along with multiple vernacular languages. hicle, whichever comes first. Since the doot” in 2012. Initially “Meghdoot” started tion. Cloud is the catalyst for a host of dis-
view of the need to maintain social dis- infra for work-from-home was put in In the current age of open banking, Bank has no visibility on date of actual as an experiment to analyse and study pri- ruptive technologies, from Chatbots to AI,
tancing and decongestion in the brick place, which helped us to achieve ‘busi- Bank’s systems are exposed not only to sale of each vehicle, earlier we were vate cloud practices. It grew in a staggered ML, NLP, to Blockchain and IoT. Cloud tech-
and mortar branches, the journey of ness as usual’ in a relatively short time. the customers but also to the partner forced to track on the basis of credit pe- manner from offering development/test nologies will help SBI redefine modernisa-
process digitisation is gathering rapid As a risk mitigating measure GITC’s op- ecosystem and the device ecosystems, riod only. Bank took the initiative to start environments and then UAT and eventu- tion, innovation, and meet competition in
pace. All the reasons for which a cus- erational staff had been segregated to leading to the need to have a robust cy- use of blockchain in SCF, which helped ally production environment for applica- today’s rapidly changing digital world.
tomer needed to visit physically are be- different locations to ensure Human bersecurity system in place. us in switching from Invoice based Fi-
ing addressed through technology like BCP for seamless operations. We have As a Banker to every Indian, SBI aims nance to Vehicle Identification Number
online upload of document, facial rec- 2-3 standby sites in addition to the pri- to use the latest technology to provide (VIN) based finance. Now Bank has visi-
ognition, online authentication etc. Our mary site. best in class products and services to bility on actual sale made by dealers and
solutions for different segments under Cyber criminals and hackers are try- every customer; from the most digitally can implement repayment on the basis
the YONO umbrella is a prime example ing to take advantage of the present savvy in the metros to the farmer in a re- of actual sale. Sales based repayment
of this. Going forward, Remote-adviso- situation and in fact have become hy- mote corner of the country, from the system for automobile dealers will help
ry and Robo-advisory services may per active. Our Cyber security system largest corporate house to the smallest us to inculcate better credit discipline
also gather pace and the entire delivery team has been ramped up to ensure SME. We have designed products and amongst dealers.
journey will be digitised. resilience to all the COVID-19 themed services for this, the aim is to reach out Blockchain in SCF was started with 02
Due to the restrictions and adviso- attacks. We have adapted a WAR room and deliver. Industry Majors (IM) and 02 dealers of
ries, working from home has become level preparedness where our Security Different levels of technology maturi- each IMs. We are using open source hy-
the new normal. With banking catego- Operations Centre, Command Centre ty between the stakeholders is a chal- perledger fabric as a blockchain frame-
rised as an essential service and al- and next level security technologies viz. lenge to overcome. Another challenge is work to implement blockchain nodes in
though our branch-employees are pre- WAF, RASP are always on alert. to get all the stakeholders to come on a SCF. There are three stakeholders in this
sent on the counters, most of the Our digital offerings for customers common platform to exchange informa- proposition viz. Industry Major (IM), Auto
customers are utilising digital chan- viz. Yono, Net Banking, Swayam kiosks, tion and transact. Dealer and the Bank. Blockchain nodes
nels. Banking industry may also explore e2e digitisation of loan products, Pre- Digital banking is facing pressure and supportive infra and software’s are
this and work out the ways to migrate approved loans etc. and the digital ena- from both external and internal forces maintained in Bank’s environment and
all low value transactions to digital blers for branches viz. CRM solution, which can broadly be categorised under we have decided to go with a ‘Private
channels while retaining high value analytics based leads, YONO branch four main heads: Technology Infrastruc- Blockchain Set-up’.
transactions requiring human inter- interface etc. are helping our branches ture upgradation, rapidly changing eco- There are numerous other possibilities
vention, at the branches. to serve the customers in these un- system, customer demands and disin- in use of Blockchain and these are being
We at SBI are already leveraging Ar- precedented times. termediation by FinTechs. These actively evaluated and worked upon.
 MONDAY, 31 AUGUST 2020 | DELHI, MUMBAI, BENGALURU, HYDERABAD, CHENNAI, KOLKATA, AHMEDABAD, CHANDIGARH, PUNE 3 | MINT MEDIA MARKETING INITIATIVE

NUMERO UNO IN BANKING TECHNOLOGY

The Universe of YONO (You Only Need One)

L
aunched in November represents various strata of the global While YONO Retail fulfills the needs of Additionally, the Bank is providing the enhanced and convenient experience to the each process is conceptualised keeping
2017, You Only Need One population. With this in mind, the Bank the individual customers, the YONO Busi- convenience of online purchase of various customers, should they visit the Branch. customer convenience and security as-
(YONO) has been one of has developed different variants of ness platform is aimed at providing digi- financial products of the Bank’s Joint Ven- pects in mind.
the most ambitious, inno- YONO in order to provide a delightful tal solutions to MSMEs and the corpo- ture Companies (SBI Life, SBI Caps, SBI YONO Business
vative & path-breaking digital experience to each & every cus- rates of all sizes. While YONO Global Cards, SBI Mutual Fund and SBI General YONO Business is one-stop integrated YONO Krishi
digital offering by any Bank across the tomer. The entire YONO platform is serves the aspirations of Bank’s interna- Insurance) on a single platform. Custom- banking solution addressing corporate fi- YONO Krishi was launched in July 2019
world. With more than 24 million ac- fuelled by path breaking data analytics tional customers, YONO Krishi has been ers can instantly avail life insurance cover nancial needs. YONO Business has pro- primarily targeted for farmers. With
counts, it has already transformed SBI & advanced technologies. developed to address the unique require- up to Rs.20 lakhs. Along with addition of vided single sign-on to the Corporate features like Agri Gold Loan, YONO Man-
from the largest Bank in India to the big- ments of the farmers. various new features on the YONO app, customers who may be using Corporate di and YONO Mitra, the platform has
gest digital bank. ve new journeys
several ys (such
( as Digital Ac- Internet Banking, Cash Management been designed to cater to the banking
The design principles of YOYONO are YONO Retail
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count Ag Gold Loan,
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ex
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convenience of FuFund transfer ve been
have b launched on the YONOYO Po
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simple, intuitive ye yet through UPI or QR Co Code as wewell as card- interfacing the Branch, to provide ov an and password for all their corporate ap- fering simplified banking services, fi-
secure digital solu- less withdrawal at AT ATMs. C Cardless cash plications within the bank. nance/ credit, investment and advisory/
tion. YO
YONO is a sin- withdrawal can also be done YONO business-design principle is to market intelligence related services as
gle touch point and through Po PoS terminals along make all journeys intuitive and simple. It well as to enable market linkage through
one stop solution fo for with the facility to shop without ACCOLADES AND is designed to reduce the footfall at an online marketplace. Apart from pro-
va
various Banking, Financial & Lifestyle use of a debit/credit card. With RECOGNITION branches and to serve each corporate viding enhanced customer experience
needs of the customer through a 90+ leading merchants such as YONO HAS WON 9 AWARDS customer in a seamless way. The design for agriculture needs, existing processes
conven
convenient and user friendly Ta
Amazon, Myntra, TataCliq, Ya
OLA, Yatra, TILL DATE IN BOTH NATIONAL & is supported by robust technology with at the branches are being digitised to
omni-channel interface. With St Uber etc.
IRCTC, Shoppers Stop, et on a sin- INTERNATIONAL ARENA high end systems and controls. API reduce manual intervention, which will
more than 45.8 ex
gle platform offering exclusive YO
YONO based platform is getting ready for di- reduce the turnaround time and improve
million down- deals fo
for online shopping. SBI custom- SBI YONO Global has won rect interface with ERP systems of cor- operational efficiency.
loads with daily ers don’t need to separately Economic Times BFSI Innovation porate customers.
logins of around download these apps and Tribe 2020 award in Feb 2020 YONO Business platform also provides YONO Global
5.5 million, the vo ow
volume growth can directly accessce them IDRBT Banking Technology unified digital on-boarding of NTD (new YONO went international with the launch
alone showsws tthe pace of populari- YO
through YONO. Online av
avail- Innovation Contest (IBTIC) in to digital) corporates using simple and of Yono Global mobile application in UK on
ty amongst users. ment of Pre-approvedove loans April 2019 omnibus document submission process. 23.09.2019, with a strong focus on con-
State Bank of India serves the (Personal Lo Pe
Loan, Pension Proprietory / single user firms can use venience for retail customers. The app
largest, and the most diverse cus- Lo
Loan, Cr
Xpress Credit and Finnoviti Awards in January 2019 their debit card credentials for complete aims to serve the hyper connected, highly
tomer base in the world. From re- Cr
Xpress Credit Insta top-up CSI Innovation & Excellence digital on-boarding. Corporates interest- informed, value-driven customers ex-
tail customers to corporates, from loan) that are immediately Awards in December 2018 ed in online booking of forex rates can use pecting immediate banking services with
foreign branches to serving the soci- p
disbursed with zero paper- the eForex module of Yono Business. Let- real time responses and targets to scale
ABP News BFSI Award in
ety in the rural hinterland, wo
work ex
are extremely ter of Credit related inputs can be entered up the business of SBI’s foreign offices/
November 2018
the cross-section of popular with the by the Corporate from his own office subsidiaries. It also provides services like
the customers the customers. Economic Times BFSI Innovation without visiting a bank branch. The cor- FD and remittances to walk-in custom-
Bank serves, Award in September 2018 porate also has facility to apply for a ers who are not maintaining any opera-
Asian Banking and Finance plethora of special corporate services be- tive savings or current account with the
Retail Banking Award in July ing provided by the Bank. These services Bank. The app enables customers to
2018 at Singapore include; requisition for PoS terminals, view, download or email the account
State Bank Collect / MOPS for collections, statements of their account whether
Indian Express Award in June Bulk Payments, e-Mandate facility, RERA maintained in SBI’s Foreign office or any
2018 accounts etc. The design of YONO busi- domestic (Indian) branch.
ET-Now BFSI Award in February ness is customer oriented as customer The app has also been released in Mau-
2018 surveys are performed with different ritius and Maldives and is getting ready for
segment of corporate customers and launch in Canada, Singapore and Bahrain.

State Bank of India :

Digital Lending: Rule-Engines & Analytics
... Continued from Page 1 es on the lead and the loan is proved Business loan-PABL for

Changing with the times

sanctioned digitally based on the its existing MSME customers.
document execution, opening of SBI’s credit rule engine. The dis- This product creates a paradigm
loan account, disbursement, and bursement is also done digitally shift from the existing Balance
credit to account is digitised and by SBI & NBFC in the proportion Sheet based lending to Cash Flow
on real time basis. Since its launch of 80:20. Not just limiting to dis- based lending. Under PABL, a
in 14th August 2019, the applica- bursement, Co-origination has credit facility upto Rs 10.00 Lakh
tion has been a game-changer in gone a step further in automat- is made available to the custom-

S
the digital world of credit delivery. ing the reconciliation of recovery ers at the click of a mouse.
BI is the country’s larg- Cell on cutting edge technologies pensionseva.sbi) specifically for Any individual who has a mobile proceeds as well, thereby making The primary objective for this
est bank providing fi- such as AI/ML, Chatbots, etc. pensioners in India that facilitates phone and an Aadhaar linked bank the full loan life cycle digital at project is to make available a
nancial services through CHAPDEX is a non-intrusive, them to view / check their pension account in SBI can apply through SBI end. As on 31.07.2020, line of credit for the MSME
its wide network of automated customer feedback related details. Pensioners can this application. The application more than 11,100 agriculture customers, which can be
branches and has al- mechanism to evaluate the cus- avail this facility by one time regis- uses Aadhaar credentials for KYC loans have been disbursed. availed digitally for meeting
ways been in the forefront in tomer satisfaction level at the tration of their email ID in the Pen- verification and the inbuilt their urgent credit
adopting emerging and innovative branches. CHAPDEX won the sion application at pension paying rule engine assesses the needs. Almost, the
technology solutions. The tech- FINNOVITI 2020 award. branch. Once email ID is updated, eligibility based on the entire customer jour-
nology initiatives are aimed at im- the pensioner can register in the satisfactory credit bu- ney is completely on
proving customer convenience, VIDEO KYC Pension Seva website. reau check and the digital channel, except
employee productivity, automat- Recent amendment of KYC norms transaction history. a simple documenta-
ing tasks reducing costs, improv- by RBI permits Banks to use Video the customer and his OVD along FASTAG After according tion, which will be
ing sustainability and promoting based Customer Identification with obtaining the exact location SBI entered this market in 2016. sanction, the terms completed by the
green banking. It is providing solu- Process (V-CIP). and device details. Currently under Four years later, with over a mil- & conditions are ac- branch. The loan is be-
tions having advanced technolo- SBI has already initiated steps testing, the bank is planning for a lion customers, SBI remains a key cepted by the cus- ing offered to the ex-
gies at heart such as Artificial In- to enable a live video session with pan-India rollout. The facility will player. SBI’s FASTAG portal https:// tomer through Aad- isting current ac-
telligence, Natural Language their customers wherein, Bank of- be made available through YONO fastag.onlinesbi.com helps poten- haar OTP based count holders
Processing, Blockchain, Advanced ficial can capture a photograph of and YonoLite apps of the Bank. tial customers to find agents who e-Signing. The com- through the
Analytics, Robotics, etc. will deliver SBI FASTAGs to their plete process is a Bank’s flagship ap-
V-CIP WILL BE USED FOR Pension Seva doorstep. Post onboarding, it has radical re-designing plication, YONO-Business.
CHAPDEX State Bank of India is the largest facilities for recharging the fast- of the way a bank Entire product devel-
Being the Bank with the largest 1. Customer onboarding for pension disbursing Bank with tags, view statements etc. loan is processed. opment process was
number of brick and mortar new accounts more than 57 Lakh pensioners. FASTAG is not going to remain a The simplicity and driven by an in-
branches in India, several initia- 2. Processing requests for SBI is the first Bank to launch an single use toll collection TAG for complete digitisa- house Analytics
tives have been taken to improve change in Address and interactive website (https://www. long. With other integrations like tion of the process has team using advanced
the branch ambience and cus- personal details the experimental car parking facil- made SBI e-Mudra an in- Machine Learning tech-
tomer experience. 3. Establishing identity and ity in Hyderabad airport etc. this stant hit among the masses. nique i.e. Neural Network. 1400+
CHAPDEX, an acronym for updation of other INQUIRY SERVICES TAG might become the future of Since the launch, around 43,000+ variables and features were used
‘Customer Happiness Index’, is particulars of existing AVAILABLE IN THE Indian mobility. applicants have benefited out of Pre-Approved Loans for customer identification. An-
one such initiative to reflect upon customers, periodically PENSIONSEVA.COM this application. Appreciation and With the vision to transform the other unique aspect is the use of
the service provided by the branch 4. Extending personalised • Pensioner profile details VAN Based Collection awards poured-in to acknowledge Bank into a Digital and Data Driv- statistical techniques to deter-
tellers. This application is devel- services to HNI clients • Life Certificate submission SBI’s Virtual Account Number (VAN) this unprecedented step in the In- en Next Gen Bank, smart lending mine the consistency of cash-flow
oped in-house by SBI’s Innovation details is an alpha numeric code which can dian banking industry when SBI was introduced across the board of a customer. The digital trail of
be linked to actual 11-digit account e-Mudra was awarded with the through analytics-based credit the selected customers also adds
• Pension Credited transaction
number of a Corporate customer of coveted IBA Banking Technology offers, Credit @ Click, end-to- further strength to the identifica-
• Every customer visiting the banking details
SBI. The code masks the actual ac- award, 2019-20, for “The Most end digital retail loans and cash tion & monitoring process.
premises and interacting with tellers • Pension Arrear calculation count number of the Corporate and Innovative project using Technol- flow based lending for MSMEs. Being a faceless credit deci-
are considered for the feedback. In sheet
paper based feedback, a limited no. can be safely shared by the Corpo- ogy”. Motivated by the warm re- SBI introduced the Pre-Ap- sion, suitable risk mitigants &
of customers are accessed.
• Pension slip rate with their payers to enable sponse, the next version titled proved Personal loans (PAPL) for features were incorporated dur-
• Form 16 them to deposit funds in Corpo- “SBI e-Mudra Branch Assist” was individuals through its YONO ing the Model building process for
• This is an eco-friendly project that
• Investment details rate’s accounts using VAN instead launched on 1st February 2020 Personal app in 2017. PAPL is a reducing the probability of de-
eliminates the usage of paper for of actual account number. whereby in-principle sanction for hybrid of rule-based credit en- fault. These features are based
feedback. It also eliminates the time Mudra loans from Rs.50,000 upto gine for initial identification of on the historical transaction be-
spent by the customer and Rs. 1 lakh is accorded. Disburse- customers and an Analytics haviour of the customer, both
employees in getting feedback. BENEFITS TO CORPORATES ment takes place after completion based propensity model for short within and outside the bank. A
> Privacy and non-disclosure of account number: VAN addresses of due-diligence of the borrower listing of prospective borrowers. data driven Risk scoring matrix
concern of the Corporate relating to sharing of actual account by the Bank. With more than 8 active variants, was developed for defining the
number with the payer With personal and MSME sec- loans worth more than Rs. loan eligibility of the customer on
> Management Information System (MIS) Reports: Companies get tors getting served through IT 20,000 crores have been dis- near real time basis. The turna-
real time MIS report of all collections made into their accounts by products, agriculture segment bursed since 2017 with a delin- round time for the customers has
• Instant feedback to serving their dealers/customers by using VAN. was not left behind either. The quency of less than 0.40 % also been substantially reduced.
employee stimulates him to > Validation of Payer: Corporate Clients can opt for validation of bank tied up with “Paisalo Digital State Bank of India being a pio- To protect against delinquencies,
relook his services rendered to
payer, amount of deposit and validity of VAN before accepting Limited”- a non-deposit taking neer in SME lending has always the accounts are centrally moni-
customers. NBFC, to make the reach of been a front runner in providing tored using an advanced “Early
credit to their account.
bank’s credit deeper and wider. the best class products and ser- Monitoring Mechanism”, with a
• Managers can analyse > Real Time Validation: SBI supports real time validation of VAN with
Corporate’s ERP system before crediting funds to their account.
With this theme “Co-origination vices to its customers. In order to detailed alert mechanism devised
performance of their workforce
and accordingly, counsel/ of Loan by SBI & NBFC” for loans meet the key expectations of for branches. In the first 20 days
> Auto Bank Reconciliation: Real time MIS from bank on who paid upto Rs.1 lakh was launched on digital lending to this segment, of the launch of the product on
motivate them.
and when enables easy reconciliation at Corporate’s end. 30.09.2019. The NBFC identifies the Bank has recently launched a 01.07.2020, Rs. 4.5 crores worth
the prospective borrowers, pass- digital loan product, Pre-Ap- of loans have been disbursed.
MONDAY, 31 AUGUST 2020 | DELHI, MUMBAI, BENGALURU, HYDERABAD, CHENNAI, KOLKATA, AHMEDABAD, CHANDIGARH, PUNE 4 | MINT MEDIA MARKETING INITIATIVE

NUMERO UNO IN BANKING TECHNOLOGY

CEOs SPEAK

T T
he partnership provide uninterrupted banking services to every In- oday, we wit- orative, elastic and intelligent financial services plat-
between SBI and dian even at the peak of the nationwide lockdown. ness accelera- form of the future. As more customers transact on-
TCS that began TCS teams embraced the Secure Borderless Work- tion of digitalisa- line and employees’ transition to remote working,
almost two decades spaces™ framework to ensure that SBI’s mission- tion in the banking there is an influx of traffic and data - we proactively
ago, is founded on a critical systems were up and running through this industry, with tech- protect and help optimise this data. The next step for
shared purpose and difficult period. These teams worked on a war foot- nology at the core of our partnership, is to embark on the journey from a
shared values. In pur- ing to generate all the reports needed to help the creating more cohe- private cloud technology platform to the public multi
suit of its vision to be bank complete its year-end closing and audits and sive and personal dig- cloud creating a true Hybrid Multi Cloud Solution.
the bank of choice for be the first public sector bank in the country to pub- ital journeys for cus- Digital-first banking is even more important now
a transforming India, lish its financial results. tomers. In the current as the COVID-19 situation has intensified the cus-
SBI has been helping When the RBI announced a moratorium on inter- milieu of digital first tomers’ need for availability, access, and control of
its customers realise est payments to provide relief to businesses and in- banking, which cent- digital channels. With NetApp, SBI is assured of
their aspirations, lev- dividuals, TCSers working remotely, made changes ers around user expe- availability and uptime of critical services during
eraging technology to to the complex business rules in back-end systems, rience, State Bank of these uncertain times.
make their day-to- enabling SBI to be the first bank in the country to roll India (SBI) comes with As Digital Transformation ultimately hinges on
Ujjwal Mathur day banking accessi- out the moratorium. Likewise, when the central gov- Puneet Gupta a spectacular legacy DevOps, the right DevOps strategy truly showcases
VP & Country Head - India ble, intuitive, easy, ernment announced direct benefit transfers of Rs Managing Director and has been playing the difference between being disrupted or being the
TCS and secured. TCS has 500 every month to women holding Jan Dhan ac- NetApp India a pivotal role in the disruptor and SBI has proven their position in the dis-
been its growth and counts to alleviate their financial distress due to the country’s financial in- ruptor category. Assured of a future ready platform, SBI
transformation part- pandemic, under the PM Garib Kalyan Yojana, TCS clusion program, ena- can seamlessly onboard futuristic applications that
ner at every step of this journey, leveraging its do- teams helped SBI process the unprecedented vol- bling millions of transactions per day. adopt microservices principles, running on cloud infra-
main knowledge, intellectual property and technol- ume of transactions leveraging the TCS Financial In- It gives NetApp great pleasure to partner with SBI structure, while leveraging the DevOps methodology.
ogy expertise to help it achieve this mission. clusion platform and other systems, crediting over on this journey to enable data driven decisions, The next five years will be a period of accelerated
At the heart of SBI’s initiatives to digitalise its 60 million beneficiary accounts in record time. modernise applications, leverage AI & ML and deliver pursuit of digital-first by banks across the country.
front-end, expand its accessibility and deliver Looking ahead, SBI and TCS – two highly purpose- the highest uptime. Today NetApp is the preferred Emphasis around data driven policies, personalisa-
world-class banking services 24x7 seamlessly driven, resilient and adaptable organisations, united in data platform for various critical applications like tion at scale, fast turnaround time, and conversa-
across next generation channels to a new digital- their customer-centricity and focus on innovation – Meghdoot - Private Cloud, CKYC, CRM, Internet tional banking will be the top factors driving custom-
savvy generation, is its highly scalable, flexible and are joining hands to launch new initiatives that use Banking and Treasury. er loyalty. With SBI pioneering the reinvention of
resilient digital-ready core banking system powered technologies creatively to offer differentiated custom- NetApp has helped SBI build its Data Fabric, en- customer experience, coupled with its data driven
by TCS BaNCS™. er experiences in areas like frictionless trade finance, suring seamless data mobility to get better insights digital approach, I see rapid realisation of SBI’s vision
This is the same resilient core that helped SBI and expand the bank’s market presence further. and accelerate innovation. We are enabling a collab- to be the Bank of Choice for a Transforming India.

S T
tate Bank of India centralised KYC registry. Other solutions include infra- he current tech- at the heart of an organisation’s products, services
is one of the ear- structure for Web based Cheque Truncation initiative, nology land- and operations that helps accelerate the business
liest of banks DNS solution, managing ATM infrastructure, manag- scape is dynamic and competitively differentiate itself, in order to im-
that has invested ing backup and archival in private cloud “Meghdoot”, and requires every prove the experience for its customers. As a technol-
heavily on digital ex- next generation firewalls and networking solutions. industry to adopt ogy company, Dell is well positioned to serve all cus-
periences and is pio- Inspira is currently building SBI’s prestigious Next emerging technolo- tomers and partners, who are embarking on their
neering a revolution in Generation Global Cyber Security Operations Centre gies to drive business Digital Transformation journey to equip them with
Indian banking land- (GSOC) with Behaviour Analytics and extensive AI/ growth. One sector high-end solutions and services.
scape – Customer Ex- ML capabilities to detect threats, reduce MTTD and that has been provid- As a trusted technology partner, Dell is supporting
perience, Digital Cen- MTTR using orchestration and automation. The GC- ing seamless services SBI, by consolidating servers from each branch into a
tricity, Re-bundling of SOC will be driven by advanced cybersecurity tech- is the Banking Sector. virtualised environment. Through the Converged In-
financial products, and nologies integrated to provide contextual intelli- Over the years, the frastructure Platform, we are delivering a world-class
more; it’s our pleasure gence, which pivots the focus from reactive to more Indian banking sector customer experience for its 25,000 branches and ad-
to be their partner in proactive approach. has adapted to all dressing assets of 80,000 users through end-user cli-
this journey” said Inspira is a leading digital transformation enterprise technological ad- ent devices. Dell Technologies is also powering SBI’s
Manoj Kanodia Manoj Kanodia, CEO, that combines bold thinking, path breaking technolo- Alok Ohrie vancements and has Global Cyber Security Operations Centre (GCSOC) and
CEO Inspira Enterprise. gies and years of expertise to transform businesses President and evolved exponentially addressing the key business imperative of security
Inspira Enterprise With our association and organisations around the world. Our expertise lies Managing Director to continue serving its transformation. Our edge-to-cloud solutions stack
of over 6 years with in Cyber Security, Networking & Data Centre, Smart Dell Technologies India customers, with the caters to various aspects of the business, through a
State Bank of India, we Solutions, i.e. Smart City, ITMS & Digital Healthcare best available solu- single Original Equipment Manufacturer (OEM).
have been their partner in adoption of advanced tech- and ANKIOS, a platform dedicated to next-gen tech- tions. SBI, being the SBI is one of the premier and the most reputed fi-
nologies in the areas of networking, cybersecurity, nologies - Blockchain, Big Data & Analytics and Cloud Numero Uno of the banking sector, is at the forefront nancial institutions in the country and it’s a great
data centre solutions, giving them an edge over their Computing. Inspira is ratified with an ISO, CMMI Level of this transformation and is recognised as the digi- honor to be associated with a bank that has a legacy
competition. Inspira has successfully implemented 5 and Great Place to Work certified company. We are tal leader in its space. of 65 years. It is indeed a privilege to assist thou-
many large projects in SBI, which include setting up of very grateful to SBI for their constant support and The changing environment has made us all rethink sands of customers, through SBI. With our deep ex-
one of the largest data centres in the country, de- congratulate them on completion of their 65th year of the way we live and work. The need of the hour is to pertise in technology and our continued partnership,
signed to handle the user traffic load across the coun- operations. Inspira takes immense pride in being as- work in collaboration and technology is playing a vi- we look forward to successfully supporting SBI in
try with faster data and transaction processing and sociated with the largest bank in India. tal role here. Digital Transformation puts technology their future quests as well.

H K
ewlett Packard companies and others. Today, organisations are at a A I TA K U S H A- we enabled centralised server security solution for their
Enterprise crossroads in their digital transformation efforts. We SEISHIN, a Japa- virtual servers and secured the web gateway. Hitachi
(HPE) is a glob- have witnessed increased demand for our as-a-Ser- nese word for pi- Systems Micro Clinic created a comprehensive, concise
al, edge-to-cloud vices offerings to deal with unexpected demand for oneering spirit, and coordinated procurement and integration plan
Platform-as-a-Ser- increased capacity as well as reducing risk and fi- signifies a continual which was formulated on the various applications and
vice company built to nancial exposure in uncertain times. pursuit of creating supporting architectures.
transform your busi- HPE’s GreenLake offering is an as-a-Service offer- something new by lev- The digital technology and analytics have helped
ness by helping you ing which can be set up in a customer’s own data- eraging Hitachi’s SBI realise security and granular control for resources
connect, protect, an- center and therefore can provide an alternative greatest strengths in and services, faster response for any application, and
alyse, and act on all when customers have workloads that are not well- technologies and inno- always available information at fingertips. The data
your data and appli- suited to running in the public cloud. HPE delivers a vation to create new has enabled SBI to create meaningful customer en-
cations wherever unique approach by providing HPE GreenLake cloud business opportuni- gagements which is helping them to mitigate the im-
they live, from edge services to customers in the environment of their ties. This spirit reso- pact of current pandemic. Hitachi Systems Micro
to cloud, so you can choice – from edge to cloud – with a consistent op- nates through the way Clinic continues to constructively engage with SBI to
turn insights into erating model and with visibility and governance we think and operate, generate enormous value by digitising its operations
Som Satsangi outcomes at the across all enterprise applications and data. Tarun Seth as we collectively through workplace transformation solutions.
Managing Director speed required to The new HPE GreenLake cloud services, which Managing Director strive to deliver solu- As we continue to adapt to ‘the New Normal’ Hi-
Hewlett Packard Enterprise thrive in today’s span container management, machine learning op- Hitachi Systems Micro Clinic tions by partnering tachi Systems Micro Clinic is proud to associate with
India complex world. erations, VMs, storage, compute, data protection, with SBI, India’s pre- SBI on transforming the digital banking landscape
HPE believes in be- and networking, help customers transform and mier banking institute. for its customers. Our focused approach combined
ing a force for good modernise their applications and data – the majority The significance of this collaboration and its result- with rich experience in technology has helped us to
and our purpose is to advance the way people live of which live on premises, in colocation facilities, and ant myriad benefits increases even further during these recalibrate business models and drive business
and work. increasingly at the edge. challenging times. As we connect the dots, the underly- growth. Our prowess to build complete infrastruc-
In these unprecedented times, we are prioritising HPE is proud to be associated with SBI in its un- ing philosophy between Hitachi and SBI has always ture management suites powered by AI and ML are
the things that are within our control. Business con- paralleled journey of digital transformation by pow- been bringing ‘human-centric innovations’ by putting helping empower, embrace and approach the
tinuity is a key focus for our enterprise customers ering the largest core banking set up, running their the customer at the core of their business strategy. Hi- change and opportunities in banking industry. Guid-
who cut across several verticals like banks, insur- largest ATM network along with many other initia- tachi Systems Micro Clinic accelerated technology- ed by the mission of promoting social innovation
ance companies, Telecom & IT/ITES companies, tives to strengthen the network, security and private driven digital banking initiatives for SBI by leveraging business in India, we will continue to bolster our
chemicals plants, oil and gas, stock exchanges, state cloud platforms and is honored to work closely with private cloud technology “Meghdoot” and developing a commitment with SBI to revolutionise digital bank-
and central government departments, technology the Indian banking sector. data lake concept. With adoption of cloud first strategy, ing in these unprecedented times.

I
BM is proud of its order food and more. The team set out to simplify
two decades long things by merging lifestyle and banking using niche
strategic associa- technologies like Mobile First Platform, Cloudant DB,
tion with SBI. As a KAFKA etc. Within the very first year of operations, not
preferred partner in only did the team expand the footprint through agile Teamwork is the ability
SBI’s path-breaking delivery, but also helped the Bank achieve their busi- to work together
Digital & Data jour- ness aspirations of delivering world class customer ex-
ney, we are commit- perience and achieving exponential growth through the toward a common
ted to helping the digital platform. This solution helped the Bank to fulfil
bank leverage tech- its objective of being seen as the Banker to GenY.
vision. The ability
nology to achieve IBM was also instrumental in designing and im- to direct individual
their mission of pro- plementing the Datawarehouse capabilities at SBI,
viding simple, re- the largest such installation in the Banking sector accomplishments
sponsive and innova-
tive solutions for a
across the world, close to ten years ago. As the new
normal for the financial sector revolves around radi-
toward organisational
Sandip Patel transforming India. cally lower cost structures, operational resiliency, objectives. It is the fuel
IBM is currently en- and reinvented customer experiences, SBI realised
Managing Director
gaged with SBI on a the need to power extreme digitisation to future that allows common
IBM India Private Limited
number of strategic
initiatives as they build
proof their banking and enhance customer experi-
ence. As a key step in that direction, the bank is col-
people to attain
an agile organisation fueled by data, guided by AI insight laborating with IBM to augment their existing solu- uncommon results."
and able to work in any cloud environment. These in- tion to a Next gen Datawarehouse & Data Lake
clude: Digital transformation on IBM Hybrid Cloud plat- solution. In addition, Bank is using Power Server,
form, Data , Analytics and co-innovation on emerging IBM Storage Systems, Analytics Software (IIAS, CDC,
technologies such as Blockchain, Cognitive Computing, DB2, Optim etc) and Hybrid Cloud solutions (WAS,
API Banking, Security & IoT to name a few. IBM is the IIB, DataPower, API Banking, Sterling File Manage- – Andrew Carnegie
key digital partner for the Bank through its iconic project ment, Cloud Pak for Data & Integration) to run the
“YONO (You Only Need One)”, that is transforming how largest internet banking platform/service and other
more than 24 million people in India bank, invest, shop, critical operations.

This special feature is conceptualised and executed by email : nutan@theresource24x7.com | contact : 9820182962 | www.theresource24x7.com