AAPI: April 2016

INDIA

INDIA & THE WORLD

21.1. India-Iran sign agreements on crude oil imports, gas field development
21.2. Ashgabat Agreement gets Cabinet nod
22. Defence Minister inaugurates Defexpo-2016 at Goa
23.1. EU-India Summit, Brussels, 30 March 2016. EU-India Agenda for Action-2020
23.2. WTO: India opposes US, EU bid to hold small-group talks
24. How Putin has changed the future of oil
25. These Are the Two Original Sins of the Internet — And Now's the Time to Fix Them

* * *

Lisbon, 20th April 2016

Newsletter, 20-IV-2016

INDIA

– GENERAL POLICY, INFRASTRUCTURE, COUNTRY FINANCES, etc.

1.1. PM Narendra Modi launches 'Stand up India' to promote financial inclusion

Economic Times | Apr. 06, 2016

New Delhi: Prime Minister Narendra Modi on Tuesday launched the Stand up India scheme to enable Scheduled Castes, Scheduled Tribes and women entrepreneurs to access loans, setting a target of creating 250.000 such entrepreneurs across the country.

Under the scheme 125.000 bank branches will provide loans up to Rs 1 crore. Each branch will be required to provide two such loans ranging from Rs 10 lakh to Rs 1 crore without collateral for setting up a new enterprise.

The PM said it is not possible for the government to provide jobs to everyone. The scheme will convert "jobseekers into job creators," he said. "This scheme is going to transform the lives of people from dalit and tribal communities," Modi said. Stand up India, he said, aims to empower every Indian and enable them to stand on their own feet. The scheme was announced by Modi in his Independence Day address last year.

At a function in Noida in Uttar Pradesh that also marked the birth anniversary of dalit leader and former Deputy Prime Minister Babu Jagjivan Ram, the PM also flagged off 5,100 e-rickshaws. Without naming anyone, Modi said that while poor people are generous and honest some rich borrowers look for ways to flee after taking loans.

"This nation has seen the generosity of poor. Rich borrowers look for ways to run away after borrowing money from banks," he said.

Modi said that Prime Minister's Jan Dhan Yojana encouraged people to open zero-balance account but they deposited Rs 35,000 crore.

"Look at their honesty, their self-respect. They opted to put money into their accounts...Rs 50, 100, 200. The deposits exceeded Rs 35,000 crore. This is the generosity of our poor people," Modi said. Finance Minister Arun Jaitley said his ministry, which is usually associated with big business houses, in the last two years has tried to work for the betterment of the poor people. He recalled various schemes of the government like Jan Dhan Yojana, insurance and pension and MUDRA Yojana to promote financial inclusion with the view to empower the poor.

Under the Stand up India scheme people from Scheduled Castes and Scheduled Tribes, and women entrepreneurs, will get support such as pre-loan training, facilitating loan, factoring and marketing. There will be a Rs 10,000 crore refinance window through Small Industries Development Bank of India (SIDBI) and the National Credit Guarantee Trustee Company Ltd (NCGTC) will create a corpus of Rs 5,000 crore.

SIDBI will engage with the Dalit Indian Chamber of Commerce and Industry and various other institutions to take the scheme forward. The offices of SIDBI and National Bank for Agriculture and Rural Development will be designated 'Stand Up Connect Centres'.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

2.1. Digital India a US$ 1 trillion business opportunity, says Ravi Shankar Prasad

Economic Times | Mar. 31, 2016

New Delhi: The communications and IT minister Ravi Shankar Prasad has said 'Digital India' initiative of the government is a $1 trillion business opportunity across IT and IT enabled services, telecom and electronics manufacturing.

At the FICCI Frames 2016 Media & Entertainment Industry Conclave in Mumbai Prasad said Prime Minister Narendra Modi's campaign to empower the citizens of India digitally will provide a business opportunity of $400 billion for electronics manufacturing including mobile phones, solar panels and so on.

He added that another $350 billion opportunity will be presented by the IT and ITES sector and the communication services will provide business opportunity of another $250 billion.

"The aspirational urge of Indians is driving the digital world in a phenomenal way. And the government's job is to create an enabling eco-system for its growth." Prasad said.

Speaking about various other Modi government's initiatives including Skill India, Stand-Up India, Aadhaar roll out, Make in India and Smart Cities, Prasad asid all thse initiative involved enormous use of digital technology.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

2.2. Reliance Jio initial investment at Rs150,000 crore ($22,55 bn): Mukesh Ambani

Livemint | Mar. 31, 2016

Mumbai: Reliance Industries Ltd (RIL) chairman Mukesh Ambani Wednesday described his phone company as the world’s largest start-up, entailing an initial investment of Rs.1.5 trillion.

The figure is far higher than the around Rs.85,000 crore RIL, in April last year, said it was investing in Reliance Jio Infocomm.

Reliance Jio is set to launch its 4G mobile phone and digital services in the second half of 2016.

In December 2015, RIL offered employees up to four Jio connections each, free of cost, to test its services. Ambani said the trend of digitization and the desire to end India’s “digital poverty” led to the creation of Jio, as the brand is known.

“To my mind, digitization is the defining trend of this century; in fact, that is the very reason we at Reliance conceived Jio,” Ambani said in his keynote address to Ficci Frames conference on the media and entertainment industry. “Jio is one of the largest transformational digital initiatives anywhere in the world with an initial investment of more than Rs.150,000 crore. It really is the world’s biggest start-up,” Ambani added. RIL has previously pegged the investment figure for Reliance Jio at $14 billion (about Rs.85,000 crore). The money has been pumped into setting up telecom infrastructure, such as telecom towers, fibre optic cables and purchase of spectrum, said executives from RIL at an analysts conference on 17 April 2015. “Rs.1.5 trillion is the peak investment that would be required in the Jio business over the next 3-4 years,” an analyst at a domestic brokerage firm said on condition of anonymity, adding that it would likely include investments already made and to be made.

Ambani said that Jio will help India become among the top ten mobile broadband markets in the next few years, ending the country’s digital poverty as the world goes digital. “Today, India is ranked 150th in the mobile Internet access rankings out of 230 countries in the world. We have the responsibility to digitally empower India. To end this digital poverty, 1.3 billion Indians cannot be left behind as world enters a new era,” Ambani said. “We have one of the youngest populations in the world. Give them the skills, give them the tools and the environment, they will surprise and support. It is this opportunity to transform the lives of our 1.3 billion Indians that motivated Reliance to enter and transform the entire digital ecosystem and Jio is the result. I have no doubt that with the launch of Jio, India’s rank will go up from 150 to among the top ten mobile Internet access (markets) in the world in the next few years,” he said.

Ambani listed four key interventions—coverage, quality, data and affordability—in order to achieve this. “First is through the coverage. Coverage refers to mobile internet access no matter where you are in India. Currently the coverage of high-speed mobile internet in India is only 15-20%. The comparative figure for the US is 75% of its population. Jio will start its services with 70% coverage of the Indian population from day 1. I’m sure with all our industry partners and the efforts Jio is making India’s high speed mobile coverage will be over 90% by the end of year 2017.”

Ambani further said, “Second, is through quality which refers to the speed and strength of mobile broadband. From day one, the Jio mobile broadband will offer speeds that are 40-80 times faster than the current speeds we see.

“Third is through quantity and capacity of data available for consumption for ever consumer in India. Currently the data consumption for an average Indian is 0.15 GB per annum. Jio’s network is engineered to provide a capacity of over 10 GB per user— that is nearly 100 times more than what he/she is using today.” He mentioned affordability as the fourth key factor to make India digitally active.

“Fourth is to make this very, very affordable. All of this is of no use is we cannot make this accessible and affordable to consumers in all parts of the country. Jio will significantly up the quantity, quality and coverage not by a factor of one or two, but as I explained technology allows us to improve this by a factor (of) 80-100. This initiative is our small and humble contribution to the honourable prime minister’s vision of digital India,” said Ambani.

Ambani also spoke about what consumers can expect from Reliance Jio.

“Jio is not just a telecom network, it is an entire ecosystem that allows Indians to live the digital life to the fullest. This ecosystem consists of devices, broadband, powerful applications and services distributed to every doorstep in India. Jio’s media offerings will include the most comprehensive library of programming of live and recorded music, sports, live and catch up television, movies and events.... Jio is about unleashing creativity and connected intelligence through the smartphone.”

Ambani also listed the major future trends of the digital world.

“The first is that world is moving from orality to visuality. Images and video will rule in the digital world. And video will be the new voice for some of us in the network industry. And thanks to Jio, India will have one of the most powerful and comprehensive video networks in the world. This transformation from voice to video driven by the network will be available in every city and village in India.

“An affordable video network has the power to change how we learn, play, communicate and entertain. Affordability changes everything—it brings millions to a new platform. Let us get used to video being the new voice,” he said.

“Second, it is important to understand that digital technology is exponential. Any exponential change will create large opportunity. The world is graduating to a telemedia world. Earlier, telecommunications, media and entertainment, TV and broadcasting used to be more or less separate industries. Telcos used to focus on infrastructure and networks and entertainment companies focused on content production and distribution. “There were different players for the large screen, the movie industry, for the small screen the television industry, for the non- screen the movie industry. Now, as mobile broadband is engulfing the world, telecom and ICT and various media sectors are converging. We are all part of a telemedia future, the rules of the game have changed. The model will shift from ownership to digital access,” Ambani said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

3. India poised to become technology leader, say industry experts

Livemint | Mar. 21, 2016

New Delhi: India has all the ingredients to become a global technology leader, according to technology industry veterans.

At the EmTech India event organized by MIT Technology Review and Mint, the buzz was all about India’s potential in digitalization on the back of massive mobile penetration, ongoing programmes to improve broadband connectivity and Aadhaar. Industry leaders remained bullish about Prime Minister Narendra Modi’s flagship programmes—Digital India, Start-up India and Make in India.

India is moving towards its goal of becoming a digitally connected country, said R.S. Sharma, chairman of Telecom Regulatory Authority of India.

“It is evident from the fact that the country now has more than a billion mobiles and data (consumption) is growing at 65% annually. This shows there is a massive interest in accessing services such as e-commerce and e-learning,” he said.

The government’s ongoing initiative Bharat Net’s aim is to connect India’s 250,000 panchayats at an estimated cost of $18 billion. Meanwhile, the government is looking at alternative approaches to connect India, including cable TV pipes and White Spaces (refers to the unused TV channels between the active ones). Another powerful soft digital infrastructure is Aadhaar, Sharma said, adding the government has started creating products based on Aadhaar like e-sign, which lets users digitally sign documents and digital lockers, which lets users store and save documents on cloud.

“With RBI issuing licences for payments banks, people can go to neighbourhood stores to take out money,” said Sharma, adding mobile payment is gaining traction in India rapidly.

“India has all the basic building blocks of Digital India ready,” he said. “What is required, however, is for all the ecosystem partners to work together to ensure this vision is realized. All the technology pieces which are available, there is innovation waiting to happen on the top of this stack.”

“Somehow, we have a mindset that we always have to follow the West. We should rely on technology we have built on. While we did not have a head-start, we do have an advantage going forward and, thus, we can leapfrog. For instance, we have gone from no connectivity to full connectivity. We had around 2 crore wireline connections in the past and now we have 100 crore mobile phones; so, it is possible to leapfrog and we must leapfrog.”

The government launched Digital India after coming to power in 2014 to ensure government services are made available to citizens electronically by improving online infrastructure and by increasing Internet connectivity. The initiative includes plans to connect rural India with high-speed Internet networks.

The Startup India campaign was launched in August to promote bank financing and create a favourable business environment for start-up ventures. Make in India is the flagship programme of the Modi government. It was launched on 25 September 2014. It aims to encourage Indian and multinational companies to manufacture their products in India.

“If you want to do a start-up, this is the right time; the infection point has a just happened,” said John Chambers, executive chairman of Cisco Systems Inc. Even as India still has a long way to go when compared with the US in the 1990s, Chambers said India is going to see a generation of start-ups coming up who will set examples for the world.

Kumud M. Srinivasan, president of Intel India, echoed the sentiments. India’s dream of becoming a start-up nation is facing challenges such as illiteracy, malnutrition, poor infrastructure and low-yielding crops, he said. “Our government is trying to get over this through efforts like Digital India, Start Up India and Make in India. In Make in India, we talk about competing with China with low-value, high-volume manufacturing. But we have to look at high-value manufacturing to improve the situation. Once we get there, the rest of the development will follow,” she added.

According to Kunal Shah, founder and CEO of Freecharge, the biggest challenge for start-ups is investment support. “I don’t know whether the government should be participating in it. But that is the need of the hour,” he added.

Responding to this, Raghav Narsalay, managing director, Accenture Institute for High Performance, said, “In initial stages, incentives do make a difference. But it is only for a certain point of time. Finally, it is the entrepreneurial zeal that matters.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

4.1. Teach entrepreneurship in schools

BusinessLine | Nitin Potdar | 23 Mar. 2016

Unless we change mindsets at a young age, we will remain a nation of job seekers

In his second Independence Day speech Prime Minister Narendra Modi put his emphasis squarely on entrepreneurship and job creation through startups by launching a new campaign ‘Start up India, Stand up India’ and expected branches of various banks to promote bank financing for startups by the underprivileged. The recent focus on startups emanates from the Nasscom Startup Report which revealed interesting statistics that should undoubtedly make us proud.

India is home to around 3,100 startups and by 2020 a projected 11,500 startups would employ 250,000 people across the country. The current volumes as also the projections are no doubt impressive, credible enough to predict a bright future for Indian startups across verticals.

But volumes alone — of any initiative, project or phenomenon — don’t necessarily speak volumes of the value attached. It’s only the quality of innovation, the ability and agility of an enterprise that separates the winners from the also-rans.

The startup universe is no exception. It needs a comprehensive ecosystem starting from school education to industry connect to ensure quality is not compromised in the focus on quantity.

Encouraging entrepreneurs

Taking a cue from the West, India has indeed taken many positive steps towards this mission. The ₹10,000 crore startup fund in the last finance budget is one of them.

At the State level too, there’s substantial activity happening — whether Karnataka’s proposed Startup Act, the first of its kind in the country, Kerala’s unique Startup Village of Kochi, West Bengal’s single-window clearance for MSMEs myenterprisewb.in, IIT-Bombay’s vibrant e-cell in Maharashtra, Gujarat’s innovative Center of Excellence in Entrepreneurship & Technology or Tamil Nadu’s pioneering ‘New Entrepreneur Cum Enterprise Development’ (NEED) programme.

In a recent development, market regulator SEBI has proposed to issue guidelines for enabling knowledgebased startups to raise funds from the capital markets. An inspiring initiative indeed, seemingly on the lines of the ‘Jumpstart Our Business Startups Act’ (JOBS Act) in the US.

Having said that, governance and regulation are fine but they will have their own limits. Both work best when the system and its constituents are intrinsically wedded to the larger cause.

As important as the gesture to boost the startup dynamic is the need to factor in the dizzying speed at which innovation is shaping the startup world: questioning business models, distinguishing between risk and adventure capital, triggering mergers and acquisitions, and calling for quick consolidation of legal structures in line with market demands, all in same breath.

Need a holistic vision

How can we achieve the needful only through instructional communiqués issued in hindsight? Such learning stems from a strong startup ecosystem that needs nurturing, to help stakeholders achieve traction and momentum in their evolutionary strides. There’s an urgent need to equip our young guns of the startup universe with the holistic vision that alone takes the primordial idea to the next level. This knowledge can’t ever be acquired through official regulations or guidelines of the reactive kind, however elaborate they are made.

This value-added learning — how to identify opportunities, how to work around problems, how to foster innovation, how to overcome constraints, how to form winning teams, how to put risk in perspective, how to strike a blend between innovation and tradition — is best imparted in the formative years of education.

Contrary to popular perception, the very notion of an enterprise is best explained on a blank slate, to a child of starry-eyed ambition while he or she is still at school.

Teaching entrepreneurship from school level has become even more critical in today’s times as the future clearly belongs to the graduates of the startup world. In fact various recent surveys have outlined the importance of encouraging entrepreneurship and creating globally skilled and competitive workforce through education system.

In fact teaching entrepreneurship from school level would be the long term blue print for the most ambitious Make in India campaign. And it is now globally proved that entrepreneurship can be easily taught. It is high time that we engage our younger generation in creating productive assets. Yes, there are many challenges in the way — prime among them is the curriculum design and the force thousands of trained teachers. Should it be optional or mandatory, should it be in-house or outsourced, should it be modular or freewheeling, should it be prescriptive or suggestive, so on and so forth.

But the moot point is the need to teach students about the redeeming value of entrepreneurship in life. How much to learn from it is up to them but isn’t that the case even with mortarboard education of math, science and language?

A new thinking

Not that the new wave of learning would turn the entire populace into entrepreneurial wizards, but most would surely appreciate a few things better than what the earlier generation did — like the value of design thinking, versatility and multi-tasking, collaborative skills, co-creational abilities and cultural sensitivities.

Thinking out of the box would then come more naturally, unconventional talent will get the respect it deserves and the heightened awareness has a better chance of bringing about much required economic prosperity based on social justice.

Unless we introduce entrepreneurship as a school subject — like math, science, history or geography — most young minds would remain oblivious of an undeniable fact for long, that jobs are best created, not consumed. Worse, the white collar brigade of the ill-famed British lineage will continue to fill umpteen cubicles across verticals, albeit in newer forms and avatars in this tech-enabled age.

4.2. A crowd-funding platform for social causes

BusinessLine | Priyanka Pani | 12 Apr. 2016

Even as capital markets regulator SEBI is yet to come out with guidelines on raising funds through crowdfunding, Bengaluru-based Fueladream has launched a platform to help entrepreneurs and social causes raise capital from individuals. The platform goes live on Wednesday.

However, the amount will go as charity, with tax benefits, as individuals are not allowed to pick up equity stakes in any venture through crowd-funding platforms at present.

Founded by Ranganath Thota in June 2015, Fueladream is a ‘marketplace’ for people and organisations that aim to raise funds for creative ideas, causes, charities, events and community-led activities.

The venture has raised ₹1.7 crore in seed funding, and is looking for another angel round in two months to build the platform, advertise and create content for all the ideas and causes that get listed.

It has its own business development team, content writers and graphic designers to help the campaign owners put their stories across in a compelling way.

Fueladream has already listed about 12 projects, of which about six are non-financial ones, ranging from saving animals to conservation of water and helping kids with cleft lips. The rest are ideas or start-ups working on ventures like electronic cycles, reversible linen shirts, a music band and a template for the visually challenged to recognise various denominations of currency.

It plans to list 20 projects every month, and has partnered with HDFC Bank for a payment gateway. Individuals can donate anything above ₹100. Fueladream charges about 9 per cent commission fee of the total fund raised by the start-ups/causes.

Huge opportunity

Thota told BusinessLine the initiative focuses on the ideas and charities segment of crowd-funding that aims to impact 2.2 billion people in India, Africa and South-East Asia. It is focused on the developing markets and looks to both disrupt the traditional ways of raising funds here and create an alternative mode of funding. Crowd-funding is defined as the practice of funding a project or venture by raising monetary contributions from a large number of people, often via internet-mediated registries. But the concept can also be executed through mail-order subscriptions, benefit events and other methods. While it is quite popular in the developed markets, the concept is catching up fast in India.

There are two types of crowd-funding — equity and non-financial.

“We are catering to the non-financial part, which is a $12-billion opportunity and is growing at 70 per cent yearon-year. In India it is growing fast as Indians by nature believe in charity.

“Last year individuals in the country gave away ₹40,000 crore towards non-religious charity and this is a huge opportunity for a platform like us that help social causes and needy entrepreneurs raise money from people. “We have a team that does due diligence on the causes and ideas which get listed on our platform so that no one can misuse it,” Thota said, adding that the donors can see online how much funds an idea is raising, or what progress a particular project is making.

The global market size for crowd-funding has gone up from $6.1 billion in 2013 to $34 billion in 2015. It has been predicted that by 2025, the global crowd-funding market will grow to $90 billion.

5.1. In 2015-16, record 6,029 km of highways constructed

Times of India | Apr. 12, 2016

New Delhi: The construction of highways touched an all-time high of 6,029km during 2015-16. Prior to this, a maximum of 5,732 km of national highway was constructed during 2012-13.

Officials said while NHAI reported construction of nearly 2,000 km, the rest came from works done by the road transport ministry through its agencies including state public works departments, Border Roads Organisation and ministry's entity NHIDCL for undertaking works in hill states.

TOI on January 10 had first reported how the total construction was set to cross 6,000-km mark.

Though surpassing 2012-13 record by merely constructing one extra km per day may not be that big achievement, sources said the increased pace of construction will now continue for the next few years.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

5.2. New defence procurement policy cleared

Business Standard | Mar. 22, 2016

New Delhi: Defence Minister Manohar Parrikar announced on Monday the clearance of the long anticipated Defence Procurement Policy of 2016 (DPP-2016). This will replace the current DPP-2013, and govern all defence acquisitions initiated after April 2. He said the new policy would be accessible on the defence ministry's website with effect from March 28.

Speaking to the media in New Delhi after a meeting of the ministry's apex procurement body, the Defence Acquisition Council (DAC), Parrikar revealed that one chapter remains to be cleared, Chapter 6, which deals with the appointment of "strategic partners" in the private sector. It governs the selection of private industries as the ministry's priority partners in manufacturing equipment like aircraft, warships, helicopters, submarines, tanks, etc, based on technology from foreign vendors.

He said the policy on strategic partners required an "extensive exercise to be carried out. It would also require financial and Cabinet Committee on Security approvals." He estimated this would be finalised in 1-2 months.

As this newspaper reported (January 13, Parrikar's proposed defence procurement policy breaks new ground), DPP-2016 includes bold changes, including a first-time emphasis on indigenously designed equipment. A new procurement class - termed Indian Designed, Developed and Manufactured (IDDM) category - has been created as the most preferred category for buying equipment. Parrikar stated that a new "penalisation provisions" policy was in the pipeline, to replace the reflexive "blacklisting" of arms vendors suspected of wrongdoing with a more appropriate range of penalties. He emphasised, however, that foreign vendors would not be allowed to get away with paying bribes. "I don't want to buy from a company that pays bribes. If you want to pay a bribe, put it on the table for the government and reduce the price," he stated.

Now IDDM would be the top category, to encourage defence industry to shift from licensed manufacture into the high-tech realm of designing and developing defence equipment.

To qualify for this category, at least 40 per cent of a product would have to be manufactured in India. Additionally, there is greater government assistance for the defence industry in the "Make" procedure.

Currently, the ministry reimburses industry with 80 per cent of the cost of designing and developing indigenous equipment. In DPP-2016, the "Make" procedure will see the government reimbursing 90 per cent of the development cost.

There is also greater assurance for the defence industry to recover its costs. If, after successfully developing a prototype, the vendor does not get an order within 24 months, even his 10 per cent expenditure would be refunded.

Offset liabilities will be placed on vendors only in contracts worth over Rs 2,000 crore, up from Rs 300 crore earlier. The policy will require the reinvestment of at least 30 per cent of the contract value back into the Indian defence sector. Parrikar also revealed that DPP-2016 would liberalise the "fast track" procurement of urgently needed equipment. "The earlier impression was that fast track could only be done during war. Now, it will depend upon urgency of [the need]", he said.

Parrikar stated that a new "penalisation provisions" policy was in the pipeline, to replace the reflexive "blacklisting" of arms vendors suspected of wrongdoing with a more appropriate range of penalties. "We will have a mechanism to calibrate the weight of the punishment in accordance with the offence committed by the vendor", he stated. He emphasised, however, that foreign vendors would not be allowed to get away with paying bribes. "I don't want to buy from a company that pays bribes. If you want to pay a bribe, put it on the table for the government and reduce the price", he stated.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. New crop insurance scheme will cover 50% of farmers: Jaitley

Hindu | Deepa Nair | Mar. 22, 2016

The newly-launched Pradhan Mantri Fasal Bima Yojana (PMFBY) will bring about 50 per cent of India’s farmers in the crop insurance net and help reduce the prevailing distress in the agriculture sector, according to Finance Minister Arun Jaitley.

PMFBY is distinct from all earlier schemes in the sense that it not only takes the number of insured farmers to a higher level (from 20 per cent earlier to the estimated 50 per cent now), but it will also provide more insurance coverage to farmers, assuring them complete safety, Jaitley said at a seminar on the PMFBY organised by the Department of Financial Services at the the Nabard (National Bank for Agriculture and Rural Development) headquarters here.

In this new scheme, farmers will pay less for more coverage and the compensation will be much more in the event of any crop failure or destruction.

“Since the last two years, we have been facing deficit monsoons. While we hope for better monsoons this year, with this new scheme in place, we will be better equipped to safeguard the farming community,” Jaitley said.

He observed that the revamped insurance schemes that have been launched have the potential to reduce distress in the farm sector and would be rolled out in a “mission mode” from April 1 to cover kharif crops.

Though the country had crop insurance schemes in the past, they were partially successful as they were mainly linked to crop loans, Jaitley pointed out. Uttarakhand became the first state to adopt PMFBY as insurance companies bid for premiums lower than the stipulated 2 per cent.

Penalty for settlement delays

The government is also looking at imposing penalties for delay in settlement of farmers’ claims under the new crop insurance plan, said Financial Services Secretary Anjuly Chib Duggal. In the Union Budget, the Centre has made an allocation of ₹5,500 crore for the crop insurance programme under which farmers will have to pay 1.5 per cent of the premium for the sum insured for rabi crops and 2 per cent of the premium for kharif crops.

6.2. India's agriculture sector can grow 6% in case of normal monsoon this year: NITI Aayog

Economic Times | Apr. 01, 2016

New Delhi: Agricultural growth can touch 6 per cent in 2016-17 if the country receives normal monsoon rains this year, a member of the government's premier think-tank, Niti Aayog, has said.

"After two back-to-back drought years, we should not be surprised if we achieve 6 per cent agriculture growth in 2016-17," Niti Aayog's Ramesh Chand said, adding that higher growth was recorded after the drought years 2003-04 and 2010-11.

Monsoon rains (June to September) remained deficit in 2014-15 and 2015-16 at 12 per cent and 14 per cent, respectively. The India Meteorological Department's forecast for 2016-17 is expected in the last week of April. "The closest inference we can take is from 2010-11, when agriculture growth was 8.6 per cent. This was after 2008-09 recorded 0.09 per cent agriculture growth rate, and 2009-10 when agriculture growth was 0.81 per cent," he said.

The drought in India in 2009 was the worst the country had faced in 37 years. Chand said the worst growth rate seen in the past few years was in 2002-03 when agriculture growth was a negative 6.6 per cent. "We bounced back the next year in 2003-04 with 9 per cent agriculture growth," he said.

Although nearly half of India's population has its livelihood in the agricultural sector, Agriculture contributes about 14 per cent to India's economic output, despite nearly half of the country's population being involved in farm-related activities.

A poor monsoon has a ripple effect on the rural economy and demand for consumer goods. Healthy growth in the agriculture is also good news for the fast moving consumer goods segment, which gets about a third of its sales from rural areas.

"If monsoon is on time and has a normal spread, then the area under cultivation will be more and production will increase, leading to growth." said Chand.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

7. Hefty bills preventing the sick from seeking medical help

BusinessLine | Our Bureau | 12, Apr.2016

Expensive healthcare is preventing people from seeking medical help. Though a majority do seek medical advice for ailments, financial constraints were the single biggest reason for those who do not, according to a new report by the National Sample Survey Organisation.

The Health of India survey conducted between January and June 2014 indicated that in the rural areas, 57 per cent who do not see a doctor cited financial constraints, while in cities 68 per cent belonged to this category. A clear indication of rising costs can been seen: the results of the 2004 survey showed only 28 per cent of the rural and 20 per cent of the urban settlers had cited money as a reason.

“The data indicates that cost considerations keep people out of paid healthcare services by hospitals. It reflects the inadequate trust that people have in treatment from primary health centres,” said DK Srivastava, Chief Policy Adviser, EY. While rising healthcare costs are generally associated with the private sector, public healthcare too has become almost twice as expensive since 2004.

In villages, the average treatment costs of a person checking into a government hospital have risen to ₹5,632 in 2014 from ₹3,238 in 2004. Public healthcare costs in cities have become just as prohibitive, having risen to ₹7,670 from ₹3,877.

While a rural patient checking into a private hospital in 2004 would have paid an average bill of ₹7,408, that amount has trebled to ₹21,726 in a decade. For an urban dweller too, the cost has trebled from ₹11,553 in 2004 to ₹32,375.

The survey also revealed that the entire process of seeking medical attention entails enormous out-of-pocket expenditure; hospitalisation accounts for just a fraction of total healthcare costs in India (28 per cent in rural and 32 per cent in urban). Over and above hospitalisation, purchasing medicines accounts for a chunk of the expenditure.

The numbers are especially troubling considering that the survey has also found that “more than 70 per cent (72 per cent in rural and 79 per cent in urban) spells of ailment were treated in the private sector.”

This, coupled with the fact that 86 per cent of the rural population and 82 per cent of the urban population are not covered under any health expenditure support scheme, establishes that healthcare appears to be getting out of reach of the average citizen.

8.1. Government on fast-track to open rural BPOs

Business Standard | Apr. 12, 2016

New Delhi: With a Budget outlay of Rs 500 crore, the government would soon start the tendering process of allocating rural business process outsourcing (BPO) centres, sources in the know said. These rural BPOs are expected to start by June 2017.

According to officials, around 190 new BPOs with a combined seating capacity of 125,000 employees (per shift) would come up in the rural areas.

The rural BPO initiative is a flagship programme of the government under the Digital India scheme. “India BPO Promotion Scheme (IBPS) to incentivise setting up of BPO/ITeS (IT-enabled services) operations across the country, particularly in digitally deficit areas, for creating employment opportunities via information technology (IT) and balanced growth of IT/ITeS sector in each state,” said a senior official.

Telecom Minister Ravi Shankar Prasad recently said the government had approved IBPS for promoting of BPO/ITeS operations across the country with an outlay of Rs 493 crore.

According to a Nasscom report, Ahmedabad, Kochi, Kolkata and Jaipur along with Bhubaneswar, Kochi, Visakhapatnam, Thiruvananthapuram, Chandigarh and Indore are fast emerging as new destinations for business process management (BPM), another name for BPO.

“These cities have made their way to the BPM sector map owing to their excellent infrastructure, including cheaper real estate, cost competitiveness, availability of talent and conducive business environment,” it said. The BPM sector is now $23.3 billion, up from $3.2 billion a decade ago. It employs 956,000 people, of which around 186,000 have been added over the past four years, according to Nasscom.

Seven states, including West Bengal, Odisha and Himachal Pradesh, have proposed their own model for setting up broadband networks under the Centre’s ambitious National Optical Fibre Network project. Government officials said other than Gujarat, Odisha and West Bengal, a chunk of call centres would come up in Assam, Manipur and Tripura.

“A major part of this scheme will help generate more jobs in the northeastern region. In the first phase itself, around 30,000 new jobs would be created,” the official added.

Steps taken for BPO revolution

Govt to offer subsidy of up to 50% of capital expenditure or Rs 1 lakh/seat, whichever is lower.
Target to set up 45,000 seats in the next two-three years.
Scheme outlay to be about Rs 500 crore, valid till March 31, 2017.
New BPO destinations - Ahmedabad, Kochi, Bhubaneshwar, Thiruvananthapuram, Chandigarh and Indore.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

8.2. Startup India initiative to get a rural avatar

Livemint | Mar. 29, 2016

New Delhi: The government's Startup India campaign aimed at boosting entrepreneurship will get a rural avatar in the soon-to-be-launched Deen Dayal Upadhyay Swaniyojan Yojana.

The programme being designed by the rural development ministry will be backed by MUDRA Bank loans, innovative credit linkages and self-help groups.

The government will also hold discussions with private entities and individuals working in the startup space to map entrepreneurship opportunities.

On the lines of the Startup India initiative launched by Prime Minister Narendra Modi in January, the Swaniyojan Yojana is finalizing its action plan and the incentives it will provide the rural poor looking for selfemployment options.

"The scheme will provide the basic skill sets required for self employment in various fields and thereafter we would provide credit linkages, incubation centres wherever needed," a senior government official said.

The Micro Units Development and Refinance Agency (MUDRA) Bank oversees funding for micro and small enterprises.

Socio Economic and Caste Census (SECC) data released in July 2015 showed that a third of India's rural households are landless and depend on manual labour for an income, highlighting the need for skill development in these areas.

The Swaniyojan Yojana will be funded by the existing National Rural Livelihood Mission of the rural development ministry.

Some of the skill sets to be provided would be related to driving, plumbing, agriculture, dairy farming, grafting and horticulture among others.

"The rural unemployed need not leave their land in search of wage employment if they have entrepreneurial opportunities," said the official cited above.

The rural development ministry is in talks with other government departments including textiles, animal husbandry and food processing to help the rural poor collaborate in setting up businesses across various sectors.

The programme to be launched is on the lines of the existing Deen Dayal Upadhyay Grameen Kaushal Yojana (DDUGKY) except its focus won't be on guaranteed placements but generating livelihood through self-employment.

The livelihood programme will provide training for activities ranging from beauty courses and masonry to horticulture and agriculture.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

9.1. 40-plus and rocking the start-up world

BusinessLine | Virendra Pandit | 8 Apr. 2016

In the era of start-ups, where 20-somethings rule the roost, 40-plus professionals may seem the unlikeliest people to start their own businesses, given they are already leading a comfortable life, well ensconced in their respective careers.

But quite a few choose to move out of the comfort zone. Their passion has no expiry date; and in mid-life, they see not a professional crisis but a new opportunity to launch their own venture.

Srikanth Lingidi, founder-CEO of car rental company ApnaCabs, an aggregator of the famed kaali-peeli (blackand-yellow) taxis of Mumbai, felt he had had enough of running a technology consultancy company in the US for 10 years.

At 40, he left his job as president of PeopleTek. Putting to use his 15 years’ experience, he launched ApnaCabs, the only government-licensed aggregator offering government-mandated fares, after he got a licence in December 2015. “We offer a unique physical security device installed in the taxis to ensure women passengers’ safety,” Lingidi told BusinessLine.

Expansion plans

With 1,700 cabs already aggregated in Mumbai, he now plans to expand this “sustainable business” to New Delhi, Hyderabad and Pune.

Pradeep Singh, 59, founder-CEO of Vidyanext, had quit his job as General Manager at Microsoft with similar plans. Educated at IIT-Delhi and Harvard, he first founded Aditi Technologies and Talisma, followed by Vidyanext in 2010, which provides personalised mathematics and science tuitions to school students. “We aren’t a tuition company but a laboratory for technological evolution of a new market offering home tutors. Next year, we will expand to some other cities,” said Singh.

Vidyanext provides a network of tech-enabled tutors to students — within a 10-minute walk from their homes — in Bengaluru. The next stop is Gurgaon, with four centres. The company’s co-founder Will Poole is a former VP of Microsoft and MD of Unitus Seed Fund.

Transport revolution

Rajiv Vij started car rental company Carzonrent in 2001 at the age of 42, after having worked in Hindustan Motors and ITC.

Now, at 57, he plans to create a platform to “revolutionise” the urban transport system in a couple of months. “Almost 70 per cent of cars in a city often remain idle. During the odd-even experiment in Delhi, we found that some 50,000 car owners exchanged, shared or loaned their cars to others. We want to monetise these idly parked, personally-owned, self-drive cars,” he said.

Prior to founding SyberPlace, Urvesh Goel was the Director of Global Invoicing at Convergys Corporation and Amdocs.

Then, at 45, he founded SyberPlace, which he describes as a mandi (marketplace) for over 5,000 merchants for the delivery of electronic goods.

By Diwali 2016, he plans to ensure the delivery of 80 per cent of orders within four hours across many States. After working as a software expert for 18 years, the last being at Ericsson, Arun Bhati founded car pooling firm Orahi at the age of 42. The company recently acquired Delhi-based OddEven, launched in December 2015 by its 13-year-old founder Akshat Mittal.

The new economy does have plenty of space for entrepreneurs across all ages.

9.2. In Indian start-ups, there’s plenty of room for family

BusinessLine | Virendra Pandit | 15 Apr. 2016

Relatives often turn co-founders, angel investors, decision-makers and mentors

Family-owned businesses were the norm in Old Economy—children or descendents simply inherited their family’s businesses and professions—from politics to medicine. The age-old practice was so mater-of-fact and popular that some educational institutions, like the Ahmedabad University, even offered a study of “family business” as part of curriculum to students.

However, unlike in the West, where startup unicorns flowered, the New Indian Economy appears to be following the same age-old, ‘all-in-family’ model, with some of the startups getting launched by, or studded with, family members in important decision-making positions. Even as there are startups that seek co-founders from diverse backgrounds to boost businesses, there are those that are roping in their family members as business associates, suppliers or mentors-advisors.

Modspace.in, launched in June 2015 as an online furniture company for delivering designer modular kitchens and home goods, follows this business route. Avijit Marwah, Co-Founder, roped in his sister-in-law Mehaa as Co-Founder, and his other family members as suppliers. “I am the fourth-generation member in my family’s traditional business of modular furniture manufacturing. At Modspace, I handle the operations, Neha looks after social media, and my other family members are material suppliers,” he told BusinessLine.

This synergy, Marwah said, is necessary: while one company has the technical knowhow, the other one knows manufacturing with wood and equipment imported from Germany and Italy, he added.

Akshay Verma, who worked with a private equity in London, teamed up with sister Arushi, a World Bank official, to return to India and found in 2015 Fitpass, a gym-cum-fitness aggregator that also provides access to health enthusiasts to go to any gym or fitness centre. “One can buy our monthly pass for Rs. 999 that provides them access to any of our 1,150 partners located next to their home or office. We are currently present in Delhi-NCR, Gurgaon and Noida and plan to expand to Bengaluru, Mumbai, Pune, Hyderabad and Chandigarh this year.”

Fitpass, he said, has already become India’s top app in the $20 billion fitness market, he said, quoting from a PwC estimate.

Sister-duo Priya and Charu Sachdev, Co-Founders of elite online marketplace RockNShop, launched their platform 18 months ago. “According to EuroMonitor, India’s online luxury shopping market is expected to grow from Rs. 16,300 crore now to Rs. 40,000 crore by 2020,” Priya said. Her startup’s growth from 12 brands in 2015 to 200 now and a projected 3,000 brands by 2017 is a pointer to this. The international online sale in India alone is currently USD 85 million, she added.

RockNShop showcases Indian and global labels and supports retailers and brands to reach out to the HNIs in the country.

10.1. Startup India Portal and Mobile App Launched

Press Information Bureau | Apr. 01, 2016

New Delhi: The Startup India portal http://startupindia.gov.in, and mobile app have been launched by Secretary, DIPP, Mr. Ramesh Abhishek in New Delhi today.

The key features of the portal and app are the following:

Information Availability: The portal and mobile app provide up-to- date information on various notifications/ circulars issued by various Government ministries/ departments, towards creation of a conducive ecosystem for Startups. The portal and mobile app provide information regarding incubators and funding agencies recognized for the purpose of recommending Startups (as part of Startup recognition application). A comprehensive list of FAQs is also available to help Startups, Incubators and Funding Agencies use the portal and mobile app more effectively.

Startup India Hub: The Startup India Hub, which has been established within Invest India, will be a single point of contact for the entire Startup ecosystem which would enable exchange of knowledge. The Hub will work in a hub and spoke model with Governments, VCs, Angel Funds, Incubators, Mentors, etc. It will assist Startups through their lifecycle, on all aspects, such as providing mentorship, incubator facilities, IPR support, funding etc. The Hub will be operational from 10:00 AM to 5:30 PM on working days and can be reached via the toll free number: 1800115565 or the email ID: dipp-startups@nic.in

Application for Startup Recognition: Entities that fulfil the criteria as per the definition of “Startup” and are incorporated/ registered in India, can obtain recognition as a “Startup” to avail various benefits listed in the Startup India Action Plan. The process of recognition is simple and user friendly and involves a single page application form that a user can fill either through a web interface or through mobile app. Formats of the recommendation/ support letters that need to be attached as part of the application form have been published on the portal and mobile app.

Real Time Startup Recognition: A real time recognition certificate is provided to Startups on completion of the application process. A digital version of the final certificate of recognition is available for download, through the portal and mobile app. A request for certificate of eligibility for tax exemptions from Inter-ministerial Board will be made simultaneously by selection of a simple option.

Verification of Recognition Certificate: The certificate of recognition is verifiable through the portal and mobile app by entering the Startup Recognition/ Certificate Number.

Approval of Inter-Ministerial Board: DIPP has also setup an Inter-Ministerial Board to verify the eligibility of Startups opting to avail Tax and IPR related benefits and to provide a certificate of eligibility to innovative Startups.

Background

The “Startup India” initiative was launched by the Prime Minister of India, ShriNarendra Modi on January 16, 2016 at Vigyan Bhavan, New Delhi. As part of the event, a Startup India Action Plan was released. The Action Plan highlights initiatives envisaged by the Government to develop a conducive Startup ecosystem in the country.

As an integral component of the Action Plan, a Startup India portal and mobile app were envisaged to be implemented. The portal and app have accordingly been released today.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

10.2. Online trading platform for farm goods launched

BusinessLine | Our Bureau | 14 Apr. 2016

Prime Minister Narendra Modi on Thursday sowed the seeds for a farming revolution, with the launch of eNAM, an online portal for trading in agriculture produce, which promises to liberate farmers from the clutches of middle-men and realise fair market value for their yields.

“Farmers in India will now call the shots,” Modi said as he launched the National Agriculture Market portal (eNAM). Terming it a ‘turning point’ for the country’s agriculture, Modi called upon all the States to come on board to help farmers reap the benefits of the trading platform.

The e-NAM marketplace will initially enable farmers in eight States — Uttar Pradesh, Madhya Pradesh, Jharkhand, Himachal Pradesh, Gujarat, Telangana, Rajasthan and Haryana — to sell 25 commodities in 21 wholesale mandis.

The commodities that will initially be sold online include chana (black gram), castor seed, paddy, wheat, maize, turmeric, onion, mustard, mahua flower, tamarind and shelling pea.

“Using this portal, a farmer can decide where his produce will be sold, when it will be sold, and at what price. At the same time, consumers and traders, too, won’t suffer,” Modi said at the launch. The number of wholesale mandis to which farmers will have access through e-NAM would soon increase to 200, said Modi. “Many States have changed their laws. Incorporation of technology is not difficult,” he said.

So far, 14 States have amended their Agriculture Produce Market Committee (APMC) Act to allow e-trading. Among them are Andhra Pradesh, Chhattisgarh, Karnataka, Sikkim, Goa and Mizoram.

Transparency in prices

The idea behind the online market is to provide transparency in pricing by removing the information asymmetry between sellers and buyers and enable farmers to benefit from price discovery.

It will also reduce transaction cost, provide a single licence valid across all markets, help farmers identify the best buyers, enable single-point levy of market fees, and set quality standards.

Additionally, the online market also liberates farmers from dependence on commission agents, who are the traditional link between them and consumers. In some cases, commission agents also double as financiers to farmers, who thus feel obligated to sell their produce through the agent to whom they are indebted.

On the e-platform, farmers can list the items they want to sell on the portal. Local traders, as well as traders in other States, can then bid for the produce. The farmer will be free to choose to accept the offer made locally or by traders in other States. The transaction will be recorded on the books of the local mandi, which will continue to earn the transaction fee.

“Earlier, the farmer never had any choice. Once he took his produce to the mandi, he was completely at the mercy of traders. If the traders decided to drop the price for a particular commodity, the farmer would be forced to sell as he didn’t want to take his produce back to his farm. With online trading, the farmer would have conducted the entire transaction before loading his produce on his tractor or cart,” Modi said.

Traders, too, stand to benefit as they can tap any number of sellers if for some reason they don’t get what they want from their traditional sellers.

The Agriculture Ministry has targeted integrating all 585 regulated markets on the e-NAM platform by March 2018; of these, 200 will be on board by September 2016, 200 more by March 2017, and the other 185 markets by the end date.

Criticising some States, without naming them, for not having laws to protect their farmers, Modi said that farmers were susceptible to exploitation there. Even in States that have laws, they need to make amendments to provide for the new technology that has come in. “I hope States will amend their laws so that they can benefit from online trading. I ask States to give it primacy,” he said.

On a positive note, the Prime Minister added that as soon as news of the benefits enjoyed by farmers in the 21 selected mandis start to come in, the other States would want to become part of the online system so that their farmers, too, could benefit.

The laboratories to be set up at the mandis would scientifically classify the quality of the product being sold and the transparency would help farmers, traders as well as consumers, he added.

– INDUSTRY, MANUFACTURE

11.1. India ranked sixth in top 10 largest manufacturers list, as per a UN report

IBEF | Apr. 04, 2016

New Delhi: India has been ranked sixth among the world’s 10 largest manufacturing countries by an United Nations Industrial Development Organization (UNIDO) report for 2015. The country’s ranking has moved up by three places compared to last year. According to the report, the Manufacturing Value Added (MVA) increased by 7.6 per cent in 2015 compared to the previous year and the quarterly Index of Industrial Production (IIP) showed 1 per cent growth year-on-year in Q4 2015. China was on top of the list followed by the US, Japan, Germany and Korea while Indonesia was placed last.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

11.2. State of Auto: If You're Not in One of These 10 Jobs, You Should Be

Linkdin | Mar. 14, 2016. Maria Barra, CEO GM Company

We’re at the start of a revolution that is changing the way people drive and interact with cars, and it’s closer than many think. As I’ve said before, the auto industry will change more in the next five years than it has in the last 50.

Around the world, social and technological changes are redefining personal mobility and rewriting the rules of vehicle use and ownership. I’m talking about huge improvements in connectivity, car-sharing, electrification, vehicle safety, even cars that drive themselves.

At GM, we don’t fear this kind of disruption – we are working to lead it. And, we’re constantly looking for the right people to join our team.

Here are just a few examples of what we’ve been up to:

In 2015, we sold seven times more 4G-equipped vehicles than the rest of the industry combined. By the end of this year, we’ll have 12 million vehicles on four continents connected through our OnStar system.
Our Maven car-sharing program is up and running in China, Germany, New York, and Ann Arbor, Michigan, with more locations on the way.
We’re very excited about our alliance with ride-sharing company Lyft to create an integrated network of on-demand autonomous vehicles.
We recently acquired Cruise Automation to further accelerate our development of autonomous vehicle technology.
And our Chevrolet Bolt EV, with a range of more than 200 miles, starts production this year.

We see tremendous opportunities in today’s global auto industry, including the chance to develop dramatically cleaner, safer, smarter and more energy-efficient vehicles for customers around the world.

Who will lead these changes? Engineers, inventors, designers, marketers and others with the passion and talent to reinvent personal transportation and change the world.

At GM, we’ve identified 10 jobs that will be critical to our plans to define and lead personal mobility:

Electrical engineers – to explore and develop electric vehicles
Analytics expert – to create algorithms to decipher how smart data can best help drivers
Interaction designers – to ensure information and technology within the car can be accessed safely and intuitively
Web programmer – to develop software that allows the next big thing to easily connect to the vehicle and its occupants
Autonomous driving engineer – to developed advanced sensor and radar systems to make these vehicles and those that follow a reality
Customer care experts – to connect with customers directly and close to instantaneously via social channels
Sustainability integration expert – to help us find ways of using less of everything to keep our planet green
Industrial engineer – to challenge engineers to build complex vehicles in ways that are sustainable and efficient
3D printing engineer – to help us innovate and build faster, often allowing us to have more affordable options to test
Alternative propulsion engineer – to refine and develop new ways for cars to move If you’re looking for a career that will challenge your intellect, reward your hard work and give you the opportunity to define the future of personal mobility, this list is a good place to start.

12.1. Ambitious plan: by 2030, India may have only electric cars

BusinessLine | Our Bureau | Mar. 25, 2016

A high-level working group of the Central government will meet in the first week of April to assess if India can be a 100 per cent electric vehicle country by 2030. It will also attempt to draw up a roadmap for achieving the target, said Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy.

“We are trying to see whether India can be 100 per cent on electric vehicles by 2030. We are trying to make this programme self-financing by monetising the savings people have from using cheaper electricity to run cars,” said Goyal.

Goyal said the working group will be headed by Transport Minister Nitin Gadkari and include Dharmendra Pradhan, Minister of State for Petroleum and Natural Gas, and Prakash Javadekar, Minister of State for Environment.

“We will try to work out whether we can give the cars for free initially and people can pay back out of the savings from not using petroleum products,” he elaborated. The target of becoming a 100 per cent electric vehicle is ambitious. Data indicate that there are over 200 million vehicles on Indian roads. As on January 2015, the number of electric vehicles globally was around 6.65 lakh, according to the International Energy Agency’s Electric Vehicle Initiative. Global estimates peg electric vehicles to hit 30 million only by 2030.

12.2. Electronics manufacturing gets a Rs 6,000-crore push

Business Standard | Mar. 28, 2016

New Delhi: As the country vies for self reliance in electronic goods production, the Department of Electronics and Information Technology (DeitY) has so far approved proposals amounting to around Rs 6,155 crore under the Modified Special Incentive Package Scheme (M-SIPS).

The scheme looks at providing financial incentives to private companies for setting up electronics manufacturing units. The government has given final as well as in-principle approval to 28 electronics manufacturing clusters (EMCs) and common facility centres (CFCs) across the country.

According to a report by Deloitte Touche Tohmatsu released last year, the demand for electronics hardware in India is projected to grow $400 billion by 2020. However, by that time the estimated domestic production could rise to only $104 billion, while the rest has to be met through imports. The government in India, through various initiatives, is looking at reducing the dependence on electronic imports by promoting domestic manufacturing.

"Here the idea is to push more companies setup base in India to manufacture LED televisions, set-top boxes, automotive electronics, telecom equipment, RFID tags and labels among other things. Most of the equipment till now are not made in India but merely assembled. We hope that this would give a much needed push to the sector," said a senior official in the Ministry of Communications and Information Technology.

"The ministry is attaching high priority to electronics and IT hardware manufacturing. It has the potential to generate domestic wealth and employment, apart from enabling cyber-secure ecosystem," added the official. While the government has taken a number of steps to increase electronics hardware manufacturing in India including 100 per cent FDI under automatic route, no requirement for industrial licence, payment of technical know-how fee and royalty for technology transfer under automatic route, the impact of such measures has not been substantial.

"It is partly because is India is a signatory to the Information Technology Agreement (ITA-1) that has resulted in zero duty regime on import of the goods covered under the agreement. India also has free trade agreements (FTAs) with several countries and trading blocks, which has enabled zero import duty of imports not covered FTA," said the official. Besides, lack of reliable power, high cost of finance, poor logistics and infrastructure, weak components manufacturing base are other factors hampering growth of electronics in the country.

According to government officials, DeitY under the M-SIPS programme received proposals from 14 states including Goa, Gujarat, Haryana, Kerala, Madhya Pradesh, Telangana and Uttar Pradesh among others. The proposals received include manufacturing of RFID inlays and tags, automotive electronics, telecom equipment, instrument clusters, optical fibre cable, LED televisions, wifi dongles among other things.

"Till date under the EMC scheme, DeitY has received 44 applications for setting up 40 greenfield EMCs and four CFCs in brownfield clusters over an area of 6,922 acres spanning across 18 states with a project outlay of Rs 8,313 crore, seeking grant assistance of Rs 3,508 crore," said the official.

DeitY has accorded final approval to seven greenfield EMCs, one CFC in brownfield cluster. Also, it has given in-principle approval to 17 greenfield EMCs and three CFCs in brownfield clusters.

The states which have been given final approval are Madhya Pradesh, Rajasthan, Jharkhand, West Bengal, Karnataka and Maharashtra.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

13.1. Renewable energy sector received Rs 71,200 crore finance in last 13 months

Livemint | Apr. 12, 2016

New Delhi: The National Democratic Alliance (NDA) government on Monday said that in the last 13 months over Rs.71,200 crore has been sanctioned by 40 banks and non-banking financial companies (NBFCs) for the renewable sector, mainly wind and solar projects.

Of this, Rs.29,500 crore has already been disbursed (as on 21 March). This a part of commitment made by them during RE-INVEST 2015, the first Renewable Energy Global Investors Meet and Expo organised by the ministry of new and renewable energy (MNRE), which held in February 2015.

During the event, 40 major banks (public, private sector banks and foreign banks operating in India) and NBFCs had committed to provide debt funding to renewable energy projects aggregating to over 78.75 GW during the span of next five years.

RE-Invest 2015 saw renewable energy capacity commitments of over 283 GW from stakeholders. There was also a commitment to manufacture in India renewable energy equipment for 62 GW.

“Loans sanctioned by these banks and FIs (financial institutions) for RE (renewable energy) projects are 18.63% of the commitments made,” said an MNRE statement, adding that it is expected to boost the growth of the Indian renewable energy sector.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

13.2. 'We will make India a global manufacturing hub'

Business Standard | Apr. 12, 2016

New Delhi: India contributes less than two per cent to Panasonic’s Rs 4.74 lakh crore ($71 billion) global revenue. However, Manish Sharma, the new president and chief executive of Panasonic India and South Asia, aims to improve that ratio by increasing enterprise businesses such as security & surveillance and energy storage. Sharma, who is now a part of the Japanese major’s global executive council, tells Arnab Dutta about his plans and new responsibilities.

Edited excerpts:

What are the new responsibilities under your new role?

India & South Asia, I will be solely responsible for Panasonic’s India operations. This implies all the group and sister companies will also report to me. The group companies are Panasonic Appliances, Panasonic AVC India, Panasonic Energy India, Panasonic Carbon India, Anchor Electricals, and Firepro Systems. I shall be responsible for driving profitable growth along with strategy planning and sustainable business development across businesses.

It is a big step-up for me professionally and personally. Until now, I was mainly focused on the sales and marketing of the company but now I will also be in-charge of the manufacturing arm of the India operations including for sister companies like Anchor Electricals. Also, I will be looking more closely into product planning and supply chain management.

What are your current priorities?

I’m entrusted with strategic role. My focus will be on building new business for the company in the country. My priority is to scale up our B2B (business-to-business) focus, especially in areas like energy storage and security and surveillance.

We have been largely focusing on the B2C (business-to-consumer) market in the country and generate Rs 5,200 crore revenue from it. Going forward, our business strategy will witness a change as we also start to focus aggressively on the B2B market. We are aiming a revenue target of Rs 20,000 crore ($3 billion) in India by 2018.

In addition, I will keep the momentum going when it comes to growing our consumer businesses because that’s what connects directly with our consumers. It continues to be the driving force for us in India and we want to consolidate our position as a leading brand in the various B2C segments.

How will your elevation to a global role help the Indian unit?

Efforts would be made to make India an even bigger contributor to Panasonic’s growth and revenue. My elevation goes hand-in-hand with the philosophy ‘Think globally but execute locally’. The elevation will allow me to access more information and contribute more closely with global strategies. It will allow me to extract more resources for the India division.

Where does India stand in the pecking order of importance for Panasonic globally?

India is definitely high up in the pecking order. We already play a crucial role in the South-Asia region and have huge opportunity to be a growth leader, even when we talk about the wider APAC (Asia-Pacific) region. Even at a global level, India is crucial in Panasonic’s growth and revenue. We are working towards making India a global manufacturing hub to assist in exporting to West Asian and African markets.

The setting up of our Techno-Park at Jhajjar model economic township in Haryana is one of the biggest milestones for us. With an invested of about Rs 900 crore to annually produce one million sets of air conditioners, 400,000 sets of washing machine and 25,000 sets of welding and cutting machine, it is our largest manufacturing unit in the country.

What are Panasonic’s plans for India?

We are currently looking at how to make Panasonic a truly global brand and all our announcements will be around achieving this aim. With relation to India, we believe the market holds tremendous untapped potential. India can be the next growth leader for us. From a strategic view, India’s contribution to global management strategies will increase.

India business has catapulted in a big-way, whether it is Anchor or, small appliances factory which so far was not under my mandate. Even from the perspective of management strategies, India’s contribution to Panasonic globally will increase.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

14.1. Foreign automakers make India their export hub

Economic Times | Mar. 29, 2016

Mumbai: India has become the first country in Asia to export two fully-built inter-city luxury buses to Europe, marking a dramatic shift in its manufacturing capabilities. Swedish auto major Volvo, which started operations in India through the import of a luxury bus from Hong Kong back in 2000, executed the shipment. Its Bengaluru-based plant is gearing up to undertake more of such orders, which is notable because its parent company has a plant in China, too.

Following in Volvo’s footsteps is rival company Volkswagen-owned Scania, which has also set up a manufacturing facility in Karnataka and is working towards its goal of exporting fully-built buses to Europe. Earth mover JCB is not too far behind. Although headquartered in the UK, its India subsidiary has just started exports to Russia.

These companies, which hail from Europe, already have their mother plants based out of that region. However, given India’s strengths in low-cost manufacturing and the government’s push towards Make in India, companies are now actively looking at serving these markets from India.

Stefan Palskog, president of Scania India, said, “From a logistical point of view, there are a lot of countries that are closer to India than Sweden. The logistic cost of a completely-built product is important. In the long run, we will be able to export buses made in Bengaluru to Europe as well.” While passenger car makers such as Suzuki and Hyundai have been exporting small cars to Europe from India, heavy-duty commercial vehicle manufacturers have just started to warm up to this idea turning India into a manufacturing hub for European exports. Vipin Sondhi, managing director and chief executive of JCB India, said, “We have started with Russia where temperatures are -25 degree centigrade. So, we will go step-by-step there. We are exporting components to the UK from Pune, where they are assembled to be shipped to other parts of the world and we are exporting components to the US.”

Likewise, JCB Daimler India Commercial Vehicle (DICV) has ramped up parts supplies from India as it now reaches across the globe including Europe and the US. Around four million parts have been exported by DICV to other global Daimler entities worldwide.

Erich Nesselhauf, managing director and chief executive of DICV, said, “We export to 20 countries from West Asia, South East Asia and Africa. This will go up to 40 countries soon.”

Developed markets such Europe and the US have very stringent quality and emission requirements, which, according to companies, cannot be compromised. However, Indian companies have not been able to meet these requirements.

KTM branded bikes made in Pune by India’s third largest bike manufacturer Bajaj Auto have been well received in Germany, France, Italy and Spain. More than half of KTM’s production in India gets exported as of date with a substantial chunk being sold in Europe and the US.

Bajaj Auto owns nearly half of KTM, which specialises street and off-road bikes. Serving the developed markets from India comes at a time when the country has fallen short of its announced targets under the 10- year Automotive Mission Plan 2006-16.

Sluggish macro economic factors during the past three years have impacted the pace of growth, resulting in under-achievement of some of the targets. However, some of the targets such as creation of employment for 25 million and investments to the tune of Rs 1.5 lakh crore from auto and component manufacturers, have been achieved.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

14.2. Boeing, TATA, NTTF roll out skills program for aerospace sector

Business Standard | Mar. 29, 2016

Mumbai: Boeing, Tata Advanced Materials (TAML) and Nettur Technical Training Foundation (NTTF) rolled out a skills development program to train front-line workers for the aerospace industry. The first batch of students was inducted at a ceremony in TAML's Bengaluru facility. Sponsored by Boeing and conducted by NTTF, the "Learn and Earn" program offers students a three-year diploma program in Aerospace Manufacturing Technology (Advanced Composites), rolled out under the 'National Employability Enhancement Mission' (NEEM), a skills development initiative of Government of India. The program involves classroom sessions on fundamental theory, behavioral skills training and vocational training in manufacturing skills at TAML. This is a second initiative by Boeing, with training provided by NTTF, a partner of the National Skills Development Corporation (NSDC).

"Boeing is committed to addressing the crucial and growing need for vocational training and skills development in India's aerospace sector and fully supports the Indian government's efforts to promote Skill India," said Pratyush Kumar, president, Boeing India. "Boeing-supported curriculums and initiatives have already been launched along with aerospace partners such as Rossell Techsys, and we are working with NSDC, Ministry of Skill Development and Entrepreneurship and Ministry of Defense.

"Skills development is the foundation for achieving the goals of "Make in India," and at TAML, we continue to invest in skills development programs to ensure that our manufacturing workers are skilled and can deliver high quality products required by the aerospace and defense industry," said S.R. Mukherjee, Chief Executive Officer, TAML. "We support the Government of India's commitment to 'Skill India' and the launch of the National Skill Development Mission."

"This program is aimed at providing trainees with quality technical education while earning a living. The National Employability Enhancement Mission program is for two years and we are adding another year to offer students a diploma certificate," said N. Reguraj, managing director, NTTF.

"The "Learn and Earn'" Program is aimed at enhancing the employability of students and bridging the gap of skilled manpower in the aerospace sector.

Students from the science stream in Class 12 will be eligible for the diploma program. NTTF will conduct an eight-week induction program to make the students industry-ready for their job training.

The batch will then be placed at TAML for training in their manufacturing facilities. Trainees who complete the program will be awarded a three-year Diploma in Aerospace Manufacturing Technology (Advanced Composites) certificate by NTTF. utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

– SERVICES (IT, R&D, Tourism, Healthcare, etc.)

15.1. India aims to capture 20 per cent of the market for Internet of Things (IoT), as per industry body Nasscom

IBEF | Mar. 21, 2016

Coimbatore: India aims to capture 20 per cent market share in the Internet of Things (IoT) sector, a system of interrelated devices, machines, objects, animals or people with unique identifiers and ability to transfer data over a network, as per National Association of Software and Services Companies (NASSCOM). Mr KS Vishwanathan, Vice President of NASSCOM (Industrial initiative), has predicted that as the global IoT sector is expected to touch US$ 300 billion by 2020, India will capture 20 per cent market share in the next five years. On its part to support India’s target, NASSCOM has launched an IoT Centre of Excellence in Coimbatore, which is a joint initiative of Government of India, Department of Electronics and Information Technology (DEITY) along with TCS, Intel, Amazon Web Services and FORGE Accelerator. Depending on the success of the Coimbatore hub, NASSCOM has proposed to launch similar centres in Pune, Baroda and Hyderabad.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

15.2. Indian IT industry to grow at 12-14% in 2016-17: Nasscom

Livemint | Apr. 07, 2016

Hyderabad: Software industry body National Association of Software and Services Companies (Nasscom) expects the country’s information technology (IT) industry to grow at 12-14% during 2016-17 even as a stormy debate on job outsourcing rages on in the run-up to presidential elections in the US, the biggest market for the $108 billion industry.

“In terms of growth, Nasscom, based on its study and collective inputs from the members, is projecting a growth of 12 to 14%,” said C.P. Gurnani, chairman of Nasscom and managing director and chief executive of Tech Mahindra Ltd.

“All our businesses, we are happy to report, are showing a fair amount of growth,” Gurnani added, referring to traditional outsourcing firms, product companies and some Internet-based start-ups.

Gurnani was appointed chairman of the industry body, one of the most powerful lobby groups in the country, on Wednesday. Raman Roy, chairman and managing director of business process management firm Quatrro Global Services Pvt. Ltd, was appointed vice chairman for 2016-17.

Gurnani takes over as chairman from B.V.R. Mohan Reddy, chairman emeritus of Hyderabad-based engineering services company Cyient Ltd. Mohan Reddy will head the skills council of Nasscom.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

16.1. Oracle invests US$ 400 million in Bengaluru hub; calls India Cloud centre of world

Economic Times | Apr. 07, 2016

Mumbai: To encourage adoption of cloud technology in India, Oracle on Wednesday unveiled 'Oracle Cloud at Customer' in India ahead of Oracle Cloud World Summit in Mumbai. This is the first-of-a-kind service in the country that allows the cloud platform to function right inside customers' own data centers.

According to the company, the service removes the challenges that organizations face when transiting to the cloud platform.

This new technology operates on the premises and behind the firewall of the client allowing the chief information officers (CIOs) to move their business critical applications from on-premise data centers to the cloud platform. "While organisations in India are eager to move their enterprise workloads to the public cloud, many have been constrained by business and regulatory requirements. Verticals such as telecommunications, government administration, banking, financial services and insurance (BFSI) are usually tightly controlled by such limits". Oracle's senior vice president of Cloud, Shawn Price said in a statement.

"With today's launch, the company addresses these challenges so that organizations across industries can reap the performance, cost and innovation benefits of Oracle Public Cloud and run it wherever they want with Oracle technology, in their own datacenters." Price added.

According to Shailender Kumar, managing director, Oracle India, companies, especially those bound by the regulatory guidelines can now leverage the cloud and speed up their business transformation. Oracle Cloud at Customer supports control over data, while facilitating data sovereignty and data residency requirements."

Lauding PM Modi's Digital India initiative, Shawn Price said that Oracle sees enormous opportunity in creating digital services in India. Price added that this is the best time invest in India as it has the highest percentage of youth under the age of 30 and can lead the world in cloud services in the near future.

"Oracle sees India as the number one market in the world because of the influence that Oracle exerts through its partners, evolved cross mobile internet activity and also because more than 25 per cent of India's population is engaged in e-commerce transactions in the last quarter." Price said.

Shawn Price also mentioned Oracle's $400 million investment in setting up a technology hub in Bengaluru. The company will also open nine incubation centers to support startups in India.

Talking about Startup India, the government programme, Kumar said, "Oracle will dedicate parts of nine development centres to mentor startup companies on technology and direction towards success."

Shailender Kumar highlighted that many customers such as Fiat Automobiles, Hi-Tech Textile Automation, Induslnd Bank, L&T Finance, Safexpres, Sun Edison, Schneider Electric and Toyota Kirloskar Motor have been purchasing more than one Oracle cloud service.

Globally, Oracle cloud has shown high rates of adoption by customers, supporting 70 plus million users and more than 34 billion transactions each day, It runs in 19 data centers around the world.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

16.2. Cisco to invest US$100 million in India over two years; to train over 250,000 students

Economic Times | Mar. 21, 2016

New Delhi: Joining the league of global technology giants who are making a beeline to invest into and nurture the booming India startup ecosystem, US networking major Cisco has committed $100 million over the next 18 to 24 months. The series of investments will include $40 million that will be used to fund early-stage and growth-stage companies in the country, and train around 250,000 students by 2020.

The rest of the funds will go towards opening six new innovation labs and three centres of expertise, apart from collaborating with universities and making other investments for skill development, Cisco announced on Friday in the presence of its executive chairman John Chambers.

Cisco will collaborate closely with state governments on strategic initiatives, it said. "India is well positioned to lead in digitisation," said Chambers. India may have been slow to adopt technology but it is leapfrogging now as compared to other Asian countries, he said. "The entire economy is burgeoning because of digital economy," said Chambers who met Prime Minister Narendra Modi. He praised the government's flagship projects of Make in India, Digital India and Start up India.

Dinesh Malkani, president at Cisco India and SAARC, said the company has expertise in areas such as security, cloud, and the Internet of Things which it can lend to emerging companies. "There is a lot of scope for development in IP driven technology software companies in India," he said.

The $143-billion firm has over 10,000 people in India. It is also setting up a manufacturing base in Pune to locally make products to "support the Digital India vision" and aims to eventually make it an export hub. Chambers backed India's move to approach the World Trade Organisation (WTO) on visa issues, but said elections are an "emotional" time for the US and stressed that one will have to be "little patient" on resolution of these issues. "Middle class in America has not seen economic appreciation for the last 15 years so when people talk about job loss or global trade agreements or H1-B immigration issues, it's an emotional time in an election year. So I very much understand. I think it's a logical move by India to bring this to the WTO and say how do you address that," he said. Earlier this month, India had filed a complaint in the WTO against the US decision to impose high fees on temporary working visas.

"Over time, I am a huge believer in immigration, I am a huge believer of bringing in talent from around the world," Chambers said.

Asked about the issue of net neutrality, Chambers said he was a supporter of the principle as everyone should have access to the Internet. He also highlighted that regulations need to be in sync with the changes in technology. "Regulators and law makers have to understand that the decisions that they make today can't be the decisions that they would have made few years ago... They have to be educated about the implications and eventual fallouts... Governments and regulators and industry will have to come together and work together on this," he said. Several technology majors are investing in India.

In February this year, Oracle global chief Safra Catz announced a $400 million expansion of their India facility, a host of incubation centres for startups and an extensive training programme to groom young talent in the country.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

16.3. Capgemini wants to adopt IGATE’s management style

BusinessLine |Varun Aggarwal | Apr. 5, 2016

French IT services firm Capgemini, which has more than half of its 180.000 employees based in India, now wants to bring in Indian ways at the heart of its management style.

“Several of our clients in the US who were served by both Capgemini and IGATE said please do not change the way the accounts are managed by IGATE. Keep the IGATE management style,” Capgemini CEO Paul Hermelin said during his first media interaction since the acquisition of IGATE.

“We are today investigating as to what is so unique about this (IGATE’s management style). We want to go beyond the IGATE client base and take this to other clients as well,” Hermelin said while indicating changes across the board.

Capgemini acquired IGATE for $4 billion last year, taking over IGATE's 25,000 employees and 280 clients, of which only three were also working with Capgemini before.

Transition plan

He said the transition to an IGATE-style of working and account management will begin with the company’s financial services unit, which was built out of the acquisition of Kanbay that had most of its workforce based in India. “We see this getting implemented in a quarter or two. The rest of our US operations it will take some more time and Europe much longer,” Hermelin said.

Capgemini, with a revenue of €11.92 billion in 2015, already has four Indians — Salil Parekh, Srinivas Kandulu, Aruna Jayanthi and Srikanth Iyer — in its board.

While Parekh serves as the company’s deputy CEO, Kandulu heads India business, Jayanthi was appointed as the global BPO head and Iyer was hired as the global sales head. Highlighting how the company is already so much Indian, Hermelin, who is also the Chairman of the Indo-French CEO Forum, said, “Prime Minister Modi said I should be on the other side of the table (in the Indo-French CEO forum) as I am no longer French.”

New campus

On Tuesday, Capgemini opened its new campus at Airoli, near Mumbai that will house 30,000 employees. Hermelin said it will also serve as a centre for applied innovation exchange. “At group level we have 40 innovation centres but there are only nine certified as group innovation centres and one of this will be in India,” he said.

He said IGATE played a big role for the company to establish itself in the US market, which was the core strength of IGATE. For further acquisitions, he hinted on tapping into the US healthcare market, where IGATE has zero presence at the moment.

“Acquisition will be more targeted with the goal to increase the US presence. The US market is more than 40 per cent for several global firms, while for us it is 31 per cent.”

Digital tech

Apart from focusing on geographic expansion, Hermelin said the company will look at growing in digital and innovative technology fronts. “Currently, 22 per cent of our revenues come from digital and it is growing at 23 percent. We expect digital revenues to be around 30-35 per cent in the next 2-3 years organically and with an acquisition we can touch 40 per cent.”

However, digital is where IGATE had almost negligible impact on Capgemini’s revenue. At the time of acquisition, IGATE had 500 people working on digital technologies, while Capgemini had close to 30,000.

17.1. SAP wants to tap India's booming start-up culture: Bill McDermott

Livemint | Mar.21, 2016

New Delhi: German enterprise software giant SAP SE is planning to help Indian start-ups innovate by leveraging its HANA platform that helps companies with analytics and business intelligence to manage their processes, says chief executive officer Bill McDermott. He also talks about SAP’s recent push in the healthcare sector and explains the importance of India for the company.

Edited excerpts from an interview:

What is the purpose of your visit to India this time? Is it a regular business trip or is there something more on the agenda?

There is a real high purpose. We want to make sure that we impact 1 billion lives in India. SAP is going to do that through a combination of things. One of the things is to impact young start-ups. So, we are making a bold commitment to the start-up community. We see that HANA is the database platform for the 21st century. We want to give young start-ups access to HANA; we want to make it easy for them to make their innovations on top of HANA and with SAP and we want to make it extremely simple and affordable for them to do that.

In combination with IIT (Bombay), we will announce a beautiful incubation programme for the young brilliant minds which are filled with new ideas. They can see around corners that haven’t been created yet and we can partner with them and give the tools they need to fulfil the dreams on our technology. Other major areas of impact that we want to work on are education and healthcare.

It’s an interesting time. You almost have a start-up revolution in India. The government too has come up with Digital India and Start-up India programmes. So, from a business opportunity standpoint, does it help you?

I think it is the best of times. There are two sides of the equation—one of small and medium enterprises and start-ups and the other of large enterprises. The small and medium enterprises are largely uninitiated in the digital economy. Most small companies today don’t have the interest and resources to buy all the hardware, support all the hardware and all the staff to run the hardware and then all the updates and improvements in the innovation cycle. It’s just too complex. What I see on the small side of the equation is to provide small and medium enterprises and young start-ups the access to SAP innovation in the cloud, which is an easy way to consume affordable cloud solution. So, we take away all the complexity and we give them all the benefits of digital that large companies need, but in a small company package.

On the other side of the equation, the most significant state-owned companies and the largest commercial entities, these are companies that have to digitize to win.

They are very complex, their data structures and processes are very complex. So, if you are the government and if you are trying to provide digital services to citizens, you have to digitize.

If you are a large commercial entity trying to connect your supply chain to your demand chain where your customers live, and incidentally they want you to be able to know them, customize your products to their likes and needs and sell them something on the mobile. That’s a very different company than what we have today. So, we have to work to digitize those companies.

Lately, SAP has been focusing a lot on the healthcare industry. Is it driven by your personal experiences? While the opportunity would be huge, it is also a fragmented and disorganized industry, at least in India.

People say that in every geography there is the patient, the hospital and the insurer. It’s disorganized and it is fragmented. But we have HANA, which is a great simplifier and that’s why we have a moonshot at transforming the healthcare industry. I believe that once the network of professionals understands the potential, they will pull SAP as much as we will push them.

So, it’s something you are trying because you already have the base to build on?

We are going to totally commit to it. We are going to announce a healthcare division. So, we will have a healthcare division globally and we will know more about the healthcare industry than any company in our space. We already have the best engineers working on it. We already have relationships with NCT (National Center for Tumor Diseases) Heidelberg, Germany. We are doing the human genome sequencing; we are already fighting against cancer. In the US, we have partnered with ASCO (American Society of Clinical Oncology) on a cancer-linked application. We are partnering with all the best universities in the world to see how we can use HANA in their programmes and do the early research against this villain called cancer. We plan on taking this to India and all other parts of the world.

What’s interesting about healthcare is that it behaves a lot like smart meters for the home and like smart cities. So, a lot of the characteristics of the solution are transferable from one industry to another. It also capitalizes on the Internet of Things. So, we feel like we have a fast start and in some ways an unfair advantage. In India, too, you will see us put a tremendous amount of focus on healthcare.

Is there an additional investment towards these healthcare plans?

We already have an operating plan, that we have communicated to the capital markets, and a guidance. At this time, it’s appropriate simply to say that we have factored that investment in. We manage a portfolio. So, we just have to look at the portfolio and decide on how much one priority gets over the other. So, at the macro level, it’s accounted for. Within the company, we make the adjustment based on priorities.

You also have a communicated strategy on mergers and acquisitions. You have done a handful already. How is the integration coming along and are you still on the lookout globally and in India?

This is an important leadership question. It might have appeared that SAP was becoming a highly acquisitive company if you watch what we did in 2010 and beyond. The acquisitions we did were necessary to get firstmover advantage on the best possible cloud assets that were available in the world. Our customers expected us to buy the best ones, the market leaders, and to make sure that the culture and the teams that came along with that technology were very customer centric. Every single one of them has outperformed the business case that we proposed to the board of directors when we got the funding for them. I think that is represented in the revenue and stock performance of the company. Now, if you look at the landscape, there are not a lot of good assets left to buy, at least of size and scale. So, most of our activity will be tuck-in in its orientation or smaller by nature because we got the big ones that we needed.

So, the acquisition strategy is a product or industry specific as opposed to geography specific?

Yes. That’s because one of the things we have is a strong global channel. So, one of the things you have seen us do is take smaller companies and grow them quickly across global channels. So, when we buy something, we think of it as global in nature and scalable across our global channels. It is not necessarily great to do M&A (merger and acquisition) geographically if you can’t extend the solution globally.

You have invested close to a billion dollars in India in the past decade. With the kind of plans you are talking about with a focus on SMEs, healthcare, education and start-ups, will the investment and the size of SAP in India grow?

Definitely. You will see consistent hiring in India. You have a very large workforce here already, but we will have a larger workforce. So, I think you will see a 10-15% increase in hiring on a per annum basis for the next several years. Of course, if our ambitions play out the way I dream they would, that will just accelerate. The other thing is that we have 77,000 employees globally, but the whole ecosystem is over 2 million. So, when we grow, the ecosystem grows. For every one employee we have in India, the ecosystem has nine or 10. Therefore, this start-up initiative with HANA as a platform, if India embraces it, we can become the technology on which these start-ups are built.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

117.2. Driven by IT sector, Karnataka is country’s top job creator

PTI, BusinessLine | 4 Apr.2016

Karnataka has been ranked as the country’s top job creating state with over 24 per cent share during the fourth quarter of the last fiscal, according to a study.

It is followed by Maharashtra (23 per cent) and Tamil Nadu (10.5 per cent), said the study by Assocham. Information technology (IT) sector created about 57 per cent of about nine lakh job openings recorded between January-March, 2016, followed by services (19 per cent) and manufacturing (11 per cent), according to the report.

Banking, financial services and insurance (BFSI) sector accounted for just over eight per cent share followed by construction and real estate (3.5 per cent share).

Within Karnataka, ITEs accounted for over 65 per cent share in job openings across the state followed by services (16 per cent), manufacturing (eight per cent), BFSI (six per cent) and construction and real estate sector (2.5 per cent).

The Assocham Economic Research Bureau (AERB) had analysed the data sourced primarily from vacancies posted by companies via various job portals together with advertisements offering employment opportunities published in national and regional dailies across India.

Karnataka had recorded 2.16 lakh job openings in the first quarter of the last fiscal followed by Maharashtra (two lakh), Tamil Nadu (93,000), Andhra Pradesh and Telangana region combined (82,000) and Haryana (72,000).

Sector-wise, Karnataka leads in terms of job openings in ITES sector with 28 per cent share in over five lakh jobs created by the sector followed by Maharashtra (20.5 per cent), Tamil Nadu (11 per cent), Andhra Pradesh-Telangana (10 per cent) and Uttar Pradesh (eight per cent), it said.

Services sector recorded 1.69 lakh jobs in January-March quarter of 2015-16 with Maharashtra accounting for the “lion’s share” of about 24 per cent followed by Karnataka (21 per cent), Haryana (8.4 per cent), Uttar Pradesh (8.2 per cent) and Andhra Pradesh-Telangana (8.1 per cent).

In manufacturing sector, Maharashtra has recorded highest share with 22.5 per cent in over 99,000 job openings, followed by Karnataka (19 per cent), Tamil Nadu (12 per cent), Andhra Pradesh-Telangana (nine per cent) and Gujarat (eight per cent).

Maharashtra also topped with highest share in job openings recorded in BFSI and construction and real estate with a share of about 31 per cent in both sectors each, while Karnataka followed with a share of 18 per cent and 17 per cent respectively, it added.

18.1. Nippon Life, AIA, Sun Life & 12 other FDI proposals cleared

Economic Times | Mar. 22, 2016

New Delhi: Big-ticket investments in the insurance sector by Nippon Life Insurance, AIA International, Sun Life and Aviva Life were among 15 proposals that the Foreign Investment Promotion Board (FIPB) cleared on Monday. These proposals are expected to bring foreign direct investment of Rs 7,262 crore. Yes Bank's proposal to raise foreign investment limit to 74% from the existing 41.87% has been referred to the Cabinet Committee on Economic Affairs (CCEA). It needs to be endorsed by the CCEA because the potential foreign investment inflow is Rs6,885 crore.

The FIPB can sanction proposals of only up to Rs 5,000 crore. The board comprises secretaries and is headed by the secretary at the department of economic affairs. The finance minister gives the final nod to the proposals cleared by the FIPB. "FDI inflow continues.

Fast clearances make a difference," Economic Affairs Secretary Shaktikanta Das tweeted. Nippon Life is looking to raise stake in Reliance Life Insurance to 49% from 26% by investing Rs 2,265 crore. AIA International proposes to invest .`2,055 crore to increase its stake in Tata AIA Life Insurance Company to 49% from 26% at present.

Aviva Life Insurance Company's proposal to raise the shareholding of Aviva International Holdings, UK, to 49% by transferring the 23% currently held by Dabur Investment Corp to it was also approved.

Total foreign inflow through this deal is about Rs 940 crore. This is the first set of big-ticket investments in insurance after Parliament approved a Bill in March last year to raise FDI limit in the sector to 49% from 26%. The government expects over Rs 25,000 crore investment because of the change in the investment policy. QBE Asia Pacific Holdings got approval to raise its stake in Raheja QBE General Insurance to 49% from 26% by acquiring a 23% stake held by Prism Cement. The inflow is Rs 101.85 crore. Sun Life will acquire an additional 23% stake in Birla Sun Life Insurance Company from Aditya Birla Nuvo, increasing the foreign equity in the company to 49% for a total consideration of Rs 1,664 crore.

In the defence sector, there were two significant proposals. In a non-resident to non-resident transfer, Lockheed Martin Global acquired 26% in Tata Sikorsky Aerospace from United Technologies International. There is no net foreign inflow. Quantum Simulators' application to set up a simulator manufacturing company with a 49% stake was also a

pproved. This proposal is expected to bring investment of Rs 14 crore. A proposal by Bupa Singapore Holdings Pte Ltd to raise investment in Max Bupa Health Insurance Company to 49% by way of acquisition of shares from Max India was deferred.

The FIPB also deferred a decision on permission sought by ICICI Lombard General Insurance to sell a 9% stake to FAL Corp, an indirect wholly owned arm of Fairfax, for Rs 1,550.2 crore. ICICI Prudential Life Insurance's proposal to transfer 2% of its shares held by ICICI Bank to Compassvale Investments and 4% shares to Hasham Traders was also deferred.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

18.2. Mobile banking sees dramatic surge in India

Livemint | Mar. 28, 2016

Mumbai: The value of transactions concluded over smartphones surged in recent months as banks encouraged businesses to manage their finances using mobile phones and mobile usage among retail customers expanded rapidly.

The value of mobile banking transactions jumped 46% to Rs.49,029 crore in December from the previous month, according to Reserve Bank of India data.

The value of such transactions surged 82% over the September-December period, the RBI data showed. Bankers attributed the surge to an increase in the number of corporate customers transacting on their phones, along with the continued growth in retail mobile banking transactions driven by the adoption of smartphones across the country.

“Our economy is now graduating into an interaction-based economy. Customers are highly concerned about the time and expense related with making transactions at an outlet or a branch,” said Alok Shende, the founder-director and principal analyst at Ascentius Consulting, a technology and analytics consultancy.

While mobile recharges, bill payments, money transfers and purchases on e-commerce websites dominate the retail transactions that take place on the mobile platform, large-value transactions by corporate clients have resulted in an increase in the amount transacted through the phone, bankers said.

On a year-on-year basis, the amount transacted in December 2015 rose more than fourfold from the Rs.11,323 crore transacted in the year-ago period.

For State Bank of India (SBI), the average size of a banking transaction on its mobile platform has jumped fivefold since the bank introduced two applications for its corporate customers.

SBI unveiled State Bank Anywhere-Saral for the SME sector (small and medium enterprises) in May and State Bank Anywhere -Corporate for its larger corporate customers in October, leading to an increase in the average transaction value.

“We have about half-a-million corporate banking customers on our web banking platforms, and we want to bring most of them on mobile by September,” said Manju Agarwal, deputy managing director for corporate strategy and new business at SBI.

At present, about 25% of SBI’s retail customers transact through their phones, Agarwal said. SBI aims to increase this to about 50% by the end of the second quarter of 2016-17.

Private sector lender Axis Bank Ltd, which introduced two mobile applications for its corporate banking client in October, allowing them to conduct foreign exchange-related and trade finance-related payments on the phone, has also seen a surge in the number of corporate clients using the mobile banking platform. Axis Bank has about 2.4 million customers who actively transact on the mobile platform, which also includes its SME clients.

“In case of SMEs, the business owners are usually very involved with the day-to-day transactions, and therefore need the mobile applications, which allow them to manage money on the go. This is the space that banks need to be in,” said Rajiv Anand, group executive and head (retail banking) at Axis Bank.

The private sector lender’s average mobile transaction size stands at more than Rs.11,000 currently, Anand added.

In December, Axis Bank saw more than six million mobile banking transactions worth Rs.6,268 crore. One of the main challenges in bringing corporate clients to mobile banking services is the two-person approval system that companies have for financial transactions, bankers said.

With banks coming up with better proprietary technology, they have been able to overcome this challenge, allowing for more coordinated transactions among different users from the same company.

HDFC Bank Ltd, which reported more than 3.9 million transactions worth Rs.8,717 crore in December, is also working on pushing its corporate clientele to shift to the mobile platform.

Nitin Chugh, executive vice-president and head of digital banking at HDFC Bank, said that the private sector lender has been conducting sessions with its corporate clients trying to explain how moving from web to mobile will help in conducting cost effective and timely transactions. “At a ticket size of about Rs.34,000- 35,000 per transaction, we are already higher than most of our industry peers, when it comes to mobile,” Chugh said. “By bringing in more corporate clients, we can increase this number further. We are working on introducing more user intuitive services for web and mobile so that customers can have a better experience.” While larger corporate transactions are pushing up the ticket size, the number of transactions is also continuing to rise driven by increased adoption of smartphones.

The number of mobile banking transactions has risen from 16.8 million in December 2014 to 39.5 million in December 2015, according to RBI data.

“As customers use more smartphones and mobile connectivity improves, we will see banks trying to come up with more effective applications in the market. This will boost the number of transactions and the value involved,” said Axis Bank’s Anand. At ICICI Bank Ltd, the focus remains on the fast-growing retail segment. It reported the second largest number of mobile banking transactions.

According to Rajiv Sabharwal, executive director of ICICI Bank, most of the lender’s corporate customers transact only on the web, while the adoption of mobile transactions among retail consumers has picked up. Retail mobile transactions will lead the way with more smartphones in the market, he added. “While the bank’s overall transactions have been rising by 20% a year, we have seen mobile transactions rise by a much higher margin over the last 18-24 months. The average ticket size now stands at about Rs.15,000 per transaction. Our aim is now to get more customers on this platform and try to customize services depending on individual customer profile.”

According to Sabharwal, the growth in smartphone sales over the last three years has resulted in this increase in mobile banking. Smartphone sales in India are expected to rise to 160 million in the year ending 31 March 2017 from 100 million in 2015-16 on the back of falling prices and a shift from feature phones to smart devices, industry association Assocham said last week.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

19.1. The future is being reshaped by digital technologies

BusinessLine |Venkatesh Ganesh | 15 Apr. 2016

The country’s second largest IT services company, Infosys, is turning the corner through large-scale innovations, introducing practices such as design thinking and zero distance which have resulted in better win rates in large deals, and automation.

“Already efforts such as zero distance (working with clients very closely) have touched large number of our people,” Vishal Sikka, the CEO of Infosys, told BusinessLine in an interview.

He also said software is reshaping the world. “The future looks entirely different — as it is being fundamentally reshaped by digital technologies. While I am happy that our company's achievements have yielded results, I am humbled by the task in front of us.”

Sikka, 48, said there is a definite shift in policy on visas and the company was working towards becoming visa independent. This was possible because of advances in technology such as Virtual Reality and collaborative technologies through which we can do the same thing sitting out of any location.

Sikka, who took over as the CEO of the company 20 months ago, said that Infosys has so far made 20,000 campus offers and for laterals it will be looking at ‘just in time’ hiring.

19.2. Reliance Industries launches online fashion portal Ajio.com

Livemint | Apr. 04, 2016

Mumbai: Reliance Industries Ltd, the oil to yarn conglomerate launched its online fashion portal Ajio.com with the preview of its collection on Saturday at the ongoing Lakme Fashion week in Mumbai.

The show also saw the company unveiling its campaign ‘Doubt is Out’ with five show stoppers which included actor Sunny Leone, transgender activist, Laxmi Narayan Tripathi, comedian, Bharti Singh, yesteryear actor, Helen and Suman Sharma, the first woman to fly the fighter plane MIG-35 as it tried to differentiate.

Isha Ambani, director on the board of Reliance Retail, the retail arm of RIL who has been closely associated with the online fashion venture from its conceptualisation was present at the Lakme Fashion week show.

The company has said that it will offer the largest collection of private labels for women online, in an earnings presentation in January. Some 60% of the merchandise it sells, including national and international brands and Indie (ethnic fusion) wear, will be exclusively available on the portal, RIL said in its earnings presentation on Tuesday. The products will be aimed at 18-34-year olds, the presentation said. Reliance Retail, RIL’s retail arm is the country’s largest modern retailer with revenues of Rs.17,640 crore for 2014-15, of which 54% comes from its 616 stores spread across value retail that includes Reliance Fresh and Reliance Marts. The retailer has a total of 2,621 stores spread across 200 cities which will be part of its ecommerce drive.

For the last one year the company has been piloting www.reliancefreshdirect.com, it’s online groceries delivery platform in Mumbai. On the cards is also an online electronics platform that will be launched later in the year.

Conglomerates including the Tata Group and Aditya Birla Group have evinced interest in the high growth online market place business. On 16 October, Aditya Birla Group launched an online fashion store, www.abof.com, which offers shoppers brands of Aditya Birla Group and as well as other companies. Tata’s online marketplace venture is also expected to launch later this year.

Meanwhile retailers like Shoppers Stop Ltd and Future Group which runs chains like Big Bazaar and Central are also in the midst of rolling out their omni channel strategies which will see them have an online presence. The e-tail market in India is still nascent and so far has been dominated by pure play e-commerce companies who have grown rapidly. Online retail is now a $14 billion market as compare to a $1 billion in 2012 fuelled by venture capital investors, who pumped in more than $9 billion over the past two years alone. A huge chunk of this money has been spent on luring customers through advertising and, more importantly, discounts.

On 29 March, the government announced 100% foreign direct investment (FDI) in online market places and this will see a majority of the pure play e-tailers rework their business models and structures to align with the riders that was announced as a part of the FDI policy.

The riders specify that FDI will in online retail companies can be only made for market places and not for inventory led. Under the inventory model, the e-commerce firm buys, stocks and sells goods, while in the marketplace model, it simply acts as a platform connecting buyers and sellers. Moreover, no one company can contribute for more than 25% of the business for a marketplace.

Fashion retailers such as Myntra and Jabong are moving to a marketplace model but currently depend on one seller for most sales. While Myntra gets over 90% of its sales from Vector e-commerce, Jabong’s sales largely depend on Xerion Retail.

Another important rider is that marketplaces will no longer be able to influence prices directly or indirectly. While there is clarifications required on how this will get implemented, what it will eventually lead to is the deep discounting may no longer be possible for marketplaces.

The end of discounting, if it happens, would significantly hurt the high valuations of India’s top e-commerce firms— Flipkart ($15 billion), Snapdeal ($6.5 billion) and Paytm (more than $3 billion)—as well as the rapid sales growth of Amazon India.

This could well work in the favour of retailers and also companies like Reliance who are now venturing online said experts as it creates a level playing field.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

20.1. Hotel hiring clocks 30% growth after 5-year lull

Economic Times | Mar. 30, 2016

Mumbai: A strong business sentiment and pick-up in corporate travel have brought good tidings for hotel employees, with hiring registering a good uptick in the past six months, after a long period of lull. Indian and International chains have stepped up their hiring, with hotels reporting over 30% growth in hiring.

"The hiring pattern has seen a relatively sharper increase in the past six months on account of new hotel preopenings, movement of incumbents between hotel companies across functions, requirement of skilled talent and roles that call for local market knowledge," said Neha Garg, director of Red Kite Consulting, that specializes in hospitality recruitment, adding that hotel groups such as Hyatt, AccorHotels, Starwood, ShangriLa, Oberoi, and The Leela have added to their workforce.

The Indian hotel industry has seen an extended down-cycle since 2009, barring a brief growth in 2010-11. The industry has been in the doldrums due to the economic slowdown that hit both business and leisure travel. With hotels slipping into the red amid falling check-ins and declining room rates, several of them stopped hiring and functioned with minimum staffing levels. "Industry has come out of the low point and occupancies have picked up. Business has rebounded after over three years of lull, which has made hotels brace for good times," said Vimal J Singh, managing director for South Asia at Louvre Hotels Group and its sister concern Golden Tulip Hospitality Group. Louvre Hotels Group, Europe's second-largest hotel firm, will add over 750 people across six new properties that the company will open in India this year. "This is the highest we have recruited in a year in the past five years," said Singh.

Pride Group of Hotels too added over 500 employees to its workforce -- highest the company recruited in the past five years -- across different departments including F&B, banquets, housekeeping, etc., said its chairman SP Jain.

According to industry estimates, demand for hotel rooms in India grew by 20% during the second half of 2015, again the highest in five years. Increased business and leisure demand is driving the hospitality job market. According to hotel consultancy HVS, the hotel industry is expected to see over one lakh new jobs being creating over the next five years.

"Last year has been one of the best so far for Hyatt hotels in India. As we open new hotels, we increase manning proportionately in every department, with majority of associates in operations," said Ramjan Bhugeloo, regional vice president - HR, Hyatt Hotels and Resorts - Southwest Asia.

In fact, last year, was the first time in five years that pan-India hotel occupancy crossed 60%. Several hotel chains which had put new projects on hold, pressed the growth pedal as market started shaping up. Several of them are now building a talent pool, even for their future properties, realizing the shortage of quality talent. "AccorHotels India is proactive in building a talent base for the future regardless of requirement, understanding full well that superior talent alone will enable us stay ahead of competition and outperform the market," said Ashwin Shirali, regional director-HR at AccorHotels .Moreover, Shirali said that the war for talent has intensified with significant increase in room inventory and corresponding demand for human capital. The French hotel major bulked up its workforce by 1,000 more people in 2015, which is 20% higher than previous year.

Patu Keswani, chairman of Lemon Tree Hotels, said the company will double its workforce to over 8,000 employees by the end of 2018 from the current 4,200.

"There's much better outlook and since the next five years are going to be good, the industry is likely to see stronger hiring momentum," Keswani said.

Garg of Red Kite Consulting said functions such as sales and marketing, culinary roles, rooms division and finance among others have seen major increase in demand.

Ajay Bakaya, executive director of Sarovar Hotels and Resorts, said there is a rise in demand for revenue management professionals in the industry. "As hotels adopt technology and the business moves online, revenue management role is imperative for accurate forecasting of optimal revenue rates for hotels," said Bakaya.

While hiring activity has picked up, attrition rate too continues to be as high as 40% which makes the industry a 'poaching ground' for not just service sector but even other industries.

"One of the major challenges for the industry will be workforce management. This has prompted hotels to judiciously use their existing employees, thereby increasing their productivity," said Natwar Nagar, managing director of HVS Executive Search.

This has prompted hotels to increase benefits and salaries across different levels. Data from hotel chains and recruitment firms shows that there has been a significant increase in the average salaries across different levels, ranging from 10% to 25%.

In a bid to retain top talent, hotels are sweetening compensation and benefits for their employees. According to Garg of Red Kite Consulting, focus on employee retention, putting critical talent on fast track growth programmes, striving for work-life balance, decentralization and unit empowerment and continued focus on learning and development are some of the measures taken by hotel chains to hold on to the existing workforce.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

INDIA & THE WORLD

21.1. India-Iran sign agreements on crude oil imports, gas field development

Economic Times | Apr. 12, 2016

New Delhi: Eyeing to step up energy partnership in the post-sanctions period India and Iran have signed an agreement that involves crude oil imports, petrochemical complexes and gas fields development besides Delhi making an announcement of $20 billion for strategic Chabahar Port complex during ongoing two-day visit of Oil Minister Dharmendra Pradhan to Tehran.

Pradhan who met his Iranian counterpart Bijan Zanganeh in Tehran Saturday also discussed on increasing India's import of Iranian oil from its current 350,000 barrels a day. "We hope this number will increase now that sanctions have been lifted," Zanganeh told Iranian news agency Shana after his meeting with Pradhan. A high-level delegation of Indian major oil and energy firms who accompanied the Minister, also evinced interest in Iran's oil, gas and petrochemical projects, government sources here said.

The two ministers signed a cooperation agreement encompassing oil exports, petrochemical operations and gas-field development on the occasion, sources said. Pradhan addressing a joint press conference on Saturday with his Iranian counterpart said,

"Iran and India's energy ties are no longer limited to crude oil imports," and that India was ready to invest $20 billion in the port of Chabahar in Southeastern Iran. He added that "energy sector can be determining in development of Tehran-New Delhi relations." India has already extended over $ 100 million Line of Credit for berths and jetties at Chabahar.

India's participation at Farzad-B gas field topped discussions between the two Ministers, sources informed. Last year ONGC submitted a proposal of $ 3 billion for development of Farzad-B field.

In fact the most important item in Zanganeh discussions with Pradhan was the investment to develop FarzadB offshore gas field, sources said. "It was decided that Iranian and Indian sides agree on the schedule of implementing the project which is a demanding job and take time," sources quoting the Iranian Minister said. Post sanction Iran wants to cultivate closer ties with countries in the East and India's close relationship with Iran is an added advantage, Iranian government sources said, adding the Minister also discussed pending oil payments issue by India with the banking authorities in Tehran.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

21.2. Ashgabat Agreement gets Cabinet nod

Our Bureau, BusinessLine | 23 Mar. 2016

Will pave the way for transport corridor between Central Asia and Persian Gulf

The Cabinet on Wednesday has approved a proposal to accede to the Ashgabat Agreement, a move that will further strengthen trade ties between India and the Eurasian region.

The decision paves the way for an international transport and transit corridor facilitating transportation of goods between Central Asia and the Persian Gulf.

“The Cabinet, chaired by Prime Minister Narendra Modi, has given its approval for India to accede to the Ashgabat Agreement,” said Ravi Shankar Prasad, Minister of Communications and IT.

Oman, Iran, Turkmenistan and Uzbekistan are the founding members of the Ashgabat Agreement, and Kazakhstan joined it subsequently.

The decision is a big step towards enabling India to utilise the existing transport and transit corridor to facilitate trade and commercial interaction with the Eurasian region, Prasad said. Further, this would synchronise with India’s efforts to implement the International North South Transport Corridor (INSTC) for enhanced connectivity, he added.

India’s intention to accede to the Ashgabat Agreement would now be conveyed to Turkmenistan, which is the Depository State. India would become party to the Agreement after the consent of the founding members.

GSAT-11 launch

Meanwhile, the Cabinet also has decided procurement of launch services and realisation of ground segment for GSAT-11 spacecraft at a cost of ₹1,117 crore. The satellite will be ready for launch by the end of this year, Prasad told reporters while briefing the Cabinet decisions.

GSAT-11 is a communication satellite with 32 high-power spot beams for providing high bandwidth VSAT communication and is currently under development at DOS/ISRO facilities.

The satellite’s launch will lead to better connectivity in rural areas and hilly regions where broadband connectivity is difficult, he said.

U-17 World Cup

The Cabinet approved the hosting of the ‘Under-17’ Football World Cup next year by authorising the Sports Ministry to constitute an organising committee for smooth conduct of the event, while giving its stamp of approval to the changes suggested by FIFA’s inspection team.

“Expenditure towards overlays and equipment including display boards may be incurred. The total cost, however, will be within ₹95 crore as approved earlier,” a government statement said.

22. Defence Minister inaugurates Defexpo-2016 at Goa

Press Information Bureau | Mar. 29, 2016

New Delhi: The 9th edition of Defexpo India, a biennial exhibition on Land, Naval and Internal Homeland Security Systems was inaugurated today by the Defence Minister, Shri Manohar Parrikar at Naqueri Quitol, Quepem Taluka, South Goa, Goa. The four-day event is being organised by the Defence Exhibition Organisation of Department of Defence Production, Ministry of Defence.

At the outset Shri Parrikar announced that the Defence Procurement Procedure-2016 (DPP-2016) has been uploaded on the website of Ministry of Defence, commenting that it will provide a push to the ‘Make in India’ campaign. He said the Government has been proactive in its ‘Make in India’ initiative and desires to also include ‘Startup India’ which will find opportunities in Defence sector. The Defence Minister stated that the Government has tweaked the policies to address the concerns of defence manufacturers and suppliers and enhanced transparency. The new procurement policy being promulgated by DPP-2016 will ensure faster pace in procurement especially through newly introduced categories under Indigenously Designed, Developed and Manufactured (IDDM) provisions. Such provisions will encourage Indian Industry in Defence Sector, he added. He acknowledged the contributions of the Small and Medium Scale Industries in Defence Sector, quoting that many innovative ideas have come from these sectors. He further added that, while Foreign Direct Investment (FDI) in Defence Sector is capped at 49%, cases for higher FDI can be considered on case to case basis. He commended the organisers and the delegates present for the overwhelming response to Defexpo 2016 with record participation of companies in the event.

Speaking on the occasion Shri Laxmikant Parsekar, the Chief Minister of Goa, welcomed the delegates from all over the world to the State of Goa. He said that Goa is an industrially advanced state in the country, and there are many steps taken by the Government to enhance the ease of business within the state. These steps include Investment Promotion Board which provides a single window for obtaining all clearances required for setting up new industries. He hoped that an exhibition of this scale should give adequate stimulus to the local economy.

The Minister of State for Defence, Rao Inderjit Singh, who also spoke on the occasion, said that over the last 70 years India has created a robust industrial base and the aim of the government is to transform India from being a net importer to a net exporter of defence equipment through its ‘Make in India’ campaign.

The inaugural ceremony saw live demonstrations of military equipment including Main Battle Tank Arjun Mk I and II, various types of heavy bridging equipment, Wheeled Armoured Vehicle, Sarang Aerobatic team and Naval LCA. MBT Arjun Mk II and Wheeled Armoured Vehicle were being displayed for the first time in any exhibition.

The function was also attended by the Union Minister for Railways Shri Suresh Prabhu, Union Minister of State for AYUSH Shri Shripad Naik, MP from South Goa Shri Narendra Keshav Sawaikar, Chief of the Army Staff General Dalbir Singh, Chief of the Naval Staff Admiral RK Dhowan, Defence Secretary Shri G Mohan Kumar, Secretary (Defence Production) Shri AK Gupta and Senior Officials from the three Services and Ministry of Defence, Government of Goa as well as from the participating countries.

47 countries from different continents are taking part in the exhibition against 30 countries which participated in Defexpo 2014. In comparison to Defexpo 2014 where 624 companies participated; over 1000 companies, both foreign and Indian, are taking part this year. The net exhibition area sold during this edition is 40,725 square meters against 27,515 Square Meters in 2014.

On the sidelines of the exhibition, Seminars will provide a platform to showcase developments and opportunities in the defence sector. The topics of the Seminars being conducted on 29 and 30 March 2016 are Global Defence Supply Chain, advances in shipbuilding technology, Make in India for defence sector, India – Korea Defence Cooperation, Modernisation Programme of Indian Army and Challenges and opportunities of Defence Offset.

The event will be open to public on 31 March 2016 and by prior registration on other days. People who wish to visit the site on other days may do so by registering on the website www.defexpoindia.in.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

23.1. EU-India Summit, Brussels, 30 March 2016. EU-India Agenda for Action-2020

Mr. Donald Tusk, President of the European Council, Mr. Jean-Claude Juncker, President of the European Commission, and Mr. Narendra Modi, Prime Minister of the Republic of India met in Brussels on 30th March, 2016 for the 13th European Union - India Summit.

They have endorsed this EU-India Agenda for Action-2020 as a common roadmap to jointly guide and strengthen the India-EU Strategic Partnership in the next five years. The agenda further builds upon the shared objectives and outcomes of the Joint Action Plans of 2005 and 2008.

Foreign Policy and Security Cooperation

Foreign policy

Strengthen foreign policy cooperation, in areas of mutual interest such as Asia, Africa, the Middle East/West Asia, Europe, and other relevant areas including through regular dialogue at appropriate levels of the Ministry of External Affairs and the European External Action Service.
Explore possibilities for development partnership and triangular cooperation.
Identify opportunities for strengthened cooperation and coordination in international fora, including a possible dialogue on gender equality, global humanitarian issues and disaster risk reduction.

Security

Strengthen cooperation and work towards tangible outcomes on shared objectives of non-proliferation & disarmament, counter-piracy, counter-terrorism (including counter-radicalisation) and cyber security.
Explore possibilities for sharing information between EUROPOL and Indian agencies in the context of transnational threats including terrorism.
Deepen existing cooperation and consider cooperation in other areas mentioned in the EU-India Joint Action Plan, including promoting maritime security, freedom of navigation in accordance with International law (UNCLOS), peace keeping, peace building, post-conflict assistance, and fight against trans-national organised crime.

Human Rights

Reaffirm commitment to the EU-India Human Rights Dialogue as a key tool to promote shared human rights values and forge mutual understanding within the Strategic Partnership. Discuss Human Rights issues including cooperation in multilateral fora in the EU-India political dialogue.

Trade and Investment, Business & Economy

Continue engagement at multilateral level, notably on global economic cooperation and governance in the G20 framework and in the ongoing WTO negotiations and future discussions, including re-invigorating and accelerating services negotiations.
Both sides remain engaged to discuss how to deepen their bilateral trade and investment relations in order to fully reap the benefits, including through negotiations on the Broad-based Trade and Investment Agreement.
Implement a mechanism to facilitate investments of EU businesses in India.
Make full use of the existing institutional mechanisms to resolve trade irritants in particular concerning goods, services and investments, and strengthen trade and investment relations between India and the EU.
Continue ongoing cooperation and exchange of best practices with regard to intellectual property rights.
Continue interaction regarding facilitating the registration of Geographical Indications (GIs) in each other’s territories.
Strengthen exchange of experience and deepen cooperation on public procurement, customs and competition policy.
Cooperate at international fora to reach agreement on an international legal instrument(s), without prejudging the nature of outcome(s), relating to intellectual property, which will ensure the balanced and effective protection of Genetic Resources (GR), Traditional Knowledge (TK) and Traditional Cultural Expressions (TCE).
Strengthen cooperation in the area of pharmaceuticals, in particular in the context of regular meetings of the EU-India Joint Working Group on pharmaceuticals, biotechnology and medical devices.
In the context of India's 'Make in India' Initiative, strengthen exchanges and create favourable circumstances for investment, including public-private partnerships.
Encourage EU and India business including SMEs to strengthen dialogue, as appropriate with the active participation of business chambers and groups, including in the margins of EU-India Summits.

Global issues/sector policy cooperation

Climate Change

Develop cooperation on the implementation of the Paris Climate Agreement including on Intended Nationally Determined Contributions (INDC) implementation.
[Recalling the Dubai Pathway on Hydrofluorocarbons (HFCs) adopted by the Parties to the Montreal Protocol in 2015, explore possibilities of cooperation.
Work towards the establishment of a regular India-EU climate change dialogue and increase cooperation on broad climate change issues including through regular Round Tables and working group events.
Identify opportunities for strengthened cooperation, including coordination in international fora.

Energy

Under the aegis of the EU-India Energy Panel and its working groups, expand energy cooperation including on renewable energy, energy efficiency, smart grids, clean coal technology, energy security, and energy research & innovation and explore possibilities for joint initiatives supporting the “Sustainable Energy for All” objectives, launched by the UN Secretary General.

Environment

Having regard to, inter alia, the 'Clean India', ‘Clean Ganga’ and 'Make in India' initiatives, step up exchanges including through the Joint Working Group on Environment and the multi-stakeholder Environment Forum in areas such as clean air, waste, chemicals, water, biodiversity, soil and land, including in an urban context.
Establish and implement an Indo-European Water Partnership (IEWP) with the involvement of a large array of stakeholders including EU Member States, Indian States, EU and Indian water authorities, business and civil society.
Enable more coherent and effective cooperation between the EU and India on water issues, notably in the context of India’s 'Clean Ganga' flagship programme to rejuvenate the river and in achieving the objectives of India's National Water Mission.
Work towards promoting resource efficiency (including exchange of best practices), improving technologies and industrial processes, and contributing to low greenhouse gas emissions and climate resilient development.
Facilitate exchange of information and expertise on the circular economy, inter alia through the Resource Efficiency Initiative project, being developed under the EU’s Partnership Instrument.

2030 Agenda for Sustainable Development

Identify opportunities for strengthened cooperation and coordination in international fora to support the implementation of the 2030 Agenda and explore possibilities to develop cooperation in this regard.
Establish an EU-India dialogue to share experiences on the implementation of the 2030 Agenda for Sustainable Development.

Urban development

Referring to the ‘100 Smart cities’ flagship programme and EU urban policy development experience, enhance EU-India cooperation on Urban Development with increasing involvement of Indian States and cities, EU Member States and regions/cities and the EU’s Committee of Region, building on regular dialogue on issues such as infrastructure, energy, sanitation and water management.
Promote dialogue and partnership/twinning between local, regional and state entities.

Research & Innovation

Pursue India-EU Science, Technology and Innovation Cooperation, based on the outcomes of the 10th India-EU Science & Technology Steering Committee Meeting held at New Delhi on November 23, 2015.
Work towards reciprocal access of researchers in selected EU Horizon 2020 & Indian programmes.
Consolidate the good cooperation on fusion energy research, in particular on JET(Joint European Torus), under the Euratom-India Fusion Cooperation Agreement; as well in ITER (International Thermonuclear Experimental Reactor).
Finalise and start implementing the EURATOM-India agreement for research and development cooperation in the field of the peaceful uses of nuclear energy.

Information and communications technology (ICT)

Create synergies between the "Digital India" initiative and the EU's “Digital Single Market”, in particular by cooperating on economic and regulatory issues (e.g. market access), ICT standardisation, Internet Governance, research and innovation as well as innovative start-up companies ("Startup Europe India Network") and by making good use of the annual Joint ICT Working Group and Business Dialogue.
Work towards finalisation of a Joint Declaration for cooperation on the next generation of global communication networks (5G), including under the India-EU Joint ICT Working Group.
Exchange of expertise and best practice in Cyber Security, conformity assessment, Internet of Things, Cloud Computing, high performance computing, language technologies, e-Infrastructures Social Media in eGovernance.
Discuss a simplified co-financing mechanism for Research and Innovation in mutually agreed areas of IT & electronics.
Discuss all pending issues with regard to promotion of IT industry.

Transport

Strengthen cooperation and dialogue on transport policy, covering, inter alia safety, legal and regulatory issues and infrastructure.
On civil aviation, implement the EU-India horizontal agreement (signed in 2008) and enhance cooperation including on aviation safety.

Space

Enhance space cooperation including earth observation and satellite navigation for the strengthening of interaction between the Indian Regional Navigation Satellite System and EU's Galileo as well as joint scientific payloads.

People-to-people

Migration & Mobility

Resume regular meetings of the High Level Dialogue and in this framework, implement the EU-India Common Agenda on Migration and Mobility (CAMM).
Explore possibilities, in the context of the CAMM, for further cooperation on migration and mobility issues of mutual interest, including through relevant recommendations, actions, training and capacity building.

Skills, employment, social policy

Referring to 'Skills India' and the G20 skills strategy, explore possibilities of cooperation in skills development, with the involvement of EU Member States, business, universities and other relevant stakeholders.
EU and India to organise a high level skills event.
Explore possibilities within G20 to enhance collaboration to promote decent work, productive employment, social protection and occupational safety and health and fostering sustainable global supply and value chains.

Education & Culture

Strengthen dialogue and cooperation on education including through India's GIAN programme and EU's Erasmus+ programme; sharing of best practices including on mobility and multilingualism; organisation of EUIndia Higher Education Fairs; and working on issues such as access, quality, learning outcomes and benchmarking.
Enhance policy dialogue and cooperation on culture including by promoting networking among EU Member States' cultural institutes and encouraging joint projects between EU and Indian artists/creative professionals in various fields (cultural heritage, cultural and creative sectors).

Parliaments, Civil society and Local/Decentralised Authorities

Hold regular meetings on mutually convenient dates between delegations of the Indian Parliament and the European Parliament on reciprocal basis.
Promote regular dialogue between, Indian and EU civil society organisations, think tanks, local and decentralised authorities.

Institutional architecture of the EU-India Strategic Partnership

Merge the EU-India Security Dialogue and Foreign Policy Consultations into “Foreign Policy and Security Consultations” (FPSC) and maintain the four security working groups, which will report to the FPSC. Hold annual meetings of these dialogue fora.
Review jointly the current EU-India fora for dialogue and propose improvements.

The EU and India note that, for the implementation of the present Agenda, various instruments of both sides are available including dialogue mechanisms, the exchange of expertise and experience, pilot projects, the EU's Partnership Instrument and lending possibilities of the European Investment Bank.

Joint monitoring of progress in implementing the present Agenda will be ensured through the existing EU-India institutional architecture, including the relevant joint working groups.

The leaders will take stock of progress during the Summit meetings.

23.2. WTO: India opposes US, EU bid to hold small-group talks

BusinessLine | Amiti Sen | Apr. 13, 2016

Taking on India and China, developed members including the US, the EU and Japan have demanded that the talks on tariff reduction on industrial goods should take place plurilaterally between a few like-minded countries.

India, backed by some other developing countries, however, maintained that negotiations on industrial goods (NAMA) should take place within the multilateral framework based on an earlier discussed text, while China said that even if plurilateral talks happen, the concept of special & differential treatment (S&DT) for developing countries should be maintained.

Both India and China have been vocal in demanding the privileges for developing countries at the World Trade Organisation (WTO) negotiations.

“The NAMA talks are an integral part of the on-going Doha Round of multilateral trade talks. There can be no question of holding plurilateral talks in the area within the WTO framework,” a government official told BusinessLine.

The discussions took place at the recent meeting of the NAMA group at the WTO. This was the first meeting after the WTO’s ministerial meeting in Nairobi last December where a number of developed countries had called for an end to the on-going Doha round of negotiations and launch of a fresh round.

It is important for India to ensure that the WTO does not become a forum for plurilateral pacts as any country which is not part of those pacts would become less competitive in the markets of countries that are part of the pact since fellow members would get preferential access at lower tariffs.

“The hallmark of the WTO is the most favoured nation treatment that members accord to each other which means that all members are to be treated equally,” the official said. Brazil, Malaysia and Bolivia, too, stressed that multilateral talks on industrial goods should continue.

Alluding to India, China and South Africa, the US said there has been no change in positions of members that expect multilateral negotiations will lead to the US cutting tariffs while demanding for themselves flexibilities and no binding commitments, according to another official in know of the talks.

Plurilateral talks

It said that the success of plurilateral talks could be gauged from the completion of the IT Agreement-II (of which India is not a part) and the pact on environmental goods being negotiated.

The EU and Japan, too, expressed their preference for plurilateral talks, with the EU stating that the multilateral talks cannot progress on the basis that it bears obligations while its competitors enjoy flexibilities. The US and the EU, for long, have been trying to push large developing countries including India, China and South Africa, to take on fresh commitments to reduce the gap between the applied tariff rates (present duties) on their industrial goods and the bound tariff (levels above which tariffs can’t be increased because of past commitments).

However, these countries have been insisting that the WTO rules mandate tariff cuts from bound rates and S&DT for developing countries which mean that their tariff reduction obligation has to be much lower than that of developed countries.

24. How Putin has changed the future of oil

BusinessLine | Sanjay Kapoor | 25 Mar. 2016

His audacious intervention in Syria has shifted the power balance in the region, stabilising plummeting oil prices

On September 30, 2015, when Russian President Vladimir Putin surprised the world by sending in his air force to help out his beleaguered ally, Syria’s President Bashar-al-Assad, no one really expected a country fighting western sanctions, plummeting oil prices, falling ruble and domestic anxieties to become militarily adventurous.

It did not make sense to many strategists in western capitals why Putin should go to war when oil revenues had fallen so precipitously.

Five months after Russia’s triumphant stay in Syria where it changed the course of this messy war; it has managed to bring in more sanity to a volatile oil market.

The day Putin announced his military intervention, oil prices were $47 per barrel, which is far below the $100 mark, considered to be the level at which Russian development budget and its economy could be viable.

After sanctions, Russian economy had contracted by 4 per cent and soft crude oil prices were adding to its discomfiture. US President Barack Obama, too, could not conceal his surprise at Russia’s audacity when he said that they would not succeed in Syria and would get stuck in a “quagmire”.

A cheap war

Earlier in 2015, Obama had said that the Russian economy was in tatters after the sanctions. He did not bring in the issue of soft oil prices, but there were many takers for the theory that Saudi Arabia, the world’s largest producer of crude oil, was party to the grand conspiracy to hurt Russia by flooding the market with oil and hammering down its prices.

There were other implications of Saudi’s obduracy not to bring down oil production: destroy shale oil industry of US, hurt Iran’s attempt to rebuild its economy by raising its production to pre-sanctions level.

How was Russia supposed to fund its Syrian operations? Fresh from its success in acquiring Crimea and stirring trouble in Eastern Ukraine by deploying what is known as “hybrid war”, Russia was confident of using its state of the art weaponry to change the balance of war in the West Asian country.

Russian economy watchers claim that most of the expenses of the intervention were met from its military budget as it involved using only a few aircrafts — about 40 bombers and fighters — and missiles that were near expiry date as they had not been used since the collapse of Soviet Union.

So in some ways, Russia mounted a war, which was inexpensive and managed to provide Moscow dividends far beyond everyone’s expectations.

Russian military strategists and intelligence were justifiably of the belief that the Islamic State’s war against the Syrian government was bankrolled by the smuggling of crude oil to Turkey. There were a number of commentaries available on Russian news sites on how smuggled cheap oil was dampening global oil prices.

Shift in balance

This was a lot of hogwash, but the Russians found plenty of reasons to target the long lines of crude-laden oil convoys snaking into Turkey. Russian defense minister Sergei Shoigu briefed Putin on March 14, the day the decision was taken to withdraw the Russian forces.

Shoigou said their military had “hindered… resource support to the terrorists” by intercepting hydrocarbon trade to Turkey. “209 facilities for producing and processing and transferring of fuel were destroyed by the air force along with 2,912 sources of petroleum delivery (read trucks),” he said.

The Russians also managed to help the Syrians re-establish control over oil fields near Palmyra, which has been brought back to production. The Russian operations aggravated tensions with Turkey, which has been trying for Assad’s overthrow.

After notching significant military victories in Syria, Putin managed to broker a ceasefire with the help of the US, which has tenuously held on for more than three weeks now.

The shift in military balance also helped in kick-starting a moribund peace process in Geneva in which nearly all the important players are taking part, including the pugnacious Saudi Arabia, which does not want to deal with Assad’s government.

Russian presence in Syria has had a sobering influence at another level. A month before Moscow decided to bring down the curtains on their five-month-long campaign, Russia managed to hammer out a significant deal with the Saudis. Along with Venezuela and Qatar, they managed to freeze oil production at the peak of January 2016.

Deals and after

The impact of this agreement was that oil prices stopped sliding below $30 per barrel and began to inch up slowly. On the day Putin announced the withdrawal of his military, oil was in the vicinity of $40 per barrel. In real terms, it may have slid about $7 from the time the Russian air force went in to bomb the rivals of Assad in September 30, 2015, but clearly the prices would have gone lower if the Russians had not cobbled a deal with the Saudis.

What threatens to upset this deal is the outright rejection by the Iranian’s who want to increase their oil production to four million barrels of oil every day to fund their post-sanctions development programmes. They would not want a Russia-Saudi deal to cramp them in anyways, but some analysts claim that Tehran may not have an option but to fall in line.

The reason for this again lies in how Russia has managed to establish itself as a factor in West Asia. The US may hate doing that but the Russians have compelled them to back them in their fight against the Islamic State and also served to check Saudi Arabia’s desperate attempts to preserve its hegemony over the Sunni world.

At the face of it, the Saudis have put together a grand Sunni coalition along with the Turks and other countries to ostensibly fight the IS, but quite clearly, they would like to use their enormous money and muscle power to oust Assad, who has the backing of Iran and the Hezbollah.

The only reason why they have not attacked Syria after being so hawkish, is due to the looming presence of Russia and its promise to re-assemble their forces in Syria within a few hours if the ceasefire is violated or Syria’s sovereignty is threatened.

This worries the Saudis and the Turks, but also makes Iran conscious of the high stakes Moscow has in freezing oil production. Surely, Iran would not like to antagonise the Saudis and Russia at the same time. It is in this calculation lies the future stability of oil.

The writer is Editor, HardNews

25. These Are the Two Original Sins of the Internet — And Now's the Time to Fix Them

Walter Isaacson, the CEO of the Aspen Institute, 19 Mar. 2016, LinkedIn

I was recently given a career achievement award – which was a little unnerving since I’ve still not decided what I want to be when I grow up – and it gave me the opportunity to reflect on the intersection of technology and journalism. Because of the disruptions caused by digital technology, journalism is completely different that it was when I became a reporter more than three decades ago. Most of the changes are good, but there are two big things that I think we need to fix.

Before we get to them, we should pause to recognize that the disruption of media by technology is nothing new. It goes back at least 500 years to when Gutenberg’s movable-type printing presses wrested control over the flow of information from the scriveners and scribes that worked for the church and other authorities. This permitted people to have direct access to information, and thus helped enable both the Reformation and the Renaissance.

I’m writing now about Leonardo Da Vinci, who was born in 1452, the same year that Gutenberg printed his first bibles. Leonardo never went to a university and knew little Latin, but the new technology allowed him to teach himself everything from anatomy to zoology by reading books.

Leonardo left more than 7,000 notebook pages of drawings, thoughts, and ideas. They’re all on paper, which makes them extraordinarily easy to access even after five centuries. Indeed, Leonardo's notes are far easier to access than our e-mails, tweets, blog posts, and Facebook pages will be five centuries from now. When I was meeting with Steve Jobs and we were trying to get the emails he had sent in the 1990s, they were impossible to retrieve, even by his tech people. When I asked a university librarian recently the best way to preserve some interesting e-mails I had, she said I should print them out on paper and put them in a box. So amid technological change, we should remember what a good technology paper is. It’s superb at the storage and distribution and retrieval of information. It’s got an incredible battery life, and it doesn’t have to have backwards compatible operating systems.

In fact, I’ve often pondered what would happen if for 500 years we had been getting all of our information on electronic screens and some latter-day Gutenberg came along and said, “I can take that information and I can put it on paper and I can deliver it to your porch and you can take on the bus or to the bathtub or backyard.” We’d say, “Wow, paper is a wonderful technology. Someday it’s going to replace the internet.”

During the time of Benjamin Franklin, the declining cost of printing presses helped enable the foundation of the United States both by preventing the British authorities from controlling the flow of information (their attempts to force newspaper to publish only with a “by authority” seal did not work, nor did their Stamp Act) and by allowing people up and down the coast to connect and network. The committees of correspondence were our first Twitter feed, and pamphleteers such as Thomas Paine were our first bloggers; they spurred the Revolution.

When Franklin stitched together the colonial postal system, he made it an open network. Actually, at first he tried to favor his own content – the newspapers, magazines, and almanacs that he and his partners up and down the coats printed – like a modern media conglomerate. But he soon realize that the system would work best if there was net neutrality.

When the Internet was devised fifty years ago, its underlying technology, known as packet switching, tended to decentralize the control of information flows. Instead of central hubs that authorities could control, each node of the Internet had the power to originate, forward, and receive information. If censors or an enemy was able to restrict some of the nodes, the network would just route around them.

When I was at Time magazine in the 1990s, we reported that the Pentagon had funded this design so that it could withstand a Russian attack. One of the graduate students who had helped devise the network wrote a letter saying that was untrue. After all, he pointed out, one reason they were graduate students in the 1960s was to avoid the draft; they weren’t trying to help the Pentagon. Time didn’t print the letter, because the person who headed the Pentagon office said that it was indeed designed to survive an enemy attack, but of course they hadn’t told the graduate students that. He later said to tell the former graduate students that he was on top and they were on the bottom, so they didn’t know what was happening. One of them responded, when I told him this, that the Pentagon official was on the top and they were on the bottom, so he was the one who didn’t know what was happening. That describes the Internet well: it’s built and controlled from the bottom up, not top down.

Networks transform everything they touch. Because of the Internet’s architecture, gatekeepers get disintermediated.

I saw how that affected world politics when I was at Time. I was in Bratislava covering the fall of communism in 1989, and I was put in the hotel where they put foreigners, which meant it was one of the few places there that had satellite television. A person who worked in the hotel said, “the student like to come in here and watch the music channel.” I said they could use my room, and I came back early one afternoon so that I could meet some of them. But when I got there, they weren’t watching MTV. They were watching CNN and what was happening in the Gdansk shipyards with the revolt against the Polish communist leaders. It became clear to me that the lack of control of information was always going to lead to the demise of authoritarian regimes. I saw this again a few years later being in a town called Kashgar in the western part of China. I went to a coffee shop, and there were three kids on a computer. I asked what they were doing and they said they were on the Internet. I asked if I could try something, and I typed in TIME.com and it was blocked. And I typed in CNN.com, it was blocked. At which point one of them elbowed me aside and… boom, Time came up and CNN came up. I said, “What did you do?” “Well, we know how to go through proxy servers in Hong Kong that the censors are clueless about.” Again I could see how this lack of ability to control information was going to change our politics.

The good thing, especially with the advent of the web, was that anybody, anywhere got to publish anything they wanted and had access to any information anybody else published.

But for all of its wonders, I think that the birth of the Internet was accompanied by two original sins. First, we allowed and even indulged anonymity. I know that anonymity protects people’s privacy and allows them to say what they want. But the Internet could have been built differently, and at some point maybe it will be, so that users would have a choice. You should be able to go to the part of the Internet that’s anonymous. But you should also have the option to go to a secure layer of the network that has verified identity and authentication. That would allow you to engage in discussions and read the comments of people who are willing to take responsibility for what they say. It would make for more civil discussions. It would also permit more secure banking, easy financial transactions, fewer cyberattacks, less spam and phishing, and reduce the number of times you get emails from friends say they’ve lost their wallet in Malaysia so could you please wire them some money via a bank in Nigeria. In the real world we spend most of our time in places where we know who we are talking to and dealing with; we should have that same option on the Internet.

There’s a tale that Plato tells in The Republic involving the Ring of Gyges. If you put on the ring, nobody knows what you’ve done, nobody knows what you said, nobody knows it was you who did something. He and Socrates discuss whether you could have a civil system and morality if people could put on the Ring of Gyges. Today’s Internet shows us that the answer is no.

I was talking to Madeline Conway, who’s been the managing editor of the Harvard Crimson. She said she spends her days trying to keep anonymous quotes out of news stories, then spends the evening reading the anonymous postings in the comments section, which are frightening.

Internet anonymity is one of many reasons that civility has been drained from our public dialogue. In fact, we have a leading presidential contender who seems like the embodiment of an online comments section. We have lost the notion of community that was existent in the early days of the internet with services like the WELL, started by Stewart Brand. When you logged on to the WELL, the first thing you saw was, “you own your own words.” In another words, you had to take responsibility for what you said, even if you were using a pseudonym (which you knew could be traced to your true identity). The result was that a trusted community was formed there, and it had wonderful discussions.

The other original sin of the Internet was that most journalistic organizations made their content free when they put it online, and they thought they could survive on advertising revenue alone. I was in charge of new media at Time Inc., and when we first put our content on websites we thought we would charge users, either through subscriptions or a pay-per-drink model. But as soon as we went online, you could look out the window of the TIME-LIFE building and see people from Madison Avenue running toward us with bags of cash to buy banner ads. Ad revenue was so addictive that we began to focus only on aggregating eyeballs for advertisers, and we gave up trying to get revenue from consumers.

That was an unsustainable business model. The amount of advertising dollars rises each year in a small way, but the number of websites goes up exponentially. So, the CPMs you can get from advertisers declines inexorably.

But it was worse than just being an economic problem. It meant that we were no longer directly beholden to our readers.

Henry Luce, a co-founder of Time in 1923, said that a business model for journalism that was solely reliant on advertising revenue was not only morally abhorrent but also economically self-defeating. As a Presbyterian missionary’s son, I don’t know which of those two things he thought was worse.

So, I think we now have to look at the difficult task of trying to put these two genies back in a bottle. I think we need to offer communities that are less anonymous and more curated. Obviously there should be places that indulge anonymity, and if people want to go there, fine. But we should also create places where people can be part of communities that aren’t susceptible to trolling and anonymity – places where people take responsibility for their own words.

I think journalism is healthy these days, indeed it is vibrant. I see that every morning when I can hop around from Vox and the Atlantic and Politico to the New Orleans Advocate and the Huffington Post as well as all sorts of blogs and Twitter feeds I now rely upon.

Journalism isn’t broken. What’s broken is the business model for journalism.

So, I think we need to find ways to get revenue from users that are simpler and easier than the subscription models that some newspapers have begun to make work. That’s a good line of revenue, but it’s not easy for everybody to do that.

There are times when I want an article from some obscure magazine or newspaper, but I don’t want to subscribe. I’m certainly willing to pay a dime or even a dollar for that article or that issue. It’s not the cost but the mental transaction cost that gets in the way. We need to have easy small payment systems. We need simple transactions, without passwords or PayPal rigmarole, perhaps based on bitcoins or some other digital coin wallets embedded in our browsers.

For 500 years, technology has increased the spread of ideas and the empowerment of individuals. This has bent the arc of history towards freedom, individual empowerment, and democracy. I’m convinced that this will also be true for the next 500 years. But it’ll be up to those in journalism today to rectify some of the mistakes made by people in my generation.

Walter Isaacson, the CEO of the Aspen Institute, is the author of The Innovators and biographies of Steve Jobs, Albert Einstein, Benjamin Franklin, and Henry Kissinger. He was the editor of Time and the CEO of CNN. This piece is adapted from a talk he gave at the Shorenstein Center’s Goldsmith awards at the Harvard Kennedy School.

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