AAPI: September 2017

LISBON, 20th September 2017

Index of this Newsletter

INDIA

INDIA & THE WORLD

21.1. EU hopes to resume FTA talks with India
21.2. PM seeks strong partnership among BRICS nations to spur growth
22.1. Global investors backing India's pro-reform stance: Harshil Mehta
22.2. Rs 5,253 cr ($820 million) road projects to benefit India, Nepal: Gadkari
23.1. India-S'pore trade can reach USD 25 billion by 2019-20: FIEO
23.2. India starts exporting petroleum products to Myanmar
24.1. Policy soon to promote agri exports, says Prabhu
24.2. Vaisakhi in Addis Ababa
25.1. Shinzo Abe's India visit may see launch of Asia Africa Growth Corridor
25.2. Now, trade in diamond

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LISBON, 20th September 2017

NEWSLETTER, 20-IX-2017

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

1.1. Gauri Lankesh: A profile in limitless courage
BusinessLine, 6 Sep. 2017, K Giriprakash

The murder of journalist-activist Gauri Lankesh has a frightening similarity to the killing of Malleshappa Madivalappa Kalburgi, the former Vice-Chancellor of Kannada University, who was gunned down at pointblank range by assailants on August 30, 2015 in Dharwad in north Karnataka.

Kalburgi’s killers haven’t been traced yet, though Chief Minister Siddaramaiah has on several occasions promised they will be nabbed soon. In the case of Lankesh’s murder, however, the Chief Minister responded quickly and set up a Special Investigation Team to probe the case.

The similarities don’t end in the manner in which Kalburgi and Lankesh were killed. Both of them fought religious orthodoxy, both were staunchly secular and both of them in their writings espoused the cause of the downtrodden and were critical of the politics of the “Hindutva brigade”.

A state funeral

On Wednesday, Lankesh was accorded a state funeral, a rarity for a journalist. There was an outpouring of emotions from ordinary people who had lined up to see her body kept at Ravindra Kalakshetra, the stateowned centre for performing arts.

Indrajit Lankesh, Gauri’s younger brother and a prominent Kannada film maker, told BusinessLine that he and Gauri had had ideological differences, but nevertheless respected each other. “She never tried to impose her will upon me.”

Indrajit, who recently joined the BJP, said that in spite of threats to her life, Gauri stuck to her principles, which he was proud about.

Krishna Prasad, former editor of Outlook magazine, said Gauri Lankesh had her angularities like everyone else. “Gauri was a small figure in physique. But behind the slight frame was a steely determination that raged against the inequalities, inequities and injustices. This set her up against forces far larger than her.”

Helping Naxals

According to one of Lankesh’s former colleagues, she was arguably one of the few journalists in Karnataka who spoke her mind without mincing words even on as sensitive a topic as Naxalism. She even befriended Naxals and in some ways was their spokesperson, making sure to present their side of the story so that people and the Goverment could understand what the movement stood for and weigh their version against that of the police.

Lankesh was also responsible for bringing several Naxals back to the mainstream, working along with the government behind the scenes to ensure that not a single one of them was betrayed. It was a huge task, and she never received any recognition for her efforts; if anything, her work was viewed with suspicion by lawmakers.

‘Icon of the oppressed'

Venkatesh Bubberjung, a lawyer who represented Lankesh in several cases, said she was a real braveheart. “Those who gunned her down have made her more relevant today. She is now an icon of the oppressed,” he said.

He narrated an incident in which BJP leader Uma Bharti was convicted in a case in Hubballi and had 36 nonbailable warrants issued against her, none of which were executed. Lankesh filed a case seeking Bharti’s arrest and, because of that, faced threats from Bharti’s supporters.

“She refused to be cowed down though the prudent thing to do at that time for her was to withdraw the petition,” said Bubberjung, who was once Karnataka’s state public prosecutor.

Krishna Prasad, who knew Gauri Lankesh personally, said that in paying with her life, “Lankesh has alerted us to the gigantic battle that India is up against.”

1.2. Privacy as a fundamental right will boost trust in digital services: Nasscom

Livemint, Aug. 25, 2017

New Delhi: The Supreme Court’s decision to declare privacy as a fundamental right will enhance citizens’ trust in digital services and help in their wider adoption, IT industry body Nasscom said on Thursday.

In a landmark decision, a nine-judge Constitution bench headed by Chief Justice J.S. Khehar has ruled that “right to privacy is an intrinsic part of right to life and personal liberty under Article 21 and entire Part III of the Constitution”.

Nasscom president R. Chandrashekhar said the ruling also “significantly boosts India’s attractiveness as a safe destination for global sourcing”. It will ensure that protection of citizen’s privacy is a “cardinal principle” in India’s growing digital economy, he said. Citizen’s trust in digital services is a prerequisite for widespread digital adoption, he noted.

With falling data and smartphone costs, adoption of digital services has seen a manifold growth in the country. However, concerns around security of the user data has also emerged as a matter of debate, particularly with reference to Aadhaar. Rama Vedashree, CEO of the data security council of India (DSCI)—a part of Nasscom—said the body has always advocated for a stronger data security regime in the country. “... This judgement will further reinforce industry efforts and resolve to provide necessary assurance in this regard,” Vedashree said. Nasscom and DSCI have asserted that they will continue to work with the government in accelerating the enforcement framework.

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

2.1. The lessons of demonetisation

Livemint, 31 Aug. 2017

There is now ample proof that the grand demonetisation gamble has failed to meet its primary objective. The Reserve Bank of India (RBI) has finally released numbers that show how most of the currency notes that were cancelled were deposited in banks. The airy hopes that the Indian central bank would be able to extinguish a substantial chunk of its liabilities—and some mistakenly also argued that this would provide a fiscal bonanza that the government could use to recapitalize the banking system—have been belied. The minor relief is that the value of notes returned was not greater than the value of currency printed by the Indian central bank. That would have created a huge accounting mess.

Prime Minister Narendra Modi had said in his address to the nation on 8 November that the decision was an attack on the scourge of black money. It was only later that other potential advantages of demonetisation were introduced into the public discourse. The press release by the Union finance ministry after the new currency data was made public similarly tries to broaden the set of benefits from demonetisation. Finance minister Arun Jaitley said on Wednesday that the money is now in the system, where the use of Big Data analytics could help the government identify who deposited black money.

This newspaper had welcomed the move when it was announced. In an editorial published on 11 November, we had described demonetisation as a war on the stock of illegal wealth: “The Modi government has clearly signalled its intention to move against illegal wealth. The currency swap deals with the stock of black money held by tax evaders. The challenge now is to ensure that the creation of new black money is minimized. There is no magic wand to solve what is a deep problem in India, but a committed government plus tax reforms such as the new goods and services tax (GST)—which creates incentives for producers to seek bills from their input providers—will be part of the solution.” The editorial overestimated the amount of illegal wealth that would be extinguished while paying little attention to the immediate negative impact it would have on economic activity. Every policy has a stated goal as well as secondary consequences, some of which are unintended. It is still quite possible that demonetisation will have positive consequences over a longer period—the growth in the direct tax base, the switch in the financial holdings of households from cash to bank deposits, the increased use of digital payments. That is what its supporters are now banking on. The question to be asked is whether the potential long-term benefits will be greater than the short-term costs that the Indian economy had to bear.

The main negative economic consequence of demonetisation has been the disruption of unorganized supply chains that are dependent on cash transactions; it is still not clear how smoothly they were being rebuilt as the economy was remonetized. However, it is also true that the Indian economy did not collapse because of the disruption of the monetary base, as some economists had predicted. There are two possible reasons for this. First, the impact on broad money was far less severe than the effect on base money thanks to the growth in bank deposits. Second, informal contracts to settle financial transactions could have kept economic exchange going during the worst weeks of the cash crunch. The reasons will be debated for many years to come. There are a few salient lessons to be learnt from this episode. One, the main lesson, is that the Modi government did not seek the advice of experts before going ahead. The strategic decision to surprise holders of illegal wealth would anyway have restricted the circle of those who could be informed, but it seems that the idea came from outsiders with a penchant for quixotic ideas rather than experienced policy advisers.

Two, good policy design should take into account how people will respond to any change in the rules of the game. In other words, incentives matter. Most rational human beings will adjust their behaviour to further their self-interest. Those who had illegal wealth held in cash obviously gamed the cash exchange process. Good incentive-compatible policy design is thus as important as good policy intent. This is a lesson that is relevant in several contexts, but is one of the clear lessons from the demonetisation experience.

Three, political dynamics can be quite different from economic dynamics. That voters have continued to back the Bharatiya Janata Party (BJP) despite the pain imposed by demonetisation shows that the ruling party has gradually redefined its typical voter from the traditional trading base that supported the Bharatiya Jana Sangh to the aspirational middle class that has a lower tolerance for corruption.

2.2. Voting for man-made disasters

BusinessLine, 3 Sep. 2017, Narayan Ramachandran

The root cause of man-made disasters of the type we saw in August is not merely incapacity and apathy but conscious errors of omission and commission by the state

Dozens of infant deaths in a government-run hospital in Gorakhpur, Uttar Pradesh, frenzied rioting after a godman was convicted in the rape of two followers, untold deaths and millions displaced in massive floods in Bihar, a night of horrendous commutes in Mumbai following torrential rains, and the aftermath of significant flooding in the North-East— these marked only the most notable disasters during the month.

What is common to the disasters above (except for the godman-related riot) is that they are all about water, waterlogging, and waterborne disease. Even more important is that they are man-made, with a collapse in administration and a sharp political failure, even though at first glance they appear to be due to force majeure. Another commonality is that they span geography and political party, with the much vaunted efficiency of the Bharatiya Janata Party (BJP) found severely wanting (no different from the earlier Congress party in power).

The Gorakhpur deaths that took place early in August were allegedly due to the lack of oxygen supply in the hospital. The district magistrate who investigated the incident confirmed the likely cause of the deaths to be insufficient oxygen supply but found only those immediately in the hospital management chain to be responsible and pronounced them guilty based on technical violations (like going on leave without permission). Their political masters were spared culpability, as widely expected. The tragedy exposed the weakness of the entire public health system. A severe shortage of trained nurses and doctors, an apathetic interest in maintaining even the most basic critical care supply chain, and a political and administrative system with dysfunctional incentives and accountability.

Little known about Gorakhpur is the fact that another 60 or so children died of Japanese encephalitis only last week, 300 more have died since January this year, and nearly 8,000 have died in the region since the disease was first detected in 1978. Japanese encephalitis overwhelms the region due to rampant mosquito breeding consequent to annual floods in the low-lying region. The impact, particularly on the rural poor, continues year after year.

The plains of northern Bihar (not far from Gorakhpur) are particularly susceptible to flooding by a large system of rivers that originate in the Himalayas. This river system is made up of Ghaghra, Gandak, Burhi Gandak, Bagmati, Kamla Balan, Mahananda and Kosi. The last, dubbed the river of sorrow, is the most infamous. The Kosi flooded again this year and 500 people are dead and nearly 17million have been rendered homeless in Mithila.

I write this column today having been unable to get into Mumbai, paralysed yet again by waterlogging from torrential rains. The reasons are well known by now—clogged drains, illegal construction, concreted run-offs and overbuilt wetlands. State intent and capacity has been found dramatically wanting in prevention, early warning and disaster management. In fact, state complicity in illegal construction is the primary reason for the repeated collapse.

To this litany of woes that happens year after year, we have added a new variety. Rioting by lawless goons because the political and administrative machinery has been totally captured by godmen with a following. The sycophancy of the political establishment simply to align with vote banks is reaching a new high. Almost as alarming is that otherwise well-read professionals and thought leaders in society have also thrown in their lot with elected politicians fearing a cut-off in access, believing that democracy means simply winning an election (at any and all cost).

While many journalists, civic leaders and other influencers have given in, a few individuals and institutions have displayed exemplary courage in calling a spade a spade. In response to a particularly aggressive set of actions in a recent Rajya Sabha election in Gujarat, election commissioner O.P. Rawat said “it appears to a cynical common man that we have been scripting a narrative that places maximum premium on winning at all costs—to the exclusion of ethical considerations”. Criminal intimidation using the arms of state or goons from your sect are two sides of the same coin. But let us not forget the courageous Central Bureau of Investigation (CBI) judge, Jagdeep Singh, a hardworking legal journeyman who produced a remarkable verdict despite the pressures from politicians and cult followers.

Similarly, the Supreme Court pronounced two verdicts in the month of August—on triple talaq, and on privacy as a fundamental right—that reflected great wisdom and balance and went against the grain of the prevailing nationalist/majoritarian sentiment.

The root cause of man-made disasters of the type we saw in August is not merely incapacity and apathy but conscious errors of omission and commission by the state. The only way to return a semblance of normalcy, and reduce this capture of the state by those dealing in money and votes, is for checks and balances in the democratic system, which includes the press and civic society, to work. While we salute the election commissioner, the Supreme Court and the CBI judge this month, many more will have to speak up and act to mitigate utter disaster.

P.S. Forgotten is this noble idea from Mahatma Gandhi: “You can chain me, you can torture me, you can even destroy this body, but you will never imprison my mind.”

3.1. Why inclusive growth is indispensable to India

Livemint, 14 Sep. 2017, Uwa Hedrick-WongManu Bhardwaj

With 80% of the labour force stuck in informal employment, it is not surprising that the Indian economy is performing far below its true potential

On 15 August India marked 70 years of independence from the British empire, a monumental triumph in social and political liberalization. Today, India is in the midst of an equally monumental struggle in economic liberalization. The stakes could not be higher. An economic future of broadly shared prosperity and vanishing poverty for more than 1.2 billion people is within grasp. To get there, however, calls for advancing inclusive growth.

India’s economic performance in recent years has been outstanding in relation to both its own historical record and the global economy. Between 2010 and 2016, for example, annual real gross domestic product (GDP) growth in India averaged 6.7% despite a relatively weak post-crisis global economy that averaged only 2.7% annual gains. Yet the economic optimism in recent years is now tempered by a growing recognition that many deficiencies in the economy remain deep-seated and if not effectively addressed could undermine future growth.

Front and centre is the concern over employment growth.

Despite strong economic growth in the last decade, job growth averaged only approximately 2% a year in the formal sector. Such growth is basically flat when adjusted for the growing population. In the coming decades, some 12-15 million Indians will enter the labour force each year, and if the current job growth trends persist, fewer than half of them will be able to secure formal employment of any kind. For those who fail to find formal employment, their only option is to work in the informal economy.

It is estimated that about 80% of India’s labour force works in the informal economy. Jobs in the informal economy are typically insecure, with neither employment contracts nor regular pay, and very often workers are engaged on a day-to-day basis. The working conditions in the informal economy therefore resemble a low productivity trap.

Employers have no incentives to invest in training workers who are seen as transient and interchangeable or to invest in better tools and equipment for them. Without some assurance of future income, workers find it difficult to plan for the long term, let alone find the means to invest in learning new skills. The informal economy thus embodies the exact opposite of inclusive growth: workers are effectively excluded from accessing many of the resources they need to make themselves more productive and thereby improve their life chances.

This is why advancing inclusive growth is so important in India today. At the most basic level, economic growth results from labour force growth and productivity growth of workers. With 80% of the labour force stuck in low productivity activities in informal employment, it is not surprising that the Indian economy is performing far below its true potential.

For the Indian economy to reach its growth potential, ways and means must be found to move workers from informal to formal employment. Ultimately, the economy can reach its full potential only when the hundreds of millions of Indian workers can escape the trap of low productivity.

The good news is that recent reform initiatives are preparing the ground for greater inclusion. The biometricbased unique identification system, Aadhaar, now ensures that the poor are no longer invisible and, therefore, more empowered. A bank account for every adult now ensures universal access to financial services, at least in principle. When combined with Aadhaar, such access will accelerate financial inclusion. The shock of demonetisation and the introduction of the new national goods and services tax will gradually expand India’s tax base and eliminate incentives for businesses to operate in the shadow of the formal economy. Critics of the government’s recent reforms are quick to decry their disruptive effects. But this is to miss the woods for the trees. Any reforms that have an impact and are worth doing are necessarily disruptive. Without short-term cyclical effects, there are no longer-term structural gains. Much greater gains will be realized when the different reforms begin to converge to bring more people into the mainstream economy altogether. What is needed is to sustain the push for more reforms, not fewer.

Reducing the size of the informal economy is pivotal to inclusive growth. It allows India to reach its growth potential and deliver broadly shared prosperity for the vast majority. Sustaining a real GDP growth rate of 7% each year until 2040 will quintuple per capita GDP to $28,000 on a purchasing power parity basis. By 2040, India will also reach its maximum share of the working-age population. This is a glittering prize—endowing its youth bulge with meaningful, well-compensated and rewarding formal employment in a society where prosperity is broadly shared and absolute poverty has become a thing of the past.

The historian Ramachandra Guha has argued (India After Gandhi: The History Of The World’s Largest Democracy, New York: Harper Collins, 2007) that India is both the world’s largest and least likely democracy. The odds were daunting that India could hold as a democracy, and yet it did. At 70, what India needs to do next is clear: democratize productivity through inclusive growth to finally reach its full economic potential.

Uwa Hedrick-Wong and Manu Bhardwaj are, respectively, chief economist at Mastercard, and vice-president, research and insights, Mastercard Center for Inclusive Growth.

3.2. Now we have a tit-for-tat democracy

BusinessLine, 8 Sep. 2017, Rashmi Pratap

Prof Homi K Bhabha on how the “criminalisation of dissent” at universities is the bedrock of the didacticism that is killing dialogue in India In February 2016, when the Jawaharlal Nehru University (JNU) students union president Kanhaiya Kumar was sent to judicial custody in a sedition case, Harvard professor Homi K Bhabha wrote to vice chancellor M Jagadesh Kumar against what he called “criminalisation of dissent”. The letter by the cultural theorist and Padma Bhushan awardee may have been written in response to the JNU case, but his call “for engaging with the diversity of opinion” is something that many in the country may relate to.

Edited excerpts from a BLink interview with Prof Bhabha:

What was the context of your letter to the JNU vice chancellor?

The immediate context was a request by Prof Veena Das, an eminent anthropologist at Johns Hopkins University, that a letter to the vice-chancellor would provide an opportunity for him to reflect on a very precarious situation. It is my view that universities are crucibles of conversation and dialogue, and an essential part of democratic dialogue is public dissent, so long as it does not break the law or causes harm to individuals or groups. Without dissent there can be no hope for progress in a democratic society — and this is the lesson of Gandhi, Tagore, Ambedkar, and several other pioneers of freedom. Universities serve the needs of students and faculty from various social strata who espouse a range of views and beliefs. University education is a transitional and transformative phase in the life of an inquiring individual. Good governance on the campus requires the wisdom of the leadership in negotiating dissent as a process and practice of pedagogy. We have to learn to negotiate dissent, not negate it.

Does the present government know how to negotiate dissent, even if in a university? What do you think makes the current regime so attractive to the masses still?

There is a trend in India today to enhance political didacticism rather than democratic dialogue. The appeal to one element of the composite and syncretic culture of India — Hindutva, for instance — on the grounds of patriotism or populism is to distort the fine balance between cultures, beliefs and communities that represents the wonder that was India and could become the wonder of India once again. Our Constitution is a fine instrument of equality with checks and balances to protect minorities as a part of the larger national interest. Once the state devises majoritarian instruments of intimidation and exclusion, and aims itself indiscriminately against the “enemy within” — dalits, Christians, Muslims, the LGBT community, NGOs, etc — then democratic participation is overshadowed by authoritarian paranoia, and citizens are alienated and excluded as scapegoats.

There is a corrosive contradiction in world politics today between globalisation for foreign consumption and nationalist populism at home. World leaders never fail to represent their countries as essential actors on the world stage — economically, financially, technologically, digitally. At home, however, there is a growing social conservatism and parochialism that flagrantly denies the values of cosmopolitanism. We Indians are pioneers of global interaction and intervention because we learned the ‘global’ lesson the hard way by waging anticolonial struggles and forging independence in the struggle against imperialists who believed that they had the right to be the rulers and definers of the world as a global system.

What explains this decline from being a vibrant democracy?

India is still a country of viable democratic institutions and a vibrant civil society. But global networks also produce new networks of poverty and disadvantage. Unfortunately, we now have broken futures, where some people succeed conspicuously and others suffer conspicuously in the same place and in the same time. Every city in India today belongs partly to the “first world” and partly to the “third world” — to say nothing of the agricultural sector and farmer suicides.

Our current predicament cannot be divorced from the dismay with the last Congress-led government. I was here for much of the pre-election period and there was no credible leadership of the enlightened secular kind. By secular, I emphatically don’t mean anti-religious. Secularism is an idea of civic and republican citizenship committed to people debating and discussing the “common goods” they expect from society. Now we have a ‘tit-for-tat democracy’. It seems that the destiny of the nation is a football kicked between different teams without anybody defining the shared rules of the game.

Why is there almost a famine of democratic discussion?

One of the reasons has to be that the city universities such as Mumbai, Delhi, Chennai have been neglected and under-funded. My college, Elphinstone (in Mumbai), is a skeleton of what it used to be. It prepared me to go to Oxford, but over the years, large public cultural institutions have received scant support and have become battlegrounds of sectarian political interests and influences. The people who suffer are the younger generation, who are ready to embrace a new India and to gather the greatest gifts of the democratic Indian past. There is another vacuum now — that of education. If you don’t have education, how do you produce leaders, how do you generate ideas for a sustainable and equitable future?

What is it that needs to be done?

India has considerable resources — ideas, skills, expertise; we have sustainable social institutions; we have a cosmopolitan cultural tradition. You need political will and scholarly imagination to rethink the educational system which produces not only good scholars but people who are brought up in a system that creates a cultural citizenship that embraces the mosaic of communities and beliefs that constitutes the secular map. Fundamentalisms — whether political or religious — create a toxic, even tragic, condition. I think there has to be a way of making people understand that you cannot scale down value-systems to appeal to any one dominant class, community or faith. We need to recalibrate our value system to live up to ideals andaspirations that witnessed the birth of our nation.

4.1. How to make Indian courts more efficient

Livemint, 14 Sep. 2017

Better case management and procedural reforms can go a long way in reducing case pendency

The Indian judicial system has a pendency problem. This is known—a staple of every governance reform and economic growth debate. That makes the news that lower courts in Kerala, Punjab, Himachal Pradesh, Haryana, and Chandigarh have disposed of almost all cases that had been pending for a decade or more as welcome as it is surprising. Today, there are only a total of 11,000 cases pending for over 10 years in these four states and the Union territory of Chandigarh. This is impressive given that the national pendency count is pegged at around 2.3 million cases. Delhi, Assam, Andhra Pradesh, Madhya Pradesh, and Karnataka are also close to clearing out long-pending cases.

These figures are only for the lower courts but there are still valuable lessons to be learnt—especially since the lower courts are where most cases get stuck. Take, for example, the high court of Punjab and Haryana which has jurisdiction over the lower courts of Punjab, Haryana and Chandigarh. Almost a decade ago, it set up a case management system—i.e. a mechanism to monitor every case from filing to disposal. It also began to categorize writ petitions based on their urgency. In addition, it set annual targets and action plans for judicial officers to dispose of old cases, and began a quarterly performance review to ensure that cases were not disposed of with undue haste. All these measures ushered in a degree of transparency and accountability in the system, the results of which are now apparent.

There is also a less obvious lesson to be learnt when it comes to reducing pendency—one that seems counter-intuitive. The accepted wisdom is that courts struggle to keep up because there aren’t enough judges. But this might not be entirely true given that some courts are clearly managing to perform better in the same conditions. A study by data journalism website IndiaSpend has found no strong direct correlation between judicial vacancies and the performance of a court. The study looked at the lower courts in Tamil Nadu and found that while all courts had missing judges, there was still significant variation in their performances. For example, while a civil case anywhere in the state takes on an average about 2.95 years to be resolved, in the district of Ariyalur, it takes an average of 4.65 years. Similarly, while Chennai’s lower courts dispose criminal cases the quickest, Coimbatore’s lower courts are the slowest.

This is not to suggest that the large number of judicial vacancies isn’t a problem. But there are other effective ways to address the problem as well. Judicial case management is one important measure. Here, the court sets a timetable for the case and the judge actively monitors progress. This marks a fundamental shift in the management of cases—the responsibility for which moves from the litigants and their lawyers to the court. While some legal experts, such as the former chief justice of Australia, Sir Gerard Brennan, have argued that judges should stick to judicial matters and leave administrative issues to other court officials and staff, others such as Lord Woolf of the UK—who worked extensively on reforming the civil justice system in England and Wales—believe that the two functions cannot be viewed separately.

The Law Commission of India in its 230th report has also offered a long list of measures to deal with the pendency of cases. These include providing strict guidelines for the grant of adjournments, curtailing vacation time in the higher judiciary, reducing the time for oral arguments unless the case involves a complicated question of law, and framing clear and decisive judgements to avoid further litigation. In addition, the courts should also seriously consider incorporating technology into the system; digitizing courts records has been a good start in this context but a lot more can be done. For example, just like automation powered by Artificial Intelligence is already helping doctors, it can also be leveraged to assist judges and lawyers.

Earlier this month, a special court sentenced gangster Abu Salem and others for the 1993 Mumbai bomb blasts. It took nearly 25 years for the Indian state to convict and sentence at least some of those who had perpetrated one of the bloodiest acts of terrorism on Indian soil. Justice delayed this much is justice compromised. That is the truth underscored by the Indian judicial system’s sclerotic nature. Citizens are poorly served by the state twice over: once when their access to the law exists more in name than in fact, and the second time when they are deprived of the benefits of economic growth that has been hamstrung by clogged courts. The lower courts in states like Kerala and Punjab have shown that this need not be the case.

How do you think the Indian judicial system can be made more efficient

4.2. It’s high time to deal corruption, compromise & cronyism with iron hand

BusinessLine, 16, Sep. 2017, J Mulraj

Judicial proceedings against Sahara are proceeding with vigour (the Supreme Court refused to stay the auction of Aamby Valley last week, for example) but those against Ponzi schemes such as Rose Valley, PACL and NSEL proceed at the pace of a tortoise with gout.

Three Cs, Corruption, Compromise and Cronyism, will lead an economy to Destruction. Let’s examine each.

Corruption: The Surpreme Court asked, last week, why no action was taken after a big jump in assets of netas, or political leaders. The Attorney General stated that they will face action. There are news reports of investigations and raids which have found incriminating evidence of disproportionate assets with several political leaders. The assets of some have been seized. But in the past, the brouhaha caused after such disclosure ended with a political compromise, and the guilty went away laughing, haha.

Compromise: If the aim of a political party is to end the cycle of corruption and to cleanse the system, then the investigative and judicial systems work towards that end. But if the aim is to play a game of political musical chairs, in which political parties periodically occupy or vacate chairs, then it leads to compromises, because someone else may later be occupying the chair. The watering down of investigations has become an art form, and the slowness of the judicial process aids the wrongdoer and punishes the victim. Thus we notice that justice is selective. Judicial proceedings against Sahara are proceeding with vigour (the Supreme Court refused to stay the auction of Aamby Valley last week, for example) but those against Ponzi schemes such as Rose Valley, PACL and NSEL proceed at the pace of a tortoise with gout.

Selective actions

In the case of NSEL, the investigations have been hampered/ delayed because the computer server on which email and other records were maintained mysteriously ‘crashed’ (if the investigative machinery is rusty a little grease helps). Yet it is four year later that a firm has been brought in to try and retrieve the data. In the case of Dera Sacha Sauda, the head of IT has been immediately arrested for the same accusation, of tampering computer records. Why the differential treatment?

Cronyism: Much has been written about the crony capitalism which has resulted in NPA problems of banks. As a result, banks, not getting a large chunk of their loans back, are constrained in fresh lending and the economy does not grow as fast. This leads, ultimately, to a rising inequality. French economist Thomas Piketty, in a recent talk in Delhi, pointed to the dangers to economic growth, arising from such inequality. A report by Credit Suisse says that the top 1 per cent of Indians own 58 per cent of national wealth. This is untenable and the rising levels of street protests and violence are a pointer to the dangers.

Unless these three Cs are tackled with firmness and fairness, it will lead to a Destruction of India’s hopes of living up to its potential of becoming a global economic power. Let’s hope, for India’s sake, that the three C’s can be tackled with firmness and speed.

(The writer is India Head — Finance, Asia/Haymarket. The views are personal.)

5.1. Centre takes up Rs 34K cr ($5,32 bn) road projs to decongest Delhi: Govt

PTI, Sep. 14, 2017

New Delhi: The Centre today said it has taken up highway projects worth Rs 34,100 crore to decongest the national capital and sought Delhi government's support in expediting the work.

Chairing a high-level meeting on 'Projects on Decongestion of Delhi, Union Road Transport Minister Nitin Gadkari said a comprehensive exercise for decongesting arterial road network of national highways connecting NCT Delhi was on.

He further said that projects were being expedited and the National Highways Authority of India (NHAI) has taken up comprehensive development and decongestion of NH-1, NH-8 and NH-24. The NH-1, NH-2, NH-8, NH-10 and NH-24 converge in Delhi.

Briefing the media after the meeting, Minister of Environment, Forests and Climate Change Harsh Vardhan said, "The Centre has taken up projects worth Rs 34,100 crore to decongest Delhi that includes Rs 6,000 crore project on NH24."

He also sought cooperation from the Delhi government, saying the Centre's approach is positive in developing the arterial network and the state government should come forward and cooperate.

Other stakeholders like Haryana and Uttar Pradesh have assured their full support in the initiative, he said. Reviewing the projects during the meeting it was felt that for complete decongestion, interconnectivity among National Highways need to be improved for which a few more roads are required to be developed, officials said.

The issues pending with the Delhi government included permission to fell trees for Dhaulakuan junction as it required cutting of 1,900 trees. The Delhi government was also asked to expedite land acquisition for Dwarka Expressway.

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

5.2. Govt to focus on water grid, highways-cum-airstrips: Gadkari

PTI, Sep. 11, 2017

New Delhi: Making e-autorickshaws a common sight in rural India, creating a water grid that is on par with power grid and constructing 17 highways-cum-airstrips are the government's priorities and it will start work on them this year, Union Minister Nitin Gadkari has said.
After getting the additional charge of water resources, river development and Ganga rejuvenation in last week's Cabinet reshuffle, Gadkari told PTI in an interview that another "mammoth task" that lay on his shoulders was to make Ganga 'aviral and nirmal' (continuous and clean flow).

"Public transport on electric mode is the dire need now.

We are bringing a policy for it. Thrust will also be on rural transport on electric autorickshaws and other vehicles, powered by lithium ion battery. Its cost has already been reduced by 40 per cent and prices will further come down on mass production," Gadkari said.

He said that last week DMRC facilitated the launch of a fleet of E-autorickshaws at Gurgaon to provide lastmile connectivity in the millennium city for metro commuters and likewise initiatives in all states where metros trains are coming up could be taken.

"India has become coal and power surplus. Electric mode is getting cheaper. Transport charges will come down. People will get sustainable transport. Whether West Bengal, Assam, Andhra Pradesh, North East, Uttar Pradesh or Bihar - metro and electric transport will expand eliminating hand rickshaws, which is inhuman (practice)," he said. He said massive work was lined up in this direction and would be launched before 2018. Another thrust area is creating a River Grid on par with Power Grid that undertakes transmission of electricity through Inter-State Transmission System (ISTS), he said.

"Maharashtra, Karnataka, Telangana, Tamil Nadu, Chhattisgarh, Andhra Pradesh, Odisha, Jharkhand, Gujarat, Madhya Pradesh and Rajasthan battle with water crisis. Even drinking water is not available in many villages," he said.

"On the other hand, states like Bihar and Uttar Pradesh witness massive floods. Why not create a Water Grid on par with Power Grid and divert excess water to scarce areas," he said.

Gadkari said he was serious on the issue and would start work soon in this direction besides would begin work on three of the five river inter-linking projects worth Rs 50,000 crore in the next three months.

"Will start work soon on five projects of river connectivity as per Prime Minister Narendra Modi's vision. Interlinking of rivers was also the dream of former PM Atal Behari Vajpayee. Why can't we divert the excess water from Ganga and Brhmaputra to Cauvery and other rivers," he said.

He asserted that he had a "mammoth task" on his shoulders to make Ganga 'aviral and nirmal', besides increasing irrigation capacity for farmers in the country.

On highway projects, he said the Defence has agreed to transfer land near Dhaulakuan to widen the stretch and work will begin soon on the project which will ease traffic condition on that road.

Besides, its nod has been obtained for building 17 highway stretches in areas near borders that will also double up as airstrips and permission will soon be sought from the Aviation Ministry, he said.

"There are 17 projects and we aim to start work on all before 2018," the Minister said.

The projects are designed in such a fashion that the roads will double up as airstrips and traffic will be stopped when an airplane lands or takes off. The road and air connectivity will also provide better access to remote areas.

Such projects are planned in Rajasthan, Arunachal Pradesh, Meghalaya and some other border districts. Waterways also are top on the agenda of the government and work has already been underway on two projects Ganga and Brahamaputra, he said, adding that work on another 10 projects will start by the end of the year.

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. Japan's Miniso sets up shop in India, eyes Rs10,000 crore ($1,56 bn) revenue in 2 years Livemint, Aug. 18, 2017

New Delhi: Miyake Junya, co-founder and chief designer of the Japan-based low-cost retail chain Miniso, has set himself an audacious target for India, which he believes is a market of “immense potential”.

Junya, who opens the first Miniso shop in India on Friday, is looking to earn Rs10,000 crore in revenue over the next two years. Founded in 2013, Miniso positions itself as a lifestyle brand and sells products in 12 categories including health, beauty, stationery, gift items, creative homeware, boutique package decoration and digital accessories at a starting price of Rs150.

The company, which retails in 60 countries through 2,000 stores, will open its first store in Ambience Mall, Vasant Kunj, Delhi, spread over 2,000 sq. ft. Subsequently, Miniso plans to open 210 stores by the end of 2018 and take the count up to 800 by 2019. The company is currently looking for franchise partners in India. Globally, Miniso opens an average of 80-100 stores every month. “India has a good market expansion opportunity. The brand is all about fashion and lifestyle; life is moving fast in metro cities, so will Miniso.

Keeping in mind the fast-paced lifestyle, we will be starting with metro cities first Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad, Jaipur and so on,” said Junya, in response to an e-mailed query.

The plan, Junya said, is to make India one of its top five markets in terms of revenue. For the year 2016-17, Miniso recorded a revenue of $1.5 billion, up from $750 million in the previous year. “The huge potential of India lies in the fact that it offers a very large customer base to tap into. With the population of India running into the billions, the scope this offers is tremendous,” he said, adding that the company is planning to open 10,000 stores in more than 100 countries by 2019, with annual revenue reaching $15 billion.

Over the years, the company has faced criticism for positioning itself as a Japanese brand despite its Chinese origins. The company, however, claims that the confusion regarding its origins can be attributed to the fact that it has both Japanese and Chinese co-founders. While Junya is from Japan, co-founder Ye Guofo is from China.

“Headquartered in Japan, Minoso also has an operations headquarters in China. Minoso was co-founded by Ye Guofo who is Chinese,” said Junya. The company claimed that it primarily sources its products from countries like Japan, South Korea, Singapore and Malaysia.

Rajat Wahi, partner, management consulting, Deloitte India, said that the company might be looking at a challenging model in India. “The company will have to build multiple distribution channels including ecommerce and teleshopping and play strong in all. The targets are ambitious, but the price point is very attractive. However, the challenge here is that this kind of category can be easily copied by others,” he said.

The Indian fashion and lifestyle market is expected to touch Rs3.94 trillion over the next five years, according to a 2016 survey by consulting firm A.T. Kearney. The market was valued at Rs2.21 trillion in 2016, growing at a compounded annual growth rate of 12%.

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

6.2. Investment in India's retail market touched $ 200 million in Jan-Jun 2017: CBRE report Livemint, Aug. 18, 2017

Bengaluru: Investments in India’s retail market by private equity firms and wealth funds touched $200 million, a report on the first half of 2017 by real estate consulting firm CBRE South Asia Pvt. Ltd showed.

There were 70 new entries or expansions by global and domestic brands across Mumbai, Delhi-NCR and Bengaluru during the first six months of the year, the firm said in its India retail market report published on Thursday. Seven new global brands entered India during the period, including apparel names like Kate Spade and Scotch & Soda.

India overtook China to top the global Retail Development Index in 2017 with a market attractiveness of 63.4% and retail sales of about $1 trillion, CBRE South Asia said in the report.

“With several legislations and policies in implementation mode, we are already seeing an increase in consumer and investor confidence. This will have a cascading effect on the retail segment. Overall, retail real estate will continue to grow and witness healthy demand across tier I and II cities,” Anshuman Magazine, CBRE’s India and South East Asia chairman said in a statement.

Many retail developments were completed across select cities and resulted in about 1.5 million square feet of fresh supply entering the market. Demand for quality retail space was strong during the first six months of the year with a majority of the supply concentrated in Mumbai, Bengaluru and Delhi-NCR.

The supply pipeline for the rest of the year is also healthy and is led by Hyderabad and Bengaluru, the report said, adding that demand for quality space will remain strong in the fast fashion, department store, sport and leisure segments.

Completion of infrastructure initiatives will decide the rental trajectory for markets. But rental growth in most high streets across key cities will be limited since rents in these locations have already peaked, CBRE said. “The fact that demand for quality space continues to outstrip the supply is indicative that the retail real estate segment across key cities in India is growing exponentially. While global brands continue to evaluate and consider quality retail developments in the top cities, with growing globalization, smaller cities are also gaining prominence and witnessing traction,” Vivek Kaul, the firm’s India retail services head said in a statement. The implementation of the goods and service tax (GST) has had some impact on the retail segment, CBRE said. While most essential items are exempt from tax, fast-moving consumer goods (FMCG) are in the 5% tax bracket, restaurants are in the 18% slab and some items–ranging from luxury cars to movie tickets priced over a certain amount–are in the higher 28% bracket.

Going forward, retailers will need to review their product pricing based on market expectations and accordingly align the rest of their business–from procurement to distribution–to ensure they remain cost-effective, CBRE’s report said.

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

7.1. India largest seafood exporter in 2016: FAO

Business Standard, Aug. 28, 2017

Bhubaneswar: Amid growing uncertainties in the seafood trade, exporters now have a reason to cheer as India has emerged as the highest shrimp exporter in 2016. India exported about 438,500 tonnes in 2016, up 14.5 per cent in 2015, according to a report by Globefish, a unit within the Food and Agriculture Organisation (FAO) of the United Nations.

The exports of value-added shrimp from India surged by 130 per cent in 2016 to 23,400 tonnes from 10,100 tonnes in 2015 and were mostly directed to the US market.

According to the report, the top five shrimp exporters to the international market in 2016 were India, Vietnam (425,000 tonnes, up by 18–20 per cent from 2015), Ecuador (372,600 tonnes, up 7.8 per cent), Indonesia (220,000 tonnes, up 21 per cent) and Thailand (209,400, up 22 per cent).

India’s top export markets included the US, Vietnam, the EU and Japan. India exported 1,134,948 tonnes of seafood, worth an all-time high of $5.78 billion (Rs 37, 870.90 crore), in 2016-17 against 9,45,892 tonnes, worth $4.69 billion, a year earlier.

The US Food and Drug Administration (FDA) rejected 133 shrimp consignments due to the existence of prohibited antibiotics, which included 95 from India.

The report has come at a time when Indian exporters are fearing a ban from the EU, their third-largest market. Stating that imports to the EU declined last year, the report stated, “Beginning in late 2016, the EU Veterinary Authority has increased the mandatory quality checks of Indian farmed shrimp from 10 to 50 per cent, a move that contributed to additional costs for importers and led to diversification of shipments to other markets.” On the global demand, it said that imports increased moderately in the US, EU and Japanese markets in 2016.

In China, strong demand was reported as a result of falling domestic production with foreign supplies increasing both directly and indirectly to this market. International prices remained stable throughout 2016. “Mixed production trends for farmed shrimp were observed in Asian producing countries during 2016, with a total estimated production of around 2.5 million tonnes. While disease remained a major concern, adverse weather conditions also had an impact on production, particularly during the first half of the year. Fortunately, supplies recovered in India, Indonesia, Vietnam and Thailand during the second half of 2016,” the Globefish report said.

In terms of prices, vannamei shrimp prices increased marginally during 2016. In the single-largest import market, the US, there was a 5.5 per cent rise in import prices compared with 2015. US prices for Indian shrimp and Ecuadorean shrimp increased by 2.7 per cent and 7.8 per cent, respectively, the report said.

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

7.2. Agriculture exports may grow to USD 100 bn by 2022: Experts

PTI, Aug. 24, 2017

Mumbai: The country's agricultural sector has potential to double farmer income and grow exports to USD 100 billion by 2022 from the present USD 36 billion, according to industry experts.

"India ranks second globally in agricultural production at USD 367 billion and we have potential to double farmer income and increase exports to USD 100 billion by 2022.

"Globally, exports in agricultural products is over USD 1,500 billion annually as per the latest data from WTO and India's share is less than USD 35 billion at present," said Crop Care Federation of India (CCFI) president Rajju Shroff.

"We have urged the government to increase focus on trebling India's share in agri exports to double farmer income by 2022," Shroff, who is also MD of United Phosphorus Ltd, told reporters here.

A report, prepared by city based not-for-profit organisation Centre for Environment and Agriculture (Centegro), also emphasised the need to raise India's share in global agri exports to increase farmers' income automatically.

The report was prepared in association with experts from Tata Strategic Management Group was released by Union minister Nitin Gadkari recently. India ranks second globally in agricultural production, whereas in services and manufacturing sectors India's position stands at 11th and 12th respectively.

Agriculture's contribution to India's economy extends beyond the rural economy and encompasses many activities in manufacturing and services sector. Export surplus from the country's agricultural trade is higher than the corresponding figure achieved by the manufacturing sector, the report said.

On lines of the 'Make In India' campaign, the report urged the government to launch 'Grow In India' campaign aiming for substantial gains in agri-exports with a single authority to monitor India's international agricultural trade-both exports and imports.

The study debunked popular notions about farmers injecting hormones, colouring chemicals into fruits and vegetables improve colour and size in watermelons and pomegranate.

Organic farming is not sustainable because of low yield and need for huge amount of unavailable manure. Farmers spend on crop protection chemicals is just 1 per cent of the value of total agriculture production, it said.

The health scare about pesticide residues in food is a malafide campaign propagated by foreign funded NGO's in order to tarnish Indian agriculture, the report said.

"Traditionally used yield per acre for crops is an unfair measure of Indian farm productivity. Globally, India is the largest producer of milk, second largest in fruits, vegetables & fish and third largest in egg production in the world.

"This is all due to small and marginal farmers who deploy family labour and engage in intensive multi cropping all year round. They also manage livestock & poultry efficiently using agriculture waste as animal feed and to produce manure," Shroff said.

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

8.1. Edible oil output to be around 11 mn tn in 2021-22: ICRA

PTI, Sep. 05, 2017

Mumbai: With improvement in oilseeds production in next five years along with increase in yield, ICRA expects the edible oil production to be around 11 million tonnes in 2021-22.

The total edible oil production stood at 8 million tonne in FY17, ICRA said in a report.

In line with the output, the demand for edible oils is also expected to increase to around 29 million tonne in FY22 from around 24 million tonne in FY17, the rating agency added.

This will result in rise in import requirements, which is expected to increase to around 16 million tonne in FY22, from around 14 million tonne in FY17.

However, the report opined that the proportion of import in total edible oil consumption is expected to reduce to around 55 per cent from around 60 per cent during the same period.

ICRA said, the government has been focusing on improving the production of oilseeds in the country through various schemes and which has resulted in reasonable level of success in improving the yields.

However, it added that the increase in production achieved so far is much less than required and is mainly on account of factors like limited availability of quality seeds, inefficient infrastructure setup and low economic incentives for farmers to shift to oilseeds production.

There is an urgent need to improve the seed supply chain to improve the seeds availability and to technical assistance to farmers along with infrastructure development for efficient and smooth functioning of the markets, it said. Meanwhile, the report said, the well-spread out monsoon in FY17, has helped the industry and the good rains in current year are expected likely to keep the production levels high during FY18.

ICRA expects the seed industry to continue witnessing double digit growth over the medium term largely driven by improving seed replacement ratio and increasing adoption of improved varieties of hybrid seeds. "Further, we continue to maintain that the sector needs significant increase in investments in research and development (R&D) and infrastructure development for the industry to further build on the growth momentum," ICRA Associate Head and AVP, Corporate Ratings, Sachin Sachdeva said.

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

8.2. Sugar output may rise 24% to 25 MT in 2017-18, says ISMA

PTI, Sep. 08, 2017

New Delhi: India's sugar production is estimated to rise 24 per cent to 25.1 million tonnes (MT) in the next marketing year starting October on higher sugarcane area, industry body ISMA said today.

Sugar production in the world's second largest producer after Brazil is estimated at 20.2 MT in the ongoing 2016-17 marketing year (October-September).

It is likely to rise in all states except Tamil Nadu, Indian Sugar Mills Association (ISMA) President T Sarita Reddy said on the sidelines of a Kingsman sugar conference here.

"We estimate output at 25.1 MT next season and an opening stock of 4 MT. So, there would be sufficient availability of sugar in the country," he said.

In Uttar Pradesh, she said, the production could rise to around 10 MT in the 2017-18 season. India's sugar demand is 24-25 MT annually.

Sugarcane area is higher at 49.88 lakh hectares this year compared to 45.64 lakh hectares in 2016-17.

To boost domestic supply this year in view of fall in production, the government had allowed duty free import of 5 lakh tonnes of sugar in April-May.

Today, it further allowed imports of 3 lakh tonnes of raw sugar at concessional duty of 25 per cent to check prices during upcoming festive season.
International Sugar Organisation (ISO) Executive Director Jose Orive also said that India's production will rise to 25 MT from 20.5 MT in 2016-17.

The global production will rise by 7 per cent to 179.3 MT, while consumption will increase 1.7 per cent to 174.7 MT, according to ISO.

Sanjay Bhoosreddy, Principal Secretary, Sugarcane Development and Sugar Industry, Uttar Pradesh, said the output of sugar in the state will rise to 10.3 MT in 2017-18 from 8.8 MT in the current year. He said the crushing is expected to start in some parts of UP from October 10.

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

9.1. Cabinet approves implementation of the scheme "Dairy Processing & Infrastructure Development Fund"

Press Information Bureau, Sep. 13, 2017

New Delhi: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi has approved a Dairy Processing & Infrastructure Development Fund” (DIDF) with an outlay of Rs 10,881 crore during the period from 2017-18 to 2028-29.

Consequent to the Union Budget 2017-18 announcement, Dairy Processing & Infrastructure Development Fund will be set up as a corpus of Rs 8004 crore with National Bank for Agriculture and Rural Development (NABARD), the Expenditure Finance Committee has given approval for; Initiation and setting up of Dairy Processing and Infrastructure Development Fund (DIDF) at a total scheme outlay of Rs 10881 crore. Out of Rs 10881 crore of financial outlay for project components of DIDF, Rs 8004 crore shall be loan from NABARD to National Dairy Development Board (NDDB) and National Dairy Development Cooperation (NCDC), Rs 2001 crore shall be end borrowers contribution, Rs 12 crore would be NDDB/NCDC‘s share and Rs 864 crore shall be contributed by DADF towards interest subvention. NABARD shall disburse Rs 2004 Cr, Rs 3006 Cr and Rs 2994 Cr during the year 2017-18, 2018-19 and 2019-20 respectively.

Allocation of Rs 864 Crore for meeting interest subvention will be released to NABARD over a period of 12 years covering the entire loan repayment period from 2017-18 to 2028-29.

The major activities of DIDF: The project will focus on building an efficient milk procurement system by setting up of chilling infrastructure & installation of electronic milk adulteration testing equipment, creation/modernization/expansion of processing infrastructure and manufacturing faculties for Value Added Products for the Milk Unions/ Milk Producer Companies.

Management of DIDF: The project will be implemented by National Dairy Development Board (NDDB) and National Dairy Development Cooperation (NCDC) directly through the End Borrowers such as Milk Unions, State Dairy Federations, Multi-state Milk Cooperatives, Milk Producer Companies and NDDB subsidiaries meeting the eligibility criteria under the project. An Implementation and Monitoring Cell (IMC) located at NDDB, Anand, will manage the implementation and monitoring of day-to-day project activities. The end borrowers will get the loan @ 6.5% per annum. The period of repayment will be 10 years with initial two years moratorium. The respective State Government will be the guarantor of loan repayment. Also for the project sanctioned if the end user is not able to contribute its share; State Government will contribute the same. Rs 8004 crore shall be loan from NABARD to NDDB/NCDC, Rs 2001 crore shall be end borrowers contribution, Rs 12 crore would be jointly contributed by NDDB/NCDC and Rs 864 crore shall be contributed by DADF towards interest subvention.

Benefits from DIDF: With this investment, 95,00,000 farmers in about 50,000 villages would be benefitted. Additional Milk processing capacity of 126 lakh litre per day, milk drying capacity of 210 MT per day, milk chilling capacity of 140 lakh litre per day, installation of 28000 Bulk Milk Coolers (BMCs) along with electronic milk adulteration testing equipment and value added products manufacturing capacity of 59.78 lakh litre per day of milk equivalent shall be created. Initially 39 MUs the Department will start the project with 39 profit making milk unions of 12 States, other Milk Cooperatives which become eligible on the basis of their net worth and profit levels, in subsequent years, to apply for loan under DIDF.

Employment Generation Potential: The implementation of DIDF scheme will generate direct and indirect employment opportunities for skilled, semi-skilled and unskilled manpower. Direct employment opportunities for about 40,000 people will be created under the scheme through project activities like expansion & modernisation of existing milk processing facilities, setting up of new processing plants, establishment of manufacturing facilities for value added products and setting up of Bulk Milk Coolers (BMCs) at village level.

About 2 lakh indirect employment opportunities will be created on account of expansion of milk and milk product marketing operations from existing Tier I, II & III to Tier IV, V & VI cities/towns etc. This will lead to deployment of more marketing staff by Milk Cooperatives, appointment of distributors and opening of additional milk booths/retail outlets in urban/rural locations.

With the increase in milk procurement operations of the Milk Cooperatives, there would be generation of additional manpower employment for supervision of increased milk procurement operations, transportation of milk from villages to processing units, and increased input delivery services like Artificial Insemination (AI) services, Veterinary Services, etc.

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

9.2. NITI Aayog calls renewed focus on Nutrition, launches the National Nutrition Strategy

Press Information Bureau, Sep. 06, 2017

New Delhi: Leader of the Green Revolution Dr. M.S Swaminathan and Padma Shri Dr. H Sudarshan, today, launched the National Nutrition Strategy, along with Vice Chairman Dr. Rajiv Kumar and Member Dr. Vinod Paul.

With a benefit to cost ratio of 16:1 for 40 low and middle-income countries, there is a well recognized rationale, globally, for investing in Nutrition. The recently published NFHS-4 results reflect some progress, with a decline in the overall levels of under nutrition in both women and children. However, the pace of decline is far below what numerous countries with similar growth trajectories to India have achieved. Moreover, India pays an income penalty of 9% to 10% due to a workforce that was stunted during their childhood.

To address this and to bring nutrition to the centre-stage ofthe National Development Agenda, NITI Aayog has drafted the National Nutrition Strategy. Formulated through an extensive consultative process, the Strategy lays down a roadmap for effective action, among both implementers and practitioners, in achieving our nutrition objectives.

The nutrition strategy envisages a framework wherein the four proximate determinants of nutrition – uptake of health services, food, drinking water & sanitation and income & livelihoods – work together to accelerate decline of under nutrition in India. Currently, there is also a lack of real time measurement of these determinants, which reduces our capacity for targeted action among the most vulnerable mothers and children.

Supply side challenges often overshadow the need to address behavioural change efforts to generate demand for nutrition services. This strategy, therefore, gives prominence to demand and community mobilisation as a key determinant to address India's nutritional needs.

The Nutrition Strategy framework envisages a Kuposhan Mukt Bharat - linked to Swachh Bharat and Swasth Bharat. The aim isensure that States create customized State/ District Action Plans to address local needs and challenges. This is especially relevant in view of enhanced resources available with the States, to prioritise focussed interventions with a greater role for panchayats and urban local bodies. The strategy enables states to make strategic choices, through decentralized planning and local innovation, with accountability for nutrition outcomes.

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

9.3. FSSAI launches online platform for food inspection, sampling

PTI, Sep. 12, 2017

New Delhi: To bring in transparency in food safety inspection and sampling, food regulator FSSAI today put in place a nationwide online platform and asked states to adopt this system as it would help eliminate discrepancy and make food safety officers accountable.

The web-based 'FoSCoRIS' system will help verify compliance of food safety and hygiene standards by food businesses as per the government norms.

The new system will bring together all key stakeholders -- food businesses, food safety officers (FSOs), designated officers, state food safety commissioners -- on a nation-wide IT platform and data related to inspection, sampling and test result data will be shared seamlessly by all the officials. "This system will give a clear picture to the FSSAI on the real-time basis and helps eliminate any discrepancy, hence inspection is accountable," the regulator said in a letter written to states.

The system will ease out the process of sample collection, make it transparent and traceable and controls the quality of compliances, it said.

Directing the states to adopt the new system, the FSSAI said this requires a hand-held device with internet connectivity with FSOs.

It has asked those states that have already provided hand-held devices to FSOs to straightway adopt the system while other states have been asked to provide such devices to FSOs or on rental and even reimburse mobile expenses to them.

The states have been told to appoint a nodal officer for this purpose and send the details of the officers of the state food authority for integrating them with FoSCoRIS.

In the initial phase, the FSSAI said, it has decided to bear the cost of rental plans for first three months to a maximum of Rs 500 per month per connection to first ten states and UTs.

"This would replace the current system of ad hoc and subjective inspections and sampling that are currently carried out by the regulatory staff," it noted.

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

10.1. Government charts seven-point strategy to double farmer incomes by 2022

Livemint, Sep. 11, 2017

New Delhi: Raising crop production, reducing cultivation costs and post-harvest losses, and reform of agriculture markets are among the focus areas of the central government to double farmer incomes by 2022, according to a blueprint released by the agriculture ministry on Friday.

Adding value to farm produce via food processing, risk mitigation through crop insurance and disaster relief, and promotion of allied activities such as horticulture and animal husbandry will be the other areas of intervention, the ministry said.

The release of the seven-point strategy follows Prime Minister Narendra Modi’s Independence Day speech, in which he had reiterated that his government will strive to double farmers’ incomes by 2022, the 75th year of India’s Independence.

Falling crop prices and rising debt have led to farmer protests in several states since June.
Earlier in August, a panel on doubling farmer incomes set up by the government released a four-volume report which said the central government’s goal is to raise average incomes of agricultural households from Rs96,703 in 2015-16 to Rs193,406 in 2022-23 (measured at 2015-16 prices).

According to the report, India will need cumulative private and public investments of Rs1.486 trillion (at 200405 prices) during this period to double farmers’ incomes.

According to the seven-point strategy released on Friday, the government is seeking to raise production by improving water-use efficiency and access to irrigation.

Cost of cultivation is coming down as farmers are using soil health cards for balanced use of fertilizers and due to the use of neem-coated urea, the strategy statement said.

It added that the government is encouraging farmers to use warehouses to avoid distress sale of farm produce.

On reforming agriculture markets, the statement said that the central government has launched an electronic National Agriculture Market, or eNAM, to connect wholesale markets and is encouraging states to adopt a model marketing act which allows for setting up of private market yards.

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

10.2. Record production of horticulture crops in the country during 2016-17 is estimated to be around 300 million tones

Press Information Bureau, Sep. 01, 2017

The area under horticulture crops has increased from 24.5 million ha to 25.1 million ha in 2016-17 Record Fruit production during the current year, estimated to be 93.7 million tones

Record production of vegetables is estimated to be around 176 million tonnes

Flowers is estimated to be around 2.3 million tonnes

Record production of Plantation crops estimated to be around 18.3 million tonnes

Record production of Spices is estimated to be around 8.2 million tonnes

Third Advance Estimates of Area and Production of various Horticulture Crops for the year 2016-17

New Delhi: The Department of Agriculture, Cooperation and Farmers Welfare has released the Third Advance Estimates of Area and Production of Horticulture Crops for 2016-17. These estimates are based on the information received from different State/UTs in the country.

The following table summarizes the Third Advance Estimates of area and Production of horticulture crops for the year 2016-17 along with Second Advance Estimates for 2016-17 and Final Estimates for 2015-16: (Area in ‘000 Ha, Production in ‘000MT)

Highlights of the “Third Advance Estimates” for 2016-17: 

The record production of horticulture crops in the country during 2016-17 is estimated to be around 300 million tonnes which is 4.8% higher as compared to the previous year’s i.e. 2015-16 estimates.
The area under horticulture crops has increased from 24.5 million ha to 25.1 million ha in 2016-17, recording an increase of 2.6% over previous year. 
Fruit production during the current year is estimated to be record 93.7 million tonnes which is about 3.9% higher than the previous year. 
Production of vegetables is estimated to be record around 176 million tonnes which is 4.2% higher than the previous year. 

With 21.7 million tonnes estimated onion production in the country, there is an increase of 3.8% over the previous year. The major onion producing States are Maharashtra, Karnataka, Madhya Pradesh, Bihar and Gujarat. 
Record potato production in the country has increased from 43.4 million tonnes to 48.2 million tonnes in the current year which is 11.1% higher than the previous year. Major Potato growing States are Uttar Pradesh, West Bengal, Bihar, Gujarat, Madhya Pradesh and Punjab. 
During the current year tomato production is estimated to be around 19.5 million tonnes which is 4.3% higher than the previous year. The major tomato growing States are Madhya Pradesh, Andhra Pradesh, Karnataka, Odisha and Gujarat etc. 
Production of flowers is estimated to be around 2.3 million tonnes which is 4.3% higher than the previous year. 
Production of Aromatics & Medicinal Plants is estimated to be around 1.04 million tonnes which is 2% higher than the previous year. 
During the current year the record production of Plantation crops (areca nut, cashewnut, cocoa and coconut) is estimated to be around 18.3 million tonnes which is 10.2% higher than the previous year.
Record production of spices is estimated to be around 8.2 million tonnes which is 17.4% higher than the previous

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

– INDUSTRY, MANUFACTURE

11.1. India-made garments have the largest pie in US imports in H1

Business Standard, Aug. 17, 2017

Chennai: For the first time in the history of India’s garment exports to the US, the country has clocked top position in market share in the category ‘men/boys knitwear shirts cotton’ (a variety of knitwear) for the first six months of 2017.

This was attributed to the slowdown in China. Exporters, however, said they will not be able to retain top position. Exporters say that since the US market offers a level playing field, they were able to compete with other countries, but the recent appreciation of the rupee against the dollar will be a major hurdle to them. The data released by the Office of Textile and Apparel, US department of commerce, show that India exported 8.5 million dozens of men/boys shirts cotton to the US. India’s share in men/boys knitwear shirts import by the US stood at 8.7 per cent in June.

After a dip in 2014, India’s market share has been growing steadily. In 2013, India’s market share was 6.4 per cent and dropped to 6.2 per cent in 2014. From then it has been steadily increasing, and in 2016 it stood at 7.8 per cent. Contrary to that, China’s market share, which was 11 per cent in 2012, dropped to 9.6 per cent in 2016 and is now 8.5 per cent.

In other segments including women/girls knit shi-rts/blouses, cotton, men/boys cotton trousers, breeches, shorts, and cotton nightwear/pajamas, India and others’ market shares have increased. While China’s loss is India’s gain, exporters are not happy because Vietnam is running India close.

Bangladesh is also increasing its market share. The data show Vietnam exported 8.47 million dozens of men/boys knitwear to the US. Tirupur Exporters Association President Raja M Shanmugam said heavy investment increased India’s share in export. “The US is the only country that gives us a level playing field, and that is why we could compete,” said Shanmugam, adding that the country was losing the edge now because production cost was increasing here.

An exporter said: “We will not be able to compete with Vietnam or with any countries because products made here are becoming costlier.” For example, exporters are quoting 3-5 per cent higher prices after the rupee appreciated, while the hike should be of around 7 per cent to compensate them for the losses on account of currency fluctuation. On the other hand, competitors' currencies have depreciated and they are bringing down the prices.

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

11.2. India well on path to produce 500 million mobile phones by 2020

PTI, Sep. 14, 2017

New Delhi: 'Made in India' phones have seen significant growth, with the number of such devices poised to touch the 50 crore mark by 2019-20, an official said today.

"In 2014, we produced 6 crore mobile phones. In 2016-17, we produced 17.5 crore mobile phones and we are well on path to producing 50 crore mobile phones by 2019-20," IT Ministry Additional Secretary Ajay Kumar said at an event here.

He added that the value addition in these indigenously made phones has also grown significantly over the years.

"It was 10 per cent or so and now, it is 20 per cent and hopefully by 2020, it will be 35 per cent or so," he said. Kumar was speaking at an event to mark the 50th anniversary of setting up of ELCINA, an industry body representing electronics manufacturers.

Minister of State for Home Affairs Kiren Rijiju lauded the role played by the electronics sector in empowering the country.

"The first thing I always stress is it must be Made in India... you can acquire technology by collaboration, by signing MoU... we keep national interest on top of the mind...

we will acquire the perfection of the particular item or instrument but in long term, we must ensure that it must be Made in India," he said.

He also called on the industry to come forward with their views and suggestions on promoting Indian companies in areas of defence technology.

"I seek your opinion and suggestion. Please come up as industry as a whole. You must come up with a clearcut suggestion, please identify that these are the bottlenecks, please suggest that government adopt this policy so that we become a manufacturing hub," he added.

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

12.1. India may become 1st nation using LED for all lights by 2019'

PTI, Aug. 17, 2017

New Delhi: Power Minister Piyush Goyal today said India will probably be the first country in the world to use LEDs for all lighting needs by 2019, which would help the nation save over Rs 40,000 crore a year. State-run Energy Efficiency Services Ltd (EESL) today inked pacts with oil marketing companies IndianOil, Bharat Petroleum and Hindustan Petroleum for selling its LED bulbs, tubelights and fans at over 54,500 petrol pumps.

"This effort will help us ... India will probably be the first country in the world which will be 100 per cent using LED for its lighting needs by 2019. It will be message that India acts rather than making big promises," the minister said at a function to ink the MoUs.

The minister later clarified that all those consumer buying these products would not get EMI facility. The facility is being launched at petrol pumps in Delhi initially.

In the first phase, distribution of energy efficient equipment will commence from the states of Uttar Pradesh and Maharashtra. The retailing of these products would eventually be done at all petrol pumps across the country.

On this occasion, Oil Minister Dharmendra Pradhan said that petrol pumps would soon have common service centres (CSC) of the IT ministry.

The CSC provides basic online services at one point including Aadhaar enrolment/updation and payment of power and telephone bills.

Pradhan said that since ATM, retail facilities are already available at petrol pumps, the CSCs would make the place one stop solution for day to day requirement of the commoners.

As part of the MoU with OMCs, EESL will make the entire upfront investment for ensuring availability of the products at the outlets and no upfront capital cost will be borne by the OMCs barring manpower and space. The consumer can purchase high quality 9W LED bulbs for Rs 70, 20W LED tubelight for Rs 220 and five-star rated ceiling fan for Rs 1,200.

Currently, over 25.5 crore LED bulbs, over 30.6 lakh LED tubelights and around 11.5 lakh energy efficient fans have been distributed in the country under the UJALA scheme. This is leading to an annual energy savings of over 3,340 crore kWh and resulting in avoidance of over 6,725 MW of peak demand.

Through the scheme the estimated cumulative cost reduction in bills of consumers annually, is over Rs 13,346 crore and is leading to reduction of approximately 2.7 crore tonnes of CO2 every year.

Later speaking about the Indian Bank's Association's plea seeking his intervention on the issue of cancellation of power purchase agreements (PPAs) and renegotiation of tariff, Goyal said, "These are concluded PPAs. We will respect the rule of law and every PPA would be respected."

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

12.2. As LEDs burn bright, it’ll soon be lights out for CFL bulbs

BusinessLine, 31 Aug. 2017, Rashmi Pratap

A 9-watt LED bulb that sold at ₹300 in 2014 is now priced ₹65 and getting cheaper

After the old incandescent bulbs, it could be the turn of Compact Fluorescent Lights (CFLs) to be totally switched off in India. With lighting companies increasingly focusing on energy-efficient Light Emitting Diodes(LEDs), CFLs could be a thing of the past in the next few years.

“The prices of LED bulbs have come down drastically in the last three years and that has pushed up sales. LED lamps are also more energy efficient and produce more light compared to CFL lamps, whose sales are dwindling,” Shekhar Bajaj, Chairman and MD of Bajaj Electricals, told BusinessLine.

Already, nearly 60 per cent of the lighting market in India has been taken over by LEDs. And the government’s decision to switch to LED for all street lamps and public space lighting will only hasten the end of CFLs in India.

In 2014, a nine-watt LED bulb would retail at ₹300 but that has now come down to ₹65 and is slated to go down further. This is largely due to the government’s Unnat Jyoti by Affordable LEDs for All (UJALA) scheme, under which LED bulbs are distributed free in some States. Government-backed Energy Efficiency Services Ltd (EESL) invites tenders from manufacturers and in the latest round, the lowest price quoted was ₹38 for a nine-watt bulb.

While nine watts may seem low, this LED lamp will emit light equivalent to an 18-watt CFL or 60-watt conventional incandescent bulb. “Now, LEDs bring over 50 per cent of the revenues in the lighting segment for us,” says Bajaj.

Expanding LED portfolios

But Bajaj is not the only one benefiting from the growing appeal for LEDs. From Philips and Havells to Crompton and even new players, corporates are now investing money on expanding their LED portfolios. Corvi LED, which entered the space in 2012, reported revenues of ₹45 crore in FY 16.

“We expect to hit revenues of at least ₹200 crore by March 2019, a growth of four times over a three-year period,” says Vimal Soni, founder and principal product designer of Corvi.

Hero Enterprise, led by Sunil Kant Munjal, has already announced an investment of $10 million in Corvi, whose biggest focus is on design in LED lights. “India today urgently needs technologies that are scalable, sustainable and cost effective and LED lighting fits the bill. As volumes grow and unit costs come down, we expect LED lighting to become the de rigueur standard across homes, offices and infrastructure facilities,” says Munjal.

Long-lasting lamps

Another advantage of LED lamps is that they are cooler than CFLs, translating into longer life and lower lifecycle cost. So, if an LED lamp is used for 10 hours a day, it will last 12 years, while a CFL will last only 2.2 years with the same usage. Moreover, companies are also giving a warranty of up to two years on LEDs, making them more appealing to consumers.

“Today, consumers have become more discerning; there is a greater emphasis on features like lumen per watt, warranty, power factor and the ability to tolerate electricity fluctuation. As a design company, we address cost efficacy through a minimalist form of products that require lesser material,” adds Soni.

Corvi, a design-driven company, is already supplying to Europe, West Asia and Africa. At this growth rate, it won’t be surprising to see Indian companies lighting up overseas market too with their LEDs.

13.1. Honda Cars gets eco clearance for Rs. 1,577-cr (~$250 million) expansion project in Rajasthan

PTI. 21 Aug. 2017

Honda Cars has received the environment clearance for a Rs. 1,577-crore expansion project at its Tapukara plant in Rajasthan.

Honda Cars India Ltd (HCIL) plans to expand the production capacity at the Tapukara plant in Alwar district along with indigenisation of various car parts to reduce the cost of its products.

The company’s proposal was first examined by an expert panel last month and based on its recommendations, the Environment Ministry gave the go-ahead to the expansion project.

The environment clearance has been given subject to the compliance of certain specific and general conditions, the Ministry said in a letter issued to HCIL. PTI has reviewed a copy of the letter.

The proposal is for enhancement of aluminium melting from 20,000 tonnes per annum (TPA) to 30,000 TPA, propane storage from 50 tonnes to 100 tonnes and power back-up from 4.9 MW to 37.3 MW at the existing premise of Tapukara plant.

Honda Cars has informed that it has a total land area of about 17.68 lakh square metre which is enough for the proposed expansion. Total investment would be Rs. 1,577 crore.

Among the conditions specified, the company has been asked to develop a green belt in 33 per cent area to mitigate the effects of fugitive emissions and ensure plants operate on a zero-discharge concept and treated water be recycled and reused.

Besides Tapukara, Honda Cars has another manufacturing facility at Greater Noida in Uttar Pradesh. The combined production capacity is nearly 2.4 lakh units per annum.

Honda Cars is seeing a strong sales momentum this year. Its domestic sales rose 21 per cent to 55,647 units during April-July of the ongoing fiscal from 45,880 units in the year-ago period, as per the company’s data.
HCIL sells compact car Brio, compact sedan Amaze, mid-sized sedan City, premium hatchback Jazz, premium sports utility vehicle CR-V, among others.

13.2. Volvo Buses seeks right ecosystem for BS VI

BusinessLine, 7 Sep. 2017, Murali Gopalan

VRV Sriprasad completely supports India’s ambitious target of meeting Bharat Stage VI emissions by 2020 and the proposed electrification of the automotive ecosystem a decade later.

As Managing Director of Volvo Buses – South Asia, he represents a group that has constantly been ahead of the curve when it comes to prioritising clean air. Yet, he believes that a lot more work needs to be done first in order to make India’s vision statement a reality.

“We at Volvo Buses are very enthused by this aggressive intent, both locally and globally, see it as a long-term vision,” says Sriprasad. “Yet, what concerns us is that while this is good, we cannot have an ecosystem where there is no level playing field.”

Existing paradox

As much as the transition to BS VI or electrification is more than welcome, he cautions that one cannot have an environment, which is continuing to “foster and support” Euro 0 and 1 vehicles. Nowhere in the world does such a paradox exist.

“That is the fear for us in that if this is not addressed, we will not land up with the intended objective,” says Sriprasad. “We need to have a good vehicle retirement policy and ensure that no operator loses his business.” The key is to balance out gradually where these operators are encouraged to give up old vehicles while moving to a fleet, which is new in terms of technology and not just in (number of) years. Given the value-formoney fixation in India, a bus operator handling an Euro 2/3 fleet would naturally be more competitive than someone with an Euro 6 bus range. “We cannot afford to have any vehicle, which is not a BS IV on the road (by 2020) to get going and this drive should begin in right earnest. If this is not done, there will be so much imbalance in the system and environment that it could even affect targets that we have set for ourselves,” cautions Sriprasad.

One thing at a time

Volvo Buses is also keen on being part of India’s electric vision statement but would rather take one thing at a time. “Just because there is an opportunity does not mean that we are going to jump blindly into it,” adds the MD. “What we need to do now is that whatever is commercialised in the rest of the world has to be adapted to an Indian environment.”

This means that other parameters such as India’s geography, climate, driver/passenger psyche and so on need to be factored in before validating the product. This will ensure that the global success of the Volvo brand in electro-mobility is replicated here.

“We believe in an electric bus for sure but will work on our own development programme,” says Sriprasad. “How many years that will take is difficult for me to say at this point in time,” says Sriprasad. Representatives of the Roads and Highways Ministry have already been shown Volvo’s expertise in electro-mobility during visits to Sweden. The response has been very positive, a clear indication that the Centre is keen on taking technology levels higher back home in India.

Volvo’s work on alternative fuels, which started over a decade ago, has clearly shown that electro-mobility is a better option for the environment even while diesel remains the more economical fuel. Yet, the Swedish group has noted that what matters more is the entire value cycle and its impact on the environment. Hence, even while India is keen on going electric, generating so much electricity from thermal sources would mean burning a lot of coal, which in turn is polluting.

“We need to come down on thermal and do a lot of balancing,” says Sriprasad. “There is no point just cleaning up the living room and dumping everything else in the bedroom.”

While on the subject of policy, The Volvo Buses chief has been ecstatic about the response to Prawaas 2017, an exhibition, which was arranged by the Bus Operators’ Confederation of India in Navi Mumbai recently. Different segments of operators converged on this occasion be it a tourist, school bus, stage carrier, intercity operator and so on.

“I see a big promise in what has started here in terms of a mature way to get things done,” he says. This would help iron out a host of issues through joint representations instead of handling things individually as was the case till recently. And some of these are quite critical as in the case of the directive from the Ministry of Road Transport to State RTOs over a year ago, limiting commercial vehicle speed to 80 kmph on the highways.

On highway accidents

“While we don’t question the intent of this directive, a lot more thought could have gone into this,” he adds. “All of us share the Centre’s concern on highway accidents and the need for safety. We would have preferred an analysis instead on what really is leading to accidents rather than getting fixated on top speed being the villain of the piece for CVs,” explains Sriprasad.

On the contrary, what is more important is to look at the stopping distance and just not the top speed in order to prevent an accident. Stopping distance is a function of how well the vehicle is balanced in terms of braking systems, load distribution and so on.

“Just going for top speed will not help, especially when operators have good vehicles and ensure that customers benefit in terms of travel time,” says Sriprasad. “If you limit all speeds to 80 kmph, then you go back to the old days of everyone sitting on roads and waiting for a bus,” says Sriprasad.

Hopefully, issues like these will be sorted out thanks to a beginning made at Prawaas 2017. As he says, there is a single voice in place today, which is a far cry from the “fragmented multiple voices we have been used to”. The key is to keep this effort going in the years to come.

14.1. L&T hopes to bag defence contracts worth ₹40,000 cr ($6,25 bn)

BusinessLine, 7 Sep. 2017, Amrita Nair-Ghaswalla

The alacrity with which the government has moved with its defence policies, clearing and finalising the Strategic Partnership Policy and integrating it with the new Defence Procurement Procedure, has come in for huge praise from engineering conglomerate Larsen & Toubro.

With defence contracts worth more than $34 billion hinging on these decisions, Jayant D Patil, Whole-time Director and Senior Executive Vice-President (Defence Business), L&T, says the momentum should not be lost, for getting to initial operational capability will take additional time.

Like other private sector defence majors, L&T has been waiting in the wings for multi-crore defence projects to take off, and is hopeful of bagging some six contracts amounting to ₹40,000 crore. Given the emphasis on indigenous technology, Patil avers balancing technology and declining budgets could be a tough call for certain private defence players who do not have any track record with a defence project.

Edited excerpts:
On spiralling costs, delays

Though there has been a significant shift towards domestic procurement, there is still tremendous scope for improvement in the pace of acquisitions. If one compares a defence shipyard with a private sector, the shipyard relies on 75 per cent import content and despite that the project is delayed. A private company could do it much faster and make it far larger with 75-80 per cent indigenous content. Hence, it was imperative to involve the private sector.

Different committees

It took longer for the government to make the (SPP) announcement because it was necessary to break through a whole lot of mindsets. The fundamental principle is that the defence industry is procedure-bound. The SPP has now clearly defined a process through which the selection can be done.

It took four rounds of different committees to suggest this. Several committees were appointed to look into it like the Kelkar committee, the Sisodia committee, the Rama Rao committee, the VK Misra committee...The basic principle came out of the Dhirendra Singh committee, which stated that private companies could frontend and manage complex defence projects at par with DPSUs (Defence Public Sector Undertakings) and OFs (Ordnance Factories). The Atre committee actually put the matrix to it, recommending guidelines for selecting domestic private firms for strategic partnership in critical segments like submarines, aircraft and missiles. Since the matrix was incomplete, or a bit too theoretic from the practioner's perspective, the industry committees were brought in. There were specific recommendations from the industry for each of the platforms.

Need to maintain speed

Personally, in the last 31 years of dealing with this business, I haven't seen such speed. And rightly so. This is obviously something that was sorely needed by the industry. The momentum should now continue in right earnest.

Apart from some large contracts which came L&T's way, there have not been any major programmes that have kicked off under Make in India.

On Make in India

Make in India is the new paradigm for change. Not just for today, but to shift from a situation of large scale imports to actually making in India. All of this will happen right here, since we will move from Make in India to Made in India. This gives a huge strategic advantage, as we will never be dependent on any export control for defence products.

Role of DPSUs

DPSUs are supposed to be independent, and will continue doing what they have been doing. Most of our shipyards actually buy and assemble. We are hull makers and provide some amount of design. One cannot continue to be assemblers. Though we do not have many mature players in the private industry, we can counter this by distributing the commercial weightage of the project between two partners, say 80 per cent and 20 per cent weightage.

On high imports

From a situation of importing 70 per cent for our defence requirements, we have brought it down to 60-70 per cent during the last three years. If a few more Indian companies are allowed to bring in their expertise in the defence sector, there is a chance imports may drop to 40 per cent.

Private sector track record

Big ticket items were stalled and this announcement was sorely required, because it puts the private industry on a different map now. The current RFPs (request for proposal) have all been of the previous regime. Though some amount of system integration was indeed present in the DPSUs, I won't call it holistic, there was no reason to hold the private sector at bay.

14.2. Boeing to deliver made-in-India Apache helicopters next year

Livemint, Aug. 29, 2017

New Delhi: Boeing Co. will start manufacturing and handing over made in India Apache AH-64E multi-role attack helicopter fuselages from next year, the company said on Monday.

India bought 22 Apaches and 15 Chinook heavy-lift helicopters worth $3 billion for the Indian Air Force (IAF) under a government-to-government deal with the US in 2015.

This month it ordered six additional Apache AH-64E helicopters valued at Rs4,168 crore for the Indian Army. Boeing will make the helicopter fuselage at Tata Advanced Systems’ Hyderabad facility which will be ready by end of the year and the fuselage will then be taken to the US for fitting before being sent to customers. While the first Apaches for Indian Air Force will be delivered in 2019 and are being built in the US and other places, the Indian Army Apache will be made locally.

“We are ahead of schedule,” said Pratyush Kumar, president of Boeing India, referring to the production with the Tata firm, said at a press briefing in the capital on Monday. Boeing has won contracts worth about $14 billion from India over the past few years, including for the supply of C17 Globemaster transport planes, Harpoon missiles, P-8 anti-submarine warfare jets, Apaches and Chinooks.

In lieu of that, it has an offset obligation to source products and services worth about 30% of the contract value from India. A lot of work being undertaken by Indian firms is the result of this offset, but Boeing stresses that it is here for the long term. Marc Allen, president of Boeing International, told Mint in an interview last month that the firm was casting its “anchor deep into India” and more announcements are likely soon.

The next target for Boeing is to clinch an Indian Navy deal. Boeing’s F-18, French Rafale, Swedish Saab Sea Gripen, Russian MiG-29K are contenders for a proposed $15 billion purchase of 57 fighter aircraft by the Indian Navy. Boeing expects movement on the deal by next year.

“We submitted our RFI (request for information) in May and from what we understand they will evaluate the RFP (request for proposal) by end of this year and perhaps come up with RFP or EOI (expression of interest) sometime early next year,” Boeing’s Kumar said.

Boeing said it has evaluated 400 suppliers who could supply to a F-18 line that could come up in India if it wins the order. The current line in St Louis, US, will not be shut down.

With respect to concerns over whether F-18s will be compatible with Indian aircraft carriers which are mostly of Russian origin, Boeing said simulations had been conducted and it was sure the planes would be able to use the carriers and with a “meaningful” weapons payload.

The actual trials are still some time away. India was the world’s fifth highest defence spender in 2016 with a total expenditure of $55.9 billion, up 8.5% from the previous year, according to Stockholm International Peace Research Institute.

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

15.1. E-scooter sales likely to double in FY18

Business Standard, Sep. 05, 2017

Ahmedabad: Electric two-wheeler sales is expected to double in FY18, albeit on a small base. But, it is still a niche category in the world’s biggest market for two-wheelers. About 23,000 units of electric two-wheelers, primarily scooters, were sold in a market of 17.58 million units in FY17.

The sector has seen some action in recent times with new entrants trying to make a mark. Seasoned players such as Hero Electric, which was about 70 per cent share, believe that financing options and front-loading of government subsidy might act as a further boost.

Hero, which plans to launch at least two new scooters every year for the next few years, said it would double its sales in FY18. “We plan to sell about 25,000 units in FY18,” said Sohinder Gill, chief executive officer, Hero Electric.

He said that e-scooters’ existing customer base look at a vehicle that has a low price point, but gradually, with the lithium-ion battery-driven vehicles — which perform on a par with conventional scooters — a new customer base is evolving and they are willing to shell out more. “Our range starts from ~19,900, but these are lead acid battery vehicles,” Gill said.

About four years ago, a lithium-ion battery would cost double compared to the current price. These batteries have a five-year life and cost about ~25,000 a unit. Companies such as Hero are committing to offer lithiumion batteries to their existing customers at ~17,000 a unit, five years from now. “We know the trends in the global market, and prices are likely to keep coming down for batteries,” Gill said.

Okinawa Autotech, which plans to invest $40 million over the next three years, is building capacity anticipating the future demand. It is building a one-million-units-per-annum plant in Rajasthan. The company targets sales of 12,000 units in FY18 and has set an ambitious target of 100,000 units by FY19.

Jeetender Sharma, managing director of Okinawa, said they are getting the lithium-ion batteries manufactured locally through a vendor. “The battery design has been done by the company, and a Delhi-based supplier is manufacturing it,” Sharma said. He is expecting the e-scooters’ market to double in this financial year. Another start-up in this space is Ather Energy. It is close to launching its first vehicle in the domestic market, the Ather S340. The company claims it is the fastest e-scooter in the country. The S340 will first be available in three cities — Bengaluru, Pune and Chennai — in 2018. Ather has an investment of ~200 crore from domestic two-wheeler major Hero MotoCorp.

The Ather S340 has a top speed of 72 km per hour, a range of 60 km, and comes equipped with fast charging. Makers are now working on offering an improved user experience in e-scooters to boost adoption. While the S340 comes fitted with a touch screen and cloud connectivity, Okinawa is working on an e-scooter that would run 200 km on a single charge. Sharma said his firm was close to launching the vehicle within FY18. Apart from small players, bigger original equipment manufacturers, too, are focussing on the sector. Gill said as all these years the market had negative growth, big players were in wait-and-watch mode. TVS is all set to launch a hybrid scooter in December followed by an e-scooter in March and reports suggest that Bajaj, too, is working on an electric motorcycle. Honda Motorcycle and Scooter India is working on an escooter model that would also be launched in the Indian market.

TVS Chairman Venu Srinivasan had recently said, “Hybrid vehicle will come out this year by December 2017. Our electric vehicles will also come by February-March 2018 and will be using our own battery management system.”

Industry players, however, feel that for volumes to pick up, bank financing is the key. “Let us not waste the government subsidy. While the subsidy should be front-loaded with a limited time offer that would bring down prices significantly to ~45,000 levels, this should see a rush for buying. Plus, the RBI (Reserve Bank of India) might provide guidance to banks for preferential financing to this sector,” Gill said.

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

15.2. Karnataka wants to become the electric vehicle capital of India

Business Standard, Sep. 14, 2017

Bengaluru: Karnataka is looking to attract investments to the tune of Rs 31,000 crore from companies looking at research and development (R&D), and manufacturing of electric vehicles (EVs) in the state, at a time when the Centre is using a heavy hand to force automakers to switch to green technology.

Karnataka is the first state to roll out an Electric Vehicle and Energy Storage Policy that looks not only at boosting sales of EVs, but also setting up charging infrastructure and special manufacturing zones. “I am sure this policy would be a game-changer in the industry and will be a model for other states. Our real work starts now, focusing on developing a ready ecosystem for a vibrant EV sector in the state,” said R V Deshpande, Karnataka’s industries minister.

The state estimates that it will be able to create employment for 55,000 individuals over the next few years through the EV industry. One of the top mandates for Karnataka’s policy is to set up EV manufacturing zones along with facilities for testing that can be used even by start-ups.

Karnataka already has a fledgling ecosystem for supporting electric mobility, thanks to some of the early movers such as Chetan Maini, the founder of Reva. Apart from India’s only electric car manufacturer Mahindra Electric, the state is also home to one of the most promising electric mobility start-ups Ather Energy. Apart from manufacturers, Karnataka is also home to component makers such as Bosch and Delphi, which have begun preparing for India’s electrification drive.

Bosch has already announced its plans to supply manufacturers of electric two- and three-wheelers with motors, control units, battery packs and other ancillaries within the next 12 months. The company’s R&D unit in Bengaluru has been working on electrification solutions since early 2016, drawing on decades of research from its headquarters in Germany.

Karnataka’s policy also asks for the creation of a special purpose vehicle that will involve civic agencies, state transport and energy companies, and its renewable energy and industrial boards for the creation of charging infrastructure within the state. The state will also mandate installation of charging units in all highrise buildings, malls, information technology (IT) parks, and apartment complexes.

While states such as Delhi have looked at the use of subsidies to boost sales of EVs to counter its growing pollution problem, Karnataka is taking a much more holistic approach of supporting research, manufacturing of vehicles and charging infra, apart from looking at ways of getting EVs on the ground.

After claiming the titles of IT capital and start-up capital of the country, Karnataka is now hoping to become the EV capital of India. The state’s Cabinet approved the new policy, which has a vision “to make Karnataka, a preferred investment destination for manufacturing of EVs”.

Charged Up 

Karnataka is the first state to roll out an Electric Vehicle and Energy Storage Policy that looks not only at boosting sales of EVs, but also setting up charging infra and special manufacturing zones
The state estimates that it will be able to create employment for 55,000 individuals over the next few years through the EV industry 
One of the top mandates for Karnataka’s policy is to set up EV manufacturing zones along with facilities for testing that can be used even by start-ups

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.)

16.1. Telecom sector to create 3 million jobs by 2018, claims study

PTI, Aug. 18, 2017

New Delhi: The telecom sector could generate 30 lakh jobs by 2018 on the back of rapid 4G technology deployments, rising data consumption, use of digital wallets and smartphone adoption, claims an AssochamKPMG study.

The optimistic job assessment comes at a time when telecom companies are battling financial stress and competition has led to a free fall in tariffs, putting pressure on revenue and profitability of operators. "The telecom sector finds itself in an unenviable position where despite falling average revenue per user (ARPU), the players are forced to invest significantly in infrastructure and technology upgrades in order to maintain competitiveness," it said.

The study said the existing manpower in the sector may not match up to the upcoming demand, both in numbers and required skill sets.

The gaps in skills will need to be closed for diverse roles such as infra and cyber security experts, application developers, sales executives, infrastructure and handset technicians, and re-skilling will have to be undertaken for the existing manpower, given the technological advancements, it added.

"Also, emerging technologies such as 5G, M2M (machine to machine) and the evolution of information and communications technology are expected to create employment avenues for almost 8,70,000 individuals by 2021," said the joint study.

Stating that the telecommunications sector will "generate 30 lakh jobs by 2018", it said the increased job opportunities will come from "rollout of 4G technology with an increase in data, entry of new players in the market, introduction of digital wallets, popularity of smartphones, leading to consistent increase in demand for technology and other developments".

The study acknowledged that the competition in the sector has increased putting pressure on operators' margins.

"Indian telecom sector is a highly price-sensitive market with a subscriber base that has majority pre-paid subscribers with lower ARPU... The increased debt burden on operators coupled with continuous pressure on profitability has affected the financial health of the telecom sector," it said.

Mobile data traffic grew 76 per cent in India in 2016, with the growth primarily attributed to increased smartphone penetration, it noted. The total number of SIM connections is expected to reach 1.4 billion by 2020, from the current 1.1 billion.

"With 646 million unique mobile subscribers, India is the second-largest mobile market in the world and will add more than 300 million new unique subscribers by 2020," it said, adding that the telecom sector contribution to GDP is likely to touch 8.2 per cent by 2020.

The Assocham-KPMG study pointed to "tremendous growth potential" for Internet of Things (IoT) solutions, saying the market is poised to reach USD 15 billion by 2020 with 2.7 billion units of connected devices. The market size in 2016 was USD 5.6 billion with 200 million units of connected devices. The study further pegged the capex investment during 2016-20 at USD 35 billion.

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

16.2. India to add 206 million mobile subscribers by 2020: report

Livemint, Aug. 18, 2017

New Delhi: In recent years, the Asia Pacific region has been the major contributor to global mobile-phone subscriber growth.

There were 2.7 billion unique subscribers in the region by the end of 2016. India and China account for more than half of the world’s mobile subscribers.

According to the report The Mobile Economy- Asia Pacific 2017 by the trade body GSM Association, there has been dramatic shift towards higher speed mobile technology in Asia Pacific.

Since 2012, when half the region’s population had subscribed to mobile services, the region has gained 15% more customers, and by 2020 an additional 9% will be added, bringing the total to more than 75%. India is expected to add 206 million new subscribers by 2020. China will add 155 million subscribers by the end of the decade.

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

17.1. Taizo Son’s Mistletoe, GSF India tie up for start-up incubator

Livemint, 15 Sep. 2017, Anirban Sen

Taizo Son’s Mistletoe and GSF India’s start-up incubator will focus on agri-tech and food-tech start-ups in India

Billionaire Japanese investor and serial entrepreneur Taizo Son’s start-up incubator Mistletoe has forged an alliance with GSF India to launch a new accelerator programme for agri-tech and food-tech start-ups. The largest investors and venture capital firms in India have had mixed success with ventures in the two sectors targeted by the alliance.

The accelerator programme called Gastrotope will invest in and help incubate early-stage ventures in the two sectors and attempt to build an ecosystem for start-ups focused on agri-tech and food-tech—something that Son feels is lacking in India. The new programme will attempt to replicate the model followed by Mistletoe, which is not just an incubator programme but is also an investor in start-ups.

In an interview, Son, who is the younger brother of SoftBank Group Corp.’s founder Masayoshi Son, said he wants to fix key food and farming industry problems such as oversupply and outdated farming techniques through the new start-up incubator programme.

“If we can make innovations which are good for India, those technologies and ideas can be adapted later for the rest of the world. Together with GSF, we will support and invest in start-ups in these areas and create a programme to support those kind of people—and also test every kind of new technology for agriculture and food,” Son said.

“Today’s food supply chain is discriminatory towards producers, farmers, logistics and distribution companies and consumers. This is a 20th century industrialized paradigm...I think we need to change from the industrialized supply chain to a newer, updated one,” he added.

Taizo Son, who shifted base from Japan to Singapore and pledged to invest at least $100 million in earlystage ventures in South-East Asia earlier this year, said he wants to “open-source” all the solutions that are generated by ventures in the accelerator programme, or in layman’s terms, make those solutions readily available for everyone.

“We will bring the open source culture from the IT (information technology) industry to the food supply-chain area...we want to take a different approach—and not just look at investing in start-ups,” Son said. He did not specify the kind of corpus Gastrotope has set aside for start-up investments in India, but indicated that a significant amount of funds would be earmarked for early-stage ventures.

“So far the venture world view of farming is basically one that sees farmer as a labourer or the farmer as a factory manager,” said Rajesh Sawhney, founder of GSF India. “In our view a farmer is an artist, a technologist and an entrepreneur. If we can bring about that transformation in India, then a lot of changes will happen on a sustainable basis.”

Mistletoe has already made inroads in India—so far the venture-capital and incubator program has backed food-tech and agri-tech start-ups such as Ninjacart, InnerChef and Kisan Network. Sawhney is also a cofounder of InnerChef.

In the late 1990s, Taizo Son founded game-making firm GungHo Online Entertainment Inc., which became famous for coming up with the popular mobile game Puzzle and Dragons—which in turn helped him amass a fortune. Prior to GungHo, Taizo and Masayoshi Son worked together to kickstart Yahoo’s Japan operations. A serial entrepreneur, Taizo Son launched Mistletoe in 2013, focusing on creating a network of experts, mentors and investors—an attempt at replicating a classic Silicon Valley model.

So far, Taizo Son has invested roughly $100 million of his own money in start-ups and other ventures across the world.

Unlike his brother Masayoshi Son, who is known for writing large billion-dollar cheques, Taizo Son believes in backing early-stage start-ups that have the potential to become the next big thing. And unlike his illustrious older brother, who is currently estimated to have a net worth of about $22 billion according to Forbes, Taizo Son likes to keep a much lower profile and considers not his older brother, but Yahoo co-founder Jerry Yang as his true role model.

“(Masayoshi Son) is accelerating the growth speed of great companies in India. He plays a good role there. On the other hand, my focus is on much earlier-stage (start-ups)—seed, Series A, etc. At those stages, companies need money, but more than money they need a network and ideas and a market and customers. I provide those kind of things and I provide new inspiration to founders—that’s my role, compared to my brother,” said Taizo Son.

17.2. Homegrown technology firm Smartron wants to ‘turn traditional devices smart’

BusinessLine, 17 Aug. 2017, V. K. Kurmanath

Back home after a gruelling day at work and don’t the energy to open the door, switch on the fan or TV? And then longing for a cup of coffee? Smartron, a homegrown technology products firm, has readied a smartphone-based tech platform called TronX that helps you achieve these luxuries.

“You can talk to the phone to charge your smart bicycle or order the coffee vending machine to brew coffee for you. It will tell you when you are running out of cooking gas and will place an order with the gas agency for a refill,” explains Mahesh Linga Reddy, founder and Chairman, Smartron.

Internet of Things-enabled TronX is backed by artificial intelligence. The firm is in the process of building an ecosystem of developers and service providers to populate the smart devices that can be remotely controlled by Smartron devices.

“We understand the legacy issues. We can’t ask people to replace their geysers, fridges, TVs and lights with smart devices. What we are going to do is, we will enable the traditional to turn smart,” he said.

The firm will roll out the whole platform in the next 6-9 months. Though the platform is ready, Smartron is working to build a customer service network to help consumers make their homes smart.

The firm, which has roped in Sachin Tendulkar as an investor-brand ambassador, has also come out with a few phones and a laptop. It generated revenues of ₹100 crore in the past 12 months.

Smartron will launch services on the four verticals of health, home, infrastructure and personal. To start with, it firm will launch a smart band around which it will offer a healthcare support ecosystem. It would also come out with e-bikes that will also be tagged to TronX.

Expansion plans

The firm, which has so far invested ₹400 crore, will invest another ₹500-600 crore in financial year 2018-19. Lingareddy, who sold his chip-designing company Soft Machines to Intel about a year ago, said: “We have 300 employees now. We will be adding 150 more this year and will double the number in the following year. We target to achieve a turnover of ₹700 crore by then.”

18.1. Govt plans wifi for all panchayats by Mar 2019 for Rs 3,700 cr ($580million)

PTI, Sep. 08, 2017

New Delhi: The government is giving shape to an ambitious Rs 3,700-crore plan in an attempt to cover nearly 5.5 lakh villages with wifi facility by March 2019, a top Department of Telecom official said.

"In September, we expect to put out tender for 2.5 lakh GPs (gram panchayats) to be covered with wifi by March 2019.

This is a big goal. This will mean that if we are able to put out wifi access in literally every GP, 5.5 lakh villages will actually have access to mobile broadband," Telecom Secretary Aruna Sundararajan told PTI in an interview.

The project cost is estimated to be around Rs 3,700 crore. The government expects to start broadband services with about 1,000 megabit per second (1 gbps) across 1 lakh gram panchayats by the end of this year. Earlier, the plan was to provide 100 megabit per second connectivity to village panchayats, but under the new BharatNet, the broadband speed has been enhanced 10 times to 1 gigabit per second at every panchayat level.

"1 lakh wifi will used under BharatNet service. The other 1.5 lakh need not be on BharatNet from Day 1. Once we complete BharatNet, we will integrate all wifi backward to the BharatNet," Sundararajan said. At download speed of 1 gbps, an user can theoretically download a video equivalent to the size of a general Bollywood movie in about 2 seconds.

Under the new telecom policy, the government will focus on linking some 40,000 villages and increase availability of regular Internet access facility to 70 crore people, from 30 crore, by 2022.

The telecom secretary termed BharatNet as "extremely crucial" for meeting new goal of the government -- Internet services for all.

She was quick to point out the pace of implementing BharatNet has accelerated by seven times in the last one month. "Earlier, we were doing around 150 installations a day.

We have now reached 800 installations of electronic equipment a day," Sundararajan added. Data shared by Telecom Minister Manoj Sinha showed that Internet service has started in 33,430 gram panchayats as of September 6.

As of July 2017, 2,21,925 kilometres of optical fibre cable (OFC), covering 1,00,299 gram panchayats, were laid and 25,426 GPs provided with broadband connectivity.

The government, Sundararajan said, has already completed optical fibre rollout in 1 lakh GPs and is installing electronic equipment for commissioning of broadband services.

"We have crossed 61,000 GPs where electronic (equipment) have been installed. In the next 2-3 months, we will complete the installation as well as integration to the network. The network for 1 lakh GPs will be functional before the end of this year," Sundararajan said.

The government has set a target to complete BharatNet project by March 2019.

The inter-ministerial panel, the Telecom Commission, is scheduled to meet tomorrow to consider phase-2 of BharatNet project under which 1.5 lakh GPs are to be covered with high speed broadband network.

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

18.2. McLaren Technology Group selects Wipro as technology partner

PTI. Sep. 15, 2017

New Delhi: Sports car maker McLaren Technology Group has signed a multi-year contract with IT major Wipro to help drive digitalisation across its businesses.

"We are passionate about delivering high performance digital solutions underpinned by robust service level agreements across McLaren. Wipro, with its deep domain expertise and vast application services portfolio, will help us achieve excellence as well as drive innovation in Artificial Intelligence," McLaren Technology Group, Chief Information Officer, Craig Charlton said in a statement.

McLaren has won 20 world championships and over 180 races in Formula 1.

Wipro will assist McLaren with achieving its recently defined IT strategy, focusing on providing differentiated IT services to its business divisions, the statement said.

As part of this multi-year partnership, Wipro will leverage artificial intelligence platform and managed services framework to offer flexibility and boost the productivity of McLaren's automotive businesses.

"We are delighted to partner with McLaren Technology Group to bring this strategic initiative to life," Wipro Limited President Manufacturing & Technology, N S Bala said.

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

19.1. Belling India’s political cats — easier said than done

BusinessLine, 1 Sep. 2017, J Mulraj

The government is (finally) doing the obvious and selling Air India, a business it ought never have gotten into, in order to cut continuing losses which are funded by taxpayers. Air India has a debt load of ₹55,000 crore, which is being partly funded by the ₹30,000-crore bailout package doled out by the UPA regime.

The debt will be written off prior to the sale. In other words, taxpayers have to pay for the mistake. Unless the root cause is dealt with, we will keep having such problems.

What is the root cause? It is that there is no accountability. The person who took the decision on behalf of Air India to buy over 100 aircraft it could not afford, piling on huge debt for the purchase, must be brought to task and severely punished. Why is nobody doing this? Why are non-commercial decisions causing irretrievable damage to public companies never questioned?

Why doesn’t anyone bell the political cats?

Similarly, public sector banks are faced with a mountain of non-performing assets (NPAs). Several solutions are being tried to remedy this issue, including restructuring of loans (throwing good money after bad and sticking one’s head in the sand, ostrich-like, to avoid looking at the problem), the SARFAESI Act and now the Insolvency Law.

The Directorate of Revenue Intelligence is investigating two very large business houses for having over invoiced imports. One reason for the ability to over-invoice is because in most cases, imports of the items are, for various reasons, at zero per cent duty. So, over-invoicing does not result in an additional outflow of duty, but does result in a 30-40 per cent (the extent of over-invoicing) offshore gain, and tax avoidance. Ultimately, it is the banks which end up holding huge liabilities that often turn into NPAs.

The banks in these two cases include private sector banks. Thus, the malaise is not restricted to PSU banks. RBI is now releasing the list of defaulting borrowers. All these companies are to be referred to a company law tribunal to decide on the amount payable by the defaulter to the lenders.

2G turmoil

Or take the mess resulting from cronyism in the telecom industry, once the poster boy of successful economic reforms in India. One of the several scandals exposed by the then Comptroller & Auditor General related to discretionary allotment of telecom spectrum. But this feeble attempt to bell the political cat failed.
What ensued was a decision by the Supreme Court to auction all future spectrum, and thus avoid discretionary allotment. This led to high bids to acquire spectrum, in turn to high borrowing from banks for the acquisition, and, since more money was used to acquire spectrum and less available for creating telecom infrastructure, to a deterioration in quality of service for consumers.

The political cat has not been belled, but the industry is suffering. It is facing severe competition from a new entrant, and the competition has destroyed its cash flow. The telecom industry cannot now bid for the 5G spectrum which the government plans to auction.

Teflon-coated class

It seems that there are two classes of people in India. One class is the Teflon-coated class — nothing happens to them. These cats cannot be belled.

The other class comprises the rest of the 99 per cent of Indians. These are the suckers. If India is to progress, this has to change. Before 2019.

19.2. With ₹16,000-cr ($2,5 bn) bid, Star India hooks global rights to beam IPL

BusinessLine, 4 Sep. 2017, Bindu D Menon


Star India has won the global media rights for the Indian Premier League (IPL) for five years beginning 2018. The media company bid ₹16,347.50 crore, beating 14 contenders, including Sony Pictures Network, which held the broadcast rights of the cricketing league for ten years since 2008.

A total of 24 companies, including Amazon, Facebook and Twitter, had picked up tender documents for two major categories — TV broadcast and digital. However, only 14 companies were in the fray on Monday. Big names such as Amazon, ESPN Digital Media, Twitter and Discovery dropped out of the auction at the last minute.

Sony Pictures bid ₹11,050 crore for the India broadcast rights alone, but lost to Star India because the latter had bid for global rights. Players such as Reliance Jio, Times Internet, Airtel and Facebook submitted bids primarily for digital rights. Facebook had bid ₹3,900 crore for digital rights — the highest in the category — but lost out to Star due to the latter’s consolidated bid.

IPL media rights comprise seven categories, including Indian television, Indian digital, the US, Europe, Africa, the Middle East and Rest of the World. Star India was the sole bidder for all categories.

“India, IPL and digital have changed in the last ten years and the competitive bidding is a reflection of that. We made a conscious call to bid for all categories as our channel is globally distributed. We aim to provide a complete experience to the viewers and this was possible only if Star bagged both the broadcast and digital rights,” said Uday Shankar, Chairman. Star India.

In 2008, when the IPL debuted, Sony had paid ₹8,200 crore for rights over a 10-year period. When contacted, Sony Pictures Network said: “SPN has nurtured IPL since its inception and, within a span of 10 years, established it as one of the most popular sporting properties in the world. We take this opportunity to wish Star India the best as they shape IPL over the next five years.”

According to a Duff & Phelps report, IPL’s online viewership has grown from 41 million in 2015 to 100 million in 2016; for 2017, the number is put at 130 million.

Star’s win comes even as Direct-to-Home service provider Dish TV filed a complaint with the Competition Commission of India against Star TV for allegedly monopolising the broadcast rights of BCCI.

20.1. Mumbai to Ahmedabad on the bullet train

BusinessLine, 14 Sep. 2017, Aashish Chandorkar

This project will open up huge job and skilling opportunities, apart from boosting economies all along its route India will start work on its first bullet train — the Mumbai-Ahmedabad High Speed Rail (MAHSR) — on September 14, with Japanese Prime Minister Shinzo Abe and Prime Minister Narendra Modi laying the foundation stone together. Funded by the Japan International Cooperative Agency (JICA), this project will be the biggest change Indian Railways has witnessed in post-Independence India.

The MAHSR debt structuring is also very attractive: a ₹88,000-crore loan at a notional rate of interest of 0.1 per cent to be repaid over 50 years, with a principal payment moratorium of 15 years.

Japan has had Shinkansen, its HSR, for over 50 years now. China has laid more than 20,000 km of HSR tracks.

When China introduced its HSR, its per capita GDP was just under $3,500. When the MAHSR is inaugurated on completion of 75 years of Independence, India’s per capita GDP should be between $2,500 and $3,000 depending on the how the growth rates stack up in the next five years. There’s no better time to start working on a bullet train. The most obvious benefit of MAHSR will be an Indian manufacturing and software ecosystem for the Railways. The Japan external trade organisation or JETRO will be assisting the Indian government in identifying potential areas for ‘Make In India’ localisation. Indian industry will gain further experience in managing large projects. A network of mid- and small-size enterprises will come up to support this manufacturing process and the ecosystem will eventually tap new Indian HSR requirements and export market possibilities.

Expansion possibilities

New production bases and townships will eventually expand along the MAHSR. The trickle-down effects of opening avenues for cheaper housing, logistics hubs, and industrial units along the route will benefit smaller towns and cities. The districts of Palghar in Maharashtra and Valsad in Gujarat, along with the Union Territory of Daman, will have a great shot at attracting new investments and amenities.

The Japanese experience has been quite positive. In areas where Japan has put up the HSR, local government revenue receipts have grown at almost twice the rate compared to areas which do not have HSR connectivity. If this trend works in India, it will be a boon because Palghar, Daman and Valsad are relatively less developed.

Construction activity will boost allied industries such as steel, cement and infrastructure. This will translate into additional logistics and warehousing demand. It is estimated that an additional annual cement demand of two million tonnes and steel demand of five lakh tonnes will be generated over four years by the MAHSR project. This will help near-term economic growth which has been sluggish in the last few quarters.

Jobs and skills

New temporary and permanent jobs will also be created with most of the manufacturing, from components to rolling stock, done in India. The construction phase will create opportunities for employment for about 20,000 people. After the commissioning of the project, there will be job openings for 4,000 for the operation and maintenance of the line. Further, some 16,000 indirect employment opportunities are expected to be generated.

Managing a project of this complexity and scale will be a great learning experience for the Indian agencies involved, resulting in skill development. The safety standards of Shinkansen will be something to learn from. India is already planning to set up an HSR training institute at Vadodara.

Expected to be functional by 2020, it will train up to 4,000 individuals in high quality rail technology following Japanese standards, methods and tools. Indian Railways will train 300 of its officials on rail technology in Japan.

The HSR systems offer reliability of operations, not affected by bad weather or congestion, which impact road and air traffic. Once commissioned, 40,000 commuters are expected to use the service everyday. This will decongest the conventional rail, road, and air traffic between Mumbai and Ahmedabad.

When Prime Minister AB Vajpayee launched the Golden Quadrilateral, commentators said it was a waste of tax money. When ISRO launched the Mars Mission, the global media mocked India as a poor country with fancy ambitions. Technology boost should not wait for critical approval. India should put on fast track what it can, even if there are some slow lanes in the economy.

Not only should India welcome the MAHSR, there should be more concerted efforts to set up new lines in sectors such as Bengaluru-Chennai, Delhi-Chandigarh, Mumbai-Pune, Nagpur-Hyderabad, and Varanasi Kolkata.

The writer is a management consultant with an interest in public policy

20.2. Surge in air travel bookings during this Diwali: Report

PTI, Sep. 04, 2017

Mumbai: With Diwali round the corner, there has been an increase in air travel as 1.3 time more customers are travelling during Diwali this year as compared to same time last year, according to 'Diwali Festive Airfare Trends'.

"There has been 1.3 times more customers travelling during Diwali this year as compared to last year," according to online travel company MakeMyTrip's 'Diwali Festive Airfare Trends'.

It also revealed that in the top sectors, the fares have increased by up to 30 per cent, with festivities still one month away signalling a huge advance purchase.

"With the festive season approaching, there is a significant surge in travel bookings with people preferring to book in advance since fares are more affordable. Another reason for uptick in advanced booking is the 'Zero Cancellation' feature, which is finding favour amongst many customers resulting in 15 per cent rise in bookings for peak season," MakeMyTrip COO-Online Mohit Gupta told PTI here.

Kolkata-Delhi and Delhi-Hyderabad are few of the most travelled routes with more than 100 per cent growth during this festive season as compared to last year, it added.

According to the trend, average fares for the top 20 sectors on domestic flights have increased by 10 per cent this time from last year.

In some of the major sectors, the fare has increased by up to 30 per cent, with festivities still one month away, it added.

It found that from the average fares of bookings from the metros, maximum increase in fares was seen from cities like Mumbai and Bengaluru.

"The average fares from Mumbai and Bengaluru have witnessed maximum increase, but have remained same from Delhi and Kolkata, as compared to last year," it added.

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. EU hopes to resume FTA talks with India

PTI, 14 Sep. 2017

The European Union is looking at a bilateral summit with India next month that would act as a catalyst for resumption of talks on the free trade agreement encompassing goods, services and mutual investment protection, according to a senior EU official.

Talks on the Bilateral Trade Investment Agreement (BTIA) — the official title of the pact — started in 2007 but have been marred by various flip-flops and disagreements.

The discussions have remained deadlocked on issues like tariffs on automobiles and wines and spirits, EU trade officials said.

They hoped that the 14th EU-India Summit, likely in early October “will get the economic dialogue going as a precursor to relaunching talks on FTA“.

The last summit on March 30, 2016, saw discussions focused on trade and investment, energy and climate, water, migration and foreign and security policy.

“Unfortunately, Indian policy has created major uncertainties for us because your government has taken policy decision to let bilateral investment treaties, which gave very clear rules, lapse,” said a senior EU official, who did not want to be named.

The 28-member states of the EU wanted the pacts to continue until they are replaced by EU—India FTA that would have had an investment chapter.

“Indian side thought it was wiser to let the bilateral investment treaties (BITs) lapse,” the official said, adding that EU investors, in many cases, no longer have bilateral investment protection.

The official said EU not just wants an FTA but “also an investor certainty created by provisions of treaty“. The EU push for the pact comes amid many countries world over, including the US, questioning the system of free trade.

The US has pulled out of the Trans—Pacific Partnership and has questioned the benefits of globalisation and free trade.

Expressing dismay over India’s decision to do away with bilateral investment treaties with its member states, the EU official said: “All the EU member states wanted to prolong these until it would be replaced by EU wide treaty with India in form of FTA, which would have had an investment chapter“.

On the expected deliverables of the EU—India Summit, another official said that besides joint declaration on climate change and clean energy, a likely one is on a partnership for smart and sustainable urbanisation —— linking the EU’s Urban Agenda with India’s ‘100 Smart Cities Mission’

European Investment Bank (EIB) loan for Bangalore metro development, is also on the cards. “The European Investment Bank which sits is Luxembourg, had in the last summit signed a major loan for Lucknow metro development. And I think now there will be new loans for Bangalore metro development,” an EU official familiar with the development.

He declined however to specify the size of the new loan being negotiated. The loan is in the process of finalisation, the official added.

The two sides may also look to strengthen security cooperation such as by expanding the scope of counter— piracy dialogue to maritime security and establishing a new dialogue on cyber crime and space.

Also, it may support India—Europol cooperation on issues like cyber crime and counter terrorism. “We have had recently good and concrete dialogue on cyber security and counter terrorism and on maritime security. And these are certainly key fields where we can deepen our cooperation,” the EU official said. On the new areas of cooperation, he said a strategic cooperation with Europol, which is the Europe wide agency for police cooperation, is being talked about.
“We are looking forward to having some form of strategic cooperation between India and Europol. So these are examples of increased cooperation in security,” said the official.

21.2. PM seeks strong partnership among BRICS nations to spur growth

PTI, 4 Sep. 2017

Prime Minister Narendra Modi has sought a strong partnership among BRICS nations to spur economic growth, saying that the bloc of emerging countries has contributed to the stability in a world “drifting towards uncertainty“.

Addressing the plenary session of the BRICS Summit in China’s Xiamen city, Modi said trade and economy were the foundations of the cooperation among BRICS — Brazil-Russia- India-China-South Africa.

BRICS rating agency

He suggested some steps that can be taken to upgrade mutual cooperation. He also called for the creation of a BRICS rating agency to cater to the financing needs of sovereign and corporate entities of developing countries.

The Prime Minister said a strong partnership among member nations on innovation and digital economy can help spur growth, promote transparency and support the sustainable development goals.

He also urged central banks of the member nations to further strengthen their capabilities and promote cooperation between the Contingent Reserve Arrangement of the grouping and the International Monetary Fund.

International Solar Alliance

The Prime Minister said BRICS countries can work closely with International Solar Alliance (ISA) launched by India and France in November 2015.

“Our five countries have complementary skills and strengths to promote the use of renewable and solar energy. The NDB can also establish an effective link with ISA to support such cooperation. We would wish to see more clean energy funding, particularly in solar energy, from the New Development Bank,” Modi said. He also called for scaling up cooperation in skill development and exchange of best practices. “India would be happy to work towards more focused capacity building engagement between BRICS and African countries in the areas of skills, health, infrastructure, manufacturing and connectivity,” the Prime Minister said.

Modi also emphasised the need to accelerate track of cooperation in smart cities, urbanisation and disaster management.

New Development Bank

He said the New Development Bank has started disbursing loans in pursuit of its mandate to mobilise resources for infrastructure and sustainable development in BRICS countries.

“After more than a decade of existence, BRICS has developed a robust framework for cooperation. We contribute stability and growth in a world drifting towards uncertainty,” the prime minister said. “While trade and economy have been the foundation of our cooperation, our endeavours today touch diverse areas of technology, tradition, culture, agriculture, environment, energy, sports, and and Information and Communications Technology (ICT),” he said.

'Mission-mode'

Highlighting India’s achievements, Modi asserted that country was in a “mission-mode” to eradicate poverty and ensure health, sanitation, skills, food security, gender equality, energy and education.

He said women’s empowerment programmes were “productivity multipliers” that mainstream women in nation building.

He said India has also stepped up the fight against black money and corruption. “Moving forward, using the springboard of our national experiences, BRICS countries can deepen partnership for win-win results,” he added.

“The next decade is crucial. In an environment where we seek stability, sustainable development and prosperity. BRICS leadership will be crucial in driving this transformation. If we as BRICS can set the agenda in these areas, the world will call this its Golden Decade,” the Prime Minister said. Appreciating China’s thrust in people-to-people exchanges, Modi said that such inter-mingling will consolidate our links and deepen our understanding

22.1. Global investors backing India's pro-reform stance: Harshil Mehta

Livemint, Sep. 15, 2017

A rapidly transforming environment has also compelled housing finance companies to broaden their focus on financial inclusion, says Mehta.

India’s improved regulatory landscape prompted housing finance companies (HFCs) and private equity (PE) firms to turn their attention to the affordable housing segment, Harshil Mehta, joint managing director and chief executive officer, Dewan Housing Finance Corp. Ltd (DHFL), said in an interview. The Indian housing finance industry is growing rapidly, and mortgage lending is a strong driver of growth for both housing demand and construction of houses, Mehta said.

Edited excerpts:
When you meet investors in Singapore, what are they asking you about India and the Narendra Modi government? What are their concerns on India?

These are interesting times for the Indian economy and the world is taking great notice of India. According to the International Monetary Fund (IMF), such emerging markets will drive the global economic activity. Asian economies led by India are picking up speed as policy and consumption-led tailwinds have given businesses a positive fillip. Global investors are supporting the pro-reform stance taken by India. A fundamental premise of optimism stemmed from India’s strong socio-economic reforms that have already started aligning our country’s economic direction in a transformational manner.

You have a lot of exposure to the affordable housing segment. How do the margins stack up in that space?

The Indian housing finance industry is growing rapidly. Mortgage lending is a strong driver of growth for both housing demand and construction of houses in the country, driven by urbanization, especially in the affordable segment. Consequently, housing finance firms have witnessed an increase in total outstanding loans with a compound annual growth rate (CAGR) of 23% between fiscal year 2010-2011 and 2014-2015.

DHFL had assets under management (AUM) of Rs88,236 crore as of June 2017—the company has been reporting revenue growth at a CAGR of more than 20% for the past five years. Considering that two-thirds of DHFL’s home-loan portfolio are retail home loans wherein our average home-loan ticket size is below Rs15 lakh, we have endeavored to protect margins at 300 to 305 bps (basis points). In the quarter ending June 30, 2017, DHFL reported a NIM (net interest margin) of 305 bps. (One basis point is one-hundredth of a percentage point.)

With many banks and non-banking financial companies (NBFCs) pushing their efforts towards affordable housing now, how do you view the competition?

There is enormous market potential for the affordable housing sector in India. Over the past few quarters, the government has already been taking several noteworthy steps to build a conducive environment for the growth of the affordable housing sector. Although the industry is served by several large financial institutions, companies like us are well placed with strong competitive advantages to serve LMI (lower-middle income) customers in the tier-II and III markets, thereby driving financial inclusion across the country. I believe competition is healthy and HFCs not only help broad-base the market but also drive financial literacy, thereby creating opportunities and developing the industry landscape. We, through a deep understanding of this target segment and strong distribution network, have been leveraging these opportunities, which is reflected in our steady growth.

Do you see this sector going through a crisis as witnessed in the microfinance sector a few years ago, which led to tighter regulations and limited credit limits from banks?
The government has taken several noteworthy steps towards generating greater credit offtake and supplies in the affordable housing industry, while also putting in place a stringent regulatory environment. The countrywide implementation of the The Real Estate (Regulation and Development) Act, 2016, (RERA) has indeed been a milestone step towards stronger governance and greater transparency for developers, customers, financial institutions such as banks and housing finance companies and other important stakeholders. It is a timely implemented initiative of the government’s mission towards industry development and a catalyst to meet the objectives of ‘Housing for All by 2022’.

Over the past three decades, we have been enabling affordable housing finance to the low- and middleincome segment wherein a majority of the lending has been towards self-occupied residential properties, which are backed with assets and lower LTV (loan-to-value) ratios, thereby maintaining the asset quality. We believe that this industry is poised for growth.

How do you view the current regulatory regime for the India real estate market and for lenders such as DHFL?

With the long-term aim of creating a growth-oriented environment for the housing industry—which is one of the contributors to India’s GDP (gross domestic product)—the government has undertaken several progressive initiatives over the past few months. Bestowing infrastructure status to the affordable housing industry, announcing a credit-linked subsidy scheme under the ‘Housing for All by 2022’ (scheme), to loans of value up to Rs12 lakh—from the Rs6 lakh earlier—and adding the middle income category to the economically weaker section (EWS) and lower income groups, are commendable efforts to stimulate the industry. Due to an improved regulatory landscape, a number of housing finance companies and private equity firms are turning their attention to the affordable home segment. A rapidly transforming environment has also compelled housing finance companies to broaden their focus on financial inclusion.

Have you seen an increase in default on loans on the back of demonetisation?

Buying a home for the security of his family is a very big decision in the life of an LMI customer and is not a mere investment instrument. We understand this sentiment, which is a key motivator. Our strong underwriting skills and our well-built system further protects and strengthens the asset quality. We maintain a high level of customer quality checks and have a robust collection machinery, supported by a strong back end for timely action in defending asset quality. In fact, DHFL has one the lowest NPAs (non-performing assets) in the industry of 0.97% (of the loan book). This has been constant pre- and post-demonetisation.

How does this exposure to the affordable housing space go with your investors in terms of margins and credit quality?

In addition to being among HFCs, we are also one of the largest players in securitization of home loan portfolios to banks and other financial institutions. We enjoy CARE’s highest ‘AAA’ (triple A) credit rating with our asset base growing towards Rs1 trillion. The company is well acknowledged and positioned as a leading core mortgage player in the industry with strong business fundamentals. We registered a net profit growth of 29% to Rs260 crore for the quarter to June. Our assets under management reported 23% year-on-year growth, reaching Rs88,236 crore as on 30 June. We’ve been receiving an overwhelming response from the investor and analyst communities, which is evident from the positive reaction of the capital markets, steady margins and robust asset quality. Our steady growth reflects the positive sentiment among our investors, who are extremely buoyant not only towards the growth of the affordable housing industry, but also confident of our concerted efforts towards driving financial inclusion across the country.

Apart from housing finance, DHFL also offers other financial instruments. Would you be interested in applying for a banking licence?

For over three decades, we reached out to millions of customers across India, and helped fulfil their dreams of owning a home. The expertise of servicing this particular segment has led us to evolve as a comprehensive financial services company that addresses various financial requirements of customers across the social spectrum. As a group, our product offerings also includes insurance, mutual funds, education loans to service the full spectrum of the consumers loan and investment requirements. We believe specialization in the financial services space is the future of the Indian financial services ecosystem.

There were reports of DHFL planning to sell a majority stake in Aadhar Housing Finance Ltd unit. Is this correct?

The board of DHFL Vysya and Aadhar, respectively, have approved the amalgamation of DHFL Vysya and Aadhar, and both the entities have filed their respective applications to seek approvals. Both the companies are subsidiaries of Wadhawan Global Capital (WGC). International Finance Corporation holds a 20% stake in Aadhar Housing. The merger of the two entities will make it a pan-India company.

What is the average size of disbursement for DHFL now? How do you view this in the next few years, given the push towards affordable housing?

DHFL’s average loan ticket size at the portfolio level stands at Rs14.3 lakh. We offer a range of home loan products, including home loans, home extension loan, home improvement, plot loans and SME (small and medium enterprise) loans to all customer segments across India, retaining its concerted focus on the low and middle income segment.

The government has been taking several significant, growth-oriented steps to build wide-reaching, impactful policy frameworks towards greater financial inclusion and, in the process, paving the way forward for the housing finance industry. The supply of affordable housing, backed by strong government policies and measures, and demand in the affordable segment fuelled by the consumer will impact the average ticket size.

You recently divested your insurance arm Pramerica. Are there similar plans for any other unit?

Our decision to sell the entire equity stake in the JV (joint venture) entity DHFL Pramerica Life Insurance Co. to its wholly owned subsidiary was aimed at value creation for all stakeholders. It added to DHFL’s net worth and book value. It will ensure all our expansion plans are capitalized fairly. The enthusiastic response to the two public issues of non-convertible debentures (NCDs) of Rs14,000 crore—oversubscribed on the very first day across all three segments of retail, high net worth individuals and qualified institutional buyers—is testimony to the trust we enjoy among our stakeholders.

Would you require additional funding any time soon?

We are well capitalized for the next 18-to-20 months for all business expansion. We set a historic trend in the retail debt market through two public NCD issuances that have repositioned our borrowing portfolio and generated a much competitive cost of borrowing. The issuance has helped the company to diversify its borrowing profile.

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

22.2. Rs 5,253 cr ($820 million) road projects to benefit India, Nepal: Gadkari

PTI, Aug. 25, 2017

New Delhi: Road projects worth Rs 5,253 crore are being implemented which would benefit both India and Nepal, Union minister Nitin Gadakri said today.

The projects include a 300 km road from Kakarwaha to Varanasi entailing Rs 1,499 crore investment besides a Rs 1,338 crore project for linking Rupaidiha to Barabanki, he said.

"Nepal's Prime Minister Sher Bahadur Deuba who is on a visit to our country and Prime Minister Narendra Modi have emphasised on closer cooperation between the nations. We are implementing a number of road projects entailing Rs 5,253 crore investment that will benefit both the nations," Road Transport, Highways and Shipping Minister Gadkari said.

The Cabinet yesterday approved an MoU to be signed with Nepal for construction of a Rs 159-crore bridge on Mechi river at Indo-Nepal border.

Elaborating the projects, Gadkari said a Rs 158 crore bridge is being constructed on river Mechi with assistance from ADB under which Kakarvitta in Nepal would be linked to Pani Tanki in West Bengal. This six-lane bridge will link Nepal with East West Corridor and ADB will provide Rs 89.52 crore loan while the rest will be borne by the Road Transport and Highways Ministry.
Another 144 km road will be completed by October this year to link Rupaidiha to Barabanki at a cost of Rs 1,338 crore under NHDP, the minister said.

Besides a 300 km road will be completed by June next year, linking Kakarwaha to Varanasi at a cost of Rs 1,499 crore.

The minister said that apart from this, an 83 km stretch from Sonauli to Gorakhpur will be completed by October at a cost of Rs 570 crore.

The other projects being implemented include Rs 512 crore Muzaffarpur-Sonbarsha stretch, Rs 247 Fobesganj to Jogbani stretch, Rs 429 crore project for linking Piprakodi to Raxaul, he said.

In addition to these, the minister said 10 roads are being developed at a cost of Rs 500 crore for constructing Rs 305 km stretches under Indo-Nepal agreement and NHIDCL which is executing these has opened its branch office in Kathmandu for this.

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

23.1. India-S'pore trade can reach USD 25 billion by 2019-20: FIEO

PTI, Sep. 08, 2017

Singapore: Bilateral trade between India and Singapore can achieve the target of USD 25 billion by 2019-20 as it has seen a strong growth in recent years, an Indian trade body official has said.

"We can easily reach USD 25 billion trade with Singapore by 2019-20, up from the current level of USD 17 billion," Federation of Indian Export Organizations (FIEO) chief Ganesh Kumar Gupta said here yesterday. India's export to Singapore grew by 23 per cent in the last fiscal though overall exports grew by only 4 percent, he said, pointing out that the bilateral trade between India and Singapore was only 2.52 per cent of India's overall trade.

FIEO will be increasing participation by its small and medium scale manufacturers and retailers, Gupta said at the opening of the four-day Singapore International Indian Expo.

"The expo is providing wonderful opportunity to micro and small exporters to showcase wide range of quality products to high demanding customers in Singapore.

"Exporters will move from B2C (business to consumer) to B2B (business-to-business) platform through participation in such expo," he said.

The FIEO is participating in the expo with 89 companies representing apparel, gems and jewellery, furnitures, handicrafts and textiles.

"The participation is likely to be doubled in 2018," Gupta added.

More than 200 stalls, offering over 10,000 Indian-origin products, have been put at the expo.

Gupta joined Indian High Commissioner Jawed Ashraf and Singapore's senior Parliamentary Secretary for Trade and Industry Low Yen Ling and other officials in lighting the inaugural lamp of the expo, being held from September 7 to 10 at the Suntec complex.

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

23.2. India starts exporting petroleum products to Myanmar

Livemint, Sep. 05, 2017

New Delhi: India on Monday started exporting petroleum products to Myanmar by road, discovering a new market for its fast- growing oil refining sector at a time when renewable energy and electric mobility are laying claim to a higher share of the domestic energy market.
“The first consignment of 30 tonnes of high speed diesel was sent today from India to Myanmar by land route,” said an oil ministry statement, adding that Numaligarh Refinery Ltd. exported the fuel.

Numaligarh Refinery despatched the first diesel consignment across the Moreh Custom Check Point on the Indian side and Tamu Custom Check Point on the Myanmar side, added the statement. The Indian stateowned refinery is already supplying diesel to Bangladesh.

Numaligarh Refinery, situated 420 km from the India-Myanmar border, has tied up with Myanmar’s Parami Energy Group of Companies for the supply of diesel. Myanmar has opened up a new market for India’s export of petroleum products, which at $12 billion in 2016-17, had grown 12.61% from a year ago.

India’s refining capacity of 230 million tonne is also expanding at about 7%. The country is now preparing to build a 60 million tonne a year refinery-cum petrochemical complex in Maharashtra, which is expected to be completed by 2022. Such refinery capacity expansion when growing renewable energy generation is eating into consumption of diesel for power generation, necessitates refiners to find new markets.

Supply of diesel to Myanmar is part of Prime Minister Narendra Modi’s goal of having better hydrocarbon synergy with neighbouring countries as well as promoting India’s ‘Act East Policy,’ said the oil ministry statement.

Oil minister Dharmendra Pradhan had visited Myanmar in February this year to explore collaboration in the oil and gas sector including setting up of liquified natural gas terminals, retail marketing, refurbishment of refineries and participation in exploration of hydrocarbons.

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

24.1. Policy soon to promote agri exports, says Prabhu

PTI, Sep. 06, 2017

New Delhi: Outlining his priority, new Commerce Minister Suresh Prabhu today said the ministry will work on promoting agri exports and will ensure global market for farmers.

He said that farmers have all the right to access global markets and get better prices and "for that we will put in place a good policy framework very soon".

Prabhu, who took charge as Commerce and Industry Minister yesterday, said that his ministry will work on developing global supply chain for the agriculture sector.

Addressing the 10th Agriculture Leadership Summit 2017 here, the minister said at the multi-lateral platforms also, there is a need to work on removing trade restrictions with an aim to boost the country's agri shipments. "We have right to have access to global markets for our farm produce by removing all trade restrictive practices," he said adding all these measures would help increase farmers' income.

The Narendra Modi-led government aims to double farmers' income by 2022. Crop diversification, focus on allied sectors and food processing and tapping global markets are among the steps the government is taking to meet the target.

In 2016-17, export of agri products, such as cereals, processed fruit and vegetables, processed foods, and animal products, was around USD 16.27 billion, according to the data by Apeda.

Prabhu said the ministry will work on developing global supply chains for the sector.

"We have to develop global supply chains and we are going to actually work on that," he added. The commerce ministry, Prabhu said, will make sure that "we will achieve this goal to ensure that India's agri sector will also be able to feed hundreds of others".

As a commerce minister, he said "my job is to ensure that we will develop this global supply chain and ensure farmer get better prices".

Domestically, the ministry will work with its agri counterparts to develop agriculture parks in India. "If here are clusters for industry, why should we not think about clusters for different kinds of agriculture," he said.

Further Prabhu informed that soon he would be meeting trade ministers in Manila, the Philippines, and Seoul, South Korea.

Talking about the World Trade Organisation (WTO), he said the ministerial conference is in Argentina in December.

"Our agenda is going to be very aggressive. This is a development round ... We will like to make sure that Indian farmers get their due by getting better price from global markets. This is very important and this is going to be part of the strategy to increase farmers income in India," the minister said.

Talking about challenges in the agri sector, he said land and water is limited but the population is growing and "we have a challenge to keep feeding".

"New challenge is climate change. It will have a huge negative impact on agriculture ... how to keep feeding more people," he said, adding the changing food habits are also going to be a big challenge and to address these "we have to have technologies and you need to think differently".

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

24.2. Vaisakhi in Addis Ababa

BusinessLine, 16 Sep. 2017, Puneetinder Kaur Sidhu

From the Canadian prairies and Australian hinterland to Ethiopia and Georgia, thousands of Punjabi farmers are ploughing their own furrow in faraway lands

There is something about the Punjabi farmer and land. He seemingly never has enough of it. Augmenting holdings is coded in his DNA, as are enterprise and assiduousness. It is no surprise, therefore, that he has not allowed mere geography to come in his way of acquiring more. As land prices skyrocket in his home state, he is trading it for hundreds of acres elsewhere.

An instinct for risk-taking, coupled with common sense and ingenuity, has spurred him to own and till massive farmlands in foreign locales. The Canadian prairie, Californian ranches and Australian hinterland have, for decades, yielded rich harvests under the determined toiling of legions of turbaned farmers. Some six years ago, Ethiopian soil beckoned the adventurous Punjabi farmer, even though outright ownership was not on offer. After all, fertile swathes were available on lease at unbelievably low rates (₹500 per acre!). Additionally, a supportive government-in-residence provided a safe and red-tape-free access to the inexpensive land and labour, spurring many to invest time and dime in this North African nation.

Upendra Kamra, a progressive farmer from Jalalabad, wasted no time leasing 1,500 acres in Bahir Dar, in northwest Ethiopia, after hearing about it at a social gathering in his home-town. “The fertiliser-free black soil was most conducive for mixed farming, particularly for growing vegetables. Besides, the place has an international airport, making to-and-from travel easier.” A pre-existing distillation unit at the farm was an added charm, and Kamra had for years cultivated aromatic plants for oil extraction. Though he discontinued his venture recently — “Remote management was becoming increasingly difficult and unwieldy” — he believes that agriculture in Ethiopia, Zimbabawe and Mozambique could well be the Punjabi farmer’s holy grail.

Immigration consultants and travel agents, however, soon had another idea coming — Georgia, the erstwhile Soviet republic sandwiched between the Black Sea and the Caucasus Mountains. Vast tracts of fertile vineyards and mostly flat farmland, once collectively administered by the former Soviet-era government, now lay fallow. Broke and at a loss, local farmers were content with self-sustenance. This knowledge, coupled with the promise of visa-on-arrival and registered ownership of boundless hectares at throwaway prices (₹20,000 per acre) was music to the hard-working Punjabi’s ears. Besides, it was the shortest route to realising their long-held European dream. Unscrupulous brokers, too, swooped down.

Consequently, early 2012 found Tbilisi, the Georgian capital, teeming with new arrivals sporting colourful turbans, a headgear that was hitherto unfamiliar in these parts. Soon, residents of remotely located Caucasian villages such as Sonori, over 100 km from the capital, began acquiring new neighbours. In less than two years, the number of arrivals swelled to 2,000. “I’m not in the least surprised at this kind of exodus,” declares writer Khushwant Singh (not to be confused with the other Khushwant Singh), a third-generation citrus farmer from Hoshiarpur. His family, however, has mostly stayed put, aside from a tentative exploration of the Australian outback in the 1980s.

As for the reasons for the exodus of Punjab farmers, he says, “With the Land Ceiling Act in place, along with diminishing returns, lack of insurance, exploitation by middlemen, and the absence of a coherent government model, the farmer has started seeing his land as a real-estate block rather than an agricultural one.” He’s not far off the mark. The prevailing circumstances in Punjab — marked by shrinking assets, rising costs, opportunity deficit, widespread drug addiction, and suicides — have heightened the sense of despair, further galvanising the quest for a fresh start elsewhere.

****

Jagjit Singh Josal, a 26-year-old farmer from Gazipur village near Jalandhar, was among the early movers. His family has been long engaged in potato cultivation on its 150-acre farm. A two-month stay in Tbilisi was enough to convince Josal to make the switch. To start with, Georgia ranked 17th worldwide in ease of doing business and its facilitation centres helped register a mandated company for as little as $110. Facilitated solely on the basis of valid passports, the process was completed within days and the company allowed to dabble in more than 100 different businesses. Cost of agricultural land ranged from an irresistible ₹60,000 to ₹1 lakh an acre, depending on location.

The trick was to not be tricked by certain medical students-turned-agents passing off infertile chunks as otherwise. Many a Punjabi farmer was duped into buying patches that oozed crude oil, a cultivator’s bane. A close look also revealed an unforeseen high operating cost in the absence of adequate back-up. Bred on subsidies back home, the Punjab farmers struggled to meet the cost requirements of property tax, commercial electricity, highly priced seeds, and hiring of equipment from cooperative societies in the new country. The complete absence of a market was another revelation, requiring produce to be ferried from one village to another for sale. The recommended herbicides, weedicides and fertilisers were not very effective, leading to less-than-satisfactory yield. Still, the newcomers persisted, overcoming the challenges of adjusting to a new culture, language and food habits. Most of them shared apartments and took turns cooking. Until they managed to acquire a working knowledge of the Georgian language Kartuli, they relied on interpreters to fill in the gaps.

In 2013, Josal’s decision to return home for good coincided with the Georgian government’s refusal to renew visas and a review of its open-door policy. The sudden influx of Indian, Chinese, Iranian, Russian and Turkish companies had sparked off widespread resentment among the locals. Farmers’ unions demonstrated against the government’s push for foreign investment in the agro sector instead of propping up the Georgian farmer. The anger finally culminated in a complete ban on the sale of agriculture land to non-citizens in mid-2014. Punjab farmers found themselves cutting their losses as quickly as possible and exiting after either selling or leasing out their acreage. “At last count, there are less than 150 of us,” 24-year-old Amarinder Singh tells me over a long-distance call from the popular Georgian seaside resort of Batumi.

The owner of 25 acres in Punjab’s Kapurthala district, the young Singh had made Tbilisi home since 2012 after acquiring a 40-hectare farm in Sonori. The initial killing he made by growing vegetables — onion, garlic, potato — was overturned by huge losses in maize cultivation. Now, like his remaining peers in Georgia, he focuses entirely on wheat even though it takes longer to harvest due to snow. “The crop is totally weatherdependent as irrigation is non-existent. Rainfall and snow ensure a robust bounty.” Having waited out the adversities of the last few years, he is today benefiting from the political stability and well-defined policies of the current government. The visa regime was relaxed again in 2015, but the ban on sale of agricultural land to foreigners continues. And while a formal market is still missing, flour mills and poultry farms are ready buyers for his wheat.

With the Georgian economy looking up, and its banking sector offering easy loans, many of the migrant farmers are diversifying into real estate. Singh, on his part, has tentatively ventured into tourism, which is witnessing a boom of late. He rents out two cabs to self-driving tourists travelling around Tbilisi, Batumi and Kutaisi. If time permits, he is happy to drive them on request.

He likes to keep himself busy to overcome his homesickness. “Jee lagiya rehnda ai (I keep myself happy, so I don’t miss home that much),” his wistful voice reaches me over the phone. Apart from his family in Karhal Nau Abad — his pind (village) — he yearns most for saag (mustard greens) and makki di roti (cornflour chappati). Yet, he does not deter others from chasing their vilayait de supne (foreign dreams), so “long as they do their homework well and see through dishonest brokers”.

His sentiments are echoed as succinctly by Gen CS Panag. At 75, this sprightly retired soldier from Fatehgarh Sahib has made many an exploratory foray into Georgia, and has encouraged others to follow suit. Despite dampeners in the form of curbs recently imposed by the Georgian lawmakers, he insists, “It’s still a nation with zero tolerance to corruption, a system in place that actually works smoothly, and is crime-free.” He hopes, nay urges the Punjab government to marry an increasingly underutilised skill at home with the unrealised potential in Georgia to forge a happily-ever-after union. “And… the ladies are lovely,” he chuckles, even as his wife dimples prettily at him in mock indignation. “I’ll be joining him on his next trip,” she says, showing me to the door of their comfortable Chandigarh home. Clearly, you can take the man out of Punjab, but not Punjab out of the man.

Puneetinder Kaur Sidhu is a Chandigarh-based writer

25.1. Shinzo Abe's India visit may see launch of Asia Africa Growth Corridor

Livemint, Sep. 11, 2017

Ahmedabad/New Delhi: The upcoming visit of Japanese prime minister Shinzo Abe to India is expected to see the launch of the Asia Africa Growth Corridor (AAGC), three officials familiar with the development said of the project that is regarded as a counter to China’s Belt and Road Initiative (BRI).

India and Japan may commit about $40 billion initially to the proposed growth corridor with their partnership playing a key role in development of the corridor.

“Japan is ready to commit $ 30 billion for the AAGC while India is expected to commit about $ 10 billion in the proposed corridor. An announcement on this is expected in next few days. These investments will be supplemented by other institutions. The actual investment may go much higher as $ 40 billion is the initial commitment for launching AAGR,” said Sachin Chaturvedi, director general of Research and Information System for Developing Countries (RIS), a New Delhi-based think tank.

The investment commitment from Japan is for a period of three years while India’s time frame for $10 billion is for five years, he added. A final project report for AAGC has been prepared by RIS, the Economic Research Institute for ASEAN and East Asia and Institute of Developing Economies—Japan External Trade Organization (JETRO) which will soon be released, Chaturvedi said.

Government officials in New Delhi declined to comment on the AAGC or possible investments in it. The idea of AAGC emerged in the joint declaration issued by Prime Ministers Narendra Modi and Abe in November 2016.

Earlier in May, RIS along with these two research organizations had released a Vision Document on AAGC on the side lines of the annual general board meeting of African Development Bank (AfDB) in Gandhinagar. The four main strands of the AAGC as explained by the RIS vision document are: capacity building and human resource development in Africa, creating quality infrastructure and institutional connectivity, people-topeople partnership, and development and co-operation projects. It also envisages developing capacities to sustain infrastructure, green field projects, investment opportunities, renewable energy, power grids, agriculture and agro processing, disaster management, joint venture projects and private sector financing. The AAGC will also give priority to health and pharmaceuticals.

Modi, in his inaugural speech at the African Development Bank event in May this year, had said that India was working with the US and Japan to support development in Africa. On the vision document, Modi said that “the idea is that India and Japan, with other willing partners, would explore joint initiatives in skills, health, infrastructure, manufacturing and connectivity.”

India-Japan’s outreach programme for Africa comes at a time when China is implementing its Belt and Road Initiative (BRI) that aims to link China with markets in Europe and Africa through Asian countries and the Indian Ocean.

“The difference between Obor (One Belt One Road) and AAGC is that while the former is centrally planned, it is not the same with AAGC. The proposed corridor by India and Japan will be built to connect different growth poles rather than aiming to build big carbon footprint-intensive projects,” RIS’s Chaturvedi said.

Foreign secretary S. Jaishankar in a speech at the RIS last month explained the concept of the AAGC: “There must be a strong sense of local ownership that can only happen with consultative project designing, transfer of technology and encouragement of skills. No less important is ensuring of financial responsibility, so that there is no encouragement of unsustainable debts. Our activities must fully conform to balanced ecological and environmental protection and preservation standards. And, I am compelled to add, respect for sovereignty and territorial integrity.”

India has objected to the BRI on the grounds that it violates India’s sovereignty given that a strand of it – the China-Pakistan Economic Corridor – runs through disputed Kashmir. New Delhi had also drawn attention to the debt trap countries like Sri Lanka had fallen into by accepting Chinese loans for infrastructure projects— besides their environmental costs. Given these, India refused to participate in the launch summit for the BRI. Meanwhile, Indian industry is enthusiastic about the AAGC with a senior executive of a large infrastructure company saying his company is ready to invest in African countries once it was launched. “I am told it’s is only a matter of days before AAGC is officially launched. We have already readied some investment plans that we can’t reveal at this point,” this person said.

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

25.2. Now, trade in diamond...

BusinessLine, 4 Sep. 2017, Bavadharini KS

Given that India is one of the largest exporters of polished diamonds, a futures contract to hedge price risks will help manufacturers, wholesalers and retailers and jewellery fabricators. Surat (Gujarat) is the hub for diamond trading operations in India.

Whether the ICEX diamond contracts will gain momentum and sustain the interest of investors remains to be seen. Factors such as spending capacity in India and China, consumer preferences, performance of current mines and global demand and supply influence the prices of diamonds.

Contract specifications

The diamond futures contract launched by ICEX will be traded Monday through Friday between 10 am and 11:30 pm. One lot is one cent (2mg) and the maximum order size is 3,000 cents (1 carat is 100 cents). It will be quoted in rupee per cent of HVS2 grade diamond.

HVS2 is one of the common grades of diamond which has minor visual inclusions (the marks and taints on the diamond) that are difficult to see under (10X) magnifications. H indicates near colourless diamond (and VS- very slightly). The diamond colours usually range from light tint to colourless (between grades K and D). The diamond futures contract will expire on the 5th of every month. If you want to trade in the futures contract, an initial margin of 4 per cent along with extreme loss margin of 1 per cent has to be paid. A special margin may also be imposed on the buy side or sell side, or both, if the regulator or the exchange finds increased volatility in prices.

The exchange accepts graded natural untreated diamond stones without any brown, green or milky discolouration and without dark or black inclusion for delivery.

ICEX does polling for diamond prices through quotes from diamond traders, jewellers and wholesalers.

Delivery procedure

The diamond futures contract is a compulsory delivery contract.

Physical delivery, however, happens only if a trader has accumulated at least 100 e-units, where one e-unit is equivalent to one cent. For those who hold less than 100 units of the contract, the delivery will only be in electronic form.
Say, upon the expiry of contract, you have a buy position of 20 cents, you will get the delivery of the said 20 cents as e-units in your account. You can’t ask for a physical delivery unless you hold a minimum of 100 eunits (i.e., one carat).

Similarly, if a seller wishes to give delivery, the diamond has to be of weight 1 carat or above and he has to get it graded from the agency designated by the exchange (International Institute of Diamond Grading and Research). Post this, the grading report and the diamond stones will have to be deposited with the exchange accredited vault (Malca-Amit, vaulting agency).

The exchange will credit e-units to the seller’s account once the confirmation from the agency is received to the exchange.

The delivery centre is at an exchange designated vault at Surat (Gujarat). Currently, three contracts of 1 carat diamonds are available with the exchange — one expiring in November 2017, one in December 2017 and the other in January 2018.

Price movements

Globally, diamond prices have been declining over the last one year.

According to Rapaport 1 carat HVS2 index, 1 carat diamond was trading at $5,220 in September 2016 which has since declined to $4,644 per carat now.

This is mainly due to low demand from Chinese markets, one of the largest consumers next to the US. Competition in the industry and excess supply have resulted in the price decline.

However, with the demand from the Chinese market showing signs of improvement recently, prices may edge higher now, say analysts.

Prices of diamonds in the domestic market may also move up and help volumes in the newly launched futures contract.

* * *

AAPI

Pages

Monday 18 September 2017

NEWSLETTER, 20-IX-2017

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

– INDUSTRY, MANUFACTURE

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

NEWSLETTER, 20-IX-2017

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

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