AAPI: November 2017

LISBON, 20th November 2017

Index of this Newsletter

INDIA

INDIA & THE WORLD

21.1. Trump praises India's growth story, PM Modi at APEC Summit
21.2. US wants stronger economic, defence ties with India: Tillerson
22.1. India emerges as biggest source for digital talent: Survey
22.2. Bilateral trade between India and Ghana may touch US$ 5 bn
23.1. India sends 1st wheat shipment to Afghanistan via Chabahar port
23.2. India, Bangladesh launch connectivity projects, including new train service
24.1. Indian companies create 113K jobs in US: Report
24.2. India companies lead the world on disclosing CSR spends: Study
25.1. Apologise for Jallianwala Bagh massacre: Indian-origin MP to British govt
25.2. India, Canada to fast-track free trade pact negotiations

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LISBON, 20th November 2017

NEWSLETTER, 20-XI-2017

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

1.1. Consumer Protection Bill is the top priority: Shri Narendra Modi

Press Information Bureau, Oct. 27, 2017

New Delhi: Shri Narendra Modi inaugurates International Conference on Consumer Protection for East, South and South-East Asian Countries with the theme of “Empowering Consumers in New Markets” in New Delhi

The Prime Minister, Shri Narendra Modi inaugurated the two days International Conference on Consumer Protection for East, South, South East and Asian Nations on the theme “Empowering Consumers in New Markets” in New Delhi, today. The Prime Minister in his inaugural speech congratulated the Department of Consumer Affairs for holding this important event and mentioned that East, South and South East Asian countries have a shared heritage. These nations have long history of trade. This in itself paves way for mutual cooperation in the area of consumer protection. Shri Modi said that it is the consumer that helps markets grow and trade expand. The Prime Minister thanked the delegates from countries and UNCTAD for associating with India in holding this conference. He drew attention of the gathering to the traditions and laws of ancient India as old as 2500 years and Vedic period, when laws existed for preventing unfair trade practices, abuses and adulteration of products.

Shri Modi said, in India, Consumer is considered as God in trade premises. ‘Grahak Devo Bhava’ is the dictum for consumer satisfaction. While mentioning the unique nature of CP Act 1986, He mentioned the new Consumer Protection Bill which is on the top priority of the Government. The Prime minister mentioned several important efforts taken by his government across various sectors like Housing, Energy, Standards, Healthcare, pharmaceuticals and medical devices and procedures that has resulted in financial benefits to consumers. He drew attention to demonetization and the GST regime that introduced a new business culture which will ultimately bring down prices for consumers. Redressal system that is efficient is the corner stone of democracy, he asserted.

While talking about various sectoral initiatives he mentioned the, importance of good governance, Jandhan Yojna, Make in India programme, Swachh Bharat Abhiyan and provision of free LPG to the poorer sections of society, technology driven PDS system and Aadhar based transparency system, etc that have protected consumer interests and how specific consumers are benefitted and their hard earned money saved. On the digital front he said efforts are on to ensure that at least one member in a rural family gets digitally educated so that the rural population can derive benefits from various government schemes and are able to use UPI, BHIM etc. Finally, while concluding his speech the Prime Minister mentioned the need for trans-national cooperation especially in Asian region on cross border issues based on mutual trust.

Shri Ram Vilas Pawan, Union Minister for Consumer Affairs, Food & Public Distribution, welcomed the delegates from East, South and South East Asian Nations for being in New Delhi to attend this first ever Asian Conference on consumer protection. Shri Paswan explained various initiatives taken by the Govt in furthering consumer protection. He made specific reference to the New Consumer Protection Bill which is likely to replace the old Act soon and the new BIS Act with specific emphasis on Hallmarking Scheme for ornaments. For protection of consumer interests and their hard earned money, he mentioned, several measures have been taken including Hall Marking of Gold.

Secretary General, UNCTAD, Dr. Mukhisa Kituyi in his address elaborated on globalization and the resultant challenges it brought to consumers. He mentioned the backdrop against which the UN Guidelines on Consumer Protection were revised in 2015 and the commendable role India has played. He said that this Conference is an ideal opportunity to learn from best practices and exchange information, and suggested some points for consideration of India to consider in the implementation of UN Guidelines, such as Provision of high quality ICT infrastructure at affordable prices, Consumer safety from hazardous goods, complete disclosure of all information for guidance of consumers, redressal system that is rapid and affordable for consumers in shortest time possible and regulations against identity theft and provision for data privacy protection.

International Conference on Consumer Protection is being organised by the Department of Consumer Affairs, Government of India with the association of United Nations Conference on Trade and Development (UNCTAD). This is the first time an international conference on consumer protection is being organised by India for countries of the region which account for a majority of the global consumers and share common challenges and experiences. 22 countries from East, South and South-East Asia are participating in the international conference.The two day conference will conclude on 27th October, 2017.

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

1.2. Narrow banking is an idea whose time has come

Livemint, 17 Nov. 2017, Ravi Krishnan

Narrow banks should be considered seriously as they will ring-fence a good part of India’s banking system from repeated failure that necessitate grand bailouts

The most heartening takeaway from last week’s public sector bank executive jamboree was the discussion around differentiated lending structures. The ThinkShop (earlier editions were called Gyan Sangams) suggested that large banks focus on corporate lending, while smaller lenders focus on retail loans or specific geographies. It is a good start.

One of the key things the three credit crises in the Indian banking system over the past three decades have taught us is how little progress has been made to improve the impaired credit culture of state-owned banks. Taking differentiated lending to its logical end, the time has come to consider converting the worst performers among state-owned lenders to narrow banks, which won’t lend at all.

Narrow banks are safe banks. By not lending, and using their deposits to buy government bonds, they carry virtually no credit risk. There is no danger of non-performing loans and frequent injections of equity capital that has to be funded by taxpayers. For the Reserve Bank of India (RBI) too, supervision gets easier. There is no need for deposit insurance.

Narrow banks are safe banks. By not lending, and using their deposits to buy government bonds, they carry virtually no credit risk

Take for instance, lenders such as IDBI Bank and Indian Overseas Bank. For both banks, close to one in every Rs4 they have lent has turned bad. They are both under the so-called prompt corrective action (PCA) framework of RBI; the central bank has placed restrictions on their lending in a scramble to ensure that their capital adequacy ratios don’t plummet. Such lenders could just become large payment banks. It need not be done overnight, but can be done on an incremental basis by slowly whittling down their loan books.

Traditionally, the argument against such conversions has been that narrow banks do not perform certain crucial functions such as giving loans to the so-called priority sectors. Such an argument might have been valid two decades ago. India doesn’t need so many universal banks to achieve financial inclusion Remember, that even the 1991 Narasimham Committee had recommended moving to a structure which would have four lenders as global banks and only 10 nationwide universal banks, besides local banks. RBI has already laid the foundation when it introduced differentiated licences. So, even if the worst of state-owned banks are converted to narrow banks, there are enough private and small finance banks out there to lend to the small borrower. Newer technologies such as peer-to-peer lending, for which RBI has come out with regulations recently (although unsatisfactory), will further financial inclusion.

Even the 1991 Narasimham Committee had recommended moving to a structure which would have four lenders as global banks and only 10 nationwide universal banks, besides local banks

For larger borrowers, banks have been replaced as the largest source of funds over the last two years by other means such as debt securities market and the equity market. In any case, RBI is moving to a system where it wants large borrowers to shift their incremental borrowings to the bond market. Indeed, financial sector reforms that inject more life into the bond markets will do more to prevent the problems of future bad loans building up rather than throw more money into weak banks.

Narrow banks should be considered seriously to ensure that the mistakes of the past are not repeated at this scale. They will ring-fence a good part of the banking system from repeated failure that necessitate grand bailouts. Although, the government is planning to infuse Rs2.1 trillion into state-owned banks over the next two years (a right and long-overdue step), the recapitalisation fails to address the critical issue of improving credit culture. What is being done to prevent future non-performing loans from building? How is the capital going to be allocated?

Even if the worst of state-owned banks are converted to narrow banks, there are enough private and small finance banks out there to lend to the small borrower

It will also be a better alternative to merging banks, another popular proposal to increase efficiency. The finance ministry is moving in this direction by setting up a ministerial panel to nudge banks into consolidation and for considering merger proposals. But merging weak banks won’t solve the problem of a improving a lending culture that seems beyond repair. What good will it do if the merged bank has to listen to the same finance ministry mandarin pushing for extending a loan to a crony capitalist?

Yes, the history of implementation of narrow banking has been patchy at best because governments, especially in developing nations, want lenders they own to further financial inclusion. But in the current context of Indian banking which has repeatedly thrown up crises in state-owned banks, narrow banking may be an idea whose time has come.

Ravi Krishnan is assistant managing editor, Mint.

2.1. India makes it to Top 100 in ‘ease of doing business’

BusinessLine, 31 Oct. 2017

India jumped up 30 notches into the top 100 rankings on the World Bank’s ‘ease of doing business’ index, thanks to major improvements in indicators such as resolving insolvency, paying taxes, protecting minority investors and getting credit.

“The significant jump this year is a result of the Indian government’s consistent efforts over the past few years and India’s endeavour to strengthen its position as a preferred place to do business,” said Annette Dixon, Vice President, South Asia region at the release of ‘Doing Business 2018: Reforming to Create Jobs’ on Tuesday.

Prime Minister Narendra Modi hailed the jump in India’s ranking as “historic” and said it was a result of “allround and multi-sectoral reform push.”

Finance Minister Arun Jaitley said India’s jump is the highest by any country, and that reaching the ‘top 50’ target set by Prime Minister Modi is “doable”.

GST will improve rank

“There is significant improvement in many criteria such as protecting minority investors, availability of credit and getting an electricity connection,” Jaitley said, adding that on the taxation index, India had vaulted up 53 places; once the impact of the GST is factored in, the ranking will improve further. The cut-off for the rankings was June 1.

“Work is in progress in many areas such as enforcement of contracts and building construction permits. The reforms in starting a business have not been factored in,” Jaitley said. “If we expedite this work in the next few months, India can come in even higher.”

An improvement in the rankings will help not only foreign investments but also domestic investors. The Centre, Jaitley said, would talk to States to expedite construction permits. These initiatives would help India improve its position by at least 30 points, he said.

Asked about India’s low ranking in registering property, DIPP secretary Ramesh Abhishek said, “There are over 100 reforms in progress that have not been factored in this year.” Only two of 42 completed reforms had been accepted, and two others had been partially accepted, he said.

India is among the top ten improvers this year, with improved ranking in six of the ten indicators, while its performance in absolute terms improved in nine. The six areas of improved ranking include dealing with construction permits and enforcing contracts.

Where India slipped up

In the category of starting a business, though, the need for local entrepreneurs to go through 12 procedures to start a business, as opposed to five in high-income countries, worsened India’s ranking in the category to 156 from 155 last year.

There was also a major slip in ranking in the category of registering property — from 138 last year to 154 this year — due to increase in time taken, cost and number of procedures for registration.

Bhutan, in 75th place, is South Asia’s highest-ranked economy, followed by India (at 100) and Nepal (at 105). This year, the report recognised eight areas in which reforms were implemented in Delhi and Mumbai, as opposed to just four last year.

India’s corporate law and securities regulations were recognised as highly advanced, placing it in fourth place in the global ranking on protecting minority investors. The time taken to obtain an electricity connection in Delhi reduced from 138 days four years back to 45 days now, against a 78-day average in OECD high-income economies, the report observed. This put India in 29th place in the category.

India still lags in areas such as starting a business, enforcing contracts and dealing with construction permits.It takes longer to enforce a contract today, at 1,445 days, than 15 years ago (1,420 days).

“Tackling these challenging reforms will be key to India sustaining the momentum towards a higher ranking. To secure changes in the remaining areas will require not just new laws and online systems but deepening the ongoing investment in the capacity of States to implement change and transform the framework of incentives and regulation facing the private sector,” Junaid Ahmad, Country Director World Bank said.

2.2. India offers golden opportunities for global investors: Gadkari

PTI, 4 Nov. 2017

NEW DELHI: India offers "golden opportunities" for global investors in sectors such as infrastructure, transport, agriculture and food processing, Union minister Nitin Gadkari said on Saturday.

Not only the country is going to offer a world class infrastructure in highways in two years, waterways and agriculture are also undergoing massive reforms that include 325 irrigation projects and massive river interlinking programme, the Road, Transport, Highways, Shipping, Water Resources, River Development and Ganga Rejuvenation minister said.

Addressing the World Food India 2017 conference on the 'Opportunities in Infrastructure Technology & Equipment', Gadkari said, "There are golden opportunities for investors in food processing, agriculture, water transport, highways, shipping and other sectors."

"We are bound to create a world-class infrastructure in coming two years. Of the 32 logistic parks, 24 have already been identified on National Corridors to be built at a cost of Rs 2 lakh crore. These parks will cater to key production and consumption centres accounting for 45 per cent of India's road freight," the minister said. He said the work has already been started at Chennai, Bangalore, Vijaywada, Hyderabad, Surat and Guwahati for logistic parks that are designed to house cold storages and warehouses.

Besides, government's another major initiative Sagarmala for port-led economic development of the country will see reduction of about Rs 40,000 crore logistic cost in the country, he said.

Sagarmala will see development of 14 coastal economic zones besides development of two mega food processing parks, he said.

The minister stressed that development of logistic parks is essential as India witnesses wastage of fruits and vegetables worth Rs 13,300 crore which account for about 35 per cent of the produce due to lack of infrastructure.

Unfortunately, he said only 10 per cent of fruit and vegetables are processed in India whose participation is barely 1 per cent in global processed food.

The government aims at enhancing the processing of fruits and vegetables to 20 per cent by 2019, he said. He said construction of 44 economic corridors that include Mumbai-Kolkata and Mumbai-Kanyakumari will result in quick delivery of produce to markets besides reduction in logistic costs and enhancement in farmers' income.

Talking about highways, he said that Eastern Peripheral Expressway to decongest Delhi will be made operational by next month while electronic tolling on highways pan-India will result in seamless flow of traffic throughout the country and would contribute in reduction of logistic cost which is at 18 per cent in India as comparison to a mere 8 to 10 per cent in China.

On irrigation front, he said, "As many as 325 new projects are being taken up by the government to help state governments in canal and other systems."

3.1. How demonetisation affected the Indian economy, in 10 charts

Livemint, 7 Nov. 2017, Pramit Bhattacharya

The potential benefits of demonetisation are not clear yet, but the costs are clear

New Delhi: A year ago, Prime Minister Narendra Modi announced the scrapping of high-value banknotes which amounted to 86% of currency in circulation. The demonetisation of currency notes was supposed to be an attack on black money, on counterfeit notes, and projected as part of a broader push to promote digitization and non-cash payments. A year later, progress on all these counts appears to be very modest, and should make us question whether this exercise was needed at all to fulfil its stated aims.

The costs imposed by the currency-scrapping exercise were, however, quite severe, at least in the short term, disrupting ordinary life across the country for several weeks. The hardest-hit were those in rural areas, where access to banking and the internet are quite low. A 2016 Reserve Bank of India (RBI) report on branch authorization policy classified 93% of rural centres in the country as unbanked, with the population dependent on roving banking correspondents and on distant urban or semi-urban branches. Access to the internet is equally patchy, with only 3% of households in underdeveloped rural areas reporting access to internet in a 2016 consumer economy survey.

Economic costs

The rural and informal economy suffered disproportionately because most transactions are cash-based. The liquidity squeeze led to a pile-up at wholesale markets, leading to a sharp decline in the Wholesale Price Index (WPI) of perishables such as fruits and vegetables in the immediate aftermath of demonetisation. By turning farm markets into buyers’ markets, demonetisation may have also contributed to the decline in prices of pulses. Rural consumer sentiment too took a hit, with domestic sales of two-wheelers plunging sharply. Car sales also declined but the decline was less severe than in the case of two-wheelers.

The slowdown in the economy, which started before demonetisation, also seems to have been exacerbated by demonetisation. New project announcements declined sharply in the wake of demonetisation, a Centre for Monitoring Indian Economy (CMIE) analysis showed, hurting the capex cycle. Contrary to what some economists predicted, the dividend from RBI to the government was lower because of demonetisation. RBI’s domestic earnings declined as it had to pay interest of Rs17,426 crore after it mopped up excess liquidity in the banking system following demonetisation. The previous year, the central bank had earned interest of Rs506 crore in its liquidity management operations. RBI’s printing costs also went up because of the move.

Uncertain benefits

The one big promise of demonetisation was a rapid expansion in the tax base but the actual results have been quite modest. According to the finance ministry’s estimates published in the latest Economic Survey, the tax base expansion attributable to demonetisation was Rs10,600 crore, lower than what RBI spent on interest expenses, and equivalent to only 0.1% of India’s gross domestic product (GDP). The full effect on tax collections “will materialize gradually” as reported income of new taxpayers grows, said the survey. How far such gains materialize remains to be seen.

Another stated aim of demonetisation was to detect and eliminate counterfeit notes. The growth in detected counterfeit notes after demonetisation has not been unusually large, shows RBI data, even as counterfeits of the freshly issued notes have already emerged in the system.

Demonetisation did provide a boost to non-cash payments in the short term but that effect may be waning, with the cash-to-GDP ratio back to double-digits. There seems to have been some impact on the stock of black money (rather than the flow), given that the construction sector has been hit hard. But this may also have led to large-scale job losses. The proportion of high-value notes (Rs500 and above)—often viewed as conduits of black money—has also been rising as new notes have entered the system. At the end of fiscal year 2017 (FY17), the proportion of high-value notes stood at 74%, considerably lower than that in FY16. But this figure may rise significantly by the end of FY18.

This is the first of a two-part data series on demonetisation. The second part will examine the impact of demonetisation on cashless payments.

3.2. Textile hub Tirupur still reeling from demonetisation blow

Livemint, 8 Nov. 2017, Dharani Thangayelu

‘Employees Required’ signboards outside garment-making units in Tirupur have been replaced by ‘To Let’ signs, such has been the impact of demonetisation on the town’s textile industry

Tirupur: “Employees Required” signboards used to be a common sight outside small garment-making units in Tirupur, the textile hub of Tamil Nadu. Now, they have been replaced by “To Let” boards.

Many garment units have shut in recent months, said K. Thangavel, a former Communist Party of India (Marxist) member of the state legislative assembly from Tirupur. That’s because they couldn’t overcome the impact of the cash crunch that followed the 8 November invalidation of high-value banknotes. The textile industry used to directly employ around 500,000 workers and log yearly sales of around Rs.40,000 crore. The cash crunch brought the industry, mainly comprising micro, small and medium enterprises (MSMEs), to a grinding halt. A year after the note ban, many small units are still struggling. “There was no business for three to four months,” said Raja M. Shanmugham, president of the Tirupur Exporters’ Association (TEA). MSMEs just couldn’t withstand the impact of something like the note ban, which took out 86% of the currency in circulation by value.

Even as the textile industry struggled on, it was hit by another disruptive event: the goods and services tax (GST), which kicked in on 1 July. “The implementation of the GST without any dry run has led to a chaotic situation,” said Thangavel.

According to TEA, the textile industry of Tirupur had been expected to earn Rs30,000 crore from exports alone in the year that ended on 31 March. It ended with Rs26,000 crore in exports, besides Rs.16,000 crore from domestic sales.

The December quarter of the year is the busiest time of the year for Tirupur’s textile industry because of Christmas and New Year demand from the European and US markets. Last year, because of the withdrawal of high-denomination currency, it was a “real testing time”, says R. Veni, who works at one of the garment units in the city.

Recalled a job worker who runs a small knitwear-cutting unit: “A worker who would earn Rs500- 600 per day had to lose a day’s salary to stand in the queue to exchange a sum of Rs2,000.” He added that at least 30 garment units have shut down in his ward alone.

Garment units getting closed and new ones opening is part of an annual cycle in Tirupur. But no new units have sprung up in the past year, claim business owners here. Note ban and GST have only aggravated the situation in Tirupur, which is a self-evolved business cluster that has been facing a slow decline over the years. “In 2004, India was a global leader in knitwear, just next to China. With the growing global market in Bangladesh, Cambodia, Vietnam, Sri Lanka, Myanmar and Ethiopia, we are no longer in the top position and it is very difficult to sustain if there is no policy intervention from the government,” said TEA’s Shanmugham.

4.1. Deepening innovation ties with the US

Livemint, 9 Nov. 2017, Ziad Haider and Richard Rossow

India and the US must leverage Global Entrepreneurship Summit to deepen ties between their innovators and enabling institutions

This month, the US and India will co-host the seventh Global Entrepreneurship Summit (GES)—the preeminent gathering of entrepreneurs across the world—in Hyderabad. As US secretary of state Rex Tillerson has noted, co-hosting GES is “a clear example” of how both sides are “promoting innovation, expanding job opportunities, and finding new ways to strengthen both our economies”. With preparations for GES under way, Washington, Delhi and the private sector should take additional steps to maximize GES’ impact and accelerate the trajectory of the US-India innovation partnership.

Since 2010, Global Entrepreneurship Summits have been held in Dubai, Istanbul, Kuala Lumpur, Marrakesh, Nairobi, and Washington. GES 2016 convened 700 entrepreneurs from 170 countries and 300 investors who announced millions of dollars in commitments to support entrepreneurs. India is the natural partner to sustain this success.

The US and India have a history of pooling in the ingenuity of our peoples to achieve global breakthroughs, such as the Green Revolution. Prime Minister Narendra Modi has injected new dynamism into India’s innovation ecosystem with initiatives like the Atal Innovation Mission and the creation of a $100 million “fund of funds” for start-ups. Driven by this logic and the bipartisan support for the US-India partnership, during Modi’s visit to Washington in June, he and President Donald Trump reaffirmed a commitment made during the Barack Obama administration to co-host GES 2017.

So what can be done to maximize the success of GES 2017?

First, the government should use GES not just to showcase its innovation record to date but also highlight its forward-looking policy and regional leadership. It should announce reforms at GES that further enrich the innovation ecosystem in India and enable foreign investors. It should also host an invite-only event for policymakers from select countries who are prepared to make similar announcements. Delhi must also message Indian industry and society on the importance of start-ups. At GES 2016, one of the most compelling engagements for attendees was seeing former US president Barack Obama moderate a discussion with three young entrepreneurs on the challenges they faced; in many countries, the political elite only shared the stage with corporate titans.

A prime minister-level engagement with young entrepreneurs who are not household names would be a powerful visual stamp of support for India’s burgeoning entrepreneurs. In terms of regional leadership, GES 017 will be the first GES in South Asia—an opportunity for India to leverage its soft power to promote regional connectivity. There should be panels at GES focused on collaboration among innovators and entrepreneurs in South Asia to tackle cross-cutting challenges, along with discounted registration fees for South Asian Association for Regional Cooperation (Saarc) attendees to increase regional affinity.

Second, the Trump administration needs to ensure that a top-flight US private sector delegation attends GES and that US engagement tangibly advances commercial partnerships. With Ivanka Trump—adviser to the President—leading the US delegation, the White House must take ownership by building a strong delegation that is prepared to announce funding, training, and mentorship opportunities. In addition, the Trump administration needs to bring a clear policy focus to its engagement at GES. The US delegation must come prepared to talk not just about partnership in theory but also about the specific steps that are needed to unlock opportunities and to use the GES platform to help accelerate commercial partnerships in India.

Third, industry must seize the opportunity GES provides to identify and nurture talent and innovation in India. Companies should proactively engage the GES organizers in Washington, Delhi and Hyderabad on potential interventions, ranging from hosting side events at GES to offering their corporate leadership as speakers, to announcing investment and training commitments. Many companies are well-positioned in this regard. US firms such as Uber, Mozilla, Qualcomm, Pfizer and others have announced programmes to strengthen India’s innovation ecosystem. Such programmes should be highlighted and replicated.

Looking ahead, the US and India must channel the momentum from GES to take their innovation partnership to new heights. They should survey US incubators and accelerators to identify those interested in supporting Indian counterparts funded under the Atal Innovation Mission. The US Small Business Administration has novel programmes to channel funding to start-ups; India should adapt these programmes for its domestic efforts. Lastly, American universities play a key role in the innovation ecosystem. The US should create channels to share how these universities integrate into the ecosystem, from community business outreach to commercializing intellectual property created on campus.

The US-India partnership is thriving. We have made progress in expanding our defence ties; American and Indian firms are enlarging our trade and investment linkages. Now we must leverage GES to deepen ties between our innovators and enabling institutions. A successful GES with follow-on action will only deepen the intimate connection and strategic partnership between our two democracies. Ziad Haider and Richard Rossow are, respectively, the senior adviser at the Center for Strategic and International Studies (CSIS) and senior adviser and Wadhwani chair in US-India policy studies at CSIS

4.2. The future of work might not be so bleak

Livemint, 1 Nov. 2017, Jean Tirole.

The most difficult tasks for computers involve unforeseen problems that do not match any programmed routine

What’s the future of work? Will gigs replace salaried employment, and will robots eventually leave humans with nothing to do? I see reason for scepticism, but also for concern.

Technology, of course, is already making independent work a lot easier. It puts workers into contact with customers and helps them run a back office. More importantly, it allows individuals to build and promote their reputations at low cost. Customers used to rely on a taxi company’s reputation, or choose a washing machine by the manufacturer’s brand. Now, each worker has a brand: On Uber, customers can reject drivers based on their personal ratings. A firm’s collective reputation, with the concomitant control of its employees’ behaviour, is becoming gradually less important.

That said, technology can also favour standard salaried employment. The economists George Baker and Thomas Hubbard, for example, have noted how onboard computers could change US trucking. By monitoring behaviour, they would solve a moral hazard problem: Drivers have little incentive to be as careful with company trucks as they would with their own. As a result, more drivers could become employees of companies that buy and maintain fleets, rather than going it alone. They wouldn’t have to invest in their own vehicles; and they wouldn’t be out of pocket and out of work when their trucks broke down.

More generally, conventional jobs have a lot of advantages. First, a single worker or group of workers might lack the capital needed to set up a business, or prefer to avoid the risk of running one. Second, business owners might not want their employees to have other bosses—particularly if the work involves confidential information or team projects that require undivided attention. Third, reputations based on ratings might not be reliable: The economist Diane Coyle has shown that the quality of individual consultants can be hard to monitor, at least immediately, whereas a traditional consultancy may be more efficient at “guaranteeing” quality. In short, I believe that salaried employment will not disappear, although it might become less prevalent over time.

But what about Artificial Intelligence? Many jobs involving routine (and thus codifiable) tasks have been eliminated: Banking transactions are digitized, cheques are processed by optical readers, call centres use software to shorten the conversations between customer and employee, or even replace humans with bots. These changes have global repercussions. They threaten the low-salary, outsourced jobs that emerging and underdeveloped countries have counted on to escape poverty. In developed countries, as the economist David Autor and his co-authors have demonstrated, they tend to benefit those employees whose skills complement the new digital tools. This “hollows out” the distribution of jobs into either high-paying skilled positions or low-paying basic service positions. In the US, the difference in salary between those who hold university degrees and those who left right after high school has grown enormously in the past 30 years. It’s still not clear, however, which human tasks computers will be able to replace, and what the effects will be. Deductive problems, in which the particular is deduced from the general rule in a logical way, are the easiest. An ATM verifies a card number, the PIN code, and the bank account balance before issuing money and debiting the account. Nonetheless, total employment in banking rose even as the ATM network spread, because demand grew and teller jobs were replaced by new tasks.

Computers have also made great advances in induction, which starts with specific facts and works towards a general law. For example, algorithms are capable of predicting the US Supreme Court’s decisions about patents as well as any legal experts. Similar techniques are enabling automated facial recognition, voice recognition, medical diagnosis, and other tasks that previously only humans could perform. The most difficult tasks for computers involve unforeseen problems that do not match any programmed routine. Frank Levy and Richard Murnane offer the example of a driverless car that sees a little ball pass in front of it. This ball poses no danger to the car, which therefore has no reason to slam on the brakes. A human being, on the other hand, will probably foresee that the ball may be followed by a young child, and will therefore have a different reaction. The driverless car will not have enough experience to react appropriately. Although machine learning might be able to solve this problem, it illustrates the obstacles that computers still encounter.

So humans and computers face different challenges. Thanks to machine learning, computers can increasingly cope with unforeseen situations, provided they have enough data to recognize the structure of the problem. On the other hand, the human brain is more flexible: A five-year-old child can handle some problems better than any computer. So the people best equipped to succeed in the new world will be those who have acquired abstract knowledge that helps them adapt to their environment, while those with only simple knowledge preparing them for routine tasks are most in danger of being replaced.

This is why education is crucial. If we don’t have a system that gives everyone a chance to gain the necessary skills, differences in education and family background will lead to even greater inequality.

Bloomberg View. Jean Tirole is a Bloomberg View columnist. This article is adapted from Economics For The Common Good, to be published next month by Princeton University Press.

5.1. Reflections from inside a toxic city

Livemint, 17 Nov. 2017, Sudipto Mundle

A programme to reduce crop stubble burning would have far greater positive impact on curbing Delhi pollution than many schemes ongoing today

Living as I do in the capital city of Delhi, breathing its toxic air, what’s more appropriate to write about than the recent spike in Delhi’s air pollution? Writing about it is less depressing than thinking about the life years we have already lost or, more important, the life years that our children and grandchildren will lose if we continue to live in such toxicity.

Twenty years ago when my co-authors U. Shankar, Shekhar Mehta and I published our monograph

Controlling Pollution: Incentives And Regulation (Sage Publications India, New Delhi, 1997), the economics of pollution control was still largely an unknown subject in India though a substantial literature already existed abroad. However, an environment regulation and monitoring system was already in place. There were separate Acts for water pollution, air pollution and an overall Environment Protection Act. An administrative framework to enforce the Acts had also been established, consisting of the Central Pollution Control Board and similar state-level boards.

The boards had fairly wide powers to impose penalties, ranging from levies and fines to closure of polluting sources and even imprisonment. A rudimentary system for monitoring pollution was also already in place. In the past two decades much has changed. The economics of pollution control is now a flourishing sub-discipline within the burgeoning field of environment studies. Air quality monitoring has also become quite sophisticated with continuous monitoring of a whole vector of pollution indicators and readings available, along with an air quality index (AQI), on a daily basis from multiple city locations. However, the regulatory framework has remained largely unchanged, still dependent on the “command and control” (C&C) approach instead of market-based instruments (MBI). The same fatal flaw that had rendered the pollution control Acts ineffective 20 years ago still applies today.

This is the disconnect between the ambient air and water quality standards laid down in the Acts and the source-specific standards which are the only standards that can actually be enforced under the Acts. The consequences are there for all to see. Emission levels from individual sources like motor vehicles and industrial plants did come down progressively after standards were mandated in 1981. Yet the ambient pollution load kept getting worse as the number of vehicles and factories kept growing. This was already evident and reported in our book 20 years ago. Since then the number of factories has grown manifold, millions of vehicles have been added on to Delhi’s roads, and pollution levels have long crossed all critical red lines. During the past week Delhi is experiencing a pollution emergency. For the main pollutant of concern, suspended particulate matter (SPM) the ambient pollution load has been about 7-10 times the specified standard and the overall AQI is well past the danger level.

A 2016 IIT (Indian Institute of Technology), Kanpur study, generally seen as the most authoritative source on air pollution in Delhi, estimated pollution levels for a whole vector of pollutants in different parts of the city. For SPM of size 10 micrograms/cubic meter (mcg/cu m), it identified the four main sources of pollution as road dust (56%), concrete batching (10%), industrial emissions, including power plants and municipal solid waste burning (10%), and motor vehicles (9%). For SPM size 2.5 mcg/cu m, the four leading sources identified were road dust (38%), motor vehicles (20%), domestic fuel burning (12%), and industrial emissions (11%). These are annual averages, with large seasonal variations. Thus road dust is worse in summer while biological residue (stubble) burning is a major source in winter. We are seeing this right now across all of north India and also contiguous parts of Pakistan.

At the time of writing there are forecasts that the pollution crisis may abate. Hopefully the gods will be kind, surface winds will rise and blow the crisis away in a day or two. Meanwhile, the Environment Pollution Prevention and Control Authority has laid down a set of emergency measures to help mitigate the crisis. But what can be done to avoid such crises in the future? The question is best addressed in four parts: pollution drivers over which government has no control, pollution sources which require inter-governmental cooperation, pollution sources which the government can regulate through MBIs and sources or actions which it can directly control.

Factors like wind, temperature and rainfall are important determinants of pollution over which government has no control. But if the weathermen could improve their forecasting that would help governments and the public prepare better for any impending pollution crisis.

Pollutants blowing into Delhi from neighbouring states include dust, industrial emissions and emissions from stubble burning. Not much can be done about dust, the most important source of pollution. But the present spike in SPM is mainly driven by stubble burning in Delhi and the neighbouring states. Addressing it requires cooperation among the concerned states, and the observed moves towards cooperation are most welcome.

What can they do collectively?

Following the “polluters pay” principle, some suggest that farmers burning stubble should be penalized to contain the burning. This is a non-starter. No state government would have either the political courage or the administrative capacity to impose such penalties on millions of farmers who are already under stress. However, a reduction in stubble burning can also be achieved by the opposite policy of rewarding farmers who incur the cost of disposing of stubble by other means, e.g, processing it for manure. Space limitations preempt a discussion of details, but schemes can be worked out, drawing on the armies of sarpanches and patwaris present in every village.

No doubt there will be corruption and leakage, errors of inclusion and exclusion in paying out rewards. But that applies to most government programmes. It cannot justify avoiding a stubble burning reduction programme. In fact, such a programme would have far greater positive externalities than many schemes ongoing today. A more serious question is how such a programme could be funded without unduly burdening the fisc. Since the National Capital Region (NCR) would be a major beneficiary of the programme, the Central government should lead with a centrally sponsored scheme, partnering with concerned states on a cost-sharing basis. The Central share could be financed by cutting poorly targeted non-merit subsidies, like on fertilizers or kerosene. The states’ share could be similarly financed by cutting their tax expenditures and non-merit subsidies, like on power.

The NCR states should also cooperate on programmes for cross-border industrial emissions. The traditional approach is to close down polluting units. While helpful, such C&C policies also encourage “inspector raj” and rent seeking. A combination of penalties for dirty technologies and rewards for adoption of clean technologies may be the best way forward to give the right incentives without a high fiscal cost.

Industrial emission is also an important internal source of pollution within Delhi as shown by the IIT-Kanpur study, hence the same approach could be adopted by the Delhi government within its own jurisdiction. In several advanced countries established carbon credit markets help to discover the market-clearing price to support a target carbon cap. However, it would be premature to jump to such a sophisticated system in India. It may be prudent to first establish a fiscal penalty-reward system, then gradually introduce a pollution permit market over the long term.

Motorized vehicles are the other important source of high SPM 2.5 pollution in Delhi, especially in winter. As explained earlier, merely enforcing individual vehicle-emission standards will not help to achieve ambient air quality standards if the total number of vehicles grows without any limit. To achieve ambient standards, it is essential to restrain the growth in number of vehicles. How can that be done? To simply cap the total number of vehicles of a given type and ban further registration once a cap is reached is a blunt C&C policy which is neither practical nor desirable.

In well-governed cities like Singapore, Shanghai, London and elsewhere, the total number of motorized vehicles is contained through MBIs like a high registration price or high entry and parking fees in restricted zones. This is the way vehicle growth can be contained in Delhi as well, by charging much higher registration fees, introducing zoning and drastically raising public area parking fees, with strict enforcement.

However, such an approach can be considered only if there are adequate alternative means of public transport like the mass transit systems seen in most modern cities. For this, the rapidly expanding Delhi Metro network has to be complemented by other transport modes, especially for last-mile connectivity. Particularly, important here is the acute shortage of buses. When the present government took over nearly three years ago, there were only 5,000 buses on the road instead of the estimated requirement of 10,000. Since then needs have grown but the number of buses is reported to have further declined.

Expanding the bus fleet is most urgent to help contain the growth of personal vehicles. Other important areas of direct intervention by the government would include switching from dirty to cleaner fuels in the city’s power plants, and introducing cleaner technologies for municipal solid waste disposal.

The Delhi government cannot by itself fix the air pollution problem. There is much that is beyond its control. But there is also much that it can do in collaboration with other neighbouring states, and much that it can do on its own to help mitigate the problem.

Sudipto Mundle is emeritus professor at the National Institute of Public Finance and Policy and was a member of the Fourteenth Finance Commission. Comments are welcome at views@livemint.com

5.2. Delhi’s shiny happy sarkari schools

BusinessLine, 10 Nov. 2017, P. Anima

After decades of neglect, Delhi’s government schools are finally turning the page with much-needed improvements to facilities and teaching methods. But problems such as staff shortage and a broken primary education system refuse to go away easily

Delhi’s bustling IP Extension has a familiar skyline — a linear arrangement of ageing residential complexes. A gleaming new building in their midst catches the eye. Until recently, the Rajkiya Sarvodaya Kanya Vidyalaya in West Vinod Nagar was, much like the other 1,000-odd Delhi government schools, characterised only by its unremarkableness. The sprawling new brown-and-cream building in its place is as a pleasant revelation. Tell her that, and principal Manju Shammi straightens up a wee bit more in her chair. The school’s metamorphosis is a matter of special pride for her. It was, in fact, her vision that saw the school being picked for a pilot project along with 53 others in Delhi. Within two years, the infrastructure has been overhauled and there have been systemic interventions as well. The existing 87 classrooms are in various stages of renovation. Seventy-six new rooms have been sanctioned, of which 49 are already functional in the new primary block.

‘World class’ is a term Shammi frequently uses while giving a tour of the building. Physical education classes are underway for senior girls in the new covered courtyard. Some pause to wish the principal. Shammi points to the panelled false ceiling, diffused lights, clean and tiled washrooms, large cans of handwash, water coolers — all newly added at the school. All classrooms have new blue desks and seats. The fans and lights work. But the school’s overarching pride is the 25m swimming pool still under construction. “Can you imagine a government school with a swimming pool?” asks Birender Gupta, the school’s estate manager, who recently moved his children to this school from the private institution they were attending in Bihar. Parents like him are on the rise, says Shammi. “This year we’ve received more enquiries from parents whose children are in

private schools,” she says. Education is free in government schools up to Std VIII and the fee is ₹20 a month thereafter.

Stressing that the changes are not just cosmetic, Shammi says the appointment of the estate manager, for instance, is an unprecedented one for government schools. “Earlier, from getting leaky taps fixed to checking cleanliness, everything was the principal’s job,” she says. An estate manager, hired on contract, will allow the teachers to focus on teaching. “He arrives an hour before schooltime and ensures that electricity and water supply are in order, the classrooms and washrooms are clean.”

The school started nursery classes this year. The specially designed classroom is twice the size of a regular one. It’s crafts hour when we enter. Perched on the shiny new blue benches, the nursery kids are hunched over mounds of dough, engrossed in pressing them into shapes. A few days ahead of Diwali, teacher Noorjehan is telling her KG class to steer clear of crackers.

The changes in the school are not lost on its students. “My school was not very good,” Shivani Dhyani, a Std II student, does not mince words. “But now we drink chilled water. There are good desks. In fact, I don’t feel like leaving school,” she adds. Her classmate Phoolbanu chimes in, “Teachers are taking special effort. I never used the washrooms earlier, but now they are clean. Earlier, we stood in the sun for the assembly, now we have a covered auditorium.”

Students in the higher classes remark happily that from sitting on durries in barely clean classrooms, they have moved into well-ventilated spaces. Ritika of Std X says, “Teachers were not very serious earlier. But now they are, and classes happen on time.”

As construction work is still underway, Shammi is anxious about the children’s personal safety and security. All visitors are duly registered and the workers carry identity cards. Outside the school’s gates, hordes of parents, mostly from West Vinod Nagar, wait to fetch nursery and KG children. Three of Reshma Khatun’s grandchildren study here. As she awaits the youngest, she says, “What was this school earlier... a dumpyard... A lot has changed, of late.”

****

After decades of neglect, Delhi’s government schools are finally turning the page. The Delhi government has, for three years running, allocated a large chunk of its budget to education. Driving in this point, education minister Manish Sisodia said about the budget for 2017-18, “The allocation of 24 per cent... is the highest among all States.” An expenditure of ₹11,300 crore has been proposed for the education sector in the current financial year.

The rejig, which began with the infrastructure, subsequently spread to teacher training and pedagogy. The physical fixes, relatively easier, are beginning to show. It all began over two years ago with a few schools getting selected for a pilot project initiated by the Delhi government. The selections were based on the vision spelt out for each school by its principal. Apart from infrastructure, teacher shortage and quality of education figured among the top concerns.

Two years on, the pilot projects have served as a blueprint. Atishi Marlena, advisor to the education minister, says all the 1,029 government schools in Delhi are now being overhauled.

The biggest struggle so far has been in bringing about changes in the teaching methods. As a large segment of the secondary school students were found to be non-readers, the government launched its Chunauti (Challenge) programme. With the stated aim of teaching children according to their learning level, students from Std VI to VIII were categorised as non-readers, slow readers and proficient readers (neo nishtha, nishtha and pratibha, respectively). However, this move to label children swiftly provoked criticism.

Marlena argues that they had little choice in the matter. A majority of the students in Delhi’s government schools come from an underprivileged background. “More than 50 per cent are first-generation learners,” claims Marlena. But the education system — books, syllabus and teaching methods — is not tailored to meet the needs of first-generation learners. “They will need to be taught differently. By pretending that this reality does not exist we’re just widening the gap further,” she contends.

Delhi’s distinct governance structure adds to the complexity. Primary education is under the Municipal Corporation of Delhi (MCD). Government schoolteachers grumble that children arriving from MCD schools in Std VI are mostly non-readers. “Most cannot read, write or add. Catching up with that gap at that level is difficult,” Marlena explains. Instead of benignly neglecting weak students in a heterogeneous classroom, Chunauti engages with them upfront, she declares.

Despite the initial misgivings of many parents, Shammi too backs the initiative. “We have to identify children who are facing problems.” A year into the programme now, she says it is bearing results. “When children see that other students in class have similar problems, they become more confident. The teacher takes special care to teach at their level. Neo-nishtha gets the best teacher.”

At the Government Girls’ Senior Secondary School in Shakarpur, commonly called the School Block, students of Std VI B flock around their teacher with papers in hand. Rajani Baluni, the teacher development coordinator(TDC), explains that weekly tests are underway for neo-nishtha students. Attentive tending has helped the children move to the next level.

Located bang in the middle of Shakarpur’s narrow market lane, the school was known by a different moniker until recently. As Rehana of Std XI tells it, “It was just the subzi mandi wala (vegetable market) school.” She and her friends used to be embarrassed about it, but not any more. Principal Reeta Kathuria, who admits she hadn’t heard much about the school before joining it four years ago, describes its transformation from the dumping ground it had turned into for the nearby vegetable market to what it is now. To end encroachments, the first thing she did on taking charge was to firm up the compound wall and clear the compound of waste. “Eight trucks of waste were removed. We refilled with soil and raised a garden,” she says. They called it Radhika Kunj.

****

Another of the chosen pilot schools, today it is coated with the grime and dust of renovation. Inherent disadvantages — high-tension wire passing nearby and severe space constraints — mean the school cannot expand. But it now has a new look and new equipment. Rehana’s class has new desks, and is brightly lit and clean. “Ever since it became a pilot school, the impression about it has changed,” she says.

Classes in creative writing, dance, theatre and fine arts have been introduced in the pilot schools. For this, the Delhi government’s cultural wing, Sahitya Kala Parishad has engaged with multiple organisations. When we visit, the cultural hour is in full swing at School Block. Music auditions are on for the upcoming annual day.

Supriya of Std VIII coyly sings “Tum mere humsafar” as her teacher tunes the harmonium. She halts after a few lines and declares she does not remember the rest. In the class next door, the furniture has been pushed to the corners. Girls are standing in line and their theatre instructor is testing them with a few mind games. In the third room, girls draw immaculate Warli figures on cards.

At the creative writing class, Jaishree Sethi is reading a piece written by a small group of students. Baluni has put Sethi in charge of some of the most challenging students. “I had children who had trouble reading and writing even in Std VIII and IX,” Sethi says. Children who could manage to write had difficulty imbibing concepts. “If I was talking to them about theatre, it would take me two hours to explain the concept of theatre, the director etc.” She was introducing them to a world they were not familiar with. “Most of them are first generation learners.”

She goads them to work on ideas and put them into words. Baluni recalls a breakthrough they made last year. Five children wrote poems in Hindi and recited them on stage. Unused to any kind of cultural activity before this, this was a big leap for them. “They were overwhelmed, so was I,” remembers Baluni.

Sethi has her task cut out when it comes to building the children’s confidence. “I cannot change them

overnight, I get to work with them for six months, four hours a week.” She hopes that a child who has learned to think and express herself, will also fare better in an exam. Most of all, she is thrilled that creative writing, long seen as an activity exclusive to private schools, is available to students of government schools.

Baluni’s role as a TDC — a link between teachers, students, the principal and the department — is again a new feature. A teacher for the past 25 years, she had often felt that the system had failed committed teachers earlier. Not anymore. “The platform we get for capacity-building never existed before,” she says. She documents her interactions with teachers on their teaching practices, the difficulties they encounter, as well as their suggestions. She and her peers in other schools later discuss their experiences and feedback at the workshops held for them.

Much like School Block, the Government Girls Senior Secondary School Shakti Nagar 2 is short on space. The school’s reception area opens into a busy lane in north Delhi. “But we’ve had 100 per cent result for class XII,” says its principal, Indu Kaushik. As a pilot school, it now has a new second floor. “We’ll have laboratories and an audiovisual room on the top floor,” adds Kaushik.

Kaushik and Meera Sharma, a senior teacher, say the new system has facilitated greater interaction with parents.“Response to the parent-teacher meetings has improved.” Both Kaushik and Sharma agree that the process will take time to bear results. Chunauti, they believe, is putting too much on a teacher’s already full plate. They suggest hiring specialised teachers for the neo-nishtha segment. They blame the no-detention policy, which forces schools to promote all students to the next higher class until Std VIII, for bringing a lot of non-readers into the senior level. They want systemic changes initiated at the primary level.

At the Government Boys’ Senior Secondary School, Shakti Nagar 1, principal Rakesh Kumar Sorot happens to be helming his alma mater, which is also one of the older schools in the State. Inaugurated in 1957, the building is now undergoing its first-ever renovation on this scale.

It has a large compound and an eco garden occupies a prominent space in front. After being selected as a pilot school, it has added 32 new rooms. The refurbished multipurpose hall has over a dozen air-conditioners and other state-of-the-art facilities. Of the six smart classes sanctioned, two are already functional.

The renovated school has instilled a sense of ownership among the boys, says Sorot, who often catches them standing and staring at it in admiration. Some of them wanted to bring their parents and show them around. “Most of the students come from resettlement colonies and slums. Frankly, though, the gap between government and private schools is closing. I would say we’re getting better than private schools,” says Sorot. A year ago, he and other heads of pilot schools were sent to Cambridge University. There they acquainted themselves with the popular activity-based teaching methods. On returning, he discussed it with his teachers and they now try to incorporate it in their interactions with students. The principals of government schools also meet every month to share best teaching practices. The meetings, earlier restricted to the principals of pilot schools, have now expanded to include heads of all schools. “We also share common problems and try to find solutions,” says Sorot. “Earlier, we had no incentives. So sincerity was missing. Now we have the infrastructure, smart classes and outcome-based workshops. Some school heads have been sent to the

Indian Institute of Management for training.” An added boost for him is the interest shown by the local legislator, who participates in all of the school’s activities, including the student management committee (SMC) meetings.

That attention, in turn, means a demand for greater accountability from the teachers. They are watched hawkeyed by the department of education. They receive a handful of circulars almost every day. “It takes days to implement those. At times, we end up taking work home,” says Sorot.

****

A recent circular cancelling leave for teachers of senior classes until end-February had raised quite a furore. News reports said the move was prompted by the need to help students prepare well for the upcoming examinations. However, the general secretary of Delhi Government School Teachers Association, Ajay Veer Yadav, says such measures smack of dictatorship. “Teachers are eligible for eight casual leave and 10 earned leave,” he points out. The preoccupation with exam results is putting too much pressure on teachers, he adds. “As it is, each teacher is doing the work of two.”

Marlena concedes the circular is “draconian”, but lays the blame on Delhi’s massive shortage of teachers. “The biggest crisis in the education system are the 9,500 vacancies,” she says.

According to Yadav, regular staff make up only about half of the State’s school teaching force. Of the over 60,000 teaching posts in schools, 15,000 are handled by guest lecturers, and close to 10,000 are lying vacant. “Nothing has been done to fix this. New guest lecturers have not been chosen,” he says.

The row over teacher recruitment has reached the Delhi High Court. The Delhi Subordinate Services Selection Board examinations, the recruitment test for teachers, have been stalled since 2014, as the State government and Lieutenant-Governor (L-G) differ on the issue of regularising existing guest lecturers. “If we conduct recruitment now, those guest teachers will never get regularised. The L-G has been refusing our proposals,”says Marlena. In September, the Delhi HC stayed the appointment of new guest teachers.

****

Any call to overhaul Delhi’s education system frequently comes up against the tussle over the no-detention policy — a vital part of the Right to Education Act.

Says Kiran Bhatty, senior fellow at Centre for Policy Research, “The no-detention policy exists for a very good reason, and raising questions about it is unfair.” She further argues that it is short-sighted to blame the policy for all the ills in the education system. Corrective measures, she suggests, should instead focus on improving the quality of education in MCD schools.

Contending that teachers are the least-empowered players in the system, she warns against the dangers of threatening them with punitive measures. “Punitive measures should be effected from the administrative level — the top,” she says. She lauds the ongoing infrastructural makeover efforts as an exercise in instilling selfworth among students. Agrees Marlena, “I realise how important it is. Children had also so far considered swanky schools the privilege of the rich.”

Countering Yadav’s assertion that many schools in the Capital still function out of tin sheds, Marlena says the efforts will soon cover even those schools. “Eight thousand new classrooms were made in the first phase. We are in the process of sanctioning 13,000 more rooms in the second,” she says, adding that 29 new schools are also being constructed. That still leaves a huge deficit from the promised 500 new schools. “Land belongs to the Delhi Development Authority. They were willing to provide us land for ₹4 crore per acre,” Marlena says. Consequently, the government was forced to scrape out land from its own properties and that was enough for just 29 new schools across the Capital.

As a system churns, its key players — teachers and students — pray that there should be no dire reversals. For teachers such as Seema Varma who have experienced the apathy that had hitherto characterised the system, a relapse would be nothing short of heartbreak. “Frankly, I fear it is going back to what it was. It is important to sustain the motivation and energy that’s now part of the system,” the teacher pleads.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. Agri sector's contribution to GDP up by 2%: Arjun Ram Meghwal

PTI, Nov. 10, 2017

Udaipur: Union Minister of State for Water Resources Arjun Ram Meghwal today said the agriculture sector's contribution to the country's GDP has increased under the present government's rule.

Speaking at the closing ceremony of global agritech meet here, the minister also encouraged farmers to focus on growing horticulture and commercial crops to increase their income.

Meghwal said the role of agriculture sector in GDP has increased by 2 per cent and now the efforts will have to be made to further enhance it.

He said the state government is taking all steps and initiatives to double the income of farmers by the year 2022 and the farming community should also focus on horticulture and commercial crops to get more income.

Union Minister of State for Law P P Chaudhary highlighted the steps taken by both the Centre and the state government for the welfare of farmers.

He said that more than seven crore soil health cards have been distributed and the government has taken steps to check black marketing of urea which has benefited farmers.

The state agriculture minister, experts of the farming sector, farmers and others were present on the occasion. The event began on Monday which was participated by experts, farmers and companies.

The government also signed an MoU with companies in the area of food processing, cold storage and ware house, training and education, green house farming, among others.

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

6.2. A bitter harvest: low prices leave farmers seething

BusinessLine, 15 Nov. 2017, Vishwanath Kulkarni

The Narendra Modi government is finding it hard to live up to its promise of doubling farm incomes by 2022 given the challenge it faces in addressing the unremunerative prices of farm produce.

The kharif harvest began a little over a month ago, and already the prices of a majority of the crops have slipped below the minimum support price (MSP). Indeed, average prices for farm produce across mandis were lower in November than in the previous month and the corresponding month last year (see table).

This decline in prices is despite the fact that output in many cases is either flat or marginally lower than last year; black gram and cotton are the exceptions, with an increase in output.

It isn’t just agricultural produce; even the procurement price of the milk that farmers supply dairies has dropped in Maharashtra and Karnataka.

This decline across farm produce categories has caused unrest among the beleaguered farmers, who are resorting to protests, albeit sporadic ones, in Gujarat, Maharashtra, Karnataka and Punjab.

The All India Kisan Sangharsh Coordination Committee, a coalition of over 180 farmer associations, had recently pegged the losses incurred by growers on account of the drop in prices against the MSP this kharif at a whopping ₹35,968 crore.

Note-ban impact

The poor demand from traders and stockists, who are said to be facing liquidity issues due to demonetisation, as a result of which their inventory management has been disrupted, and lack of export parity for commodities such as soyabean and maize, are said to be influencing the mandi prices.

“With liquidity not restored, traders are hesitant to take positions. Also the lack of a stable policy on stocking limits is seen influencing the prices,” said Tejinder Narang, a grain trade analyst.

“We are monitoring the prices,” said Ramesh Chand, member, NITI Aayog, attributing the lower prices to the “lack of competition from buyers in the mandis”. He, however, disagreed with the trade claim that liquidity issues were hurting market prices, while stressing upon the need for States to speed up implementation of market reforms to attract large buyers.

Though government agencies have begun procurement in several States, the exercise has not yet stabilised prices. Nafed has, so far, procured over 1.03 lakh tonnes of moong and about 47,000 tonnes of urad this season, a fraction of the estimated output of 1.32 million tonnes and 2.53 million tonnes, respectively. “It is nothing, but a disaster,” said Ashok Gulati, former CACP chairman, referring to the sharp decline in prices of pulses and oilseeds

Gulati blamed the current crisis in pulses on a combination of factors, such as a bumper harvest last year, export controls and stocking limits imposed by the government on private trade, and record imports.

Policy flip-flop

One way to wriggle out of this piquant situation is to jack up import duties, which the government has begun to do with yellow peas. “But this flip-flop policy won’t work,” said Gulati.

YK Alagh, former Union Minister, said the wrongly timed import of several items of produce, including edible oils and pulses, adversely affects pricing at a time when farmers have begun sowing the next crop. The pressure on farmers to sell their produce to meet their immediate cash requirements is forcing them to sell at prices below market rates. In Gujarat, groundnut farmers are facing issues with payments, which are being made after 3-4 weeks.

In Karnataka, maize growers are battling falling prices in the absence of any clear signals from the government on procurement. Kishor Tiwari of the Maharashtra State Task Force claimed that cotton and soyabean farmers in the State were facing losses to the tune of ₹10,000 crore due to pest attacks and low prices.

“The farm crisis is worsening by the year,” says Devinder Sharma, farm policy expert. “Earlier the debate was on low productivity and lack of improved technologies/varieties; but now, the focus is seen shifting to the income security of the farmers,” he added.

“The government should look at providing a stimulus package like the one it announced for the

roads/highways sector recently,” Sharma said.

(With inputs from TV Jayan in New Delhi and Rutam Vora in Ahmedabad. This is the first in a series on farmers’ distress)

7.1. World Bank to provide US$ 200 mn loan for farm sector in Assam

PTI, Oct. 31, 2017

New Delhi: India today signed a USD 200 million loan agreement with World Bank to facilitate investment in the agricultural sector and increase productivity in Assam, benefiting over 500,000 farm households. The loan from the International Bank for Reconstruction and Development (IBRD), has a 7-year grace period, and a maturity of 16.5 years.

"The project will support the Government of Assam to facilitate agri-business investments, increase agriculture productivity and market access, and enable small farm holders produce crops that are resilient to recurrent floods or droughts in the state," the finance ministry said in a statement.

It will be implemented in over 16 districts of Assam and over 500,000 farming households will directly benefit from the project, the release said.

"At least 30 per cent women are expected to participate in project activities. Specific focus will be given to women- led enterprises and their participation in the decision-making process of farmer producer organisations," the ministry said.

Speaking on the occasion, Hisham Abdo, Operations Manager, World Bank, said that Assam aims to double farm income in the state and transform the agricultural sector into a stable source of growth and economic development.

He said this project will serve as the nucleus to fulfill the State s much larger vision of an agriculture-based rural transformation.

Another key component of the project will be to promote market-led production that can deal with the vagaries of climate change.

"Assam's agriculture sector is highly vulnerable to climate variability and the state experiences recurrent floods and droughts," the release said.

Currently, more than 50 per cent of the paddy growing areas are prone to flooding, submergence and drought. "A market-led production system will take advantage of the rapidly changing market, introduce crops that are resilient to climate change, increase production and manage risks for farmers," the ministry said.

Manivannan Pathy, Senior Agricultural Specialist and World Bank's Team Leader for the project said that the value addition and market led production systems supported through the project are expected to play a vital role in enhancing the competitiveness of the agriculture sector.

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

7.2. Harsimrat Kaur Badal: Govt will spend Rs 6,000 crore to create food processing infrastructure

Livemint, Nov. 02, 2017

New Delhi: Ahead of the World Food India event aiming to attract investments and the latest technology in food processing, Harsimrat Kaur Badal, minister of food processing industries, announced on Wednesday that investments to the tune of Rs65,000 crore have already been committed by companies. In an interview, she said the government wants to transform India’s food economy and double farm incomes by bringing in the best global technologies.

Edited excerpts:

Currently, just 10% of food produced in India is processed and you are targeting to take it to 30%. How are you going to do that?

We are going to do this by creating the infrastructure for food processing through schemes like the Pradhan Mantri Kisan Sampada Yojana. We will spend Rs6,000 crore over the next three years to create the infrastructure which will leverage investments worth Rs31,000 crore. When I am putting up this infrastructure, I want to bring in the best technology of the world, which is why we are having this event where the best in the processing industry—manufacturing, technology, reefer vans, R&D (research and development), lab testing — comes in.

What explains the resurgence in food processing? You said today that Rs65,000 crore investment commitments have come in ahead of the World Food India event.

First we worked for creating an environment. When there is policy paralysis and nothing is happening on the ground no one is interested to come. First we brought in a Rs2,000 crore corpus fund to provide cheaper credit. We also brought incentives in terms of taxes and import duties. The other thing we brought in was transparency in the whole procedure. Those who want to make use of the Sampada (scheme) grants do not have to grease palms. We have removed the government interface and made it all online, so someone from South (India) does not have to come running here to apply. Then we worked to create the markets and (allowed) 100% FDI (foreign direct investment). We have also worked to create a cold chain grid.

Simultaneously, as this infrastructure is coming we want to collaborate with the West... We are telling them this is our infrastructure, we have a $600 billion retail sector out of which $400 billion is food retail. The markets are there, there is no dearth of raw material, the infrastructure the government is subsidizing and incentivizing and the middle class is also wanting more and more ready-to-eat foods. So companies are looking at Indian markets... and while they grow their business we will learn from their technology to make ourselves the global food factory.

Food processing as a sector has a deep rural connect. But how much will the farmer benefit? Will these industries be set up close to the farm gate?

The food processing industry has to connect with the farmer. Whatever they are processing they have to have storage and preservation facilities at farm gate level. They have to have reefer vans and transportation facilities. What is lacking for the farmer today is storage, transportation, and good scientific methods. This is what the industry is going to provide. This is going to help the farmer who is now forced to sell to the nearest market or middle man. Even better, the farmer will have the option to preserve and sell when prices go up, or value add and become a processor himself. My aim is to provide all these opportunities to the farmer. Food processing will not only play a pivotal role in doubling of farm incomes but also job creation. In any mega food park, a large number of women are employed. Besides processing it will also help reduce wastage and make food available for more people at reasonable prices.

How much of FDI has come into food processing in the past few years?

In 2015-16, it was $500 million which rose to $740 million the next year. This financial year $200 million has come in already. We have got big companies like Amazon which is into e-retail committing $500 million over next 2-3 years. We have companies like Bigbasket, Grofers, Metro Cash and Carry.

Food processing is a seasonal industry. How much of that is a challenge?

That has been the biggest challenge. It is capital intensive like any industry but since it is seasonal in nature (like mangoes can only be processed during harvest season) a company has to bear expenses year round. We are telling big industries to use the facilities in the mega food park, that instead of using Rs200 crore to set up one industry they can set up units in 10 parks using common facilities. Nine mega food parks are functional and we have had 264 meetings with people who are going to invest in these parks. To put up a separate unit in the park we are giving incentives to companies.

Traditionally Indian households prefer fresh to processed food. Do you think in such a scenario the industry can grow rapidly?

Everything we eat today from the wheat flour to ghee and sugar is processed. The only thing is that the variety of healthy things we eat which is processed should increase. Today when you pluck an apple it starts losing nutrients. If the same apple was plucked and preserved to maintain its nutrients, you’re eating something more healthier. Indians are having fresh food but are more malnourished than Western countries as our food is losing nutrients during transportation and storage.

But food safety does play a critical role in processed food industry.

Yes, it plays a very important role... that is why we are having it in the GST (goods and services tax) net so the unorganized sector comes into the organized sector and the consumer is assured of a standard. So Food Safety and Standards Authority of India (FSSAI) is launching a food regulatory portal. So anyone can go and see the parameters of what they are consuming.

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

8.1. Amul’s utterly Twitterly business offer gets butterly reply from Railways

PTI, 25 Oct. 2017

Dairy giant Amul today reached out to Indian Railways on its official Twitter handle with a business proposition to use its refrigerated parcel vans to transport Amul Butter across India.

“@RailMinIndia, Amul is interested in using refrigerated parcel vans to transport Amul Butter across India. Request to please advise,” the dairy major tweeted to the Railways.

The Railways promptly responded on the micro-blogging site, using a popular tagline of the Amul brand.

“IR will be utterly butterly delighted to get the taste of India to every Indian,” the ministry’s handle @RailMinIndia tweeted.

Indian Railways extensively uses Twitter to address passenger woes.

But this could perhaps be the first time the national transporter has received a business proposition on the micro-blogging site.

Refrigerated van service

Indian Railways had introduced the refrigerated van service a few years ago to facilitate the transportation of perishable commodities such as fruits, vegetables, frozen meats/poultry and chocolates, but most of the vans were lying defunct, according to a ministry official.

Moreover, this service exists only on specific routes. “We would certainly like to capture this traffic. Let us see what can be done,” the official added.

The senior manager of the Ahmedabad Division will meet officials from Amul tomorrow to discuss this, said the official.

He said the South Western Railway has some refrigerated vans, and that they could be repaired and used by the Railways to assist Amul.

8.2. Indian retail market expected to reach US$ 1 tn by 2020

PTI, Nov. 16, 2017

New Delhi: The Indian retail market is expected to grow over 60 per cent to hit USD 1.1 trillion in the next three years, said a joint report by Assocham and MRRSIndia.com.

This growth in retail market will be led by factors such as change in lifestyle and rising income middle class, which helped the FMCG industry to grow at a rapid speed over the past few years.

Retail market in India is estimated to reach USD 1.1 trillion by 2020 from USD 672 billion at present, with modern trade expected to grow at 20 per cent per annum, which is likely to boost revenues of FMCG companies, the report said.

It further added: "FMCG market in India is expected to grow at a CAGR (compound annual growth rate) of 21 per cent and is expected to reach USD 103.7 billion by 2020 from USD 49 billion in 2016".

Retail and FMCG markets in India are exponentially growing and are expected to grow at 20 per cent and 21 per cent, respectively, said the study by industry body Assocham and media group MRRSIndia.com. The rural FMCG market in India is expected to grow at a CAGR of 14.6 per cent, and reach USD 220 billion by 2025 from USD 29.4 billion in 2016.

Moreover, the e-commerce will also play a role in the growth story of the sector.

"E-commerce and digital connectivity is not limited to the urban localities, with rural population using these services with high penetration of smartphones, credit cards/ debit cards and online banking services. There are customers sitting in far and wide corners of India waiting to be serviced," it added.

However, it also added that "making their products available to them is next big challenge before large FMCG companies".

Health and wellness is a mega trend shaping consumer preferences and shopping habits.

Leading global and Indian food and beverage brands have embraced this trend and are focused on creating new markets demands.

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

9.1. Brand Tata back on solid ground under Chandra

BusinessLine, 23 Oct. 2017

Walk into Bombay House these days and you will not find any reminiscence of the mayhem that had broken out a year ago when then chairman Cyrus Mistry was unceremoniously sacked.

The sense of disbelief, despondency and uncertainty has been replaced by purpose, decisiveness and hope going by what a number of company insiders told BusinessLine.

“A year ago we were shocked. All hell had broken loose. How could this happen in the Tata Group was the first reaction. But 12 months later it’s almost as if nothing happened. We have taken positives out of the entire saga and we have worked on areas that needed attention,” said a senior Tata executive.

The same executive had told BusinessLine last year that the mood within the group then was one of

uncertainty, with several businesses within the group struggling and on the verge of collapse.

While messy boardroom battles are known to impact the brand significantly, the Tatas have managed to contain the impact, thanks to Mistry failing to get a favourable ruling in most court hearings.

“When the tussle broke out, many group employees were uncertain as to who was right. On the one hand, Mistry had made allegations of interference and mismanagement, but on the other, the Tatas are not known for such events. It was confusing for most,” said an executive close to the Tata’s legal team. But when neutral entities such as the NCLT started commenting mostly in favour of Tata Sons, Mistry’s campaign lost steam. When N Chandrasekaran took charge as Chairman of Tata Sons in February, he was faced with multiple challenges, including loss-making businesses, skewed capital allocation and the fallout on brand Tata, post Mistry’s exit.

Eight months later, many of these challenges have been addressed through some tough decision-making. Tata’s bleeding mobile services unit has been given away to Airtel in a zero cash, zero debt deal, which Tata Group CFO Saurabh Agrawal termed as “ gulping the poison”.

Similarly, a decision has been taken to form an equal joint venture between Tata Steel’s Europe assets and Thyssenkrupp. These two deals alone will lead to savings of several thousands of crores for the Group. “Chandra has moved quick and decisively. Some of the points flagged by Mistry, including doing away with the complex cross-holding structure and exiting stressed assets, have been addressed. This has brought in confidence within the Group,” said a former Tata executive.

9.2. Demand for quality goods/services rise in rural India: SBI

PTI, Nov. 16, 2017

New Delhi: The demand for quality goods and services is increasing in rural India reflecting improvement in living standards, an SBI report said today.

"The good thing is that prices of discretionary consumption in rural areas has been on a declining trend since 2015-16.

"One possible reason for such is that big manufacturing / FMCG companies have significantly revved up their distribution channels in rural areas," SBI said in its 'Ecowrap'.

The SBI has factored in items of discretionary consumption as soft drinks, prepared meals, snacks, recreational and amusement, and personal care, among other things in the report.

In India, it said the consumption pattern of the people has been continuously changing with the change in their livelihood, mostly in rural areas.

"With the betterment of rural livelihood, the demand for better quality goods and services is increasing in rural areas," said Ecowrap.

The report noted that non-discretionary (food, electricity, fuel and light, clothing and housing) items have also witnessed declining trend with the decline much more steeper since July 2016.

While the crash in food prices has been one of the reasons, the report said, adding "we believe such decline is also fueled by the big impetus that has been given to Pradhan Mantri Ujjwala Yojana (PMUY) that almost coincided with the beginning of such decline (launched in May 2016)".

The report has also analysed the impact of PMUY on rural fuel and light retail inflation for 10 states.

"These 10 states accounted for 95.3 per cent of total connections and among them Uttar Pradesh, Madhya Pradesh and Rajasthan accounts for top 3 places," it said.

The data shows that the states where more number of connections were distributed (like UP, Rajasthan, Odisha), the rural fuel and light inflation has significantly declined/ stayed flat since the launch of the scheme (May 2016).

The report has also made suggestions to the government to make this PMUY "more successful", including frontloading the subsidy payments to the oil marketing companies so that the subsidy payments are released to the poor people within a stipulated time of say maximum a fortnight from booking.

Further, the government should now target some of the states like Chhattisgarh, Haryana and Maharashtra where the number of LPG connections have not expanded significantly.

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

10.1. Hershey plans to turn India into export hub

Business Standard, Nov. 06, 2017

New Delhi: Global chocolate major Hershey is considering turning India into an export hub.

The company, which has recently urged Prime Minister Narendra Modi to ease export-import norms, plans to use the huge market as a testing ground for its newer products. India can be turned into an incubation hub for Hershey products once barriers are removed, said Steven Schiller, president international, Hershey global.

“During the round table meeting with Prime Minister Narendra Modi, I mentioned about two areas that require focus. And they are about simplifying import and export barriers and tariffs here. India is a huge market and we want to build infrastructure here. But that’s a very expensive proposition. Despite the fact, that India has potential to be turned into an export hub. Also, we would like to bring our global products here and test them and then take them to other markets,” he said.

Hershey, which has committed ~320 crore of investment over the next five years in the country, is also looking at bringing in new brands here. The majority of its investments would be channelised towards building its existing and new brands.

The company, makers of chocolate syrups and Jumpin mango juices, plans to export all products such as soyabean milk, spreads and Jolly Rancher lollypops that it currently markets in the country to markets in West Asia, where significant number of Indian diaspora reside.

Lack of scalable quantity is a major hindrance in doing so, Schiller said. Once the regulatory norms are in favour, however, the company can begin exports “fairly quickly”, he said. “It’s a great opportunity. We would like to export at least half a dozen items from here, which will also optimise transport cost,” he said. “But (for that) we would like to have a zero duty trade kind of environment.”

To utilise the diverse market and consumer insights that can be gathered from the country, Hershey also envisages to use India as an incubation and development hub for new products. According to Schiller, the company can bring innovative products here and then test them in the market and do further research, before taking them to other markets.

“I think India can be a good incubation hub. In fact, we had been discussing this very recently. Some of our products that received less success outside, have been very successful here. So we replicating that model in other markets makes sense. We have got good R&D and manufacturing capabilities here and solid marketing talent, as well. We should be able to learn here and take that knowledge. But today it is insulated,” he said.

Of late, Hershey’s business in India has witnessed rapid growth. While in 2016 it posted 40 per cent growth, during the last quarter, its business grew by 16 per cent.

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

10.2. To increase silk production Government has pumped Rs. 690 crore: CSB

PTI, on BusinessLine, 28 Oct. 2017

To counter China’s growing silk production, the Government of India has pumped in Rs. 690 crore in 24 districts in the North East region, Central Silk Board (CSB) chairman K M Hanumantharayappa said today.

“Under North East Region Textile Promotion Scheme (NERTPS), 24 projects worth Rs. 690 crore is being implemented in NE states and of these, six are in Assam, one in Sikkim, two each in Meghalaya and Manipur and the rest in other states,” Hanumantharayappa told PTI on his one day visit to the state.

He said the scheme is being implemented under two broad categories — the Integrated Sericulture Development Project (ISDP) and the Intensive Bivoltine Sericulture Development Project [IBSDP] covering Mulberry, Eri and Muga.

The scheme is aimed at a holistic development of sericulture in all its spheres from plantation development to production of fabrics with value addition at every stage of production chain.

“All four commercially exploited varieties of silk — mulberry, muga, eri and tasar — are produced in the North—east and this region contributes about 21 per cent of the total silk production in the country,” he said.

The Silk Board chairman also informed that the government has big plans as far as promotion of silk farming is concerned to meet the domestic demand and also at the same time to counter China’s Silk production He also lauded the eri production which has reached 3,600 tonne in 2016—17 even as muga production was 141 tonne and production of mulberry silk stood at 45 tonne this year.

In Meghalaya, the Centre has funded a pilot mulberry project for three years worth Rs. 29 crore at Thadlaskein in West Jaintia Hills district and also at the government farm at Laban.

The mulberry farms in Meghalaya are almost a 100 year old, first set up by the British in 1925 but their growth story after Independence is negligible and is a dying art at present.

Taking a cue from what the British did, the Centre has identified three districts in Meghalaya and an intensive awareness campaign will be launched to help draw back silkworm farmers to the trade.

“Before we started silk board, British had identified Shillong as a centre for rearing silkworms. We are implementing a Rs. 29 crore 3 year n—to—n project in Mulbery production wherein nursery, land development, plantation, rearing tools, rearing house, irrigation for plantation, cocoon, product development, marketing and training for farmers,” he said.

The Integrated project for Eri, Mulbery and Muga is in West Jaintia Hills district, Williamnagar in East Garo Hills and Trikkikilla in West Garo Hills district, the Central Silk Board, chairman added. PT

- INDUSTRY, MANUFACTURE

11.1. Flipkart to launch its own smartphone under the Billion brand

Livemint, 10 Nov. 2017, Anirban Sen and Mihir Dalal

The Flipkart smartphone, called Billion Capture+, will be priced at Rs10,999 for the 32GB model and at Rs.12,999 for the 64GB model, and will launch on 15 November

Bengaluru: India’s largest online retail firm Flipkart will launch a new smartphone under its Billion brand, which is the first major initiative by co-founder and executive chairman Sachin Bansal since he stepped aside as chief executive in January 2016.

The new, so-called Made for India smartphone called Billion Capture+ will go on sale on Flipkart on 15 November.

The Flipkart smartphone, based on the Android operating system, will be priced at Rs10,999 for the 32GB model and at Rs12,999 for the 64GB model, Billion category head Hrishikesh Thite said.

The phone has been designed, engineered, manufactured and tested in India, he added.

The phone’s appeal with customers will be closely tracked.

Flipkart, which is the leader in the crucial smartphone category, boasts of key partnerships with top phone brands such as Xiaomi, Samsung, Vivo and Oppo, all of whom have competing products with Billion Capture+.

Overall smartphone sales account for more than 50% of all e-commerce in India.

In an interview, Bansal said that Flipkart will launch more products across categories such as large appliances under the Billion brand over the coming months.

“This is a very significant event for us, given that a hi-tech product like a smartphone takes our brand to another level. What we have done better from our side is that we’ve tried to understand consumer needs better, we’ve tried to understand what are the features in a smartphone that they would like to see more of and what are the kind of features that they don’t use much. And that’s something that we’ve used to over-index on those features that they need more in a smartphone, and we’ve taken away those features that they don’t value as much,” said Bansal.

The launch of the new smartphone brand raises the prospect of a possible cannibalization of sales that Flipkart gets from its top smartphone brands, although Bansal dismissed the possibility of that happening. In July, Flipkart launched Billion across categories such as home appliances and fashion—Bansal’s first initiative since he stepped aside as CEO in January 2016.

Mint had first reported on 15 June that Bansal was developing Billion and that Flipkart may also offer a lowpriced smartphone under the brand to compete with the likes of Xiaomi and Micromax.

Under the Billion private label, Flipkart has already launched mixer grinders, cookware, backpacks and irons, and will expand to other categories over the next few months.

“Eventually we want to launch everything. But there are a couple of things that drive the prioritization—one is to find the manufacturers who will work with us according to the quality expectations that we have and the scale expectations that we have. The other is our bandwidth. We have a team of 50 people. There’s a limited bandwidth that we have,” said Bansal.

Flipkart has, so far, positioned the brand as a value-for-money offering, indicating that it will be a budget brand. The name Billion is a favourite of Bansal’s—the company’s flagship sale event is called Big Billion Days.

Bansal’s attempt at building the Billion brand is one of Flipkart’s supplementary bets. He has a 50-member team for Billion that includes sourcing executives, marketing managers, engineers and product experts.

The initiative is also part of Flipkart’s efforts to increase sales of private label products, which offer higher margins to online retailers than those sold by third-party brands.

11.2. India plans 20.000 MW solar tender, eyes domestic manufacturing boost

Livemint, 10 Nov. 2017, Utpal Bhaskar and Jyotika Sood

The 20GW solar tender will help further lower solar power tariffs in India and spur local manufacturing of equipment like solar panels

New Delhi: India plans to invite bids for setting up 20 gigawatts (GW) of solar power capacity—the world’s largest solar tender—at one go, in an attempt to spur domestic manufacturing of solar power equipment.

The effort will help further lower the country’s solar power tariffs and provide a boost to the National Democratic Alliance (NDA) government’s Make in India plans.

Most solar power developers in India have been sourcing solar modules and equipment from countries such as China, where they are cheaper. This has resulted in domestic manufacturers accounting for only around 10% of the market despite India having an ambitious 175GW clean energy target by 2022, of which 100GW is to come from solar projects.

“We are planning to introduce the idea of mega bids to boost solar equipment manufacturing in India. This may also result in a substantial reduction in tariffs,” a senior government official said on condition of anonymity.

According to the contours of the tender being worked out, the ministry of new and renewable energy (MNRE) plans to award these contracts to developers who will quote the lowest price at which they will sell electricity in the auction process for the grid-linked capacity. The projects are expected to be commissioned in phases.

“The tender is being conceptualized by MNRE. These contracts will be awarded in one go with developers to construct projects in phases. Once people see visibility of such projects, then manufacturing can kick in,” said a second person aware of the development, who declined to be named.

Solar modules, or panels, account for nearly 60% of a solar power project’s cost. For China’s solar panel manufacturers, with a capacity estimated to be around 70GW per year, the major markets are the US, India and China itself.

Solar tariffs fell to a record low of Rs2.44 per kilowatt hour (kWh) in May, and firmed up to Rs2.65 per kWh in an auction by the Gujarat government in September. These tariff levels are lower than the average rate of power generated by coal-fuelled projects of India’s largest power generation utility, NTPC Ltd.

“The mega tender has been in discussions. For it to be effective, a holistic view needs to be taken with reference to land availability and the evacuation of the electricity generated,” said another government official, who also spoke on condition of anonymity.

The consultations have started, but there are issues in terms of land and evacuation of power, added the first government official.

Raj Kumar Singh, minister for power and new and renewable energy, has announced that 20GW each of wind and solar power contracts will be auctioned to help India achieve its ambitious clean energy target by 2022. “It is a good plan but will face the challenges of who will sign the PPAs (power purchase agreements) of this quantum? That has to be planned,” said the second person cited earlier.

The solar industry welcomed the move; firms are hoping problems associated with the sector are adequately addressed.

“It is a great move. Bidding pipeline has gone dry for quite some time and this is very much welcome. This reinforces the government’s commitment to solar... I would also hope that issues related to land acquisition, electricity evacuation and PPAs are simultaneously addressed,” said Sanjay Aggarwal, managing director at Fortum India Pvt. Ltd.

The tender comes against the backdrop of concerns that declining green energy tariffs may result in electricity offtake commitments from wind and solar projects at higher tariffs not being honoured.

“One needs to accept the new reality that with the current module prices and looking at their trend in coming months, it’s hard to imagine that tariffs would be sub-Rs3 per unit,” added Aggarwal.

Queries emailed to an MNRE spokesperson remained unanswered.

Seized of the issue, the government has planned a legal route for power sector reforms that include enforcement of signed PPAs, making it mandatory for any power distribution company to have PPAs covering 100% of the annual average demand, penalties in the event of electricity generators’ dues not being cleared in time and statutory renewable purchase obligations.

12.1. Readymade garment exports up 25% in Sept; firms say can't sustain growth

Business Standard, Oct. 25, 2017

Mahindra LifeSpaces Developers Ltd (MLDL), the real estate arm of Mahindra Group, has partnered with to develop affordable housing projects.

The platform will develop five-10 million sq ft in various locations selected for its projects, under the Happinest brand. The proposed projects will be undertaken through Mahindra Happinest Developers with a 51:49 share between Mahindra and HDFC Capital. The first project to be undertaken by the joint platform will be Happinest Palghar. The project is expected to be launched in the second half of FY18.

Mahindra has been present in the affordable housing segment since 2014, through its category brand, Happinest. Over 1,600 units have been launched in Chennai (Happinest, Avadi) and Mumbai Metropolitan Region (Happinest, Boisar), with close to 1,000 homes already handed over. Its products are currently priced between Rs 17 lakh and Rs 27 lakh, and offer strategic connectivity and vibrant community living options.

Anita Arjundas, managing director, MLDL, said, “Affordable housing is a critical component of quality urban infrastructure, as also a growth driver for the real estate industry in India. We are delighted to partner with HDFC Capital which will leverage the experience and commitment of each organisation, to develop affordable homes, creating a sustainable value for our customers, while also addressing the largely unmet demand in this segment. Vipul Roongta, chief executive, HDFC Capital Advisors, said, “The objective of this platform is to invest in budget residential projects by providing long-term equity. Lack of long-term capital is one of the key challenges for the the low- and middle-income groups in India.”

HDFC Capital’s first fund is dedicated to addressing this funding gap by providing long-term equity-oriented capital for developing projects in urban and semi-urban peripheral areas.

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

12.2. India's textile market to touch USD 250 bn in 2 years: Study

PTI, Nov. 09, 2017

New Delhi: India's textiles sector is likely to touch USD 250 billion in the next two years from the current level of USD 150 billion, a study said today.

The joint study by Assocham and Resurgent pointed out that the textile sector in India accounts for 10 per cent of the country's manufacturing production, 5 per cent of its GDP, and 13 per cent of exports earnings.

The study observed that textile and apparel sector is the second largest employment provider in the country and employed nearly 51 million people directly and 68 million people indirectly in 2015-16.

However, it said that demonetisation and the transition to GST have hit smaller players hard.

"The number of workers affected due to closure of cotton and man-made fibre textile units (bigger units that comprise the non-SSI segment of the industry) during 2016-17 was 4,356 on account of the closure of 18 units, according to official Textile Ministry data on non-SSI units," said the study.

"During the previous two years, the numbers were 7,938 workers affected by the closure of 27 units in 2015-16 and 5,384 workers affected from the closure of 21 units in 2014- 15, taking the cumulative figure to over 17,600 workers impacted by the closure of 67 units in the last three years" it said.

It found that the rollout of the Goods and Services Tax (GST) has further hit small and medium players in textile hubs such as Surat, Bhiwadi and Ichalkaranji.

Moreover, capital goods firms are struggling as most of the downstream sectors are saddled with excess capacity and low demand.

Releasing the study, Minister of State for Textiles Ajay Tamta said the textile and handicrafts sector is economically important from the point of low capital investment, high ratio of value addition, and high potential for export and foreign exchange earnings for the country.

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

12.3. Raymond to relaunch FMCG portfolio in overseas markets

BusinessLine, 16 Nov. 2017

Textile major Raymond is planning to relaunch its FMCG brand Park Avenue in West Asia and SAARC countries.

The efforts are part of ‘One Park Avenue’, Raymond’s initiative to reposition the male grooming brand in the wider grooming portfolio and boost its presence internationally.

“The 27-year-old Park Avenue is a ₹1,000-crore brand today. We are reinventing it for the global market as a new-age world class product as there is going to a stronger focus on FMCG business for the Raymond Group,” said Gautam Hari Singhania, Chairman & Managing Director, Raymond.

Despite making a foray into overseas markets, Park Avenue has been a dormant brand for the past couple of years. Even its other FMCG brand — Kamasutra — has a limited presence though it is registered in 94 countries.

Raymond’s FMCG portfolio is spread across two companies — JK Helene Curtis and JK Ansell. It recently acquired the balance stake in Ansell and the two FMCG companies may be consolidated. “Our revenues from the two FMCG companies stood at ₹500 crore in FY17,” said Singhania.

Park Avenue, its leading brand, has 12 products in its portfolio including deos, soaps and shampoos. It has now been extended as an eau de parfum.

“In the personal care segment our margins range between 40 and 70 per cent. We had to get our FMCG house in order to make an entry into the overseas markets as it has been dormant for the past three-four years,” said Giriraj Bagri, CEO - FMCG business, Raymond.

In the domestic market, Park Avenue is available at nearly 2 lakh outlets. In the deo category, it claims to have a share in excess of 10 per cent, next only to Vini Cosmetic’s Fogg brand, which has a 16 per cent market share.

13.1. How Walmart pivoted its India strategy and succeeded

BusinessLine, 6 Nov. 2017, Tanya Thomas

When Krish Iyer took charge of Walmart India’s operations in 2013, the American giant faced a number of major challenges.

The joint venture with Bharti Group had just broken up, there were investigations into allegations of bribery against some of its executives and the future of its retail business seemed uncertain, given the stringent foreign direct investment rules governing the sector.

Four years later, though some of these concerns still remain, Iyer has led the company’s smart pivot from its traditional strength of selling directly to retail consumers to selling to small wholesale buyers in India with its chain of cash-and-carry stores.

The bets are beginning to pay off: each of Walmart’s India stores has turned profitable at the store level. “This year, India was made a priority market for Walmart, which means we’re getting more resources, more talent. This will help in accelerating stuff, and investments in the back-end and the supply chain will happen,” Iyer, President and CEO, Walmart India, told BusinessLine.

Walmart has 20 such cash-and-carry (CC) stores in India and is expected to launch 50 stores by 2021 at an overall investment of over $500 million. The initial success has given the company the confidence to move into other formats.

This week, it launched its first fulfillment centre (FC) in Mumbai, an improvement on its cash-and-carry store model, which will hit markets much faster and focus exclusively on FMCG products and staples.

“We’re following both the CC and FC models simultaneously,” Iyer said. “We have plans in the pipeline to open another FC in Lucknow. The Mumbai store is a pilot, and if we see proof of success here, we know the model is viable. With the FC, we can open stores much faster.”

The Mumbai fulfilment centre is built on a 4-acre plot and was launched in 60 days. In comparison, a fullfledged CC store still takes about two and a half years to set up.

Iyer says all of Walmart’s India stores are profitable at the store level. The capacity utilisation at some of its stores, particularly in Punjab with Zirakpur, is at about 130 per cent.

“Of course, the head office cost won’t get covered. And we keep increasing our investments. The point is that Walmart is letting us lose money in India, and that’s a sign of confidence.”

For the 15 months ended March 2016, Walmart India posted sales of ₹3,996.8 crore. Net loss fell to ₹140.4 crore, nearly halving from the previous reporting period. The company’s latest financials haven’t been made available yet.

Pinakiranjan Mishra, Partner and Sector Leader (Consumer Products and Retail), EY, believes that the cashand-carry model makes good business sense in India.

“A few years ago, the margins here were as good as in retail,” Mishra said. “If the foreign players can build scale the way they have abroad, the market opportunity is huge. The market is large enough for foreign and local players in cash and carry. I believe the key will be in execution and building supply chains, more than getting market share.”

Going forward, Iyer hopes that the Centre will open up non-food retail to FDI. “We are, of course, interested in food and non-food retail. But doing food retail alone does not make sense because the margins are higher in non-food retail. Besides, it’s not a level playing field when there are domestic retailers who will do food and non-food.”

13.2. It is not just capital that we bring to India (Metro, Cash & Carry)

BusinessLine, 6 Nov. 2017, Meenakshi Verma Ambwani

Leading wholesale chain Metro Cash & Carry plans to double the number of its stores by 2020. India is a key market for the company and Metro is also looking to increase sourcing from the country for its global operations, said Pieter Boone, COO, Metro AG and CEO of Metro Cash & Carry, who was in India to attend the World Food India conference. In an interaction with BusinessLine, Boone said his cash-and-carry chain which services kirana stores, hospitality players and service providers, is also keen to grow its private label business in India. Excerpts:

How do you see your business growing in India?

We currently have 24 wholesale distribution centres. Of these, 8 have opened in only the last 24 months, indicating that India is the key focus market for us.

Our objective is to double our footprint in the years to come and that not only requires a commitment from us in terms of capital, but also in bringing in our expertise in terms of capability building. Creating jobs fits in well with our mission, which is to be a champion of independent businesses by growing our nationwide footprint. Recent decisions of the Indian government, like demonetisation and GST, are bold steps and will help transform the country and create more transparency in doing business.

What fresh investments have you committed for your India operations?

It is not only the euros that we bring to the market, but, for us, even more important is the expertise we bring to India for capability building. So besides expanding our footprint, we are also investing in human capital. The main focus in the Indian market is to help kirana stores take their business to the next level. The success of small and medium businesses and kirana stores is our success. It is also about building a value-proposition for the hospitality sector by leveraging our global expertise.

How do you intend to step up sourcing from India?

Firstly, nearly 85 per cent of products sold by Metro in India are sourced locally. Through our collection centres, we source fresh produce directly from farmers and help them realize better financial value for their products. From the global perspective, there is a huge potential to source from India. We are using India as a hub in order to source and distribute products to other countries, where we have a presence. India has a rich diversity of products and our international procurement team is working hard on tapping the sourcing potential with our local team.

What is the potential for your private label business?

In India, it is still in single-digits in terms of sales. We are committed to double-digit sales growth in the coming years. I see huge potential for our private label business in categories such as breakfast solution for the hospitality sector, canned goods segment and cleaning products for our kirana store owners. There is huge opportunity in frozen produce such as vegetables, and frozen value-added products among others.

What are issues which you have raised with the Indian government during this visit?

We believe there should be a single-window mechanism for clearance to obtain permits required to open new stores as it takes about 12-18 months for these clearances to come through. The government has given us constructive and positive feedback and acknowledged the need to speed up these processes. We have also discussed ways to improve the logistics infrastructure. We also talked about how the public private partnership model can be encouraged with subsidies to further improve the infrastructure.

What’s your omni-channel strategy in India?

India is witnessing a massive digital transformation. We are working on building a proper omni-channel value proposition for our customers with various tools. Our business is different from B2C so we also have to continue to focus on building relationships.

We have recently given e-pos systems to kirana stores in Hyderabad and Bengaluru, to enhance their abilities such as issuing GST compliant invoices, to do proper price setting, track their profitability and optimise their working capital. We are also working with young start-ups in this space. From the delivery perspective, we are enabling our sales force with digital tools. Digital tools will play a key role in reduction of wastage and better stock management.

14.1. Pricol marches confidently towards Vision 2020

BusinessLine, 16 Nov. 2017, G Balachandar

It has been a remarkable turnaround story for the Coimbatore-based Pricol. The auto component maker, which was plagued by labour unrest, mounting losses and accumulated debt till not-so-long ago, is now back in the black and eyeing new frontiers.

Today, Pricol has moved beyond Coimbatore to other parts of the country as well as new geographies. The person who spearheaded this comeback script was Vikram Mohan who had to step into the business operated by his parents, Vanitha and Vijay, in 2010.

Struggling days

This was a trying period when plants had to be shut down and Pricol was struggling to stay afloat with mounting losses and debt. A serial entrepreneur who had been constantly incubating companies earlier,

Mohan quickly got into the driver’s seat and set about working on the turnaround.

Today, Pricol is on the fast track with acquisitions, collaborations and expansions taking top priority. It has earmarked ₹700 crore investments over the next three years and targeting revenues of ₹3,000 crore by 2020, an over two-fold jump from ₹1,268 crore in 2016-17.

Mohan can probably rest easy now after all the turmoil seven years ago when Pricol was virtually skating on thin ice. He did contemplate restructuring the business and selling it but since this idea did not go down well with the family, the only other option was to put things back on track.

Mohan then started putting the rebuilding blocks in place, which kicked off with an exit from the unviable four wheeler passenger vehicle instrumentation space. This move brought in the much needed cash that helped the company retire its debt and strengthen its balance sheet.

The next step was to shut down loss-making units and exit many other small product segments. Downsizing manpower was another key part of the cost-cutting exercise. Mohan also rebuilt the engineering and R&D capabilities, which today boasts of a few hundred engineers. Nearly 4.5 per cent of Pricol’s revenues are earmarked for R&D, which is among the highest in the Indian auto parts sector.

The big bet

Mohan’s next big bet is Vision 2020, which will involve a mix of growth, acquisitions and collaborations. Driven by the ‘rule of three’ theory, it endeavours to put Pricol in the Top 3 in geographies and businesses. This has resulted in the creation of new product verticals and expansion of the existing portfolio in instruments and pumps.

Sensors, for instance, were identified as a key business and Pricol is today the world’s second largest twowheeler instrument maker by volumes. Likewise, in pumps, it decided to go beyond two-wheelers and this is where its acquisition in Brazil paved the way for variable flow pumps.

However, the script went awry thanks to the collapse of the Brazilian economy immediately after the deal that led to Pricol losing nearly ₹100 crore. Things could look up now “after a deep restructuring exercise” even while the country is gradually limping back to normalcy.

Another focus area is electric mobility where wiping systems was identified as the core growth area. This is where the acquisition of the Ashok Piramal group company, PMP Auto Components, will help take things forward. A foothold in the wiping assets space will also give Pricol a presence in the replacement market.

April 2020 will usher in the Bharat Stage VI emissions era and Pricol will focus on three product verticals – fuel pump modules, oxygen sensors and park assist systems – to be part of the action.

Over the last five months, it has entered into two technical collaborations and, even more recently, a joint venture, which will translate into a combined business of ₹1,000 crore in the coming years. It is also readying facilities in Sri City and Hosur, which will meet the needs of the clusters in Chennai and Bengaluru.

Beyond products, the company is keen on growing in the solutions business. Today, it has one of the largest installations in the hardware side of telematics where it aims to be a total solutions provider.

“This year, we should be doing business of about ₹1,800 crore,” says Mohan. “We have now very respectable profits, low debt on our books, a global manufacturing footprint and no loss-making entities. Yes, we are future-ready.”

14.2. Direct-selling company Amway bets big on India, awaits regulatory rules

BusinessLine, 10 Nov. 2017, Meenakshi Verma Ambwani

Leading direct-selling company Amway believes India has the potential to become its third largest market in the next five years. India already ranks among the top 10 markets globally, the company said.

Direct selling players expect the industry to grow at a faster pace once the Centre and State governments formalise norms that will regulate the industry. Last year, the Ministry of Consumer Affairs had released model guidelines for the direct selling industry and now States have to notify these regulations. Samir Behl, Regional President-Europe, Africa and India, Amway, said: “We are now working with the States so that that these rules get notified as soon as possible. States such as Chhattisgarh and Sikkim have recently notified these rules and many other States are in the process of doing the same.”

With the Centre now working on bringing a new consumer protection law, Behl said, the industry is also hopeful that regulations will be formalised at the Central-level.

“The single biggest impediment for the direct-selling industry has been the lack of legislation. We are confident once the legislations are put in place, the direct-selling industry will take off in a big way, as there is a huge potential for the industry to grow in India,” he said.

Nutrition space

He said India is already among the top 10 markets for Amway globally and the company aims to make it among the top three markets in the next five years. Nearly half of the sales in India are contributed by its food supplements brand Nutrilite and the company will continue to focus on growing its presence in that segment.

Behl said, “We will to continue to focus on the core business which is the nutrition space through our brand Nutrilite. We are also working on bringing new products especially which are well-suited for the Generation Y and the millenials. So we will look at focusing in categories such as sports nutrition as well as introduce products that will offer a holistic approach to well-being.”

“Amway India is aggressively driving innovation by entering into newer categories, and we will continue to invest on multiple fronts,” he added.

Early this year, the company introduced its stainless steel premium cookware range with Amway Queen in India, which has become one of its fastest growing segments in the country. Globally, the company has a range of other consumer appliances products such air-purifiers and water purifiers. The company could look at introducing these products in India in the next few years.

15.1. Ministry asks Apple to come up with new plan to make in India

BusinessLine, 14 Nov. 2017, S. Ronendra Singh

The government has asked US tech major Apple Inc to come back with a fresh approach to its demands for manufacturing in India since the nodal Ministry has changed.

The Ministry of Electronics and Information Technology (MeitY) is now mandated to assess the proposals that were earlier being looked into by the Ministry of Commerce and Industry.

Since MeitY became the nodal Ministry a couple of months ago, Ministry officials and senior executives of Apple have been meeting to evaluate the issues, sources close to the development told BusinessLine.

The sources said that both the sides were looking at making things ‘favourable’ for manufacturing in India.

“There have been a series of meetings between Apple’s senior officers and IT Ministry’s senior officials to sort out the issues. Another meeting was held two weeks ago,” a government official said.

According to the official, the Indian government and Apple are ‘nearing a solution’. The Cupertino-based iPhone and iPad manufacturer had sought certain concessions for setting up a manufacturing unit in the country.

The concessions sought included duty exemption on manufacturing and repair units, components, capital equipment and consumables for smartphone manufacturing and service/repair for a period of 15 years; the government has not yet agreed to these.

The government felt that regulations or norms cannot be changed for one company, and if it accommodated Apple’s demands, other companies would also come up with similar demands.

Apple had also sought relaxation in the mandated 30 per cent local sourcing of components, apart from reduction in Customs duties on completely-knocked-down and semi-knocked-down units of devices that are to be assembled in the country.

In March, the then Commerce and Industry Minister Nirmala Sitharaman had informed the Rajya Sabha that the government had not accepted ‘most of the demands’ of Apple, which wants to set up a manufacturing unit in India.

But with the latest developments, there could be a way out to all the issues, the sources said.

“The Ministry has told Apple to come back with a fresh proposal altogether, which may take some time, as big companies take time to do the due diligence,” said a senior official.

However, the official also added that there would not be any compromise on the existing norms or regulations, to make things ‘favourable’ for Apple.

15.2. Allcargo puts Scandella at tiller to take ECU Worldwide to next level

BusinessLine, 12 Nov. 2017, P. Manoj

Allcargo Logistics Ltd has named industry veteran Claudio Scandella as the CEO of ECU Worldwide to drive the next phase of growth at the global unit that contributes 80 per cent of the revenue and 50 per cent of the profit to the Mumbai-listed integrated logistics firm.

Scandella, a Swiss national, was until recently a member of the global logistics giant DHL Global Forwarding’s senior leadership team as the CEO for its Middle East, Africa and Turkey region.

He will be initially based in India for a short period to familiarise with group activities.

Four regional CEOs of ECU Worldwide, having presence in over 160 countries, will report to Scandella as part of the strategic overhaul of the senior management structure undertaken by Allcargo Founder and Chairman Shashi Kiran Shetty. Scandella will report to Shetty.

Founded in 1987 in Belgium, ECU Worldwide is one of the global leaders in non-vessel operating common carrier (NVOCC) services and the biggest less-than-container-load (LCL) consolidator in the world.

New phase

Allcargo, one of India’s biggest publicly-owned logistics firms, acquired the company in 2006 and consolidated its global footprint with over 300 offices.

“ECU is an important subsidiary of the company. Globally, it is considered one of the world’s largest NVOCC in terms of geographical presence and volumes carried, which is systematically handled, largely through its offices. We plan to take it to the next level of growth through digitalisation, tapping into new markets and areas, including diversification of our offerings. We are strengthening the top management to drive this new phase in line with the emerging opportunities,” Shetty said.

“The plan is to deepen and widen the management bandwidth in the company to grow the business,” Shetty told BusinessLine.

“I’ll take a more strategic role”, he said.

Scandella brings over 30 years of industry experience, having held senior positions with different logistics firms across geographies.

Backed by his in-depth understanding of key customer issues and global experience, he will look to create a sustainable roadmap along with the existing leadership team for future business growth and development, with a customer-centric business model.

“ECU Worldwide has set its own benchmarks in operations, with its strong values and capabilities. The changing global scenario still offers potential to tap further and this will make my journey with ECU challenging and exciting at the same time. I will be working closely with Shetty and the team to leverage technology to bring in efficiency for customers as well as for internal processes,” Scandella said.

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

16.1. India eyes 100 million jobs through tourism in 5 yrs: Alphons

PTI, Oct. 24, 2017

New Delhi: India aims to create 100 million jobs through tourism and attract 40 million foreign tourists annually in the next five years, Union minister K J Alphons said today.

The minister also said that at present, 14.4 million international tourists visit India annually, adding the annual foreign exchange earning (through tourist spends) is about Rs 1.56 lakh crore.

"We have set an aim of providing 100 million jobs through the tourism sector and (attracting) 40 million foreign tourists annually into India in the next five years. Today, we are providing about 43 million jobs," the Minister of State for Tourism said at a press conference.

After meeting the CEOs of companies investing in the sector and deliberating upon how to maximise its potential, Alphons asserted he would "strongly recommend" to the finance ministry for a reduction in the GST rate for five-star hotel rooms attracting a tariff of Rs 7,500 and above.

"They (industry) feel the taxes are too high. We would certainly bat for the industry and request the finance ministry to bring down the tax rates so that there will be much better acceptance," the minister said. Besides, Alphons said, the ministry was in advanced stages of a proposal to provide infrastructure status to the tourism industry for projects up to Rs 50 crore and will soon approach the union Cabinet for its approval on the same.

"With the infrastructure status, possibly the lending rates would come down, states would be able to give land on much better terms to the hotel industry," Alphons pointed out.

Elaborating upon the suggestions that emerged from the day-long deliberations, the minister said the tourism industry has sought a single-window clearance mechanism for approvals.

"Even though things have been made much easier at the Centre by the Government of India, they (industry) feel that things are still complicated at the state level. You need about 70 permits for a hotel to be opened, this is outrageous.

We need to bring down the number of permits which are required to operate a hotel down to the minimum," he said.

Moreover, Alphons said, the tourism industry feels that it is extremely expensive to set up hotels in India because the land cost is extremely high.

"We had proposals from the tourism industry which basically talked about providing land at concessional rate or lease so that one does not have to pay the complete amount upfront. We also agree in the ministry that the cost of land must come down dramatically otherwise they will not be able to set up hotels," said the minister.

Observing that there is a shortage of two lakh rooms across the country in the Rs 2,000 (per day tariff hotels) and below segment, Alphons highlighted the need for massive investment by the sector.

Besides, he said, the government and the industry will work together to ensure the availability of skilled professionals for the hospitality sector.

"We have a fairly large number of hospitality institutes run by the ministry itself and we along with the private sector will work on a massive skill development programme," he said.

The minister also conveyed the decision to set up four joint working groups to handle various issues. The working groups will comprise of representatives from the government, tourism industry, Invest India and Department of Industrial Policy and Promotion.

"They (working group) will meet very often and sort out issues, make recommendations to the ministry. We will follow up on these issues meticulously," Alphons said.

He said the tourism sector sought establishment of a national tourism board for constant engagement between the tourism ministry and the industry and a regulatory framework for home stay, etc, adding that the ministry will certainly look into both suggestions.

India currently attracts 1 per cent of global tourists and the government expects to double the numbers over the next five years, Tourism Secretary Rashmi Verma said.

Besides, Verma said the ministry is looking at creating better facilities at the airport so that tourists coming to India get clearance faster and don't have to stand in queues.

"We are also setting up facilitation centres at some of the key airports like Delhi, Mumbai, Chennai, etc to facilitate the people who are coming on e-visas," Verma said.

She said the ministry was trying to completely change the mindset and ensure that the country's world heritage sites and the Archaeological Survey of India (ASI) protected monuments have world-class infrastructure facilities.

"We have launched a new scheme called Adopt a Heritage, in which we have offered select ASI monuments and the World Heritage sites for adoption by the industry or the public sector for setting up basic amenities like clean toilets, clean drinking water.

"Seven sites have already been selected by the public sector and the private sector (for adoption). We are very hopeful that we will succeed in creating world-class facilities at our ASI monuments and world heritage sites in partnership with the private and public sector to provide a much better experience to tourists," Verma said.

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

16.2. Flexi hiring in IT poised for double digit growth in next 4 years: study

Livemint, Nov. 08, 2017

New Delhi: The slowdown in tenured jobs notwithstanding, flexi staffing in information technology (IT) is poised to grow in double digits in the next four years, Indian Staffing Federation (ISF), a grouping of top staffing companies in India, said in a report Tuesday.

This growth will be driven by sectors like information technology, banking and retail.

Flexi hiring refers to temporary jobs.

The IT flexi staffing market in India, worth $3.04 billion in 2016-17, is expected to grow 14-16% annually to become a $5.3 billion industry by 2021, the ISF report said.

Companies like TeamLease Services, Manpower, Kelly Services, People Strong and Adecco India are part of ISF.

According to the report, new technologies including artificial intelligence, machine learning, cloud, analytics, Internet of Things etc., will generate demand for a niche skill set, encouraging hiring of IT flexi staff. “IT is no more one sector. It is the base for almost all sectors whether it is banking, retail or insurance. With the kind of digital push the country is making, the need for IT staff across sectors will grow and here we found that flexi staffing will see a big growth,” said Rituparna Chakraborty, president of ISF and also the senior vice president of TeamLease Services.

Poor jobs growth has been a constant refrain of India’s economic narrative.

The top six India-based IT companies, referred to by the acronym TWITCH by some analysts, have reported a net decline of 10,505 employees in the first two quarters of FY18. During the same period last year, they had reported net hiring of 58,765, Mint reported on 3 November. TWITCH comprises Tata Consultancy Services Ltd, Wipro Ltd, Infosys Ltd, Tech Mahindra Ltd, Cognizant Technology Solutions Corp. and HCL Technologies Ltd.

“The slowdown of jobs indicate that while tenured jobs are not getting created as much as required.

Companies are looking to hire more flexi staff to fulfil project specific requirements,” Chakraborty added.

As per the report, which surveyed 120 companies, flexi staffing will grow fastest in the e-commerce and startup sector (17.3%) followed by IT/ITeS (15.8%), and healthcare (14.1%).

It said wide adoption of cloud computing, use of mobile phones for work or mobility service and the growing concern around cyber security will drive flexi staffing. At least 73% of the companies surveyed said that cyber security and cloud computing will drive flexible hiring, and 45% said mobility was a key driver.

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

17.1. IndiGo to be 5th largest Asian airline with 1,000 daily ops

PTI, Nov. 07, 2017

Mumbai: IndiGo, the country's largest airline by market share and also in terms of fleet, will soon be joining the big league of airlines with 1,000 daily departures, becoming the fifth Asian carrier to do so.

According to Capa (Centre for Asia Pacific Aviation) data for the week, the top three Asian airlines operating over 1,000 daily departures are all Chinese and the fourth is All Nippon of Japan.

While China Southern Airlines operates 2,178 flights a day, China Eastern Airlines has 2,083 daily services and Air China operates 1,333 departures a day. The Japanese national carrier All Nippon Airways comes fourth with 1,062 flights a day.

And Indigo will soon be joining the 1,000-per day departures milestone from December 23.

The country's largest carrier, with close to 40 per cent market share and a 144-strong fleet, today announced 47 new service (19 new sectors and 28 additional flights), connecting key domestic cities and some in the Gulf region from December 23.

The airline said from December 21 it will connect Lucknow and Hyderabad with Sharjah and 16 new domestic routes.

It also opened bookings from today on the new routes.

The airline, known for its on-time performance, said it will begin flights between Lucknow-Sharjah, Hyderabad-Sharjah, Lucknow-Srinagar, Hyderabad-Ranchi and Lucknow-Dehradun, among others, from the third week of December.

The new schedule will also see additional frequencies connecting Kolkata, Bengaluru and Chennai with other cities like Guwahati, Bhubaneswar, Kochi respectively, it added.

Announcing the soon-to-be-achieved milestone, IndiGo president Aditya Ghosh said, "A thousand daily flights is a milestone that no domestic airline in has achieved so far. As we approach this mark, we thank our over a 100 million customers who have made this journey possible."

Some of these new flights are already effective from November 2, the airline added.

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

17.2. Jaipur and Srinagar Airports rated Best Airports in the World in 2-5 million Passenger category in ACI-ASQ Survey

Press Information Bureau, Oct. 20, 2017

New Delhi: The Jaipur and Srinagar Airport got First and Second rank respectively in the category of 2-5 million passengers in ACI-ASQ Survey. Dr. Guruprasad Mohapatra, Chairman, Airports Authority of India along with his team received the ACI-ASQ Award at a function held in Mauritius on 17th October 2017. The Chairman congratulated both APDs for their stupendous achievement and challenged more AAI airports to compete and win at ACI-ASQ Awards in their respective categories in future.

This is for the second consecutive time that Jaipur Airport has been rated the Best Airport in the World in the traffic volume of 2 to 5 million passengers per year. Jaipur was ranked as the Best Airport in the World catering to a traffic volume of 2 to 5 million passengers per year in 2016 also.

The Airport Service Quality (ASQ) Awards are the aviation industry's most prestigious accolades. The awards recognize the airports which have achieved the highest passenger satisfaction ratings in the ASQ Survey - the world's benchmark measure of airport excellence. It is the only worldwide programme to survey passengers at the airports on their day of travel. Every year, the programme delivers some 600,000 individual surveys in 41 languages in 84 countries. It measures passengers’ views on 34 key performance indicators, including airport access, check-in, security screening, restrooms, stores and restaurants. Each airport uses the exact same survey, creating an industry database that allows airports to compare themselves to other airports around the world. The ASQ programme also has a feature that facilitates sharing of best practices among airport operators.

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

18.1. Amazon focused on customers, not competitors: Jeffrey Wilke

Livemint, 10 Nov. 2017, Mihir Dalal

Jeffrey Wilke, CEO of worldwide consumer, Amazon.com Inc., on the e-commerce firm’s India focus, country manager Amit Agarwal and the threat from Flipkart.

Bengaluru: Jeffrey Wilke is the chief executive of worldwide consumer, the largest business of Amazon.com Inc. Wilke, an 18-year veteran of Amazon, was at the Bengaluru headquarters of Amazon India this week to meet the company’s leadership team. Wilke is one of the most influential executives at Amazon and a favourite of Jeff Bezos, the company’s founder and chief executive officer (CEO). In the Amazon biography, The Everything Store, Wilke is described as having a “cerebral and occasionally impatient management style” that is similar to that of Bezos.

In an interview, Wilke said Amazon India’s business will grow at a high rate for a long time and that he spends more time on India than any other global market for Amazon. The 50-year-old also spoke of Amit Agarwal’s future as Amazon India country manager and the threat from Flipkart. Edited excerpts:

Analysts say India has turned out to be a much more shallow market than anyone thought. What’s your take?

I’m delighted with the growth of the India business. It was 124% last year (in calendar 2016), 82% in Q1 and 88% in Q2. It’s our fastest growing country. It was the fastest to get to in (product) selection which is 160 million.

We promised in 2014 that we’ll invest $2 billion, and in 2016, another $3 billion. We’re committed to spending all of that and we’ll continue to invest more as India grows. - Jeffrey Wilke, CEO of worlwide consumer, Amazon

The Prime business is doing really well in India. We will continue to invest aggressively here because I think (the India business) can grow for a long time.

I’m very bullish about the opportunity for us and for all of retail in India. It’s a great opportunity to expand ecommerce from just urban-focused and very infrequent visits and purchases to a much broader availability. In Diwali, more than 99% of pin codes had at least one order. Our selection is really broad, so we can offer customers products that weren’t available through e-commerce earlier.

There’s a perception here that Amazon lost a chance to achieve complete domination in India by letting Flipkart back into the game last year. Do you agree?

I don’t think about what’s happening in India that way. First of all, I’m focused on customers and not

competitors. Competitors’ strategy changes all the time. We don’t want to distract ourselves from customers by obsessing over what competitors are doing or not doing. I also don’t think India or the rest of the world’s retail space will have any single dominant player. I think there will be opportunities for many winners in each of the countries we’re in. That’ll be true in India, too.

Is there pressure from shareholders to make India count more on the top line and reduce losses here?

I’m not aware of any. As I’ve said, the pressure that we put on ourselves is to invent on behalf of customers. Our shareholders would expect us to do that like we have in every other area, and so far we’re doing a good job here.

So the rate of investments will continue?

We promised in 2014 that we’ll invest $2 billion, and in 2016, another $3 billion. We’re committed to spending all of that and we’ll continue to invest more as India grows.

Competitors’ strategy changes all the time. We don’t want to distract ourselves from customers by obsessing over what competitors are doing or not doing. - Amazon’s Jeffrey Wilke on how he sees the competition from Flipkart

Amit Agarwal was promoted to the seniormost leadership team at Amazon in 2016. There’s been talk that he may go back to the US to take up a bigger role. How long will he be here and what’s the succession plan?

First thing is, Amit is in a giant role right now. And I don’t have any plans to ask him to do anything else. He and the team are doing a great job. We use the term single-threaded, which means you work only on one thing. And Amit is the single-threaded leader for India. And I hope (he stays here) for a long time.

You head the entire consumer business for Amazon globally. How much time do you spend on India?

I spend a larger amount of my time on India than I do on any of the other single international countries. We’re in 14 countries now. The US, of course, gets a reasonable amount of my attention; but of the other 13 countries, I spend more time in India.

You’ve seen a fair amount of churn in middle and senior management levels in India. What’s your view on the quality of the team you have?

I think it’s terrific. It’s technical; we’ve been able to hire really good technologists and business people.

What’s your view on the quality of competition that you face in India, compared with your other markets?

It’s hard to rate any country on this measure. We face intense competition in every geography and every business we are in.

I spend a larger amount of my time on India than I do on any of the other single international countries - Amazon’s Jeffrey Wilke on his India focus

In your global Prime business, your head Ray Price left recently. Even in India, the head of your Prime business is no longer with the firm. How are you managing the change in leadership? And how do you plan to ensure you don’t go wrong again with hiring leaders in this business?

Over a number of years, we’ve proved we can build award-winning content in TV and feature-length movies. India has a strong content environment and we’ll continue to invest in content here. We have a very high standard of leadership. It’s hard to speculate on what may happen in the future. I’ll just tell you that I have a lot of confidence in the leadership team (at Prime). We have a code of conduct and have zero tolerance for people who violate that.

Any learning points from what went wrong?

Not at this point.

18.2. SoftBank investments have kept Amazon at bay: Masayoshi Son

Livemint, 8 Nov. 2017, Anirban Sen

CEO Masayoshi Son says SoftBank’s biggest bets in India, Flipkart and Paytm, are market leaders in their sectors by a wide margin

Bangaluru: SoftBank Group Corp. chairman Masayoshi Son claimed that the Japanese firm’s investments in the global e-commerce market have been successful in keeping the world’s largest online retailer Amazon.com Inc. at bay, and pointed to the recent success of two of the Japanese investor’s biggest bets in India, Flipkart and Paytm, market leaders in their sectors.

In a post-earnings conference call with analysts late on Monday, Son said both Flipkart and Paytm were market leaders by a wide margin in their sectors, citing market share data from various research reports.

According to SoftBank, Flipkart has a 60% share in India’s e-commerce market, while Paytm commands a 58% share of India’s digital payments business.

“E-commerce as a business model is now becoming the essential business model for our society,” Son said.

“Amazon is still making a loss in e-commerce.”

“Flipkart, India’s number one e-tailer has 60% in the domestic e-commerce market and is bigger than Amazon India. It is very difficult to see someone who is bigger than Amazon. I believe, after China in terms of size, India should be next, and in a market with such huge potential Flipkart has 60% market share which is a good start. In China, Alipay has been successful as a business model and Alipay and SoftBank support Paytm.

Again, thanks to the Alibaba Group, we are the second-largest shareholder in Paytm,” added Son.

The latest earnings report from SoftBank was a sharp contrast from last year when the Japanese firm had seen some of its India investments—mainly Snapdeal—go sour and was forced to write down the value of its biggest investments in the country. In November last year, SoftBank had written down as much as 58.1 billion yen ($555 million) in two of its biggest investments in India, cab-hailing firm Ola (ANI Technologies Pvt. Ltd) and online marketplace Snapdeal (Jasper Infotech Pvt. Ltd), the company said. Earlier this year in May, SoftBank had written down the value of its investments in Snapdeal and Ola by $1.4 billion. In its latest earnings report, SoftBank reported a gain of 10.2 billion yen ($89.3 million) on its India investments, saying the latest numbers were a “recognition of gain in the fair value of investments, primarily in Southeast Asia and India, during the period”.

In the one year since Son’s last visit to India, SoftBank has pumped more than $4 billion into the Indian market, taking the Japanese conglomerate’s investments in Indian start-ups to more than $6 billion in less than three years. Out of the $4 billion that has been committed this year, more than half would go to Flipkart, with about $1.4 billion being allocated as a primary investment in India’s leading online retailer. In May, SoftBank bought a 20% stake in New Delhi-based One97 Communications Pvt. Ltd, owner of Paytm, for $1.4 billion. In May, SoftBank also joined Sunil Munjal’s Hero Enterprises in infusing $250 million into Gurugram based budget stays aggregator OYO (Oravel Stays Pvt. Ltd).

SoftBank ventured into in 2014 at the peak of the funding boom.

SoftBank entered the Indian consumer internet segment by writing big cheques for Ola and real estate platform Housing.com. The firm also invested in grocery delivery start-up Grofers. In 2014, Son committed to invest at least $10 billion in India’s booming technology and start-up ecosystem. Late last year, Son reiterated SoftBank’s bullish stance towards India and said the Japanese firm would surpass its initial $10-billion pledge towards India.

However, a significant number of its Indian investments have not worked as well as the company expected, prompting SoftBank to scout for mergers for its portfolio companies. Earlier this year, SoftBank pushed for a merger between Snapdeal and Flipkart, but that deal failed to materialize through after Snapdeal’s founders Kunal Bahl and Rohit Bansal opted to run the online marketplace as an independent firm.

19.1. Dream of a fully connected and truly empowered India on way of realization Manoj Sinha

Press Information Bureau, Nov. 14, 2017

Memorandum of Understanding signed with States for implementation of BharatNet Phase II during the Conference

The Union Minister of Communications Shri Manoj Sinha said that government will provide all the necessary and requisite support for fulfilling the dream of a fully connected and truly empowered India very soon.

Inaugurating a National Conference on “BharatNet and its Utilization with States” in New Delhi, he said that this is our mission and your vision for the nation. It is equally a call to action for the entire nation, “Connect India”, and then watch India - Create, Collaborate and Conquer. The Minister exhorted that every one of us the states governments, private sector players, TSPs, Internet, Technology and Digital Services Companies, Media, Academia, Civil Society, Do-gooders, change makers to work together for making this a success. He expressed satisfaction that the Hon’ble Prime Minister’s vision of Digital India is on the right track and Bharat Net is an integral part of that dream.

He said, with BharatNet and the Digital India programme, we hope to touch lives, connect people, inform, educate, spread awareness, create jobs, save lives, build relationships, nurture bonds, make significant investments, contribute to the exchequer and the economy and above all bridge the digital divide and amplify financial inclusion. He said that the National Optical Fiber Network (NoFN) (now renamed as BharatNet) project was launched in 2012 with the approval of Union Cabinet provided in Oct, 2011. When it was launched previously it was actually, no fun for any one. Little or no progress had been made. Progress had been rather slow and the actual work on the project commenced only in the second half of 2014. The project involves connecting all the 250,000 GPs in the country to the block headquarters for provision of both bandwidth and dark fiber on a universal and non-discriminatory basis. The network is capable of providing scalable bandwidth of up to 1 GBPS. The provision of broadband & internet penetration and e-services has a positive impact on GDP growth besides quicker, transparent and cost effective governance.

Shri Sinha said that for the purpose of implementation, the Bharatnet project covering all 250,000 Gram Panchayats was divided into Phase-1 and Phase-2. In the last one year the progress of phase-1 has picked up, tremendously. He informed that for 125,000 GPs in Phase-I, the duct/pipe has already been laid in 110,368 GPs, OFC laid in 103,275 GPs, equipment installed in 85,506 GPs, service ready in 75,082 GPs and service opened in 47,836 GPs. The progress of service readiness has picked up to such an extent that in October, 2017 around 25,000 GPs have already been made service ready. To achieve this, the process of equipment procurement was smoothened by decentralising it. Moreover, multi-layered monitoring has been instrumental in achieving this success in the last few months. He said that the Cabinet in July 2017 approved a Modified Implementation Strategy for BharatNet and in the modified, new and improved strategy, the most important change is the Involvement of states along with CPSUs and private sector in implementatio n of the project to make a win-win situation. The states being the most important stakeholder in provision of bandwidth also stand to gain the most, once this block to GP link is established for citizen centric services such as ehealth, e-education, e-governance, etc. The implementation is expected to be much faster and smoother with the participation of states.

He said, based on positive response from various states the proposals of Maharashtra, Gujarat, Chattisgarh, Jharkhand, Andhra Pradesh, Telangana & Tamil Nadu were approved by Telecom Commission in September 2017. He complimented the states which provided a detailed project report (DPR) on time and extended their full support in resolving the technical, commercial and financial issues, which are common in projects of this nature, size, scale, scope and magnitude.

Shri Sinha said, the major users of this network are the Telecom Service Providers, ISPs, MSOs, LCOs etc which will use the Bharatnet for provision of broadband and extending the mobile network in the rural & remote areas. He said, as the world and India too moves from voice to data, Bharat Net will herald a new era in connectivity and empowerment, reaching the poorest of the poor and every corner of the nation.

The Minister said that an important and critical stakeholder and end user of this network are the Government Ministries, Departments & State Governments and expressed hope that the network will be used for various citizen centric services such as e-health, e-education, e-medicine, etc. He urged all the States – whether present here or otherwise to come forward and include BharatNet in their plans in spreading digital literacy, building digital capacity &, proficiency and proliferation of e-government services.

Speaking on the occasion, Secretary, Department of Telecom Ms Aruna Sundararajan said that BharatNet phase-1 is nearing its completion by December 2017, where one lakh Gram Panchayats covering 3 lakh villages will see the roll-out of broadband services. Referring to BharatNet as the world’s largest rural optic fibre network, she said that Phase-2 of the project is 100 percent Made in India as from fibre to design to software everything has been spearheaded by C-DoT. The Secretary said that by 2020 about 25 lakh government institutions and 50 lakh households will be linked to BharatNet.

Memorandum of Understanding for implementation of Phase II of BharatNet has been signed with States during the Conference. Keeping in view the Government’s aim to provide affordable digital services in rural areas, the tariffs for utilising BharatNet infrastructure have also been reduced by up to 75% of earlier notified tariffs. Owing to this, the Telecom companies including Airtel, Reliance Jio, Idea and Vodafone have come forward for providing connectivity services utilising BharatNet infrastructure. The Telecom companies like Airtel, Vodafone and Reliance Jio, handed over advance cheques to the Government during the Conference against leasing of BharatNet infrastructure. The service delivery models, which were showcased during the Conference, are set up in collaboration with the Telecom companies. States have also been encouraged to work on such utilization models.

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

19.2. TCS, Infosys, Wipro face twin trouble of digital struggles, slow legacy business

Livemint, 30 Oct. 2017, Varun Sood

Accenture has already stolen a march over Indian IT companies TCS, Infosys and Wipro in digital business with 52% of its revenue coming from the new technology sector

Bengaluru: Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd face twin challenges in muted growth in traditional business offerings even as their growth in digital areas pales in comparison with Accenture Plc, underlining the struggle faced by India’s three largest information technology outsourcing companies in this two-speed world of digital and non-digital.

Digital, the fuzzy and umbrella term which each company uses to classify revenue generated from areas generally classified as social, mobile, analytics, cloud computing and Internet of Things, accounts for less than a fourth of revenue at Indian IT companies, far less than Accenture, which claimed 52% of business coming from selling these new technology solutions (see table 1).

Accenture’s new and digital revenue reported a 9.5% sequential jump to $4.76 billion in the fourth quarter ended August.

Accenture, which follows the September-August financial year, grew 6% to end fiscal 2017 with $34.9 billion in revenue, with new revenues alone totaling $18 billion. This means Accenture’s $18 billion new revenue is more than the entire business TCS did last year. In the June-August quarter, Accenture’s new business alone was more than TCS’s $4.74 billion revenue in the September quarter.

This explains why despite reporting a 2.9% sequential decline, on the back of a 12.5% drop in legacy business last year, Accenture still managed to grow almost on par with Indian rivals: Accenture’s 6% dollar revenue growth last year is a shade less than the 6.2% growth recorded by TCS. Infosys grew 7.4% and Wipro managed a 4.9% growth in 2016-17 (see table 2).

Already, a few analysts like Keith Bachman of BMO Capital Markets estimate Accenture to grow faster than Indian IT services firms in the current financial year while some others believe that a relative underperformance could impact the firm’s revenue growth and interest among shareholders.

“Indian IT players now have two distinct parts to their portfolios: the legacy portion (55-83% of FY17 revenue) that is barely growing, and the smaller ‘new’ portion that is growing 20-30% y-o-y. Thus, how fast the ‘new’ grows and how well the slowdown in the legacy part is arrested could decide how revenue growth and valuations play out over the medium term,” BNP Paribas analyst Abhiram Eleswarapu wrote in a note earlier this year.

Considering most Fortune 1000 firms are cutting their spend on legacy work such as application maintenance, and ploughing the savings on newer projects in areas such as data analytics and cyber security solutions,Indian IT services firms need to strengthen their offerings in these areas.

“Digital parts of the business grow 2-3 times faster than the rest of the business , and this is simply driven by increased client demand for digital services,” said Ralf Dreischmeier, London-based head of technology practice at Boston Consulting Group.

For now, Indian companies are finding it challenging.

At the heart of Accenture’s better performance is the strong consulting practice and aggressive investments in new technology areas like cloud computing, data analytics and design capabilities: Last year saw Accenture spending $1.7 billion to buy 37 companies. This is more than the $1.58 billion spent by TCS, Infosys and Wipro together since 1 April 2014.

“Clients are realizing their IT costs have hit rock bottom and the only way to get additional value is to demand digital expertise embedded into legacy relationships,” said Phil Fersht, chief executive of US-based HfS Research, an outsourcing-research firm.

This building of newer solutions like data analytics as part of legacy projects offers outsourcing companies to sell solutions in areas like software testing.

“I think it’s important to say that traditional business is an important enabler for digital. Because of exception of what you call as digital natives, the other companies, which are majority of the world, which are digital immigrants, are all building digital on top of the traditional technology backbone,” Francisco D’Souza, chief executive officer of US-based Cognizant Technology Solutions Corp, said in an interview earlier in August.

A spokesperson for Cognizant clarified that its platform solutions business, including that of Trizetto acquisition, and revenue from business process services, are not part of digital revenue of traditional business.

20.1. Looking beyond the rhetoric of Gorakhpur

Livemint, 8 Nov. 2017, Seema Bansal, Rohit Sahani and Subhadra Bandra

Simple fixes, many of which are administrative and managerial, could save millions of newborns in India

At first glance, the tragedies at hospitals in Gorakhpur and Farrukhabad indicate that neonatal mortality (NMR: death of a newborn within 28 days per 1,000 live births) is an issue unique to these hospitals. This is not true.

NMR is one of those metrics that just hasn’t improved adequately across India. According to World Bank statistics, we moved from 33 in 2010 to 28 in 2015. As a benchmark, the UN Sustainable Development Goal (SDG) for NMR is 12 by 2030. If India continues on this slow trajectory, we will achieve the SDG only by 2040.

An NMR of 28-30 implies that any hospital which has roughly 40-50 births per day will see 30-40 newborns die in a month. The larger, more overburdened public hospitals in the poorer states will see a much higher number. Hence, Gorakhpur and Farrukhabad are not anomalies; rather, they are quite close to the norm for large public hospitals.

Is this an unsolvable problem? Absolutely not. Sri Lanka, with an NMR of 5.4, tells us otherwise. Closer home, Kerala is already at 6 and Tamil Nadu at 14. Achieving the SDG by 2030, or even faster, will require five key interventions—all related to the basic management of public health.

Need for 2-3 emergency obstetric points (C-section points) in every district: We usually find only one-two operational C-section points in most districts. This implies longer travel times for women in labour, creating distress and overburdening facilities—which in turn cannot provide adequate care, thereby endangering the newborn. While research indicates that the C-section rate in India is now beyond the optimal range (greater than 10–15%), the situation in public institutions is quite the opposite. In Uttar Pradesh and Bihar, the Csection rates in public institutions remain at 4.7% and 2.6%, respectively.

To achieve two-three fully operational C-section points on priority, a functional trio of specialists (paediatrician, gynaecologist and anaesthetist) and specialized equipment are needed. To tackle the somewhat overhyped specialist shortage, some states have tried innovations like rationalization of staff across hospitals to complete the trio as well as leveraging private anaesthetists. However, 10–20% of facilities have a complete trio but still do not perform procedures due to behavioural and accountability issues. This also needs to be addressed.

Quality special newborn care units (SNCUs): Conditions like asphyxia, prematurity or sepsis require specialized care. Two-three SNCUs should be fully functional per district. This means that three-four beds per 1,000 deliveries need to have critical equipment, including radiant warmers and phototherapy machines. Additionally, the critical nature of the newborns warrants round-the-clock care—a minimum of four nurses. Additionally, SNCUs need to be integrated with newborn stabilization units at secondary facilities like community health centres through a strong referral system.

Addressing key clinical skill gaps: Global research like Johns Hopkins’ Lives Saved Tool indicates that seven basic clinical skills can prevent a majority of neonatal deaths. These include monitoring labour progress using partographs to detect complications. Unfortunately, many clinical staff lack these basic skills, or don’t practise them. For example, research indicates that the simple process of placing a pre-term child against the mother’s chest keeps the baby warm and facilitates weight gain through breastfeeding. However, this practice (kangaroo mother care) is still not widely practised. Similarly, clinical staff are diffident about practices like neonatal resuscitation that can tackle asphyxia. Several tools, including a “safe birth” checklist, are available. Development agencies (for example, Jhpiego, Unicef) conduct specialized training programmes for clinical staff. However, states should mandate such training and the practice of these basic protocols.

Improving care of pregnant women: While many complications are detected during labour, many can be identified during pregnancy through tests, like those for blood pressure and haemoglobin. However, coverage of antenatal visits by front-line workers is alarmingly low: 51% according to the National Family Health Survey, 2015-16. Additionally, the quality of nurse and pregnant women interactions is often poor. Simple diagnostic procedures are not conducted, resulting in dismal rates of high-risk pregnancy identification. Availability of basic diagnostic equipment, an expansion of front-line worker capacity (using methods like supportive supervision) and their increased accountability towards coverage and quality of antenatal visits are key.

Data tracking and accountability: Data tracking would enable success. Currently, management information systems are only able to track around 20-40% of actual deaths. This is because staff are rarely held accountable for the data. Complex and multiple registers are also to blame. Field data collection processes need to be simplified. Wherever possible, technology like mobile apps should be used. Systemized datadriven reviews of key NMR-related measures, including still-birth rates, are necessary. More often than not, it is not cutting-edge science that will save lives. Simple fixes, many of them administrative and managerial, don’t get addressed. Let us use this important perspective to fix the foundations of our health system.

20.2. Our No.1 goal is to fix the Sheraton brand’

BusinessLine, 31 Oct. 2017, Chitra Narayanan

“Most companies tend to lose step when they are merging as they are so busy integrating they stop watching their customers and bottomline,” says Craig Smith, President and MD (Asia Pacific), Marriott International, the largest hotel operator in the world, post its merger with Starwood Hotels and Resorts last year. Yet, Marriott managed to grow during this period, as everyone went about their jobs even as they worked at knitting the two organisations together. “We really taxed our teams,” he admits. In an exclusive interview with BusinessLine, Smith discussed how the integration is panning out, and the priorities. Smith oversees operations and development in 15 countries across Asia Pacific, with more than 180 hotels and 49,000 employees. Excerpts:

What were the toughest bits in the integration with Starwood? Were there any mistakes?

Planning and costs were a big challenge. But the hardest piece was to match personality and culture. I walked into this integration reminded of the experience of my marriage. My wife and I were previously married. I brought two kids from a previous marriage, she brought two and then we had two of our own. There were questions like ‘Do I see them as all my children or do I treat them as your kids and my kids and our kids’. We had this same thing in our organisation. If I picked on somebody, I would be told oh, you are picking on them, because they are coming from Starwood. No I would say, I am picking on them because they are not doing their job.

The mistake we made in the beginning was that we took too long to make decisions as we were trying so hard to be fair and nice. We could have also communicated some of the benefits faster to the owners. At times we worry that we don’t want to Marriottise the Starwood brands.

With 30 brands in your portfolio now , will there be some rationalisation? Especially in the Collections (Starwood’s Luxury & Tribute collections and Marriott’s Autograph).

As of now we are not putting any brands together. We are working on swim lanes. Swim lanes means we are trying to figure out what is each one’s lane and then letting each stay in their particular lane. Even before the merger, these questions were asked about some of our own Marriott brands. The hardest parts are undoubtedly the Collections because there are no set standards to these.

Our number one goal is to fix Sheraton. We think Sheraton has aged. It needs to become more relevant. There are a few Sheratons that may be affecting the brand image. The idea being that you are only as good as your worst hotel.

One way to improve the image is to start with our bottom hotels and fix those. Funnily enough Sheraton was the largest part of the Starwood portfolio — I think close to 40 to 50 per cent when we acquired them.

Everybody is titillated by W and Westin but Sheraton is the core brand of Starwood and it’s a grand brand. We are working on new specifications for Le Meridien as well. But the biggest focus is on the Sheratons.

How is the scale helping you in India?

We are the largest hotel operator in India and in Asia. We will be at 100 before the end of the year. Even by number of rooms we are much larger than the Taj and others. Our marketshare has grown over the last year.

Part of that is due to our brands, and part of that is our distribution.

And yet, the Indian hotels still command the highest rates in gateway cities like Delhi and Metro?

I would say location is the factor. Some of the historic Indian hotels have got the best locations. But we now have the St. Regis in Mumbai . Also, we don’t judge ourselves on rates but look at RevPar (Revenue per available room that you get multiplying average rate into occupancy rate) and marketshare. What’s the point commanding the highest rate if you have only 30 per cent occupancy?

Where’s India in the worldwide Marriott standings?

The percentage of fastest growth for Marriott is Asia Pacific. Within Asia Pac, China is growing fastest for us and India is second. But we feel India should be growing faster and needs to catch up.

India has dealt a tough card to hoteliers with demonetisation, liquor ban and GST – how have you coped with those?

Demonetisation and GST I see as positive in the long term. The comparison is that when an athlete gets an operation, he is slowed down for a few weeks. But over the long run it is good. That’s why we continue to be bullish about India. However, 28 per cent GST on hotels is no good. Tourism is a job creator and yet it is being treated as luxury and punished. Most of our hotel owners are screaming. We are already being told by some of our owners that new projects may slow down or die. So we are worried about that. We are hoping, the government will listen to us.

Has your ability to negotiate with OTAs gone up post merger?

The percentage of profit being given away to OTAs has already come down. The commission rates had come down even before the merger. These rates will go on for a couple of years before we re-negotiate again. The highest percentage of our direct bookings come through loyalty members. We have a 100 million loyalty customers. In India we have a million. Just in Asia Pac we will grow our loyalty base this year by 7 million. If we have 14 million members in Asia Pacific today by 2017-end we would have acquired another 7 million.

China is still the biggest.

Some of your rivals like Hyatt have been moving into adjacencies like wellness. How about you?

We are launching cruise ships — Ritz Carlton cruise ships. We are continuing to look at other opportunities. But (with a laugh), we are never getting into airlines. Too risky.

INDIA & THE WORLD

21.1. Trump praises India's growth story, PM Modi at APEC Summit

PTI, Nov. 13, 2017

Danang: US President Donald Trump today praised India's "astounding" growth after it opened its economy and also lauded Prime Minister Narendra Modi, saying he has been working successfully to bring the vast country and its people together.

Speaking at a gathering of CEOs on the sidelines of the annual Asia-Pacific Economic Cooperation (APEC) summit here in the Vietnamese port city, Trump cited India as one of the countries in the Indo-Pacific region making strides.

He pointed out that India was celebrating the 70th anniversary of its independence and highlighted that the country was a sovereign democracy with a population of over 1 billion as well as the largest democracy in the world.

"Since India opened its economy, it has achieved astounding growth and a new world of opportunities for its expanding middle class," Trump said.

"And Prime Minister (Narendra) Modi has been working to bring that vast country and all of its people as one.

And he has been working at it very, very successfully indeed," the US President said.

Earlier, a senior Trump administration official told reporters travelling with the President from China to Vietnam said that India is a major economy that has registered fast growth.

"Prime Minister Modi has been doing a lot in the way of pressing reforms to allow India to pull even more people out of poverty," the official, who spoke on condition of anonymity, said.

India, the official said, is increasingly a partner of America in security terms as well, and it also happens to share many values in common with the United States.

"India and the United States are the world's first and second largest democracies, and both of us have an abiding interest in the maritime commons remaining open and trade continuing to flow freely," the official said.

"So it is no accident that we are viewing the region with a wider aperture to include India as one of the "bookends", as Secretary (of State, Rex) Tillerson calls it, of the region -- the United States being the other bookend," the official said, defending the use of term Indo-Pacific instead of Asia-Pacific for the region.

The Indo-Pacific is a term that, in a sense, widens the aperture for the region, the official said.

It talks about a region that encompasses everything from India to the West Coast of the US; all of the Asian countries in Northeast Asia; down in Oceania with Australia; the Pacific Islands, and New Zealand d in thesouth; India to the west; the United States to the east; and, of course, Southeast Asia as the crossroads to all of that, the official said.

With a vibrant area, a young demographically, one should be envious of the demographics, said the official. Prime Minister Modi is leaving for the Philippines on Sunday to attend the India-ASEAN and East Asia summits. Trump is also scheduled to attend the East Asia Summit, where he is expected to meet Modi.

Meanwhile, in a veiled attack on China, Trump said the US would "no longer tolerate the audacious theft of intellectual property."

"We will confront the destructive practices of forcing businesses to surrender their technology to the state, and forcing them into joint ventures in exchange for market access," the US president said.

American firms have long complained about China failing to honour intellectual property rights.

Trump had travelled to Danang from Beijing, where he had also discussed America's huge trade imbalance with China.

In the speech, Trump said he had spoken "openly and directly" with Chinese President Xi Jinping "about China's unfair trade practices and the enormous trade deficits they have produced with the US."

Trump's tone in Vietnam was strikingly different from the day before in Beijing, where the US president appeared to be friendlier toward the Communist giant as he sought Xi's help to reduce the massive trade deficit and to rein-in nuclear- armed North Korea.

The bilateral trade between the US and China was worth USD 648 billion last year, but trade was heavily skewed in China's favour with the US amassing a nearly USD 310 billion deficit.

Xi, speaking at the same APEC event shortly after the US President, did not respond to Trump's remarks, but said economic globalisation had become an "irreversible historical trend."

Trump also used his speech at the APEC business meet to promote his vision for a free and open Indo-Pacific region.

"We have been friends, partners and allies in the Indo- Pacific for a long, long time," he said.

"The story of this region in recent decades is the story of what is possible when people take ownership of their future."

The use of the term Indo-Pacific by President Trump has led to speculation that it may have something to do with Washington preparing the ground for a revival of the so-called Quadrilateral strategic alliance between the US, Japan, Australia and India to counter China's rise.

China has already reacted cautiously over the proposal by the Trump administration for a working-level quadrilateral meeting, saying Beijing hopes that it would not target or damage a "third party's interest".

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

21.2. US wants stronger economic, defence ties with India: Tillerson

Reuters, 19 Oct. 2017

US Secretary of State Rex Tillerson has said before a visit to India next week that the Trump administration wanted to “dramatically deepen” cooperation with New Delhi, seeing it as a key partner in the face of negative Chinese influence in Asia.

Speaking on Wednesday, less than a month before President Donald Trump is due to make his first state visit to China, Tillerson said the United States had begun to discuss creating alternatives to Chinese infrastructure financing in Asia.

In another comment likely to upset Beijing, he said Washington saw room to invite others, including Australia, to join US-India-Japan security cooperation, something Beijing has opposed as an attempt by democracies to gang up on it.

The remarks coincide with the start of a week-long Chinese Communist Party congress at which President Xi Jinping is seeking to further consolidate his power.

“The United States seeks constructive relations with China, but we will not shrink from China's challenges to the rules-based order and where China subverts the sovereignty of neighboring countries and disadvantages the US and our friends,” Tillerson told the Center for Strategic and International Studies think tank.

“India and the United States should be in the business of equipping other countries to defend their sovereignty, build greater connectivity, and have a louder voice in a regional architecture that promotes their interests and develops their economies,” Tillerson added.

The US decision to expand relations with India almost certainly will upset India's rival, Pakistan, where Tillerson also will stop next week, said a senior State Department official, speaking on condition of anonymity. Pakistan was the main US ally in South Asia for decades, but US officials are frustrated with what they charge has been Pakistan's failure to cut support for the Taliban insurgency in Afghanistan, where the administration wants India to play a bigger role in economic development.

South Asia strategy

As part of a South Asia strategy unveiled by Trump in August, Tillerson is expected to press Islamabad, which denies aiding the Taliban, to take stronger steps against extremists and allied groups and intensify efforts to pressure them to agree to peace talks with Kabul.

“We expect Pakistan to take decisive action against terrorist groups based there that threaten its own people and the broader region,” Tillerson said.

Trump has threatened further cuts in US aid to Pakistan if it fails to cooperate.

Trump's Beijing visit

China, a strategic rival to the United States and India, is also vital to Trump's efforts to roll back North Korea's efforts to create nuclear-armed missiles capable of reaching the United States, an issue expected to top the agenda in Trump's November 8-10 Beijing visit.

A senior State Department official defended the timing of the speech, saying Tillerson also said he wanted a constructive relationship with China.

“For many decades the United States has supported China's rise,” said the official. “We've also supported India's rise. But those two countries have risen very differently.”

The Chinese Embassy in Washington said in a statement that Beijing “contributes to and defends the rules based world order" and seeks to enhance international cooperation.

“We will never seek hegemony or engage in expansion, never pursue development at the expenses of others interests,” it said.

Alternative to Chinese funding

Tillerson did not say what he meant by creating an alternative to Chinese infrastructure financing, but said the Trump administration had begun a “quiet conversation” with some emerging East Asian democracies at a summit in August.

He said Chinese financing was saddling countries with "enormous” debts and failing to create jobs.

“We think it's important that we begin to develop some means of countering that with alternative financing measures.”

“We will not be able to compete with the kind of terms that China offers, but countries have to decide what are they willing to pay to secure their sovereignty and their future control of their economies and we've had those discussions with them as well,” he said.

22.1. India emerges as biggest source for digital talent: Survey

PTI, Oct. 27, 2017

Mumbai: India has highest proportion of digital talent with 76 per cent among the countries surveyed, compared to the global average of 56 per cent, according to a survey.

"The digital talent landscape India ranks highest in proportion of digital talent at 76 per cent," according to the Capgemini and LinkedIn survey.

India is followed by Italy at 66 per cent, Spain at 65 per cent, UK at 62 per cent, the Netherlands 61 per cent and the US 55 per cent, the survey added.

The survey was conducted among 753 employees and 501 executives at the director-level or above at large companies with more than 1,000 employees.

It took place from June to July 2017, and covered nine countries, including France, Germany, India, Italy, the Netherlands, Spain, Sweden, the United Kingdom and the United States covering seven industries like automotive, banking, consumer products, insurance, retail, telecom and utilities.

The survey also revealed that the digital talent gap is widening in India as 64 per cent organisations in the country cited a widening talent gap over the past few years.

Globally, 54 per cent of the organisations agreed that the digital talent gap is hampering their digital transformation programs and that their organisation has lost competitive advantage because of a shortage of digital talent, it added.

Further, the survey said, the major roadblocks for existing talent are the workforce worrying over their skills becoming redundant soon.

"Globally, employees worry that their skills are either already redundant or soon to become so. In India, 49 per cent believe that their current skill set will be redundant in the next 4 5 years and 34 per cent believe that this will happen as early as the next 1-2 years," it said.

Among the employees surveyed globally, 47 per cent stated digital skill development to be a key reason to switch to a new organisation, it said.

The survey said with India, the UK and Germany having the largest supply of digital talents, the migration is also high from these countries.

For every 4 digital talent moving into India, 10 move out of the country, it said.

The US (47 per cent), UK (14 per cent), UAE (6 per cent) are the top countries from which digital talents are migrating to India.

Moreover, US (50 per cent), Australia (8 per cent) and UK (8 per cent) are the top three countries to which talent from India is moving to, it added.

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

22.2. Bilateral trade between India and Ghana may touch US$ 5 bn

PTI, Nov. 13, 2017

Mumbai: The new envoy of Ghana has said bilateral trade between India and his country is expected to touch USD 5 billion in the next three years.

"Bilateral trade relations between India and Ghana are growing exponentially. We intend to expand our bilateral trade with India from USD 3 billion to USD 5 billion in the next three years," Ghana's new Ambassador to India Mike Aaron Oquaye Jnr told reporters here last night.

A high powered delegation from Ghana comprising the Speaker of Parliament of Ghana Aaron Mike Oquaye along with delegates from the One District One Factory, from the President's office, The Exim Bank of Ghana and Ghana Commercial Bank visited the city to seek business opportunities.

"We seek Indian investments into agri and food processing, palm oil, jute, cocoa processing, pharmaceutical and solar sectors. We will work towards expanding business, economic and bilateral trade between India and Ghana by promoting and stimulating the Mumbai business community to look towards Ghana," Oquaye said.

"We will work towards expanding business, economic and bilateral trade between India and Ghana by promoting and stimulating the Mumbai business community to look towards Ghana," the Ambassador added.

According to Oquaye, it is expected that by the end of 2017, about 51 districts across Ghana would rollout business enterprises under the One-District-One Factory initiative. PTI AP

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

23.1. India sends 1st wheat shipment to Afghanistan via Chabahar port

Livemint, Oct. 30, 2017

New Delhi: India on Sunday flagged off a shipment of wheat for Afghanistan through Iran’s Chabahar port— marking the operationalization of the port for the trans-shipment of goods from India to the landlocked country.

The development is seen as a significant one as it torpedoes Pakistan’s veto over trade between India and Afghanistan—a move aimed at circumscribing India’s role in Afghanistan. And it comes almost 15 years after India and Iran first agreed to develop the Chabahar port to ease connectivity bottlenecks for New Delhi in reaching out to landlocked Central Asia and Afghanistan. It also follows US president Donald Trump in August calling on India to play a larger role in stabilizing war-torn Afghanistan as he announced a revamped security plan to defeat a resurgent Taliban.

On Sunday, Afghan foreign minister Salahuddin Rabbani joined his Indian counterpart Sushma Swaraj through a joint video conference as the latter in New Delhi flagged off a ship carrying the first consignment of wheat from India’s Kandla port to Afghanistan.

“The shipment is part of commitment made by the Government of India to supply 1.1 million tonnes of wheat for the people of Afghanistan on grant basis,” an Indian foreign ministry statement said. “Six more wheat shipments will be sent to Afghanistan over the next few months,” it said.

“The wheat shipment is a landmark moment as it will pave the way for operationalisation of the Chabahar port as an alternate, reliable and robust connectivity for Afghanistan. It will open up new opportunities for trade and transit from and to Afghanistan and enhance trade and commerce between the three countries (India, Iran, Afghanistan) and the wider region,” the statement added.

It was in 2003 that India and Iran first agreed to develop the Chabahar port, located in the Gulf of Oman near Iran’s border with Pakistan, to allow New Delhi to reach markets in Afghanistan and landlocked Central Asia.

The project was delayed due to international sanctions on Iran over its suspect nuclear programme and India’s focus on concluding a civil nuclear pact with the US. Interest in the project was rekindled in 2013 after Iran and the US, UK, France, Russia, China and Germany reached an interim agreement on Tehran’s nuclear programme and some sanctions were lifted.

And in May last year, India, Iran and Afghanistan signed a trilateral trade pact when Prime Minister Narendra Modi visited Tehran to enable the movement of goods from Chabahar to Afghanistan.

The Chabahar port is also less than 100km from Pakistan’s Chinese-built port of Gwadar, which is part of the China-Pakistan-Economic Corridor project (CPEC) aimed at opening up an energy and trade corridor from the Gulf to western China. The CPEC is also a strand of China’s ambitious Belt and Road Initiative that aims to connect around 60 countries across Asia, Africa and Europe through a series of roads, railways and ports.

When linked to the International North-South Transport Corridor (INSTC), the Chabahar-Zahedan-Zaranj corridor would connect South Asia on one hand and Europe on the other, Modi had said. INSTC is an ambitious multimodal transport system established in 2000 by Iran, Russia and India to promote transportation cooperation. It is planned to connect the Indian Ocean and Persian Gulf to the Caspian Sea through Iran and then onwards to St. Petersburg and northern Europe through Russia.

It was expected that a 2010 US-supported pact between Afghanistan and Pakistan on transit trade would be extended to India to allow Indian goods to pass through Pakistan. But that floundered when Pakistan refused to allow Afghan trucks to come up to the Indian border at Attari, Punjab, or take back Indian goods. At present, Afghan trucks with Afghan products come up to Torkham on Afghan-Pakistan border where the goods are loaded onto Pakistan trucks that in turn come up to the India-Pakistan border at Wagah. Once the goods are offloaded, the trucks go back into Pakistan empty, an Indian official said.

With the US refusing to certify that Iran was complying with its commitments under the international nuclear pact, there were doubts that India’s plans to use Chabahar for trade with Kabul could come under a cloud once again. Last week, however, US secretary of state Rex Tillerson said that the US did not intend to “interfere with legitimate business activities that are going on with other businesses, whether they be from Europe, India, or agreements that are in place that promote economic development and activity to the benefit of our friends and allies”.

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

23.2. India, Bangladesh launch connectivity projects, including new train service

Livemint, Nov. 10, 2017

New Delhi: In a bid to boost connectivity and people-to-people contact between India and Bangladesh, the prime ministers of the two countries on Thursday flagged off a new train service between Kolkata and Bangladesh’s southwestern industrial city of Khulna.

This is the second major railway link between the two countries. A link connecting Dhaka and Kolkata was flagged off in 1999.

Prime Minister Narendra Modi and his Bangladeshi counterpart Sheikh Hasina flagged off the service in the presence of West Bengal chief minister Mamata Banerjee through video conference, an Indian government statement said.

“The most important dimension of connectivity is people-to-people connectivity,” said Modi in his speech on the occasion.

The Kolkata-Khulna service called “Bandhan” (bond) is an air-conditioned weekly passenger train that will run every Thursday from both cities.

“The two major services—Maitree (friendship) and Bandhan—are in accordance with our vision for connectivity between the two countries,” Modi said, adding that development and connectivity were interlinked with each other.

The three leaders, who were joined by Indian foreign minister Sushma Swaraj, also inaugurated two railway bridges, and an international railway passenger terminus at Chitpur in Kolkata.

In her remarks, Hasina said that ties between the two countries had been further strengthened by the new railway link.

India-Bangladesh ties have seen an upswing especially after India ratified the Land Boundary Agreement with its eastern neighbour in 2015, something that had been languishing for decades. New Delhi sees its eastern neighbour as key to bringing to fruition its plans to quell insurgency in India’s restive northeast as well as usher in development in the region through trade besides strengthen linkages with Southeast Asia given Bangladesh’s strategic location.

Connectivity has been a key theme espoused by Modi since coming to office in 2014 given that South Asia is seen as one of the least integrated regions in the world with low levels of trade. India has been working with many of its neighbours to boost connectivity in the region —at the level of the South Asian Association for Regional Cooperation (Saarc) as well as the subregional Bangladesh-Bhutan-India-Nepal level.

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

24.1. Indian companies create 113K jobs in US: Report

PTI, Nov. 15, 2017

Washington: Indian companies have created more than 113,000 jobs in the US and invested nearly USD 18 billion in the country, according to an annual report which gives state-by-state breakdown of the tangible investments made and jobs created by 100 Indian firms doing business in America and Puerto Rico.

The report titled 'Indian Roots, American Soil', which was released by Confederation of Indian Industry (CII) yesterday, states that Indian companies have also contributed USD 147 million towards corporate social responsibility and USD 588 million as research and development expenditures in the US.

Together, 100 Indian companies employ 113,423 people across 50 states, the District of Columbia and Puerto Rico, the report said, adding that the total value of tangible investments made by these companies exceeds USD 17.9 billion.

The top five states in which Indian companies have generated maximum employment are New Jersey (8,572 jobs), Texas (7,271 jobs), California (6,749 jobs), New York (5,135 jobs) and Georgia (4,554 jobs). According to the report, the top five states in which Indian companies have contributed the highest foreign direct investment are New York (USD 1.57 billion), New Jersey (USD 1.56 billion), Massachusetts (USD 931 million), California (USD 542 million) and Wyoming (USD 435 million).

The average amount of investment received from Indian companies per state/territory is USD 187 million, the report said, noting that 85 per cent of the companies plan to make more investments in the US. As many as 87 per cent of the companies plan to hire more employees locally in the next five years. Indian industry and professionals are making significant contributions to the US economy, said Indian Ambassador to the US Navtej Sarna.

"The presence and reach of Indian companies continue to grow each year as they invest billions of dollars and create jobs across the United States," he said.

Chandrajit Banerjee, CII director general said the story of Indian investment in the US is one that showcases how intertwined the two countries are that contribute to each other's success.

Indian firms are among the fastest growing investors in the US, contributing to growth and job creation in the US economy, said Senator Chris Van Hollen.

As the world's oldest democracy and the world's largest democracy, a strong US-India partnership is vital for the 21st century, said Congressman Ami Bera.

The friendship between the United States and India has continued to grow under President Trump's administration, said Congressman Pete Sessions.

Indian businesses have brought hundreds of millions of dollars and thousands of jobs to Texas and, at the same time, the reforms led by Prime Minister Modi have opened doors for American companies to expand their operations in India, he said.

"I am glad to see, as CII's event today proves, bonds between our nations both commercial and strategic - continue to grow stronger," Sessions said.

"According to CII's survey, Indian companies in Virginia have invested over USD 37 million in my state, and I can only hope that they will continue to invest in Virginia and that our engagement with these companies will continue to grow," said Congressman David Brat.

In addition to spurring economic activity, particularly in North Carolina, this type of investment serves to strengthen the bond between our two countries, said Congressman George Holding.

The report shows that Indian companies have invested over USD 195 million in the state of Illinois, and created over 3,800 jobs, said Congressman Raja Krishnamoorthi.

"I hope that Indian companies continue to put down roots and invest in our state, as our economy and community are strengthened by their engagement with us," he said.

"As the largest India-headquartered multinational in North America, the Tata Group has had operations and investments in the US market for many decades," said James Shapiro, resident director North America of Tata Sons Ltd.

Ravi Kumar, president and Deputy COO, Infosys said his company began working with its first US client over 35 years ago and, have worked to boost American innovation ever since.

"Earlier this year, we announced plans to hire 10,000 American workers over the next two years, partnering with local colleges and universities to shrink the IT skills gap in the US, and are focused on upskilling and reskilling workers seeking to grow their careers in computer science," he said.

The work of Infosys Foundation USA has benefited over 4,700,000 students, 13,000 teachers and 21,000 schools across all 50 states in America since 2015, he asserted.

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

24.2. India companies lead the world on disclosing CSR spends: Study

PTI, Oct. 24, 2017

Mumbai: India has witnessed a marginal dip in corporate responsibility-related reporting by the top- 100 companies, but continues to be among the best in the world in this aspect, a 49-country study has found. It also tops in the list of countries with highest rate of corporate responsibility (CR) related information in annual reports, it said, adding 98 per cent of the top 100 companies have the details.

As against a 100 per cent compliance observed in 2015, the reporting rate dipped marginally to 99 per cent for 2017, the study by global consultancy major KPMG has said.

It can be noted that under the amended Companies Act, 2013, corporate social responsibility (CSR) reporting has been made mandatory for companies.

Interestingly, it said regulation is driving reporting on human rights as well, it said.

"The Business Responsibility Report (BRR), an annual disclosure mandated by the Securities and Exchange Board of India (SEBI), requires the top 500 listed companies to report on nine core principles, one of which focuses on human rights," Santhosh Jayaram, KPMG's partner for sustainability services, said.

India is ranked the highest, with 95 pf the top 100 companies acknowledging human rights in their CR reporting, the study said.

From a global perspective, it said companies in the mining space have been found to be the most likely to acknowledge human rights in their reporting.

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

25.1. Apologise for Jallianwala Bagh massacre: Indian-origin MP to British govt

BusinessLine, 20 Oct. 2017, Vidya Ram

Labour MP Virendra Sharma is urging British parliamentarians from across the political spectrum to come together to support his parliamentary motion pushing for a formal apology from the British government for the Jallianwala Bagh Massacre.

Sharma, the Labour MP for Ealing Southall, tabled the Early Day Motion — a formal parliamentary means for MPs to draw attention to an issue — earlier this week, and has so far attracted eight signatories from across the political spectrum, including Labour, the Conservatives, the Scottish National Party, the Democratic Unionist Party of Northern Ireland.

The motion called for the government to “formally apologise” in the House of Commons and inaugurate a memorial day to mark the event, ahead of the 100th anniversary in 2019. It notes David Cameron’s description of the massacre as a “deeply shameful event” while on a visit to India in 2013 and urges the government to ensure more was taught about this “shameful period” in British history. “This event does not represent modern British values,” it said.

Sharma said he expected to garner further political support. “Its not a question for any political party — it’s a historical fact that the people of Britain should know about. It hurt deeply then and it hurts deeply now.” While Sharma does not anticipate an immediate debate in the House of Commons on the issue, he said he planned to launch a number of other initiatives to raise awareness of the issue and the need for an apology and greater education through community events, as well as in the House of Commons. “There are parts of the history that are unacceptable but which people must know about…its missing in large part from history books in this country,” he said.

The debate over the impact of the British Empire more widely has gained increasing prominence in the past year, with the focus on Brexit and Britain’s desire to expand beyond the European Union, with some harking back to the days of it being a great trading nation, and the Empire.

Colonial history

“The UK is one of the few countries in the EU that does not need to bury its 20th century history,” declared Liam Fox, a prominent campaigner for Brexit, several months before he became Britain’s Secretary of State for International Trade last year. A 2016 poll found that just 21 per cent of people in Britain regretted it’s colonial history. However, others have endorsed the views of critics such as Shashi Tharoor, who caught much media and public attention earlier this year during his book tour for Inglorious Empire (published in India as An Era of Darkness), which is deeply critical of the impact of British rule on India. He accused Britain of historical amnesia. With the 100th anniversary of Jallianwala Bagh in 2019, and the latest parliamentary campaign, the debate is likely to intensify further.

25.2. India, Canada to fast-track free trade pact negotiations

BusinessLine, 13 Nov. 2017

Canada and India discussed ways to expeditiously conclude the free trade agreement and investment pact being negotiated at the Ministerial dialogue in New Delhi on Monday.

Minister for Commerce and Industry Suresh Prabhu and the Canadian Minister for International Trade François-Philippe Champagne directed the chief negotiators of the free trade pact to discuss and explore ways for early conclusion of the agreement, according to an official release.

India highlighted the importance of services component under the proposed free trade pact formally known as the Comprehensive Economic Partnership Agreement (CEPA). “The Canadian side assured that they would look into the issues concerned, including movement of natural persons or workers and the kind of provisions could be built into the CEPA,” the release said.

Both sides also noted the exchange of wish lists on the services front and the Indian side reiterated that the architecture for services under CEPA is a vital focus area and response from Canada on positive elements has to be mutually beneficial. The Canadian side assured that it would look into the issues concerned, including movement of natural persons and the kind of provisions that could be built into the CEPA.

Both Ministers also took note of the progress made under the Foreign Investment Promotion and Protection Agreement (FIPA) and expressed their hope for an early conclusion.

While Canada is pressing for an earlier conclusion of the FIPA, India wants the CEPA to be also concluded simultaneously.

The two countries agreed to explore collaboration in the area of export credit insurance through India’s Export Credit Guarantee Corporation Ltd and Export Development Canada.

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Monday 20 November 2017

NEWSLETTER, 20-XI-2017

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

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NEWSLETTER, 20-XI-2017

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