AAPI: July 2018

DELHI, 20th june 2018

Index of this Newsletter

INDIA

INDIA & THE WORLD

21.1. India, China demand reduction in rich nations’ harmful farm subsidies from 2019
22.1. India, Australia formalize open sky agreement in aviation sector
22.2. Govt to study ways for boosting pharma export to China
24.1. How US-China trade war will affect India
24.2. China to reduce or cut to zero tariffs on 8,549 types of goods originating in India, 4 other Asian countries
25.1. Indo-US trade growing twice as fast as US-China: Senator Portman
25.2. Dimon, Bezos, Buffett tap Atul Gawande for new healthcare firm

* * *

DELHI, 20th June 2018

NEWSLETTER, 20-VI-2018

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

1.1. Govt to raise ₹1 trillion from market for funding education infrastructure

Livemint, 4 Jul. 2018, Prashant Nanda

The funds will be raised from a clutch of sources, including education bonds, commercial borrowings and corporate houses

New Delhi: The Union cabinet on Wednesday allowed the human resource development (HRD) ministry toraise ₹1 trillion from the market for funding education research and infrastructure.

The funds will be raised from a clutch of sources, including education bonds, commercial borrowings and corporate houses. The money shall be given as loans to government-controlled higher educational institutions, including medical colleges, as well as central government-run school chains such as Kendriya Vidyalayas (KVs) and Navodaya Vidyalayas (NVs) as the Union government explores innovative ways to fund education to reduce the burden on the exchequer.

The funds will be raised through the Higher Education Financing Agency (HEFA), a recently minted non- banking financial company under the HRD ministry. The cabinet committee on economic affairs onWednesday approved enhancing HEFA’s capital base to ₹10,000 crore from the current ₹3,300

crore, Mint first reported the proposed plan on 3 June.

“The cabinet committee on economic affairs...approved the proposal for expanding the scope of HigherEducation Financing Agency (HEFA) by enhancing its capital base to ₹10,000 crore and tasking it to mobilize ₹100,000 crore,” law minister Ravi Shankar Prasad said after the cabinet meeting.

The ₹10,000 crore capital base includes present and subsequent contribution from Canara Bank, a joint venture partner of the HRD ministry for establishing and running HEFA.

HRD minister Prakash Javadekar termed the decision a “landmark” development that will work as a “huge push for research and academic infrastructure with social equity”.

This move will reduce the budgetary pressure on the exchequer at a time when the government is facing a funds crunch, said an HRD ministry official who asked not to be named. The ministry may effectively save the few thousand crores of rupees it is giving on grant for infrastructure development and bring in fiscal accountability among institutions, as most of these loans will be paid back by institutions, said the official. Technical institutions like Indian Institutes of Technology (IITs), Indian Institutes of Management (IIMs) and National Institutes of Technology (NITs) that are more than 10 years old will repay the whole loan from their internal earnings, while technical schools started between 2008 and 2014 will repay 25% and rest will be paid from government grants, according to the cabinet decision.

Central universities established before 2014 will have to repay 10% of the loan they take from internal resources and will receive a grant for the remaining part of the principal.

KVs and NVs as well as new medical colleges and central universities established after 2014 will get grants to service HEFA loans.

So far, funding proposals worth ₹2,016 crore from some of the older IITs have been approved by HEFA and nearly ₹9,000 crore more of loan proposals are in the pipeline for development of education infrastructure andresearch capabilities at various IITs, NITs and other technical schools.

1.2. Moving from slogans to policies and programmes

Livemint, 29 Jun. 2018, Montek Singh Ahluwalia

We must raise the rate of investment in the Indian economy and push for reforms which will increase efficiency and productivity

Slogans are the “front end” of economic strategy. They are the catchy formulations designed to capture publicattention without making it clear how exactly the objective will be achieved.

“Sab Ka Saath Sab Ka Vikas”, is the current slogan of the National Democratic Alliance (NDA) government. It is almost a repackaging of the 11th Plan’s somewhat academic title “Inclusive Growth”, into a much catchier Hindi version. It sounds good, but it needs to be translated into quantitative targets. Performance can then be measured against these targets, and policies and programmes outlined that will achieve these targets.

Growth targets

Vikas means development and the most commonly used measure of vikas is growth of gross domestic product (GDP). So let us start by identifying the growth target being promised. Sab Ka Vikas also implies a distributional assurance but I leave that for another column.

In the old days growth targets were laid down in Five Year Plans. In the “post planning world” that we now livein, they have to be inferred from other official documents. The first Economic Survey of the NDA government, published in February 2015, said that the “economy was poised to move to double digit growth”. No specificdate was mentioned for the new dawn, but four years later, we are certainly nowhere near double digit growth. Two recent pronouncements by the prime minister (PM) are relevant in this context. First, he said we should try to become a $5 trillion economy by 2025. Second, he has said the time has come to move to double digit growth. How does performance thus far stack up against these targets?

Most independent analysts think that GDP (GVA, or gross value added concept) will grow by about 7.4% in 2018-19. If this is achieved, the Narendra Modi government will have averaged about 7.2% per year in its five years. This will be about the same as that under United Progressive Alliance (UPA) II, despite the benefit of an oil price bonanza. It will be well below the growth rate of 8.4% delivered by UPA I.

NITI Aayog, in its “Three Year Action Agenda” published a year ago, said the economy could get to an “8%-plus” trajectory in another “two to three years if not sooner”. This would imply a significant acceleration from 7.4% in 2017-18 to something above 8% in 2019-20, and even higher subsequently. The InternationalMonetary Fund’s (IMF’s) April edition of the World Economic Outlook projected India’s GDP growth exceeding 8% in 2021. These are projections of what is feasible if (a) policies followed are sufficiently supportive of growth and (b) the external environment does not deteriorate. Since the external environment has deteriorated—with threats of trade wars growing by the day and also a firming up of oil prices, we may see adownward revision in the IMF’s projections in the revised edition due in a month or so.

This suggests that GDP growth may not clock “8% plus” in the next two years. However, even if we grow at only around 7.5%, we will still be the fastest growing large country among the emerging markets. We will notbe on course to meet the PM’s target of becoming a $5-trillion dollar economy by 2025. That would need growth rate of 8.5% over the next eight years.

Our real problem is that 7.5% growth will not be enough to create the number and quality of jobs we need. It will also not significantly increase our global footprint or clout in the next few years. For those outcomes we have to aim much closer to the PM’s target of double digit growth. The lowest double digit number is 10 andwe should try to work out what is needed to achieve 10%.

China did grow at more than 10% per year for 30 years. But they reformed relentlessly from 1980 onwards to achieve this feat. They also faced a much more supportive global trade situation. The question to ask is arewe in a position to take the steps needed to achieve something along these lines? Even if we can’t get to 10%,can we at least get to 9%? UPA I actually averaged 9.3% growth in the three years 2005-06 to 2007-08?Setting a target of “9% plus” requires action on two broad fronts. We must raise the rate of investment in theeconomy and push for reforms which will increase efficiency and productivity.

The rate of investment

The rate of investment (gross fixed capital formation as a percentage of GDP) had reached a peak of 33% in 2007-08 and then declined to 31.8% in 2011-12. The new national accounts series raised the base year ratio for 2011-12 to 34.3%, but it also showed a continuing decline from that level to 28.5% in 2017-18.

An investment rate of 28.5% may suffice for 7%-plus growth, but it is certainly not enough to bring about a substantial acceleration to 9%. Ideally, we need to increase the investment rate by 4 to 5 percentage points of GDP to get the economy back to a 9% growth trajectory which was achieved in 2007-08. Furthermore, at least half the additional investment needs to be in infrastructure.

Policies and programmes to increase productivity

What are the policies and programmes that will achieve this objective? Action will be needed on several areas, but in this column I discuss just one: fixing the problems facing public sector banks . If we fail on this count, we can forget about even 8% growth.

Two years ago, the finance ministry enumerated four “R”s that were critical for fixing the banks: recognition,resolution, recapitalization and reform. Recognition was satisfactorily accomplished as an outcome of the asset quality review triggered by then Reserve Bank of India (RBI) governor Rahguram Rajan in 2015. The scale of non-performing assets (NPAs) turned out to be much larger than earlier thought. The latest Financial Stability Review released by the RBI shows the problem not getting better. It is likely to worsen next year.

Resolution made very little progress because bankers were reluctant to accept any package which involved large haircuts. This problem has now been resolved with the RBI directing the banks to refer their troubled assets to the insolvency process under the new Insolvency and Bankruptcy Code. This ensures a time-bound resolution of a large proportion of NPAs through either takeover or liquidation. Bankers will be able to justify accepting large haircuts as long as they get a better deal than what they would get under liquidation. Thus far, the courts have resisted the attempts of vested interests to stall the process and the first few successes have begun to come through. However, it is clear that successful resolution will involve substantial haircuts for the banks, leading to large losses. This will increase the scale of recapitalization needed.

The government has rightly taken the view that recapitalization without reform of the public sector banks would achieve little. Unfortunately, they have yet to take the next step of outlining a coherent strategy ofrecapitalization and reform. The government has five options, each of which poses problems. They don’t haveto choose one option for all banks. Some banks could go through one route while others take another.

(i) Government could try to attract new private capital into the public sector banks and allow thegovernment’s equity to be diluted below 50%, but without giving the new investors any strategic partner status with a role in management. It is not clear that substantial investment would be attracted on these terms, but in any case the government must outline the governance reforms it is willing to put in place in banks where the government will now have technically a minority stake, but still a dominant one.

(ii) Attract new private sector investors into the banks as strategic partners, with some role in management. In these cases, the government would have to reach an agreement with the new strategic partner on what role it will have, and this could be built into the shareholders agreement. The arrangements can be tailor made.

(iii) Retain majority control and recapitalize through the budget. This option implies bearing a large fiscal burden. The PM has recently reaffirmed that the government will stick by the fiscal consolidation path announced. This may rule out any substantial budget-based recapitalization. In any case, the government should outline what governance reform is intended for banks which will remain majority government owned. An obvious reform crying out for implementation is to make all public sector banks subject to the same regulatory oversight by the RBI that it currently enjoys over private sector banks. Governor Urjit Patel has made it amply clear that the RBI wants this reform to be implemented.

(iv) Recapitalize banks through a public sector financial institution, as is reported to be under consideration in the Life Insurance Corp. of India/IDBI Bank case. This avoids a budgetary outgo, but it is too obviously a subterfuge and will adversely affect the credibility of the government’scommitment to reforms. In my view, it is best avoided.

(v) Leave the bank with inadequate capital, and have the RBI trigger prompt corrective action effectively limiting expansion in commercial credit, and making the bank a “narrow bank” investingall its resources in government securities.

Each of the options involves some difficult decisions, but since going below 50% requires legislative amendments, time is rapidly running out. If we end up with no decision before the next election, we will have lost a whole five years in making progress on a critical area. The finance ministry will have done what bankers are often accused of doing in the context of managing NPAs: kicking the can down the road for their successors to take up!

Montek Singh Ahluwalia was the deputy chairman of the erstwhile Planning Commission. Comments are welcome at views@livemint.com.

2.1. Medical body slams Ayushman scheme rates, says patient safety is at risk

PTI, BusinessLine, Jun, 24.

The Indian Medical Association (IMA) on Sunday rejected the Centre’s recently announced packages in itsambitious Ayushman Bharat Pradhan Mantri Rashtriya Swasthya Suraksha Mission, under which treatment for coronary bypass, knee replacements and stents, among others, would be 15-20 per cent cheaper than they are under the Central Government Health Scheme (CGHS).

The 205-page draft model tender document shared with the States last month had knee and hip replacements fixed at ₹9,000 each, stenting at ₹40,000, coronary artery bypass grafting (CABG) at ₹1.10 lakh, caesarian delivery at ₹9,000, vertebral angioplasty with single stent at ₹50,000 and hysterectomy for cancer at ₹50,000. Emergency meeting

In an emergency meeting here this evening, the IMA said the package rates were “unacceptable” but appreciated the Centre’s decision to empanel hospitals from 10 beds onwards.

These package rates expose patients to danger in hospitals, as quality will be compromised and corruption will rise, it said. While certain reports said the IMA has fully backed this scheme, this is not true, said theAssociation. “Our objections about package rates, fund allocation and the insurance model stand unchanged.IMA had also raised the need for scientific costing before fixing the rates,” said Ravi Wankhedkar, National President of the IMA. “The cardinal objections raised by IMA remain to be addressed.”

The Mission in its present form will lead to elimination of small and medium hospitals, Wankhedkar added.He, however, said the IMA is willing to partner with the government in the Ayushman scheme provided “the package rates are revised to a reasonable level”.

2.2. India’s capable teachers can solve all education woes

Livemint, 4 Jul. 2018, Anurag Behar

India’s educational challenges can only be addressed by efforts of engaged and capable teachers in school

The elderly man was pleasantly drunk at 10am. He was minding the shops, two of seven, on the main road. Most people who were not out of the village earning their livelihoods, including some of the shopkeepers, seemed to have gone to the government primary school where we were headed.

The path to the school wound down the mountainside. The valley had a sharp drop, common in that part of the Kumaon region. Around a bend, the school became visible in the distance. It looked like a movie-set piece, perched on a distended platform overhanging the valley, framed by the high mountains behind. Even from a distance, it seemed abuzz with movement and colour.

Over 100 children were at the playground, which comprised most of the rectangular platform that was a natural outcrop of the mountainside. Some were painting on old newspapers stuck to the wall of the building, while others ran about helter-skelter, playing some game. The three rooms of the school, on one edge of the playground, were filled with people from the village. They were visiting the Baal Shodh Mela (Children’sResearch Fair). The mela was a joint effort of the school at Syalidhar, which is where we were, and the government primary schools at Lama Singh and Raialkot, both about 2km from there.

The walls of the rooms were covered by posters with stories of two kinds—original ones written by the children, and local folk tales. The rooms were packed with visitors. The children were being called in repeatedly to explain their work. A few of them would squeeze in, but would soon sneak out, pulled by theactivities outside, with no desire to talk about what they were done with. Many of the visitors’ reading abilities were limited, but they were as awestruck as those who could read well. It seemed impossible that those long interesting stories were written by their six-, seven- or eight-year-olds. Teachers from other schools also visited the mela through the day.

When the crowd of visitors thinned, Sudha Pande and Geeta Khatri, the two teachers, narrated the story of the mela. Teaching children reading and writing with expression and comprehension, and not as mechanical reproduction of letters, is one of their biggest challenges. A large proportion of their students live in homes withdeep economic disadvantage. Far from having any books, many of the parents can’t read and write. Everyoneis out long hours, struggling to earn a living in the steep step-fields or as daily-wage earners in the towns. The children often take care of their siblings.

These challenges are faced by almost all our public (government) schoolteachers. The complexity and difficulty of these challenges are usually underestimated, which is part of the reason why teachers don’t getadequate systemic support. Instead, they are often saddled with simplistic techniques, including packaged early language curriculum, all woefully inadequate in developing reading and writing as integral to expressive language.

The exercises leading up to the mela started six weeks earlier, sparked by a workshop that the teachers had attended. The children were asked to get local folk tales from their families. On the first day, only one child had a story, from his grandmother, which he narrated to the whole school. The fun snowballed and, within some days, each child had a story. Soon, each had many, and they had to be divided into groups.

Each of the groups had children from classes I-V, with a few who could write. In the next stage, those who could write wrote down the stories as they were narrated by each child. Then the stories were read aloud.There was a scramble for stories to be written and read before anyone else’s.

Next, each child used the written text of their own story to write it themselves with the help of those who could write well. The two teachers were deeply engaged with each group, supporting each child. This exercise went on for five weeks with variations, such as days being reserved for creating original stories. Over this period, the children became more and more independent with written language. The last week was spent preparing the exhibits.

The two teachers were as awestruck with their own experience as the visitors were with the exhibits. They had never seen such progress. Those who were beginners had made progress that used to take a year or more. Students already familiar with writing had gained fluency and become substantially more expressive. But their greatest sense of achievement was that all children had become keenly interested in reading and writing.

The two teachers attempted this pedagogical experiment with enormous effort. The mela in itself played a crucial role, energizing the teachers and students, engaging the community and teachers from other schools. But the real value was in the overall experiment, especially for the two teachers, who developed an effective approach for language teaching.

No official had asked them to do this. No official stopped them either. Their desire to get their students to learn better had fired this effort. This fire, or its early sparks, are there in a large proportion of our teachers. We needto fuel this fire. India’s educational challenges can only be addressed by such efforts of engaged and capable teachers in school. All efforts, at all levels, must be informed by this reality. Not by grandiose ideas cooked up sitting on perches of power of policy or academia.

Anurag Behar is the chief executive officer of Azim Premji Foundation and leads the sustainability initiatives for Wipro Ltd. He writes every fortnight on issues of ecology and education.

Comments are welcome at othersphere@livemint.com. Read Anurag’s previous Mint columns

at www.livemint.com/othersphere

3.1. ACME bags another 600 MW at ₹2.44 a unit in SECI’s latest auction

BusinessLine, 15 Jul. 2018, Ksenia Kondratievat

The two latest wins will boost ACME’s capacity to 4,400 MW, out of which 1.7 GW is already operational. Latest tender for 3,000 MW solar capacity was oversubscribed by 2,100 MW

ACME Solar has once again emerged the lowest bidder at ₹2.44 a unit in the reverse auction of Interstate Transmission System (ISTS)-connected solar projects conducted by the Solar Energy Corporation of India (SECI) on Friday.

This is the second time ACME is emerging as the L1 bidder since the beginning of this month when SECI had auctioned 2,000 MW ISTS-connected solar projects.

Earlier, ACME bid a historical low tariff of ₹2.44 per unit in May 2017 in the Badla Phase-III Solar park auction.

Azure bags 300 MW

The latest tender for 3,000-MW capacity was oversubscribed by 2,100 MW with a dozen players, including industry majors such as Mahindra Susten, Tata Power, Adani Power, Renew, Mytrah and Hero Future Energies participating.

ACME has bagged 600 MW capacity while Azure Power, the L2 bidder at ₹2.64 a unit, will develop 300 MW. Rutherford Solar Farms, an SPV (special purpose vehicle) of Canadian Solar, won 200 MW at a tariff of ₹2.70. Mahoba Solar (UP), a part of the Adani Group, ReNew Power, and SoftBank-backed SBE Renewables quoted ₹2.71 a unit bagging 300 MW, 500 MW and 1,100 MW respectively.

With eye on IPO

According to several market players who spoke on conditions of anonymity, bidding at the level of ₹2.44 a unit looks opportunistic given the uncertainty over the rupee-dollar exchange rate.

Securing transmission connectivity and land acquisition, too, pose risks for the developers of these projects. Industry experts note that some players are willing to bid aggressively in order to ramp up capacity as they are preparing for an initial public offering.

ACME Solar was planning to raise around ₹2,200 crore through an IPO and had filed a DRHP with SEBI last year. It later decided to revise the valuation by half, but missed the deadline for refiling.

According to sources close to the company, ACME had overvalued itself and put the IPO plan on hold.

ReNew Power

The two latest wins will boost ACME’s capacity to 4,400 MW, out of which 1.7 GW is already operational.

Sumant Sinha-led ReNew Power has filed for an IPO in May to raise up to ₹8,000 crore including a primary fund-raising of ₹2,600 crore and a secondary share sale of 94 million shares most of which belongs to Goldman Sachs.

Last month, Adani Green Energy Ltd (AGEL), the renewable power arm of Adani Enterprises demerged into a separate entity in 2017, got listed on the NSE.

3.2. India wins GRR award for "most improved jurisdiction"

PTI, Jun. 29, 2018

New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) today said that India has won Global Restructuring Review's "most improved jurisdiction" award.

The honour recognises the jurisdiction which improved its restructuring and insolvency regime the most over the last year, IBBI said in a statement.

Global Restructuring Review (GRR) is an online daily news service and magazine on cross-border restructuring and insolvency law.

"The award for the "most improved jurisdiction" is extremely well deserved," said GRR editor Kyriaki Karadelis. "... India narrowly missed out on the title to Singapore last year, but as the Insolvency and Bankruptcy Law of 2016 has begun to be tested in the new network oh National Company Law Tribunals resulting in several key, precedent-setting judgements, we felt it was the right time to celebrate India's progress in this sector," she added.

"Most improved jurisdiction" is one of the nine categories in which GRR presents the award, which were introduced in 2017.

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

4.1. Impact of Metro on Hyderabad, Bengaluru traffic: What data shows

Livemint, 21 Jun. 2018, Arjun Srinivas

Ensuring first- and last-mile connectivity remains crucial for the success of mass rapid transit systems such as metro trains

Mumbai: Metro trains can reduce congestion on roads, shows an analysis of Uber Movement data for Bengaluru and Hyderabad. However, ensuring first- and last-mile connectivity to stations remains crucial for the success of mass rapid transit systems.

Although Bengaluru Metro or ‘Namma Metro’ began operations in 2011, the two major routes—Purple Line and Green Line—were completed only in April 2016 and June 2017, respectively. Travel time along the adjoining roads came down after the completion of both lines, shows analysis using Uber Movement database, which provides anonymized, collated data of rides on its platform since 2016.

The completion of the Purple Line (west to east) had a visible impact on road traffic along the Vijayanagar to Indiranagar corridor, while the Green Line (south to north) reduced travel time between JP Nagar and Malleshwaram.

The reduction in road travel time along the metro routes is more pronounced after a span of six months, with the JP Nagar-Malleshwaram route witnessing a 9% reduction in travel time.

The delayed impact is not surprising, given that the initial patrons of the Bengaluru Metro were those who already used other means of public transport. The switch from privately-owned vehicles to Metro usually happens with a lag, said Sonal Shah, an expert on integrated public transport and senior program manager at the Urban Works Institute, New Delhi.

The apparent switch from private vehicles to public transport was also witnessed in the national capital after the introduction of the Delhi Metro in 2002, shows a study by Deepti Goel and Sonam Gupta, published in The World Bank Economic Review. The pace of new private vehicle registration also fell in the years following the launch of Delhi Metro.

However, it is not clear how far the Bengaluru Metro can alleviate the city’s traffic woes. “The growth beingexperienced by Bangalore city is radial in nature, while the Metro routes are linear (West to East, North to South). Therefore, the Metro may be unable to service the growing demand for transport in the city,” saidDeepak Baindur, senior technical adviser (urban transport), GIZ Bengaluru.

The same is also true for the Hyderabad Metro, which was opened to the public in November 2017. While analysis shows that travel time along adjoining roads declined marginally after the introduction of the Metro, substantial impact might not be visible until the entire stretch of planned Metro is opened.

Given that the Metro routes in Hyderabad are not along the normal traffic patterns in the city, the impact may not be as much, said Sai Ratna Chaitanya, associate, Institution for Transport and Development Policy, India. The Metro does not yet cater to Hi-tech city, which accounts for substantial traffic flow.

Apart from the Metro network, first- and last-mile connectivity also impacts the success of mass transport systems. For instance, feeder bus systems to Metro stations, pedestrian and cycle routes are important aspects that determine the success of any Metro system, said Megha Kumar, a PhD student at McgillUniversity studying Bengaluru’s traffic network. Additionally, the adoption of the Metro in Bengaluru has beenimpeded by inadequate parking facilities. Moreover, the trains currently have three coaches, and are extremely packed during peak hours.

This shows that an integrated approach to transport in cities, backed by studies on commuting patterns, is crucial to resolving the transport woes in Indian cities.

This is the concluding part of the two-part data journalism series on metropolitan traffic in India. Click here to read part one.

Arjun Srinivas is a fellow, working with Mint as part of the Hindustan Times–Mint– How India Lives Data Journalism Fellowship.

4.2. TATA Projects consortium bags ₹11,744-crore (~$ 1,75 bn) project in Mumbai

BusinessLine, 22 Jun. 2018, V. Rishi Kumar

The consortium of TATA Projects, Capicite Infraprojects and CITIC Group has been awarded an ₹11,744- crore project by the Maharashtra government and Maharashtra Housing & Area Development Authority. The order is for redevelopment of existing BDD (Bombay Development Department) Residential and Commercial Societies (Chawls), one of the oldest British-era developments in Mumbai.

Located in Worli, the project will involve redevelopment of 26 million square feet of area. It is set to employ over 10,000 and the construction will be carried out in phases over a period of eight years.

More than 10,000 families associated with this redevelopment will benefit by moving into a new home, will have access to improved quality of life and the region will witness large-scale change in the societal upliftment of the neighbourhood.

Vinayak Deshpande, Managing Director, TATA Projects Ltd, based in Hyderabad, said, “This is one of thelargest single value infrastructure projects in the country. Execution of this skyline changing, socially beneficial project, shall help Mumbai become a world-class city. This win is also a testimony to TATA Projects focus on developing high-quality social infrastructure, while maintain high standards of safety.” This massivecommercial and residential urban renewal project is of significant national importance towards societal upliftment.

BDD was set up in 1920 by the then Governor, who designed a massive housing and development scheme on 22 hectares in Worli. The construction of 121 chawl buildings, each with 80 rooms, was completed between 1921 and 1925 to solve the massive housing shortage during that time. Currently around 9,700 families reside in the project precincts.

Since the housing colonies are now more than 90 years old and have completed their life cycle, the Mahrashtra government decided on their redevelopment.

Project plan

It will be developed in five phases over eight years. The project comprises around 98 rehabilitation and sale buildings having 22-66 floors and involves construction across 26 million square feet.

The project also requires construction of 720 units in transit camp. Around 10,000 employment opportunities will be generated through this project.

5.1. Home launches increase 40% in June quarter

Business Standard, Jul. 11, 2018

Mumbai: Launches of residential units have gone up 40 per cent in the second quarter of the current calendar year but sales of such houses have risen by a mere two per cent, said a new study.

The main reason for the jump in launches was due to the spurt in roll out of affordable housing units, or those priced below Rs 4 million, said Anarock Property Consultants in report released on Tuesday.

On a quarterly basis, the jump was 50 per cent in Q2 of 2018.

The National Capital Region (NCR), followed by Pune, saw maximum jump in launches at 25 per cent and 28 per cent, on a yearly basis, respectively. Kolkata saw a regrowth of 47 per cent in launches. Sales went up 24 per cent in Q2 of 2018 on a quarterly basis.

In terms of sales, except Bengaluru, Hyderabad and Kolkata, all top cities have seen a degrowth on a yearly basis.

Bengaluru saw a 32 per cent growth in home sales in Q2,2018 and Hyderbad witnessed 16 per cent rise. Kolkata saw 5 per cent growth. Anarock said the unsold inventory has come down from 770,000 units in Q4, 2017 to 700,000 units in Q2, 2018.

“The hitherto abstaining homebuyers are back on the market. Developers are working hard on clearing unsoldinventory with attractive schemes, freebies and discounts. Moreover, the positive impact of the policy reforms,including RERA and GST, have begun to bear fruit,” said Anuj Puri, chairman at Anarock PropertyConsultants.

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

5.2. Sterlite bets big on 'risky' transmission projects

BusinessLine, 13 Jul.2018,Ksenia Kondratievat

Sterliite Power is eyeing a sizeable chunk of India’s $25-30 billion power transmission market over the next five years, according to Group CEO Pratik Agarwal.

The company is scouting for challenging projects that make a significant impact, he told BusinessLine.

“Up to 50 per cent of our current portfolio are projects in Kashmir and the North-East, and these are the projects that other (players) will avoid because there are many local issues,” he said. Risky projects providebetter returns, he added.

Currently, Sterlite Power has 12 projects across 21 States, of which around 60 per cent is completed. Considering the pace at which the Centre is adding renewable generation assets, Agarwal expects the transmission sector to see new bids worth around ₹10,000 crore during the current fiscal. Going forward this should increase to at least ₹30,000 crore a year, he said.

Top-down vision

While India has introduced competitive bidding in the transmission sector, which has improved the efficiency of project implementation, India could also have a top-down vision for the transmission space, like it has for the renewable sector, Agarwal said.

“Unfortunately, the vision for transmission doesn’t come from anyone on the top. If you have a top-down vision for generation, you need a top-down vision for transmission,” he observed.

Sterlite Power had entered Brazil in 2017 by winning three projects in two separate auctions. The company bagged another six projects in the latest auction in June, as BusinessLine reported last month.

This takes the committed investments in Brazil to $1.7 billion out of the planned $4 billion, Agarwal said, adding that around 80 per cent of this commitment will come from debt financing.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. Farm crisis takes centre stage in national politics

Livemint, 25 Jun. 2018, Anil Padmanabhan

The current round of farm crisis suggests that the country is rapidly running out of time. No longer do politicians or policy planners have the luxury of kicking the can down the road

Last week, a report published in The Hindu newspaper said that Odisha chief minister Naveen Patnaik had dashed off a letter to Prime Minister Narendra Modi demanding a national policy on farm loan waivers.Patnaik’s initiative comes in the backdrop of a round of politics of competitive populism with all parties promising farm loan waivers in the run-up to the just-concluded assembly elections. Though once elected almost all of them have struggled to deliver on the promise; the latest being Karnataka, where farmers are threatening to take to the streets to force the state government to keep its pre-election promise.

Patnaik should be credited for trying to force a debate on what is otherwise an increasingly popular policy prescription (another matter that he may be making virtue of a necessity since, in less than a year, Odisha goes to polls and Patnaik will be battling anti-incumbency especially on account of farm distress).

At the same time, he has also inadvertently put the issue of farm distress on the centre stage of national politics—and by consequence central to the electoral agenda in the 17th general election due next year.

It has been long overdue. While it is indeed a legacy issue, the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) is guilty of not reacting early enough. I remember raising this issue in a conversation with a senior member of the Union cabinet in 2015—by when the crisis had already assumed distress proportions—who summarily dismissed it as a non-problem. It was only in this year’s budget that the government committed to a series of measures, including extending the minimum support price to all crops to mitigate price risks.

While this collective political focus on farm distress is the good news, the bad news is that farm loan waivers, while it may be politically very remunerative, is a mere stop-gap solution. Besides the issue of moral hazard, it does not address the core concern plaguing farming in the country. And the danger of a national policy means that it will be written in stone.

Indian farming is no longer what it used to be, primarily a foodgrain economy. It has diversified very dramatically and now horticulture dominates the farm basket. While it is far more remunerative, it also brings with it some attendant downside risks—including prices.

Mitigating this risk and improving the farming ecosystem by investing in irrigation, a national market for the produce and better rural road connectivity are some of the more sustainable solutions required to address farm distress.

By lining up behind farm loan waivers politicians are causing double trouble for the national economy. Not only will it further accentuate fiscal pressures on the national and state budgets, it will also conveniently distract from addressing the core problems such as the failure to provide a national market place for farm produce—right now a cosy nexus between politicians and middlemen ensure the operation of cartels, which end up giving a bad bargain to farmers as well as giving short shrift to consumers (visible in the cyclical price gouging in onions and potatoes).

The thing is that farming cannot be left entirely to the play of market forces. The government will always have a role to play, given that it still absorbs 50% of the national workforce. So far politics has influenced this trade off.

The current round of farm distress, which has worsened in the past three years, suggests that the country is rapidly running out of time. No longer do politicians or policy planners have the luxury of kicking the can down the road.

At the same time, in the middle of a very busy and contentious election calendar, it is very likely that the political noise will overwhelm rational decisions.

In short, it looks like, for the moment, the odds favour bad politics over good economics.

Anil Padmanabhan is executive editor of Mint and writes every week on the intersection of politics and economics.

6.2. Why the crop cover scheme is seeing enrolment wane

BusinessLine, 25 Jun. 2018, RAJALAKSHMI NIRMAL

Data gaps, dearth of funds saw fewer farmers covered by PM Fasal Bima Yojana in 2017-18

After a good run in 2016-17, marked by an increase in area and the number of farmers covered, the Centre’sambitious crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY), lost pace last fiscal year. The total number of farmers covered under the PMFBY in FY18 was 4.72 crore, against 5.5 crore in FY17. The total area covered was 496 lakh hectares, versus 551 lakh hectares in the previous fiscal year.

While data for Rabi 2017-18 are not out yet, the numbers for the Kharif season show claims-settlement of cropinsurance policies is progressing at a snail’s pace.

Data from the Ministry of Agriculture show that of claims worth ₹15,948 crore received for Kharif 2017, only ₹4,275 crore was settled by insurance companies till the first week of May.

What’s going wrong?

Several factors have contributed to the scheme slowing down. One, insurers face a delay in receiving data on crop yields from the States. A case in point is the Kharif 2017 season; while the cut-off date for submission of yield data to insurance companies for the season was January 31, 2018, some States, including Chhattisgarh, Haryana, Rajasthan, Tamil Nadu and Telangana, delayed it by over a month. Andhra Pradesh and Madhya Pradesh took close to three months after the deadline, while Jharkhand and West Bengal had not provided the yield data till the first week of May. Also, in many cases, insurance companies do not agree on the yield data provided by the States, which results in disputes and delays in claims settlement.

The other problem is that the States do not pay their share of the premium on time, which means insurers are unable to process the claims. For Kharif 2017, States had to pay their share by December 2017 but many failed to do so.

Bihar, Madhya Pradesh, Telangana, West Bengal and Andhra Pradesh, among others, had not paid their premium for Kharif 2017 even till the first week of June, according to an official at a crop insurance company. The delay is also because the Centre has opted for direct benefit transfer (DBT) of claims payment. For this,details of farmers’ bank accounts have to be provided to the insurers. This is often not done on time, which further delays the settlement.

From 2017-18, it has been mandatory for banks to register data pertaining to PMFBY customers on the government portal. Many banks in States such had not finished uploading the data even in the first week of May.

Further, insurers say, the drop in the number of farmers covered in FY18 could be because of the data moving online now, eliminating duplicate farmer records present in the previous year.

Insurance companies are hoping FY19 will be a good year for all with mandatory registering of farmer data, the push from the Centre for quicker yield assessment through use of technology, and a more efficient DBT process.

7.1. Using agriculture to tackle the water crisis

Livemint, 26 Jun. 2018

Research and development in water-efficient crops, along with investment in alternative modes of irrigation, are a must NITI Aayog’s recent report, “Composite Water Management Index”, underscores the looming threat of India’swater crisis. Its current proportions are severe—about 200,000 people die every year due to inadequate access to water—and are set to become far more so. There are many dimensions to the problem. One of themost important is agriculture, given that it consumes about 83% of India’s freshwater resources. In this context, another recent report—the National Bank for Agriculture and Rural Development (Nabard) and IndianCouncil for Research on International Economic Relations’ (Icrier’s) “Water Productivity Matching Of Major Crops”—holds important lessons.

The roots of the problem, ironically enough, may lie in the Green Revolution. By 1961, India’s agricultural yieldproblem was severe enough to threaten famine. Norman Borlaug, V.S. Banda and their ilk ensured food security with the revolution. But this also included skewed incentive structures—heavily subsidized electricity, water and fertilizers for farmers—which have played a significant role in the misalignment of crop patterns in the country.

Consider the production of water-thirsty crops like paddy and sugar cane in the Punjab-Haryana belt and Maharashtra, respectively. There is a serious mismatch between the cropping pattern of these crops and water resource availability in the states growing them. Government incentives, such as the sugar mill build-up pushed by politicians in Marathwada to replicate the prosperity created by mills in other areas, as well as assured markets for these crops through procurement, have led to farmers cultivating these water-guzzling crops, despite the water-scarce nature of these regions. Environmentalists have often argued that sugar cane is the cause of chronic drought in Marathawada. The Nabard-Icrier report also makes an argument for moving such high water-reliant crops to other, relatively water-abundant areas.

The Union minister for transport and water resources, Nitin Gadkari, seems to disagree with the feasibility of changing crop patterns to relieve water scarcity. That is politically understandable. Any such disruption will come at a political cost. But it is economically—and, for that matter, existentially—important. If state policies put a thumb on the scales in the first place, it is incumbent on the government to find the right incentive structure for a sustainable solution to the water crisis. For instance, in regions with high irrigation water productivity better suited to water-intensive crops—such as Jharkhand and Chhattisgarh—poor power supply and other such problems make cultivation of water-intensive crops non-remunerative. There is room for the government to correct such misalignment.

A decisive step in this direction would be reapplying the primary lesson of the Green Revolution: Science canhelp. India’s public sector agriculture research institutions led by the Indian Council of Agricultural Research had released a record 313 new crop varieties during 2016-17. These crops would increase farm production while minimizing the use of inputs. The list of new crops includes an early maturing (52-55 days) variety of mung pulse—the first of its kind in the world. Developments like these have the potential to help states adopt a more sustainable cropping pattern without disrupting the flow of their income streams. And there is room for improvement here when it comes to research and development. India still lags behind its Asian neighbours in agriculture genomics—the process of increasing agricultural productivity by developing crops with promising agronomic traits.

Readjusting cropping patterns is a job only half done, however. Investing in readjusting irrigation patterns isequally important for fulfilling the “more crop per drop” objective. Natural water systems lose their dilutioncapacity on becoming hydrologically deficient, leading to a higher concentration of pollutants. To deal with such water-management challenges in rivers and groundwater, boosting alternative irritation techniques such as drip irrigation is a necessity. There has been some progress here; the Maharashtra government has made drip irrigation mandatory for sugar-cane cultivation, for instance. But more must be done.

State agriculture universities have a big role to play here. Consider the work done by scientists from the Tamil Nadu Agricultural University. They have been suggesting irrigation techniques such as the alternate wetting and drying method (AWD)—a widely practised technique in the Philippines and Vietnam—in the wake of theSupreme Court’s Cauvery water-sharing decision. This technique enables farmers to save up to 5,000 litres of water for each kilogram of rice produced—water savings of about 30% without a decline in yields.

The tasks of making agriculture remunerative as well as water-friendly eventually coincide. Doubling farm income by 2022 is a tall order. But if the current government and its successor are to hew to the spirit of that promise at the least, research and development in multi-resistant, water-efficient and high-yielding crops along with investment in alternative modes of irrigation are musts.

What can be done to promote water-efficient techniques in Indian agriculture? Tell us at views@livemint.com

7.2. Seafood export rises 22% to nearly US$ 7.1 billion in 2017-18

Business Standard, Jul. 03, 2018

Chennai: Seafood export rose 22 per cent to nearly $7.1 billion in 2017-18 as compared to $5.8 billion a year before. Frozen shrimp and frozen fish were the prime items. In terms of quantity it was nearly 1.38 million tonnes (mt), from 1.13 mt earlier.

“With policy support, we intend to achieve $10 billion by 2022,” said A Jayathilak, chairman of the MarineProducts Export Development Authority.

The rise, he said was despite a surge in supply of shrimp from Ecuador, Argentina, Vietnam and Thailand, beside a drop in price. There were also issues on antibiotic residue in Indian shipments.

The US took the largest share of Indian seafood, at $2.3 billion or 32.8 per cent. Frozen shrimp was 95 per cent of this total by value. The US was followed by Southeast Asia, 31.6 per cent in dollar terms. The European Union took 15.8 per cent and Japan took 6.3 per cent. Around 4.1 per cent went to West Asia/North Africa.

Export to the US rose 31.6 per cent and to Southeast Asia by 29.4 per cent, in dollar terms. In the latter,Vietnam’s share was 79.3 per cent, followed by Thailand at 11.6 per cent. Vietnam alone imported 413,518tonnes of our seafood.

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

8.1. Dairy sector to see Rs 140-billion ($2,04 bn) investment in 3 years: CRISIL

Business Standard, Jul. 12, 2018

Mumbai: Encouraged by rising demand for value-added products, the dairy sector in India is likely to see Rs 130-140 billion of investment in the next three years, says rating agency CRISIL.

To strengthen the procurement and processing infrastructure, companies in the organised sector haveinvested a similar amount in the past three years. CRISIL’s recent study says the Indian dairy industry would see compounded annual growth (CAGR) of 14-15 per cent annually for the next three years.

Companies with a focus on value-added products are set to do well but those with focus on bulk liquid milk selling would remain laggards, says the study, due to oversupply of liquid milk as a commodity.

“Organised dairies are likely to see spending of Rs 140-billion over the next three (financial) years fiscals, similar to the previous three, to enhance processing capacity by 25-30 per cent and strengthen milk procurement. Prudent funding mix and better cash generation will keep the capital structure of organised dairies satisfactory, with gearing of 1-1.2 times, in spite of sizable capital expenditure,” said PoonamUpadhyay, associate director.

The new investments are expected to be funded with moderate dependence on borrowing, including soft loans from the government’s Dairy Processing & Infrastructure Development Fund, beside public and private equity. CRISIL studied 100 dairy companies, accounting for around 60 per cent of the organised segment’s revenue. With steady growth in milk sales, the sector should see revenue of Rs 7,500 billion by 2020-21, from Rs 5,700 billion in 2017-18, it says.

Gujarat Co-operative Milk Marketing Federation (GCMMF), which sells the Amul brand of dairy products, has announced Rs 50 billion of investment to be completed by 2022 on processing capacity and distribution. Increasing demand at home and from Indians abroad has helped its turnover reach Rs 295 billion for FY18. After acquisition of Reliance Dairy to boost geographical reach, Heritage Foods plans a big expansion in North India. Heritage has also acquired Shah Motilal Foods, based in Telangana, and Vaman Milk Foods, based in Punjab, for Rs 120 million and Rs 200 million, respectively. It now has a big capital expenditure (capex) plan, with expansion planned in segments such as curd, cheese and yogurt.

“The company is well poised for growth, along with expanding return on capital, already highest in the sector,"said Aditya Narain, head of research at Edelweiss Securities, in a recent report.

Parag Milk Foods' profit is estimated to rise 49 per cent over FY17-20, due to a focus on value-added products, with established brands and capex already undertaken.

Arshad Perwez, an analyst with JM Financial, says India’s milk production has been increasing at a steady CAGR of 4.4 per cent between 1994-95 and 2017-18 -- foodgrain production's comparative rise was 1.5 per cent in the period. Urbanisation and changes in dietary patterns has driven consumption growth, while improvement in yield has aided growth in production over the years, he added.

India’s milk production is estimated at 165.5 mt for 2017-18, an increase of 3.8 per cent from the previous year.

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

8.2. MSMEs revenue rose 27% in FY18, vibrancy returning to sector: Report

PTI, Jun. 28, 2018

New Delhi: Revenues of micro, small and medium enterprises surged by 27 per cent and operating profit by 66 per cent in 2017-18, signalling that vibrancy is returning to the sector after challenges posed by demonetisation and GST rollout, according to a study.

The liquidity challenges also appeared to have receded with improvement in the working capital parameters particularly the debtor position which has declined from 100 days as on March 2017 to 78 days as on March 2018, the study of a representative set of 327 MSMEs with rated debt up to Rs 25 crore conducted by Acuite Ratings observed.

"These figures reinforce the belief that the MSME sector is already on a recovery path and should continue to sustain the improved performance in FY19, Acuite Ratings CEO Sankar Chakraborti said.

"SIDBI's MSME Pulse report jointly released along with TransUnion CIBIL estimates that 5 lakh new borrowers are likely to tap the formal borrowing channels in the first half of 2018 as compared to 4 lakh in the second half of 2017.

"There is a good pick up in credit to micro and small enterprises in the March quarter and we are hopeful that this will be sustained in the current year, SIDBI CMD Mohammad Mustafa said.

However, Acuite said there is a need to revive fresh lending by public sector banks to MSMEs through specific measures.

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

9.1. Andhra Pradesh tops states’ ease of doing business ranking

Livemint, 10 Jul. 2017, Asit Ranjan Mishra

Telangana, Haryana, Jharkhand and Gujarat make up the top five in states’ ease of doing business ranking, Meghalaya last

New Delhi: Andhra Pradesh topped the ranking of states in the central government’s ease of doing businesssurvey, while a newly introduced feedback system dragged down the performance of several states, including West Bengal, as their claims were not matched by feedback from users.

Though the reform evidence score of Andhra Pradesh (99.73%) was lower than Telangana and Jharkhand, which scored a perfect 100%, its user feedback score at 86.5% was the highest among all states, helping it top the Business Reform Action Plan ranking conducted by the department of industrial policy and promotion (DIPP).

The ranking, which was introduced in 2015 with 285 action points, expanded to 372 measures in 2017 spread across 12 areas, including registering property, paying taxes and labour regulation enablers. While in the first two years, the ranking was based only on evidence provided by state governments, DIPP introduced in 2017 user feedback for 78 action points from architects, lawyers and contractors among others to weigh whether reform measures are reaching the users or not.

From the next year, the ranking will be based entirely on user feedback, said DIPP secretary Ramesh Abhishek.

In 2017, nine states achieved a combined score of more than 95% while six states achieved a combined score between 90-95%.

9.2. India to be among top 10 markets in coming yrs: Dr Oetker

PTI, Jun. 21, 2018

New Delhi: German processed foods maker Dr Oetker is looking to make India one of its top 10 markets in coming years as it targets Rs 1,000 crore sales by 2020, said a top company official.

The firm, which is upbeat after its domestic unit reported the fastest growth globally in 2017, plans serve around 35 million customers driven by expansion of sales network, product portfolio, export and acquisitions. Besides, Dr Oetker is also exploring opportunities for store-within-a-store retail format, and is in talks with some retailers.

"I can see India being one of our top 10 markets," Dr Martin Reintjes, Member of the International Executive Board of Dr Oetker told PTI.

He did not give a timeline for the progress, but indicated it could be sooner.

At present, India is among the company's top 20 markets. And last year the company reported the fastest growth rate here, he added.

"India is the fastest growing market unit of Dr Oetker... considering Dr Oetker is present in 40 plus countries world wide and sells in more than 50 markets, there is competition for growth from other markets, and India is performing very well," Reintjes added.

The company, which follows the January-December financial year, had a sales of Rs 200 crore in last year. Dr Oetker has recently started a new manufacturing plant in Kaharani, Rajasthan, which has a present capacity of 46,000 tonnes. The company has invested around Rs 250 crore in the facility.

On further investments here, Dr Oetker India Managing Director and CEO Oliver Mirza said, the company would continue to invest in the Indian market and is also open to acquisitions to chase its growth plans. Dr Oetker, which entered India in 2007 by acquiring Delhi-based Fun Foods, is also now presence in 489 cities with its range of Western sauces and spreads.

At present, 85 per cent of its sales come from the retail segment and rest come from the HoReCa (Hotel, Restaurant and Catering) segment.

As part of expansion of its product portfolio, the company has launched a complete new range of ten zero-fat dressings today.

The company is also looking the export opportunities in the retail side and soon start shipping to Sri Lanka besides Nepal and Malaysia.

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

10.1. Reliance Industries bets on Jio to double sales in 7 years

Livemint, 5 Jul. 2018, Kalpana Pathak

Mukesh Ambani seeks to reduce reliance on energy sector, focus on consumer business

Mumbai: Mukesh Ambani, India’s richest man, said on Thursday that Reliance Industries Ltd (RIL) aims to double sales in about seven years, even as the company explores ways to boost profitability of its mainstay refinery and chemicals businesses.

Ambani, however, does not plan to rely solely on refinery and petrochemicals, and is placing outsized bets onnew consumer businesses to drive growth. RIL has invested about ₹2.5 trillion in telecom unit Reliance JioInfocomm Ltd, through which Ambani wants to venture into e-commerce, healthcare, education and agriculture in the next two years.

“As India starts on its high-growth journey to double the size of its economy by 2025, I assure you that the sizeof Reliance will more than double in the same period,” Ambani told shareholders at the company’s 41st annual general meeting (AGM) in Mumbai.

“Our consumer businesses will contribute nearly as much to the overall earnings of the company as ourenergy and petrochemical businesses,” he added.

RIL currently derives 80% of its sales from refining and petrochemicals. This however, is undergoing a change as the company focuses on consumer-facing businesses. RIL saw operating profit from its consumer businesses rise to 13% of the total in the year ended 31 March from 2% in the previous year. RIL’s consolidated revenue from operations was at ₹4.08 trillion last fiscal and net profit at ₹36,080 crore.

On the consumer side, Ambani’s immediate bet is on optical fibre-based fixed-line broadband which, he claimed, offers hundreds of megabits per second of data speeds and will allow RIL to offer smart home solutions.

On the consumer side, the company’s immediate focus is on optical fibre-based fixed-line broadband-“The big story for Reliance Jio from here on is going to be fibre connectivity,” said Mayuresh Joshi, a fundmanager at Angel Broking Ltd.

In the coming months, Jio will extend fibre connectivity to homes, small businesses, traders and small businesses. Leveraging on its advanced fibre bandwidth network, Jio will be offering this service in over 1,100 cities and towns across India.

For homes, this could mean ultra HD entertainment, multi-party video conferencing, digital shopping, security cameras, home appliances, voice-activated virtual assistants, lights and switches.

Over the past 40 years, RIL has periodically transformed its core business through backward integration. First it was textiles, then it was polyester, followed by chemicals and then refining. In the past few years, a major lateral shift has happened, with the focus on telecom, data, broadband and retail.

Now, the energy business is under threat due to a shift from fossil fuels to renewables, and Ambani acknowledges that.

“It is our belief that the rapidly increasing demand for petrochemicals maximizing oil-to-chemicals conversionwill play a catalytic role in determining profitability of hydrocarbons businesses of the future,” Ambani said. “As the world migrates from fossil fuels to renewable energy, we will further maximize this oil-to-chemicals conversion and upgrade all our fuels to high-value petrochemicals,” he said, adding this upgradation willhappen in a phased manner over the next decade.

Still, there are some concerns about the company’s growing debt (about ₹1.41 trillion) on account of Jio.“Generating reasonable returns (say a 10% post-tax return on capital employed) off a balance sheet of R-Jio’ssize (current levels) needs the company to generate an Ebitda (we compute it to be $8 billion) that is higher than the peak historical annual Ebitda ever generated by the aggregate Indian telecom industry, including thehome broadband and enterprise data players, per our math,” said Rohit Chordia & Aniket Sethi, analysts atKotak Institutional Securities, in a 5 July note.

10.2. Ikea gives its first store in India a local touch

Livemint, 5 Jul. 2018, Yunus S. Lasania

The Ikea store will have a wide range of products with competitive pricing, with 1,000 of them priced under₹2,000

Hyderabad: The Ikea store to open later this month in Hyderabad, the country’s first, will offer a mix of itsfamed Scandinavian design with an Indian touch.

The Swedish home furnishing giant, with about 7,500 items on sale, has included household items like frying pans and plastic tiffin boxes, additions made based on feedback the company has received from Indians over the last few years.

One example is the omission of knives in the 12-piece steel cutlery set that the store will be offering for ₹179. This was done not only to keep costs down but because the company was told knives weren’t used much atIndian dinner tables.

“We did nearly a 1,000 plus home visits and asked consumers what they need and what they don’t need. Andit was very clear that they had no use for so many knives in the cutlery set, so we took them off to make it more affordable. Now you have the teaspoon, fork and the table spoon. For those who want knives, we sellthem separately,” explained John Achillea, manager of Ikea’s upcoming store in Hyderabad, which opens on 19 July.

It has also frying pans (at different prices based on sizes) on sale, which Achillea said is something that the Swedish home furnishing giant does not sell otherwise.

“When we open the store, we will hear directly from the customers. It is about adding relevant products to our range,” Achillea told Mint, after giving the media in Hyderabad a ‘sneak peek’. The upcoming store, which isbeing set up over an area of 400,000 square feet in Hyderabad’s Hitech City, will have a wide range of products with competitive pricing, a thousand of which are priced under ₹2,000.

Conducting a tour of the store on Thursday, Achillea said that customers also have the option to customize their purchases from products depending on their need. For example, one can buy only the cabinet, covers and other parts of a modular kitchen instead of the whole thing.

“We are also giving a 10-year guarantee on our kitchen sets,” he added.

The new store also has a place to take care of babies while parents are shopping. It also has a massive 1,000-seater cafeteria where customers can relish both Swedish and Indian cuisines.

- INDUSTRY, MANUFACTURE

11.1. Bosch eyes ₹1,700-cr ($250 million) investment in IoT and AI

BusinessLine, 20 Jun. 2018

Adugodi plant in Bengaluru is being revamped into a technology hub

Bosch will invest ₹1,700 crore in the next three years in India as it hedges its opportunities in both electric, diesel vehicles and also transitions into a technology company by focussing on Internet of Things (IoT) and Artificial Intelligence (AI).

The German tech major, which built its empire by selling auto components, is now betting on shifting its focus on technologies like AI and IoT as it sees the consumer shift towards that direction.

“Here in India, the transformation of Bosch into a leading IoT company is especially evident and we have been investing heavily to drive this forward,” said Volkmar Denner, Chairman of the Board of Management, Bosch Group, who is visiting India after four years.

Denner's message pivoted around the company's future bets regarding the above mentioned technologies, and at the same time, continuing to have an eye on legacy areas.

“Main growth for the company comes from opportunities in diesel technology, electromobility, connected mobility and the government's initiatives for connected manufacturing and connected cities,” said Denner.

In line with this change, the Adugodi plant in Bengaluru is being revamped from a manufacturing facility into a technology hub with investments of ₹370 crore in the last three years and more than eight lakh electric vehicles (EVs) on the road worldwide contain Bosch components.

Simultaneously, Bosch set up an AI centre in Bengaluru, and a Connected Mobility Solutions division in India too, with an intent to shape the mobility of the future from a technology and standards perspective.

The German major's India arm saw its mobility solutions registering a 5.9 per cent growth, domestic business grew 8.6 per cent (higher than industry average of 7 per cent) and business sectors beyond mobility solutions such as security systems, energy and building solutions posted 16.8 per cent growth.

Electric future

Also, as India plans to implement BS-VI from April 2020, adoption of electromobility solutions is bound to increase, which are tailwinds for companies like Bosch.

“We believe that the Internal Combustion Engine will continue to be the mainstream solution for freight andcommercial vehicles and our new solutions will not cause diesel engines to become more expensive,” saidDenner, adding that it will co-exist with electric and hybrid technologies.

While the government's effort to transition only into electric vehicles by 2030, lack of norms for EVs in areas such as performance, safety, charging points, amongst others have put companies such as Tesla to hold back their India plans.

“We believe in the electric future but we need an adequate transfer period timeline. If this shift happens faster,it will be a problem,” said Denner.

Recently, a Brookings India put out a paper pointing out the implications for the electricity grid in case of a large-scale EV transition. While generation capacity at a national level may be present, many bottlenecks will be local, especially at the feeder or distribution transformer level, the paper said.

There are broader ecosystem issues that need further study, including grid-signalling (including time-of-day pricing for electricity), valuing pollution reduction, charging infrastructure and finances.

More than half the retail cost of petrol is taxes, which would need to be covered via other means if we move to EVs. It is unlikely one can (or should) tax electricity at the same rate, it added.

Denner believes that uptake of EV adoption in India will get kick-started by fleet operators.

11.2. Suzuki to stick to N India for its second two-wheeler plant

BusinessLine, 15 Jul. 2018, Ronendra Singht

Suzuki Motorcycle India (SMIPL) is no longer looking at South India for its second manufacturing plant, and will remain in the North for the upcoming facility, a top official said.

The company was considering either Andhra Pradesh or Telangana for setting up the new plant last year, but with suppliers reluctant to go there, SMIPL has decided to remain in North India.

The 100 per cent subsidiary of Suzuki Motor Corporation, Japan, has a plant in Gurugram (Haryana).

“We are looking at various options...we are looking at one which is closer to the existing plant – could be in Haryana only, Rajasthan or Uttar Pradesh – one of these places,” Sajeev Rajasekharan, Executive Vice- President - Sales and Marketing, SMIPL, told BusinessLine.

He said consulting firm KPMG is doing a study on selecting the area, and soon it should be able to finalise the place. KPMG had done studies around south last year, which lasted till recent months, but did not give a ideal picture for setting up a plant there.

Rajasekharan said States such as Andhra Pradesh and Telangana are very proactive in welcoming business centres, but as a company, it has to look at various other reasons.

“For us, it not only depends on ease of doing business, but other things also...in terms of proximity to thecurrent plant, availability of our suppliers – we need to be close by. We need to manage with the existingsuppliers giving more quantity,” he said.

He said the company has to decide the location of the new plant by the end of this year as the existing facility only has a maximum capacity of 10-lakh units per year.

In Novermber, Satoshi Uchida, Managing Director, SMIPL, had said that “our target is to sell one-million units by 2020. Up to one-million we can use the existing plant [at Gurugram], but beyond that we have to consider a new plant. We expect to take a decision on it by next year”.

He had also added that “from the market point of view, South India is our biggest, so in terms of proximity tomarket, south is a good option, but then from the operational point, if we have two plants next to each other inHaryana, it will be a lot easier to manage”.

New launches

The company plans to launch an electric scooter by 2020 from the new plant, said Rajasekharan.

SMIPL manufactured around five-lakh units last year, and plans to manufacture around 7.70 lakh units this year at the Gurugram plant, eventually reaching up to 10-lakh units by 2020.

Apart from assembling the superbike Hayabusa at the plant, the company manufactures Access 125 scooter and motorcycles such as Gixxer, GSX-750 and Intruder 150.

12.1. Flipkart eyeing 65% growth in online fashion retail in 2018-19

Livemint, 25th Jun. 2018, Anirban Sen

Flipkart has undertaken a rebranding exercise as part of a broader strategy to stand out as a premier online fashion destination and help differentiate itself from other e-commerce firms

Bengaluru: Flipkart’s fashion business, which is aiming to grow sales by 60-65% this financial year and touch $1.7 billion in terms of gross merchandise value (GMV) by March 2019, has undertaken a rebranding exercise as part of a broader strategy to stand out as a premier online fashion destination and help differentiate itself from other online retailers.

Since Flipkart started selling fashion in 2012, it has aimed to be a mass-market player, catering to all sections of online shoppers across big and small cities.

Flipkart’s acquisition of Myntra in 2014 further helped boost its position as the leading online fashion retailer in the country. Flipkart also kept the Myntra brand alive as it catered to a premium section of buyers, selling more expensive fashion.

Now, under chief executive Kalyan Krishnamurthy, Flipkart is aiming to differentiate itself from rivals such as Amazon India and stand apart as a premium fashion player, with its new rebranding project to make itself a so-called online fashion capital.

“Usually, you would hear of fashion capitals being cities globally and that’s where people go to get the latestfashion, the latest fashion news, meet fashionable people, get influenced, etc. All of that will now be availableon Flipkart,” said Rishi Vasudev, head of Flipkart Fashion, in an interview.

“On the experience side, we revamped the whole buying experience and brought in personalization, we brought in tie-ups with lots of films, magazines, etc., so that there is content that customers look up to,” addedVasudev.

The rebranding exercise started in early 2017 when Flipkart launched a project internally that was called Avatar.

As part of its new Fashion Capital initiative, Flipkart is aiming to bolster its roster of big brands, including large international players, while also expanding its reach in smaller towns and cities, where online shopping is steadily gaining momentum.

That strategy of getting bigger, international brands, however, might put Flipkart in competition with Myntra—something that Vasudev conceded.

“Because we are multi-format (retail), are we cannibalizing each other? Yes, there would be somecannibalization, but you’re also ensuring that you’re taking care of different kinds of customers,” he said.

In January, Mint reported that Flipkart’s fashion business has caught upwith market leader Myntra and emerged as a dominant player in the online fashion retail space. Flipkart had claimed then—and continues to—that it was the largest player in the online fashion segment and had overtaken all its online competitors. Despite raking in lower average selling prices (ASPs) per unit than Myntra, Flipkart edges out Myntra and all its other competitors in online fashion retail in terms of sheer volume.

Over the past 12-18 months, since former Tiger Global Management executive Krishnamurthy returned to the online retailer in mid-2016, he has pushed executives to grow the fashion business rapidly and set aggressive growth targets for the unit.

In the middle of last year, Flipkart’s fashion business also underwent a major revamp and the online retailercleaned up its marketplace and zeroed in on large, trusted sellers to ensure higher-quality products, while also tightening internal systems and processes. Put together, Flipkart, along with Myntra and Jabong, controls more than 70% of online fashion retail in India and is far ahead of arch-rival Amazon India.

Myntra-Jabong generated $1.2 billion in gross merchandise value in the last financial year. Flipkart fashion, on a standalone basis, claimed that it closed fiscal 2017-18 with $1 billion in GMV.

12.2. Hero Cycles plans ₹ 250 crore investment for Punjab factory

Livemint, 25th Jun. 2018, Malyaban Ghosh

Hero Cycles is planning around 10 joint ventures from Japan, Germany, Taiwan and China which will help the Hero Motors firm get into the market valued at ₹ 3 trillion

New Delhi: Hero Cycles Ltd, a unit of Hero Motors Ltd, will develop an entire ecosystem to manufacturebicycles in Punjab with an investment of ₹ 250 crore.

In an interview, Pankaj Munjal, chairman and managing director of Hero Cycles, said the company’s ‘cycle valley’ project will shift focus of the bicycles industry from China to India.

“There will be around 10 joint ventures from Japan, Germany, Taiwan and China. This will help us get into the market, which is valued at ₹ 3 trillion. From our Sri Lankan base we can export to the European Union (EU)nations and, to the rest, we can export from India.”

The revenue of the cycles business increased by 30% year-on-year in the April-June quarter. The funds required for the development of the manufacturing base in Punjab will be generated internally and the company would not look for any external fund raising. The company will also focus on developing e-bicycles and premium bicycles in India.

“The premium segment is on 25% growth in India though the base is very low, but it has been consistently growing for the last three to four years. We were not present there, so we bought Firefox and, now, we are going to launch our English brands, including InSync. For e-bicycles the market will take some time to developin India, but we will export to Europe. I think we will do 8,000 units a month from September,” said Munjal.

In the current fiscal year, parent Hero Motors has an order book of ₹ 2,000 crore for its automotive componentmanufacturing business, besides recently unveiling a new manufacturing facility in Gujarat. Hero Motors is also looking to sell its stake in some of the joint ventures to gain technological know-how about the new technologies in the automotive space. It is also betting big on its transmission business and are supplying to premium manufacturers, including BMW, Ducati and Harley-Davidson, outside India.

Two of the company’s joint ventures, including Munjal Kiriu Ltd and ZF Hero Chassis Systems Pvt. Ltd, arefocused on the India market.

“For the automotive business, we had a top-line growth of 35% last (fiscal) year. Now, we have the Automotive Manual Transmission (AMT) technology and, I think, that will be the next big leap for the Indian automotivesegment,” Munjal said.

13.1. RIL hits $100 billion market cap, shares jump 17.5% this year

Livemint, 12 Jul. 2018, Ashwin Ramarathinam

This year so far, the RIL stock has risen 17.5%, beating benchmark Sensex index which climbed 7.3% in the same period

Mumbai: Reliance Industries Ltd (RIL) hit a market capitalization of $100 billion on Thursday, regaining its 2007 peak and becoming only the second Indian company to cross the milestone.

Shares of RIL closed at ₹1,082.20, up 4.4%, after gaining as much as 6% to a day’s high of ₹ 1,098.80 during the day. At the day’s close, the Mukesh Ambani-led company was valued at $100.03 billion, or ₹6.85 trillion in rupee terms.

The only other Indian company in the $100-billion club is Tata Consultancy Services (TCS) Ltd, the country’s biggest software services exporter, with a market capitalization of ₹7.5 trillion. TCS crossed the $100-billion milestone on 23 April this year.

This year so far, the RIL stock has risen 17.5%, beating benchmark Sensex index which climbed 7.3% in the same period.

Deepak Jasani, head of retail research, HDFC Securities said, “Investors seemed to be enthused by the visionpronounced by the chairman at the annual general meeting (AGM) of a strategic move to a technology platform company with three key verticals of mobile connectivity, fiber connectivity and new commerce platform for the retail business, even as the traditional businesses of energy and petrochemicals continue to perform quite well. This may result in scaling up consumer profits at parity level to energy and petrochemicalsbusiness over the next decade.”

According to him, cheap relative valuation in terms of price to earnings ratio (P/E ratio) also enticed investors to look afresh at the stock, when P/E ratios of other stocks have risen sharply over the last few months.

At the company’s AGM earlier this month, Ambani said RIL aims to double sales in about seven years, even as the company explores ways to boost profitability of its mainstay refinery and chemicals businesses. Ambani, however, does not plan to rely solely on refinery and petrochemicals, and is placing big bets on new consumer businesses to drive growth. RIL has invested about ₹2.5 trillion in telecom unit Reliance JioInfocomm Ltd, through which the company wants to venture into e-commerce, healthcare, education and agriculture in the next two years.

“As India starts on its high-growth journey to double the size of its economy by 2025, I assure you that the sizeof Reliance will more than double in the same period,” Ambani told shareholders.

RIL also unveiled its fibre broadband system Jio GigaFiber at its AGM, in a push to make deeper inroads into the wireless and fixed-line internet industry. In the coming months, Reliance Jio will extend fibre connectivity to homes, traders and small businesses. Leveraging on its advanced fibre bandwidth network, Reliance Jio will be offering this service in over 1,100 cities and towns across India.

Thirty analysts surveyed by Bloomberg have a buy rating on the stock whereas five have a hold rating and fivehave sell. Analysts have estimated RIL to report a consolidated net profit of ₹9,489 crore and net sales of ₹1.23 trillion in the June quarter, according to Bloomberg.

13.2. In largest capacity expansion, Asian Paints to invest Rs 4,000-cr ($580 M) this fiscal

PTI, BusinessLine, 24 Jun. 2018

Asian Paints is embarking on its largest capacity expansion this fiscal year, investing Rs 4,000 crore at its Visakhapatnam and Mysuru facilities to add 1.1 million kilo litre to its present output.

The city-headquartered company is setting up plant with a 5 lakh KL per annum capacity at Visakhapatnam at an investment of Rs 1,785 crore and a 6 lakh KL plant at Mysuru pumping in Rs 2,300 crore.

“We are in the midst of our largest capacity expansion. In the first phase, two mega plants with initialcapacities of 3,00,000 KL per annum each of water-based paints would be commissioned at Mysuru and Visakhapatnam in FY19,” Asian Paints managing director & chief executive KBS Anand said in the annualreport.

Asain Paints, which is the domestic market leader, operates in 16 countries and have 25 manufacturing facilities globally, catering to consumers in over 60 countries.

Its industrial coatings business was badly affected in the second half of FY18 due to GST as well rising input costs. But launch of industrial tinting machines in the dealer networks, and the success of its direct-to metal coatings, it could not only retain market share but in fact increase it in the second half of FY18, Anand said. In the automotive paints segment, the company added Ford and Hyundai during the year. It could also gain market in share in the two-wheeler space.

However, Anand said international business did not perform well. While a weak economy and a highly deflated currency hit its Egyptian operations, Ethiopia and Sri Lanka also did not do well. But higher sales in Nepal, Oman and Bahrain could contain some the impact of the poor show by the above markets.

He said the greenfield operations in Indonesia as well as acquisition of Causeway Paints in Sri Lanka have increased its global revenue. Having completely exited the low growth Caribbean markets, Asian Paints is now focusing on expanding its portfolio into the emerging markets of Asia and Africa, chairman Ashwin Choksi said.

He further said the uncertainty is likely to continue in the current financial year as well, citing the generalelections and a slew of assembly polls. “While the economy gradually absorbs the impact of GST, impending elections across many states and the general elections will add to the instability, Choksi said.

14.1. India to contribute 15% to Roca’s global revenue in 3 years

PTI, Jul. 02, 2018

Mumbai: Roca Bathroom Products, a wholly-owned subsidiary of Spain-based sanitary product maker Roca, expects its India business to contribute 15 per cent of its total sales over the next three years, according to a top company official.

Roca had a global turnover of 1.8 billion euros last year of which India contributed 10 per cent.

"We should be around 15 per cent in the next three years, because India is growing at a faster pace, and exports from here to the Roca Group is also on the rise," Roca Bathroom Products managing director KE Ranganathan told PTI.

Roca India exports to Australia, the US, China, Europe, South Africa, and the UAE, among others, as the cost of production is still very competitive here.

The Rs 3,500-crore domestic sanitaryware market is clipping at 8 per cent. But more than 50 per cent of this is in the unorganised at about Rs 2000 crore, he said.

Ranganathan claimed his company enjoys 35-36 per cent of the organized sanitaryware market and is growing at double the market rate.

Its flagship domestic brand Parryware, which it had acquired in 2008, accounts for 70 per cent of the revenue and features among the top three brands of the group globally.

Institutional business contributes 30 per cent of the sales and the company has a tie-up with 500 developers. Ranganathan further said the affordable housing segment has been booming and its brand Johnson Pedder that caters to the budget segment, has been growing at 74 per cent.

Besides Parryware and Johnson Pedder, its other brands in India include Armani Roca, Laufen, Roca and Johnson Suisse.

The company, which is present in sanitaryware, faucets and plastic-based products, is also planning to enter the premium tiles segment next year under the Roca brand.

The company has a capex of 10 million euros each year and is augmenting its faucet capacity at an investment of 2-3 million euro.

The faucets category is growing at or more than 35 per cent for the company. The current capacity for faucets 1.5 million and for sanitaryware is 4 million.

"We will be going for sanitaryware capacity expansion in 2020 and will look at a plant in Gujarat or in a Western state," he said, adding the investment for a greenfield sanitaryware factory would be around Euro 50 million.

The company has eight factories (four sanitaryware, one faucet, three plastic) located in Madhya Pradesh, Tamil Nadu, Rajasthan, and Uttarakhand.

It also has five design studios and would add three more each year. It has 15 exclusive brand outlets in the country, 500 Parryware brand outlets, and also 200 Roca brand outlets. The company is also present through 8,000 multi brand outlets and 300 priority retail outlets.

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

14.2. VW group to invest 1 bn euro in India by 2021

PTI, Jul. 03, 2018

New Delhi: German auto major Volkswagen Group today announced investment of 1 billion euro (around Rs 7,900 crore) between 2019 and 2021 as part of its latest strategy to enhance presence in India which will be led by group firm Skoda Auto.

As part of 'India 2.0' project, Skoda Auto is setting up an engineering design and development centre at Pune besides enhancing capacities at the group's two plants at Aurangabad and Pune.

The group will launch a new SUV based on VW's flexible MQB platform by the second half of 2020.

The group has set a target of capturing 5 per cent of the Indian passenger vehicles market by 2025.

"We are now investing up to 1 billion euro by 2020-21. This is the biggest investment which we have done in one single market. This is the first and most decisive step," Skoda Auto CEO Bernhard Maier told PTI in an interview.

On the R&D centre, he said: "It will be ready by the end of the year... we plan to hire 200-250 engineers to develop cars in India."

The group is looking to create up to 5,000 direct and indirect jobs through setting up of the engineering centre and creation of additional capacities in the two plants.

"We want to exploit the maximum of our current capacities in Pune and Aurangabad," he said adding currently the group is working on finalising the details.

Elaborating on the VW group's ambition in India, he said: "Our plan is to have a market share of 5 per cent for VW and Skoda brands together in India by 2025."

The VW group has around 2 per cent market share in PV segment in India, which stood at over 3.2 million units in 2017-18.

In order to achieve its targets, the group which had earlier explored unsuccessfully a partnership with Tata Motors, is looking at launching two models each from Volkswagen and Skoda brands between 2021 and 2025. Admitting that the group made mistakes in India in the past, Maier said: "We decided 1.5 years ago that we want to tackle the Indian market better than we did in the past."

The most important part is that the group decided to split responsibilities and Skoda not only got the responsibility to develop in India but also in Russia, he said.

"In India we are doing it collaboratively...This market is expected to be one of the biggest markets in the world. From 3.2 million units, the market is expected to grow to 5-6 million units by the end of next decade," Maier added.

India is in a transformational phase, things are taking place in the market, he added.

Going forward in India, he said the group's future models will be based on the MQB AO platform which will be highly localised in order to achieve cost competitiveness.

"We are not looking at cheap cars and not are only driven by volumes, we want to be on a sustainable growth path," Maier said, adding vehicles on the new platform would comply with upcoming emission and safety standards in India post 2020.

When asked about the future of VW brand in India, he said:"Skoda is taking the lead but there are going to be two brands in the market."

VW cars would continue to be manufactured at the plants, he asserted.

When asked to elaborate on future product plans for India, he said, the group would continue with current portfolio.

From 2020, he said the model campaign of MQB AO platform will begin with a mid-sized SUV.

"The platform can have many body styles, we do not rule out anything. If market is ready then we can be ready too," Maier said.

When asked about exports, he said the priority will be India but VW is already exporting to various markets, mainly the emerging ones.

"It (exports) could be an opportunity for Skoda as well but the main focus is developing cars in India with Indian suppliers and Indian workers," he said.

As part of the new strategy, he said, Skoda would also expand sales network in tier 2 and tier 3 cities in India.

Since November 2001, Skoda has sold around 2.5 lakh units in India. It sells four models - sedans Superb, Octavia, Rapid, and SUV Kodiaq.

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

15.1. M&M: Global sales to account 50% of total farm equipment revenue in 3 yrs

PTI, Jul. 09, 2018

New Delhi: Mahindra & Mahindra (M&M) is revving up globalisation of its farm equipment sector, targeting 50 per cent of overall revenue of the vertical to come from international markets over the next three years, according to a senior company official.

The company is focussing on three key markets --Americas, including the US, Canada, Mexico and Brazil; Japan and Turkey to be the primary growth drivers.

It expects revenues from Americas to touch USD 1 billion in the next three years, up from USD 600 million at present, while it is also aspiring for business in Japan to touch USD 1 billion over a period of time as compared to USD 450 million currently.

Besides, the homegrown farm equipment major is also charting out strategy to re-enter China in the implements segment after exiting from an earlier joint venture for tractors.

The farm equipment sector (FES) of the company had clocked a revenue of USD 3.4 billion in 2017-18. "Currently, our global operations constitute 37 per cent of the revenues of FES. Over the next three years, we hope to see this go up to 50 per cent," M&M President - Farm Equipment Sector Rajesh Jejurikar told PTI in an interview.

He said the company has drawn up a globalisation strategy with a differentiated strategy for each of the three key regions -- Americas, Japan and Turkey.

In Americas, Jejurikar said the company has recently entered the above 80 hp (horse power) to 120 hp segment in US and Canada catering to the income producing segment such as commercial operators, landscapers and hay management.

"Up until now in North America (US and Canada) we were only in the 80 hp and below segment catering to rural lifestylers, who are typically hobby farmers. We are number three in the segment," he said, adding still M&M was not present in hardcore agri segment in North America where there is requirement for very big machines.

The other aspect of strategy in Americas is to expand further in markets like Mexico and Brazil, where the company is a relatively new entrant.

"These are agricultural markets and we have been there only for last couple of years. We are competing in the agri space there," he said.

Stating that there is a lot of similarity, specially with Mexico and India from agro-climatic point of view and the type of crops grown, Jejurikar said M&M's Indian products are suitable and accepted very well in these markets.

"The challenge for us is to create brand awareness and build distribution network. We are doing that by creating our own subsidiary Mahindra Mexico and Mahindra Brazil," he said.

Overall in Americas, Jejurikar said, "We expect revenues to be USD 1 billion from USD 640 million over a period three years."

In Japan, he said, "We are at USD 450 million at present. Our aspiration is to reach USD 1 billion but there is no timeline set for it."

The company is number four player in agri machinery segment and has a market share of around 6 per cent. "We have two areas of priority in Japan. One is to improve our market share in the local market and second is to enhance exports from there using some of the other markets which come in as a part of the Mahindra network," Jejurikar said.

M&M is focusing on global centre of excellence (CoE) for rice value chain to create global access of harvesters and rice transplanters through Mitsubishi Mahindra Agricultural Machinery (MAM), he added.

"The intent would be to take farm machinery to a global platform through the rice transplanters as well as rice harvesters thereby taking MAM beyond Japan," he added.

Currently, Mitsubishi tractors are exported primarily to Mahindra USA, which get branded as Mahindra.

"We are also looking at exporting transplanters from Japan to other markets, including to India. We already have a walk-behind rice transplanter in India and a ride-on should happen by the end of the calendar year and a harvester sometime next year," he added.

In Turkey, M&M's three subsidiaries Erkunt Traktor, Hisarlar and foundry Erkunt Sanayii account for around USD 240 million of revenue.

"While Erkunt Traktor has an aspiration to be the number two in its market, up from four at present, Hisarlar will look at proving mechanisation solutions for the complete agri value chain," he said.

Being the fourth largest tractor market globally, Turkey presents a lot of opportunities, Jejurikar said, adding Hisarlar will be the CoE for farm implements.

When asked about plans for China, he said, "We are putting in place a strategy to return to the USD 25 billion farm equipment market in due course of time. We plan to venture on our own rather than look at a JV."

There is big potential for M&M to exploit farm machinery opportunity in China with rice transplanters and rice harvesters from Mitsubishi, he added.

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

15.2. Samsung’s new unit gives a nice ring to ‘Make in India’

BusinessLine, 9 Jul. 2018

Noida facility, world’s largest factory for mobile handsets, will also make for world

Korean technology giant Samsung on Monday inaugurated the world’s largest mobile phone factory at its Noida facility, providing a fillip to the Narendra Modi government’s efforts to promote manufacturing in thecountry, and also signalling its intent to take on Chinese counterparts, which have been dominating the Indian market.

The facility was jointly inaugurated by Prime Minister Modi and the visiting South Korean President Moon Jae- in, underlining the significance attached to the project.

“Today is an important day in making India a global hub for manufacturing. Our push for ‘Make in India’ is not just part of our economic policy, but a commitment for bilateral ties with countries like South Korea,” Modi said.The facility will help Samsung double its current capacity for mobile phones in Noida to 12 crore units a year, in a phase-wise expansion that will be completed by 2020.

In June 2017, Samsung had announced an investment of ₹4,915 crore to add capacity at the Noida plant,under the Uttar Pradesh government’s Mega Policy. The plant was set up in 1996.

Samsung India also launched its ‘Make for the World’ initiative, whereby it aims to export mobile handsetsproduced in India, to overseas markets.

“Our Noida factory, the world’s largest mobile factory, is a symbol of Samsung’s strong commitment to India, and a shining example of the success of the government’s ‘Make in India’ programme. Samsung is a long-term partner of India. We ‘Make in India’, ‘Make for India’ and now, we will ‘Make for the World’,” said HCHong, Chief Executive Officer, Samsung India.

He said the company is aligned with government policies and would continue to seek their support to achieve“our dream of making India a global export hub for mobile phones”.

According to analysts, it is a win-win situation for both Samsung and India. “It will help them (Samsung) moreeffectively leverage the R&D that has been going on for a long time now. Now, it has a very market-oriented R&D, and the largest facility to utilise that in India,” said Faisal Kawoosa, Head - New Initiatives at CyberMedia Research.

For India it is a big positive at a time when we see most of the anchors of ‘Make in India’, domestic brands dwindling with their performances. “Mobile manufacturing in India has been [riding] on the shoulders of Chinese brands of late, but the expansion of a brand like Samsung will send a very positive message across the globe. This will [also] help the ecosystem and auxiliary industries grow as they will have demand to bemet,” he added.

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

16.1. India launches its first national healthcare facility registry

Livemint, Jun. 20, 2018

New Delhi: The Union ministry of health and family welfare on Tuesday launched the National Health Resource Repository (NHRR), the first ever registry in the country registry of authentic, standardised and updated geo-spatial data of all public and private healthcare. The Indian Space Research Organisation (ISRO) is the project technology partner for providing data security.

It will now be possible to provide comprehensive data on all private and public health establishments and otherresources, including Railways, Employees’ State Insurance Corporation (ESIC), defence and petroleumhealthcare establishments. Under the Collection of Statistics Act 2008, more than 20 lakh healthcare establishments such as hospitals, doctors, clinics, diagnostic labs, pharmacies and nursing homes would be enumerated under this census, which will capture data on more than 1,400 variables.

The Central Bureau of Health Intelligence (CBHI) has looped in key stakeholders, including leading associations, allied ministries, and several private healthcare service providers.

This resource repository shall enable advanced research towards ongoing and forthcoming healthcare challenges arising from other determinants of health such as disease and the environment. Approximately 4,000 trained professionals are working with dedication to approach every healthcare establishment to collect information.

It shall also enhance the coordination between central and state government for optimisation of healthresources, making ‘live’ and realistic state project implementation plans (PIPs) and improving accessibility ofdata at all levels, including state heads of departments, and thus decentralise the decision making at district and state level.

“Some key benefits of the NHRR project are to create a reliable, unified registry of country’s healthcare resources showing the distribution pattern of health facilities and services between cities and rural areas,” saidUnion health minister J.P. Nadda.

“Additionally, it shall generate real-world intelligence to identify gaps in health and service ratios, and ensure judicious health resource allocation and management. It shall identify key areas of improvement by upgrading existing health facilities or establishing new health facilities keeping in view the population density, geographicnature, health condition, distance,” he said.

The NHRR project aims to strengthen evidence-based decision making and develop a platform for citizens and provider-centric services by creating a robust, standardized and secured Information Technology (IT)-enabled repository of India’s healthcare resources.

“Data is an important source of navigation. It helps in understanding the goals, our strengths and weaknesses and it is also an important means to strategize. Good compiled data enables the policymakers to make evidence-based policies and aids effective implementation of various schemes. NHRR should have inbuilt process for updating the data so that the system is relevant for a long time,” said Nadda.

The health minister on Tuesday also released the National Health Profile (NHP)-2018, prepared by CBHI. The National Health Profile covers demographic, socio-economic, health status and health finance indicators, along with comprehensive information on health infrastructure and human resources in health.

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

16.2. Job-spinner Ayushman Bharat may create employment for 100,000: Indu Bhushan

Business Standard, Jun. 20, 2018

New Delhi: The Ayushman Bharat Mission, apart from being a tertiary health care system, will also be a job- spinner.

Indu Bhushan, chief executive officer of the Ayushman Bharat — National Health Protection Scheme (NHPS), says 100,000 jobs will be created.

Experts say as hospitals start setting up infrastructure for the scheme, employment generation will be an adjunct of that.

Not just that, claim management support at trusts and insurance agencies will help create jobs. Meanwhile, doctors and big hospitals are unhappy with the rates of treatment proposed in the scheme.

The Indian Medical Association (IMA) has criticized the scheme over the use of funds allocated to it and the reimbursement rates.

They say the package rates, set by the government, will not cover even 30 per cent of the cost of theprocedure and hospitals will not be able to follow the procedure without “seriously compromising patient safety”, as mentioned in their statement.

India’s large private hospitals have raised concerns over the procedure rates under the scheme and asked the government to reconsider the treatment package rates, saying they would be unviable.

On the other hand, small private hospitals have shown an interest in participating in the NHPS at these rates, according to Bhushan.

The scheme aims to provide Rs 500,000 health protection cover to around 100 million poor families. The scheme will replace the Rashtriya Swasthya Bima Yojana (RSBY), which provides cover up to Rs 30,000. While initially Aadhaar will not be compulsory for identification under the scheme, in its later phase it will be necessary. Families availing of the scheme need to make sure they have Aadhaar registration by the time of their second visit to health care facilities, according to Bhushan.

States can use the ration card, apart from the socio-economic caste census, or SECC, data, to identify beneficiaries.

Bhushan says in rural areas, 85 per cent of the beneficiaries could be identified using the SECC data while in urban areas 50-60 per cent have been identified.

Bhushan says states, not insurance companies, will enroll beneficiaries, unlike in the case of the RSBY. He says this is one of the lessons the government has learnt from the RSBY.

“Insurance companies were keen to enroll a person under the scheme but were reluctant to process claims. It was advantageous for them to enroll beneficiaries but disadvantageous to pay the claim. So now states will enroll people.”

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

17.1. NIIT aims to train 1 lakh students in next 3 yrs

PTI, Jul. 13, 2018

Mumbai: Skill and talent development firm NIIT is targeting to train one lakh students in the next three years from IT and BFSI sectors, a top official said today.

The company, which focuses on corporate training wherein it imparts skills to freshers as well as re-skills the existing staff, will be catering to 15,000 students in the current year, NIIT chief executive officer Sapnesh Lalla told reporters here.

"We will be training one lakh students in the next three years. We are focusing on the banking, finance and insurance, and the information technology sectors," he said.

When asked about the revenue accretion because of the increased numbers, Lalla declined to comment citing the pre-results 'silent period' the company is in at present, but said that there will be "material changes" in revenues in the next six to nine months.

The company counts on India, China, the US and Canada as its key markets and will continue to focus on the same, he said, adding that it is open for acquisitions.

At present, the BFSI sector accounts for two-thirds of its business, while the remaining comes from the IT sector.

Lalla said issues like surge in non-performing assets have led to an increase in demand for risk management and regulatory compliance teaching for banking clients.

Traditionally, it has been imparting courses on new technologies for bank employees and system introductions to the freshers, as the lenders undergo a change in focus from operations to relationship management, he said.

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

17.2. Four million jobs added during Sep-Apr: CSO report

PTI, Jun. 26, 2018

New Delhi: As many as 41.26 lakh new jobs were created during September 2017-April this year, with the first month of the current fiscal witnessing highest ever monthly addition of 6.85 lakh, says Central Statistics Office. The CSO had brought out the first release of employment related statistics in the formal sector in April, 2018 covering the period September 2017 to February, 2018, using information on the number of subscribers who have availed benefits under three major schemes, namely - the EPFO, Employees' State Insurance Scheme (ESIC) and National Pension Scheme (NPS).

Now, in the similar data release suggest that as many as 41,26,138 new payrolls were created during September 2017 to April 2018, and in April alone 6,85,841 new payrolls were recorded by the retirement fund body EPFO (Employees' Provident Fund Organisation).

According to the data, the EPFO's April payroll number was the highest in the last eight months, indicating higher jobs creations than preceding 7 month.

During April, the maximum new payrolls of 1,87,221 were recorded in the age bracket of 18 to 21 years followed by 1,80,892 payrolls in 22 to 25 years.

According to the EPFO, the data for most recent months are provisional as updation of employees records is a continuous process and are likely to be updated in subsequent months. For each age-wise band, the estimates are net of the members enrolled and ceased during the month.

It also said the estimates may include temporary employees whose contributions may not be continuous for the entire year. The members' data are linked to unique Aadhaar identity. The body has more than 6 crore active members with at least one month contribution during the year.

The CSO, which is a wing of Ministry of Statistics and Programme Implementation, said the estimated total number of new National Pension Scheme subscribers during the period September, 2017 to April, 2018 is 5,12,040 persons.

The present report gives different perspectives on the levels of employment in the formal sector and does not measure employment at a holistic level, it added.

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

18.1. Walmart gathers allies in war against Amazon and Alibaba

Livemint, 29 Jun. 2018, Mihir Dalal

Walmart, which retained Alibaba-rival Tencent Holdings and Microsoft as Flipkart investors, is in talks to bring in Google as an investor—a move aimed at Amazon

Bengaluru: Walmart is bringing together a bunch of companies at Flipkart to fight two common enemies: Amazon and Alibaba.

The alliance of Flipkart investors represents an extension of the global battle for retail and internet supremacy being fought among American companies Walmart Inc., Amazon.com Inc., Google (Alphabet Inc.) and Microsoft Corp. and Chinese internet giants Tencent Holdings and Alibaba Group Holding Ltd.

Last month, Walmart agreed to buy 77% of Flipkart for $16 billion. It retained Tencent Holdings and Microsoft Corp., among others, as minority investors. The company is also in talks to bring in Google as an investor.

Google is keen on investing in Flipkart partly because it wants to avoid ceding ground to Amazon in its core search business

Earlier this month, at a press conference in Walmart’s US headquarters of Bentonville, Mint asked Walmart executives if the company was building an anti-Amazon alliance at Flipkart. Walmart chief operating officerJudith McKenna replied, “I prefer to think of it as a pro-Flipkart alliance.”

When asked why Walmart didn’t buy all of Flipkart and instead chose to purchase a 77% stake, McKenna added, “It’s very deliberate (keeping some minority shareholders at Flipkart). We think that not only does it help bring a healthy diversity of views around the table but it also helps the business succeed in the long term.Flipkart had a very diverse board previously and I’m very excited that companies like Tencent and Tiger(Global Management) and Microsoft are going to remain part of the mix.”

The continuation of Microsoft and Tencent as Flipkart shareholders and the proposed investment of Google into Flipkart are no coincidence. Microsoft and Google are rivals of Amazon, which is a close No.2 to Flipkartin India’s $18 billion e-commerce market. Tencent decided to retain its stake in Flipkart partly because its arch-rival Alibaba is pumping hundreds of millions of dollars into Paytm’s e-commerce business, two people familiar with the matter said.

Tencent decided to retain its stake in Flipkart partly because its arch-rival Alibaba is pumping hundreds of millions of dollars into Paytm

Google is keen on investing in Flipkart partly because it wants to avoid ceding ground to Amazon in its core search business, the two people cited above said. In the US, Amazon is so dominant in online retail that some people are increasingly going straight to Amazon to search for products rather than using Google.

This has prompted Google to make an aggressive push into e-commerce in the US, a move the firm wants to replicate in India. A strategic partnership with Flipkart is one of the approaches Google is exploring, the people cited above said.

The alliance of retail and internet firms at Flipkart is the latest example of how intertwined the tech businesshas become and how internet firms are increasingly encroaching on each other’s turf. For instance, a fewyears ago, it was unthinkable that Google would enter e-commerce or that Amazon could ever threatenGoogle’s dominance in search and online advertising.

The alliance also highlights the fact that American and Chinese firms, along with Japan’s SoftBank Group Corp., have become key players in India’s internet market. Apart from Flipkart, many large Indian startups, including ride hailing app Ola, payments platform Paytm, food-tech firm Zomato and hotel brand Oyo, count either SoftBank or Chinese firms as their largest shareholders.

Walmart and Google didn’t respond to emails seeking comment

18.2. We commission more from India than anywhere else: Netflix's Ted Sarandos

Business Standard, Jun. 29, 2018

New Delhi: The $11.7 billion Netflix Inc reaches 125 million subscribers across 190 countries. It is among theworld’s largest subscription-driven streaming services. Over the years, Netflix has also morphed into a studio, which commissions (for the global market) dramas and films such as Narcos and Okja. Its first Indian series, the gritty crime drama, Sacred Games will release on July 6. In 2017, Netflix had a $6 billion budget for content, which went up to $8 billion this year. Vanita Kohli-Khandekar spoke to Netflix’s Chief Content Officer Ted Sarandos, the man who decides how this money will be spent. Edited excerpts:

What is the role of the Indian market in Netflix’s global scheme of things?

India is our biggest market for content. We commission more from here than anywhere else. We were in Latin America for four years before we commissioned Narcos. We have been in India for two years and have commissioned much more (seven scripted and two unscripted shows). We are looking to work with great storytellers from the region. The more authentically local the storytelling is, the more likely we are to tap it. Sacred Games will appeal to people who love crime stories. (The show is based on Vikram Chandra’s bookand stars Saif Ali Khan and Nawazuddin Siddiqui among others.)

We are also very enthusiastic about the Indian market; about half the people are online, it is a highly addressable market. Our library has grown two times and viewing hours have increased dramatically.

How do you balance the audience need for local stories with the fact that you commission globally?

What people love and like remains the same. The percentage of our Indian subscribers who have liked Narcos and Stranger Things are as big as anywhere in the world. The people (in a foreign show) may be different and exotic but everybody loves a good story.

How much of your commissioning decisions are data-driven?

Data helps us make financial decisions. It helps us organise the site, how you track it, how you choose content. It doesn't ever tell us this show is great or perfect. It helps commissioning in the sense that it tells us about what’s come out, but not about new voices. For that we go to film festivals, agencies.

Are there patterns or trends that you see across markets.

There is no learning from one country that can be applied to another one. Every country is different.

Which shows have been your biggest surprises and successes recently?

The surprises — there have been some small shows which break out. For example, End of the F***ing World, a small British show or La Casa de Papel, a Spanish drama, both broke out and were very big in India too. La Casa de Papel is a very Spanish show . The successes — The Rain (a Danish show). Most of the successful shows get a vast majority of their viewing outside the country of their origin.

What’s the Netflix experience been like in films?

Last year, we produced, acquired or licensed 58 films for release globally.

The total is 80 if you include only regional releases. Of the 58, about 33 were released in the theatres and five were nominated for the Academy awards. These include narratives, documentaries and feature films.

You have talked several times about reducing the window between a film’s theatrical release and its going online (from the current 90 days in the US).

The thing is how do you improve the chances of a viewer finding a movie. If it is going to be in the theatre for three-five months, it seems wrong for an internet generation that wants on-demand. A theatre is a differentexperience; we like to go out with strangers or with a date. The only reason to watch in a theatre shouldn’t be because it is not available elsewhere. (All of Netflix’s theatrical releases go online simultaneously). One of our Indian films Lust Stories has done well online. Another Indian Netflix movie is Love Per Square Foot. Small romantic comedies are a good example because it is difficult to release them in theatres.

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

19.1. Pharma sector may post 17% revenue growth in June qtr: Report

PTI, Jul. 09, 2018

Mumbai: The pharmaceutical industry is likely to report a 17 per cent revenue growth in the June quarter, driven by strong domestic growth and currency tailwinds, said a report.

"Overall revenue for the pharma sector is likely to grow 17 per cent YoY (year-on-year) and PAT 50 per cent YoY," Edelweiss Securities said in its report.

"Domestic sales are likely to spike 26 per cent on the back of a low base due to GST-related disruption," it added.

The US sales in constant currency is expected to grow 6 per cent in annual terms, but fall 2 per cent in quarterly terms, on lack of any meaningful launch during the June quarter, according to the report.

Currency tailwinds, namely the rupee's 4 per cent depreciation against the US dollar and 11 and 5 per cent fall against the euro and yen, respectively, are likely to drive EBITDA margin expansion of 350 bps in annual terms and 100 bps in quarterly terms in the June quarter, it said.

Edelweiss Securities said that the optimism is on favourable regulatory environment.

The US Food and Drug Administration (USFDA) approval rate rebounded to 198 nods after a temporary hiatus in the March quarter, with 109 approvals due to extra documentation requirements for elemental impurities, the report revealed.

Following the recent USFDA clearance of Sun Pharma's Halol plant, the report said piled-up filings are expected to keep the approval rate buoyant for domestic pharma companies.

"On the regulatory front, favourable inspections at Cadila's topicals plant, Dr Reddy's Medak, Srikakulam SEZ, UK, and Sun Pharma's Halol plant demonstrate that the worst in terms of regulatory issues is over," it said. Edelweiss Securities, however, said that the pricing challenges in the US is still cause of concern.

"Though the Q1FY19 results will be seemingly better, we believe underlying growth will remain muted. However, initial signs of rebound in domestic markets is key positive," it said.

The domestic pharmaceutical sector accounts for 3.1-3.6 per cent of the global pharmaceutical industry in value terms and 10 per cent in volume terms.

It is expected to grow to USD 100 billion by 2025, according to the report.

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

19.2. CSIR-IMTECH inks pact with Zydus Cadila

BusinessLine, Jul. 5, 2018

Drug firm Zydus Cadila today said it has inked an agreement with the Council of Scientific and Industrial Research (CSIR) - Institute of Microbial Technology - to identify new drug candidates for treatment of drug resistant infections.

The collaborative research agreement will see scientists from both organisations working together on microbiology and genomics to identify a new lead candidate as a novel anti-tuberculosis compound, Zydus Cadila said in a filing to the BSE.

Commenting on the development, Zydus Cadila Chairman Pankaj Patel said: “We are committed to support the End TB Strategy.” Given the vast scientific experience of the CSIR-Institute of Microbial Technology (IMTECH) in microbial-related research, and Zydus’ expertise in drug discovery and development, “wewelcome this opportunity to partner with CSIR-IMTECH and hope to deliver new therapies for the nation,” he added.

A positive outcome from such collaborative efforts could define the way drug discovery would be carried out in future in India via public-private partnerships, the statement said. For this project, scientists at IMTECH would utilise their expertise and scientific knowledge in microbiology, while Zydus Cadila will provide expertise in medicinal chemistry and pharmaceutical drug development to develop new drug combinations against drug- resistant pathogens, which causes severe diseases in India and across the world, it added.

Published on July 05, 2018

20.1. Is India winning the battle against extreme poverty?

Livemint, 4 Jul. 2018

India is now a middle-income country. The political, policy and administrative systems have to adjust to the new realities

India is perhaps no longer home to the highest number of people living in extreme poverty. Researchers at Brookings Institution say Nigeria had 87 million people living in extreme poverty in May 2018, compared to 73 million in India. They predict that the Indian number is expected to drop to around 20 million over the next four years. The World Bank defines a person as extremely poor if she is living on less than 1.90 international dollars a day, which are adjusted for inflation as well as price differences between countries.

The Brookings prediction is based on data provided by a host of international agencies. Economist Surjit Bhalla has written in The Indian Express recently that new Indian data will paint a similar picture. He says that the results of the recently concluded consumer expenditure survey conducted by the National Sample Survey Organisation—which is used to generate estimates of absolute poverty—will show that there are 50 million Indians now living below the poverty line defined by the Suresh Tendulkar committee, or one in 25. The poverty decline since the beginning of this century has been quite dramatic.

Poverty numbers have always been a source of heated debate in India and the claims that India is on the verge of winning the battle against extreme poverty sit uneasily with the current concerns about job creation or rural distress. So how believable are these estimates? An international comparison would help. China began to score massive wins against extreme poverty at the turn of the century, when its per capita income in terms of purchasing power parity (PPP) was around $4,000. It was thus very likely that India would see a similar result after it reached a similar average income level at the end of the previous decade. PPP incomes average around $7,000 right now, compared to around $2,500 in the year 2000.

Scholars who have studied the Chinese success have no doubt that rapid economic growth has been the main reason why extreme poverty could be rolled back. The centrality of economic expansion is often lost in the heated ideological debates in India. However, there were also other factors at play—the shift of people to jobs in formal enterprises, investments in human capital, relatively equal land ownership in rural areas, and targeted interventions to help the extremely poor. These allowed China to pull most of its citizens out of extreme poverty despite rising inequality.

The reduction in extreme poverty—and the debates should only be about its extent—has several implications. First, it is time to close the tired debate about whether the economic reforms of 1991 have only helped the rich, though empirical proof will not come in the way of grand claims that poverty is actually increasing in India. Other indicators of well-being such as infant mortality and nutrition have also been improving.

Second, India will once again have to redefine what it means by poverty. Poverty lines have to be recalibrated depending on changes in income, consumption patterns and prices. The usual poverty line used in narratives is 1.90 international dollars a day, but the World Bank has two others—$3.20 per day for middle-income countries and $5.50 per day for rich countries. India is now a middle-income country, with an estimated per capita income of around $9,000 in purchasing power parity. Bhalla suggests that a poverty line of $3.20translates into ₹75 a day, or 68% higher than the Tendulkar poverty line.

Third, the Indian political, policy and administrative systems have to adjust to the new realities of the transition to a middle- income country, in which poverty does not mean living at the edge of hunger but, rather, lack of income to take advantage of the opportunities thrown up by a growing economy. The focus of government spending should be on the provision of public goods rather than subsidies. That is easier said than done given the political economy equilibrium. Also, the rate at which economic growth translates into poverty reduction depends on what happens to inequality, or how the growth dividend is distributed.

Few would remember that India was battling the threat of widespread famine some five decades ago, when even its ability to feed a growing population was questioned. There has been a lot of progress since then. Even the very possibility of a final victory against the sort of extreme poverty that was common not so long ago is no mean achievement.

How important is the role of economic growth in fighting extreme poverty? Tell us at views@livemint.com

20.2. Six universities granted ‘Institute of Eminence’ status

BusinessLine, 9 Jul. 2018

IIT Delhi, Bombay, BITS Pilani among those selected

In a bid to improve the rankings of the Indian institutes globally, the Human Resource Development Ministry on Monday announced the name of six universities which have been selected for the Institute of Eminence status. Out of six, three are in the public sector and the remaining in the private sector.

HRD Minister Prakash Javadekar on Monday tweeted, “The Institute of Eminence are important for the country. We have 800 universities, but not a single university in top 100 or even 200 in the world ranking.Today’s decision will help achieve this.”

“Improving ranking needs sustained planning, complete freedom and public institutes getting public funding. This is the commitment of Narendra Modi government to not to interfere but to allow institute to grow the waythey should grow,” he added.

Indian Institute of Technology (IIT)-Bombay, IIT-Delhi and IISc Bangalore are the three public universities selected under this. Jio Institute by Reliance Foundation, BITS Pilani, Manipal Academy of Higher Education are the three private universities which have been granted the status of Institute of Eminence.

Under the Institute of Eminence, 10 private and 10 public universities are to be selected. The selected institutes shall be regulated differently from other deemed to be universities so as to evolve into institutions of world class in a reasonable time period.

INDIA AND THE WORLD

21.1. India, China demand reduction in rich nations’ harmful farm subsidies from 2019

BusinessLine, 27 Jun. 2018, Amiti Sen

Hitting back at WTO members that have questioned India’s Minimum Support Price (MSP) programme forfood, including the US and the EU, New Delhi has teamed up with Beijing to formulate a step-by-step proposal for rich members to eliminate their farm subsidies where the World Trade Organization (WTO) has allowed them higher amounts beyond de minimis (ceiling) levels.

In a joint proposal to the WTO submitted recently, the two countries have said that the reduction processshould begin as early as 2019 to remove the asymmetry in the WTO’s agreement on agriculture and removedistortions in world trade.

“Any meaningful attempt at reforms in agriculture subsidies must address the asymmetry between the developed members on the one hand and most of the developing members on the other hand in their respective entitlements to AMS (Aggregate Measurement of Support) beyond de minimis and the flexibility to provide high product-specific support,” the proposal said.

Negotiations on further discipline on domestic support for agriculture should start only after reduction of trade- distorting subsidies by developed nations, it added.

US allegations

The US has recently taken on India, with support from the EU and Australia, on reporting of MSP for wheat and rice. Washington has alleged that India is under-reporting its subsidies, which New Delhi has refuted.

The new proposal by China and India is a follow-up of the first proposal submitted last year, where they pointed out that rich nations have been consistently giving trade-distorting subsidies (aggregate measurement of support) to their farmers at levels much higher than the ceiling applied on developing countries.

The developed world cornered 90 per cent of total entitlements, amounting to a whopping $160 billion annually, they said.

The first paper revealed that WTO rules provided flexibilities to a handful of countries, allowing them to increase harmful subsidies beyond de minimis levels, which resulted in subsidies for many items given by the developed world going over 50-100 per cent of the production value, while developing countries were forced to contain it within the 10 per cent ceiling or face penalties. As per the new proposal, a ceiling and reduction of AMS beyond de minimis as product-specific support would be the most important and incremental first step in the reform process for establishing a fair and market-oriented agricultural trading system.

The proposal further lays down steps based on which developed countries with product-specific-subsidies beyond the ceiling level should cut it down.

To ensure accountability, the proposal stated that each WTO member with AMS entitlements beyond de minimis shall annually notify the Committee on Agriculture about the product-specific AMS beyond de

minimis and the value of production of the concerned agricultural product in sufficient detail, so as to monitor compliance with its obligations on product-specific AMS.

22.1. India, Australia formalize open sky agreement in aviation sector

PTI, Jun. 20, 2018

New Delhi: In a move which could give a boost to air passenger traffic between India and Australia, the two countries have formalized an open sky agreement allowing airlines on either side to offer unlimited number of seats to six Indian metros and as many Australian cities.

The decision comes against the backdrop of several Australian airlines and Indian carriers expressing desire to operate between the two countries.

Both IndiGo and Vistara, which are firming up plans for international services, are understood to be eying the Australia market.

According to some reports, India is the eighth-biggest source country for travelers to Australia. At present, the only Indian carrier that operates a direct flight to Sydney is Air India. Tourism Australia has already described India as being "under-served" due to lack of aviation links.

"India and Australia formalized an open sky arrangement that allows airlines of both sides to deploy unlimited seats to six Indian metros and six cities in Australia respectively," said a tweet of the Ministry of Civil Aviation after the finalization of the agreement.

As per the National Civil Aviation Policy, 2016, the open sky agreement allows the government to enter into air services agreement on a reciprocal basis with SAARC nations as well as countries beyond a 5,000 kilometre radius from New Delhi.

India has signed open sky agreements with Greece, Jamaica, Guyana, Czech Republic, Finland, Spain and Sri Lanka. India also has open sky agreement with the US, among other countries.

In September last year, during the visit of Japanese Prime Minister Shinzo Abe to India, both the countries had signed an agreement under the open sky policy to operate unlimited number of flights between the two countries.

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

22.2. Govt to study ways for boosting pharma export to China

PTI, Jun. 19, 2018

New Delhi: The commerce ministry has commissioned a study on ways to boost the export of pharmaceutical products to China.

The study aims to have a proper understanding of Chinese market and to help the domestic pharma industry to evolve appropriate and focussed strategy for the entry of the Indian generic drugs, the ministry said.

The move assumes significance as China is among the world's most attractive markets for pharmaceuticals and medical products.

"The Department of Commerce in coordination with Embassy of India at Beijing commissioned a study on enhancing Indian exports of pharmaceutical products to China," it said in a statement.

The study examines the healthcare market, pharmaceutical market, distribution system, procurement and bidding process and the regulatory landscape in China, it added.

It also suggests ways to access the Chinese market.

China's healthcare sector continues to grow rapidly with spending projected to grow from $ 357 billion in 2011 to $ 1 trillion in 2020, it added.

India wants greater market access in China for its pharma products with a view to bridge the widening trade deficit with the country, which has touched $ 63.12 billion in 2017-18.

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

24.1. How US-China trade war will affect India

Livemint, 20 Jun. 2018, Harsha Jethmalanji & Pallavi Pengoda

There is no question that economic growth and asset markets will be badly hurt by a full-blown US-China trade war

China’s Shanghai Composite Index fell 3.8% on Tuesday, hit by escalating trade tensions with the US.Benchmark emerging markets such as Hong Kong (down 2.8%), Taiwan (down 1.7%) and South Korea (down 1.5%) too felt the heat. India was no exception. The Nifty fell 0.83%.

How high are the stakes for India in a trade war scenario? In trade conflicts, there are no winners. Too much protectionism ultimately constricts global growth. Nonetheless, here are some points to consider:

1) With Chinese growth being affected by trade wars, will it have an effect on commodity prices, especially metals?

China being the largest consumer of base metals, the current development should have a negative impact on prices of base metals. Gold is a safe haven and should benefit. Crude oil too will bear the brunt, depending on the severity of the impact and the resultant slowdown in global growth.

2) In the backdrop of trade tensions, will lower base metal prices be good for India?

Not necessarily, as revenues of companies will be adversely affected.

3) What happens to US crude oil if China does not buy it?

According to Wood Mackenzie, while China could secure crude oil from alternative sources such as West Africa which has similar quality as US crude, the US would find it hard to find an alternative market as big as China. However, if crude oil prices fall as a result, then other things staying the same, it will benefit India.“However, if lower oil prices are caused due to a full-blown trade war, its positive impact on the economy can get negated/limited due to other negative developments such as weaker confidence and/or disruption in global trade,” said Anubhuti Sahay, senior economist at Standard Chartered Bank.

4) How badly can US protectionism hurt India?

There is a lot of uncertainty with respect to how the ongoing retaliatory tariff impositions between the US andChina pans out, says economist Upasna Bhardwaj of Kotak Mahindra Bank, adding, “So, in that sense, investment across borders is likely to get impacted.”

5) Will the trade wars also affect capital flows?

Capital flows will be affected but that’s not due to trade tensions. “It is owing to the fact that the amount of easy money that was available due to quantitative easing is drying up,” says Madan Sabnavis, chief economistat CARE Ratings. The US Fed is in monetary policy tightening mode. A recent UNCTAD report says foreign direct investment has already slowed down.

6) Can India substitute Chinese exports to the US to some extent and therefore gain?

This could offer an opportunity for India. “India can become more competitive in segments such as textile,garments and gems and jewellery since India already has an edge,” says Bhardwaj. However, this is doubtful in the short run because China’s exports to the US are much more diverse and it’s a tall order for India to fillthe gap.

7) Will rupee weaken further?

The rupee will weaken more on account of capital flows than the impact of trade problems, says Sabnavis. At the moment, economists do not foresee the currency to breach the psychological level of 70 per US dollar.

8) Will the effect on India be less as its economy is more domestic-oriented?

Don’t forget that our exports plus imports of goods and services constitute around 42% of GDP. Also, we have a current account deficit dependent on external capital inflows for financing.

There is no question that economic growth and asset markets will be badly hurt by a full-blown trade war. The more important issue is the current global economic order is in danger of being dismantled, brick by brick. The ramifications will go far beyond trade—the impact on geopolitics, for instance, could be far more serious.

24.2. China to reduce or cut to zero tariffs on 8,549 types of goods originating in India, 4 other Asian countries

PTI, Jun. 28, 2018

Beijing: China will reduce or cut to zero tariffs on a total of 8,549 types of goods originating in India and four other Asian countries from July 1, according to the Ministry of Finance.

The adjustment, covering products made in India, Bangladesh, Laos, South Korea and Sri Lanka, was part of the tariff concession arrangement reached under the Asia-Pacific Trade Agreement (APTA), it said.

The goods include chemicals, agricultural and medical products, clothing, steel and aluminum products. The items on the list from the five Asian countries will have a new tariff rate effective on Sunday.

"The change was decided upon as unilateralism and trade protectionism are on the rise and tensions appear in the trade relations among global economies," the state-run China Daily said, referring to the looming US- China trade war.

After the adjustment, tariffs on 2,323 categories of commodities such as certain chemicals, optical components and television cameras will be reduced, state-run Xinhua news agency reported, citing the ministry.

The move came after a new arrangement was reached during the fourth round of tariff concession negotiations among the six APTA members in January 2017.

The trade agreement, formerly known as the Bangkok Agreement, signed in 1975 and renamed in 2005, has been the oldest preferential trade agreement among economies in the Asia-Pacific region. Formed by six member countries, the trade agreement covers a population of three billion.

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

25.1. Indo-US trade growing twice as fast as US-China: Senator Portman

PTI, Jul. 13, 2018

Washington: The United States' trade with India was growing twice as fast as that with China which sends a powerful message across the world that this bilateral relationship was deepening, a top US Senator has said. Rob Portman also called for removing trade and non-tariff barriers, which he felt was an "impediment" to growth of bilateral trade.

The senator was speaking at the inaugural Annual Leadership Summit of the US India Strategic and Partnership Forum (USISPF).

"I think, we have ways to go (in bilateral trade). But let me give you a good news story. The USD 126 billion (in bilateral trade) today is 370 per cent increase in trade between our two countries since 2005. Trade with China has also increased (during the same period), but only by 174 per cent, Portman said.

"So, if I look at it, US-India trade is growing twice as fast as US-China (trade). This I think is only one indicator but interesting one to show the deepening of the relationship," he said.

Portman asserted that the opportunity to grow this relationship is "tremendous" as India is world's seventh largest economy of the world.

The Republican Senator from Ohio said more than 100 Indian companies have created more than 1,00,000 jobs in the US. Similarly, US companies have invested USD 26 billion in India, as per 2016 figures.

Portman said the opportunity was here to address some of the longstanding trade issues between the two countries, especially as they look more broadly at the importance of strategic and geo political relationship.

In his remarks he also called for addressing the issue of intellectual property rights.

"I think that sends a powerful message to the rest of the world that US-India relationship is deepening and that it is one that has strategic importance well beyond trade," Portman said.

"It will be beneficial to Indian economy, certainly to our economy and our exports, if we can address these issues in the context with GSP," he said.

"We have come a long way and we have a long way to go," he said.

Portman said there is a "tremendous interest and appetite" in deepening this relationship.

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

25.2. Dimon, Bezos, Buffett tap Atul Gawande for new healthcare firm

Livemint, 20 Jun. 2018, Zachary Tracer, Katherine Chiglinsky and Michelle F. Davis, Bloomberg

The new healthcare firm—meant to help Amazon, Berkshire Hathaway and JPMorgan improve care and lower costs—will be based in Boston and Atul Gawande will start on 9 July

New York/Mexico City: Atul Gawande, a surgeon and journalist who has written extensively about the US failure to grapple with rising healthcare spending, has been named to head a new health venture for Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co.

The new firm—meant to help the three companies improve care and lower costs—will be based in Boston and Gawande will start on 9 July. It will be independent from the three firms, whose leaders formed the group as away of contending with what Berkshire chief executive officer Warren Buffett called a “tapeworm” eating theUS economy.

“I have devoted my public health career to building scalable solutions for better healthcare delivery that aresaving lives, reducing suffering, and eliminating wasteful spending both in the US and across the world,”Gawande said in a statement from the group announcing his appointment. Along with his writing and medical practice, Gawande is a professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School.

Gawande is a prominent name in healthcare policy circles, though hasn’t run a major business. Many detailsof the new venture—its name, size, budget and authority—weren’t immediately available. It will be an “independent entity that is free from profit-making incentives and constraints,” the group said in the statement.The companies announced in January that they were forming the venture to improve employee health care. JPMorgan CEO Jamie Dimon and Buffett have since said it could take years for the venture to show results. Employers are the largest providers of health insurance in the US, giving more than 150 million people access to coverage. Insurance premiums have soared 55% over the past decade, according to the Kaiser Family Foundation, contributing to the growing dissatisfaction voiced by employers.

‘Cost Conundrum’

Gawande, 52, rose to prominence among healthcare policy experts with a 2009 New Yorker article, The Cost Conundrum, that examined why health care was vastly more expensive in some parts of the US than others, despite little difference in the sickness or health of people getting it. The piece focused on McAllen, Texas, andwhy the Medicare program spent $15,000 a year on the town’s older patients, thousands of dollars more thanin other areas.

At the time, the article also attracted the attention of Buffett and his business partner Charlie Munger. Gawande “had an article last summer that was absolutely magnificent,” Buffett told CNBC in 1 March 2010,according to a transcript of the appearance.

“You have these enormous variances around the country. And, you know, if you had some really smart peoplerunning it that knew a lot about medicine, they’re going to—they could do a lot about it,” Buffett said in theappearance.

Munger thought the article was so socially useful that he blindly mailed Gawande a $20,000 check, Buffett told CNBC at the time. Gawande donated the money to an international project to improve surgical equipment in developing countries, according to the Huffington Post.

Broad Agenda

The choice of Gawande suggests that the venture will take a broad look at how to approach fixing health care, Ana Gupte, a health stocks analyst at Leerink Partners, said by email.

“The ABC coalition is looking not at the drug value chain in isolation, but more broadly at the overall health-care system across payors and providers of care delivery,” Gupte said.

Fed up with the status quo, some major firms like Walmart Inc. have separately experimented with bypassing insurers entirely, instead buying health care for their workers directly from doctors and hospitals.

Meanwhile, healthcare companies are embarking on a wave of unconventional deals to broaden the services they offer. The drug-store chain and pharmacy benefits firm CVS Health Corp. is acquiring insurer Aetna Inc., while insurer Cigna Corp. agreed to buy the drug benefits firm Express Scripts Holding Corp.

The Amazon-Berkshire-JPMorgan venture could put pressure on those middlemen. Buffett has said his ambitions are larger.

Healthcare spending is taking up an increasing proportion of the US economy, and a goal of the venture is to“at least” halt that, Buffett said on CNBC in February. He added that he hopes “we could find a way where perhaps better care could be delivered even at somewhat lesser cost”.

The companies have indicated a more modest initial goal, saying they want to use technology to reduce costs and improve care for workers.

Dimon, in his annual letter to his bank’s shareholders, also laid out a broader agenda: aligning incentivesamong doctors, insurers and patients; reducing fraud and waste; giving employees more access to tele- medicine and better wellness programs; and figuring out why so much money is spent on end-of-life care.

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AAPI

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Tuesday 17 July 2018

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– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

- INDUSTRY, MANUFACTURE

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

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