AAPI: May 2020

DELHI, 20th MAY 2020

Index of this Newsletter

INDIA

INDIA & THE WORLD

21.1. Lessons for India from ground zero New York
21.2. Four money lessons from Warren Buffett’s AGM
22. Global firms look to shift from China to India
23.1. Scrutiny is key to allowing Chinese presence in India
23.2. Crouching tiger upsets hidden dragon
24. India may be Apple's next big production hub
25. India signs US$ 1.5 billion loan with ADB to support India's COVID-19 immediate response

* * *

DELHI, 20th MAY 2020

NEWSLETTER, 20-V-2020

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

1.1. Deep reform can get foreign firms to make in India

Livemint, 12 May 2020, Karan Bhasin

Several states have undertaken factor market reforms, including labour reforms, to attract firms exiting China. Critics caution against the move, citing marginalization of labour in the absence of these laws. Mint explains the implications for India’s manufacturing sector.

What’s wrong with India’s labour norms?

The overarching complexities of India’s labour laws are said to have a dampening effect on the ease of doing business. These laws, in an atmosphere of unmindful bureau-cratic control and corrupt officials, have led to the exploitation of factory owners, which has in turn come at the cost of the welfare of workers. The Centre had tried to simplify these norms and compile 44 such laws into four draft labour codes—on wages, industrial relations, social security and safety, health and working conditions. As labour is on the concurrent list, both state and central governments are competent to enact legislation on this.

How have the laws impacted industry?

The labour norms in force have often been considered a key reason for India having a large informal sector and the overall small size of companies. One such norm is the Industrial Disputes Act (IDA) that prevents companies with more than 100 employees from firing people without government permission. This has led most companies to prefer being small or rely on the informal sector. Such norms have often prevented large-scale global corporations from setting up their plants in India. The small size of companies has also resulted in them not being competitive in several sectors.

Why have these outdated laws not been changed?

The Rashtriya Swayamsevak Sangh-affiliated Bharatiya Mazdoor Sangh and the Left-backed Centre of Indian Trade Unions have opposed any change to IDA, thus preventing an overhaul of the regulatory architecture. Successive state and central governments have not addressed the problems with the labour laws because of political considerations.

What changes have states proposed now?

States including Uttar Pradesh, Madhya Pradesh and Gujarat have temporarily suspended all labour codes. The only ones that will apply in UP are the Building and Other Construction Workers Act, Section 5 of the Payment of Wages Act, Workmen’s Compensation Act and the Bonded Labour System (Abolition) Act; 13 laws have been suspended for three years. Gujarat has exempted new industrial units from all related laws for 1,200 days, except the Minimum Wages Act, Industrial Safety Rules and the Workmen’s Compensation Act.

What’s keeping foreign firms away from India?

Five areas of concern have kept foreign firms from investing much in India. These are land acquisition problems, labour norms, high tax levels, high cost of power and red tape. The Centre has cut corporate taxes and proposed a new draft electricity code; states have enacted labour reforms. States’ ability to address issues on land, power and cost would determine how many firms come to India. Manufacturing may well take off in India after these reforms.

Karan Bhasin is a Delhi-based policy researcher.

1.2. Stories from Kerala’s spirited virus fight

Livemint, 20 Apr. 2020, Nidheesh M.K.

Though an early covid-19 hotspot, parts of Kerala are now out of a full lockdown. How did the state do it?

The fight is still on. The state is already preparing for a possible second wave. Scores of overseas workers are likely to return from hotspots in the Gulf once travel restrictions ease

ERNAKULAM/KOCHI: One morning in March, a woman in Kerala’s Kasaragod district suddenly developed a fever, along with fits of coughing. Her husband had recently returned from a Gulf country, but he had been quickly isolated after being detected with the novel coronavirus. The couple claimed they had not even had a chance to meet each other as they were both in quarantine. So, how did she get the disease?

Public health investigators in the district began to get nervous. If the woman had acquired the infection from someone else other than her husband, it could indicate community transmission. And that would be a nightmare, especially because Kasargod has the weakest public health network in the state.

What happened subsequently offers an instructive glimpse into how Kerala mounted a fightback against the virus—by paying attention to the minutest of details.

A list of people the woman had come in contact with over the previous week was drawn up, but the source of her infection remained a puzzle for the district’s team of six virus detectives, who were led by a doctor. Finally, they passed on the case details to 20-odd neighbourhood-level health workers who got in touch with the woman’s relatives. In the detailed interviews which followed, it came to light that she had been talking to everybody about some new saris. “We deduced that the husband, as is the local tradition with gulf returnees, may have brought back some gifts," said one of the virus detectives, requesting anonymity.

By following the hints hidden in those conversations, they discovered that the husband had passed on a suitcase to his wife before going into quarantine. Along with that suitcase, the detectives concluded, he may have shared the coronavirus too.

The fact that some Kasaragod district officials could figure out the mystery behind this one case may be the result of several factors—some of which exist perhaps only in Kerala. It gives a peek into what academics call the “Kerala Model" of governance.

When the coronavirus threat began to trail every single individual, so did Kerala’s society and government. After becoming India’s first hotspot in early-March, Kerala launched a large-scale medical manhunt, akin to the Kasargod case, in order to trace, test and isolate infected people. More than 100,000 people were traced and placed under quarantine by 26 March, a day before the nationwide lockdown. Kasargod, the most-affected district, has been testing more than 200 samples each day over the past month.

While the rest of India worries about the rate at which new cases are doubling, that question has become almost irrelevant in Kerala. Active cases are plummeting, not doubling. And only two patients have succumbed to covid-19 so far.

On 13 April, the state crossed a significant barrier: the share of fully recovered patients exceeded the number of active covid-19 cases. In a clear sign of victory, seven districts, or half of Kerala, exited the lockdown partially on Monday. The mood has clearly shifted, with the police having a hard time enforcing social distancing. Evidently, the fight is still on. The state is already preparing for a possible second wave. Scores of overseas workers are also likely to return from hotspots in the Gulf once international travel restrictions ease.

For now, however, Kerala’s template offers three important pointers for the rest of India: the value of diverting significant state resources every year towards building public health infrastructure, trusting village-level bodies with autonomy and funds, and promoting shared values that encourage social cooperation.

“Health and education have always been a priority in state budgets, irrespective of the governments," said K.P. Kannan, a development economist and former director of the Centre for Development Studies. “Kerala’s performance is the result of a long-term process of strengthening the public healthcare system, in which people’s planning and Panchayati Raj institutions have achieved an important role at the grassroots-level," added Kannan.

Fear and panic

Around the same time that the Kasargod woman began displaying early signs of the infection, what happened in another part of Kerala reflects the societal response and the role of non-state actors.

A large group of people had gathered with thick wooden logs in their hands in Kumarakom, a tourist hub surrounded by scenic backwaters and paddy fields. It had been only hours since local television channels had reported that a three-member family who had returned from Italy were found to be covid-19 positive in the neighbouring Pathanamthitta district.

Kottayam resident Robin, and his wife Reena, had gone to the airport to receive the family, and now, the neighbours had begun to make a ruckus about the threat posed by the duo. Plans were being made to attack one of their shops in the neighbourhood.

Former Kottayam MLA and the ruling Communist Party of India (Marxist) district secretary V.N. Vasavan had watched the same news report which had resulted in a mob outside Robin’s home. Like most politicians in Kerala, Vasavan was part of a number of public groups and associations. He immediately called the local panchayat president, got Robin’s contact details and dialled him.

“Robin, I saw the news. Don’t be afraid. This is not a deadly disease. Many have recovered. We are all with you for any help you need," Vasavan recalled telling Robin. “Brother, everybody who has called so far has only scolded me," responded Robin, who happens to be a former worker of Vasavan’s political nemesis, the Congress party. Robin said he then broke down inside his washroom where he was holed up.

It happened to be a Sunday. Many of the major public officials were not in town. The district collector P.K. Sudheer Babu was in Kannur. But the public health office moved quickly. Vasavan himself took an ambulance from the district hospital, in which he is a board member, and sped towards Robin’s house.

The house was in a densely populated corner of the village, surrounded by poor as well as middle-class families. Vasavan is a popular local leader, but he said: “Nobody came to the street. When we reached the house, the neighbours were peeping through the windows. I realized everybody was gripped with fear."

Vasavan and others held a meeting at the Kumarakom panchayat office, bringing in a small fraction of the people who were gripped with fear. He started the meeting by recalling a catchy line from a play called Aswamedham that is etched in the public imagination: “Is having a disease a crime?"

He then added: “Couldn’t this happen to any of us? If you attack their shops, it will be global news (sic) and bring shame to all Malayalees. Do we really want this?" The public meeting brought the crowd under control. But the district needed more than that. Roughly 600 residents were required to stick to measures aimed at containing the virus. Many of them weren’t cooperating at first. They asked how they would survive without stepping out of their homes.

“In the next one hour, we got groceries and vegetables delivered to their doorsteps and they got their answers. In the following weeks, 500 books were arranged for them to read," Vasavan said. “Social media groups were started with art competitions and yoga classes. Once their basic needs were met, they stayed inside their homes," he added.

To be sure, Vasavan is only representative of a broader political culture that cuts across party lines. “A politician in Kerala is rooted in a number of public groups and associations. He cannot unplug. He has to be seen as discharging his public duties," Kannan said.

Edgy moments

Meanwhile, the scene inside the hospital in the neighbouring district had become edgy. Handling Reena’s grandparents, the 93-year-old Thomas and 86-year-old Mariyamma (two of the three who had returned from Italy and tested positive), was a real challenge and they were transferred to the Kottayam medical college from Pathanamthitta for better care. Thomas suffered a heart attack, but his life was saved as doctors from the cardiac, nephrology and urology departments were pulled together as a team.

Even after he was out of danger, the job was gruelling, said a nurse, requesting anonymity. The 93-year-old Thomas was resolute about his morning routine. For instance, he told the nurse treating him that he wants to start his day with a glass of milk “procured from a local dairy farm".

The nurses emptied milk from a retail packet on to a dairy farm’s bottle every day and served Thomas. They also allowed the duo to be unencumbered by face masks while talking, as it made them uncomfortable—even though it placed additional safety requirements on the health staff.

At the end of Thomas’ hospital stay, following his recovery on 23 March, he was too emotional to talk to reporters. He said he was treated by the nurses as family. By then, a nurse who had treated the elderly duo, Reshma Mohandas, was infected. While Thomas became one of the oldest people in the world to have recovered from covid-19, Mohandas became the first health worker in Kerala to be infected.

The news could have set off ripples of shock and despair among the state’s health worker community. But Mohandas posted a personal note to colleagues on WhatsApp, brimming with confidence and urging other health workers to not let the guard down, which went viral. “I will leave this room within a week after defeating you (the coronavirus)," she vowed in that note.

And she did. By 3 April, she tested covid-19 negative and was sent back home for 14 days of self-quarantine. “I’ll be back soon," she told reporters while leaving the hospital.

Attention beyond health

Before the pandemic, the health department in Kerala had already received much acclaim for its successful handling of the Nipah virus, another vaccine-less, deadly virus.

But over the past few weeks, the concerns were not just confined to the realm of public health. The health success story could not have been scripted without working on livelihood protection in parallel. The state government had announced India’s biggest regional stimulus (of ₹20,000 crore) two days before the lockdown.

The state also ran community kitchens which fed lakhs of isolated people every day. Chief minister Pinarayi Vijayan formed a volunteer force to run the kitchens and it grew to more than 250,000 people in a week.

The planning also took into account the people who otherwise face tragic hardships: domestic migrants, who set off on foot along highways in many other states. They were offered free food and shelter. If they didn’t like the food, they were offered dry rations instead. The state as well as voluntary organizations arranged call centres in at least five languages commonly spoken by migrants.

Vishnu Narendran, a Sussex university graduate who ran one of those call centres for distressed migrants, said that at its peak, he was getting 40-45 calls every day. One such call came during the break in a prime-time television debate on migrant issues on 29 March. Since he was a panellist on the show, Vishnu said he was in a meeting. “‘By the time your meeting is over, I’d have died’ said the caller," Vishnu recounted.

“I became all emotional. When the debate resumed, the anchor asked some questions and I broke down saying there are people still starving in the streets," he said. The panel had in attendance the finance minister Thomas Isaac and former labour minister Shibu Baby John. Vishnu quickly connected the caller to a community kitchen.

“The sensitivity of people in the top of the governance chain in Kerala is way ahead of other states," said Benoy Peter, an expert on internal migration and executive director of the Centre for Migration and Inclusive Development. “Initially, it was a shock for the migrants in Kerala, like anywhere else in India. Now, they have accepted that the state is serious about them."

2. Tracking the Biggest Story of All

Dhaka Tribune, 30/4/2020

When the time comes for South Asia to look back at this year’s astonishing disruptions, the biggest story won’t be coronavirus, because the contagion will be behind us by then. Much greater and more

lasting impact will come from the massive de-peopling of our cities, as untold millions of migrant workers have already decamped. When lockdown lifts, even more will go.

This signal moment marks the end of processes that seemed irreversible. The subcontinent has only urbanized – from 10% of the population in 1901 to over 30% in 2001. If the dense, concretized

sprawls beyond municipal boundaries are included, over 60% of us are city dwellers.

Whichever way you measure growth (area, population, economy), the majority of the world’s fastest growing cities are in the subcontinent. According to The Economist’s most recent survey, three

are in Kerala alone (this anomaly is probably because the southern Indian state reports numbers reliably, while others fudge).

Lockdown guillotined the growth. Hundreds of millions have seen livelihoods disappear, with inadequate accommodations made for their welfare. They’re told to remain strictly indoors, but in living

conditions that are highly vulnerable to coronavirus. Thus, calculating correctly that the state will do little for them, the workers want to leave. The case of Surat is illustrative. Gujarat’s commercial capital was projected to be the fastest growing city in the world until 2035. But now workers have rioted repeatedly, demanding to go home. It’s unlikely they will come back.

Future historians will say this moment of reckoning was inevitable. South Asians had become unconscionably inured to condemning huge numbers of their own people to the worst and most unsustainable living conditions on the planet. As 2020 began, 25 of the most polluted cities in the world were in our region (21 in India alone). What is more, at least 20 Indian cities - including the national capital of New Delhi - will run out of groundwater thus summer.

These are potentially survivable conditions for elites (who will take care of themselves) and the middle class (because our governments will endeavour to deliver for them). But for the 85% majority that comprises the informal sector in India, they’re a death sentence. This is why so many people – soon to outstrip Partition numbers by orders of magnitude – have taken responsibility for themselves by taking to their feet.

Even while it’s readily apparent this exodus is the most important dimension of the coronavirus emergency, the media has struggled to do it justice. One notable exception is the veteran anchor Barkha Dutt (in 2017 she left mainstream television, and now runs Mojo, her own digital channel). Every day over the past month, she has tirelessly covered the story on the highways, and online, including to over 7 million Twitter followers. The barrage worked. Earlier this week, the Home Ministry finally relented to allow relatively safer large-scale return for migrants.

Dutt told me she was compelled to persist where others did not because, “my former medium – which is national television – totally flunked this story. I was appalled by this journalistic abdication by

mammoth media organizations. We are talking about millions of Indians being judged as if they were the perpetrators, instead of the victims. It just made me so angry.”

A pioneer of Indian television news, who rose to stardom after covering Kargil battlefields in 1999, Dutt told me, “I have reported war, conflict, insurgencies from the frontline, and this figures right

alongside in the breathtaking scale of its tragedy. In some ways it has been even tougher - the greatest mass exodus since the partition, and yet rendered invisible. I had to work doubly hard, physically and emotionally, to go out there, walk with the migrant workers and get people to care about them. I definitely draw some satisfaction from the fact that our relentless coverage did finally have an impact.”

To get some perspective on Dutt’s achievements over the past month, I wrote to Patricia Mukhim, the indomitable veteran editor of Shillong Times in Meghalaya, and member of the Executive Committee of the Editor’s Guild of India.

Mukhim responded, “Every once in a while we see a committed journalist pursuing the path of the true scribe - that gives the agency of voice to the voiceless. It goes beyond the cacophony of television debates, and brings readers and leaders face to face with what is often the ugly truth they would rather not know about. In this crisis, Barkha Dutt has been that soul of journalism, stepping out of the comfort zone of the TV studio to empathize with those most affected by Covid19 – the migrant labourers who lost their jobs, their hope and their dignity by having to walk thousands of miles. Such journalism is what keeps our hopes alive.

https://www.dhakatribune.com/opinion/op-ed/2020/04/30/tracking-the-biggest-story-of-all

3.1. States set their sights on hotspots, show the way to manage them

Livemint, 15 Apr. 2020, Nidheesh M.K., Neetu Chandra Sharma

At least 25 districts, which previously had covid-19 cases, have had no new cases in the last two weeks

ERNAKULAM/NEW DELHI: On 7 March, when news surfaced that a family of three returning from Italy had skipped the voluntary screening at the airport, the administration in Kerala’s Pathanamthitta district sprang into action. Realizing the potential for an outbreak, collector P.B. Nooh scrambled a team of doctors, police personnel and local politicians. In 48 hours, hundreds of people the family met were identified using mobile location data and physical interviews, and placed under quarantine. Pathanamthitta district, with 1.1 million residents, was at that time the epicentre of the coronavirus outbreak in Kerala, reporting the highest number of cases (9) at that point. Aided by aggressive contact tracing, quarantining and testing, the district has since brought down covid-19 cases to just six. Pathanamthitta’s success story reflects Kerala’s successful fightback against the virus, with nearly 55% of its 386 covid-19 patients recovering as of Tuesday.

Several parts of the country that were covid-19 hotspots just a fortnight ago have since successfully pushed back the pandemic, offering lessons for others still struggling to get the disease under control.

According to government data, at least 354 of India’s 736 districts are reporting covid-19 cases, out of which over 153 are hotspots (recording more than six cases as per government definition) and the rest emerging hotspots with cases being reported.

According to the health ministry, at least 25 districts that previously had covid-19 cases have had no new cases in the last two weeks, displaying positive outcomes of the containment plans.

“A constant vigil is being maintained to ensure that no new cases may occur in the future. Through a collective effort to combat covid-19 in the country, we are taking several steps along with the states/UTs for its prevention, containment and management of covid-19," said Lav Agarwal, joint secretary, Union health ministry.

Rajasthan’s Bhilwara district has had remarkable success too. The state claims it has screened nearly 50 million people and tested 11.7 million households so far. The state’s Pratapgarh district reported two new cases on 20 March, which later turned negative. “It’s been over 15 days that we got any positive case and the two cases which were positive have also turned negative," said Anupama Jorwal, district collector, Pratapgarh.

Similarly, Punjab, which reported one of the initial deaths due to covid-19, has stopped reporting cases in some areas.

“We started with extensive door-to-door campaign to spread awareness on covid-19 and all our staff were put into service. We covered each and every household in urban areas with more than 21 lakh households. All urban areas have been sanitized with sodium hypo 1% diluted solutions. Public buildings have also been sanitized," said Brahm Mohindra, minister of local government, Punjab.

For over 10 days, Delhi’s Dilshad Garden residents have become familiar with sanitization work and frequent house visits from health workers to check for symptoms. The area is the Delhi government’s first success story in fixing coronavirus hotspots.

Dilshad Garden had become a hotspot after reporting over eight positive cases after a woman returned from overseas; the disease spread to her family members and a mohalla clinic doctor she visited. It was the first containment zone in the national capital under Operation SHIELD, which involves sealing the area, imposing home quarantine, isolation of infected patients, ensuring essential services, local sanitization and door-to-door surveys.

“We have declared more containment zones and identified them as red zones. We have also identified high-risk zones which have been marked as orange zones to reduce the spread of the virus," Delhi chief minister Arvind Kejriwal said. Delhi now has over 1,500 positive cases, one of the highest in the country along with Maharashtra and Tamil Nadu. A key hotspot in Delhi is also the Markaz in Nizamuddin, which led to a sharp spike in the number of cases across states.

Pretika Khanna contributed to this story.

3.2. In containment lies the answer to unlocking India

Livemint, 10 Apr. 2020, Leroy Leo

While some states, including Delhi and Uttar Pradesh, have enforced strict lockdown measures, Odisha on Thursday became the first state to extend it till 30 April. With covid-19 cases on the rise, Mint analyses how far the lockdown has succeeded in limiting the spread

What is the status of the covid-19 spread?

More than 6,000 cases of novel coronavirus infections have been reported from across India, with Maharashtra accounting for over 1,300 till 9 April. In the last two weeks, Assam, Arunanchal Pradesh, Goa and Jharkhand reported their first covid-19 cases, while some larger states witnessed a surge in cases. Two factors have contributed to the trend. One, the government has increased the number of tests in particular areas. Two, more than 1,000 people, who attended a religious gathering of over 2,400 in New Delhi in mid-March days before the nationwide lockdown kicked in, have tested positive for the disease.

Has the lockdown been effective so far?

The result so far has been mixed. While Kerala, Gujarat, Punjab and Karnataka have managed to check the spread, others such as Delhi, Maharashtra, Telangana and Tamil Nadu have seen cases rise by at over 10 times at least. However, most cases that surfaced in the past two weeks were those who had been exposed to the virus before the lockdown, considering that it can take about two weeks before symptoms start appearing. Most experts, however, said it may still be a little early to tell whether the lockdown has been effective. Also, the lack of testing kits significantly stymied the operation to confirm coronavirus cases.

What is the government’s plan now to curb infections?

Since the lockdown was implemented, the government has raised testing capacity using rapid antibody blood tests, which can give results within 30 minutes. It will be a precursor for confirmatory tests with real-time polymerase chain reaction (RT-PCR) on throat or nasal swabs, which are more reliable. The government has also issued a cluster containment strategy.

In what way will cluster containment help?

The government on Saturday indicated that transmission of the disease had started in small communities, or clusters, and these can be contained with more strict implementation of the lockdown and social distancing norms. On Wednesday, Delhi, Uttar Pradesh and Maharashtra sealed particular areas, whose residents will not be allowed to leave their homes and essential items will be home-delivered to them by the authorities. Masks have been made compulsory in public places across most states.

How long can the lockdown be in force?

As per the cluster containment strategy, the government plans to keep lockdown measures in place for at least four weeks after the last case has been confirmed and after all contacts of a patient have been monitored. While these are applicable for particular hotspots, or clusters, states and the Centre are considering whether to extend the lockdown to 30 April. Prime Minister Narendra Modi is said to have hinted as much to lawmakers on Wednesday. The final decision will likely be taken after a meeting with chief ministers on Saturday.

4.1. Dharavi’s economy goes down the tubes

Livemint, Apr. 2020, Smruti Koppikar

A ground report on how the hub of Mumbai’s informal economy worth an estimated $1 billion has come to a halt
The garment market has been shut. It’s the same story for other businesses—from leather and aluminium to plastics, gold and pottery

The row of leather goods shops along the snaking 90-Feet Road in Dharavi in central Mumbai has been shut for more than a month now. Behind the road and perpendicular to it lies an unfathomable maze of alleys and passageways wide enough for only two adults to walk by, hosting a jigsaw of semi-permanent ground-plus-one structures that are workshops of leather goods and double up as homes of workers.

In the innards of one dimly-lit such workshop, two young men idle away, sharing a phone to take in a TikTok video, barely managing to smile. Two other men sleep within centimetres of each other in the mezzanine loft amid an array of differently-sized colourful leather pieces.

“These are four of the five men who work for me but are bloody wasting their time now. The youngest has gone to get some rations," said Mohammed Zahid, owner of the workshop who prides on being a trained designer. “We were on the verge of sending a large order of wallets last month to a five-star hotel in Ooty and Kerala when we had to shut. The packages are here taking up my space, my money is stuck, and maybe those guys don’t even want these wallets now."

The shutters on his shops on 90-Feet Road, Leather Touch and Zaraa, have not been opened since mid-March when the Maharashtra government enforced a shutdown in Mumbai almost 10 days before Prime Minister Narendra Modi announced the nationwide lockdown.

Across the myriad lanes and markets of Dharavi, the pulsating hub of the informal economy in Mumbai worth an estimated $1 billion, it’s the same story.

The garment market—workshops and tiny retail units—has been shut too. Some owner-traders are unwilling to even acknowledge that Dharavi’s first victim to covid-19 was a fellow garment trader. Kumbharwada, pottery units and market at the intersection of 90-Feet and 60-Feet roads, lies forlorn. The clanging, the low hums, the uproar from aluminium smelting units, soap and plastic recycling workshops have fallen silent.

Only sullenness hangs here, broken by occasional jabs of fear as news trickles in of rising covid-19 cases and deaths. Within 13 days of the garment trader’s death on 6 April, Dharavi registered 11 deaths and 138 positive cases.

Dateline Dharavi

Dharavi, spread over 240 hectares and housing more than 700,000 people, including large groups of migrants from all over the country, is familiar with disease—from asthma and malaria to typhoid and syphilis. Residents, however, have never seen anything like covid-19. The fear about this strange, unknown disease is exacerbated by their fear of the destruction it will bring to their businesses.

There’s no saying when the covid-19 curve here will flatten out but the economic curve already has. In Asia’s largest informal settlement or slum that’s essentially an economic centre, the dilemma of policymakers pushed to choose between saving lives and livelihoods acquires a painful urgency. Here, lives and livelihoods are interwoven in inextricable ways.

In Dharavi, the work-from-home practice did not arrive with the covid-19; it was always there, just the way life and work have been arranged across the swath of tiny and cramped places. There are a few predominantly residential bastis and nagars, especially the redeveloped buildings that rise above the informal settlement on its edges, but the rest of Dharavi is a flexible, mixed-use space.

(…)

Social distancing

Social distancing, in particular, is a joke here. Nearly half of India’s urban population live in houses where the per capita space is less than a single room, analysed Mumbai-based economics professors Mohd Imran Khan and Anu Abraham in a recent paper in the Economic And Political Weekly. In Dharavi, this space is often one-fourth or one-sixth of a single room.

This pushed the BMC to look for alternatives. Within days of the first few cases, the BMC turned a nearby sports complex into a quarantine facility—now used well—and enlisted beds in the government-run Sion Hospital, a stone’s throw away, to be used exclusively for covid-19 patients from Dharavi. “We cannot isolate people at their homes here," remarked Kiran Dighavkar, assistant municipal commissioner in charge of G-North ward in which Dharavi falls. As the number of positive cases hovered around 90, the civic body set up “fever camps" across Dharavi in an attempt to screen as many as possible while negotiating local resistance.

(…)

In conclusion

The tremors from Dharavi will be felt far and wide. In an unusual installation at an arts exhibition three years ago, the urban research and planning group URBZ traced these connections. On perpendicular walls, it put up maps of Mumbai with Dharavi showing prominently and a map of India, and invited people to tie colourful strings or ribbons from Dharavi to their home towns, villages or places of business interest. The strings and ribbons made a dense tapestry all across India, with the exception of Kashmir and parts of the North-East.

With Dharavi shuttered, the fumes and fires are undoubtedly fewer. But a large segment of Mumbai’s economy—and hundreds of thousands of lives—are upended. Between lives and livelihoods, there is literally no choice here.

*Smruti Koppikar is a Mumbai-based journalist and urban chronicler

4.2. The business plan for life after lockdown

Livemint, 13 Apr. 2020, Goutam Das

From getting workers back to securing factories, Indian businesses are drawing up business continuity blueprints
Depending on the sector, the firms said that demand could take anywhere from a quarter or more to revive. Many more firms would need to reconsider their product strategy

NEW DELHI: A few days after covid-19 broke out, the Automotive Component Manufacturers Association of India (ACMA) sent its 830 members a health advisory. Weeks later, ACMA is back to the drawing board, chalking up more guidelines to help auto component makers deal with a post-lockdown world.

The scale of the covid-19 infection has ballooned multifold in the past two weeks with India registering over 9,000 cases and 300 deaths. Segregating the working stations on the shop floor is now a must, so is fumigating the plant every few hours. The number of workers seated in a bus— those that ferry them from the villages to factories—must be capped. Managing the shifts, the lunch hours and even the sort of cutlery that can be used in the canteens now need a rethink.

“One of the interventions we are working on is how a single person can manage multiple machines," Vinnie Mehta, director general of ACMA said. “Going forward, the industry would need systems that enable remote monitoring of processes and machines. You will have more automated vehicles moving inside the plants."

Indian manufacturers were coy when it came to adopting automation. A balance between deploying people and machines was in vogue, partly because of the high capital costs of automation and mostly because cheap manpower is abundant. Covid-19 is challenging many of these assumptions. People deployment on the shop floor has to be significantly cut.

The stakes couldn’t be higher. Even if one worker is found to be infected, an entire factory can be sealed. Component makers supply to many large car, bike and tractor manufacturers. Production for much of the industry, therefore, can come to a standstill, overnight. Securing the factories and the people who work there are important pillars in the business continuity plan of every company.

The big plan

Nearly all companies are in the middle of what they describe as “scenario planning". More automation is on the cards but that’s a long-term goal. This writer spoke to 10 organizations, from heavy engineering and white goods makers to fast moving consumer goods (FMCG) and real estate firms. Besides drawing up social distancing norms, companies are right now focussed on fixing the supply-side. They are strategizing around securing raw materials, managing costs, up-skilling their workforce, and getting back workers who may have migrated back to their villages.

Depending on the sector, the companies said that demand could take anywhere between a quarter or more to revive.

“For each of our factories, the workers are not just locals. They come from different states," Sridhar V., group vice president and director of Honda Motorcycle and Scooter India Pvt Ltd said. “We are planning for different scenarios. By the time people who have gone back to their villages return, it would take 15-20 days. Many of them are skilled and cannot be replaced easily," he added.

The problem of getting back workers could be worse for sectors such as construction, which are heavily dependent on casual labour, Siddharth Jain, partner at management consulting firm Kearney predicted. Fixing the supply-chain, particularly for non-essential goods, wouldn’t be easy either. Part of the packaging material for FMCG companies, for instance, are imported. Moreover, there is also a shortage of components such as pumps used in beauty products since much of the capacity was diverted to the manufacture of hand sanitizers and hand washes.

“If there is import dependence, it is a big task right now to get the supplies. In cases where the supplies are domestic, companies would need to micromanage their smaller suppliers. A financial health check on the suppliers may be required," Jain added.

People first

Meanwhile, some industrialists have made a case for a more humane approach in dealing with suppliers and employees. M.S. Unnikrishnan, managing director and CEO of engineering company Thermax is one of them. “People first, economy second—this is what I believe in," he told Mint when asked about the economic consequences of under-utilized factories, post the lockdown. “We can start with 30% capacity, go 40-50% over the next few months," he said.

Part of the reason why companies cannot bounce back quickly enough is that suppliers—like Jain indicated—may not be in a good shape. Some of the components for Thermax’s heating, cooling, water and waste management products, for instance, are made by smaller companies. “The micro, small and medium enterprises were facing major difficulties even before the lockdown because of economic difficulties. Covid-19 is a double whammy," Unnikrishnan said.

Thermax is, therefore, planning to reimburse salaries for the workmen of some of its contractors who are unable to pay given the lockdown. “Currently, we can’t be contractual and business-like. There should be large heartedness among the larger companies. We may have to make advance payments to some of our smaller suppliers and help them overcome difficulties," he said.

A humane approach in tough times can go a long way in securing trust as well as people, particularly in the unorganized segments of the economy. Trucking is an example. To get manufacturers on their feet, India needs drivers to move raw materials and goods. Nevertheless, drivers were one of the most impacted. Thousands were left high and dry along the highways after the lockdown took effect.

“We have around 4,000 vehicles that are stranded in different parts of India carrying loads for customers. These are trucks carrying engines, cell phones, televisions etc," Rampraveen

Swaminathan, managing director and CEO of Mahindra Logistics, a third-party logistics company, said. “In many cases, the drivers have left the vehicles and gone back home out of fear. We are in touch to mobilize them back," he added.

A week into the lockdown, Mahindra Logistics launched a helpline for the drivers. “In more than 40 sites across India, we have organized food and temporary lodging. We have also created economic relief programmes for the families of drivers. The intent is to secure assets, secure drivers, secure partnerships," Swaminathan said. Most third-party logistics companies are asset-lite—they don’t own the trucks or employ the drivers directly. Instead, they depend on big and small transporters who own trucks.

Not just drivers, getting any migrant labour back to the workplace would now require “compassion, care and comfort", industry body Confederation of Indian Industry (CII) contended. Most of them had a harrowing experience finding their way back to the villages.

“CII has already begun dialogues with some unions to address their issues," the industry body wrote in a strategy paper, Exit From The Lockdown. “Set up accommodation, with access to food and medical facilities for migrant workers. The next two-three weeks should be used to structure this intervention," the paper noted.

Distancing goals

An executive from an electronics hardware manufacturer, which employs over 20,000 people in India, summed up the post covid-19 scenario, poignantly. “We have an economic storm, a health storm, a security storm. All of them have converged into the perfect storm".

The management in the company have taken a 30% salary cut and no workers have been fired just as yet. But then, he quickly warned, the electronics hardware industry operates at 5.5-6% margins. “You can sustain these challenges for two-three months. Post that, retaining the workers or letting them not go may not be an option for me," the executive who didn’t want to be identified, said.

His immediate challenge, post the lockdown, is to have less people on the factory floor in compliance with the social distancing norms. According to Johns Hopkins Medicine, staying at least six feet away from one another reduces the chances of catching covid-19. This implies factory-floor modifications with lifting and shifting of machinery. It is easier said than done when the lockdown is still in force.

“In the short term, you simply need to have fewer people because one needs time to retrofit a factory—a team of workers is needed for the modifications," the executive said. Typically, a worker stands almost shoulder to shoulder in an assembly line. The gap of nearly two metres implies that the manufacturer’s plant would now run at about 30% capacity. “You cannot run the factory with less than 30% capacity anyways," the executive said. That’s the capacity required to maintain bare minimum profitability.

The social distancing norms would shoot up costs. Manufacturers across India would require more number of buses to transport workers, for instance. In the case of the electronics manufacturer mentioned here, one seat in the bus sat four workers. Now, it can seat just one. “I have 30 buses for one of our plants. One worker per seat means I have to run over 100 buses for the same plant," the executive said.

Companies are similarly planning for distancing norms in warehouses and offices. Mahindra Logistics had cut down the density of people in its warehousing floors mid-February. That could continue post the lockdown. Thermax reduced the number of employees in its offices by one-third before the lockdown. It created two shifts instead of the usual one. The first shifts began early, at 7am and ran till 2-2.30pm. The office was sanitized before the second batch of employees arrived, at around 2.30-3pm. That’s a strategy likely to continue, once things start rolling.

Getting retail ready

The Zoom conversation with Pushpa Bector, executive director of DLF Shopping Malls, began around life in a lockdown. Is this writer getting fish in CR Park (in Delhi)? Well, yes, you might if you are resourceful enough. And is she getting vegetables online? No, not at all. India needs physical retail, still.

Shopping malls, nonetheless, may take a bit of time to limp back to normalcy. People may be scared of public spaces. Bector’s scenario planning is around making her retail spaces comfortable for shoppers. “We are evaluating sanitation tunnels at the entrance of the malls. We are assessing the vendors as we speak," she said.

Besides, there would be social distancing norms in stores, restaurants and film theatres. The waiting lines would be defined. “I am talking to cinema operators. There should be a two-seat gap between two bookings," she added. “I am starting to talk to the brands on sanitization of their stores and products. Kitchen sanitization will play an important role in restaurants." Over the next two weeks, the mall staff would be online trained to be sensitive — understand the customer’s body language to figure out if they are uncomfortable.

Brands such as Panasonic, a home appliance maker, is also using the lockdown period to ready its retail sales staff and up-skill them.

As Panasonic waits for consumer demand for its appliances such as air conditioners and refrigerators to return post the lockdown, the firm is working on a long-term strategy—diversify into the business-to-business (B2B) segment. “Today, we are more of a B2C (business-to-consumer) company in India—69% of our revenues. We want to rapidly accelerate our B2B capabilities," Manish Sharma, president and CEO of Panasonic India and South Asia, said. Panasonic, for instance, makes industrial robots for the automotive sector. Pressing the accelerator on such products would feed into the growing automation story in India’s factories.

In the post-covid world, many more companies would need to re-look at their product strategy. Perhaps, drop non-essentials. Perhaps, drop luxury products that may no longer find currency in a climate of tight discretionary spending.

“The whole planning process is going to change. Today, most companies do quarterly and monthly planning of demand, what needs to be manufactured. People would need to do daily and weekly planning, reassess the situation every week or so," Siddharth Jain of Kearney said. “Large companies have a lot of complexity—a lot of products and services. They would need to focus on fewer products because dealing with complexity in a plant would no longer be easy," he concluded.

Some of the more progressive companies have indeed pressed the reset button.

5. Opinion | Markets work better for workers than regulations do

Livemint, 12 May 2020, Shruti Rajagopalan

Economists support dismantling stringent labour regulations because it would result in more jobs. Then why is there so much opposition? There are three reasons

Economists frequently argue that labour laws in India have had disastrous consequences. They make it very costly, on the margin, to formally hire workers. In response, employers use more capital, a trend we see through a relatively low share of labour in gross domestic product. Or, employers circumvent regulation in perverse ways, like having contractors hire workers instead of directly employing them. This has created a two-tiered labour system—a small group of formal, often unionized, workers, who get protection through regulation and cannot be fired easily, and a large (90% by some estimates) unorganized pool of labour, which does not get most of these protections. Even the limited shield they could have got, through a direct (though lopsided) contract with their employer, is not available to them. There is evidence backing both these trends. Economists support dismantling stringent labour regulations because it would result in more jobs. Then why is there so much opposition to these economists? There are three reasons.

The first reason relates to the way most workers are treated in the country’s unorganized sector: long hours, lack of safety, poor treatment of women, lack of restrooms, etc. In comparison, the small but formal sector looks great. The typical response has been to legislate the problem away, and mandate, often with criminal penalties, that employers follow these rules. But this only treats the symptom, and not the problem.

The problem needs to be restated as one of demand and supply—wages are low and workers are treated poorly because there are too many workers, mostly unskilled, trying to get too few jobs. This is not the fault of workers, but the consequence of a terrible education system and 70 years of bad economic policy, which has trapped most Indians in poverty. Consequently, employers find workers easily substitutable; they treat them badly, as less than human in some cases.

The well-intentioned are sceptical of the market because contracts may be lopsided, to the disadvantage of workers. But there is only one permanent solution to this problem—more jobs. This would give workers more options, which is the only way to discipline badly-behaved employers. Instead, we have tried suppressing and legislating our way out of market reality. Laws against market forces misalign incentives and create corrupt inspectors and middlemen, as witnessed in the past. Instead, economists suggest using market forces to discipline bad players.

This brings me to the second reason for the disagreement—splitting versus growing the pie. There is a legitimate question over the sharing of any surplus between workers (suppliers of labour) and employers (that demand labour). The typical solution is to split the pie more equitably through legislation. But sharing this surplus has to do with bargaining power, which depends on choice, competition and substitutability. Demand for labour services in India is highly responsive to prices (or wages). In small firms, the cost of labour (wages+cost of compliance) is a large proportion of total costs, so the demand for labour is highly elastic. In larger firms, demand is elastic because capital can be more easily substituted for labour. This highly elastic demand for low-skill labour, coupled with a very large supply of poor and unskilled workers, is the reason for workers’ low bargaining power. It has little to do with mal-intentions and class struggles, though it is often seen through these prisms. Those who worry that deregulation would lead to a lot of new unregulated firms entering the market should also understand that it will create jobs and inadvertently provide a different kind of regulation, through increased competition and choice. But most importantly, there will be a larger surplus to split, because the size of the pie will likely get bigger and create more jobs—to the benefit of workers.

The third disagreement is over agency. Those who demand legislation to protect workers are also taking away their agency. The standard explanation is that workers are poor and illiterate, don’t have bargaining power, make bad choices, and need protection. The core assumption of economic thinking is that when individuals make a choice, they pick the better option among the available choices. One need only look out of one’s window to recognize that India’s poor and marginalized workers have terrible choices. But, when they choose to work in these awful conditions, they are still choosing their best option, given the alternatives. India’s poor are smart and resourceful, they work incredibly hard to survive, and given an alternative way to improve their lives, they would be the first to take it. The problem is not that they make bad choices, but that they have a bad and limited choice set. Our effort should be to increase the choice set, which cannot be done through legislation but only through more jobs and economic growth, coupled with improving their choice set through efforts to create a strong contract-enforcement system.

Finally, with the contraction of India’s economy and an unemployment rate pegged above 25%, deregulation will create a huge pool of desperate workers willing to work at low wages and unfavourable conditions. The way to solve this problem is not through more labour regulation, but unconditional income support for the poor. Income support will save workers from making desperate and unsafe choices without distorting the country’s labour market, as so many old regulations have done.

Shruti Rajagopalan is a senior research fellow with the Mercatus Center at George Mason University, US.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

6. How covid-19 is speeding up the modernization of supply chain

Livemint, 13 May 2020, Prasid Banerjee, Nandita Mathur

The pandemic has set physical constraints on companies, and access to digital solutions allow them to have visibility not only within their organization, but across the value chain

The outbreak of Covid-19 is prompting companies to increase their dependency on both emerging and existing tech solutions, even before Prime Minister Narendra Modi called for the country to modernize the chain.

“One clear trend I’ve witnessed is that clients who were already invested in technology are able to manage the current situation much better," said Ashish Nanda, Supply Chain Leader, EY.

He explained that the pandemic has set physical constraints on companies, and access to digital solutions allow them to have visibility not only within their organization, but across the value chain.

Traditional planning models do not apply due to the pandemic, say experts. Companies could set forecasts for months in advance earlier, but now they have to work on much more real time models. For this, traditional technology tools aren’t always feasible either.

“What is happening now is that companies are investing in low cost add-ons or hold ons, which are helping them monitor the constraints on a real-time basis," Nanda said, adding that emerging technologies, like artificial intelligence and blockchain will play a crucial role.

"Covid has taught us to look at new ways of patternization, understanding demand and supply and fulfillment," said Easwaran PS, Partner, Deloitte India. “One of the big applications that’s coming up is artificial intelligence (AI) based inventory optimization," he added.

Food products brand Parle and IBM are working together to create an "Intelligent supply chain". The company will be making use of IBM’s Watson AI solution to predict demand, reduce time to market and right-size its inventory across the supply chain.

In the fast moving consumer goods (FMCG) sector, firms have rushed to tie-up with delivery platforms like Zomato, Swiggy and Dunzo to ensure their goods keep moving. These are companies who have traditionally depended on traditional mom and pop stores to meet the market’s demand.

Early last month, Britannia Industries partnered with hyperlocal delivery firm, Dunzo. This allows customers to order products like cakes, biscuits etc. directly from Dunzo’s app and the company’s riders can pick up products directly from Britannia’s warehouses. Before the pandemic, users could have used Dunzo to order such products, but they would be ordering from neighbourhood stores.

Similarly, delivery platform Swiggy has collaborated with HUL, P&G, Godrej, Dabur, Marico, Cipla, Vishal Mega Mart and more to deliver essentials to customers. It’s also worth noting that Swiggy and Zomato both sped up their grocery delivery efforts post the pandemic. The two platforms were predominantly used for food delivery before that.

Digital trucking platform Mavyn, said it has gained new clients in companies Reliance Fresh, Baxter, Kuehne+Nagel, Cadbury and Reckitt Benckiser during the pandemic.

But big companies aside, digital transformation extends right to the lowest levels of the supply chain right now. According to Pankajj Ghode, CEO of Agri10x, he added over one lakh new farmers to its platform in the past month and a half. It had taken the platform six months to add the same number before the pandemic. “We had to actually put a load balance on our server because of the load coming from the platform," he said.

Agri10x is a virtual platform that uses AI and blockchain in order to connect farmers to buyers, eliminating the middle-man to some extent. The company uses data from various sources, and AI software, to determine market prices and allows farmers to sell their products directly to prospective buyers, be it consumers or traders.

“All in all, I think it’s (the pandemic) is going to accelerate the adoption of digital technologies, but also bring about a fundamental level change in the manner in which companies are managing their end-to-end supply chain," said EY’s Nanda.

7. Amazon India adds offline retailers

Asiafruit, 27 Apr. 2020, Liam O’Callaghan

After a successful trial, the e-commerce giant will allow kiranas and small retailers to use its platform

Amazon India has announced an initiative that will enable kiranas and small, offline retailers to use its platform to sell their products and earn additional income.

This announcement follows Amazon owner Jeff Bezos’ commitment in January that the company will invest US$1bn in digitising small and medium businesses in India, allowing them to sell and operate online.

It also comes just days after Facebook partnered with Reliance Retail to connect kiranas with WhatsApp.

Amazon had been trialing the ‘Local Shops on Amazon’ programme over the past six months with more than 5,000 offline retailers.

However, the important role the local retailers had been playing during the coronavirus (Covid-19) pandemic caused Amazon to scale up the programme and pledge US$1.3m to assist the process.

Gopal Pillai, vice president of Amazon India Marketplace, said within 24 hours of the announcement, Amazon had more than 1,000 registration requests.

“Local shops can play a bigger role during this time of need by serving customer needs while maintaining social distancing,” Pillai said.

“They can also jumpstart their own livelihood post the unprecedented disruption and open up a long-term opportunity for themselves.”

Amazon India said the programme will help consumers connect with their local retailers and it will help shopkeepers supplement their footfalls with a digital presence and expand beyond their normal catchment.

Additionally, shops can sign up for other programmes to earn additional income including the ‘I Have Space’ programme to act as delivery and pickup points, and the ‘Amazon Easy’ programme to offer expanded selection to their walk-in customers.

8. Money for nothing, pumpkins for free

Livemint, 07 May 2020, Sayantan Bera

A ground report reveals deep distress among vegetable and fruit farmers. Is this the right stage for agri-reform?
Despite repeated attempts to weaken state regulation, no competing agency can aggregate large volumes of produce and also help in price discovery

BULANDSHAHR/NEW DELHI: When Surendra Panwar speaks, his words are steeped in politeness. For instance, when asked whether it was his farm, Panwar’s response was, “Yes, but it belongs to you as well". That said, on 1 May, when this reporter spoke to him at a lush green pumpkin field in Prangarh, a village in Uttar Pradesh’s Bulandshahr district some 80 km from Delhi, the tension was palpable.

Panwar, a well-to-do farmer who also dabbles in vegetable trading, was sweating despite the pleasant evening breeze. He was plucking the best pumpkins to send to friends and family. Some days back Panwar asked fellow villagers to pluck as many they needed. For free. “Inside my head I never planted this crop," Panwar said, more to himself than to me.

If Panwar had sent the harvest to the wholesale market in Delhi’s Ghazipur mandi, it would have sold at less than ₹1.5 per kg. That would not cover the cost of plucking and transport, let alone growing expenses.

Panwar’s loss from an acre of pumpkin is capped at a modest ₹30,000 since he owns the land. For those farming on leased land, the losses are much higher. For instance, 50-year-old Sukha Saini from Sikandrabad tehsil of Bulandshahr took 10 acres on lease at a hefty ₹300,000 to grow spinach. Traders are now offering Saini around ₹5 per kg, just enough to cover the cost of harvest and transport.

“At these prices I cannot recover the land rent and growing costs", Saini said, adding that half the harvest was lost to a freak hailstorm last month.

As India announced a stringent lockdown more than 40 days ago to control the spread of the novel coronavirus, farmers who grow perishables like fruits and vegetables have been among the worst hit. Farm gate prices plunged due to a supply disruption—from transporters quoting a higher price to ferry the harvest and mandis scaling down operations—coupled with a fall in consumer demand and petty retailers disappearing from the roadside.

Rising numbers of covid-19 cases in large agricultural markets like Azadpur in Delhi and Koyambedu in Chennai poses an additional risk—as mandis which facilitate aggregation and sale of produce limit their operations, farmers will be left with little option but to dump their harvest.

The disruption in the food supply chain has also rekindled an old debate: reforming agriculture markets and reducing the dependence on trader cartels in regulated market yards. During this ongoing crisis, states like Madhya Pradesh, Uttar Pradesh and Maharashtra have again promised to deregulate markets and allow direct purchase from farmers.

The idea is to allow large buyers—like food processing companies and retail chains—to purchase directly from farmers. This is expected to reduce the number of agents in the supply chain and help farmers capture a higher share of the consumer price.

The all-important question is, will this attempt at reforms have staying power in the post-covid-19 world?

Harvesting losses

For now, in Bulandshahr, while some are distributing their harvest for free, others like Vikrant Chaudhary have ploughed their spinach back into the field with a tractor.

For those growing yellow carrots, the largest commercial crop in these parts, the nationwide lockdown in force since 25 March has spelt disaster.

“Carrots are mostly used by hotels and the catering industry which are shut. So the volumes we supply fell by over 70%," said Subhash Deswal, co-founder of Sunshine Vegetables, which contracts farmers to supply carrots at a predetermined price. The company which boasts of a five-storey cold storage has over 5,000 tonnes in excess stocks, looking for buyers.

Small carrot growers are now selling the crop for a measly sum of ₹2-3 per kg. At times even that is elusive.

Last Thursday, a group of farmers from Sheikhpura village sent 200 bags to the Ghazipur mandi in Delhi. Not a single piece was sold. The group lost the ₹6,000 spent in transport, plus the money spent on plucking and washing the carrots. What’s more: they had to pay the trader to dispose the unsold carrots. “There are days when only pig farms buy the harvest to feed animals for a rupee a kg," said Bharat Singh, a farmer from the group.

While farmers are selling carrots for ₹2 per kg or spinach for ₹5 per kg, a few hours away in Delhi and Noida, consumers were paying over ₹30 per kg. The situation is similar for tomatoes and watermelon from Madhya Pradesh or grapes and mangoes from Maharashtra. Social media is full with stark images: cows munching fresh strawberries or goats feeding on green capsicums dumped by a farmer in Punjab.

“Social media messages urging households to stay away from vegetables, mostly sold on push-carts by Muslim retailers, also led to a drop in demand in urban areas of Uttar Pradesh," said Sudhir Panwar, professor at the Lucknow University and former member of the state planning commission.

Sales via twitter

The scale of the tragedy is staggering. Farmers in India grow more horticulture crop (estimated at 313 million tonnes in 2019-20) than they grow grains and pulses. India is the second-largest producer of perishables globally and a leading exporter of grapes and bananas. The horticulture sector contributes a third to India’s agriculture gross domestic product (GDP). Yet the vegetable grower faces recurrent price risks unlike the paddy or wheat farmer who can store the produce to sell at a later date.

Except for potatoes and onions which can be stored both at the farm gate and consumption points, the small vegetable grower and the well-to-do orchard owner have been hit equally by the lockdown. Few lucky ones managed to beat the lockdown blues to an extent—such as a handful of growers’ cooperative from Maharashtra, which now supplies directly to apartment complexes in urban areas.

Or, a desperate cabbage farmer from Karnataka’s Chamarajanagar district, Kannaiyan Subramaniam, who took to Twitter to scout for buyers. Subramaniam is saddled with a stock of 100 tonnes of cabbage. As the supply chain was disrupted by the lockdown, local traders offered Kannaiyan between 50 paisa to a rupee for a kg of cabbage, compared to the average farm gate price of ₹11.50 per kg last year.

He was relieved when WayCool Foods, a farm supply and distribution company, reached out with an offer to buy 8 tonnes. Kannaiyan received a modest ₹5.5 per kg but had to spend nearly ₹2 to harvest and transport the produce to Coimbatore in Tamil Nadu.

“The heavy handedness with which the lockdown was enforced in the first week led to a fear psychosis for everyone in the food supply chain... even now wholesale markets and retailers are only operating for limited hours. If this situation continues, I may not plant the next crop," Kannaiyan said.

On a brighter note, he adds, the crisis has opened up a “direct dialogue between farmers and consumers." Kannaiyan is now getting calls from housing societies in Bengaluru but he is unsure if they can absorb the large volumes.

“The existing crisis in perishables is a reminder that India needs a mature supply chain. The goal should be to open up multiple channels for farmers to sell their produce without dismantling the existing mandi structure," said Karthik Jayaram, chief executive officer (CEO) and co-founder of WayCool Foods.

Marketing reforms

On 2 May, Prime Minister Narendra Modi chaired a meeting which brainstormed how to unshackle markets to ensure a fair return to growers. It also discussed ways to make agricultural trade transparent and strengthen farmer producer organizations (FPOs) and the electronic National Agriculture Market platform (eNAM).

But none of this is breaking fresh ground—more like banging against an ancient wall.

India’s agricultural markets are fragmented and governed by state regulated by Agricultural Produce Marketing Committees or APMCs. These regulated markets are usually opaque, where prices are determined by a cartel of traders who abhor entry of new buyers.

This, coupled with the presence of a large number of intermediaries in the food supply chain is the reason why consumers often end up paying many times the price a farmer receives.

Despite repeated attempts to weaken them, APMCs have survived—no competing agency could aggregate large volumes of produce and also help in price discovery, no matter how imperfect the process.

Attempts to put in place a robust network of FPOs where farmers can collectively bargain for better prices did not take off as they are starved of capital and market access. The eNAM platform which promised a farmer, say from Tamil Nadu, access to a buyer in Uttar Pradesh, failed as governments were slow to set up assaying and grading labs and a reliable dispute resolution mechanism (when farmers do not receive payment for produce sold online, or traders complain of poorer quality that what was promised).

What of the promises by some states to deregulate markets and allow direct purchase from farmers? “The problem is that the scale of organized retail in India is too small for back-end sourcing from farmers to work. This is why organized retailers (such as Reliance Fresh or Bigbasket) end up relying on mandis," said Pravesh Sharma, former IAS officer at the agriculture ministry who was instrumental in nurturing a network of FPOs across India.

According to Sharma, who now heads an agritech startup called Kamatan, the hackneyed talk on reforming agricultural markets is mere optics. “We keep discussing market reforms during a crisis but there is no political will to see it through. What we need is to develop a farmer-to-consumer value chain for perishables, learning from the success of dairy cooperatives like Amul."

Free lunch

Fifty-year-old Kiran, a widow and a mother of two dependent children, was readying for lunch outside a carrot sorting facility when I met her in Bulandshahr last week. The greens, a bowl of fried okra and cucumber to go with wheat flat bread, were a break from the usual potatoes and chillies. “A farmer gave it to me for free," Kiran said.

But the free vegetables, Kiran realizes, is also hurting her. Abundant labour and low farm gate prices have reduced daily wages by a third, to ₹200 now. “In the last month I have managed to find work for ten days," she said.

Another daily wage earner Babita Kohli who lost her job as a housemaid in the Sikandrabad town was busy harvesting carrots with her two children. Unused to the work which requires a certain skill, the three together manage to earn just about ₹220 in a day. “I don’t know how we will survive after the harvest season ends," she said.

That question lingers heavily on the minds of the landless who have managed so far by harvesting wheat and vegetables. There will be a lull before kharif planting begins with the onset of monsoon in June, and a long one till summer crops are harvested in October.

At the Dalit hamlet in Prangarh, residents were also worried their names have been chucked out of the subsidized food scheme. Bilium, a gregarious old man, was dismissive that the coronavirus will ever reach them. “We roast ourselves in the sun every day," he said, referring to a widespread (and unscientific) belief that the virus cannot survive when exposed to sunlight. “But without work, we can only afford a frugal meal of goat meat and rice," the old man joked as his young son showed the blank pages of the food subsidy card.

Before leaving Bulandshahr, I asked Surendra Panwar—the farmer who distributed pumpkins for free—if he will continue planting despite the crash in prices. Yes, of course, he said. Ummeed pe duniya kayam hai. Hope is all that is left.

9. Trade bodies, distributors, start-ups come together to digitize ‘kiranas’

Livemint, 16 Apr. 2020 Suneera Tandon

DPIIT is developing the framework, working alongside companies that help connect local shops with consumers, and distributors and logistics providers

NEW DELHI: The government department in charge of physical retail is working with traders’ bodies, start-ups, companies that help digitize small businesses and logistics firms to help ease supply-chain bottlenecks for neighbourhood kirana stores that have been working heroically amid the coronavirus pandemic.

The department for promotion of industry and internal trade (DPIIT) is developing the framework, working alongside companies that help connect local shops with consumers, and distributors and logistics providers.

They are coming together to ensure seamless supply of essentials from packaged goods companies to distributors, and distributors to retailers.

Kiranas or neighbourhood mom-and-pop shops have won praise for the way they have kept shops open and even managed to deliver essentials home.

In a pilot started in four cities in Uttar Pradesh, logistics and technology firms are working with 100-150 kiranas in each location to see how they can help resolve supply chain issues, according to people aware of the project.

The project is still at an inception stage and is likely to be scaled up over the next few days.

In four cities in UP, logistics and technology firms are working with 100-150 kirana stores to help resolve supply-chain issues.

In an initial note shared among companies and trade bodies involved with the project, the DPIIT has laid down an overview that seeks to “synergize efforts of a number of startup companies working in the field of logistics and supply chain management, as well as local administration during these times to deliver essentials at home. In the longer run, it is expected to enable local kirana stores technologically and bridge the digital divide between them and e-commerce companies."

Startups and established companies will provide logistics support, and communication platform to manufacturing units, industries, distributors, and retailers to ensure products seamlessly reach retail stores.

Companies involved in the project include WhatsApp Business, logistics firm Delhivery, GlobalLinker, which helps digitize small businesses, and GoodBox, which connects buyers with grocery sellers on its platform . Other partners include Confederation of All India Traders (CAIT) and All India Consumer Products Distributors Federation that works with distributors and stockists of consumer goods companies.

“The objective of the project is to fulfil demand of essentials during the lockdown across India, to enable the commerce to kirana ecosystem for continued functionality," said an executive of a trade association.

India has a huge network of kiranas and neighbourhood stores that sell goods of daily use to shoppers. However, the lockdown has seen businesses disrupted as the movement of essentials and packaged goods has been stalled. These kiranas that typically rely on distributors of several large packaged goods companies have had to struggle to ensure deliveries in their stores as restricted transports and limited manpower made it hard for distributors to replenish stocks in kiranas. With India having entered the second phase of the lockdown that will extend till 3 May, trade bodies and the government are looking at initiatives that will help supply of essentials.

10. The great lockdown gums up animal farms

Livemint, 23 Apr 2020, Sayantan Bera

India’s cattle are on an enforced diet, milk’s value is on the slide and chicken farmers are in deep despair
The livestock sector contributes 30% to India’s agricultural GDP and is valued at over ₹9 trillion. Yet, during the lockdown, policy and remedial interventions have largely focused on crops

NEW DELHI: Shravan Kumar Yadav often wakes up in the middle of the night these days. The incessant mooing and grunting from the adjoining cattle shed sounds like a rebellion brewing next door. Yadav knows the reason: his animals are hungry. Yadav, who lives on the outskirts of Lucknow in Uttar Pradesh, is struggling to feed his 40-strong herd of cows and buffaloes.

As the Indian government has extended the lockdown to contain the spread of covid-19 up to 3 May, Yadav is facing unprecedented economic hardship and uncertainty. Cattle feed is hard to procure and prices have shot up. Milk prices, meanwhile, have plunged. Much of Yadav’s regular business—delivery of liquid milk to confectioners and tea shops—has come to a grinding halt. Worried households, which used to be regular customers of fresh milk delivered to their doorstep, now prefer to buy packaged milk.

Even out-of-milk buffaloes which are usually sold for slaughter—Yadav’s neighbour and friend Vinod calls them “free ka khanewala" or freeloaders—have to be fed daily. “The losses are piling up," said Yadav, for whom dairying is the only source of income, over the phone.

During the ongoing lockdown, milk supply to consumers across India has been smooth, unlike perishables like fruits and vegetables which witnessed recurrent price volatility. That is largely due to the excellent supply chain developed by organized dairy cooperatives such as Amul and Mother Dairy, among others. However, only about a quarter of India’s milk production is handled by these organized players. For farmers disconnected from these established networks, the lockdown has led to a sudden surfeit of unsold milk and rising losses.

Earlier this month, farmers from Kerala and Karnataka were seen dumping milk into canals and roads. Rajendra Patidar from Mandsaur district of Madhya Pradesh has been distributing milk for free among farm labourers and making butter from the excess milk, after the Sanchi cooperative dairy stopped procuring milk. Another farmer, Pushpendra Singh from Bareilly in Uttar Pradesh, said that dudhiyas or local middlemen who purchase milk and supply to sweet shops and dairies have stopped visiting since the lockdown was announced. “Farmers who live next to urban areas may be getting a better price but no one is paying us even ₹30 for a litre of buffalo milk (which is usually procured at over ₹50 a litre by milk cooperatives)."

Milk is again selling for less than the price of bottled water, said Sharad Markad, a young dairy farmer from Ahmednagar, Maharashtra, recounting an earlier price collapse in mid-2018. The 40 litres of cow milk which Markad supplies to local collection agents is now selling at ₹15-20 for a litre, barely enough to cover the cost of feed. “Many farmers in my village are dumping milk, distributing it for free or feeding it to calves when local agents refuse to purchase."

Farmers are prone to exploitation in states like Uttar Pradesh and Maharashtra where the dairy cooperative network is weak, said R. S. Sodhi, managing director at the Gujarat Milk Marketing Federation Ltd., which markets its products under the Amul brand. Demand for dairy products used by hotels, restaurants and catering sector has collapsed, Sodhi said, adding, “if we get working capital at lower interest rates, we can purchase excess milk and convert it to milk powder or white butter."

On a positive note, Sodhi assures the problem is temporary. Milk production is set to fall as summer intensifies across the country. A gradual easing of lockdown rules is also likely to unlock demand. But how many animals and their bankrupt owners will survive the intervening months?

End-of-life woes

Hundreds of kilometres away from Yadav’s cattle shed in Lucknow, Mohammad Akhlaq, a dairy farmer and cattle trader from Bhatinda in Punjab, sounded troubled during a brief telephone conversation. Akhlaq’s 50 buffaloes are “drying up" (producing less milk) due to a lack of feed. An added worry is his 30 spent buffaloes—unproductive end-of-life animals—which he purchased from local farmers, paying them over ₹20,000 per animal, in order to supply them to slaughter units.

“The milk I used to sell for ₹50 a litre is fetching me half the amount. I have spent over ₹1,00,000 just to keep the spent buffaloes alive... if the lockdown stretches anymore, I will go bankrupt," he said.

Akhlaq has run up a debt of ₹13 lakh, most of it accumulated over the past few months. Since 25 March, when the countrywide lockdown was enforced, buffalo meat exporting units also downed their shutters. The closure of the ₹25,000 crore export industry means farmers are not only unable to sell their spent buffaloes, but they are also incurring the added cost of feeding them.

Buffalo meat exporting units lost business worth ₹4,000 crore since February, said an industry insider who did not want to be named. This translates into an income loss of ₹3,000 crore for farmers who sell spent animals and reinvest the amount to replenish the herd. In February and March, export units also lost business due to the shutdown in major markets like China which was in the middle of a lockdown. The Chinese and South East Asian markets have opened up since, and the approaching month of Ramzan means higher demand from West Asia—but a strict lockdown in India may force export units to stay shut.

Export units and all agricultural activities have been allowed to function from 20 April but buffalo meat exporters are yet to resume production. Even if they operate, cattle markets and transport of spent animals has to be allowed for the industry to function. “Right now, we are scared to deliver buffaloes to export units even if it is allowed," said a supplier from Uttar Pradesh, where cattle traders have often faced the ire of vigilante groups, even though unlike cows, the slaughter of buffaloes is legal in India.

Why livestock matters

The significance of livestock for farmer incomes is immense. The sector (excluding fisheries) contributes 30% to India’s agriculture gross domestic product (GDP) and is valued at over ₹9 trillion. India is the largest producer of milk in the world; around 70 million rural households are engaged in dairying—a regular source of income for them unlike crops where earnings are seasonal. India is also the second-largest exporter of bovine meat in the world after Brazil.

Yet, during the ongoing lockdown, policy and remedial interventions by the government have largely focused on crops. The churning in the livestock sector is yet to come to the fore, but signs of distress are palpable. Farmers are feeding livestock lesser than normal quantities not just due to lower feed availability but also as a way to lower milk production. Organized dairies are procuring less milk from farmers. Sales of value-added products like cream, cheese and ice-cream has plunged since retail outlets are open for fewer hours, and hotels and restaurants are shut.

Even established players have slashed milk procurement rates. Mother Dairy, which has an extensive network of retail outlets in the national capital region and is owned by the National Dairy Development Board, recently slashed milk procurement rates by a staggering ₹10 per litre, said Ramchandra Chaudhary, chairman of the Ajmer dairy cooperative in Rajasthan.

According to Chaudhary, any further slide in milk prices will force farmers to abandon some of their low yielding cattle—adding to the troop of strays roaming the countryside—and sell buffaloes for slaughter. “The Rajasthan state government is providing us a support of ₹2 per litre of procured milk, but the Centre is yet to take stock of the ground situation."

The milk union stopped supplying to Mother Dairy and is instead manufacturing milk powder, expecting a shortfall in the commodity in the summer. “Mother Dairy did not reduce retail prices ( ₹56 for a litre of full cream milk) but it is paying farmers less. Where will the farmer go if a government body acts this way?" asks Chaudhary.

“The contraction in demand and rules around what qualifies as an essential commodity has severely impacted farmers," said T. Nanda Kumar, former chairman of the National Dairy Development Board. The animal husbandry sector comprising of dairy, poultry and fisheries is extremely valuable for farmers’ income security but its current woes have escaped the government’s attention, added Kumar.

He listed a few remedial steps: provide financial support to dairy cooperatives enabling them to purchase excess milk from farmers and convert it to milk powder. Open up the livestock trade. Strongly dispel rumours that consuming poultry products raises the risk of covid-19 infections. “This is also an opportune time to modernize, adopt and enforce strict hygiene standards in India’s wet markets," Kumar said.

Meat worries

While the current downturn in the dairy sector is largely driven by restrictions on retail trade and restaurants, the lockdown impacted sales of livestock products like chicken and mutton in different ways. In February, even before the novel coronavirus got a toehold in India, the poultry industry valued at over ₹1 trillion was hit as consumers shunned chicken. The fear was driven by social media rumours that consuming poultry items raises the risk of covid-19. The health and agriculture ministry stepped in to quell the misinformation but the damage was already done.

Farmers in many states were forced to dump chicken as prices crashed to as low as ₹10 per kg. Many used JCB machines to dig trenches and bury chickens to save on feed costs. A month later, demand is picking up but the poultry sheds are empty.

Prices have recovered to ₹90-100 per kg in the wholesale markets but it is too risky to invest right after a round of heavy losses, said Jagdeep Aulakh, a poultry farmer from Karnal in Haryana.

Aulakh lists several risks to the trade. Poultry feed prices are rising due to difficulties in transporting maize, soy and fish meal from Bihar, Madhya Pradesh and Andhra Pradesh, respectively. Supply disruptions are imminent if the covid-19 case count rises unabated and states like Delhi mark more areas as containment zones, stalling retail sales. In the 40 days it takes to rear a broiler chicken, demand may also take a hit due to falling consumer incomes, especially among low-income groups dependent on daily wages.

Large states like Uttar Pradesh will likely continue to discourage consumption of poultry products and meat, and not help the business revive. Given the lockdown, it is also uncertain when pushcarts and roadside eateries selling boiled eggs and chicken will resume business.

While the poultry business is limping, mutton shops in the national capital region are facing an acute supply crunch. Retail prices have nearly doubled—selling upwards of ₹800 per kg in Delhi; in Noida, where retail outlets are shut, home-delivered red meat can cost up to ₹1,000 per kg. Most retailers said supplies have dried up from the back end.

Unlike poultry, goat rearing is a scattered rural enterprise where traders purchase animals roaming across villages in states such as Rajasthan, Uttar Pradesh and Haryana, which cater to the northern Indian market. “Ever since (the) lockdown was announced, traders have been unable to move around and local weekly markets are shut as well," said Jamaluddin Khan, owner of a goat breeding farm in Ajmer, Rajasthan.

Transport is a hassle since state borders are sealed and suppliers are unwilling to risk police intimidation. There is confusion too: the home ministry has exempted animal husbandry farms from the lockdown list but unlike milk, the ministry did not specify if collection and trade is allowed. From an average of 10,000 animals per day, supplies are next to nil now, said Gulfam Salahuddin, president of the Ghazipur goat and sheep market, Delhi.

Be it fish or meat, whatever you’re getting in Delhi is due to the resourcefulness of some, said a supplier. “To move a truck loaded with fish, we are paying bribes at each and every inter-state checkpoint. These added costs (around ₹40,000 for a truck loaded with 300-400kg of fish) are often more than what the fish costs."

- INDUSTRY & MANUFACTURE

11. Why India is betting on big storage sheds

Livemint, 05 May 2020, Goutam Das

Warehousing is slated to boom post covid-19 as e-commerce grows and manufacturing shifts out of China

NEW DELHI: In mid-April, Albinder Dhindsa, the co-founder of grocery e-tailer Grofers, found himself in a tricky situation. The company’s top team—including the supply chain head—was stuck in a Gurugram township that got earmarked as a containment zone. And demand for grocery was skyrocketing. “Initially, we could let one out of eight customers check out," Dhindsa told Mint, adding that “traffic now is 25-30 times of what it was in February."

The Grofers management team worked remotely, scrambling to add both workforce and warehousing capacity over the following weeks. The company ran 26 warehouses before the lockdown. It quickly added three more as demand spiked in April. Another five will open over the next two weeks. “These are smaller facilities. The warehouses were already built, which we are repurposing for our use," Dhindsa said.

Warehousing, or sheds where goods are stored, have become crucial in the post-covid world. Inside, storage racks can go up to five levels. If you can’t store enough, you cannot meet the demand and neither can you deliver fast. Most crucially, additional warehouses will now allow firms such as Grofers to create a buffer of goods.

Many warehousing complexes are expected to come up across India, more so in the post-covid world. Many e-commerce categories are expected to boom, as people make a behavioural shift from buying offline to shopping online.

Also, over the next couple of years, industrial warehousing is expected to see a sunrise as (as some expect) manufacturing shifts out of China. India wants to be prepared—developers, particularly. They are building warehouses at a frantic pace, often with private equity (PE) booty.

As things stand, across eight Indian cities—NCR, Mumbai, Bengaluru, Pune, Kolkata, Chennai, Hyderabad and Ahmedabad—quality warehousing stock totalled 211 million sq. ft in 2019. The stock is expected to rise to 253 million sq. ft this year and further to nearly 300 million sq. ft in 2021, JLL, a real estate services firm, projected.

“There is little vacancy. Of the 211 million sq. ft, about 21 million sq. ft is vacant today," said Chandranath Dey, head of industrial operations, business development and industrial consulting at JLL India. Who stands to gain from this warehousing rush? And how real, and long-lasting are the assumptions behind this investment spree to build large sheds across India?

Bulking up

Much of the new warehouses going live this year are sophisticated top-quality stuff. Such quality comes at a cost and increasingly, warehousing is becoming a big boy’s club. In April 2019, the Hiranandani Group set up a new company, GreenBase, which has entered into a joint venture with PE major Blackstone Group to build logistics and warehousing assets. The company has invested ₹500 crore.

“We have 250 acres in Pune, 115 acres in Oragadam (in Chennai), and 73 acres in Nashik. This is the time to do it (build warehouses)," Niranjan Hiranandani, co-founder and MD of Hiranandani Group, said. “The first 30-acre complex in Oragadam would be ready by the end of the year."

Other developers trying to corner the market have strong PE or institutional backing too. IndoSpace is India’s largest developer of industrial and warehousing parks, with 35 parks and 15 million sq. ft ready. In 2020, the firm plans to build an additional 5 million sq. ft. IndoSpace, backed by PE firm Everstone Group, has invested over $3 billion thus far.

Then there’s Bengaluru-based developer Embassy Group, which has invested $100 million and has committed to another $250 million. The firm has leased out three million sq. ft and is constructing about seven million more.

About 80% of the demand for warehousing is generated by e-commerce firms, third-party logistics firms who move the goods for many fast moving consumer goods (FMCG) brands, besides engineering firms. “Covid-19 will strengthen warehousing. People will move away from offline retail modes of shopping to the online modes because of social distancing," said Dey.

Behavioural shifts

Naresh Dangwal’s motorcycle has a curfew pass taped on the handlebar. Everyday, he rides from Dwarka in Delhi to Samalka, where he works. He is assistant manager of operations in a warehouse maintained by Ecom Express Pvt. Ltd, a third-party logistics company that manages shipments for e-commerce firms. This warehouse is more of a processing centre where bags full of goods are loaded in trucks before being sent to different cities.

In complicated e-commerce supply chains, warehouses are important nodal points. Think of them as the point where batons are exchanged during a relay race.

Between a Xiaomi phone manufactured near Chennai and its delivery to a home in Aizawl in Mizoram by Amazon, there are at least six big and small warehouses. One of Xiaomi’s contract manufacturers maintains three warehouses. The assembled phone is shipped by a seller to Amazon’s warehouse in Kolkata. It is further connected to a smaller warehouse in Guwahati and finally, to another one in the destination town, Aizawl.

Without an efficient network of warehouses and processing centres, like the one Dangwal works in, deliveries would take way too long than we have come to expect.

The 34-year old’s job is timely connections. In the near past, this centre shipped 17,000 parcels across India every day. The volume has shrunk to a tenth now. “Only essentials—medicines, masks, gloves, and sanitizers—are moving," he said. “Previously, this hub dispatched everything from electronic goods to home appliances." These non-essentials are now stocked up in larger warehouses.

Because only essentials are being dispatched, Dangwal can do with fewer people. He has just five people in a shift now, about 10% of the warehouse’s pre-covid employment. “It helps us with social distancing as well," he said.

The fact is that even when the lockdown ends, the non-essential market may not be as buoyant. A category shift is likely, hinted Anshul Singhal, managing director of Welspun One Logistics Park. The company is building a 110-acre warehousing park in Bhiwandi near Mumbai, the largest hub of warehousing in India.

“From more expensive items, people would now buy more basics online. The quantum required to service the basic requirements are higher. Eventually, you would need more warehousing space, more delivery workers, more handling workers, more automation. That would drive the demand for warehousing," he said.

Meanwhile, the warehousing market could expand to tier-two cities as well. Work from home (WFH) may result in a resource shift to smaller towns. “People have realized that WFH works. If employees are based out of tier two, it would increase local consumption of daily requirements. Warehousing and supply chain companies will therefore look at smaller cities more favourably," Singhal explained.

Government nudges

While e-commerce companies have pushed the boundaries, thus far, most of India’s logistics remain unorganized and inefficient. The Indian government appears keen to change this.

A draft National Logistics Policy stated that logistics cost in India is estimated at 13-14% of gross domestic product (GDP), very high compared with more efficient global systems. In the US and Europe, logistics accounted for 9-10% of the GDP and in Japan, about 11%. Modern warehousing will now play an important role as India tries to cut through the inefficiencies.

Indian warehousing, historically, were low-grade concrete godowns that dotted the highways around many transit hubs. GST, which came into force in 2017, was the first big bang moment for the sector.

From a network of smaller warehouses across multiple states, set up to be tax efficient, companies now picked fewer but larger warehouses in more strategic locations since India became a single tax country. The larger warehouses are made of steel, are often pre-fabricated and more automated. Besides robotics, software systems drive the business. Technology giant IBM, which manages the back-end technology for FMCG companies such as Amul, said that Indian warehouses are likely to invest more in technologies that aid business continuity, going ahead. Data recovery services and cyber security solutions are two of them.

“We have had very mature policy level initiatives," said Singhal. “Besides GST, warehousing was given an infrastructure status and not a real estate status—it gives the sector better lending rates and better lending terms with higher limits." In addition, the warehousing sector allows 100% FDI. And in some states, developers can build warehousing parks with fewer approvals compared to other segments of real estate.

The China imperative

Just as the lockdown hit, Aditya Virwani, the chief operating officer of Embassy Group, moved into his father’s farm house along with his brother Karan Virwani (the India chief of co-working company WeWork) and his step sister. It’s family time. Even so, both the brothers are busy handling rent waiver requests from corporate clients who occupy the developer’s sprawling offices.

“In warehousing, it is more about the fastest fish eating the slow fish rather than the big fish eating the small fish," said Aditya Virwani during a Zoom call. “Everyone is racing for scale right now. Because once you have scale, you can control rents," he added.

There is e-commerce, of course. But the rents of the future could come from manufacturing shifting from China. The virus outbreak is forcing companies to re-think their supply chains and India stands a chance to benefit. Global manufacturers would require world-class warehousing to store components and finished products.

“Capitalizing on the China opportunity will be massive," Virwani said. “It is something the government should help with. The investment committees of private equity funds are pushing them to do more warehousing deals in India because they are foreseeing the same thing," he added.

Indeed, some state governments appear to be at work. The industries and mines department of the government of Gujarat said it is eyeing to increase its FDI from Japan as there is “a perceptible trust deficit between Japan and China post covid-19 outbreak". The Japanese government has announced a $2.2 billion economic stimulus package to help Japanese manufacturing units move out of China.

“We have already written to political and business authorities of Japan, inviting them to shift their commercial units and operations from China to Gujarat," Manoj Kumar Das, principal secretary of the industries and mines department, noted in a statement.

Manufacturing shifts, nevertheless, take a long time. Right now, industrial warehousing could gain because manufacturers aren’t sure on the direction trade policies could take. “Inventory management will become more important now. Manufacturers will increase their inventories because they don’t know what’s going to happen in trade policy with China, going forward," Rajesh Jaggi, vice-chairman of real estate in Everstone Group, said.

There are negative riders to the industrial warehousing growth story. Many industrialists such as Niranjan Hiranandani warned that India could lose out on the exit-China story if politicians and the bureaucracy botch up. Over the last many years, China’s exports in textiles have shrunk, for instance. That business has moved to Bangladesh, Vietnam, Sri Lanka and even Pakistan.

In conclusion

Besides, the warehousing apple-cart could tumble because of high land prices, about 30% of the project cost. Warehousing is a horizontal development and not a vertical one like other commercial spaces. The right shape of land is important, so is the right zone with access to road and rail networks.

“If you have to buy expensive land, it is a non-starter. Indian Railways has a lot of land, as does the government. For a sustainable logistics supply chain model, the government needs to open up these spaces," said an executive from a ports company who didn’t want to be quoted. The government, for instance, can become a shareholder in a project where its equity participation is the land, he felt.

12. A tense textile hub spins out of control

Livemint, 30 Apr. 2020, Sowmiya Ashok

Things were already not great in Tiruppur, a key export-oriented apparel cluster. And then covid-19 arrived
Europe constitutes 40% of Tiruppur’s market and America, 20-25%. Amid the hope that India could wrest export channels from China, Tiruppur offers a glimpse of the challenges ahead

CHENNAI: Saptingala?" After a five-year spell as a migrant worker, Suman is well versed with the Tamil words for “Have you eaten?". It is a question that his friends often ask each other on the factory floor in Tiruppur in Tamil Nadu, the country’s largest garments hub.

Suman, a man in his early 20s from Jeypore in Orissa, has made thousands of T-shirts and pants at the garment manufacturing unit where he works. “I don’t know where the clothes go or who ends up wearing them. If I do the work, I get paid," he said. Suman makes ₹3,800-4,000 a week. Or at least, he did—till 21 March, the day he picked up his last salary.

Two days later, the Tamil Nadu government announced a lockdown to combat covid-19. The curfew was to begin at 6pm on 24 March and last one week. The government order read: “All employers will make payments of wages/salaries to workers/employees including those working on contractual and outsourcing basis during this period." There were 95 recorded cases of covid-19 in Tiruppur that day.

Over a month later, things have only gotten worse. This week, Tamil Nadu enforced a more intense lockdown in several towns, including Tiruppur.

“Though I am employed directly by the factory, I haven’t been paid anything for this month," Suman said. He lives with five men in a room. “I have no money in hand to buy food, and between us, we have 7kg of rice and some aloo-pyaas (potatoes and onions)," he said.

“They said the lockdown will last 15 days. Then it was extended. Now, my friends here say, perhaps, trains won’t run for months," he added. Five years ago, Suman came on the Dhanbad Express and deboarded at Tiruppur. Now, he is sure his money will run out; nobody will help him; and he will walk home one day. “What else to do?"

What is unfolding in Tiruppur matters because it is highly representative of both the present character and future goal of India’s manufacturing ecosystem—a sector dominated by small and medium enterprises (SMEs), which has the new task of wresting global supply chains away from China in a post-pandemic world. The textile units in Tiruppur were among the first to try to go up against China, starting many years ago.

Last financial year, Tiruppur shipped out apparel worth ₹26,000 crore, and another ₹20,000 crore worth of clothes went to domestic markets across the country. The cluster with over 1,000 units, many of them SMEs, serves as a giant employment generator. But the road ahead looks bleak.

Starving workers

Over the past 20 days, Viyakula Mary, the executive director of the non-governmental organization (NGO) Save, has been conducting a survey among garment workers in Tiruppur. Roughly 900,000 workers are dependent on the garment industry.

Figures with the Tiruppur district administration peg the current migrant population at 130,000. Of these, 68,000 live inside factories in hostels; another 30,000 like Suman live outside factories but the company takes care of the rent. The remaining 32,000 migrants are a floating population of contract workers switching jobs often. This makes tracing their whereabouts challenging.

“Many of them are starving," said Mary. “Some are staying inside the factories and are looked after by the employer, but those who are outside living in rented rooms have no access to even the free provisions promised by the state government for lack of ration cards."

Take Rakesh Kumar, a 21-year-old from Bihar. He cuts excess thread from freshly stitched clothes and helps iron and pack garments in a factory unit. “The labour contractor I work for has switched off his phone ever since the lockdown commenced," he said.

Tiruppur district collector K. Vijayakarthikeyan said a 24x7 migrant helpline number has been set up with four staffers who speak multiple languages. “We receive over 2,000 distress calls a day often related to food. But a common question is whether they can return home," he added.

On 8 April, the Institute for Participatory Practices held a webinar on garment workers in Tamil Nadu. Among those who spoke was 27-year-old Rajeshwari, a welfare officer in a spinning mill in Dindigul which is 130km away from Tiruppur. There are 300 mills in Dindigul district which supplies raw materials to the Tiruppur cluster in what is effectively an intertwined supply chain. If Tiruppur is hit, the subsidiary industries are all affected.

“Employees have not received salary even for the number of days they have worked during the previous month," Rajeshwari said over a Zoom call. Rajeshwari spoke about colleagues who are already seriously debt-ridden because they are taking loans at higher interest rates.

Stanley Joseph from Partners in Change (an NGO) who has worked extensively in bringing reforms to the garment and textile industry across Tiruppur, Dindigul, Erode and Coimbatore said: “The biggest issue is poverty at home and the looming debt-burden. These are workers who come from extremely poor families and if they don’t go to work for one month, they will be in huge trouble. 80% of workers are those who know that only if they show up to work that day, they will get the day’s wages."

Global linkages

On the last day of January, the Italian government declared a state of emergency and cancelled all flights from China. By the first week of March, even though Tiruppur had not seen any cases of covid-19, there was tremendous unease among garment exporters and manufacturers. “When Italy, Spain and the United Kingdom was hit, we knew we were in trouble. We do a lot of business in these countries and everyone got spooked," said M.P. Muthurathinam, the president of the Tiruppur Exporters and Manufacturers Association (Teama), which has 900 manufacturers as members.

In March, several suppliers in Tiruppur received terse statements in their inboxes which called for “support in these trying times", informing them that spring and summer orders were being cancelled. It is estimated that upwards of 25-30% of orders have already been cancelled. As an additional blow, outstanding payments will be delayed, indefinitely.

“Europe constitutes 40% of our market. America, another 20-25%. All our buyers are locked down like we are. It is only when people in those countries start walking freely on the streets, then there is some chance of Tiruppur being revived. Right now, there is no communication from buyers. It is like they are all under house arrest," Muthurathinam said.

“Think of Tiruppur as a giant factory! Within a 20km radius, every job that is needed to run this factory is in place" he said. “There are about 10 back end processes that lead up to garment manufacturing. To develop a sample for 2021, we need the whole of Tiruppur to show up to work."

And even if they do show up to work, export-reliant firms may need more than fond hopes about manufacturing demand suddenly shifting away from China.

The current lockdown will have a major impact on the industry, said Geert De Neve, a social anthropologist at the University of Sussex who researches Tiruppur’s linkages with global value chains. Even before the covid-19 outbreak, De Neve said he sensed competition from Bangladesh and Vietnam was already getting tighter and affecting some exporters, as did the collapse of global retailers like Mothercare in the UK.

“When I was there in late-February and early-March this year, people definitely said that things were very ‘slow’, meaning that orders were fewer and smaller in size, with many labourers complaining of irregular work. On the other hand, Tiruppur has been able to offset at least some of such losses due to global shifts by refocusing on the domestic market, including through the development of local brands," he said.

Uncertain times

In the pre-covid-19 world, Coimbatore-based KPR Mill, which is south India’s largest apparel manufacturing company, produced 250,000kg of yarn and 310,000 pieces of garments daily. The company employs 25,000 workers, the majority of them women, and operates spinning mills and garment factories in the state. All of these came to a grinding halt on 23 March, said vice-president of KPR Mill K. Somasundaram. “Imagine workers engaged in various activities around the factory floor and then all of a sudden, the work came to a grinding halt and people walked away from their work stations," he said. The virus had caught up with Tiruppur.

With covid-19 cases rising in India, KPR Mill, like many others in the region, temporarily shifted focus from making waterproof sportswear to virus-proof outerwear.

District collector Vijaykarthikeyan said the current supply of masks and personal protective equipments (PPE) for the entire state is coming from Tiruppur. This, he said, is an effective way of keeping the industry afloat. “The suppliers have been given large orders. Roughly, they produce 1.2 lakh masks per day," he said.

At KPR Mill, 5,000 of its employees are currently engaged in making PPEs. “Right now, the raw materials are not from our own factories. It is sourced from outside. What we manufacture is knitted garments for inner and outer garments which is made out of yarn but PPEs are made out of non-woven materials, so this is coming in from other states," said Somasundaram.

Recently, KPR Mill was in the news for its admirable human resource (HR) policy for housing nearly 18,000 employees on campus and providing them with food and education through the lockdown. The company also saves costs on retraining employees in the event of a swift opening up, said the higher management. “Also, many of the women employees are studying and among them 5,000 women are pursuing higher education. This time off from work can help them focus on their studies," said Somasundaram.

For now, the women on campus have the time to watch two movies a day. “We have played Bahubali, Rajini [Rajinikanth] and Kamal [Kamal Haasan] movies. Vijay’s Sivakasi. In the garment units, since it is a mixed crowd, we also show Hindi films," said warden Krishnaveni in the Coimbatore hostel.

While workers attempt to wrap their heads around a long-drawn lockdown period, the Tiruppur Exporters’ Association (TEA) on 18 April appealed to the state government requesting partial opening up of the textile cluster. “We wish to note that some buyers, small stores in EU, UK and USA, have been asking our exporters to send Spring/Summer samples to give approval and then place the orders for shipment," wrote TEA head Raja M. Shanmugham. Further, he warned: “We would like to drive home the point that our competing nations like China, Bangaldesh, Vietnam, Pakistan have already started functioning and on track in supplying garments to the needy buyers."

However, there is a large red question mark over the fate of the densely populated garment cluster, with Tiruppur continuing to be a covid-19 hotspot. Last week, Tamil Nadu chief minister Edappadi K.Palaniswami ruled out reopening of the industrial cluster saying it was crucial to prevent community transmission of the virus.

While there is talk of opening factories outside the city limits in a phased manner, Tiruppur’s manufacturers acknowledge that maintaining social distancing on the factory floor will be a nightmare to enforce. Nobody knows when or if things will get better.

Prof. De Neve feels it is difficult to ascertain the time it will take for the industry to adapt and adjust to a new post-covid-19 situation. “My main concern is the sustainability of global supply chains that pay little attention to producers and workers in the Global South, who tend to bear the brunt of any crisis, including the one induced by the current virus," he said.

Amid all the nervousness about an uncertain future, Tiruppur still has somehow managed to find time for small joys—a movie, hopes of higher education. “I am even finding time to exercise. Tiruppur people never exercise," said Muthurathinam from the exporters association. He likens daily life to a 30-day long Bharat bandh.

“Tiruppur is known as ‘kutti (small) Japan’ where people are always active and ready to work. It is the garment industry that has put us on the map," he said. In the months ahead, Tiruppur’s place on that map, as well as India’s, will be seriously tested.

Sowmiya Ashok is a freelance journalist based in Chennai

13. TVS Motor buys UK's iconic premium bike brand Norton

PTI, Apr. 20, 2020

TVS Motor Company has bought UK’s iconic sporting motorcycle brand Norton in an all-cash deal for a sum of about Rs 153 crore (US$ 21.89 million), marking domestic two-wheeler major’s entry into the top end (above 850cc) of the superbike market.

Norton Motorcycles was founded by James Lansdowne Norton, in Birmingham, in 1898, is the most popular British motorcycle brands and is one of the most emotive marquees today.

It is famous for their classic models and eclectic range of luxury motorcycles ranging from authentic retro classic reboots of the famous Commando to their contemporary 200 bhp, 1200cc V4 super-bikes. Its other popular models include Dominator and V4 RR.

The company has presence across 21 countries with portfolio of bikes that are priced in the range of 25,000-45,000 pounds with custom-built features.

Though, it has been facing challenges with its annual sales plunging to 500 units in the past two years.

The deal between two companies involves the acquisition of certain assets of Norton Motorcycles (UK) Ltd (in administration) through one of TVS Motor’s overseas subsidiaries, and it is not carrying any liabilities of the British company.

“Norton has fantastic global appeal with its British heritage, and we see an opportunity to nurture and grow this brand globally. We will extend our full support for Norton to regain its full glory in the international motorcycle landscape,” Mr Sudarshan Venu, Joint Managing Director, TVS Motor Company said.

The company expects to witness a strong synergy between both the brands and hopes that Norton motorcycles can be benefited TVS Motor Company’s global reach and supply chain capabilities to expand to newer markets.

TVS Motor will hold 55-odd staff of Norton and will strengthen the existing manufacturing facility for future growth.

“We have huge pending orders for Norton bikes, and our immediate focus is to fulfil those orders. Norton bikes are sold across 21 markets. We will strengthen the brand’s presence in those markets first and then look at expanding to more markets, including India,” said Mr Sudarshan Venu.

This deal with Norton is for different segment than the company’s tie-up with BMW.

“Norton will continue to retain its distinct brand identity with dedicated and specific business plans. TVS Motor will work closely with customers and employees in rebuilding the brand for future growth,” he added.

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

14.1. Tech Mahindra, IBM tie up to set up innovation centres

IBEF, Apr. 22, 2020

Tech Mahindra has decided to set up innovation centres in collaboration with IBM, in order to provide boost to digital transformation and encourage adoption of more cloud-based technologies among its global customers. The centres will showcase IBM’s digital transformation solutions built with Cloud Paks running on Red Hat OpenShift, which could come handy for solving complex business problems for various industries, including healthcare, telecommunication, financial services, manufacturing, insurance and retail.

The company plans to open the first such innovation centre in Bengaluru in 2020 and more such centres will be set up across North America and UK later this year.

“The collaboration with IBM will help us accelerate the development of cloud-based applications for our customers and build multi-cloud data management solutions on the industry-leading hybrid platform. The commitment to building Innovation Centers aligns with our TechMNxt charter, an initiative that leverages emerging technology to solve real-world business problems for customers," Mr Pawan Sharma, president & global head of strategic initiatives at Tech Mahindra, said.

CloudPaks are containerised software solutions developed to help enterprises move their core business applications to any cloud in an open, faster and more secure way. It consist os containerized IBM middleware and common software services for development and management. As per IBM, it is designed on top of a common integration layer and is developed to decrease development time by up to 84 per cent and operational expenses by up to 75 per cent.

“This collaboration with Tech Mahindra is designed to help speed how businesses migrate critical enterprise workloads to the IBM public cloud and transform their operations using cloud-native technologies," Mr Bob Lord, senior vice president, Cognitive Applications, Blockchain and Ecosystems, IBM said.

There was boost in IBM’s first quarter results from Red Hat and Cloud services and revenue from cloud and cognitive software increased by 5 per cent, while total cloud revenue for the quarter grew 19 per cent.

Earlier this week, Alibaba Cloud announced an investment of approximately US$ 28 billion on its cloud infrastructure over the course of next three years, with particular focus on data centre technologies to speed up digital transformation and also prepare organisations for future exigencies.

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

14.2. Electric vehicle sales in India up 20 per cent in 2019-20

IBEF, Apr. 23, 2020

Electric vehicles sales, excluding e-rickshaws, in India witnessed a growth by 20 per cent at 1.56 lakh units in 2019-20 driven by two-wheelers, said Society of Manufacturers of Electric Vehicles (SMEV).

According to SMEV’s statement, in 2018-19, total EV sales in India stood at 1.3 lakh units.

Out of the total sales in FY20, 1.52 lakh units were two-wheelers, 3,400 cars and 600 buses. The corresponding sale for the 2018-19 was 1.26 two-wheelers, 3,600 cars and around 400 buses, it added.

"This figure does not include e-rickshaws which is still largely with the unorganized sector with a reported sale of around 90,000 units. The corresponding figures of the e-ricks sold in the previous year have not been documented," SMEV said.

The growth in the EV sales in the country was driven by the electric two-wheeler (E2W) segment.

It added, "In the E2Ws sold in FY2019-20, 97 per cent were electric scooters and a very small volume of motorcycles and electric cycles filled the rest of 3 per cent. Low-speed scooters that go at a max speed of 25km/hr and do not need registration with the transport authorities constituted a whopping 90 per cent of all the E2Ws sold."

Though, the sale in electric four-wheeler segment saw a decrease from 3,600 units in previous fiscal year to 3,400 units in FY20. This is mainly due to lack of bulk purchase of e-cars in FY19-20 and discontinuation of one of the leading car models, it added.

SMEV said, "the acceptability of electric cars in the premium segment in the second half of the year was a positive signal of a quantum jump of a much higher volume of e-cars in FY 20-21."

It added that the e-taxi segment is also starting to get some traction, though the range of e-cars and lack of charging spots in enough density are a deterrent in the growth of e-taxi segment.

Although, the big commitments by state governments for e-buses did not translate into purchases.

SMEV Director General Mr Sohinder Gill said, “the EV industry is taking shape and we believe that despite the COVID-19, FY20-21 will be a defining year for all the EV segments."

He further added, "while the EV industry is surely going to face the brunt of COVID-19 like any other automotive business, the clearer skies and the cleaner air in even the worst polluting cities is certainly leaving a permanent impression in the minds of the customers about how they can breathe easy and remain healthy if the society moves towards e-mobility."

Mr Gill said given the right impetus by the government and the industry, "the EV industry can spring back faster than the ailing IC vehicles segment".

"A pertinent factor that may work in favour of E2Ws post-COVID would be the choice of switching over from crowded mass transport to the sensibly priced electric two-wheelers with almost the same cost of commuting, as of public transport," he added.

He said there could be an inflection point in the EV industry in FY21-22 because of many factors such as experiments like E2Ws being sold without batteries and customer paying for batteries as a fuel; e-commerce companies realising the economic benefits of EVs and converting their fleets.

Also, e-carts becoming a convenient and cost-effective means of short distance logistics, e-taxis fleets beginning to make money due to lower operating costs may contribute to the growth of the EV industry.

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

15. "The robust indigenous IgG ELISA test for antibody detection developed by ICMR-NIV, Pune will play a critical role in surveillance for COVID-19": Dr Harsh Vardhan

IBEF, May 11, 2020

Indian Council of Medical Research (ICMR)-National Institute of Virology (NIV) at Pune has developed and validated the indigenous IgG ELISA test “COVID KAVACH ELISA” for antibody detection for COVID-19.

COVID-19 pandemic has spread across 214 countries with a total of 38,55,788 confirmed cases and 2,65,862 deaths. Most countries in the world are struggling to contain the pandemic using possible interventions. There is an augmented demand of various types of diagnostic tests by countries across the globe. Most of the diagnostic material for COVID-19 is imported into India from other countries. Therefore, Indian scientists are tirelessly engaged in developing indigenous diagnostics for SARS-CoV-2, the causative agent of COVID-19.

ICMR-National Institute of Virology (NIV), Pune is the apex laboratory of the country with state-of-art infrastructure and expertise for research in virology. NIV’s competent scientific team successfully isolated the SARS-CoV-2 virus from laboratory confirmed patients in India. This in turn has paved the way for development of indigenous diagnostics for SARS-CoV-2.

While real time RT-PCR is the frontline test for clinical diagnosis of SARS-CoV-2, robust antibody tests are critical for surveillance to understand the proportion of population exposed to infection.

The scientists at ICMR-NIV, Pune have enthusiastically worked to develop and validate the completely indigenous IgG ELISA test for antibody detection for SARS-CoV-2. The test was validated at two sites in Mumbai and has been found to have high sensitivity and specificity. In addition, the test will have the advantage of testing 90 samples together in a single run of 2.5 hours. Moreover, ELISA based testing is easily possible even at district level as the ELISA kit has inactivated virus. There are also minimal biosafety and bio-security requirements as compared to the real-time RT-PCR test. The test has an advantage of having much higher sensitivity and specificity as compared to the several rapid test kits which have recently flooded the Indian market.

Speaking on the occasion, Dr Harsh Vardhan said, “The robust indigenous IgG ELISA test for antibody detection developed by ICMR-NIV, Pune will play a critical role in surveillance of proportion of population exposed to SARS-CoV-2 Coronavirus infection.”

ICMR has partnered with Zydus Cadila for mass scale production of the ELISA test kits. After development at ICMR-NIV, Pune, technology has been transferred for mass scale production to Zydus Cadila, which is an innovation driven global healthcare company. Zydus has proactively taken up the challenge to expedite the approvals and commercial production of the ELISA test kits so that they can be made available for use at the earliest. The test is named as “COVID KAVACH ELISA”. This is a perfect example of “Make in India” in record time.

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

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

16. India’s economy needs big dose of health spending

Livemint, 08 Apr. 2020, Puja Mehra

India’s total healthcare spending (out-of-pocket and public), at 3.6% of GDP, as per OECD, is way lower than that of other countries

The Covid-19 pandemic crisis is a reminder of the importance of investing in the healthcare sector for any country. Mint examines how India has fared on this front and what it can do to raise its health expenditure as a percent of its gross domestic product (GDP).

How much does India spend on healthcare?

The total per capita government spending on healthcare has nearly doubled from ₹1,008 per person in FY15 to ₹1,944 in FY20, but is still low. The total expenditure by the Centre and states for FY20 was ₹2.6 trillion, or 1.29% of GDP, including establishment expenditure comprising salaries, gross budgetary support to various institutions and hospitals and transfers to states under centrally sponsored schemes such as Ayushman Bharat. Of the total public expenditure, the Centre’s share is 25%. Over the last five years, the total public expenditure on health has risen at 15% CAGR, much of this due to pay hikes.

Where does India figure vis-à-vis others?

India’s total healthcare spending (out-of-pocket and public), at 3.6% of GDP, as per OECD, is way lower than that of other countries. The average for OECD countries in 2018 was 8.8% of GDP. Developed nations—the US (16.9%), Germany (11.2%), France (11.2%) and Japan (10.9%)—spend even more. India spends the least among BRICS countries: Brazil spends the most (9.2%), followed by South Africa (8.1%), Russia (5.3%), China (5%). With public healthcare infrastructure stretched, out-of-pocket expenditure in urban centres is high in India. The Centre spends less as public health and sanitation are on the State list.

Why is India’s healthcare expenditure so measly?

India has traditionally spent less on health, 90% of government expenditure being on the revenue side. In the First Five-Year Plan, 3.4% of the total plan investment was for health outlays. This rose to 6.5% by the Eleventh Five-Year Plan. In FY20, the per capita capital expenditure was less than ₹200 per person, with 12 states spending under 1% of GSDP on healthcare.

Can investing in health boost the economy?

IMF has said in its annual Article IV reports that India can boost its human capital’s productivity by investing in education and healthcare. In 2018, it identified poor public health as the 12th most important hurdle for ease of doing business, ahead of crime, tax regulations and policy instability. Health and working conditions are a key recommendation in its suggestions for labour market reforms. The health sector creates both high- and low-skill jobs and can be used for pump-priming the service and manufacturing sectors.

What do we need to do in the post-covid era?

India can raise its supply—8.5 hospital beds and 8 physicians per 10,000 people—to the standards of Japan and South Korea: over 100 beds per 10,000 people. For this, a specially designed fiscal stimulus can be funnelled into public health and policy bottlenecks removed so that the sector becomes the engine of GDP growth. Subsidized loans, earmarked land, single-window approvals, tax holidays, etc. can be used for making medical devices and drugs and setting up hospitals.

Puja Mehra is a Delhi-based journalist.

17.1. Chitra GeneLAMP-N makes confirmatory tests results of COVID 19 possible in 2 hours

IBEF, Apr. 17, 2020

Sree Chitra Tirunal Institute for Medical Sciences and Technology, Trivandrum, an Institute of National Importance, of the Department of Science and Technology (DST), has developed a diagnostic test kit that can confirm COVID19 in 2 hours at low cost.

The confirmatory diagnostic test, which detects the N Gene of SARS- COV2 using reverse transcriptase loop-mediated amplification of viral nucleic acid (RT-LAMP), will be one of the world’s first few if not the first of its kinds in the world.

The test kit, funded by the DST called Chitra GeneLAMP-N, is highly specific for SARS-CoV-2 N-gene and can detect two regions of the gene, which will ensure that the test does not fail even if one region of the viral gene undergoes mutation during its current spread.

The tests performed at NIV Alappuzha (authorized by ICMR) show that Chitra GeneLAMP- N has 100 per cent accuracy and match with test results using RT-PCR. This has been intimated to ICMR, the authority to approve it, for COVID-19 testing in India, following which License needs to be obtained from CDSCO for manufacture.

Current PCR kits in India enable detection of E gene for screening and RdRp gene for confirmation. Chitra GeneLAMP-N gene testing will allow confirmation in one test without the need for a screening test and at much lower costs.

The detection time is 10 minutes, and the sample to result time (from RNA extraction in swab to RT-LAMP detection time) will be less than 2 hours. A total of 30 samples can be tested in a single batch in a single machine allowing a large number of samples to be tested each day.

"Development of a novel, inexpensive, rapid confirmatory for the diagnosis of COVID1-9 by Sree Chitra in record time is a compelling example of how a creative team of clinicians and scientists working together seamlessly can leverage knowledge and infrastructure to make relevant breakthroughs. Establishment of a Technology Research Center at SCTIMST and four other DST institutions has brought rich dividends by conversion of basic research into important technologies", said Prof Ashutosh Sharma, Secretary, DST.

The testing facility can be easily set up even in the laboratories of district hospitals with limited facilities and trained laboratory technicians. The results can be read from the machine from the change in fluorescence. The cost of testing with the new device for LAMP testing and the test kit for 2 regions of N gene (including RNA extraction) will be less than Rs 1000/test for the laboratory.

Sree Chitra has also additionally developed the specific RNA extraction kits along with GeneLAMP-N test kits and testing devices. The technology was transferred in for manufacture to M/S Agappe Diagnostics Ltd, Ernakulam, a leading company in In-vitro diagnostics with national and international operations.

Dr Anoop Thekkuveettil, a senior Scientist of the Biomedical Technology Wing of the Institute and Scientist-in -charge of the division of molecular medicine under the Department of Applied Biology and his team developed the kit in the last 3 weeks.

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

17.2. More than one crore face masks prepared by Self Help Groups across the country

IBEF, Apr. 30, 2020

More than one crore face masks have been made by various Self-Help Groups across the country. It shows relentless effort, positive energy and united resolve of SHGs to fight Covid-19 under DAY-NULM flagship scheme of Ministry of Housing and Urban Affairs.

At the core of this proud moment is a strong face of women entrepreneurs supported by the Mission. Their resilience is motivating others to multiply the efforts with more energy and determination. It is women empowerment safeguarding lives in true sense.

Ms Shubhangi Chandrakant Dhaygude, President, Samrudhhi Area Level Federation (ALF) has a distinct smile on her face that symbolizes satisfaction and pride. She collects orders through phone and stitches masks at her home in Titwala, Maharashtra. She says that they have made 50000 masks and 45 more women are involved in making masks with her.

Ms Meenu Jha, member of Savarni SHG in Kota, Rajasthan says that even she did not imagine that this small step can be so inspiring for others. These lines of Ms Meenu Jha reiterate the fact that all of us have unique capability of contributing to this fight even during lockdown.

Gamocha, the traditional cloth and symbol of respect in Assam has today become a symbol of health, safety and hygiene. Ms Rashmi from Nagaon, member of Runjhun SHG is busy preparing masks using this traditional cloth.

Ms Updesh Andotra, member Prayas Self Help Group in Kathua, J&K feels proud while making the tricolour masks.

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

18.1. JNCASR scientists develop a natural product based Alzheimer inhibitor

IBEF, Apr. 30, 2020

Scientists from Jawaharlal Nehru Centre For Advanced Scientific Research (JNCASR) an autonomous institute under the Department of Science & Technology (DST), Govt. of India have modified the structure of Berberine, a natural and cheap product similar to curcumin, available commercially, into Ber-D to use as a Alzheimer’s inhibitor. Their research work has been published in the scientific journal iSceince.

Alzheimer’s disease is the most prevalent neurodegenerative disorder and accounts for more than 70 per cent of all dementia. The multifactorial nature of the disease attributed to multifaceted toxicity has made it difficult for researchers to develop effective medication.

Prof T. Govindaraju, a Swarnajayanti fellow from JNCASR, led his team in the quest to discover natural product based therapeutic candidates for Alzheimer’s disease, and selected isoquinoline natural product berberine found in India and China and used in traditional medicine and other applications. However, berberine is poorly soluble and toxic to cells. So they modified berberine to Ber-D, which is a soluble (aqueous), antioxidant. They found it to be a multifunctional inhibitor of multifaceted amyloid toxicity of Alzheimer’s disease.

Protein aggregation and amyloid toxicity predominantly contribute to multifaceted toxicity observed in neuronal cells, including generation of reactive oxygen species (ROS), mitochondrial dysfunction, interfering with synaptic signaling, and activation of premature cell death. The JNCASR team developed this multifunctional inhibitor to ameliorate in cellulo multifaceted toxicity.

The structural attributes of Ber-D are such that they prevent the generation of reactive oxygen species (ROS) and rescue biomacromolecules from oxidative damage. Ber-D inhibits aggregations of metal-dependent and -independent Amyloid beta (Aβ) (which are the peptides of amino acids crucially involved in Alzheimer's disease as the main component of the amyloid plaques found in the brains of people with Alzheimer's disease).

The team developed Ber-D to effectively target multifaceted Aβ toxicity of Alzheimer’s disease. Berberine has 4 Phenolic hydroxyl groups which are methylated, hence water-insoluble. Natural product berberine was subjected to demethylation to obtain water-soluble polyphenolic derivative Ber-D. Treatment of berberine with demethylation agent BBr3(Boron tribromide) gave Ber-D Because of demethylation of berberine, 4 phenolic groups are free, increase water solubility, antioxidant property, and Cu-coordination to ameliorate multifaced toxicity of Alzheimer’s disease Detailed studies showed that Ber-D modulated Aβ toxicity of Alzheimer’s disease. Ber-D treatment averts mitochondrial dysfunction and corresponding neuronal toxicity contributing to premature apoptosis (cell death) making Ber-D a potential therapeutic candidate to ameliorate multifaceted Aβ toxicity in Alzheimer’s disease.

The antioxidant Ber-D efficiently quenched both Reactive nitrogen species(RNS) & reactive oxygen species (ROS) and prevent DNA damage, protein oxidation, and lipid peroxidation, which cause numerous adverse biochemical cascade reactions leading to neuronal death. Ber-D inhibits the formation of toxic Aβ fibrillar aggregates and protects mitochondria from dysfunction, one of the major causes of neuronal death. Their design strategy of synthetically transforming berberine to Ber-D, a multifunctional antioxidant and aggregation modulator, effectively ameliorate multiple Aβtoxicity both in vitro and in cellulo conditions.

These multifunctional attributes make Ber-D a promising candidate for developing effective therapeutics to treat multifaceted toxicity of Alzheimer’s disease.

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

18.2. Zydus Cadila gets USFDA nod to market generic cancer drug

IBEF, Apr. 20, 2020

Zydus Cadila, drug firm, has received final nod from the US health regulator to market generic Erlotinib tablets used for treatment of cancer.

The approval was given by the United States Food and Drug Administration (USFDA) to market Erlotinib tablets in the strengths of 25 mg, 100 mg, and 150 mg, Zydus Cadila said in a statement.

It further added that the drug will be manufactured at the group’s formulation manufacturing facility at the SEZ in Ahmedabad.

Erlotinib is a cancer medicine that interferes with the growth of cancer cells and slows their spread in the body. It is used for treatment of metastatic non-small cell lung cancer and pancreatic cancer. It is usually given after other cancer medicines have been tried without success, Zydus Cadila said.

So far, Zydus Cadila has 288 approvals and has filed over 386 abbreviated new drug applications (ANDAs) since the commencement of its filing process, it added.

Shares of Cadila Healthcare, the listed entity of Zydus Group, were trading at Rs 334.55 (US$ 4.78) per scrip on the BSE, down 2.62 per cent over previous close.

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

19. PE firm Vista Equity to invest Rs 11,367 crore in Jio Platforms

IBEF, May 08, 2020

Private equity firm Vista Equity Partners will invest Rs 11,367 crore (US$ 1.61 billion) in Jio Platforms for a 2.32 per cent stake. This is Jio Platforms' third deal after Facebook and Silver Lake’s share acquisition plans over the last two weeks.

“This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore (US$ 69.66 billion) and an enterprise value of Rs 5.16 lakh crore (US$ 73.22 billion)," said Reliance Industries.

"We believe in the potential of the Digital Society that Jio is building for India. Mukesh’s vision as a global pioneer, alongside Jio’s world-class leadership team, have built a platform to scale anda advance the data revolution it started. We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprises softwareto fuel the future of one of the world’s fastest growing digital economies," said Mr Robert F. Smith, Founder, Chairman and CEO of Vista.

The net combined value of Jio Platform reached Rs 60,596 crore (US$ 8.60 billion) for the unit of Reliance Industries after the investment from Vista equity. The business comprises mainly of its telecom under Reliance Jio Infocomm, which is the largest in the country with over 388 million subscribers.

Vista will be the largest investor in Jio Platforms after RIL and Facebook. On April 22, 2020, Facebook announced that it would invest US$ 5.7 billion in Jio Platforms for a 9.99 per cent stake. Then on May 4, US private equity firm Silver Lake announced an investment of Rs 5,655.75 crore (US$ 802.35 million) in Jio Platforms for a 1.15 per cent stake.

Vista has more than US$ 57 billion in cumulative capital commitments and its global network of companies collectively represent the fifth largest enterprise software company in the world. Presently, Vista portfolio companies have a significant presence in India with over 13,000 employees.

The world's largest tech investor, Silver Lake Partners announced an investment of Rs 5,655.75 crore (US$ 802.35 million) to buy a 1.15 per cent stake in billionaire Mr Mukesh Ambani's digital unit that houses India's youngest but biggest telecom firm.

This investment by Silver Lake was at a 12.5 per cent premium to the Facebook's US$ 5.7 billion investment for a 9.99 per cent stake in the firm.

Earlier, 9.99 per cent stake in Jio Platforms were brought by Facebook for US$ 5.7 billion at an enterprise value of Rs 4.62 lakh crore (US$ 65.54 billion).

The financial advisor for the completion of deal was Morgan Stanley.

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

20. Pandemic could help India fix its healthcare infra

Livemint, 30 Apr. 2020, Jhoomar Mehta

In the normal course, the investments that the government is currently making in healthcare might have taken years. Mint takes a look at the situation

The coronavirus pandemic may have come as a wake-up call for an otherwise undisciplined healthcare system in India. In the normal course, the investments that the government is currently making in healthcare might have taken years. Mint takes a look at the situation.

What’s the state of our public healthcare?

India’s healthcare spending is 3.6% of GDP, the lowest among developing countries. Often, funds allocated to states for healthcare are unutilized or underutilized. Private healthcare, preferred for its quality, is costly and, thus, out of the reach of the poor. Government hospitals have 713,986 beds in total, or 0.6 beds per 1,000 patients. There is a shortage of primary healthcare centres and community healthcare centres by 22% and 30%, respectively. The rural healthcare system has long been suffering from a shortage of medicines and instruments, as well as healthcare workers, and often lacks even basic amenities.

Are out-of-pocket health expenses high?

Out-of-pocket (OOP) expenses are borne directly by the individual and paid to the health service provider without any aid from an insurance company or the state. India (62.4%) ranks high on this tangent against the world average (18.55%), driving millions to poverty every year. While there is no one-stop solution, state governments could consider OOP as an indicator of their healthcare system performance. Provision of quality healthcare at an affordable cost and comprehensive health insurance coverage for vulnerable groups are not new ideas, but once achieved could make a big difference.

What is the govt’s strategy in the current situation?

The government has imposed a strict countrywide lockdown to limit the spread of the virus and is trying to upgrade the healthcare infrastructure as quickly as possible. Priorities include new beds, hiring of medical practitioners on contract, higher capacity of intensive care units and trying to meet the demand of ventilators and personal protective equipment.

Do the hospitals have enough ventilators?

India has around 45,000 ventilators. Global experiences show that 5-10% of covid-19 patients need ventilator support. As all ventilators cannot be pulled out from intensive care units, the number that is available would not be enough. A steady import base for ventilators is unlikely as global supply chains are strained, but local manufacturers are ramping up their production capacity. Even after things go back to normal, India would need these ventilators to treat the many citizens who suffer from respiratory diseases.

Are there enough doctors for patients?

India has 0.8 doctors for every 1,000 patients, compared to 4.1 in Italy; still, the latter had to choose whom to provide treatment to when the situation worsened. The number of doctors cannot go up in the short run, but paramedical workers could be trained for blood pressure monitoring or routine checks to take the load off doctors. Also, patients with other ailments might need hospitalization. In such cases, the use of telemedicine should be encouraged.

Jhoomar Mehta is a Delhi-based development finance consultant.

India and the World

21.1. Lessons for India from ground zero New York

Livemint, 16 Apr. 2020, Salil Tripathi

What are the learnings from the US megacity for India, should covid-19 unleash its fury across the country?
New York did well in calling out deficiencies ahead of time, which allowed the city to scale up quickly. Some of the new hospitals are not utilized fully, but the city has created the capacity

NEW YORK: New York is now a transformed city—its bustle and energy seem alien. It has the look of an abandoned ghost town. Lights continue to flash at Times Square, but almost all stores and shops are boarded up or locked, and the city has the feel of post-apocalypse dystopia. As of 15 April, there were 111,424 cases of coronavirus in the city with an estimated 10,899 deaths.

“I have never seen anything like this before. It is sad to see a city that is known for its nightlife and exuberance, which is always on the go and caffeinated, to be so quiet. It is a fundamental change, and there are no rules to follow to deal with something like this," said Surbhee Grover, a strategy consultant in New York who has lived here since 2002.

Ask US President Donald Trump, who has made characteristic flip flops. He initially ignored covid-19, then underplayed it, and chided critics saying they were exaggerating its impact. He reluctantly imposed lockdowns, second-guessed his cautious experts, boosted questionable cures (such as his latest obsession, hydroxychloroquine, whose effectiveness is neither known, nor is it safe for some patients), called it the “Chinese" virus, blamed the media, and is now withholding funds for the World Health Organization, and insisting on having his name printed on every cheque going to American citizens as relief.

In contrast, some state governors have acted sensibly and practically. New York’s Andrew Cuomo, for one, has acquired gravitas that has gained fame far beyond the US. Some blame Cuomo for not acting quickly enough, but his transparently clear responses and warnings are an object lesson in crisis communication. He sugar-coats nothing; he says what is expected; and he does what he says he would do.

New Yorkers like that attitude. Arnab Sen, chief executive at Reventics Inc, a company that works with physicians and hospitals by using technology to improve healthcare billing, told Mint: “The intensity and level of spread of covid-19 has been very rapid. While initially New York may have seemed slow, it has been very proactive since. This is a city with high density and a lot of tourists. It is highly cosmopolitan with people from all parts of the world. All that makes it unique."

The preparation

New York prepared early. When it saw the spike in cases on the West Coast, realizing how intertwined the city is with the world—some 140 million people pass through the three major airports servicing the greater New York area annually—its leaders knew it was vulnerable. But New York is also a city that celebrates individual freedom. New Yorkers resent restrictions; they believe in a 24x7 lifestyle.

Cuomo and mayor Bill de Blasio began preparing the population by making increasingly gloomy predictions and suggesting the imminence of restrictions in public remarks from February. Once March began, Cuomo’s tone got increasingly agitated about the potential outbreak, and he warned people with rising intensity that he was going to have to take stern steps. But he needed their help and cooperation to make it work. The city would change, he cautioned. Life will be different.

Cuomo’s messages were transparent and devoid of emotion. His news conferences were realistic. The frequency and daily announcements have been exemplary, Sen says. “It helped people become more aware. You can’t impose diktat here, this is not China. You can’t have a curfew, this is not India. You can quarantine, but it is based on self-awareness and education. It worked," he said.

Cuomo wanted everyone to stay at home but mass transit would continue. (That’s how essential workers, including nurses and doctors, commuted). Shops which weren’t essential would have to close. Grocery stores, supermarkets, pharmacies, laundromats, and liquor stores would remain open, and restaurants offered pick-up and delivery services.

The city’s communication strategy will one day be taught in universities. Once March set in, posters appeared in the city urging people not to congregate, to stay six feet apart, to practise social distancing, and to wash hands frequently.

On a given day, New Yorkers receive between two and six announcements on their phone from the government, if they sign up to receive the messages. Some are routine announcements to lift the spirits of the beleaguered city, but many contain links to the city’s website offering practical help, such as school meals being distributed free and where students can collect them even if schools have closed.

For New Yorkers who can’t get food, the city delivers meals-on-wheels. The city and the New York Taxi Workers’ Alliance worked together to develop a protocol to ensure that restaurant workers would fill the boot with food to be distributed; the driver would plan his route; the customers would pick up the food from the boot; there would be no physical contact, and the driver would earn $15 an hour.

Covid-19 affects everyone, the messages stress. While some orthodox Jews defied instructions and continued to congregate, some were arrested, but there was no scapegoating, and the city’s feisty radio stations did not vilify the community for defying social distancing norms—a lesson crucial for India, where some broadcast media have used terms like “jihad" to describe the Tablighi Jamat congregation.

The medical issues

New York did well in calling out deficiencies ahead of time, which allowed the city to scale up quickly. Sen says Cuomo kept saying there were no ventilators loudly to make sure everyone understood the city’s limits and it drove home the point to the White House that the city needed more.

New York also set up temporary hospitals. Some of the new hospitals are not utilized fully, but the city has created the capacity. The landmark Central Park, New York’s lung surrounded by expensive real estate and museums, now has a 68-bed field hospital with 10 intensive care unit (ICU) beds and ventilators, and the harbour has a navy hospital ship that can accommodate 500 cases.

While the supply of masks to hospitals has increased, a more poignant, even macabre, shortage is in morgues. One hospital in Brooklyn has space for only nine bodies in its morgue. Blaring ambulance sirens wail with metronomic regularity— on my quiet street, I hear the siren at least every 15 minutes. Hospitals are overwhelmed. At the Brooklyn Hospital Center trucks use forklifts to place bodies in vans. Wyckoff Heights Medical Center has a makeshift morgue in a refrigerated trailer.

Hospitals want bodies to be taken away quickly to make place for more deaths. Funeral directors are trying to stop the flow in; they do not have space to hold more bodies either. Funeral services are getting shorter and relatives and friends can toss flowers only from a distance. Companies that offer refrigerated trucks on rent have either said no—they don’t want to take the risk of holding the bodies in their trucks—or raised the rent because of increased demand. It is gruesome and tragic.

One physician who made the ultimate sacrifice was Madhvi Aya, three years my senior at school in Mumbai. She worked long hours in the emergency room as a senior physician assistant at Woodhull Medical Center in Brooklyn. She had trained as an anaesthesiologist and internist in India. She got infected in the emergency room and neither her husband, nor her 18-year-old daughter were able to meet her.

Her last communication with her family was through texts. “She was always there for us," her husband Raj told The New York Times. But when she got sick, no one was next to her, he said. (He has a weak heart, making him vulnerable to the virus and so he could not be with her).

The taxi victims

There have been other Indian victims. Most taxi drivers in New York are first-generation immigrants, and nearly half of them are from South Asia. The New York Taxi Workers’ Alliance estimates that of the nearly 30 taxi drivers who have died since the outbreak, perhaps half are from South Asia, and include, among others, Nepalis and Punjabis.

There are a little over 50,000 people licensed to drive taxis in New York, and once you add the drivers of ride-hailing services like Uber and Lyft, the number rises to over 100,000. About 23,000 are members of the union.

One of its founders, Javaid Tariq, told me: “Taxi drivers are hard-working and they earn to save money. The first person anyone travelling from abroad meets in New York is the taxi driver," he said, and this makes them more likely to get exposed to the virus than other New Yorkers. “The vulnerability begins at the airport."

The first taxi driver known to have died of covid-19 was a Nepali man in his late 40s. He had taken a passenger to Westchester, north of New York, in mid-March. Westchester was one of the early hotspots in New York State. The passenger was coughing a lot, Tariq says, and after dropping him, the driver went home as he was tired. He got fever soon and stayed home for less than a week. He was admitted to a hospital and died within days.

“The drivers are scared of the pandemic —what will happen to the families they supported, in some cases in India, Pakistan, and Bangladesh?," said Tariq.

Taxi drivers are particularly vulnerable, because they have no choice but to go to work. “If you don’t go, you don’t get any money," Tariq added. “They have to pay for the car’s lease, their own rent, and other expenses. Even if we tell them that life is worth more than going to work, we aren’t offering them a practical solution."

“Taxi drivers are caught in a bad place," said Biju Mathew, also a co-founder of the union. “They are considered an essential service, which means the city wants them on the road, whereas they would be safer off the road during the pandemic."

The business impact

While Cuomo announced statewide lockdown on 20 March, Vijay, an investment banker in New York, says his office had been encouraging working from home from 1 March. (He did not give his full name nor identified his employer because he is not authorized to speak to the media). Vijay has lived in the US since the mid-1990s. “Once New York realized the gravity, there were no half-measures," he said.

New York has worked, and its people have complied with severe restrictions, ironically, because the restrictions do not cripple all activity. Businesses that matter in everyday life are open, many till late hours. Supermarkets are getting restocked daily. Products ordered from online retailers turn up when expected. The city and state government promises only what it can deliver and manages to deliver much of what it has promised.

However, Vijay no longer sees Bangladeshi immigrants in his area who ran small businesses and shops. “I have not seen them in a month; I don’t know where they have gone," he said.

Sure, there are shortages, for which the anger is directed at Trump. At Union Square a sculpture has emerged of a naked Trump. Notoriously independent-minded New Yorkers are obeying rules that constrict them because there is basic trust in the government, and even if inadequate, there is some unemployment benefit for those who are suddenly out of work. How long this will go on remains to be seen.

In conclusion

In 1985, Hurricane Gloria had lashed the city with winds of enormous power shaking older buildings. I had recently graduated and lived in the city, barely able to stand straight as the wind pushed me around. Seeing me walking with some effort, a cop laughed and said, “It is only a hurricane." I laughed. It is a tough town.

As India braces for the full fury of coronavirus, it is clear that not all of New York’s practices can be replicated. But transparency, consistency, and honesty in communication, managing expectations and anticipating needs, establishing services to meet needs of those who are vulnerable, and reassuring the city that this too shall pass, will be crucial building blocks in halting the march of the virus.

Salil Tripathi is a writer based in New York.

21.2. Four money lessons from Warren Buffett’s AGM

Livemint, 05 May 2020, Neil Borate, Renu Yadav

Legendary investor Buffett said paying attention to the risks you face is important
Buffett believes admitting to a mistake and changing the course of investment is a wise move

With the covid-19 pandemic hitting markets and the liquidity situation, globally, people are worried about how to manage their investments and debt alike. Legendary investor Warren Buffett, in the annual general meeting of Berkshire Hathaway, his holding company, had some advice that can help ease such troubles.

The AGM, an annual pilgrimage of sorts for dedicated equity investors, was conducted over video conferencing this year due to the worldwide travel bans and lockdowns. Here are some important takeaways.

Pay attention to risk

Despite Buffett’s famous quote about being greedy when others are fearful, he made just $1.8 billion of net equity purchases in January-March 2020 (the company has a cash pile of $137 billion). Moreover these purchases were more than offset by net sales of equity amounting to $6.1 billion in April 2020. When asked why he had not bought more, he answered that the cash pile is there to protect against a number of risks, not just one.

Your takeaway: Equity investors raring to take advantage of the stock market drop, should keep this conservatism in mind. Keep a large emergency fund, ensure near-term financial goals are funded and only then invest in equity and that too if you have the risk appetite.

“Don’t interpret Buffett’s net equity sales as a signal that the market will fall further. Not everyone is Buffett and has his ability to time the markets or wait," said Amol Joshi, founder, Plan Rupee Investment Services, a financial planning firm. “The next best thing is to do what he advised his heirs to do after this death—put the money in an index fund and stay invested at all times. In a market recovery, gains come in a few trading days in the year, and you won’t know which ones they will be," Joshi added.

Accept your mistakes

Berkshire Hathaway posted a loss of about $50 billion in the January-March quarter. To put this into perspective, the market capitalization of the company is $443.79 billion. Berkshire stock was down about 17% over the past year, at the time of writing this report. In the AGM, Buffett admitted he had made a mistake by buying about 10% stakes in the four largest US airlines, a move he initiated in 2016. Buffet completely exited these in April, citing uncertainty post the lockdown and an oversupply of aircraft even if there is partial recovery in travel.

Your takeaway: If you have pointed sectoral exposures or are too much into some segments like small-caps, don’t be afraid to acknowledge your mistakes and correct them. “Investors hang on to dud investments, waiting for their cost price to come back. In some cases, this never happens. If circumstances change from your original investment thesis or the fund is not up to the mark, don’t be afraid to rebalance even if it is at a loss," said Joshi.

Consult an adviser before making such shifts. “But as a thumb rule, for instance, a change in fund manager or a needlessly diversified portfolio are triggers at which you should look to switch," said Pushkar Shah, a Pune-based mutual fund distributor.

Understand long-term

Buffett went over about 244 years of US history since its independence in 1776 to make the point that the long-term direction of the US economy is up. This was not evident during challenging times such as the US Civil War or the Great Depression, he noted, but a broad bet on US economic growth helped him build his fortune. Long-term economic growth is also true of countries such as India, particularly after the economic reforms of 1991, although investors should diversify across countries to reduce their risk. In financial terms, this translates into equity working well for investors over the long term.

However, the time period of this long term trend can be highly unpredictable. Buffett said it took the US stock market 25 years to reach the peak of 381 it had touched in 1929. The subsequent 66-odd years have been one of solid equity returns if you consider the current Dow level of about 23,000 (a compounded annual growth rate of about 6.5% in dollar terms).

Your takeaway: Although stock markets can take many years after a collapse to stage a recovery, in the very long term equity works best for investors. Build a high level of patience and tolerance for volatility. “For equity, I ask investors to have at least a five to seven years’ time horizon. If you are investing in systematic investment plans (SIPs), this is even longer at seven to 10 years because the initial few years are spent accumulating mutual fund units," said Shah.

Clear debt, then invest

Recalling a discussion with a friend, who asked him what to do with the money she had, Buffett said he first asked her what she owed to her credit card. The interest rate the friend was paying on her card was around 18%. “I don’t know how to make 18%. If I owe money with 18% interest, the first thing I would do with any money I have is to pay it (credit card dues). It’s gonna be way better than any investment idea I have got," he said.

Your takeaway: Before investing, clear off high-interest debt, such as credit card dues. In India, the interest rate on credit cards can go up to 36% per annum. Also, avoid overuse of credit cards to tide over cash flow problems. Buffett advised people to not use credit cards as a piggy bank.

“I see many people using their credit cards thinking they can pay it off later. This leads to a false sense of financial security," said Mrin Agarwal, founder director of Finsafe India Pvt. Ltd. “One needs to live life on savings and not credit. You can delay payments through the card, but finally you need your savings to pay for it," she added.

The pandemic has put us at risk, both health-wise and money-wise. So tread cautiously.

22. Global firms look to shift from China to India

Livemint, 22 Apr. 2020, Malyaban Ghosh, Biman Mukherji

Global manufacturers have initiated talks with Indian firms to explore the possibility of shifting a part of their supply chains from China as they seek to diversify their operations following the covid-19 outbreak

NEW DELHI: Global manufacturers have initiated talks with Indian firms to explore the possibility of shifting a part of their supply chains from China as they seek to diversify their operations following the covid-19 outbreak.

Most of these multinationals have suffered widespread disruptions to their businesses as authorities enforced strict lockdown measures to contain the pandemic, which originated in Wuhan city in China’s Hubei province. Wuhan is one of China’s so-called “motor cities", housing several automotive factories.

First of the lot are companies interested in sourcing automobile components and electronic products from India, according to industry executives.

Pankaj Munjal, chairman and managing director of Hero Motors Co., said the auto parts maker has received several enquiries from companies who have operations in China, but now want to de-risk their supply chain.

“A lot of supply chain was coming from China and today when we meet these customers and large OEMs (original equipment makers), some of them will migrate to countries like India, Vietnam and others. So, I believe, that will be a growth opportunity and we will see a migratory growth in supply chain," Munjal said.

Part of the demand is also coming from Indian companies who were heavily reliant on China for sourcing components, but suffered because of the novel coronavirus-induced disruption in China, which, over the years, has emerged as a manufacturing powerhouse.

To be sure, the government has still to announce new measures to woo firms planning to move operations from China. Earlier this month, Japan earmarked $2.2 billion to help its companies shift production out of China following the coronavirus pandemic.

In March, India’s cabinet announced a production-linked incentive (PLI) scheme for the electronics sector with an outlay of over ₹40,000 crore. “There is a clear negative sentiment against China. We have received requests for supply from India," said Amrit Manwani, president of Electronic Industries Association of India. “If we play our cards right, we could double our exports (of electronic products) in three years’ time."

India exports electronic products worth $9 billion each year, while its domestic market is estimated at $120 billion. “We don’t see so much interest from Europe, but definitely from US, there is a shift since the beginning of the year," Manwani said, adding that Japanese and South Korean firms are also interested in developing supply chains from the country.

Among global firms that have shown interest in India are US-based makers of medical electronics products Teledyne and Amphenol, and medical equipment makers such as Johnson and Johnson, Manwani said.

Vinod Sharma, managing director of Deki Electronics and chairman of electronics national panel at Confederation of Indian Industry, said his company is in talks with a South Korean firm for a tie-up to make electronic parts. Sharma, however, said government guidelines on threshold investment levels in electronic component manufacturing are proving to be an irritant.

At home, most local firms are actively looking for alternative sources to China and are bound to reduce imports from there though the process is expected to be gradual.

Most auto firms import parts like fuel-injection systems for the latest engines and other electronic parts from China. “In the next few months, we will see most of these Indian vehicles makers localize manufacturing of such parts or sourcing them from a different location with a foreign partner," said the executive requesting anonymity.

23.1. Scrutiny is key to allowing Chinese presence in India

Livemint, 22 Apr. 2020, Dhirendra Tripathi

Chinese firms have a big presence in India, despite concerns about the neighbour’s designs. After HDFC Ltd announced that the Chinese central bank had raised its stake in the firm, India tightened rules on Chinese investments in India. Mint analyses if the worries are genuine.

How big is the Chinese presence in India?

China dominates our lives in unimaginable ways. Think tank Gateway House says that during the period April 2015-March 2020, of the 30 Indian unicorns (companies with over $1 billion valuation), 18 were funded by Chinese companies. ByteDance’s TikTok to Alibaba’s UC Browser, Diwali crackers to lighting lamps are all Chinese. This includes several mobile and fintech companies. Chinese exports of toys, steel, aluminium, glass, chemicals and bulk drugs have hurt Indian producers. China also tops the list of countries against which India is pursuing dumping cases, all sectors combined.

How do Chinese firms invest in our country?

There are two instruments for foreign investment. Foreign direct investment (FDI) is more stable and strategic. Firms bringing FDI commit for a long term, unlike foreign portfolio investments (FPIs) made in the stock market mostly for financial returns. The commerce ministry’s department for promotion of industry and internal trade regulates FDI; the Securities and Exchange Board of India (Sebi) under the finance ministry oversees FPIs. Sixteen Chinese foreign portfolio investors are registered in India, with $1.1 billion invested in top-tier stocks. Chinese FDI in India is still small, at $6.2 billion, says Gateway.

How is India regulating foreign investments?

With an eye on China, the Centre has dropped FDI coming from neighbours from the automatic list. Earlier, barring Pakistan and Bangladesh, no neighbouring country’s investments needed the Centre’s nod. That has now changed. Sebi is asking custodians to furnish details of portfolio investments originating in 13 jurisdictions, including China and Hong Kong.

Is such aggressive scrutiny warranted?

It seems so. The world’s second-largest economy has deep pockets. India’s suspicion of China stems from the 1962 war the two fought, the 2017 Doklam standoff being their last confrontation. China gives financial and military aid to Pakistan and occupies part of the country. Central banks have unlimited resources and their stake purchases can’t be equated to just another entity’s. The People’s Bank of China taking a stake in HDFC is to be treated differently, as a financial firm has systemic importance for the banking sector.

What other concerns are there about China?

Alibaba, ByteDance and Tencent have a big presence in the Indian startup ecosystem. Smartphone makers Xiaomi and Vivo, platforms TikTok and UC Browser have access to data of millions of users on a real-time basis. The worry is this data could land with Chinese authorities. But India should not shun Chinese investments. There should be greater scrutiny, but not an overkill. China has delivered on quality and service and leads in electric and green technologies. India would do well to encourage all that coming here.

23.2. Crouching tiger upsets hidden dragon

Livemint, 26 Apr. 2020, Reshma Patil

India’s decision to block Chinese investments has led to a mini earthquake in the Sino-Indian investment corridor
Indian startups themselves covet Chinese funding, because it comes with real-time expertise on how to tweak their business models on a daily basis

MUMBAI: If India doesn’t want Chinese money,’’ said the executive of a venture capital fund in Beijing, “then more money will go to another country." The pragmatic, young Chinese man, experienced in doing business in India, already had alternative investment destinations in mind as we spoke online. New Delhi had changed its foreign direct investment (FDI) rules on 18 April, setting off alarms in Beijing.

“India’s not critical [to China’s investment plans],’’ he said. “Many investors will lose confidence and back off.’’

India has blocked the automatic route for investments from nations that share a land border to prevent “opportunistic takeovers/acquisitions" of vulnerable Indian companies as stock markets plunge during the coronavirus pandemic. The policy barrier against the dragon was raised soon after China’s central bank, the People’s Bank of China (PBC), raised its stake in housing finance major Housing Development Finance Corporation (HDFC) from 0.8% to 1.01%.

At the same time, several European nations are discussing or taking measures to block bids in struggling companies. France, Australia and Germany are among other nations that have taken recent measures to protect undervalued companies. No one has any doubt that all these measures have only one real target: China.

The Beijing executive, requesting anonymity because he isn’t authorized to speak to the media, said Indonesia, Thailand, Vietnam and the Philippines and parts of Africa could benefit from the diversion of Chinese tech funds from India.

China has been India’s fastest-growing source of FDI in the past five years. The Middle Kingdom has poured money into e-commerce, tech, retail, automotive and manufacturing sectors. No wonder the revised policy went viral on social media between the small network of Sino-Indian dealmakers— executives, lawyers, consultants and techies—who board flights nearly every month to the metropolises on both sides of the world’s two largest online marketplaces.

Some of them go on multimillion-dollar shopping sprees for Indian e-commerce startups. They then market these small firms with great promise to hopeful venture capitalists in Shanghai or Beijing who may, “in the blink of an eye", as one Indian frequent flyer from Delhi put it, decide to buy it up themselves. On every trip, they expand their closely guarded corporate guanxi, or network of techies and technocrats, hone their Mandarin or Hindi vocabulary and assess the pulse of the two emerging giants separated by the world’s longest disputed border.

This ecosystem is now in a state of suspended animation.

THE GREAT GAME

A decade ago, the Sino-Indian investment corridor wasn’t busy. In 2011, Chinese investment in India was just $102 million and it was difficult to entice Chinese CEOs to attend promotional events for Indian businesses in Beijing. Current estimates of total Chinese FDI in India vary between $5 billion and $8 billion.

Led by Baidu, Alibaba and Tencent, Chinese tech investors have pumped $4 billion into Indian startups and funded 18 of 30 Indian unicorns (startups with billion-dollar valuations) in the last five years, according to a Gateway House report released in February. The think-tank’s report noted that with its 200 million subscribers, the popularity of Chinese video app TikTok surpassed that of YouTube in India; Alibaba, Tencent and ByteDance compete with Facebook, Amazon and Google; smartphone makers such as Xiaomi and Oppo, and not Samsung or Apple, dominate the nearly half-billion-sized and fast-growing market of Indian smartphone users.

“The Indian market now,’’ as a Chinese venture capitalist was quoted in China Daily in February, “is like what China was several years back when mobile-based access to the Internet boomed." Here’s one indication: Chinese smartphone bestseller Xiaomi, which reportedly assembles three phones per second in India, announced plans in 2018 to invest ₹ 6,000 crore to ₹ 7,000 crore in 100 Indian start-ups in five years.

Indian start-ups themselves covet Chinese funding, because it comes with real-time expertise on how to tweak their business models on a daily basis. “[They] are fond of Chinese funds and expertise. An American investor can’t give them insights from a large vibrant market such as China,’’ said Santosh Pai, partner and head of the China desk at Link Legal India Law Services.

In China, the firm has clients from 40 cities, an indicator of the nationwide interest in the Indian economy. India’s embassy in China has also helped Indian start-ups secure Chinese funds.

WAIT AND WATCH

The Sino-Indian investment corridor stayed open for business and remained relatively insulated from periodic bilateral quarrels over Arunachal Pradesh, Jammu and Kashmir, Pakistan or the Indian Ocean. During the 73-day Sino-Indian military face-off at Doklam in 2017, investment evaluation proposals between firms were quietly continuing though anti-India travel advisories and anti-China boycott movements dominated the news.

“Chinese investments have a long-term goal to create industries of growth and development in India,’’ said Nazia Vasi, founder-CEO of consultancy Inchin Closer in Mumbai. “They have studied the economic landscape and invested with an aim to build scale.’’

Previously, central government approval was mandatory only for investments from Bangladesh and Pakistan. There were restrictions on acquisitions in critical infrastructure such as defence, telecom in border regions and certain pharmaceutical technologies. The Beijing executive quoted earlier said that India’s redirection of overall Chinese investment from the automatic to government route had instantly spread “concerns" and “uncertainty" in Chinese corporate circles. A sudden dip in confidence in India’s ease of doing business could potentially bring ongoing investment proposals to a temporary halt as venture capitalists go into a wait-and-watch mode.

Chinese fund managers are said to be worried about both existing tech investments in India and future fund-raising rounds. Loss-making Indian start-ups may need alternative sources to raise fresh funds quickly or face collapse. “A lot of investors are shocked,’’ said Pai. “The most panicky reactions are from those with investment transactions currently underway in India. One very big concern being heard is why China has been singled out.’’

OWNERSHIP UNKNOWN

Indian officials know that the Chinese FDI data available to them underestimates the true total. Large amounts of China-funded investment are routed to India from the US and global tax havens and financial gateways such as Hong Kong, Mauritius or Singapore.

Chinese investment ranks 18th-highest in India’s FDI inflows from countries, up from 28th in 2014 and 35th in 2011. The Indian Embassy in Beijing estimates $5.08 billion of cumulative Chinese investments in India until September 2019 comes with a rider that “these figures do not capture investment routed through third countries [such as] Singapore [and] Hong Kong, especially in sectors such as startups". Official Chinese data pegs cumulative investments in India at about $8 billion.

Venture capitalists, the majority of whom operate from Hong Kong, are stunned, and are wondering whether India may withhold automatic approvals or make difficult procedural demands if the ultimate “beneficial owners" are suspected to be in mainland China. “An entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the government route,’’ according to the revised policy from the Department for Promotion of Industry and Internal Trade (DPIIT), which will implement it. This would also apply to transfer of ownership of any existing or future FDI in any entity in India, directly or indirectly.

Chinese venture capitalists, famous for their willingness to close a deal in two or three days, now face the prospect of waiting for clearances for an unknown period, at least until the rules are clarified in detail. In coming months, if they observe that government approvals are disbursed speedily, they will remain interested. Until they know for sure, India may see its fastest-growing FDI source slow down.

China’s media has been quick to call India’s FDI restrictions as a “bitter pill to swallow" for a nation aiming to become a hi-tech manufacturing powerhouse.

The great competition among state governments to attract Chinese factories to make smartphone components and consumer goods is going hi-tech. Also, India envisages a 30% rollout of electric vehicles, or EVs, in its car market by 2030—a goal that largely depends on investments and know-how coming from China, the world’s largest EV market.

Then there’s India’s car market, the world’s fourth-largest. It has fascinated CEOs of Chinese car companies for a decade and brought investment of over $500 million in the sector recently.

As a state-backed daily in Beijing warned on Wednesday: India is not “the only choice" for Chinese manufacturers. “If it’s now risky to go to India, they will certainly turn to Southeast Asia, which, by comparison, appears more willing to accept a shift of low-end manufacturing from China,’’ said an editorial in Global Times.

MUTUAL MISTRUST

The sweeping nature of the block on automatic investments has raised questions in corporate China whether numerous Chinese investors could face the level of strategic distrust that Chinese telecom majors such as Huawei and ZTE tackle in India, the US and Europe over their alleged state links.

India’s plans to move to a 5G network are already muddled. Indian telecom majors, reportedly wary of Chinese core technology, are reaching out to alternative companies in South Korea and Japan. “There’s a lot of unease in China about the implications,’’ said Sridhar Venkiteswaran, CEO of Avalon Consulting. “The FDI policy could have been more nuanced and limited to strategic sectors.’’

The barriers are the latest outcome of the general lack of mutual trust in Sino-Indian relations. After years of economic dialogue, New Delhi is increasingly impatient with Beijing’s refusal to lower its intangible market barriers to products and services from Indian IT, pharmaceutical and agriculture.

China’s debt-trap diplomacy to build, own and control transport corridors on its Belt and Road Initiative (BRI)—which India has refused to join for reasons of sovereignty and lack of transparency—had already demonstrated Beijing’s appetite for strategic assets in 136 nations across Asia, Africa and Europe.

Chinese investments in start-ups have raised data security and privacy concerns. Two dozen Chinese tech companies and funds, led by tech giants such as Alibaba, ByteDance and Tencent, have funded 92 Indian start-ups, including unicorns such as Paytm, Byju’s, Oyo and Ola, according to Gateway House. “Alarming are the investments by China’s powerful BAT companies (Baidu, Alibaba and Tencent) in soft power projects in India—Artificial Intelligence, the Internet of Things and fintech,’’ its report on Chinese investments emphasised.

“That’s because the People’s Liberation Army of China and the Communist Party of China have a symbiotic relationship with China’s BAT, the makers of strategic domestic and overseas investments," the report stressed. It underscored a need to protect Indian online data harvested by Chinese apps and browsers from Chinese ownership, and to prevent Chinese state-backed censorship and propaganda on China-funded apps in India.

The Communist Party of China has complained of discrimination in its first reaction to the revised FDI rules. But Beijing has also indicated it’s keeping the door open for engagement. Remember, Sino-Indian diplomacy has ensured that investment ties expanded in spite of bilateral political tensions. Days before the announcement, India arranged import of millions of Chinese masks and medical equipment to battle the pandemic. New Delhi also stayed aloof from the US-led blame game directed at Beijing for spreading a “Chinese virus".

Reshma Patil is the author of Strangers Across The Border: Indian Encounters In Boomtown China.

24. India may be Apple's next big production hub

Livemint, 12 May 2020, Prasid Banerjee

Apple contracts manufacturers, Foxconn and Wistron, for production of its smartphones and other products
Currently, Apple produces iPhone 7 and iPhone XR in India

Electronics and technology giant, Apple Inc, plans to move almost a fifth of its production capacity from China to India. According to reports, the company wants to reap the benefits of the Indian government’s new production-linked incentives (PLI) scheme to encourage local production in the country.

Currently, Apple contracts manufacturers, Foxconn and Wistron, for production of its smartphones and other products. The reports suggest that the company will use these contractors to produce “up to $40 billion worth of smartphones" in India, mostly for export purposes.

The company holds a small share of the Indian smartphone market at the moment, so moving such a major chunk of its production here could only be for export purposes. Apple produces iPhone 7 and iPhone XR in India, while iPhone SE and iPhone 6S, which also used to be produced her, have been discontinued from Apple’s global product portfolio.

The company has not confirmed these reports as of now, but Apple has had some success in the Indian market in recent times. According to a report by the International Data Corporation (IDC) earlier this month, Apple took 62.7% of the market share in India’s premium smartphone market in the last quarter.

The company is also expected to benefit from the relaxation given on local sourcing norms by the Indian government late last year. At the time, Apple had thanked the government for its move and said it looks forward to “one day welcoming customers to India’s first Apple retail store".

There are rumours that the firm is ramping up retail efforts in the country. Apple currently sells through resellers in India but has not managed to launch its own stores. In a call with investors in February, Apple chief executive officer (CEO), Tim Cook, had said first Apple retail store is expected in 2021.

Apple recently announced iPhone SE globally, and will sell it in India too. The company has also announced the Homepod smart speaker, extending its portfolio beyond the usual smartphones and laptops that it's known for.

25. India signs US$ 1.5 billion loan with ADB to support India's COVID-19 immediate response

IBEF, Apr. 29, 2020

The Government of India and the Asian Development Bank (ADB) today signed a $1.5 billion loan that will support the government’s response to the novel coronavirus disease (COVID-19) pandemic, focusing on immediate priorities such as disease containment and prevention, as well as social protection for the poor and economically vulnerable sections of the society, especially women and disadvantaged groups.

The signatories to the loan agreement for the ADB’s COVID-19 Active Response and Expenditure Support Programme (CARES Programme) were ShriSameer Kumar Khare, Additional Secretary (Fund Bank and ADB), in the Department of Economic Affairs in Ministry of Finance, and Kenichi Yokoyama, Country Director, ADB, in India.

Earlier, the ADB’s Board of Directors approved the loan to provide budget support to the government to counter and mitigate the adverse health and socio-economic impact of the pandemic.

“We thank ADB’s timely assistance for the government’s immediate response measures to the coronavirus pandemic to implement (i) COVID-19 containment plan to rapidly ramp up test-track-treatment capacity, and (ii) social protection for the poor, vulnerable, women, and disadvantaged groups to protect more than 800 million people over the next three months,” said Shri Khare. “ADB’s financial and technical support will contribute to the sound implementation of the government’s far reaching emergency response programs launched in March 2020.”

“ADB is glad to support India’s bold measures to contain the COVID- 19 pandemic outbreak while protecting the most vulnerable people affected by movement restrictions, by fast-tracking and delivering the largest ever loan to India. We will continue to engage with the government to strengthen the implementation framework and capacities including monitoring and evaluation systems of its health services and social protection programmes so that the benefits reach to the poor, women, and other disadvantaged people,” said Mr Yokoyama.

Earlier, during the telephone call with Smt Nirmala Sitharaman, Minister of Finance & Corporate Affairs and ADB Governor on 9thApril 2020, ADB President Mr Masatsugu Asakawa conveyed ADB’s commitment to support India’s emergency needs for the health sector while alleviating the economic impact of the pandemic, as well as short- to medium-term measures to restore the dynamic economic growth of the country by exploring all available financing options. The CARES Programme is provided as the first support to meet the immediate requirements of the government.

Building on the CARES Programme, ADB is also in dialogue with the government for further possible support for stimulating the economy, support strong growth recovery, and to build resilience to future shocks. This includes the support for the affected industries and entrepreneurs particularly micro, small, and medium-sized enterprises (MSMEs) by facilitating their access to finance through credit guarantee schemes, MSME integration into global and national value chains through enterprise development centers, and a credit enhancement facility for infrastructure projects. Strengthening of public service delivery will be another important agenda, including the extension of comprehensive primary health services in urban areas, and of secondary and tertiary health care systems through PPP modalities.

India has taken several decisive measures to contain the outbreak of COVID-19 pandemic, including a US$ 2 billion health sector spending programme to expand hospital facilities, ramp up test-track-treatment capacity and launched a US$ 23 billion pro-poor package to provide direct cash transfer, provide basic consumption goods and free cooking gas cylinders to the poor, particularly to women, old and socially disadvantaged groups. It has also extended insurance coverage to frontline health workers engaged in COVID-19 response. The Central bank, Reserve Bank of India, has slashed policy rates, eased asset quality norms, provided loan moratoriums, taken measures to support exporters and allowed states to borrow more to meet their financing requirements. It has also pumped in massive liquidity to support banks, non-banking financial companies, mutual funds as well as taken measures to push the flow of funds to the MSMEs and the corporate sector.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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

***

AAPI

Pages

Saturday 16 May 2020

NEWSLETTER, 20-V-2020

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

– INDUSTRY, MANUFACTURE

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

NEWSLETTER, 20-V-2020

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

- INDUSTRY & MANUFACTURE

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

India and the World