HEALTH P6

Govt rules out U-turnon e-cigarette banThe government has no plan to roll back aban on electronic cigarettes, an official toldReuterson Saturday, as protests against themove by vapers in six cities drew scantsupport. India banned the sale and importof e-cigarettes this month.

BACK PAGE P12

PAN-Aadhaar linking dateextended to Dec 31The deadline to link permanent accountnumber (PAN) with Aadhaar has beenextended till December 31, a Central Board ofDirect Taxes order said on Saturday. Earlier,the deadline was September 30. This is theseventh time that the government hasextended the deadline.

COMPANIES P3

DHFL proposes to convert2.3% of debt into equityDewan Housing Finance (DHFL) has soughtapproval for conversion of 2.3 per centexposure of various categories of lendersinto equity at the price of ~54 per share,following which the creditors will own 51 per cent stake in the firm.

IN DEPTHThe voices of reason on climate

As countries reiterate old promises to controlclimate change, the young are showing theway. DDIISSHHAA SSHHEETTTTYY writes 7 >

FIVE-JUDGE BENCH CONSTITUTED TO HEAR PLEAS ON ARTICLE 370

The Supreme Court on Saturday set up a five-judge Constitution Bench headed byJustice N V Ramana which will commencehearing from October 1 on pleas challengingthe Centre’s decision to abrogate provisionsof Article 370 that gave special status toJammu and Kashmir. The Bench alsocomprises Justices S K Kaul, R SubhashReddy, B R Gavai and Suryakant. The Benchwill examine the constitutional validity ofthe scrapping of the Article’s provisions andthe subsequent presidential orders on it. ABench headed by Chief Justice Ranjan Gogoion August 28 had referred the matter to afive-judge Constitution Bench. 12 >

ON SUNDAY

SPECIAL

SPIDER-MAN WILL KEEPSWINGING IN MARVEL FLICKS

WORLD P8

HONG KONG PROTESTERS MARK5 YRS OF ‘UMBRELLA’ MOVEMENT

WORLD P9

PUBLISHED S IMULTANEOUSLY FROM BENGALURU, KOLKATA, MUMBAI AND NEW DELHI

www.business-standard.com

SUNDAY, 29 SEPTEMBER 201912 pages in 1 section

MUMBAI (CITY)~10.00 VOLUME XIII NUMBER 28

ANUP ROYMumbai, 28 September

Arate cut is almost certain inthe October 4 monetary pol-icy review to lift economicgrowth, expect economists

and market participants at large, butthe quantum varies from 15 basispoints (bps) to 40 bps. One of the 15participants polled even predicts apause. Economists, however, differ onwhether there will be room for furthercuts, especially after the recent taxbreaks given to the corporate sector,which is expected to create demandand boost growth.

Besides, there is a nagging dis-comfort that the banking system hasnot really passed on the 110-bp ratecut since February to the customers,except perhaps for retail customers.

Economists also say the presentrepo rate of 5.40 per cent should beadjusted back to the traditional sys-tem of multiples of 25 bps, after theunconventional cut of 35 bps in theAugust policy. So, at least in one leg,either in the October policy or there-after, the central bank needs to cut therepo rate by 15 bps or 40 bps to makethe cut at 50 bps or 75 bps.

“The cumulative space for ratecuts is 40 bps. Therefore, dependingon the size of cut in October, there issome more space, though limited,”said Gaurav Kapur, chief economistat IndusInd Bank. He expects a ratecut of 15-25 bps.

“There is a demonstrated sense ofurgency on the part of policymakers toboost growth. Also, inflationary pres-sures remain limited. Thus, we con-tinue to see a scope for further mone-

tary easing in the coming months,including 35-40 bp repo rate cut inOctober,” said Siddhartha Sanyal, chiefeconomist and head of research,Bandhan Bank.

Inflation, on the other hand, islikely to remain below the target of 4 per cent, say economists, in partdue to subdued core inflation, anddespite likely food price pressuresdue to erratic monsoon-inducedsupply disruptions.

“We expect a 25-bp reduction inthe repo rate in the October policymeet. Given the weak demand levelin economic activity, we expect theMPC (Monetary Policy Committee) tomaintain its accommodative stanceand expect the repo rate at 4.75 per

cent by FY21,” said Anubhuti Sahay,chief economist at Standard CharteredBank. Kaushik Das, chief economistat Deutsche Bank, also holds a similarview. State Bank of India’s group chiefeconomic advisor, Soumya KantiGhosh, on the other hand, expects a40-bp cut on October 4 itself. “Beyonda rate cut, we now firmly believe that acounter-cyclical policy response suchas tax cuts by the government is amuch better option than aggressiverate cuts against a jump in householdleverage in recent years,” Ghosh said.

He advised that rates should begood enough for the interest of thedepositors, particularly senior citizenswho have no formal social securitysupport. Turn to Page 4 >

T E NARASIMHANChennai, 28 September

The Reserve Bank of India (RBI) has initi-ated Prompt Corrective Action (PCA)against Lakshmi Vilas Bank (LVB) onaccount of a high level of bad loans, thelack of sufficient capital to manage risks, anegative return on assets for two consecu-tive years, and high leverage, the Chennai-based lender said on Saturday.

The action came after an on-site inspec-tion, under the risk-based supervision, wascarried out for the year ended March 31,2019. The regulator has advised the bank onrestrictions put in place and corrective stepsit needs to take. “The bank has taken note of(them) for necessary compliance, withprogress to be reported on a monthly basisto the RBI,” it said.

The bank said PCA would not have anyadverse impact on its day-today operations,including the acceptance and repayment ofdeposits. “There are no restrictions on oper-ations by depositors. The bank can alsoextend loans to all segments, except corpo-rates and stressed and high-risk sectors,”said a source in the bank.

The PCA plan covers various sugges-tions or measures to recover non-perform-ing assets (NPAs), reduce costs, boost capi-tal, downsize risk-weighted assets, andimprove profitability, among others. TheLVB management is in the process ofimplementing all of these, said sources.

The RBI move came days after the DelhiPolice’s Economic Offences Wing registereda complaint against the board of LVB, alleg-ing cheating and misappropriation of funds.Saturdays development could be a major setback for the proposed merger of IndiabullsHousing Finance with LVB, which is await-ing the RBI’s nod. Turn to Page 4 >

RBI puts LakshmiVilas Bank underPCA framework

The bank said PCA would not have anyadverse impact on its daily operations

FINANCIALS UNDER STRESSStandalone data in ~ croreNII Other income Netloss

Mar ‘18 120.5 38.3 -622.2Jun ‘18 130.2 60.5 -123.9Sep ‘18 151.0 71.2 -132.3Dec ‘18 138.8 61.1 -373.5Mar ‘19 140.2 57.5 -264.4Jun‘19 123.6 53.2 -237.2

CCAARR: Capitaladequacy ratioNNPPAA: Non-performing assetsSource: CapitalineCompiled by BSResearch Bureau

STOCK FEELSTHE HEAT(BSE price in ~)

(in %)

Explain ~60K-crbuy outside GeM,FM tells PSUs

ARUP ROYCHOUDHURYNew Delhi, 28 September

The top 32 state-owned enterprises have committedto spend nearly ~1.53 trillion in capital expenditure forfiscal year 2019-20, Finance Minister NirmalaSitharaman said on Saturday, after meeting heads of‘maharatna’ and ‘navratna’ PSUs.

Sitharaman also said the ministry was looking into~91,000 crore worth of purchases done by the govern-ment and PSUs outside the government e-marketplace(GeM) for goods and services. Of this, ~60,000 crore ofpurchases have been carried out by PSUs.

“It came as a shock,’’ the minister said, pointing outthat ~60,000 crore worth of purchases by PSUs weremade outside the GeM even when those goods andservices were available on the government’s e-market-place platform.

“There should be some reason. I have asked them totell me why they found it fit to purchase these outsidethe GeM,” Sitharaman added. Expenditure SecretaryGirish Murmu, who was also at the media briefing afterthe meeting with PSUs, clarified that around ~31,000 crore of similar purchases came from the government department.

At the meeting, Sitharaman asked the PSUs to front-load their capital expenditure and clear their out-standing dues by October 15. The idea is to give a boostto the economy through the frontloading of expendi-ture. The PSUs have also been directed to set up portalsby October 15 to enable monitoring of the status of pay-ments. The PSUs were told to come up with their capexrequirements for the next four quarters, similar to whatcentral government departments were told on Friday.

While briefing the media, Finance Secretary RajivKumar said the 32 major PSUs had spent ~48,077 crorein capex from April to August. Turn to Page 4 >

White House may block Chinese firms from markets

ALAN RAPPEPORT & ANA SWANSONWashington, 28 September

The Trump administration isdiscussing whether to block Chinesecompanies from listing shares onAmerican stock exchanges, the latestpush to try to sever economic tiesbetween the United States and China,according to people familiar with thedeliberations.

The internal discussions are intheir early stages and no decision isimminent, these people cautioned.

The talks come as senior officialsfrom both countries are scheduled toresume trade negotiations inWashington early next month.

President Trump, who hascontinued to give mixed signals aboutthe prospect of a trade deal withChina, said earlier this week that anagreement could come “sooner thanyou think.” His decision to delay anincrease in tariffs until mid-Octoberand China’s recent purchases ofAmerican agricultural products hasfuelled optimism that the talks could

produce an agreement.But the prospect of further limiting

American investment in Chinaunderscores the challenge that thetwo sides will continue to face even asthey try to de-escalate a trade war thathas shaken the global economy. Theadministration has already increasedscrutiny of foreign investment with aparticular eye toward China,including expanding the types ofinvestments that can be subject to anational security review.

Last week, the TreasuryDepartment unveiled newregulations detailing how a 2018 law,the Foreign Investment Risk ReviewModernization Act, will work toprevent foreign firms from usinginvestments like minority stakes tocapture sensitive Americaninformation. And the United Stateshas already blacklisted some Chinesecompanies, including Huawei,effectively barring them from doingbusiness with American companies.

Stocks dropped on Friday after areport on the deliberations was

published by Bloomberg News.The market continued to slidethrough most of the day. At close,the S&P 500 was down 0.5 percentand the Nasdaq composite index

was down 1.1 percent.Losses were particularly steep in

the technology sector, and amongsemiconductor stocks, two parts ofthe market that have been sensitive to

the latest updates on the economictensions between China and theUnited States.

Details of how the United Stateswould restrict Chinese companiesfrom American stock markets werestill being worked out and the idearemained in its early stages, thepeople familiar with thedeliberations said.

China hawks within theadministration have discussed thepossibility of tighter restrictions onlisted Chinese companies for manymonths. Supporters say the effortswould close longstanding loopholesthat have allowed Chinese companieswith links to its government to takeadvantage of America’s financial rulesand solicit funds from Americaninvestors without proper disclosure.

Skeptics caution that the movecould be deeply disruptive to marketsand the economy and risk turningAmerican investors and pensionfunds into another casualty of thetrade war. Turn to Page 4 >

©2019 The New York Times New Service

China hawks within the US administration have discussed tighter restrictions on listed Chinese companies for months

The effect of limiting Chinese firms from raising capital inside the US could besignificant, as 156 Chinese companies were listed on American exchanges witha total market cap of $1.2 trillion at the start of the year PHOTO: REUTERS

PM-KISAN has been able to reach 77 percent of the intendedbeneficiaries in Punjab,and only 57 per cent nationwide, for the April-July tranche. In comparison,about 80 per cent of farmer/labourerbeneficiaries under Odisha’s Kaliascheme, and Telangana’s RythuBandhu, have got their legitimatecash instalments by now.While PM-KISAN promises ~6,000 peryear in three instalments to each“farmer family”, Rythu Bandhupromises ~5,000 per acre per seasonto each “farm land holder”. ABHISHEK WAGHMARE & SANJEEBMUKHERJEE report 6 >

STATES’ FARMER SCHEMESMAKING DEEPER INROADSTHAN PM-KISAN

BJP supporters accord a grand welcome to Prime Minister Narendra Modi on his arrival after a week-long visit to the US, at Palam Airport in New Delhi on Saturday. The PM said the respect andenthusiasm for India had increased significantly on the world stage in the past five years PHOTO:PTI

PM’S HOMECOMING

PHOTO: KAMLESH D PEDNEKAR

PHOTO: PTI WHAT EXPERTS PREDICT

Siddhartha Sanyal Bandhan Bank

40bps

35-40bps

GauravKapurIndusIndBank

Rupa RegeNitsureL&TFinance

SoumyajitNiyogiIndiaRatings

15-25bps

Soumya KantiGhoshState Bank of India

Upasna BhardwajKotak MahindraBank

SameerNarang Bank of BarodaSamiran ChakrabortyCitibankSaugata BhattacharyaAxis BankHariharKrishnamurthyFirstRand BankKaushikDasDeutsche Bank

MadanSabnavisCAREAditi Nayar ICRAAnanth NarayanSPJIMRAnubhuti SahayStandard Chartered Bank

25bps

15bps

PAUSE

Inflation to stay within 4% target, say economists

Majority see 25-bpratecut in monetary policy

Top PSUs told to frontload capexto lift economic growth

MATT PHILLIPS, STEPHEN GROCER & ERIN GRIFFITH28 September

This was supposed to be the year whenthe US’ biggest start-ups would finallymake their triumphant debut on the stockmarket. Billionaire Silicon Valleyinvestors, sneaker-clad founders andbutton-down bankers all expectedenormous stock sales to turn companieslike Uber, Lyft and WeWork into a newgeneration of corporate giants.

It hasn’t quite turned out that way. Lastweek, WeWork postponed its plannedinitial public offering. Uber and Lyft soldshares earlier this year only to see theirprices collapse. On Thursday, Pelotonjoined the list as its shares slumped intheir first day of trading. Investors took alook and backed away, seeing overpricedcompanies with no prospect of makingmoney any time soon, in some cases ledby untested executives.

The rejection threatens SiliconValley’s favoured approach to buildingfirms. The formula relies on gobs ofmoney from venture capitalists to paperover losses with the expectation that WallStreet investors will eventually buy sharesand make everybody rich. If mutualfunds and pension funds are no longerwilling to buy once the firms go public,fledgling entities are unlikely to find

funding in the first place. “When the IPOmarket is hurting, it has a domino effecton valuations and venture capital deals,”said Steven Kaplan, professor (finance &entrepreneurship), University of Chicago.If it persists, that could make it harder forstart-ups to raise money, he said.

Much of the recent concern has beendirected at WeWork, a shared office spacecompany based in New York. As it beganto approach stock market investors, thecompany revealed losses of $1.37 billion inH12019. Investors also questionedfinancial dealings of WeWork’s chiefexecutive, Adam Neumann, and thecompany’s accounting.

On Tuesday, Neumann stepped downunder pressure from directors andinvestors. It is now uncertain when thecompany will return to the market.

Shares of rival Lyft have fallen 40 percent since the company’s debut in March.

The fitness start-up Peloton has alsoreported deep losses on its business ofselling high-end exercise bikes and live-streaming classes into users’ homes. Onthe stock’s first day of trading Thursday, itended 11 per cent lower than its IPO price.

“It’s becoming a tough time to gopublic, there’s no question,” said JohnFoley, chief executive of Peloton. “I’mhappy we got out, but I think it’s going toget pretty tight.” Other firms have delayedtheir plans.

Airbnb said last week that it did notplan to go public until 2020, later thanexpected. Palantir Technologies, the datamining firm the billionaire investor PeterThiel helped found, now does not expectto go public for years as it can continue toraise money from private investors, twopeople familiar with its plans said.

Not every prominent offering hasfloundered. Many smaller listings havesoared. Among the larger ones is theonline pinboard company Pinterest. Itsshares are up 44 per cent since it wentpublic in April. But Pinterest priced itsIPO conservatively, told investors that itwas close to profitability, and narrowed its

losses in the months since it becamepublicly traded. And the company isincreasing revenue — which comes fromadvertising — fast.

“Investors are buying the future, sohelp them pencil out the future,” said RettWallace, whose firm, Triton Research,analyzes tech companies that are goingpublic. “You can do that with Pinterest.You can’t do that with WeWork. You can’tdo that with Uber or Lyft either.”

Charles Kantor, senior portfoliomanager at Neuberger Bermanresponsible for managing more than $5 billion, said he asks a few simplequestions when considering an IPO

investments, including: can a company’sprofit margins hold up, what kind ofcompetition does it face, and canexecutives be counted on?

“The ones that we pass on, we don’tfeel comfortable with the answers that weget,” said Mr. Kantor. He did not invest inUber or Lyft, or Pinterest, for that matter.But he did buy shares of the online petstore Chewy, which went public in June.He said its profit margins, a large potentialmarket, and solid executive team were allreasons he was persuaded to buy.

In many ways, the current standoffbetween Wall Street and these giant start-ups comes down to a simple issue: price.

Because of expectations set by VCs,given the risks they face, the companiessimply asked for too much.

Uber, which private investors valuedat roughly $72 billion before its IPO, is nowworth $54 billion in the public market.Lyft, once said to be worth more than $15 billion as a private company, now has amarket cap of roughly $12 billion.

WeWork was last valued at $47 billionin the “late stage” market of matureprivate firms. In the run-up to its failedattempt to list shares, executives andbankers had discussed slashing thevaluation to $15 billion — but were stillunable to gin up enough interest.

The tepid response to these entitiesstands in stark contrast to the dot-com

bubble of 20 years ago, when shares ofstart-ups with little revenue or prospectsfor profit — like Webvan andTheglobe.com — were greedily bid up intheir market debuts.

“Everyone feared this would beanother bubble like in 1999 and 2000,”said Kathleen Smith, principal atRenaissance Capital, which providesresearch on IPOs and manages ETFs thattrack their performance. Now, the verdictfrom the stock market is that it’s theprivate investment binge that has gonetoo far. With a flood of cash, privateinvestors backing the hottest start-upshave inflated their valuations to a pointthat public investors cannot tolerate.

“Things have gone a bit nutty,” saidFred Wilson, a partner at Union SquareVentures, a New York based tech investor.This moment could be a turning point inwhat public market investors will acceptfrom highly valued, money-losing start-ups, he said.

“I think that’s very important forprivate markets,” Mr. Wilson said.

The recent troubles may stem fromthe long incubation period the largeststart-ups have had. Flush with fundingfrom VCs and other private investors, thefirms have not been forced to go to thepublic markets to secure financing likethey might have in the past.©2019 The New York Times News Service

Wall Street pokes at start-up bubble as IPO dreams fizzle out

IN BRIEF

Tesla labour practices, Musktweet broke the law: Judge

Tesla committed a series of violations ofthe National Labor Relations Act in 2017and last year, a judge ruled on Friday.The car maker illegally threatened andretaliated against employees, accordingto Amita Baman Tracy, an administrativelaw judge in California. A tweet that ElonMusk sent in May 2018, which suggested

employees who chose to join a union would give up company-paid stock options, was among the incidents the judge ruledwere in violation of the law. The judge’s order calls for Tesla tooffer reinstatement and back-pay to a fired, pro-unionemployee, and to revoke a warning issued to another unionsupporter. The ruling also calls for the firm to hold a meeting at itsassembly plant in Fremont that Musk must attend. BLOOMBERG<

GSK, AstraZenecatrial results maywiden drug use GlaxoSmithKline andAstraZeneca both reportedtrial results that will likelymake their competing drugsavailable to a wider group ofovarian cancer patients,possibly helping GSK catchits rival in a highly contesteddrug class. The firms saidseparately on Saturday theirrespective drug candidates— in a class known as PARPinhibitors — staved off thereturn of metastasizedovarian cancer in womenwho had responded toinitial standard treatment,reducing the risk of arelapse. AstraZeneca and itsUS development partnerMerck & Co said theirLynparza drug cut the risk ofthe cancer progressingagain by 41%. It was 38% forGSK's drug. REUTERS<

CIAL to give out27% dividend toshareholdersThe Cochin InternationalAirport (CIAL) on Saturdayendorsed the proposal of itsboard of directors to give outa dividend of 27 per cent toshareholders of thecompany. A decision to thiseffect was taken at the 25thannual general meeting(AGM) held here. Addressingthe shareholders as thechairman of the company,Chief Minister PinarayiVijayan said CIAL is one of thebest institutions in the stateand though there was a lotto mention about itsachievements during theprevious fiscal year, theobservance of model code ofconduct prompted him torefrain from it. CIAL hasregistered a net profit of~166.92 crore out of aturnover of ~650.34 croreduring the FY19. PTI<

RCap closes 21.54%stake sale in RNamfor ~3,030 crore Reliance Capital (RCap) hasannounced the completionof 21.54 per cent stake salein its MF arm RNam to jointventure partner NipponLife Insurance for ~3,030crore.It will furthermonetise its balance 4.28per cent stake in RelianceNippon Life AssetManagement (RNam)worth ~700 crore, RCap saidin a statement. RCap hadearlier sold 17.06 per centstake in RNam in threesuccessive offers for sale inthe past, aggregating over ~2,480 crore. PTI<

Hindustan Shipyardposts profit for4th straight yearHindustan Shipyard hasachieved an operating profitof ~68.08 crore and profitafter tax of ~36.23 croreduring FY19, said Sarat Babu,chairman and managingdirector, on Saturday. This isthe fourth consecutive yearit is achieving profit, he toldthe media. During FY19, allthree business segments —shipbuilding, ship repairand submarine refit — hadcontributed towardsachieving production valueof ~595 crore. The shipyardhas also taken steps for thewage revision for officersand workmen with effectfrom 2018 and the proposalshad already been sent to thedefence ministry and it isexpected to get approval indue course, he said. PTI<

Glenmark Pharmato raise up to $200 millionGlenmark Pharmaceuticalssaid its shareholders haveapproved a proposal to raiseup to $200 million (~1,413 cr)through issuance of debtsecurities, on Saturday. Theproposal was approved atthe company's annualgeneral meeting held onSeptember 27. “All theResolutions were declaredpassed with the requisitemajority," the company saidin a BSE filing. The firm plansto raise up to $200 million inIndian and/or internationalmarket through bonds,debentures or other debtsecurities in one or moretranches. PTI<

Vishwaraj SugarIPO to open on September 30 Vishwaraj Sugar Industries(VSIL), a Karnataka-basedsugar company, is enteringthe capital markets with aninitial public offering for 10 million equity shares of~10 face value through abook building process in aprice band of ~55–60 pershare aggregating ~55-60crore. The offer will open onSeptember 30 and close onOctober 4. VSIL has licensedsugarcane crushing capacityof 11,000 tonnes crushed perday and also makesrectified spirit, extra neutralalcohol, India-made liquor,vinegar, compost, carbondioxide besides power froma co-generation plant. Theshares of the company areproposed to be listed on theBSE and NSE.

BS REPORTER<

ADITI DIVEKARMumbai, 28 September

At a time of economic slowdown, whenmost industries do not expect stronggrowth — especially during the festiveseason — the express industry (a termfor those offering integrated shipmentdelivery services) has a slightly differentstory to tell.

Demand is not as high as last year,but those in the sector expect reason-able growth. “While we remain cautiousand are assessing the impact of slow-down, it will not be a downturn but low-er growth than last year,” said AbhishekChakraborty, executive director atDTDC. “If average demand growth ratewas 40-45 per cent last year, it will be 15-20 per cent this year. I will be sur-prised if it goes beyond 20 per cent.”

Chakraborty said the mood amongmiddle- and lower-income groups waspensive, since job security in severalsectors was low. “But, it does not takeaway the fact that people will spend dur-ing this season, as it is also more to doabout the culture and religious aspect.”

Sector entities believe attractivedeals will boost consumption in the sea-son. “The slowdown is affecting con-sumer behaviour and, consequently,spending. However, businesses hopethe festival season will bring a turn-around as customers start looking outfor deals,” said Ketan Kulkarni, chiefmarketing officer and head of businessdevelopment at Blue Dart Express.

“This year, the slowdown did affectconsumer sentiment but e-commercehas been less affected, as consumersconstantly look for variety and deals.Further, new shoppers get added to theonline consumer segment as internetaccess gets affordable,” said KSatyanarayana, co-founder and directorat Ecom Express. “We work pro-active-ly on value-selling propositions, a mix ofprice and packaging, primarily driven toaddress the needs of festive season ship-ping,” said Sandeep Juneja, vice-presi-dent (sales & marketing), DHL Express.

According to an Indian ExpressIndustry — 2018 report by Deloitte, thesector is expected grow at a CAGR of 17 per cent and reach a size of ~48,000crore in the next five years.

This will be driven primarily by e-commerce, significant demand fromthe small and medium business-to-business segment, and growth of thecountry’s cross-border trade, said thereport. Firms also said consumers inboth business-to-business and busi-ness-to-consumer entities, will prefer

express service to plain transportationfor the several differentiated servicesthe former offers.

“The consumer is no longer happywith simple transportation of goods,and in fact looks for end-to-end solu-tions that would include speed, execu-tion capability, and technology,” saidChakroborty. With GDP growth slow-ing to 5 per cent, the sector is expectedto see 8-8.5 per cent growth, a two per-centage point decline over last year, saidplayers. Being labour-intensive, the sec-tor creates employment for a large num-ber of people, directly and indirectly.

“Being an asset-light company,Mahindra Logistics uses its network ofbusiness partners for transportation anddelivery,” said Pirojshaw Sarkari, CEOof Mahindra Logistics.

Ecom Express expects 2-3 timessurge in festive sales via online shop-ping, and hence expects 20-30 per centjump in demand for last-mile deliverycustomers.

SUBHOMOY BHATTACHARJEENew Delhi, 28 September

Ride-hailing competitors Uberand Ola rolled out competingrider insurance products earlierthis week, through tie-ups withinsurance companies.

At the same time, insurancebroker Marsh has demonstratedanother example of usingblockchain to make it easy forclients, carriers, and brokers toshare real-time information andfeedback on how to book/holdthe best insurance covers.

Changes in technology andmarketing are cutting theground from the feet of India’smore than 400 insurance bro-kers. Therefore, it is difficult forthem to celebrate the liberali-sation of rules to allow 100 percent foreign direct investment(FDI) in their sector (insuranceintermediaries).

The field is, in any case,skewed with only the top six,including Marsh, Willis Towers

Watson, and Aon, which havejoint ventures with a concomi-tant foreign investment stakeof up to 49 per cent.

The challenge for everyone ishow to fend off competitionfrom insurance companies andthe sweep of technology, mak-ing their business models irrel-evant. The challenge will mountas giants such as Amazon andGoogle begin to compete withthe very same intermediaries.

“Consumer-friendly techgiants have set their sights onhealth care. They don’t yetcommand the landscape, buttheir disruptive power couldbring dramatic changes,” notesBoston Consulting Group leadauthor Sanjay Saxena in areport released in August.

While no proposals to raiseFDI above 49 per cent havecome in so far after theDepartment of FinancialServices issued the notificationon August 27, all the leadingbrokerages said — in a

response to emails fromBusiness Standard — that theywere studying the alternatives.

The Ola Money and Uber tie-ups demonstrate how insurancefirms — including even govern-ment-run ones — are forgingpartnerships with every possi-ble entiry to offer products.

These go beyond tie-upswith banks to reach clients tooffer insurance products, orestablish a big presence in cardealerships to offer motor insur-ance. Those are now passé.

New marketing plans aremaking insurance intermedi-aries irrelevant. This is why just

after the Budget announcementin July, the Insurance BrokersAssociation of India sent a list ofgrievances to Union FinanceMinister Nirmala Sitharaman.

Significantly they did not listthe raising of the FDI capamong those. This is possiblybecause foreign joint venturesare also members of the association.

Insurance intermediarieslike brokers critically providetrust for consumers, andblockchain removes the needfor cultivating that trust.

“New insurance processesand business models built onblockchain will call into ques-tion current orthodoxies andchallenge multiple pain pointsthat are prevalent across the val-ue chain,” notes lead authorJames Colaco in a Deloittereport Blockchain in Insurance.

A Gartner research esti-mates that even by conserva-tive estimates the large-scaledeployment of blockchain in

the sector is not more thanthree years away.

The advantage of ubiqui-tous presence intermediariesprovide is also being under-cutby general insurance compa-nies, here and abroad.

Brokers are supposed tooperate on behalf of customersagainst insurers while agentsrepresent the companies.

Both are under threat. Tie-ups with ride-hailing compa-nies by insurance companiesmake these intermediariesirrelevant.

Among India’s 421 interme-diaries on the list of theInsurance Regulatory andDevelopment Authority ofIndia, consolidation is there-fore likely to precede higherFDI. “Based on trends in tech-nology and changing businessmodels, consolidation amongthe intermediaries is quite pos-sible,” said S Mohan, principalofficer and director, PaavanaInsurance Brokers.

Express industrytargets 8% growth

Insurance brokers losing the race to technology

| Sector entities believe attractivedeals will boost consumption inthe season

| Players were also of the view thata consumer would prefer expressservice to plain transportation forthe several differentiated servicesthe former offers

| Primarily driven by e-commerce,significant demand from thesmall and medium business-to-business segment and growth ofthe country’s cross-border trade

| The sector creates employment fora large number of people, directlyand indirectly

EXPRESSION OF INTEREST

Data access curbs putfintech firms in a spotBusiness of credit information bureaus seen coming under threatDEBASIS MOHAPATRABengaluru, 28 September

With the Reserve Bank ofIndia (RBI) restricting fin-tech firms’ access to con-

sumer credit information, the busi-ness model of start-ups working onlending and consumer insights isbeing questioned.

Industry experts say this stepcould negatively affect the business ofcredit information bureaus that haveseen rising demand from fintechs inrecent years. The RBI last week askedbanks and non-banking financialcompanies (NBFCs) to stop provid-ing unregulated entities access toconsumer information held by cred-it bureaus.

Currently, the Credit InformationCompanies (Regulation) Act, 2005,(CICRA) defines rules relating to useand access to consumer data fromcredit bureaus such as TransUnionCIBIL, Equifax, Experian, and CRIFHigh Mark.

Banks partner fintech market-places and institutional agents andprovide them authorisation to accesscredit bureaus’ data. Sources saidsome fintech firms were planning askthe RBI to withdraw the order.

“While the RBI should have strictvigilance over the use of customerdata procured from credit informa-tion companies (CICs), disallowingthe fintech firms to access this data is

not healthy for this growing seg-ment,” said Dipti Lavya Swain, priva-cy and credit information law expertand partner at HSA Advocates.

With access to customer informa-tion, many fintech firms create con-sumer insights with the help of artifi-cial intelligence and data analyticsand offer them as a service to banks.Such insights help banks in theirlending decisions.

“With many banks not so heavilyinvested in new-age digital technolo-gies, or at least yet, they usually seekpartnerships with fintech firms fortheir technology and know-how andget insights into consumer borrowingand spending patterns. Such part-nerships help banks to detect fraudsby doing risk-based profiling of cus-

tomers,” Swain added.Companies such as Karza

Technologies, Onfido, Spocto, andTransUnion are into the data analyt-ics business and work with banks andnon-bank lenders.

Apart from fintech firms provid-ing technologies to providers of finan-cial services, even those fintechs thatare into lending as an intermediaryare likely to be affected.

“Online lenders that are workingas market places for lenders and bor-rowers are likely to be adverselyaffected,” said the founder of aBengaluru-based digital lender.However, digital lenders with anNBFC licence will not be affected bythis move because they can accesssuch data.

Indiabulls to sell London property for £200 mn PRESS TRUST OF INDIANew Delhi, 28 September

Indiabulls Real Estate onSaturday said the firm’sshareholders haveapproved a proposal to sellits London property to pro-moters for £200 million, inan annual general meetingheld on September 28.

Earlier, the firm had dis-closed its plans to focus onits India business and cutdown on debt. The resolu-tion to sell the property wasapproved by the requisite

majority of shareholders,stated a BSE filing by thecompany.

In the notice for AGM,the company had said: “Inlight of continuing Brexitrelated issues and uncer-tainty around it, theLondon property marketremains sluggish. ThePound has also had a sus-tained depreciation fromaround the time of Brexitreferendum result.”

The continued uncer-tainty regarding Brexit con-tinues to provide head-

winds for both the Londonproperty market and thepound, it said.

According to an assess-ment with lenders, a fur-ther loan of approximately£133 million will be availedto complete the ongoingconstruction on 22Hanover Square property(London property), and thefirm would not like to incurthis further additional debton its own balance sheetthe statement said.

Explaining further, ithad said, “To reduce debt

and to have its more focuson the Mumbai and NCRmarkets, the board of thecompany, had on an earlierdate, authorised andapproved divestment ofcompany's direct or indi-rect stake in the Londonproperty.”

It also said the promot-er has come forward toacquire the property for£200 million — signifi-cantly above the cost of itsacquisition, ie £161.5 mil-lion and CBRE, UK’s recentvaluation of £189 million.

With access to customer information, fintech firms create insights withthe help of AI and data analytics, and offer them as a service to banks

The Ola Money and Uber tie-ups demonstrate how insurancefirms are forging partnerships to offer their products

2 COMPANIES MUMBAI | 29 SEPTEMBER 2019 1>

MUMBAI | 29 SEPTEMBER 2019 COMPANIES 3. <

Vedanta has set a target tocontain aluminiumproduction cost at $1,500 pertonne. By when and how willyou achieve it?While a cost of production of$1,500 per tonne is our mid-term vision, we have given aguidance of $1,725 to $1,775 pertonne for FY20, and are oncourse to achieving it. Costsin the aluminium industry areprimarily driven by the costof its raw materials — alumi-na, bauxite and coal. We arefocused on unlocking opera-tional efficiencies and con-trolling cost drivers to ensurelower production cost.

Accordingly, we havesecured robust long-term con-tracts for bauxite with globalsuppliers along with thedomestic ones.

LME aluminiumprices are hoveringaround $1,700. Whatdoes this mean for thedomestic aluminiumproducers? Do you thinkglobal aluminium prices willstrengthen in the near term?The global economy has beenvolatile over the past quartersowing to several uncertaintiesand escalating trade wars.

LME prices reflect theseglobal trends too. Like everycommodity, we expect LMEprices to rebound. It is impor-tant to remember that alum-inium is the second-mostimportant metal in the worldand finds critical applicationsin key sectors. From thatstandpoint, the demand foraluminium will only surge.

How has the slump in theautomotive sector andsubdued economic growthaffected your salesperformance? Will it haveany bearing on your grossrevenues and profitability?The automotive sector inIndia has been facing a slow-

down over the past fewmonths, but it usually oper-ates via long-term contractsthrough ancillary units.

Vedanta has limitedexposure to the auto-motive sector and theslowdown has nodecipherable impacton Vedanta’s sales

and performance.

Flat-rolled products inaluminium are gainingtraction with a consensualforecast that it will be in thegrowth territory through2025. Does Vedanta intend tobranch out into thissegment?The use of aluminium flatrolled products defines thedegree of sophistication ofan economy.

Flat rolled products caterto a niche market in India asof now, but that is also evolv-ing slowly.

As our economy matures,the consumption of flatrolled products will increaseover the years. Vedantaalready maintains a pres-ence in the rolled productssegment through its 70 kgtonne facility at its Balcosmelter in Chhattisgarh.

More on business-standard.com

‘Vedanta has limitedexposure to theautomotive sector’As aluminium producers are disquieted by headwinds like soft LMEprices and soaring imports, Vedanta is focusing on reducing costsand ramping up portfolio of value-added products. AAJJAAYY KKAAPPUURR, CEO(aluminium & power), Vedanta, talks to JJaayyaajjiitt DDaasshh about Vedanta’splans. Edited excerpts:

INDIRA KANNAN Toronto, 28 September

Heralded by dhol beats and an energetictroupe of bhangra dancers, India’s Ministerfor Civil Aviation, Hardeep Singh Puri,flagged off Air India’s non-stop flight fromToronto to Delhi at the PearsonInternational Airport on Friday. The airlinewas resuming its service on this busy sectorafter a gap of seven years. Speaking toBusiness Standard, Puri said the Indiangovernment was committed to completingthe carrier's privatisation “within a definedperiod of time”, and the resumption of theToronto-Delhi flight was another step inthat direction. “We want to sell Air India as asuccessful, expanding concern,” he said.

In an interview, Air India’s Chairmanand Managing Director Ashwani Lohani,who flew into Toronto from Delhi on thefirst flight of the new service, added: “We’retrying to flog our planes so that we fly more.The single most important parameter forany airline is how many hours do you keepthe planes in the sky? We’re trying toincrease those hours and that adds value tothe airline.” Lohani said the airline wasadding a number of new flights by“bringing a couple of grounded planes backto life”.

Last year, the government failed toattract any bidders for its offer of a 76 percent stake in the airline.

This time, according to Puri: “100 percent is the current thinking everywhere, aslast time we went in wanting to retain 24 percent and clearly that was not conducive to

the process”. He declined to give details ofthe discussions among the Group ofMinisters or GoM that met earlier thismonth to discuss the sale, but declared,“I'm absolutely sure that we will completethe privatisation sooner rather than later.”Lohani said the Expression of Interest wasexpected to be finalised in October.

Asked if he was concerned about thereported opposition of employee unions to

privatisation, Puri replied, “No, I’m not,because whenever you undertake a processof this kind you will obviously ensurethose… there are issues relating to assets ofthe company, manpower, medical cover, sowe will look after all that. If you’redetermined to go through withprivatisation, then you will not allowyourself to be derailed by concern X or Y.”

At Pearson on Friday, bonhomie

prevailed as the flight and cabin crewgreeted the minister and posed forphotographs with him.

Puri said he was “appalled” that AirIndia’s popular daily service on this busysector had been withdrawn seven years ago,and added that he had made it a priority assoon as he got the civil aviation portfolio, toresume the flight.

Indian officials noted that there arearound 1.6 million people of Indian origin,as well as over 170,000 Indian students, inCanada.

Air India is starting off with three flightsa week on this route for now and hopes tobump it up to six flights a week by the end ofthe year, and then to daily service,depending on the traffic.

The demand was evident from the factthat the flights are fully booked for the nextcouple of months leading up to the peakholiday season.

The airline’s Deputy General Manager(Commercial) and Toronto co-ordinator,Sandeep Roy Choudhury, said their servicewas competitively priced againstcompetitors such as Air Canada, and UAE-based rivals Emirates and Etihad.

“We are offering two pieces of baggage,another USP for us, and that’s all the way tovarious destinations in India, andparticularly on long-haul flights, giving twopieces of baggage is a very big attraction forthe passengers,” he said.

The carrier is using the Boeing 777-300long-range aircraft for the roughly 14-and-a-half-hour flight. Puri left Toronto forDelhi on the inaugural flight.

GIREESH BABUChennai, 28 September

Eight Roads Ventures-backed EywaPharma, founded by two formerMylan employees, is looking atexpanding to the US and EuropeanUnion (EU) markets with a portfolio oflimited competition products. It plansto have a front-end marketing pres-ence in the US.

Targeting 16 products in the USmarket by the end of this year, EywaPharma wants to have its own label inthe world's largest single-countrypharma market, unlike most of itsIndian peers who dabble in thegeneric space.

The company has a total of 36products filed for approval betweenthe US and Europe. It has an approvalfor almost 20 so far. It launched itsfirst product in the US in September2018, and within a year it has launched12 products. The company is looking

at launching four more products inthe US and three products in the UKmarket before the end of this year.

"At this stage, we want to build agood presence in the US and Europe.In the second phase, a year or twofrom now, we will look at expandinginto other markets with ourexisting portfolio. Youngcompanies are better posi-tioned to address the marketbecause we are nimble foot-ed and fast to respond," said S Srinivasan, co-founder,Eywa Pharma.

Srinivasan, former CEOof pharma major Mylan in India andformer managing director ofShriram Venture (the holding entityof the various industrial businessesof the Chennai-based ShriramGroup), and R Jayakumar, formerhead of global business developmentand head of regional technical oper-ations for EMEA with Mylan, found-

ed Eywa in 2015. It is estimated that there are

around 800 products with value lessthan $200 million that have limitedcompetition in the US market.

Eywa picked a portfolio based onlimited competition, with low- to

mid-volume space wherethe overall median compe-tition is around three tofour companies. It alsowanted to be a front-endgeneric pharma company,which sells products withits own label, while mostIndian companies looked at

back-end with R&D and manufac-turing, and then went into front-endof marketing or continued to remaina back-end player.

The company manufacturesmost of its products in the US, whilesome are manufactured in India andexported to the US. Most of its prod-ucts fall under three segments —

pain management, cardiovascularand central nervous system (CNS)products.

Most large Indian pharmaceuticalcompanies have historically beenstrong in developing and manufac-turing high-quality, low-cost genericproducts, and have relied on their costcompetitiveness to win market sharein the US. This strategy helped com-panies in the first two decades of theIndian pharma industry, and up to2015. Now, with heightened price pres-sure and competition, the game needschange, said Prem Pavoor, partner,Eight Roads Ventures.

"Srinivasan and Jayakumar wereamongst the first few people torecognise that and, as a new entrant,believed they required a US salesand marketing team first. By estab-lishing a front-end in the marketfirst, it would help Eywa understandwhat the opportunities and gapswere, and based on those, they could

organise the rest of the supply chain.This is a company that has estab-lished a front-end-first structure, asopposed to what pharmaceuticalcompanies have historically done —start with back-end manufacturing,and then move to set up a front end,"he said. "We were primarily attract-ed to the investment by the world-class team, which has been able topenetrate the US market, and theconsolidated distribution structurethere, a very rare feat for a start-up,"he added.

In 2016, the company had raised$30 million from Eight RoadsVentures India (the proprietaryinvestment arm of FidelityInternational), US-based F-PrimeCapital Partners and EnvestorVentures together with its affiliates(part of the Shriram Group).Srinivasan said the company may notbe raising funds in the near future.

Eywa bats on front-end presence in the US & EU

Want to sell Air India as a successful concern: Hardeep Puri

DHFL gets new CEO on boardSUBRATA PANDAMumbai, 28 September

Dewan Housing FinanceCorporation (DHFL)has appointed Vajinath

M Gavarshetty as the new CEOon the recommendations ofthe core committee of lendersas well as the firm’s internalcommittee. Gavarshetty is theformer chief general managerof State Bank of India.

“This will help the lendersmonitor the working of thecompany,” said a public sectorbank executive.

The housing financier alsoheld its annual general meet-ing on Saturday, in which it putforth various proposals beforeits shareholders. The firm hassought approval for conversionof debt into equity, or new debtinstruments, as part of the res-olution plan.

According to the draft reso-lution plan (RP), 2.3 per centexposure to various categoriesof lenders — including debtfrom banks, bond holders,external commercial borrow-ings (ECB), borrowings fromNational Housing Bank (NHB),perpetual debt, commercialpaper borrowings, and subor-dinate debt — will be convert-

ed into equity at the price of~54, following which the cred-itors will own 51 per cent stake.

“…part of the resolutionprocess that is currentlyunderway, no principal hair-cuts will affect our creditors.Part of the debt will be con-verted into equity and will beoffered to all permissible class-es of creditors”, said KapilWadhawan, Chairman andManaging Director of DHFL,in his AGM speech.

The remaining loans will beconverted into new loans with9-, 10- and 21-year tenures.

In an exchange filing, thefirm said it had presented adraft resolution plan to insti-tutional creditors, including

banks, financial institutions,mutual funds, insurance firms,and other institutional bondholders.

The draft RP segregates thecompany’s debt, based on loanassets, into three categories —retail assets, developer loans,and slum rehabilitation. It hasbroken down every category tobe converted into multipleparts, each of which will have adifferent tenure/interest.

It had outstanding debt toof ~83,873 crore as of July 6 andloan assets to the tune of~89,476 crore — includingretail book of ~35,233 crore andwholesale book of ~47,610crore.

Cash flows from existing

retail assets are proposed to beused for restructuring liabili-ties of public depositors, to thetune of ~6,188 crore. However,no interest will be given to thepublic depositors.

Under the draft RP, ~24,619crore of the overall ~83,873crore will be converted into adebt paper of 21 years, with aninterest rate of 0.0001 per cent.Another ~10,707 crore will havea tenure of nine years, withoutany interest.

Of the remainder, loansamounting to ~40,594 crore areexpected to have a tenure of 10years, of which ~24,872 crorewill have a coupon rate of 8.5 per cent.

Another ~13,364 crore will

have a coupon of 10 per cent,while ~2,358 crore will bear nointerest. In the AGM, the hous-ing financier also soughtshareholders’ approval toeither sell, lease, or dispose ofassets to reduce the financialburden.

Other proposals put forthwere to increase the authorisedshare capital of the companyfrom ~828 crore to ~1,090 crore.“At present, the company hasan overdue liability of around~8,000 crore, which the com-pany will repay once the debtresolution process completes,”Wadhawan added.

“Through the toughestphase that our company hasbeen witnessing, it is notewor-thy that we have repaid almost40 per cent of our balancesheet without any fresh bor-rowings. This has been possi-ble only through asset moneti-sation initiatives,” he said.Moreover, the board alsosought shareholders’ nod toprovide enabling rights tolenders for appointment of anominee director on the board.

The voting on all resolutionsdiscussed in the AGM will bedone and the results declared inthe next couple of days.

Pepperfry targets two morefunding rounds before IPOYUVRAJ MALIKBengaluru, 28 September

Ahead of its proposed ini-tial public offering (IPO)in FY21, Pepperfry,

India’s largest online furniturebrand, may look at two morerounds of funding.

This includes $20-30 mil-lion in equity financing in thenext six months, said co-founder and CEO AmbreeshMurty (pictured).

The Mumbai-headquar-tered firm, which reported FY18sales of ~308 crore, is workingtowards profitability and hopesto achieve the milestone some-time in the next financial year.

“We have established a fair-ly clear leadership for ourselvesin the segment and now is thetime for us to start bringing inmargin structures more in linewith a business that is turningprofitable,” Murty told BusinessStandard.

Started in 2011, Pepperfrycompetes with Urban Ladder,horizontal players like Flipkartand Amazon, and furniturerental firms such as Furlencoand RentoMojo.

“Over the next six months,we would look to raise primarycapital in the company of about$20-30 million, effectively forgrowth and expanding ourlogistics footprint and experi-ence studios,” said Murty.

“And then, pre-IPO, we mayhave a secondary round to pro-vide exits to some of our exist-ing investors,” he said.

Usually, just before the IPO,companies get a new set of

investors in a largely second-ary share-sale to provide exitsto some of the earliestinvestors. This round typicallyhappens around six monthsprior to the IPO. Pepperfry isplanning a public float in thenext 14-18 months.

The furniture company hasso far raised around $200 mil-lion in equity funding fromplayers such as NorwestVenture Partners, BertelsmannIndia Investments, ZodiusCapital and Goldman Sachs. Inits more recent round in March

last year, it had raised ~250crore from US-based investorState Street Global Advisors.

Urban Ladder, its mainrival, is backed by KalaariCapital, SAIF Partners, Sequoiaand Steadview Capital.

In terms of sales, Pepperfryis the largest player in theonline furniture segment.

However, in the last twoyears, Amazon and Flipkarthave heavily increased focuson the furniture category, whileglobal major Ikea has also selec-tively started online commerce.

Add this, the rise of rentalplayers, including Furlencoand RentoMojo, is also nudg-ing furniture buyers towardsrenting.

“We see all these develop-ments as good for the category.It helps grow the category andgives customers more choices.All these names you men-tioned are an indication thatthe furniture market is largeenough and required a certaindegree of organisation. As amarketplace, we don’t think ofthem (other players) as compe-tition but as potential mer-chants who will sell onPepperfry at some point,” said Murty.

SoftBank bets on former Sprint boss to fix WeWorkGILES TURNER, SARAH MCBRIDE & LIANA BAKERNew York/London/San Francisco, 28 September

SoftBank Group is tappingMarcelo Claure (pictured) tohelp turn around WeWork, afterousting co-founder and ChiefExecutive Officer (CEO) AdamNeumann from the corner officeearlier this week.

Masayoshi Son, the head ofSoftBank, WeWork’s largestinvestor, has asked the formerCEO of Sprint to take a morehands-on role helping oversee aclean-up of the office-rentalcompany from his position atSoftBank, said people familiarwith the matter, who asked tonot be identified because thematter isn’t public.

No decision has been madeon his exact role, the people said.

Claure will help WeWork’snew leadership identify revenueand cost-saving opportunities,one of the people said.

Representatives for WeWork,SoftBank and Claure declinedto comment. In Claure, Sonwould be tapping an executivewith a track record of fixingcompanies and overseeing hisfirm’s investments.

The 48-year-old joinedSoftBank in 2013, when theJapanese firm boughtBrightstar, a phone distributioncompany Claure ran.

Son tapped him in 2014 torun Sprint, which he helpedturn around prior to the company’s pending sale to rivalT-Mobile US Inc.

He remains executive chair-man of Sprint.

Claure is currently chiefoperating officer of SoftBankGroup, CEO of its internationaloperations and a member of itsboard. He also oversees thefirm’s $5-billion technologyfund focused on Latin America,which it launched this year.

After clashing with RajeevMisra, head of the Vision Fund,the firm’s $100 billion invest-ment vehicle, Claure changed

his role at SoftBank, Bloombergreported in February.

Claure, already chief operat-ing officer of SoftBank Group,was tasked with leading a newLatin America investment fundand helping Vision Fund com-panies expand into that region.

He retained his duties over-seeing SoftBank Group assetssuch as asset manager FortressInvestment Group, Sprint Corp,

ARM Holdings Plc and WeWork.Neumann stepped down as

CEO officer of WeWork thisweek under pressure fromSoftBank and other backers.

Neumann was named non-executive chairman while sen-ior WeWork executivesSebastian Gunningham andArtie Minson were appointedco-CEOs.

The management shake-upcame after WeWork’s plan toraise $3 billion in an initial pub-lic offering this month disinte-grated over corporate gover-nance concerns and boardroomdrama.

The We Company, WeWork’sparent company, has likelydelayed its IPO until 2020, peo-ple familiar with the matter said this week. BLOOMBERG

Eywa Pharmawants to haveits own label inthe world'slargest single-countrypharma market

IN CLAURE, SON WOULD BE TAPPING AN EXECUTIVE WITHA TRACK RECORD OF FIXINGCOMPANIES AND OVERSEEINGHIS FIRM’S INVESTMENTS

BALANCING THE BOOKS:RESTRUCTURING PLAN

Apollo Hospitals Group signs MoU with WellysisApollo Hospitals Group hassigned a Memorandum ofUnderstanding (MoU) withWellysis, a spinoff company ofSamsung SDS South Korea, todevelop, manufacture andcommercialise cardiacwellness, diagnostic,monitoring and therapeuticdevices. The joint venture willbe set up in Chitoor, Andhra Pradesh.

The MoU was exchanged byRick Hongryul Kim, CTO/CMO andco-founder, Wellysis and HariPrasad, group president, ApolloHospitals Group.

The Group has set up over 40Cardiac Command Centresacross its hospitals and anydoctor across the country canregister to gain access to theknowledge and experience ofover 300 cardiologists across

Apollo Hospitals' ecosystem.The centre has modernconnected technologiesenabling Tele ECH Monitoring,CICU monitoring, Tele ECHOMonitoring , Remote Cathlaband ER Response Module. It willalso have facilities for trainingand development, and amanagement dashboard fortracking and control.

BS REPORTER

Converted to equity 1,764

Repaid in full 6,188

Debt, 10 yrs, 10% 13,364

Debt, 10 yrs, 8.5% 24,872

Debt, 21 yrs, 0.0001% 24,619

Debt, 9 yrs, no interest 10,707

Debt, 10 yrs, no interest 2,358

OUTSTANDING DEBT ~83,873 cr

MONEY MATTERS| Funding includes $20-30million in equity financingover the next six months

| Firm seeks funding forgrowth and expansion of itslogistics footprint andexperience studios

| Before IPO, firm may have a secondary round toprovide exits to some of its existing investors

| Furniture company hasraised close to $200 million in equity funding so far

The non-stop flight from Delhi to Toronto was heralded by bhangra dance and dhol beats

RAJ MEHTA

Debt mutual funds have comeunder the scanner over thepast one year — a rather

disappointing one due to defaults bythe Infrastructure Leasing andFinancial Services (IL&FS) and others companies. Corporates havedefaulted on their obligationstowards mutual funds even in thepast. Some of the names that come tomind are those of BallarpurIndustries, Amtek Auto, and JindalSteel & Power. But the recent spate ofdefaults, including names likeIL&FS, Zee EntertainmentEnterprises, Dewan Housing FinanceCorporation, Reliance-ADAG groupcompanies and Altico capital, com-ing one after the other in quick suc-cession, has awakened investors tothe risks in debt-fund investing.

Paying the price for asset-liabilitymismatch: Multiple factors haveled to the slew of corporates defaultswitnessed over the past year or so.IL&FS, an infrastructure giant, wasa complex web of more than 300companies. Its default last year hada domino effect on many compa-nies. Though most of the others thathave defaulted since then have nomonetary relationship with IL&FS,the latter’s default led to a liquiditysqueeze in the system and affectedlending by non-banking financialcompanies (NBFCs) especially. AsWarren Buffett has said: “Only whenthe tide goes out do you realise whohas been swimming naked.”Something similar happened withsome corporates and NBFCs. Solong as the times were good, every-body danced to the music. But assoon as there was a liquiditysqueeze in the aftermath of theevents of September 2018, severalcompanies and NBFCs were notable to roll over their short-term

papers. Asset-liability mismatch inNBFCs was a key factor responsiblefor defaults by some of them.

A collective failure: The next ques-tion that arises is: Who is to blame forthese defaults? Are fund managersto blame for holding poor-qualitydebt papers? Are credit rating agen-cies responsible for being lax and notchanging the ratings of these com-panies quickly enough as theirfinances deteriorated? Are credit rat-ing agencies not regulated tightlyenough? All the parties mentionedabove must share the blame to someextent, since it is the collectiveresponsibility of all stakeholders toprotect investors’ wealth.

Regulations tightened: Besidesdepending on credit rating agen-cies, fund houses need to buildstrong internal credit research capa-bilities to be able to spot troublewhen it is at a nascent stage. Nowthe regulations have also been tight-ened, and this will certainly helpthe industry deal with similar prob-lems in a better manner in thefuture. The regulator, the Securitiesand Exchange Board of India (Sebi),

has stipulated that at least 20 percent of the corpus of liquid fundsmust be invested in liquid assets.This will allow these funds to dealwith the redemption pressures that

arise in the wake of a default. Regulations now also allow side

pocketing in debt schemes in caseof a default. What this effectivelydoes is separate the papers of com-panies that have defaulted from thegood ones. Redemption is restrictedin the pocket that holds thesepapers. This has the potential tostem the tide of redemption thatfunds, which have suffered adefault, often face.

Some categories of debt mutualfunds will always take credit risk inpursuit of higher returns. A few ofthe corporates that funds haveinvested in will default even in thefuture. There is nothing wrong withfunds taking risks so long as theserisks are clearly defined and com-municated to the investors in thosecategories. Just as banks have non-performing assets (NPAs), mutualfunds will also have some invest-ments in corporates that default ordefer repayment.

Do the due diligence: Investorsneed to examine closely the port-folios of funds they plan to investin. Large exposure to a particularcorporate group can be risky. Look

for funds that are well diversifiedand have exposure to a large num-ber of corporates. Portfolio con-centration has the potential to offerbenefits in the case of equityschemes, but none at all in debtfunds. The less concentrated a port-folio, the more your risks are diver-sified. Furthermore, the returns arenot compromised because the devi-ation in returns of AAA-rated com-panies is usually not much (IL&FSwas an exception that offered muchhigher yield compared to otherAAA-rated companies).

If the investor’s primary goal isto preserve capital and earn a rea-sonable rate of return on it, then heshould stick only to overnight andliquid fund categories. On the oth-er hand, if he wants to earn analpha of 100-150 basis points (bps)compared to bank fixed deposits orliquid funds, and is willing to takecredit risk, then he may look atcredit risk funds and other suchcategories.

A final word on what debt mutu-al funds are up against in India.Here, they have to compete againstinstruments offered by the govern-ment and the Reserve Bank of India(RBI). Some of the schemes that thegovernment offers, like EmployeesProvident Fund (EPF), PublicProvident Fund (PPF), NationalSavings Certificate (NSC), and others, or RBI Savings (Taxable)Bonds give returns in the range of7.75-8.60 per cent.

Of course, an investor needs toconsult a financial advisor to opti-mise his portfolio in the matter ofhis liquidity and taxation needs(which debt funds can fulfil).Nonetheless, why would aninvestor take market, interest-rate,and credit risk when he has somany risk-free options that offerhigher yields? Only last week, theLabour Ministry notified that theinterest rate on EPF would be 8.65per cent for 2018-19, compared to8.55 per cent a year ago. If in adeclining interest-rate scenario, thegovernment is willing to increasethe rate of return on EPF, then itbecomes very difficult for severaldebt fund categories to competeagainst these instruments.

The writer is a fund manager with PPFASMutual Fund. Views are personal

1. Which was the highest grossing Indian movie lastyear? A. SanjuB. 2.0C. RaaziD. Sarkar

2. Modified duration of a bond depicts the extent ofchange in bond price due to a change in _________.A. InflationB. Maturity dateC. Call and put optionsD. Interest rates

3. ___________ depicts and studies the concept oftaxable income elasticity.A. Engel curve B. Beveridge curve C. Laffer curve D. Hubbert curve

4. The oldest bankin the world is located in _________. A. ItalyB.SwedenC. NetherlandsD. Greece

5. AbhinavKumar, who gained fame forhis role in theTrivago ads, recentlyjoined __________. A. GoogleB. PhonePeC. InstagramD. PayTM

Financial literacy

The quiz master is head - marketing, PPFAS Mutual FundSend your queries and feedback at yourmoney@bsmail.in

Solutions

1. B.According to IMDB, it grossed over ~700crore. Sanju was next, with around half thatfigure.

2. D.It expresses the measurable change in thevalue of a bond in response to a change ininterest rates.

3 C.It is a theoretical representation of therelationship between government revenueraised by taxation and all possible tax rates.One potential result of the Laffer curve is thatincreasing tax rates beyond a certain point willbecome counterproductive for raising furthertax revenue because of diminishing returns.

4. A.The Banca Monte dei Paschi di Siena wasestablished in 1472. It is located in Italy.

5. D.He joined them as vice president-productmarketing. Besides being the face of Trivago,in India he was also employed with the portalwhile advertising for it.

BS TUTORIALJayant Pai

INVESTMENT

4 YOUR MONEY MUMBAI | 29 SEPTEMBER 2019 1>

Opt for well-diversified debt fundsWhile portfolioconcentration canboost the returns ofequity funds, it offersno benefit in case ofbond funds

Your investment horizon must atleast be equal to or higher than theaverage duration of the fundcategory you invest in

Except in case of credit risk fundsand corporate bond funds, theregulator does not define how muchcredit risk other categories of debtfunds can take

Hence, take a close look at thequality of papers in your portfolio, orget an advisor to do so

The bulk of your debt fundinvestments should be in funds thattake neither credit nor duration risk

Stick to funds that do not investmore than 3 per cent of portfolio in asingle company or group

TIPS FOR CHOOSING THE RIGHT FUNDS

> FROM PAGE 1

The bank reported a lossof ~894 crore in 2018-19,significantly higher thanthe ~585-crore loss it post-ed the year ago.

The bank’s capitaladequacy ratio (CAR), inline with Basel III guide-lines, was 6.46 per cent asof June 30, 2019, asagainst 7.72 per cent as ofMarch 31, 2019, and 9.45per cent at the end of theJune quarter last year.

The bank has raisedcapital amounting to~188.16 crore by way of apreferential issue on pri-vate placement basis,under the non-promotercategory, to India BullsHousing.

The bank’s gross non-performing assets (NPAs)stood at 17.30 per cent asof June 30, as against15.30 per cent as of March31, 2019, sequentially. NetNPAs stood at 8.30 percent, as against 5.96 percent as of June 30, 2018,and 7.49 per cent as ofMarch 31, 2019, sequen-tially. The provision cov-erage ratio improved to63.08 per cent (55.80 percent as of June 30, 2018,and 62.08 per cent as of

March 31, 2019).The bank has got share-

holders’ approval to raiseup to ~1,000 crore byissuance of securities. Theresolution to raise fundsby issuance of securities,including AmericanDepository Receipt andGlobal Depository Receipt,was approved by share-holders in its annual gen-eral meeting.

The shareholders alsoapproved raising autho-rised share capital from~500 crore, divided into500 million equity sharesof ~10 each, to ~650 crore,divided into 650 millionequity shares.

RBI puts Lakshmi Vilas BankunderPCA framework

For the October-December quarter, theyhave pegged their capex pipeline ataround ~50,159 crore, and for January-March the commitment is around~54,700 crore, taking the total close to~1.53 trillion. Besides Kumar andMurmu, Economic Affairs SecretaryAtanu Chakraborty was also present.

When asked if this commitment wasan increase compared to what PSUswere planning beginning of the fiscalyear, Murmu said it was exactly thesame. The capex commitment mayincrease as some of the PSUs have plansto raise more from the market and oth-ers have indicated they may need moregross budgetary support. Chakrabortysaid that the PSUs’ capex plan will notaffect their ability to pay dividend toshareholders or buy back shares.

To deliberate on whether bank guar-antee is turning into a hurdle, a meetingis being planned between the RBI, thefinance secretary and select PSUs. “Wewill see why bank guarantee is becominga big hitch or hurdle in the governmentpaying up the 75 per cent post arbitrationawards. If that is the case, I want RBIhelp also. The finance secretary will sitwith RBI and sort this out,” the ministersaid. Sitharaman added that PSUs wouldreview post-arbitration claims withoutcompromising the companies’ interests.Murmu said the 32 PSUs had ~49,000crore worth of arbitration and ~43,000crore of counter-claims pending.

PEOPLE IN THE NEWS BINAY SINHA

Making an entry into financial services,Flipkart co-founder and internet billionaireSachin Bansal has taken a majority stake inBengaluru-based microfinance companyChaitanya Rural IntermediationDevelopment Services

Nearly 80 employees of C Vijayakumar-led ITservices company HCL Technologies atGoogle’s Pittsburgh office have voted tounionise, citing lower pay and benefits

ECONOMY1>

The effect of limiting Chinesefirms from raising capital insidethe United States could be sig-nificant. As of the beginning ofthis year, 156 Chinese compa-nies were listed on Americanexchanges and had a total mar-ket capitalisation of $1.2 trillion,according to the US-ChinaEconomic and Security ReviewCommission.

“The underlying concernshave merit, but how to deal withthem without creating a lot ofcollateral damage is tricky,”Patrick Chovanec, managingdirector at Silvercrest AssetManagement, wrote in a poston Twitter. “Abruptly delistingChinese firms en masse wouldclearly send shock wavesthrough markets.”

The idea gained traction onCapitol Hill this summer whenRepublicans and Democrats inthe Senate and the House intro-duced legislation that woulddelist firms that were out of com-pliance with American regula-tors for three years. The law-makers argued that Chinesecompanies have been benefit-ing from American capital mar-kets while playing by a differentset of rules. American com-plaints centre on a lack of trans-parency into the ownership andfinances of Chinese firms. Thebusiness community has longcriticised China for classifyingsome auditor reports on compa-ny finances as state secrets andoutlawing cross-border transfersof auditors’ documentation.

In 2015, the Chinese affili-ates of the Big Four accountingfirms — Deloitte Touch Tohma-tsu, KPMG, PricewaterhouseCo-opers and Ernst & Young —paid $500,000 each to settle adispute about their refusal toprovide documentation onChinese firms to the Securitiesand Exchange Commission,which an American judge hadruled was a violation of UnitedStates law. The White House hasgrown more interested in block-ing Chinese firms in recentweeks, with some in the admin-istration describing it as a toppriority. Officials say the topic isnot yet an issue in bilateralnegotiations with the Chineseand inserting it into the talkscould lead negotiations to fall

apart again.“This would be another step

in ratcheting up the pressure,”said Michael Pillsbury, a Chinascholar at the Hudson Institutewho said he raised the conceptof investment restrictions withthe White House after negotia-tions with China broke down inthe spring.

The White House declinedto comment.

The concept has dividedTrump’s advisers along theirusual fault lines, with PeterNavarro, Trump’s trade advis-er, advocating action andTreasury Secretary StevenMnuchin urging caution.

Discussions about newrestrictions comes as the Trumpadministration has been push-ing President Xi Jinping to openChinese markets to Americanbusinesses and investors and asChina has begun to relax someof its regulations that limit for-eign investment.

The logistics of enactingsuch a proposal remain some-what murky, particularly withlegislative action in Congresslargely stalled amid politicalgridlock. The SEC, which over-sees publicly traded companiesand the stock exchanges, is anindependent agency with threeRepublican commissioners andtwo Democrats and is notrequired to honour edicts fromthe White House.

The Trump administrationcould unilaterally imposerestrictions on national securi-ty grounds, as it has with tar-iffs, on the basis that Americanmoney is flowing to Chinesecompanies that pose a threat tothe United States.

The administration is alsoreviewing how leading invest-ment funds, including pensionplans for public sector employ-ees, funnel money to Chinesefirms and could try to place lim-its on those vehicles.

For example, the ThriftSavings Plan, the retirementplan for governmentemployees, is expected tochange its composition nextyear to include more expo-sure to emerging markets,including China.

That trend has been a natu-ral consequence of China’s eco-nomic growth. In 2019, Chinaaccounted for 129 of FortuneMagazine’s list of the 500biggest global companies byrevenue, while the United Statesproduced 121. Chinese compa-nies, including many state-owned enterprises, havebecome more important com-ponents of major stock indexesin recent years.

But China skeptics inCongress, the administrationand elsewhere fear that thearrangement is still funnelingAmerican taxpayer moneyinto firms that support theMade in China 2025 plan todominate global industries, ora troubling surveillance statein Xinjiang.

“We have unlimited financ-ing for the Chinese CommunistParty, and their front organiza-tions,” Stephen K Bannon, thepresident’s former chief strate-gist, said at a September 12 eventhosted by the Committee on thePresent Danger: China, anorganization that warns of anexistential threat from China.©2019 The New York Times News Service

White House may blockChinese firms from markets

The bank has gotshareholders’ approval to raise up to ~1,000 croreby issuance of securities

Majority see 25-bp rate cut in monetary policySoumyajit Niyogi, associatedirector of India Ratings andResearch expects a pause.“Amid the weakening of growthenvironment, interest rate elas-ticity falls more. Let's allow thefiscal policy arrest such propo-sitions at first, before the nextcut happens. Room will be avail-able at least 40 bps, but moreimportant is ensuring sustain-ability of the overall rate regimeat such level,” Niyogi said.

Even as there is room for afurther 35-40 bps cut in thefiscal year, Rupa RegeNitsure, chief economist atthe L&T Finance group, won-dered “if this will have anymaterial impact on reversingthe slowdown.”

“The magnitude of financialand real sector disruption islarge and current economicissues cannot be resolved com-

pletely by cyclical stimulusmeasures,” Nitsure said.

The bond market, though,will be keenly watching the fis-cal equations. Yields are alreadyup, fearing extra borrowings.And that should also weigh onthe minds of the MPC.

“The RBI and the MPC willstill be willing to cut rates evenbeyond October -- however,much will depend on how dataevolves. We could see a spike ininflation from Novemberonwards, and the questionsabout the quality and extent ofthe fiscal balance will also per-sist,” said Ananth Narayan,associate professor at SP JainInstitute of Management.

Harihar Krishnamurthy,head of treasury at First RandBank, said there could be a 25-bp cut in October, and a further15 bps at some point if the infla-

tion and borrowing calendarremains within limit.

“As of now, we expect the fis-cal deficit at 3.5 per cent of GDP.Hence, a 25-bp cut in Octoberwill be followed by another 15-bp cut in the repo rate inDecember,” said SameerNarang, chief economist atBank of Baroda.

There is, though, a real pos-sibility that the RBI may want tofrontload its rate cuts in Octoberand pause after that.

“Given the continued slug-gishness in growth, benigninflation, and global conditions,we still see room for furtheraccommodation. We expect 40bps of rate cut in October, withprobability of further rate cutsgetting minimised post the cor-porate tax cuts,” said UpasnaBhardwaj, chief economist ofKotak Mahindra Bank.

Explain ~60K-crbuy outside GeM,FM tells PSUs

MUMBAI | 29 SEPTEMBER 2019 ECONOMY 5. <

CRISIL DRIP

THE 2019 SOUTH-WESTMONSOON season has endedwith rainfall at 6 per centsurplus over the long period

average (LPA) at the all-Indialevel. A ‘normal’ season would mean rainfallat ±4 per cent of LPA.

However, uneven distribution of rains -both spatial and temporal — meant thatsowing was initially slow but gained pacelater. Excess rains in many places have alsodamaged crops, in addition to life andproperty. As of September 25, central Indiagot a thorough drenching, with rainfall 25 percent above normal. Relatively close was thesouthern peninsula, where cumulativerainfall was 16 per cent above normal.Deficiency, at 16 per cent below normal, wasthe highest in east and north-east, whereasthe northwest was 8 per cent short.

Half of the country* received ‘normal’rains this season. Compared with the past fewyears, fewer places saw normal rains, whileclose to a third saw ‘excess’ and the rest sawdeficiency. The good part is most regions thatreceived deficient rains enjoy good irrigationcover and therefore the impact on cropproduction would be somewhat cushioned.

Among major kharif growers, Karnataka,Gujarat, Maharashtra, Rajasthan, andMadhya Pradesh have received excess rains at23-37 per cent above normal. By contrast,Haryana, West Bengal and Uttar Pradesh haveseen rainfall deficiency of 20-43 per cent. AndBihar, which was deficient till the past week,has seen some catch-up.

Given the wild swings this year, deficiencyin many others, rapid catch-up in a few areasand delay in others, some damage to cropsand sowing is a given. The extent of thisremains a monitorable. To be sure, some re-sowing or delayed sowing has also takenplace, which would mitigate some of thedamage. That said, rainfall volume data alonedoes not tell the whole story. We need to alsoconsider vulnerabilities that arise frominadequate irrigation for a comprehensiveperspective on states and crops.

CRISIL’s Deficient Rainfall ImpactParameter (DRIP) does just that. The higherthe CRISIL DRIP score, the more adverse theimpact of deficient rains. We compare scoresnot just with the previous year, but also withthe last five years’ average, to get a moreholistic picture.

The latest DRIP scores show some stressin 4 states. The scores are the highest and alsohigher than trend in two of these - WestBengal and Bihar whereas the relativelybetter irrigated states of Haryana and UttarPradesh have scores that are higher on-yearbut lower than trend.* This refers to the 36 sub-divisions in the countrywhere rainfall is tracked by IMD

SOUTH-WEST MONSOON WINDS UP IN SURPLUS

State-wise DRIP scores

Crop-wise DRIP scores

WEST BENGAL

| 2018 | 2019 Average of last 5 years

0 10 15 2053.0

8.5

6.4

10.4

MAIZE

0 10 15 2057.5

6.93.6

RICE

0 10 15 2053.8

4.03.3

TUR

0 10 15 20511.0

9.72.8

JOWAR

0 15 2058.7

7.80.8

BIHAR

0 10 15 2055.5

UTTAR PRADESH

0 10 15 2057.4

2.3

HARYANA

0 10 15 2053.6

1

8.2

5.2

5.1

10

Source: Indian Meteorological Department, Ministry of Agriculture, CRISIL

Central Bank set to raise~2K cr via tier-II bondsABHIJIT LELEMumbai, 28 September

Public sector lender CentralBank of India plans to raise~2,000 crore capital throughtier-II bonds to meet the regu-latory norms for capital ade-quacy.

ICRA assigned ‘A+’ rating to the proposed bondoffering.

These rated instruments(tier-II bonds under Basel III)is a hybrid subordinatedinstrument with equity-likeloss-absorption features.

They are expected toabsorb losses once the “pointof non-viability” (PONV) trig-ger is invoked.

Central Bank will be oneof the two public sector banksthat will continue to work asan independent bank tostrengthen national presence.

The other bank isMumbai-based Bank of India.Central Bank is at presentunder the Reserve Bank ofIndia’s prompt correctiveaction (PCA) regime onaccount of high incidence ofbad loan and low capital base.

Under the PCA, the bankfaces restrictions on extend-ing big-ticket loans and incur-ring expenses.

The assigned rating fac-tors in the sizeable capitalinfusion by the Centre inCentral Bank. The Centreinfused equity capital of~6,588 crore in FY19. It pro-poses to infuse ~3,300 crorein FY20.

Moreover, the ratings aresupported by the majoritysovereign ownership of theCentral Bank, where theCentre holds 91.20 per centstake as on June 30.

Rains spark tomato price rise DILIP KUMAR JHAMumbai, 28 September

Tomato prices have doubled in thelast one month after supplyreduced from Maharashtra,

owing to incessant rains across majorgrowing regions.

Maharashtra is one of the largestgrowers of tomato.

Data compiled by Nashik-basedNational Horticultural Research &Development Foundation (NHRDF)showed almost 100 per cent increase intomato model prices in September to ~24a kg from ~14.50 a kg in the beginning ofthe month. Meanwhile, stockists rampedup supply to take advantage of the pricerise. Thus, total tomato arrivals jumpedto 519 tonnes towards the end ofSeptember from 368 tonnes in the begin-ning of the month.

Similarly, the price of tomato inMumbai jumped to ~25 a kg on Thursdayfrom ~16.50 a kg early September. InMumbai, the Agriculture ProduceMarket Committee (APMC) said onionarrivals declined to 378 tonnes onThursday as compared to 417 tonnes in

the beginning of September. Trade sources believe that tomato

supply from Maharashtra has slumpeddue to incessant rain in the state towardsthe fag end of the monsoon season.

Farmers in Maharashtra feed tomatoduring the September-October period tothe entire country with their early kharifvariety crop. It is followed by the sea-sonal kharif crop from Andhra Pradesh,Karnataka, Madhya Pradesh and Gujarat.

“Tomato arrivals have declined

sharply from Maharashtra which led to asharp surge in prices in the wholesalemandis. Farmers have reduced supplydue to water logging in the fields. Rain inthe last few weeks paralysed harvestingand thus, transportation of tomato,” saidShyam Lal, Deputy Secretary, AzadpurAPMC. Tomato sowing was delayed thisyear due to a three-week delay in theonset of the monsoon.

The vegetable’s planting was dis-rupted due to lack of soil moisture.

Following that, the uneven distributionof the monsoon hampered sowing withdrought in the initial phase in somemajor growing regions of the state.

Again, tomato farming was affectedby two rounds of floods across the state.

“There was a huge crop loss acrossMaharashtra. Delay in sowing resulted inthe proportionate delay in harvesting.While farmers are preparing to harvestthe pre-matured crop, continuous rainacross the state has eroded prospects tocash in on the higher tomato prices,” saidShivaji Pandurang Chubhale, chairman,Nashik APMC.

Interestingly, quality of the currentharvested crop is also poor with highmoisture content, thereby reducing theshelf life amid fears of spoilage.

Meanwhile, tomato processors,including chips and ketchup makers,have deferred their fresh purchases atthis price. These large corporates nor-mally purchase good quality tomato forfuture use. “There is no order from largebuyers at this price. They fill their coldstorage during peak arrivals when pricesfall sharply,” said a large tomato suppli-er in Vashi, near Mumbai.

Rates double in one month on reduced supply; processors stay away from fresh purchase

RATE CHART

Compiled by BS Research BureauSource: NHRDF

Model Price in ~QtlAug 31, Sep 27, %

2019 2019 chg

Mumbai 1,000 2,200 120.00

Abohar 1,500 2,868 91.20

Ahmedabad 1,500 2,850 90.00

Delhi 1,387 2,398 72.89

Amritsar 1,400 2,400 71.43

Kolhapur 1,150 1,500 30.43

FIT & PROPERYour weekly health guide

Blood pressure and its link to menopause

Menopause is the biologicalprocess of the end of themenstrual cycle of a woman.It occurs due to a naturaldecline in reproductive hormones when a womanreaches her 40s or 50s.Menopause leads to hormonal and biologicalchanges in the body including weight gain andhot flashes. Alongside these,it also raises the risk of heart conditions such as atrial fibrillation (abnormalheart rhythm) and highblood pressure.

Menopause, a heartdisease risk

n The level of estrogen, thehormone which plays a crucial role in overallhealth, declines followingmenopause. Low estrogenlevels impact the flow of blood and the heart needsto pump harder to ensureproper blood circulation,leading to increased bloodpressure. This in turn strainsthe heartn Increasing age and declin-ing metabolism mostly leads to womenbecoming less active. Thiscoupled with weight gaincontributes to high bloodpressure leading to heart diseasesn Apart from this, men-opausal women are sensitive to salt and excessive sodium in thebody can lead to water retention, thereby creating pressure on the blood vessels

Warning signs of high blood pressurein menopausal women

Following symptoms shouldnot be ignored inmenopausal women as theymay be an indication of highblood pressure:

n Palpitations in the heartn Family history of heart disease n Shortness of breathn Heaviness in the chest n Headachen Lightheadedness or dizziness n Diabetic or high cholesterollevelsn Obstructive sleep apnea(sleep disorder in whichbreathing repeatedly stopsand starts)

Preventive measures

n Monitor weight fluctuations and blood pressure n Consume healthy and bal-anced diet rich in fruits, vegetables and wholegrains n Increase consumption ofdairy products such as milk, yogurt and cheese to ensure adequate intake of calcium, phosphorus, potassium, magnesium and vitamins D and Kn Reduce intake of processedfood and saltn Get 150 minutes of exercisein a weekn Do not smoke, and avoid alcohol and caffeine n Keep stress in check

While it is necessary to maintain a healthylifestyle to keep blood pressure levels in control, one should undergoregular health check-ups for prevention. Womenwith high blood pressureshould create a personalised plan with their doctor to include diet, exercise and other lifestyle changes to keep blood pres-sure and heart disease incheck.

NARESH TREHANChairman & Managing Director,Medanta, The MedicityGurugram, Haryana

LISA RAPAPORT 28 September

People who work nightshifts or varied sched-ules that disrupt their

sleep may be more likely todevelop depression thanindividuals with 9-to-5 jobs, aresearch review suggests.

Researchers examineddata from seven previouslypublished studies of workschedules and mental healthinvolving a total of 28,438participants. Overall, shiftworkers were 28 per centmore likely to experiencemental health problems thanpeople with consistent week-day work schedules.

“We know that shift-workalters the circadian rhythm,that is our normal sleep-wakecycle which matches day-night cycle,” said LucianaTorquati, lead author of thestudy and a researcher at the University of Exeter inthe UK.

“This disruption canmake people moody and irritable, and lead to social isolation as shift-workerstime-off matches family andfriend’s work and life

commitments,” Torquati saidby email.

In particular, the studyfound, shift workers were 33 per cent more likely to have depression than people who didn’twork nights or irreg-ular schedules.

Shift workersalso had a higherchance of develop-ing anxiety, but inthis case the differ-ence was too smallto rule out the pos-sibility that it was due to chance.

Women appeared partic-ularly vulnerable to the neg-ative mental health effects of

shift work, researchers reportin the American Journal ofPublic Health.

Compared to women whoworked consistent weekdayschedules, women who

worked nights or splitshifts were 78 per centmore likely to experi-ence adverse mentalhealth outcomes.

Men, however,didn’t appear to havean increased risk ofmental health issueswhen they worked

nights or irregular schedules.The study wasn’t a con-

trolled experiment designedto prove whether or howwork schedules might direct-

ly impact mental health.It’s possible that people

with poor mental healthwound up in jobs with irreg-ular schedules, rather thandeveloping mood disordersafter they started workingnights or inconsistent shifts.

Even so, the results sug-gest that workers andemployees should be awareof the potential for workschedules to impact mentalhealth, Torquati said.

“Your brain is programmedto sleep during night hours(absence of light) to recoverfrom all the information it hasprocessed during the day,”Torquati said. “Conversely, daylight tells your brain it’s time to be awake and process information.”

“With shift-work you turnthis cycle upside down:process information & beingawake at night, sleep duringthe day, and this means thatbody functions that followsuch cycle are disrupted,”Torquati added. “This dis-ruption of functions canresult in irritability, nervous-ness, depressed mood, andultimately mental disorders.”

REUTERS

Shift work tied to poor mentalhealth, suggests new study

NICHOLAS BAKALAR28 September

Having an optimistic mind-set may reduce the risk forcardiovascular disease andearly death, a review of studies has found.

In previous studies, optimism has been shown tobe associated with a range offavourable physical healthoutcomes and with greatersuccess in work,school and relationships.

This newmeta-analysis,published inJAMA NetworkOpen, included15 studies thatmeasured opti-mism and pessimism byasking the levelof agreement with suchstatements as “In uncertaintimes, I usually expect the best,” or “I rarely expectgood things to happen to me.”

Analysis of the 10 studiesthat looked at heart disease,which pooled data on209,436 people, found thatcompared with pessimists,people with the most opti-

mistic outlook had a 35 percent lower risk for cardio-vascular events.

Nine studies with data on all-cause mortalityincluded 188,599 partici-pants and found that opti-mists had a 14 per cent low-er risk of premature deaththan the most pessimisticpeople.

The studies had an average 14-year follow

-up and con-trolled for various healthand behaviouralcharacteristics,including a widerange of cardio-vascular diseaserisk factors.

“It seems optimists havebetter healthbehaviours,” said

the lead author, AlanRozanski, a professor ofmedicine at the Mount SinaiSchool of Medicine. “They’remore likely to exercise andto have better diet. And there is evidence of direct biological effects — theyhave less inflammation and fewer metabolic abnormalities.”© 2019 The New York Times News Service

A positive outlook maybe good for your heart

ADITYAKALRA, MANAS MISHRA28 September

India’s government has noplan to roll back a ban onelectronic cigarettes, an offi-cial told Reuters on Saturday,as protests against the moveby vapers in six cities drewscant support.

India banned the sale andimport of e-cigarettes thismonth, warning of an “epi-demic” of vaping amongyoung people.

The action has affectedusers nationwide and theplans of international com-panies including Juul LabsInc and Philip Morris

International, as well as trig-gering court challenges bylocal firms.

Protesters convened onSaturday to call for vapingdevices to be regulated ratherthan prohibited. But organis-ers Association of VapersIndia said only about 400people turned up across sixcities, adding that someopponents of the ban fearedbeing targeted by police.

At one protest in the capi-tal New Delhi, several peopleused vaping devices. Amongthem sat a child with a posterthat read: “I don’t want mydad to be a smoker”.

The government argues

the ban is essential to protectpeople as vaping can lead to nicotine addiction andpush users towards consum-ing tobacco. Vapers say the devices help them stayaway from more harmfultobacco cigarettes.

More than 900,000 peopledie each year due to tobacco-related illnesses in India, thegovernment estimates. Butthe country has 106 millionadult smokers, second onlyto China, making it a lucra-tive potential market for com-panies selling both tobaccoand vaping products.

An Indian health ministryofficial said the government

was determined to stick by itsban, despite the protests andcourt challenges. “There is noquestion of a rollback or

anything like that,” the official said.

Two court challenges thatcould be pivotal for whether

the ban can continue to beenforced are under way in theeastern city of Kolkata,including one by e-cigaretteimporter Plume Vapour.

The company, in a courtfiling seen by Reuters, arguesthat the ban will allow ciga-rette companies to flourishwhile putting e-cigarettefirms out of business.

New Delhi protesterAryaman Chaudhary, 25, saidhe stocked up on vape refillsahead of the ban, but was wor-ried he would eventually runout. “I just want this regulat-ed, not banned ... Everybodyhas an addiction.”

REUTERS

Ban on vapes will stay, says official as protests fizzle out

HEALTH 1>

6 ECONOMY MUMBAI | 29 SEPTEMBER 2019 1>

India banned the sale and import of e-cigarettes this month

The study foundthat comparedwith pessimists,people with themost optimismhad a 35 per centlower risk forcardiovascularevents

Shift workers also have a higherchance ofdevelopinganxiety

ABHISHEK WAGHMARE & SANJEEB MUKHERJEENew Delhi, 28 September

Manjeet Singh (namechanged), a farmer fromPunjab’s Tarn Taran, was

clueless why he was not able to availthe third instalment of moneyunder the nationwide cash transferscheme, the Pradhan Mantri KrishiSammaan Yojana (PM-KISAN). Hisinstalment was rejected due to, ofall things, his mother tongue. HisAadhaar authentication failed asrecords in the bank concerned werein English, but Aadhaar details werein Gurmukhi. Aadhaar seeding—linking it with the bank and thescheme—is a mandatory require-ment under PM-KISAN for gettingthe third installment of ~2,000.

But, Manjeet isn’t alone. Latestdata shows that by September 20,around 36.1 million transactions forthe third instalment got rejected dueto difficulties in authentication. Thethird instalment pertains to August- November 2019.

“In some places, we receivedcomplaints that the beneficiaryname is spelt differently on theAadhaar and in the bank account.This is hindering the seedingprocess, and cash is not gettingtransferred,” said a senior official.

So far (till September 28), only24 per cent of the 73 million regis-tered beneficiaries have receivedtheir third instalment, the schemewebsite shows. Officials contendthat the universe has expanded to 86million now. However, officials arehopeful that the bottlenecks will becleared by November. A web optionfor corrections and faster seedinghas been introduced to smoothenthe process.

But difficulty in Aadhaar seedingis but one of the several reasons forthe slow progress of cash transfersunder PM-KISAN. Even for the sec-ond instalment (April-July), whereAadhaar seeding was not mandato-ry, only 57 per cent beneficiarieshave received cash.

In comparison, about 80 per centof farmer/labourer beneficiaries

under Odisha’s Kalia scheme, andTelangana’s Rythu Bandhu, havegot their legitimate cash instalmentsby now, their official data show.

While PM-KISAN promises~6,000 per year in three instalmentsto each “farmer family”, RythuBandhu promises ~5,000 per acreper season to each “farm land hold-er”. Odisha, under Kalia, promises~12,500 per year in a single trancheto every “small and marginalfarmer” in the state.

But why exactly is the centralscheme lagging behind similar pro-grammes offered by states? Whileall of them fall under the category ofcash transfer, the ways in which theyare implemented vary, and thatmakes all the difference.

States use data more effectively

Odisha (Kalia) uses the decadal pop-ulation Census of 2011, and appliessome approximations to arrive at thebeneficiary universe.

“The state agriculture depart-ment further uses existing data fromthe paddy procurement database,subsidy repository and food securi-ty lists to reconfirm the beneficiar-ies,” Saurab Garg, principal secre-tary for agriculture in Odisha, toldBusiness Standard.

In addition, the state departmentvisited all panchayats (villages) and

verified data of all farmers and land-less labourers in Odisha.

“We carried out this exercisebetween January and March, andscrutinised data in the block-leveland district-level committees. Wereceived 12 million applications ofwhich 6.4 million have beenfinalised as beneficiaries, and 5.1million have received money todate,” said Garg.

This system helped Odisharemove most of the irregularities indata, he said.

Telangana did it differently. Ittook two years to modernise its landrecords, invested more public fundsin the process. The 2014-born stategenerated first-hand data on alllandholders in the state, envision-ing a state-wide farmer schemeback then. Today, more than 92 percent of farmers already have digi-tised Aadhaar-seeded pattadarpassbooks (land records).

The state department made surethat all entries and relevant agricul-tural and revenue data for all landholders get filled.

With a good degree of land dis-pute resolutions, the accuracy ofdata has increased from 75 per centin the summer of 2018, to more than90 per cent now, said VakatiKaruna, director of land adminis-tration in Telangana.

“We have all land records online,and put transparently on our web-site. Land parcels where some infor-mation is missing are clearly visibleon the portal, and helps us fill thatgap faster,” she said.

The Centre, on the other hand,used the data from agriculturecensus, which is carried out everyfive years.

The biggest discrepancy in theagri-census is that it is developedfrom a survey of a sample. Secondly,it captures those cultivators too, whodo not have land records, who areshare-croppers with or without con-tract and those just tilling the land.

Though the agriculture censusgives the clearest idea of the numberof cultivators in the country, expertsfeel it is not the perfect kind of datato assess beneficiaries at the unit lev-el, due to a dearth of records.

Fund flow crashes despite fallin rejection rate

PM-KISAN was riddled with theproblem of high rejection rates inthe first instalment pertaining to theDecember 2018-March 2019 period.

Application of the eligible bene-ficiary needs to go through certainsteps such as validation, making cor-rections and authentication in thepublic funds management system(PFMS), which is the payment gate-way for all central funds.

But former agriculture secretarySiraj Hussain told BusinessStandard that the rejection rate hasdrastically dropped in the currentfinancial year.

“The rejection rate was 75 percent lower in the second instal-ment than in the first. Despite this,the cash flow to beneficiaries islower in the second than the first,”said Hussain.

Maharashtra and Uttar Pradeshled the rate of rejections at the PFMSlevel at the time of the first instal-ment, but were able to significantlyreduce it at the time of the second.

“You are the beneficiary” vs“Please apply”

The Centre and states differ in themanner in which they communi-

cate with prospective beneficiar-ies.

States have aggressively madeefforts to market their scheme,reach farmers’ doorsteps and getthem enrolled in the respectivescheme.If any discrepancy arose,the state department ensured thatit was solved, so that no eligiblefarmers was left out.

The central scheme PM-KISAN,on the other hand, requires thebeneficiary to get his bank accountand identification details seededto the scheme.

“Many persons who are count-ed as farmers in the agriculturecensus may not want to registerthemselves as farmers under a cer-tain scheme since they fear losingout on other benefits,” said a gov-ernment official on condition ofanonymity.

“Unnecessary paperwork drovesome farmers away while absenteelandlords would anyway not turnup,” he said.

Better the lead time, faster theimplementation

Finally, both the states, Telanganaand Odisha, spent considerabletime in finalising land records,linking bank accounts andAadhaar.

“The lead time of two yearsgave us the necessary window todo all the groundwork, which hasbeen the key reason for fasterimplementation,” said Telangana’sKaruna.

About 92 per cent ofTelangana’s land parcels are fully“accounted for” (attached to a landowner) at the moment, and thestate expects to reach the 95-97 percent level soon. The remaining,Telangana officials could be dis-puted or benami properties.

The Centre, on the other hand,announced the scheme in theinterim Budget in February 2019,without much concrete informa-tion on the number of beneficiar-ies it intends to cater to.

(Some names have been changed toconceal identity)

States’ farmer schemes makingdeeper inroads than PM-KISAN

Just around 20% of 8.60 crore beneficiaries registered so far under PM-KISAN have received their third instalment and the cut-off date is November-end

Allahabad Bank:The sheen thatfaded away NAMRATA ACHARYAKolkata, 28 September

In Satyajit Ray’s detective fictionJoi Baba Felunath, a hotel managermakes the protagonist, Feluda,familiar with the crème de la crèmeof Kashi.

Among the important people ofthe town, the first reference is to anagent of Allahabad Bank, employeeswere known as agents then, fol-lowed by prominent academics andbusinesspersons. That's the kind ofprestige the mid-sized public sec-tor establishment commanded tillabout a few decades ago.

With Allahabad Bank set to beamalgamated with Indian Bank, thelegacy of the oldest existing jointstock bank in India is set to fade. Italso marks the end of a bank inwhich two states with contrastingidentities — Uttar Pradesh andWest Bengal — took equal pride.

Today there are more protestmarches against the amalgamationin Allahabad, where the bank wasborn, than in Kolkata, where its head-quarters is located. Although in boththe cities the angst of losing a histor-ical identity runs deep, Allahabadsaw its genesis. While in West Bengal,there are close to 600 branches of thebank, in UP the count is about 1,000.

Set up in 1865, Allahabad Bankwas mostly nurtured by the Scots,known for their prudent banking. Itwas set up at a time when thePresidency Banks ruled the roost, andprivate-sector banks were short-lived.While a number of foreign banks hadestablished set-ups in India in themid-19th century, booming trade inAllahabad, well connected with therailways, necessitated a local bank.

The bank commenced operationson the first floor of a building in thebusy Chowk area in Allahabad. In theinitial years, it cautiously stayed awayfrom profitable businesses like exportfinance and foreign exchange. In thefirst eight months, the net profit ofthe bank was ~2,300, a book on thehistory of Allahabad Bank, releasedon its 150th anniversary, revealed.

After independence, Allahabad

Bank was treated as a foreign enter-prise, but its profits rose from ~16lakh in 1955 to ~17 lakh in 1960.

In 1969 Allahabad Bank wasnationalised, with the argumentbeing that as Allahabad Bank hadboth its head office and registeredoffice in Kolkata, for all practicalpurposes it was an Indian bank.Thereafter, about £1.3 million waspaid in annual instalments toStandard Chartered Bank.

By the late 1980s, most public-sector banks were saddled with highnon-performing assets (NPAs) dueto poor operating efficiency andimprudent lending. Allahabad Bankwas no exception. By 1994-95, thegross NPA to credit stood at 26.9 percent. The bank did an initial publicoffering in 2002, with its issue sub-scribed 3.68 times.

By late 2017, gross NPAs were 15per cent and by January last yearAllahabad Bank was under the RBI’sPrompt Corrective Action (PCA),which put curbs on lending. In 2018-19, the bank’s net loss expanded to~8,457.38 crore and its gross NPAratio stood at 17.55 per cent.

The bank owns prestigious prop-erties in Parliament Street in NewDelhi, Peddar Road in Mumbai, andIndia Exchange Place in Kolkata,apart from heritage properties inplaces like Allahabad, Nainital,Meerut, Jhansi, and Kanpur. In a fewmonths, as the buildings will get anew signage, it will also mark the endof an era in Indian banking.

Allahabad Bank was nationalisedin 1969

MUMBAI | 29 SEPTEMBER 2019 IN DEPTH 7. <

DISHA SHETTY

At the United Nations (UN)emergency climate summit,16 children, including India’sRidhima Pandey, said they

would petition the UN against five bigcarbon polluters in the world —Argentina, Brazil, France, Germany andTurkey — for violating their rights ofchildren by failing to adequately reduceemissions.

Pandey, 11, is from Haridwar inUttarakhand, and had, in 2017, filed acase against the Indian government atthe National Green Tribunal for failingto take action against climate change.

As countries reiterated old promis-es to control climate change, the youth,led by 16-year-old Swedish climateactivist Greta Thunberg, emerged asclimate leaders. “I should be back inschool on the other side of the ocean.Yet you come to us young people forhope. How dare you?” said Thunberg.

Every country, except the UnitedStates, has ratified the UN Conventionon the Rights of the Child. Of thosecountries, 45 have agreed to an addi-tional protocol that allows children topetition the UN directly about treatyviolations.

Within that group of 45, Argentina,Brazil, France, Germany, and Turkeyare some of the biggest emitters of thepollution that causes climate change.None of the five is on a path needed tokeep the planet from heating over 1.5 or2 degrees Celsius by the turn of thecentury.

The petition by children comes onthe heels of the latest report by theWorld Meteorological Organization(WMO) that said global temperaturehas risen by 1.1 degrees Celsius sincesystematic record-keeping began in1850, and by 0.2 degrees Celsius com-pared to 2011-2015.

“Climate change causes andimpacts are increasing rather thanslowing down,” said Petteri Taalas,secretary general of the WMO.

Antonio Gueterres, the UN secre-tary general, has praised Thunbergfor her leadership, calling it “absolute-ly remarkable”. The UN credits thepressure from the youth for pushingclimate action across countries.

Closer home, 600 mil-lion people living in theIndo-Gangetic plain standto be affected, as globalwarming causes Himalayanglaciers to melt, threaten-ing the steady flow of waterto the Ganga and its tributaries,according to World Bank estimates.

Nearly 148 million Indians live inareas that are “severe hotspots” of cli-mate change and are already wit-nessing large-scale changes, as a spe-cial IndiaSpend reporting project haschronicled. Climate change has led toa rise in extreme events like floodsand heatwaves. It threatens India’swater security and could wideninequality.

Yet, at the summit, India only reit-erated commitments already made

several years ago.

India’s plan

Despite efforts, CO2 (carbon dioxide)emissions continue to rise at a 2 percent growth rate. Currently China isthe highest emitter of earth warminggreenhouse gases (GHGs), followedby the United States (US), the

European Union (EU) andIndia.

Prime Minister NarendraModi was one of more than90 speakers at the climatesummit. India will scale uprenewable energy to 175gigawatt (GW) by 2022 and to450 GW in the coming years,

he said, without giving a specific dead-line. He also said that India wasfocussing on increasing the use of bio-fuels and was successful in providing150 million families with clean cook-ing gas. He reaffirmed India’s commit-ment against single-use plastic but saidnothing about reducing the use of coal,which has been flagged as a concern infast-growing India and China.

India is one of the few countries ontrack to meet the targets it set itself atthe 2015 Paris Summit and justifies theplatform the UN has given for it to

speak at the climate summit, saidLeena Srivastava, outgoing vice-chan-cellor of Delhi-based The Energy andResources Institute (TERI) School ofAdvanced Studies, and co-chair of theScience Advisory Group of the UNClimate Summit. “If you look at thetotality of it and not just one part of itthen I think we deserve to be on theplatform.”

“Science tells us that on our currentpath, we face at least 3 degrees Celsiusof global heating by the end of the cen-tury,” said UN Secretary-GeneralGuterres. He had set an ambitious tar-get for those in attendance: Reducecarbon emissions by 45 per cent by2030 and make it net-zero by 2050.

Policies to lower GHG emissionsmust triple to meet the 2 degreesCelsius target and increase fivefold tomeet the 1.5 degrees Celsius target setby the UN, found the latest WMOreport released on September 22 inNew York.

“We are at risk of crossing severalcritical tipping points in the countrysystems,” said Srivastava of TERI.“There is also in the science commu-nity a greater recognition of the factthat climate change impacts are hit-ting harder and sooner than what cli-

mate assessments had estimated near-ly a decade ago and that is somethingwe need to worry about.”

So far 66 countries have said theywill step up their NationallyDetermined Targets or NDCs — tar-gets to reduce carbon emissions thateach country sets for itself under the2015 Paris Agreement.

The UN had said that only coun-tries with strong plans would beallowed to speak at the New York

emergency climate summit, but mostcountries, including India, as weexplained above, only reiterated oldpromises.

“While countries were expected tocome to the summit to announce thatthey would enhance their climateambition, most of the majoreconomies fell woefully short. Theirlack of ambition stands in sharp con-trast with the growing demand foraction around the world,” said AndrewSteer, President & CEO, WorldResources Institute (WRI), a globalresearch organisation.

Pakistan’s Prime Minister ImranKhan repeated his earlier promise ofplanting 6 billion new trees.

The US President, Donald Trump,who was invited but had said he wouldskip the climate summit and send adelegation instead, made a briefappearance as PM Modi took to thestage. The US, one of the largest green-house emitters, has pulled out of theParis Agreement.

New Zealand Prime MinisterJacinda Ardern spoke of her country’sprior commitment to plant a billiontrees by 2028. She reiterated that NewZealand has also stopped issuing per-mits for offshore oil and gas exploration

and aims for 100 per cent renewableelectricity generation by 2023.

German Chancellor Angela Merkelsaid her country would phase out coalby 2038, an announcement she hadmade earlier this year.

Businesses pledge

Recognising the need to rope in corpo-rations, the UN has made an effort toencourage them to set ambitious tar-gets. Eighty seven major corporations—with a combined market capitalisationof over $2.3 trillion and annual directemissions equivalent to 73 coal-firedpower plants — are taking action toalign their businesses with the Paris cli-mate summit targets.

Banks financing development proj-ects and CEOs of companies said theywould stop investing in coal. “Coal isout of the window for funding,” saidPeter Hiliges, head, climate change atthe German bank KfW that funds devel-opment projects. Oliver Bäte, the CEOof Allianz, an insurance company, reit-erated their stand of not selling insur-ance to companies investing in coal.

In a recorded message, PopeFrancis called the post-industrial erathe most “irresponsible” and ques-tioned the political will to mitigate theimpact of climate change.

The UN has asked governments toend all subsidies to fossil fuel compa-nies by 2020, and incentivise renew-ables. “After all, is it common sense togive trillions in hard-earned taxpay-ers’ money to the fossil fuel industryto boost hurricanes, spread tropicaldiseases, and heighten conflict?”Gueterres asked at the climate summit.

“Fossil fuel companies must pay toclean up the mess they have made.Rich country governments must stopgiving handouts to those companies.Instead, they need to support com-munities on the frontline of the cli-mate emergency rather than thosewho created the crisis in the firstplace,” said Harjeet Singh, global leadon climate change at ActionAid, aSouth Africa based nonprofit.

The UN has also called for no newcoal plants from 2020, asking coun-tries to turn to renewable energyinstead. India currently gets over 76per cent of its energy needs from coal,as IndiaSpend reported earlier. Onlyone-twentieth of its energy comesfrom renewables, although it is a fast-growing segment. PM Modi was silenton coal during his UN address.

India and China continue to opennew coal plants despite the 2020 dead-line set by the UN, as these countrieshave to balance the energy needs ofthe underserved population whilemeeting climate targets.

“Yes, there are plans to build coal-fired power plants but we are doingvery well in terms of renewable ener-gy expansion,” said Srivastava of TERIon India.

Reprinted with permission fromIndiaspend.org, a data-driven not-forprofit organisation

PRANAB BARDHAN

In the midst of the hullabaloo aroundthe United Nations Climate ActionSummit I kept on remembering myfriend Marty Weitzman, one of thegreat environmental economists, whopassed away a few weeks back.

I first met Marty around the time Istarted teaching at MIT many decadesback. The first thing that struck meabout him was his accent — it sound-ed like a deep New York street drawl,which at first I had some difficulty infollowing. (I don’t know if his earlyyears in a New York orphanage wasresponsible for this. His mother diedwhen he was one-year old, and hisfather recently back from his militaryservice in the War, could not take careof him, and gave him over to anorphanage. Weitzman is actually thesurname of his foster parents.)

But soon I got used to his accentand his charming informality. At thattime he was a leftist, fresh from hisformative student years in the tumul-tuous sixties. He was a technicallysophisticated economist, but unlikemany others of his ilk, he grappledwith big systemic issues, which par-ticularly attracted me. We spent manyafternoons and evenings discussingthose issues, but unlike many on theleft he was a maverick, spurning clichésand thinking always out of the box. Fora time his main specialisation was com-parative economic systems; he evenlearned Russian for that purpose.

Over the years, his economicsbecame somewhat less radical. He oncetold me that in a recent visit to his par-ents’ summer cottage he discovered ona shelf his heavily marked old copy ofHayek’s Road to Serfdom. In his youth-ful radical days he had marked many ofHayek’s passages there with loud dis-missive comments like “BS-BS-BS”. But

now, he told me, he was surprised tofind how some of the issues Hayekraised were important, and he felt com-pelled to erase those profane markings.When in the early 1990s I wrote an arti-cle about how the old idea of marketsocialism (using the market mecha-nism to achieve objectives of social jus-tice) needs to be reformulated to takeinto account many of the incentive,information and organisational issuesraised by Hayek, Marty was a particu-larly appreciative reader.

He once attended a seminar I gaveon the theory of sharecropping in agri-culture. Some years later he told methat the more he thought about theidea of sharecropping, the more hebecame attracted to the applicationof the general idea to a systemic level,reforming capitalism with a shareeconomy (he later wrote a book on thesubject), where through profit-shar-ing labour and capital can coordinateto resolve the issues of unemploymentand stagnation. This was typical ofMarty, a brilliant exploration in a newdirection, following on the germ of anage-old idea.

His “Prices vs. Quantities” 1974

paper was, of course, a path-breakingpaper. Until then most of us believed inthe simple duality of the price-quanti-ty relation, which he showed breakingdown when there is uncertainty. Later,this was applied in an important wayin controlling environmental pollu-tion, quantitative controls sometimesdominating the tax-subsidy solutionwith the prevailing uncertainty.

He gradually moved to the field ofenvironmental economics, soonbecoming a leader in the field, chal-lenging some of the standard cost-ben-efit calculations, when we cannotignore the small but not entirely neg-ligible probability (in “fat-tailed distri-butions”) of catastrophic risk in thematter of climate change from green-house gas emissions. So his pleadingfor control of those emissions becameparticularly urgent and influential. Themain message of his 2015 book, ClimateShock (with his student, GernotWagner) is: “Most everything we knowtells us climate change is bad. Mosteverything we don’t know tells us it’sprobably much worse.”

He also thought deeply about therate at which society should discount

the benefit of future generations vis-à-vis that of the current generation andhow that rate changes over time. (Themore you value the current genera-tion’s welfare, the higher in general isthat discount rate). Some years backI remember receiving, like severalother economists in the field, anemail from him asking us for our voteon the appropriate social rate of dis-count. I responded to him, withtongue in cheek, saying, “Marty, ofcourse, it is 2 per cent!”

He has also important papers onthe economic theory of how to pre-serve bio-diversity under strict budg-et constraints (one of them is appro-priately titled, “Noah’s Ark”, butpublished in a technical journal likeEconometrica). All of these papers aremarked by deep theoretical insightsalong with practical operational ideasfor policy implementation.

He was intolerant of humbug andpomposity. When he was teaching atYale after his Ph.D at MIT, I asked him,as Yale compared to MIT should havemore of the classical humanities fac-ulty, if he interacts with them, givenhis wide-ranging interests. He deri-sively told me, when he saw them inthe faculty club, they were in the habitof speaking only in Latin, unintelligi-ble to him, a mere New York Jew!

It was a great shock to me when Iheard that he took his own life. Thereare speculations about his falling intodepression after being passed overby the Nobel Committee last Octoberwhen they awarded the Prize on envi-ronmental economics. If that is true,it is one more example of the simplefact that the Nobel Prize hasincreased the sum total of humanunhappiness. (Many years backwhen I said this to Amartya Sen, hetold me that he agrees to this, but hewould not put it in such crass utili-tarian terms).

Prize or not, very few people willdoubt that we have just lost one of themost brilliant environmental econo-mists in the world.

The writer is professor of Graduate Schoolat University of California, Berkeley

In memory of Marty Weitzman

MODI’S US VISITAAsshhookk SSwwaaiinn@ashoswaiWhile some youngsters protested outside#HowdyModi venue, their parents were insidethe stadium, cheering for Modi. Trump keptModiwaiting for one hour too.

VVeeddmmaalliikk@Vedmalik1Modi visit to USA. Wish Indian TV channels wouldnotgo overboard on its impacton India-Pakistan-USA relations & on Trump's responses..Duniya men bahutkuchh aur bhi hai....

DDrr DDaavviidd FFrraawwlleeyy@davidfrawleyvedEven American PresidentDonald Trump, notknown for supporting environmental protection,comes to hear @narendramodi's speech at the UN Climate Summit.

SShheekkhhaarr GGuuppttaa@ShekharGuptaModi has convinced the world except Turkey&China thatKashmir is India’s internal affair...Butenough nations, incl the US, are watchingwhathappens in Valleynext. Global patience withthe lockdown & arrests will soon run out

RRaajjddeeeepp SSaarrddeessaaii@sardesairajdeepGive him a mike and a captive audience, @narendramodi. shines more often than not.Liked the ‘yodha-buddha’ analogy.. also, theTamil quote.

IMRAN KHAN’S SPEECH AT UNGADDrr DDaavviidd FFrraawwlleeyy@davidfrawleyvedImran Khan speaks with anger, threats of violenceand nuclear jihad, criticizing America. @NarendraModi calls for ending terrorism andpromoting world peace and harmony, thankingAmerica for his visit. Difference between India and Pak is obvious.

SShheehhllaa RRaasshhiidd@Shehla_RashidModi govt's actions have created a huge softcorner for Pakistan in Kashmir. Three people fromKashmir told me over the phone that, after ImranKhan's UNGAspeech lastnight, there were rallies,celebrations, firecrackers in Kashmir. There's no diplomatic wayof saying this!

SSmmiittaa PPrraakkaasshh@smitaprakashSharp and stinging replybyVidisha Maitra, Indiato on Imran Khan speech at the #UNGA. She callshim byhis full name Imran Khan Niazi. Itwon'tbeloston Pakistanis or on Imran who never uses hislastname. Itwas LtGen Niazi who surrendered tothe Indian Army in 1971.

TTaarreekk FFaattaahh@TarekFatahAfter Pakistan's PM @ImranKhanPTIthreatened a nuclear war across the world in aspeech to the UN General Assembly, India's FirstSecretary responded with measured words thatreflect a civized democracy, nota barbaricmedeival jihadi state i.e. Pakistan.

PMC BANK CRISISFFaayyee DDSSoouuzzaa@fayedsouza"RBI has DECIDED to ALLOWdepositors towithdraw".......their own , hard earned, taxpaid, legal money........"notexceeding Rs 10,000" Shall we all clap for you now? #PMC_BANK

SSrriivvaattssaa@@ssrriivvaattssaayyAAll 12 directors of#PMCBankhave links with BJPRemember, Ahmedabad District CooperativeBank, with Amit Shah as Director, had highestdeposits of ?745 cr in just five days after DeMo!BJP using co-operative banks to lootpeople's hard earned money?

The voices of reason on climate

IMOA man intolerant of humbug and pomposity, he was undoubtedly oneof the greatest environmental economists in the world today

Children take part in a global protest against climate change in New Delh

Prime Minister Narendra Modi with USPresident Donald Trump in New York

As countries reiterate old promises to control climate change, the young are showing the way

AMBIVALENT ABOUTCLIMATE

India to scale up renewable energyto 175 gigawatt by 2022

New Zealand to plant a billion treesby 2028; 100 per cent renewableelectricity generation by 2023

Pakistan to plant six billion new trees

Germany to phase out coal by 2038

Allianz to stop selling insurance tocompanies investing in coal

The UN has called for no new coalplants from 2020

There arespeculationsabout hisfalling intodepressionafter beingpassed over bythe NobelCommittee lastOctober

AN indiaspend.org

STORY

8 WORLD MUMBAI | 29 SEPTEMBER 2019 1>

PostWeWork, IPO market slamsbrakes on unprofitable companiesJOSHUAFRANKLIN & LANCE TUPPER28 September

Companies making theirdebut on the U.S. stockmarket are getting a

rough welcome, especially ifthey are losing money, casting ashadow over the calendar forinitial public offerings for therest of the year.

The surprise postponementof the WeWork IPO has under-scored how confidence is erod-ing in the market both for com-panies looking to raise capitaland investors.

A more discerning marketfor initial public offerings con-tinued to punish PelotonInteractive Inc PTON.O onFriday, a day after it began trad-ing. Shares of the fitness startupclosed down 2% at $25.24 andare now off 13% from their IPOprice. The company is now trad-ing 15% below its WednesdayIPO price.

Before trading began onFriday, five of this year’s eightdeals of $1 billion or more weretrading below their IPO price,according to research firmDealogic. On a broader scale,only about 27% of the 112 dealsof $100 million or more weretrading below their IPO price.

Venture capital firms andother backers of many of thesehigh profile “unicorns” - com-panies valued at $1 billion ormore in the private market -had a higher tolerance for thepath to profitability, but even-tually they wanted to mone-tise their stakes.

Investors get more selective

In the past, public marketinvestors have typically expect-ed companies to become prof-itable within 18 months or so ofan IPO. This timeline has beenrelaxed with money managerseager to add businesses withfast-growing revenue to theirportfolios.

Recent deals, however, sug-gest an uncertain economicoutlook is pushing investors to

be more selective about whichloss-making companies theyare willing to back.

Peloton reported rapid top-line growth of 110% during thefiscal year that ended June 30.But the company also showednegative operating leverage,with operating expenses surg-ing 147% over the prior year.

Loss-making teeth-align-ment companySmileDirectClub SDC.O thismonth became the first U.S. IPOin three years to price above itstarget range and close down onits first trading day, according toresearch firm RenaissanceCapital.

Beyond Meat, Pinterestsurge

SmileDirectClub is the worstperformer among $1 billion-plus IPO deals, with its stockdown 43% since its debut earli-er this month, according toDealogic.

The best performer in thatgroup is social media companyPinterest Inc (PINS.N), whoseshares are up 39% since theirApril debut. Revenue atPinterest surged 58% to $463.2million in the first half of 2019.Net cash used in operationsduring that period narrowed to$16 million from a year-ago $29million, according to Pinterest’sfinancial statements.

Shares of Beyond Meat Inc(BYND.O), which came to mar-ket in May in a small $277 mil-lion deal, have surged morethan 500% since the IPO. Thecompany’s operating expensesmore than doubled during thefirst half of the year, but thatwas outpaced by top-linegrowth that more than tripled.

Average IPO return drops

Meanwhile, the average IPOreturn in 2019 was now about6% at the end of trading Friday,down from more than 30% atthe end of June and more than18% about two weeks ago.

In the United States, muchof the attention in the third

quarter has focused on a dealthat failed to come to fruition -the planned IPO of WeWorkparent We Company.

The company had aimed tolaunch its IPO earlier inSeptember, then postponedplans to list until later in 2019,before replacing itschief executive offi-cer and saying itwas reviewing itstimetable to gopublic.

EndeavorGroup Holdings(EDR.N), an enter-tainment and tal-ent agency compa-ny backed byHollywood powerbroker Ari Emanuel with atrack record of losses, made alast-minute decision to aban-don its IPO due to the toughmarket conditions.

Home rental giant Airbnbhas said it plans to list its sharesin 2020 but provided no detailsand is widely expected to do adirect listing to go public. In adirect listing no new shares are

created and investors can selltheir stakes while saving mil-lions of dollars in underwritingfees.

This month the companysaid it raked in more than $1 bil-lion in second-quarter revenue.It has not given details on

whether it was prof-itable.

Taking a lessonfrom the strugglesearlier in 2019 ofride-hailing compa-nies UberTechnologies(UBER.N) and LyftInc (LYFT.O), whichhave no statedtimetable forbecoming prof-

itable, investors have started topush back on companies with ahistory of steep losses.

“It will be a dialogueamong bankers and boardsand senior managementteams where they say, ‘thesewere isolated and not compa-rable,’ or say ‘we have a senti-ment shift and we need to bemore conservative and use a

different strategy,’” said DavidEthridge, U.S. IPO servicesleader at audit firm PwC.

While WeWork’s stock nevermade it to the market, it didfloat a $669 million junk bondin May 2018, and that plungedto near a record-low price onFriday.

The 7.875% note due in May2025 96208LAA9= fell 4 centson the dollar to 87 cents, just 1.5cents from its record low of 85.5cents in early January.

Its yield, which moves in theopposite direction, shot above11%. The spread of its yield overU.S. Treasury debt, a measure ofthe added compensationdemanded by investors to holdthe risky paper relative to safergovernment securities, mush-roomed to nearly 9.50 percent-age points, the widest ever.

A month ago, the bond hadrallied to a record high price of105 on We Co’s preparations forthe IPO. As the deal fell apart inrecent weeks, the bond has slidon concerns about the compa-ny’s lack of access to freshfunding. REUTERS

The surprisepostponement of the WeWork IPOhas underscoredhow confidence is eroding in themarket both for companieslooking to raisecapital andinvestors

HK protesters mark fiveyears since ‘Umbrella’street movement

JESSIE PANG & DONNY KWOK28 September

Thousands of protesters chant-ed anti-government slogansand sang their “Glory to HongKong” anthem on Saturday,marking the fifth anniversaryof the “Umbrella” pro-democ-racy movement as protestswhich have gridlocked the ter-ritory for weeks continued.

Families gathered at theharbourside Tamar Park, infront of central governmentoffices and the LegislativeCouncil, both of which havecome under attack for morethan three months, sparkingviolent street battles withpolice.

“It’s a special day for HongKong protesters. We will sticktogether to fight for freedom,”said Sam, 33, dressed in blackand wearing a mask. “Mostpeople think Hong Kong wasdying after five years, butmany people are still fightingfor Hong Kong.”

A series of protests for andagainst Communist Partyrulers in Beijing is planned forthe Chinese-ruled city aheadof the 70th anniversary of thePeople’s Republic on Tuesday,including at the consulate offormer colonial power Britain.

The Hong Kong building ofthe Chinese state-ownedinvestment company CITIC,next to the Legislative Council,ran a huge purple LED-lit ban-ner down its front commemo-rating National Day.

Anti-government protest-ers have attacked the legisla-ture, Beijing’s main LiaisonOffice, occupied the airport,thrown petrol bombs at police,vandalised metro stations andset street fires in more thanthree months of unrest.

Police have responded withtear gas, water cannon, rubberbullets and occasional liverounds fired into the air.

The MTR subway systemclosed entrances to some sta-tions on Saturday to preventfresh attacks. There weresome small scuffles withpolice who responded withpepper spray. Large, peacefulgatherings have often turnedviolent at night.

The student-led Umbrella

protests gridlocked the city for79 days in 2014 but failed towrest concessions from Beijing.

“They are not our chil-dren,” China supporter YauMei-kwang said of the front-line activists. “Because at thisage, they should be studying,not running to the airport,hitting people, hitting thepolice, insulting people. Thatis not right.”

A pro-democracy protesterwho only gave his name asWong defended the use of vio-lence. “We know that they willnot listen if we rally in peacebecause we are not on thesame level.”

Protesters spent the after-noon rebuilding “LennonWalls” of anti-government graf-fiti, some ofwhich were torndown by pro-Beijing activistslast weekend.

The largemosaics of Post-itnotes calling fordemocracy havecropped up inunderpasses, out-side shoppingcentres, at busstops and universities and out-side the Legislative Council.

Anti-government protest-ers are angry about what theysee as creeping Chinese inter-ference in Hong Kong, whichreturned to China in 1997under a “one country, two sys-tems” formula guaranteeingfreedoms that are not enjoyedon the mainland.

China dismisses the accu-sation and has accused foreigngovernments, including theUnited States and Britain, offanning anti-China sentiment.

“Lennon Walls carry thespirit of civil disobediencefrom the Umbrella move-ment,” said pro-democracyprotester Kelvin Law, 24.

“I am not sure when thisprotest will end. Either we winor we lose. But as long as weare united and fight, genera-tion after generation, we canachieve democracy.”

Protesters appealed toBritain two weeks ago to rein inChina and ensure it respectsthe city’s freedoms. They plan

to do so again on Tuesday. Britain says it has a legal

responsibility to ensure Chinaabides by the 1984 Sino-BritishJoint Declaration. At the sametime, it is pinning its hopes oncloser trade and investmentcooperation with China afterit leaves the European Union,due at the end of October.

Protests were sparked inJune by planned legislation,since withdrawn, that wouldhave allowed the extradition ofsuspected criminals to main-land China. But they havesince expanded into a broaderpro-democracy movement.

One of the leaders of theprotests, the bespectacledJoshua Wong, 22, said on

Saturday he willrun for local dis-trict council elec-tions inNovember.

“It’s time to letEmperor Xi(Chinese Presi-dent Xi Jinping)be aware thatnow is our battle,”he told reporters.“We stand in soli-darity, we standas one.”

The U.S. Congressional-Executive Commission onChina marked the Umbrellaanniversary with a statementdenouncing the “acceleratederosion” of Hong Kong’sautonomy.

“We call on the Hong Konggovernment to make the selec-tion of the Chief Executive andthe election of all members ofthe Legislative Council by uni-versal suffrage a priority andtake concrete steps tostrengthen Hong Kong’sautonomy,” it said.

Dan Garrett, a U.S. academ-ic who gave evidence beforethe commission, said onTwitter he was not allowed toland in Hong Kong onThursday for the first time in20 years of visiting and livingin the territory.

Official festivities forNational Day have been scaledback, with authorities keen toavoid embarrassing Beijing justas Xi seeks to project an imageof national strength and unity.

REUTERS

Anti-government protesters shield themselves using umbrellas during a protest in Hong Kong on Saturday REUTERS

A series of protestsfor and againstCommunist Partyrulers in Beijing isplanned for theChinese-ruled cityahead of the 70thanniversary of thePeople’s Republic onTuesday, including at the consulate offormer colonialpower Britain

PATRICIA ZENGERLE & IDREES ALI28 September

Democrats in the U.S. House ofRepresentatives who are pursuing animpeachment inquiry againstPresident Donald Trump forged aheadwith their probe on Friday, issuing asubpoena to Secretary of State MikePompeo for documents concerningcontact with the Ukrainian govern-ment.

Following a whistleblower com-plaint that Trump, a Republican,solicited a political favour fromUkraine’s president that could helphim get re-elected, the lawmakers areinvestigating concerns that Trump’sactions have jeopardised national secu-rity and the integrity of U.S. elections.

The House Foreign Affairs,Intelligence and Oversight Committeesalso scheduled depositions for fiveState Department officials over the nexttwo weeks, including Kurt Volker,Trump’s envoy to Ukraine. Volkerresigned his post on Friday, according

to sources familiar with the matter.The reason for Volker’s resignation

was not immediately known. The StateDepartment did not immediatelyrespond to a request for comment onthe subpoena or Volker’s resignation.

The committees announced thesubpoena after the Trumpadministration missed aThursday deadline to pro-vide documents and infor-mation about contacts withUkrainian officials, as wellas a July 25 telephone callbetween Trump andUkrainian PresidentVolodymyr Zelenskiy.

That call is central to theimpeachment investigation that NancyPelosi, the speaker of the Democratic-led House, announced this week.

The impeachment inquiry has casta new pall over Trump’s presidency justmonths after he emerged from theshadow cast by Special Counsel RobertMueller’s investigation into whetherhe colluded with Russia in the 2016

election.Trump has reacted furiously to the

impeachment inquiry, arguing he didnothing wrong, and accusingDemocrats of launching a politicallymotivated “witch hunt.” More than 300former national security officials from

both Republican andDemocratic administra-tions on Friday endorsedthe impeachment inquiry,saying they did not pre-judge the outcome butwanted to know morefacts.

As the subpoena wasannounced, Trump’s re-election campaign said it

would spend $10 million next week air-ing an ad called “Biden corruption” ontelevision and websites that accusesDemocrats of playing politics with theimpeachment investigation.

Former Democratic Vice PresidentJoe Biden is Trump’s leading rival in therace for the 2020 presidential election.

The White House this week released

a summary of Trump’s July 25 phonecall in which he asked Zelenskiy toinvestigate Biden and his son HunterBiden ahead of the November 2020presidential election - a call at the heartof the whistleblower’s complaint.

Hunter Biden served on the boardof a Ukrainian gas company calledBurisma when Biden was in office.There has been no evidence that theformer vice president used his positionto help his son in the Ukraine matter.

Ukraine’s anti-corruption investi-gation agency said on Friday it wasinvestigating permits given to compa-nies managed by Burisma during 2010-2012. Hunter Biden was hired in 2014.The agency said it would only go fur-ther if compelling new testimonyemerged.

The whistleblower raised concernsabout interactions that Trump’s per-sonal lawyer Rudolph Giuliani - whohas promoted theories about Biden’sactivities in Ukraine - had with formerand current Ukrainian officials.

REUTERS

House Democrats subpoena Pompeo for Ukraine documents

As the subpoenawas announced,Trump’s re-election campaignsaid it wouldspend $10 millionnext week airingan ad called‘Biden corruption’

HANNAH ELLIOT28 September

It’s comforting to know thatsome things never change.Markets may crumble, socialmedia may demolish civilsociety, but fresh pasta, goodwine, and the courtesy of Italiandrivers who move over on the A1when they’ve got a Ferrari ontheir tail—these things prevailacross generations.

They’re like the Colosseum.Or the V-8 turbo engine. That’sthe throbbing heart insideFerrari NV’s 2020 F8 Tributo, anew offering from the 70-year-old company. As the namesuggests, the $270,530 coupepays tribute to the almost-sacredengines that have powered theautomaker’s most successful carssince its first mid-engine V-8, inthe 1975 Ferrari 308 GTB.

The F8 Tributo is where Ifound myself in earlySeptember—yes, on a sunnysection of the A1 that runs fromModena to Milan and caters tothe most impatient of sightseers.With a 3.9-liter, 711-horsepowerengine, a seven-speed dual-

clutch gearbox, and 568 pound-feet of torque, it’s more powerfuland efficient than itspredecessor, the 488 GTB. Turbolag simply doesn’t exist here.

I looked for it, too. But as Inavigated the on-ramp at 30 mphand pushed through fifth, sixth,and seventh gears on my way to120 mph, the F8 Tributoaccelerated without hesitationand with absolute control. (Topspeed is 211 mph.) Climbing intothe craggy Apennine mountainsoutside Modena, poweringaround narrow single-lane roads,the car handled with laserlikefinesse. My drive wasincrementally smoother, moreagile, and more refined in allkinds of turns than what I’dexperienced with itspredecessors. And with a zero to62 mph sprint time of 2.9seconds, the car is lethally quick.A new engine note sings a cheerycantata rather than the growls orburps or wheezes of other cars inits class; the F8 Tributo made mefeel like a maestro conductingItaly’s grandest orchestra.

The method behind themusic, as it were, is the F8

Tributo’s weight. At just 2,932pounds, the car is 48 poundslighter than the 488 GTB.Advanced components derivedfrom Formula 1 technology haveshaved off mass: A novel exhaustmanifold saves 22 pounds;titanium connecting rods knock

off another 17.I pulled off to take some

photos at one point, and withinseconds an elderly womanemerged from her bleached-stone home, window shutterslaced with old Italian roses. Inher skirt and stockings—this is,

after all, the old country—shegesticulated energetically. Atfirst, I thought she was yelling atme for parking in front of herhome. Then I caught the word“bellissima!” She pointed at thecar and kissed her fingers like achef.

I shouldn’t have been sosurprised; the F8 Tributo is themost devastatingly beautiful carFerrari has made in a decade. Itcombines winning elements fromprevious models into a newpackage, pulling from a storiedhistory to make an automobilethat’s simultaneously familiar,reassuringly elegant, andaggressively modern. To wit: Thenew dual round rear taillights arelike those from the F40 of the late1980s and early ’90s, as are thelouvers in the cover atop thelegendary V-8 engine. Made fromultralight Lexan, the clear screenhas three slits at the center thathelp extract hot air from theengine compartment and allowfor admiration of the engine itself.

Elsewhere, the verticalheadlights of the 488 GTB arenow brilliant horizontal LEDsand have another practicalpurpose—to let new brake-cooling intake vents be placedoutside the bumper. The airintakes, which were etched onthe flanks of other recentFerraris, have been moved nearthe spoiler. A single massiveengine air intake duct on the

hood increases downforce by15%, redirecting high pressureflowing up from the bumper andpassing it over the front of thecar. Forged “starburst” wheelsare the exclamation mark on thewhole thing. The F8 Tributolooks feminine and strong,happily formidable, even playful.

But the car will be serious forFerrari’s bottom line. It’s one of arecord five model revamps thisyear, overhauls that will allow itto charge more for most of itscars. The marque is also makingmore of them; it hopes to ship10,000 in 2019, up from 9,251 lastyear, says Chief Executive OfficerLouis Camilleri. All this is aimedat higher profits.

With the F8 Tributo, Ferrarihas taken its beloved diamond V-8 engine, polished it, and placedit in a new setting. Thank God,some good things remain—though top brass declined to tellme, it may just be the last time wesee a non-hybrid engine on aFerrari of this mettle.

All of Italy pays respect—andmoves aside in tribute. Deliveriesstart in December.

BLOOMBERG

The most beautiful Ferrari in a decade pays tribute to race cars past

The author driving the 2020 Ferrari F8 Tributo in the hills above Fiorano Modenese, Italy

MUMBAI | 29 SEPTEMBER 2019 WORLD 9. <

GABRIELA BACZYNSKA & KATE HOLTON28 September

Irish Foreign Minister Simon Coveneywarned on Friday that time was run-ning out for Britain and the European

Union to hammer out a divorce deal withthe British Brexit minister also saying themoment of truth was approaching.

Prime Minister Boris Johnson hasvowed Britain will leave the EU on Oct. 31whether or not a deal has been agreedwith the bloc, and while both sides saythey are keen to reach an agreement,there is little sign of the deadlock beingbroken.

Johnson’s opponents say leaving theEU without a deal to keep most of its trad-ing arrangements in place would plungeBritain into economic chaos. The gov-ernment says it has made preparationsto avoid serious disruption.

The EU agreed a withdrawal packagewith former Prime Minister Theresa Maybut this was rejected three times by theBritish parliament over the “Irish back-stop” — an insurance policy to prevent thereturn of a hard border between theBritish province of Northern Ireland andthe Irish Republic.

After a meeting with EU Brexit nego-tiator Michel Barnier in Brussels, Ireland’sCoveney said negotiations had to be onthe basis of a “serious proposal” from theBritish on how they would replace thebackstop.

“That hasn’t happened yet and untilthere is a serious proposal in writing ...then the gaps that are wide at the momentwill remain. And time is running out,” hetold reporters.

Barnier said the bloc was firmly unit-ed on insisting on a legally operative fixfor the Irish border issue, saying it need-ed to avoid a hard border and protect theintegrity of the EU’s single market.

“The onus is on the British prime min-ister and his team,” Coveney said, addingthat Ireland was open to extending theBrexit departure date. “An extension ispreferable to no deal,” he said.

Britain is due to present concrete legaltexts on their Brexit plans next week afterthe Conservative Party conference.

This month, British lawmakers forcedthrough a law which compels Johnson toseek an extension to Brexit unless he hasagreed a new deal with the EU by Oct. 19or got parliament’s approval to leave with-out an agreement, an outcome a majorityof lawmakers and many businesses

believe would be calamitous. Johnson has repeatedly said he would

abide by the law, which he has dubbed the“surrender act”, but Britain would defi-nitely leave on Oct. 31, without explainingthe apparent contradiction.

“We will obey the law, but we’re confi-dent we can come out on Oct. 31 and thebest way to do that is to get a deal,”Johnson told reporters on Friday.

“That’s why the surrender act is sodamaging,” he added. “It has had theeffect with our European friends makingthem think: ‘maybe parliament can blockthis thing, maybe they will be forced toextend.’ If you’re in a negotiation thatobviously makes it more difficult.”

Britain’s Brexit minister StephenBarclay also met Barnier on Friday andsaid there was a long way to go until theyreached a deal.

“I think we are coming to the momentof truth in these negotiations,” Barclaysaid in a television interview, repeatingthe message that the backstop had to gobut a deal could be struck with good willon both sides.

Anger

With agreement still some way off,Britain’s exit from the European Unionstill remains clouded in uncertainty threeyears after the vote to leave, and the coun-

try remains utterly divided with animos-ity reaching ever new levels.

Parliament reached boiling point onWednesday when Johnson and his oppo-nents spent hours hurling allegations ofbetrayal and deceit across the chamberof the House of Commons.

Opposition lawmakers accusedJohnson of stoking hatred and cast him asa cheating dictator. One called him a liar.Johnson dismissed death threats againstfemale law-makers that echoed his ownlanguage as “humbug” and described thelaw brought by opponents to potentiallydelay Brexit as a “surrender” bill.

On Thursday, Johnson’s most senioradviser Dominic Cummings told politi-cians they should not be surprised by themounting anger and the atmospherewould get worse unless Brexit was deliv-ered.

“If you are a bunch of politicians andyou say that we swear we are going torespect the result of a democratic voteand after you lose you say ‘we don’t wantto respect that vote’. What do you expectwill happen?” said Cummings, the mas-termind behind the 2016 campaign toleave the EU.

Britain’s leading bishops intervenedon Friday to say all sides should moderatetheir language.

REUTERS

Moment of truth comingfor Brexit, warns EU

British Prime Minister Boris Johnson’s opponents say leaving the EU without a deal tokeep most of its trading arrangements in place would plunge Britain into economic chaos

IMANI MOISE28 September

After a difficult, months-longsearch for a new chief execu-tive, scandal-plagued WellsFargo & Co (WFC.N) named asits next leader Charles Scharf,a one-time Jamie Dimon pro-tégé known on Wall Street as adetail-oriented numbercruncher who excels instreamlining operations.

Scharf, 54, who joins thefourth-largest U.S. bank nextmonth, has been the CEO ofBank of New York Mellon(BK.N) and Visa Inc (V.N).

He served as a top lieu-tenant to JPMorgan Chaseand Co’s (JPM.N) Dimon dur-ing the financial crisis of 2008.He will become Wells Fargo’sthird CEO in as many yearsafter a wide-ranging salespractices scandal.

Some analysts saidScharf’s departure from Bankof New York Mellon, where heserved only for two years,would hurt the custodianbank. Bank of New YorkMellon named former financehead Thomas Gibbons as itsCEO on an interim basis. Itsshares closed 4.2% lower,while Wells Fargo rose 3.5% onFriday.

“He’s a good choice,” saidformer Wells Fargo CEO DickKovacevich. “He’s very expe-rienced in almost all of thesefinancial services areas.”

Scharf has his work cut outfor him.

Wells Fargo is operatingunder a regulatory micro-scope, as it tries to rebuild itsreputation with customers,investors and politicians afteremployee whistleblowersrevealed in 2016 that the bankhad opened potentially mil-lions of unauthorisedaccounts.

Since then, internal andregulatory probes have dis-covered other issues in thebank’s businesses, resulting in

billions of dollars in fines andpenalties.

Its core businesses andshares have lagged.

From 2016-2018, WellsFargo was the only bankamong the top four U.S.lenders to not grow loans ordeposits, according toRefinitiv data. Wells Fargoshares have fallen short of theKBW Bank Index as the boardlooked for a new CEO.Analysts cited uncertainlyabout management andfuture financial targets as atop concern.

On Friday, Wall Street ana-lysts applauded the bank’spick but warned that majorregulatory hurdles remained.

“The appointment of Mr.Scharf removes a major over-hang,” Saul Martinez of UBSwrote in a note to clients.

While the news cheeredWells Fargo investors, analystssaid it was a negative for Bankof New York Mellon.

KBW analyst BrianKleinhanzl said he was unsurewhat to expect from Scharf asWells’ CEO since his tenure atBank of New York Mellon last-

ed only for two years. He added that at Bank of

New York, Scharf had gone“on a hiring spree to bring inhis people, and now that hehas left, long-term strategy isin flux.”

Diversity goal

Scharf’s appointment is a winfor Wells Fargo. Sources havesaid that the board’s searchprocess was fraught, with lim-its on how much the bankcould have paid its new chiefexecutive and the require-ment that regulators approvedof their choice.

The board had said itwanted to find an outsider, akey parameter for satisfyingcritics in Washington. Theboard also initially looked thepossibility of hiring a diversecandidate, especially awoman, sources have previ-ously said.

But several candidatesthat the board approachedwere not interested in the job.At one point, the board con-sidered keeping its interimCEO, Allen Parker, on a per-manent basis.

Parker will return to hisprevious role of general coun-sel and help the companythrough its transition.

“They really realised thatthey needed a competent CEOwho could handle the issues atWells and the regulators, andit didn’t matter – race, gender,those things were secondary,”one of the sources familiarwith the matter said, referringto the board.

Wells Fargo spokesmandeclined to comment on thenature of the search process. Aspokesman for the Office ofthe Comptroller of Currencysaid the banking regulator hadsigned off on Scharf’s hiring,clearing a major hurdle in theexecutive search process.

Two sources who knowScharf describe him as some-one more at home with num-bers. When he became theCEO at Visa, people joked thecompany had two chief finan-cial officers - the actual CFOand Scharf, one of the sourcessaid.

At Visa, he is credited withtransforming the paymentgiant’s technology platformand saw the stock price morethan double. Scharf wastasked with reinvigoratinggrowth at BNY, a custodianbank which executes backoffice operations for assetmanagers.

There he quickly madechanges designed to make thecompany more efficient likeoverhauling meetings andmaking leadership changes.So far those changes have notpaid off as BNY shares aretrading lower than whenScharf took the helm.

One of the sources saidScharf always had aspirationsto be the chief executive of abig bank. If his tenure at theSan Fransico-based bankgoes well, Scharf will have aclaim to the same fame as hisone-time boss Dimon, thesource said. REUTERS

Wells Fargo taps one-timeDimon protégé Scharf tolead turnaround

On Wall Street, Scharf is known as a detail-oriented numbercruncher who excels in streamlining operations

DONKEY BUSINESS

An Afghan man loads ballot boxes and other election material on a donkey to be transported to polling stations notaccessible by road in Shutul, Panjshir province, Afghanistan. The country voted for a new president on Saturday REUTERS

DAVID SHEPARDSON28 September

Fiat Chrysler AutomobilesNV and its U.S. unit will pay$40 million for misleadinginvestors about its monthlysales figures and will resolvea lengthy probe by the U.S.Securities and ExchangeCommission (SEC).

Over a five-year periodfrom 2012 through 2016, FiatChrysler’s U.S. unit used aseries of fraudulent moves tofalsely report new vehiclesales and falsely tout a“streak” of uninterruptedmonthly year-over-year salesgrowth, when it had actually ended in September2013.

In July 2016, the companyrevised more than five yearsof monthly U.S. vehicle salesfigures to reflect a newreporting method, amid aninvestigation by federalauthorities including the U.S.Justice Department.

Fiat Chrysler said Fridayit “cooperated fully” and

added it has “reviewed andrefined its policies and pro-cedures and is committed tomaintaining strong controlsregarding its sales reporting.”The SEC settlement is notmaterial to its financialresults, it added.

The SEC said FiatChrysler putpressure on itsbusiness centres“to increasesales, maintainthe year-over-year salesstreak, and hitinternal salestargets, particu-larly on the lastsales day of themonth” and as aresult someemployees atmost of theBusiness Centres “engagedin fake sales reporting.”

Dealers were paid toreport fake sales in a compa-ny database using “coopera-tive marketing funds” to dis-guise the payments, the SEC

said, adding the database“contained false vehicle salesentries, including false cus-tomer names and dates ofsales.”

The suit said the companyused a database of fleet andcertain other retail sales, atthe direction of its head of

U.S. sales, “tomisreportvehicle salesresults andyear-over-yeargrowth per-centages everymonth.”

Employeesreferred to thevehicle salessaved for pub-lic reporting,the SEC said,with terms like“cookie jar,”

the “bank,” the “bag,” andthe “kitty.”

Detroit’s Big Threeautomakers have ended thepractice of reporting month-ly sales figures and nowreport on a quarterly basis.

In April, Fiat Chrysler set-tled lawsuits with seven of itsdealers over claims it urgedthem to input phony sales tohelp it meet sales targets foran undisclosed sum, while inMay it settled a lawsuit withstockholders for $14.75 mil-lion.

The Justice Departmentdeclined to comment on thestatus of its investigation.

In May, Fiat ChryslerAutomobiles’ U.S. sales chiefReid Bigland sued the com-pany claiming it withheld90% of his 2018 compensa-tion because he cooperatedwith the SEC probe. An Oct. 3hearing is set in the suit.

Bigland said in his lawsuitthat the company’s salesreporting methodology hadbeen in place since the late1980s and was widely knownthroughout the companyincluding by SergioMarchionne, who was chiefexecutive until his death inJuly 2018, and other seniorexecutives.

REUTERS

Fiat Chrysler to pay $40 millionover inflated sales figures

Over a five-yearperiod from 2012through 2016, FiatChrysler’s US unitused a series offraudulent moves tofalsely report newvehicle sales andfalsely tout a ‘streak’of uninterruptedmonthly year-over-year sales growth,when it had actuallyended in Sept 2013

Sony makes peace with Disney over Spider-Man CHRISTOPHER PALMERI & ANOUSHA SAKOUI28 September

The two companies haveagreed to co-produce the next“Spider-Man" movie, ending adispute that clouded thefuture of one of the industry’sbiggest franchises. Thecompromise gives Disney a25% share of the profit fromthe film, according to a personwith knowledge of thesituation. The studio hadbeen requesting as much as50% previously, said theperson, who asked not to beidentified because the termsare private.

As part of the pact, Spider-Man also will be featured in afuture Marvel Studios movie,the companies said Friday.Amy Pascal, former chairmanof Sony Corp.’s film studio,will produce the next “Spider-Man" stand-alone film, whichis scheduled for release on

July 16, 2021.The two sides had

previously been unable toagree on new terms for theirpartnership, and the disputesplashed into public view last

month. A falling-out wouldhave kept Marvel PresidentKevin Feige -- known forensuring Marvel’s qualitycontrol -- from working onnew Spider-Man films. It also

would have kept Sony’scharacter from appearing inseparate Disney movies,banishing the character fromthe so-called MarvelCinematic Universe.

Even though Spider-Manis a Marvel superhero, Sonyacquired the rights to thecharacter long before Disneybought Marvel Entertainmentfor $4 billion in 2009.

Sony used to produceSpider-Man films on its own,but after a few less-than-stellar installments, it teamedup with Disney for “Spider-Man: Homecoming" in 2017and 2019’s “Far From Home" --Sony’s highest-grossingmovie of all time. Spider-Man,played by Tom Holland, alsoappeared in the MarvelCinematic Universe movies asthe protege of Iron Man.

Spider-Man fans on socialmedia have pleaded with thecompanies to repair the rift,arguing that it would ruin the

storyline that had been builtup for years.

Financial DisputeLast month, Sony blamed

the impasse in part on Feigebeing so busy producing otherDisney movies. But Feigeseems no less busy today; infact, he’s currently indiscussions to work on a new“Star Wars" film. Peoplefamiliar with the situationhad said the financial issuewas the bigger conflict. Withthe agreement to get 25% ofthe profit, Disney is on thehook for a quarter of the nextfilm’s costs, one of the peoplesaid.

With the matter resolved,Holland will now reprise thetitle role of Spider-Man in thenew picture. He also wasfeatured in the MCU films,including this year’s“Avengers: Endgame," thehighest-grossing film of alltime.

BLOOMBERG

As part of the pact, Spider-Man also will be featured in a futureMarvel Studios movie, the companies said Friday

McLaren to return to Mercedesengines from 2021McLaren will be reunited with Mercedesengines from the 2021 season as the formerchampions go back to using the German man-ufacturer’s power units in their bid to return tothe top.

The Woking-based team are currently sup-plied by Renault, having joined forces with theFrench company last year.

They will see out that deal, which runs untilthe end of 2020, before making the switch backto Mercedes as part of a long-term agreementuntil at least 2024.

“We are delighted to welcome McLarenback to the Mercedes-Benz racing family withthis new power unit supply agreement,” saidMercedes’ motorsports head Toto Wolff in ajoint statement with McLaren issued at theRussian Grand Prix on Saturday.

“We hope that this new long-term agree-ment marks another milestone for McLarenas they aim to take the fight to the sport’s topteams, including our Mercedes works team.”

The McLaren-Mercedes partnership ini-tially ran from 1995 to the end of 2014.

It turned McLaren, enduring a slump aftertheir heady days of dominance during the late1980s and early 90s with Honda, into a force to

be reckoned with once again. The combination won 78 races, a construc-

tors’ title and three drivers’ titles with MikaHakkinen (1998, 1999) and Lewis Hamiltonwho raced to his first Formula One title with theteam in 2008.

McLaren find themselves in a similar phasenow, rebuilding after three dismal years withHonda, the Japanese manufacturer theyrejoined forces with at the end of 2014 in a bidto recreate their dominance from 30 years ago.

Fielding a fresh driver line up of Britishrookie Lando Norris and Spaniard Carlos Sainz,they have made big strides this year and arecurrently locked in a battle for fourth in theoverall standings with Renault’s works team.

But they haven’t won a race since the sea-son-ending 2012 Brazilian Grand Prix, whenthey were still powered by Mercedes.

“Renault has been instrumental to ourFormula One recovery plan and a fantasticpartner to McLaren Racing,” said Zak Brown,chief executive of McLaren Racing.

“This agreement is an important step in ourlong-term plan to return to success in Formula One.”

REUTERS

Acasual Google search on the “numberof sexual assault cases” in Delhi-NCRthrows up results that shock as well as

enrage. Last week, the Delhi governmentannounced it had installed over 200,000 street-lights across the dark corners of the city to makeit safe for women to travel. Meanwhile, a privateradio broadcaster ran a month-long initiativewhere the radio hosts discussed, argued andsought suggestions from Delhiites aswell as those in power on how to makeDelhi safe for women.

All these initiatives will remain onpaper until women feel “safe” to ven-ture out of their homes. A recentassessment undertaken by the ChiefMinister’s Good GovernanceAssociates (CMGGA) Programme inJhajjhar and Rohtak districts ofHaryana found that women, especial-ly young girls, do not feel safe whiletravelling in public transport. ProjectJaagriti, initiated in 2016 under theCMGGA programme, had till now been workingin collaboration with the Haryana governmentand Ashoka University to provide transparency,accountability and efficient service-delivery inthe state. However, their latest offering is todevelop a gender-sensitisation programme,especially for the bus drivers and conductorsof Haryana Roadways.

“Safe Gaadi, a programme of gender-sensi-

tisation training, was launched by the govern-ment of Haryana. This is the first time that thegovernment has let their staff from the HaryanaRoadways be a part of such training,” says ItikaGupta, programme manager, CMGGA. It wasduring one assessment under the CMGGA pro-gramme that the associate zeroed down on darkstreets in certain areas of Haryana. “The firstlogical step was to install street lights and ensure

all the areas were well lit,” she said.Then came the task of safer pub-

lic transport system. “This wasgoing to be possible by creatingsocially responsible drivers andconductors. So, we trained partici-pants on understanding genderissues and sexual harassment laws,as well as enhanced communica-tion skills and how to manage situ-ations which occur on the bus,” saidGupta. The programme that waslaunched in June this year aims tocover all the bus depots in the state.

“Till date, 6,000 drivers and conductors havebeen trained across 15 districts of Haryana. Theremaining seven districts will be covered byNovember-end,” she adds. The training providedby Manas Foundation includes two trainers whorun the sessions thrice a day, over two hours.

While the programme aims to sensitise over10,000 drivers by November end, it hasn’t beenan easy ride. “There have been logistical chal-

lenges especially to ensure that drivers and con-ductors are able to take time out to undergo thetraining without disrupting the day-to-day oper-ations of bus services. Depot managers have beeninstrumental in managing the schedule so thatas many drivers and conductors as possible canbe trained. There have also been challenges forthe trainers when discussing the personal con-tent during these sessions. Most drivers and con-ductors have taken the sessions very well andengaged positively, but trainers do face difficul-ties in engaging all the participants,” Gupta says.

“Such gender-sensitisation training is imper-ative to address safety of women in publicspaces. It will encourage officials to pay attentionto issues women and girls face on a daily basiswhen using public transportation and how toaddress these issues. It will raise awarenessamongst bus drivers on how to address a sexualharassment incident when it occurs on a bus,

how to believe victims and take the necessarysteps to ensure that these spaces are safe for allwomen and girls. Hopefully, it will also set a toneof zero tolerance towards sexual harassment inpublic transportation and encourage women toreport such incidents because appropriateaction is being taken to address it,” says Dr ShrutiKapoor, founder, Sayfty — an organisation thateducates and empowers women and girlsagainst gender-based violence. According toKapoor, the training must also focus on how toraise awareness amongst bystanders on what todo in case someone is harassed in public spaces.

While the funding for “Safe Gaadi” is beingprovided by Indian Oil, the programme coor-dinators are hopeful the positive response willhelp them expand it to the auto drivers in thestate as well. “We want to ensure that when awoman or a girl is in distress, immediate assis-tance is provided to them,” concludes Gupta.

10 DEMOCRACY AT WORK>

MUMBAI | 29 SEPTEMBER 2019CH

ATTE

RBOX

I will personallyact as a bridge ifthere are any gaps

Just a few days back, we have decided to drastically reducethe corporate tax. This is a very revolutionary step fromthe level of investment and after this decision, all the

people from the business world whom I met or had a discussionwith, are considering it very historical. During this time, severaldecisions have been announced one after another by the gov-ernment to increase investment. We have also abolished morethan 50 such old laws which were hindering the developmentwork. Let me remind you again, it has not been more thanthree-four months of our new government. Today, I want tosay from this platform, that this is just the beginning.

Today, India is in a unique position where our rapid growthenables us to cater to diverse demand. Our people are rapidlydefeating poverty, moving up the economic ladder and diver-sifying their consumption. Thus, if you want to invest in amarket where there is scale, come to India. Our middles classis a huge segment of people who are aspirational and has aglobal outlook. Thus, if you want to invest in a market wherethe latest trends and features are appreciated, come to India.Our youth are one of the largest users of the app economy.From food to transport and from movies to hyperlocal deliv-ery, start-ups are acing everything. Thus if you want to investin start-ups with a huge market, come to India. Our infra-structure creation is expanding at an unprecedented pace.From highways to metros, from railways to ports, from air-ports to logistics, each sector is seeing massive investmentand tremendous potential. Thus, if you want to invest in oneof the largest infrastructure ecosystem, come to India. We arerapidly modernizing our cities, and equipping them with lat-est technology and citizen friendly infrastructure. Thus if youwant to invest in urbanization, come to India. We have openedour defense sector like never before. If you want to make inIndia, for India and for the world, come to India.

Today, our government is investing on the developmentof infrastructure in India like never before. In the comingyears we are now going to spend Rs 100 lakh crore (about $1.3 trillion) on modern infrastructure. Apart from this, lakhsof crores of rupees are also being spent on India's social infra-structure. The roadmap for qualitative and quantitative leapin India's Growth Story has hit the ground. Now India has seta big goal - to make the country a $ 5 trillion economy.

When we came into government in 2014, the country'seconomy was at around $ 2 trillion. In the last five years, weadded about one trillion dollars to it. And now we are workinghard to achieve the goal of $ 5 trillion.

To achieve this huge target, we also have the capabilityand the courage and conditions are also in our favour. Todaythere are four important factors of India's growth story whichare difficult to find in the world together. These 4 factors areDemocracy, Demography, Demand and Decisiveness. If I talkabout the first factor, then this kind of opportunity and polit-ical stability in India has come after many decades. Whenthere is Democracy, Political Stability, Predictable Policy, andIndependent Judiciary then confidence of Safety, Securityand Growth of investment is automatically found there.

This growth is bolstered by India's Demographic Dividendand the Young and Energetic Talent Pool of India. TodayIndia is one of the countries with the largest EngineeringEducation base and the strongest R&D facilities in the world.Due to the encouragement that the youth of India are gettingregarding innovation, India is ranked number 3 in terms ofUnicorns after America and China.

The third is the factor of Demand. As India's large popula-tion is becoming economically empowered, Purchasing poweris increasing, so is the demand too. For example, the growthof air passenger traffic has been in double digit for the pastfew years. Because of that today India has become the thirdlargest aviation market in the world.

Along with Democracy, Demography and Demand, whatmakes India special today is Decisiveness. Despite being adiverse and federal democracy, in the last 5 years the emphasishas been laid on preparing seamless, inclusive and transpar-ent arrangements for the whole of India.

Where previously there was a web of taxes in India, now asingle Indirect Tax Regime in the form of GST has becomepart of the business culture of the entire country.

We have also worked hard to strengthen the IPR and trademark regime. Similarly, the Insolvency and Bankruptcy Codewas created to deal with the insolvency and bankruptcy. Wewill continue to make necessary reforms to bring laws relatedto tax and tax on equity investments on a par with the globaltax regime. Apart from tax reform, the world's largest financialinclusion has happened in India in a very short time. About370 million people have been linked to banking system forthe first time in the last 4-5 years. Today, almost every citizenof India has a unique ID, mobile phone and a bank account.Due to which targeted service delivery increased, leakageshave stopped and transparency has increased manifold.

In this New India, we have started the campaign for de-reg-ulation, de-licensing and de-bottlenecking. Due to such reforms,India has been consistently doing better in every GlobalRanking. A jump of 10 points in the Logistics PerformanceIndex, a jump of 13 points in the Global Competitiveness Index,a 24-point improvement in the Global Innovation Index and,most importantly, a 65-rank improvement in the World Bank'sEase of Doing Business Index, are phenomenal.

Your desires and our dreams match perfectly; your tech-nology and our talent can change the world; your scale andour skills can speed up global economic growth; Your rationalways and our human values can show the path which theworld is looking for. And if there is any gap anywhere - I willpersonally act as a bridge.

Edited excerpt from an English rendering of an address in Hindi byPrime Minister Narendra Modi at the Bloomberg Global BusinessForum in New York, September 25

The mystery behind TDP leader’s suicideHere is the full story behind the suicide of the 72 year old trained doctor and leader ofthe Telugu Desam Party (TDP) in Andhra Pradesh, Kodela Sivaprasad Rao. Rao com-mitted suicide earlier this month. After Jaganmohan Reddy came to power, his gov-ernment set up a cell in the police department to dig out all past corruption casesallegedly committed by Kodela and his family members. The AP Legislative Assemblysecretariat found that some furniture purchased for its new building in Amaravatihad gone missing and later traced it to Kodela. The Assembly secretariat booked casesagainst him under IPC 409 and 411. Though Kodela offered to return the furniture orpay its cost to the Assembly, the officials opted to pursue the case against him.According to TDP leaders, this led to depression in him and Kodela killed himself.

All praise for ModiThe latest Congress leader to endorse the policies of the Narendra Modi governmentis Chhattisgarh Chief Minister Bhupesh Baghel. Baghel justified Pakistan PM ImranKhan quoting the Congress party’s stand on the Kashmir issue, he justified it bysaying: “Inside the country, we'll strongly oppose Narendra Modi ji. But for mattersoutside the country, whatever decision the government takes, the Congress willalways support it and stand with the country”. This went out on Twitter and hasgiven great solace to Congress members like Milind Deora who acknowledged withgrateful thanks, PM’s endorsement of Murli Deora’s contribution to India-US elec-tions. No one knows whether the Congress is coming or going.

DID THEY REALLY SAY THAT?

Pakistan needs to understand that the Indian Navyhas become much stronger with thecommissioning of the INS Khanderi. They shouldknow our capabilities and we can use them ifrequired. India is proud of its Navy and can neverforget the exceptional role it played in the 1971war...”Defence Minister Rajnath Singh after Pakistan PM ImranKhan's speech at the UN General Assembly, September 28

CHECKLISTPUNJAB ASSEMBLY BY ELECTIONS: OCTOBER 21n Jalalabad: Former State youth Congress chiefRaminder Awla is the candidate from theJalalabad constituency. The seat fell vacant afterMLA Sukhbir Badal of the Akali Dal was elected tothe Lok Sabha. Ravneet Singh Bittu from theCongress had come third in the constituencywhere the number 2 was Bhagwant Mann of AamAadmi Party (AAP). Mann is now MP from Sangrurand the AAP candidate is Mohinder Singh.Winning the seat is a crucial battle of prestige forthe Badal family.n Phagwara: Som Parkash of the BJP was elected tothe Lok Sabha and resigned his assembly seat,causing the vacancy. Former IAS officer BalwinderSingh Dhaliwal will contest from Phagwara (SC) asthe Congress candidate, while AAP has fieldedSantosh Kumar. BJP is yet to name its candidate.Development and the menace of drugs are thetwo most important issues in the constituency.

n Dakha: The Dakha seat fell vacant after formerAam Aadmi Party MLA H.S. Phoolka resigned inJanuary, against the Congres government’salleged failure to take action against those whowere involv ed in the desecration of Sikh religiousscriptures in 2015.The Shiromani Akali Dal (SAD)announced that Manpreet Singh Ayali, a formerMLA, would be its candidate for the seat. SandeepSingh Sandhu, political secretary to Punjab ChiefMinister Amarinder Singh, is the Congresscandidate, making this a high-visibility election.Amandeep Singh Mohi is the candidate from AAPn Mukerian: the seat fell vacant following thedeath of Congress MLA Rajnish Kumar Babbi. InduBala, his wife, will now be the Congresscandidate. The town falls in the erstwhileinsurgency-hit district of Hoshiarpur. In thissegment, during the Lok Sabha election, theCongress had trailed by 38,000 votes.

OPINIONNARENDRA MODI

How has the journey from Hotstar toFacebook been? What are Facebook'smain priorities in India?While earlier (in Hotstar), I had the oppor-tunity to start and drive video of a certainkind, the opportunity that I see here(Facebook) is of scale and engagement to goa lot deeper in India, and be relevant acrossmultiple things.

The scale, relevance and engagement withour family of apps across Facebook, Instagramand WhatsApp in India are vast. Facebook hasmore than 325 million users a month,WhatsApp more than 400 million users amonth and Instagram is growing massively. Itis clear that the scale of opportunity to createan impact in India is massive.

The Facebook family of apps is so rootedin communities, whether in public or privatecontext, that it comes across as made forIndia. It would have originated out of Indiain another world.

Where are the conversations Facebook

is having with the government now,given what the Prime Minister has saidabout privacy recently? How importantis WhatsApp as part of thatconversation?The Prime Minister and the governmenthave been vocal about the power of socialmedia to reach a large number of people. Ithink governments and citizens are bothconscious that many of the issues (aroundtech companies) involve extraordinarily dif-ficult trade-offs between competing values,for example, something that India values,which is freedom of expression and open-ness, and national security.

In case of WhatsApp, the government haspublicly articulated that they supportencryption, that Indians need to have theability to have private communication. Wehave been very engaged in all conversationsabout privacy and data, including represen-tations to the Sri Krishna committee andMeitY (Ministry of Electronics andInformation Technology), and we have found

that it’s a challenge. But it is an importantconversation that should happen for gettingthe right answer between tech firms like us,governments and citizens. We have foundopenness, we are engaging, we haveexpressed our points of view.

While we are cognizant that privacy is animportant agenda, we are equally aware thatconcerns around national security should beaddressed too.

While the government says it supportsprivacy, there is still talk abouttraceability of messages, including acase in Indian Courts. And that alsoleads into the larger issue of fake newsand monitoring online content. How doyou look at that internally?On the first one (traceability),because it’s going through thejudiciary, it is sub judice so I won’ t be able to talkabout it.

The third party fact check-ing programme on Facebook,came out of limiting the spreadof misinformation. Today, inIndia, we run one of the largestthird party fact checking pro-grammes anywhere in theworld, with nine partners in 12languages. Whenever there iscontent that violates the community guide-lines of Facebook, we pull it down. We takeoff content from the platform, millions ofpieces of content, even before they get anydistribution, even before they’re seen by any-one, because there’s been so much progressand automation and artificial intelligence.

One of the big changes on WhatsAppcame from the feedback from stakeholdersin India, about limiting the virality of misin-formation. When WhatsApp introduced lim-iting forwards to only five that limited thepossiblity of virality of a content. However,we were happy to make the trade-off.

You also set up an election integrityteam in India before the generalelections. What does the team do nowthat elections are over?That’s a global team. After 2016 US election,there was a big focus (on Facebook), whichcontinues to be there. The feedback we hearis, our efforts at ensuring integrity look a lotmore involved than it was two years ago, andis still improving. The reality is, around theworld, there are elections happening at somepoint. So it’s a team that is working globally,across elections, and the idea is also to keeplearning from each election, and funnel itinto the next big set of product changes.That’s what the integrity team does.

So they’re looking at state elections aswell?All the principles that we used in the generalelections hold true for the state elections aswell.

How do you look at the fact that mostpeople, whether politicians, businessesor celebrities take to Twitter as the firstplatform of choice for mass messaging?

We feel really comfortable in terms of notjust the scale and growth of our family ofapps in India, but how our communities areengaging with them. Between Facebook,Instagram, and WhatsApp, people use ourplatforms quite differently.

Facebook is used more for friends andfamilies to connect with each other,Instagram (is used by) brands and celebritiesand interest groups. And then of course,Whatsapp is the private forum. Over time,we’re introducing new propositions like theintroduction of music on Instagram and sto-ries, both on Facebook and Instagram.

Data has become a mainstreamconversation in the Indian context, inthe last year or so. The Prime Minister

also had recently said datais the new gold. Howimportant is thisconversation in the Indiancontext from what you seein other parts of the world?A lot of this massive growth inthe internet economy hap-pened on the back of a massivedisruption from Reliance Jio,fundamentally changing thegame in terms of access toaffordable 4G.

I know there were head-lines from Nick’s (Nick Clegg, Facebook VPfor Public Affairs was in India two weeks ago,and said data is not the new oil but more likewater) conversation two weeks ago, but Ithink it’s key to recognise that we have ben-efited from it (Jio 4G). We see Reliance as apartner, and hopefully Reliance and the oth-er telcos see the value that Facebook,Instagram and WhatsApp have bought interms of people using data. It’s important tocall it out, because I don’t think it should belost in the noise of the headlines around themetaphor.

China has created a model where it’swalled off. The reality is, the polarity of theglobal internet now comes from the US,Europe, and India. I think we recognise thatIndia has a very special role in thinkingabout some of these issues, and a lot of theanswers that India comes up with, will influ-ence how the internet evolves, includingtheir stance on data and privacy.

How do you look at India’s demand fordata localisation?We genuinely believe that the right answerfor India would be to keep the doors openon data flows. India has benefited from thosewho have been open — the first wave ofinformation and technology companies. Ibelieve that there is commonality in the val-ues that drive India. The openness, the spiritof entrepreneurship, some of the samethemes that Prime Minister Narendra Modihas spoken about in the US this week. In acountry that has deep engineering talent,and is now at the cusp of creating fundamen-tally new models that can be exported to theworld, I think it’s the right answer for India.I’m not saying this from a self interested lensof Facebook, rather with a lot of humility andrespect that India will find its own answers.

‘We should keep thedoors open for data’

Whether oil, gold or water, data is here to stay, and Facebook is going to work with telecomplayers, including Reliance Jio to reach more and more people in India. Vice-President andManaging Director Facebook India, Ajit Mohan spoke to Neha Alawadhi about the social mediagiant’s priorities in India, issues with the government and the way forward. Edited excerpts:

AJIT MOHANVice-President andManaging Director,Facebook India

Enhancing safety of women

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THE OTHERINDIA

A gender sensitisation training is being providedto the bus conductors and drivers of HaryanaRoadways in a bid to make public transport safer,writes Meghna Chadha

Till date, 6,000 drivers and conductors have been trained across 15 districts of Haryana. Theremaining seven districts will be covered by November-end

Google has just won a judgment withimportant implications at theEuropean Court of Justice (ECJ).The court ruled that the European

Union’s (EU’s) Right to Forget regulation couldonly apply within the jurisdiction of the EU.Hence, Google and others can geo-selectivelyremove links to information within the ambitof that regulation. The Right to Forget, or Rightto Erasure, lets individuals in the EU requestthat search engines remove links to some cat-egories of embarrassing information, or per-sonal data, on the Internet. The informationmay remain available, but it can no longer befound via a simple search. The law came into

effect in 2014 after a Spanish citizen appealedto have links pertaining to an old bankruptcyto be erased. The provisions became morestringent after the General Data ProtectionRegulation (GDPR) came into force last year.

Affected citizens can make a request “ver-bally or in writing” to have links or personaldata deleted. The recipient of the request (notnecessarily a search engine) has one month torespond. The recipient must consider manythings before it complies with the request orturns it down. For example, the data may bepersonal, or collected with consent, for a pur-pose that has been fulfilled. It may be obsoleteor pertain to a minor. In such cases, the data

itself may be erased. However, it could also bein the public interest, or it may be necessary tohold that data in the interests of freedom ofexpression. For example, criminal records ofadults may not be erased. Nor can news aboutcommunicable diseases, etc. be wiped out.Ironically, the landmark case that sparked theregulation remains easily searchable precise-ly because it led to the regulation.

In practice, search engines delete linkswhile the content itself may remain available.Google claims that it has complied with suchrequests roughly 45 per cent of the time — ofthe 845,000 requests that it has received ask-ing for the removal of more than 3.3 millionlinks. It does this by geo-blocking. The linksare no longer visible if a search is made onglobal server Google.com from within the EU.All links are removed from European serverslike Google.fr, Google.co.uk, and Google.de.But the links are visible from other regions

and they are visible to a EU surfer who uses aVPN to circumvent geographic restriction.The search engine giant appealed an order bythe French regulator, CNIL, which demandedthat links be removed globally. CNIL alsoimposed a fine of ^100,000. The ECJ hasruled this as overreach saying: “There is noobligation under EU law for a search engineoperator who grants a request for de-refer-encing made by a data subject ... to carry outsuch a de-referencing on all the versions of itssearch engine.”

The UK will become a grey zone if Brexitoccurs if it doesn't legislate its own versionof GDPR. Many other non-EU nations arelegislating their versions of GDPR. Such leg-islation will be uneven since it is driven byregimes and constitutions, which vary inthe priority allotted to privacy and freespeech. Assuming this ECJ judgment isfoundational, there may be a situation where

geoblocks with regard to the right to forgetare selectively applied in many regions. Theembarrassing information will remain searc-hable from servers and IP addresses in oth-er jurisdictions. This will lead to a delicatebalance between privacy and free expres-sion. India could be a global test case. It hasa vast, growing population of Netizens. TheSupreme Court affirmed privacy as a fun-damental right but the government has notcome up with specific privacy legislation inthe two years since that judgment. The draftprivacy legislation by the SrikrishnaCommittee doesn't include a Right to Forget.At the same time, vast numbers of sites aregeoblocked in India, on the request of gov-ernment agencies and under court ordersgranted to companies and individuals. HowIndia chooses to prioritise privacy and freeexpression will affect the internet experi-ence of hundreds of millions.

SHIVANSHU GUPTA, AUROBIND SATHPATHY, BARATHRAM A & GANDHARV VIG

Discontinuities are disruptions on the evolutioncurve that alter the way an industry operates.The automotive component industry in India

has been in a growth phase in the past decade withdomestic turnover more than doubling and exportturnover growing five-fold between 2010 and 2019,according to the Automotive ComponentManufacturers Association of India (Acma).

In recent months, we have seen discontinuities inthis sector. Auto sales have declined driven by factorslike the liquidity crunch in non-banking financial com-panies (NBFC), higher acquisition costs for vehiclesowing to an increase in the costs of raw materials, insur-ance and finance; and weaker consumer sentiment.Growth in the automotive component industry declinedfrom 18 per cent in the 2018 financial year to 14.5 percent in the 2019 financial year.

While policy measures could bring back growth,the industry can adopt some practical measures to stimulate near-term impact and long-term pre-paredness:

Maximise product modularity using a spend paretoacross product, sub-system and parts to improveeconomies of scale and reduce the working capitalrequirement. A pareto is a statistical technique in deci-sion-making used for the selection of a limited numberof tasks that produce significant overall effect;

Embrace a zero-defect culture at operator level todrive individual and area-level performance manage-ment;

Rationalise the portfolio by focusing on products thatbring the majority of revenues and profits and expandafter-market activities and export markets;

Re-imagine end-to-end sales and operations process-es by using digital technologies and analytics, such asforecasting tools, to optimise capital and cost andincrease customer satisfaction;

Manage fixed costs by establishing a war room toreduce indirect costs services, stores and spares.

INDUSTRY DISCONTINUITIES AND THEIR IMPLICATIONS

Component makers are bound to be affected by thefundamental changes in the automobile industry. Theywould do well to prepare for big changes already visibleon the horizon in the following ways:Expedited enforcement of emission and safety stan-dards: Introduction of BSVI (Bharat Stage VI) emis-sion standards (equivalent to Euro VI) will bring Indiain line with global markets. This will open up globalexport markets as component makers improve theircapabilities and build products targeted to the widerworld.Renewed focus on electric vehicles: The governmenthas earmarked nearly ~10,000 crore (approximately$1.4 billion) for electric vehicles and related subsidies,while the private sector has increased its investment toabout ~400 crore ($56.4 million) in 2019 (up from about~300 crore or $42.3 million in 2018). Electric vehicleadoption could have many subsequent implications:Power train components could change drastically withsome becoming rising stars in the age of electrificationand others under high pressure; the material composi-tion of vehicles could change fundamentally, and sup-pliers could transform where and how they play in theauto sector value chain. Rise of shared mobility: Changing consumer prefer-ences could prompt the growth of new customer seg-ments, such as fleet owners, and create new revenuepools for auto component suppliers.Growing demand for connected vehicles: This couldgradually change the composition of vehicles with the

electronics and software components dominatingthe mix.Consolidation of auto original equipment manu-facturers: Global auto OEMs are consolidating to takeadvantage of their mutual strengths and improve theircapabilities. Component makers could use this oppor-tunity to hasten modularisation and vendor consoli-dation. Digital and analytics-driven transformation of corebusiness: Digital and analytics will transform auto-motive organisations across the value chain.Manufacturers will need to use digital technologiesheavily for internal transformations.

IMPERATIVES FOR AUTO COMPONENTMANUFACTURERS

Given these changes and possibilities, auto componentmanufacturers would need to examine their business inthe following ways: Rethink product strategy: Manufacturers will needto de-risk their portfolio by diversifying across chan-nels, for example, including after-market sales. Theywould need to redefine customer segments, such asshared taxi aggregators, and rethink their geography,for example, by sharpening export markets. Thesecannot be one-time efforts and will require annualreviews of strategy.Partnerships to build capabilities: Faster marketaccess and time-to-market are critical. Manufacturerscan co-invest in R&D and product development, build-ing capabilities through partnerships.Embrace digital: Manufacturers will need a roadmapfor this transformation with clearly defined milestonesand a taskforce to drive change.Non-conventional sales approach: Business shoulddevelop a hunter/farmer approach, where the hunterfocuses on bringing in new business and the farmerworks to grow that customer, and invest in the cus-tomer of the future.

Manage organisational and cultural change: Manu-facturers would need a transformation office to identi-fy the roles that create the most value for an organisa-tion and assign them projects that will drive growth inthe future.

HOW STAKEHOLDERS CAN SUPPORT AUTOCOMPONENT MANUFACTURERS

Managing the slowdown and embracing discontinu-ities in India’s automotive component industryrequires crucial stakeholders, such as the govern-ment, industry bodies and OEMs, to co-create andcollaborate.

The government could continue to encourage elec-tric vehicle manufacturing and adoption, appoint traderepresentatives at consulates to facilitate exports andincentivise companies to establish operations in India.Industry bodies could work with export promotioncouncils to identify target markets for exports, facilitatea cooperative supply chain in high-potential exportmarkets, set up incubation centres in metropolitanzones to promote innovation related to automation,connectivity, electric power and the shared-mobilityeconomy (ACES); and conduct training on the impactof digital interventions.

Anchor actions for OEMs include investing in andcollaborating with Tier-I and Tier-II component manu-facturers to help them build a workforce of the right si-ze and with the relevant skills and knowledge partner-ships to embed digital capabilities in their organisations.

Concerted actions across all stakeholders couldcreate a unified push for a robust and thriving auto-motive industry in India.

Shivanshu Gupta is a senior partner, McKinsey & Company,based in Bengaluru. Aurobind Sathpathy is a senior partner,based in Chicago; Barathram A is an associate partner, basedin Chennai; and Gandharv Vig is a knowledge expert, based in Mumbai

SURUCHI AGARWAL

Giving development policies agender content would have agreater impact in some of

India’s most backward districts.Consider Mewat district, situated 60kilometres from high-tech Gurugram,Haryana’s most backward district,where a saline water zone coupled withlack of water supply forces women totravel for up to two to three hours dailyto fetch drinking water.

Being a Muslim-dominated region,the cultural ethos is conservative,restricting the movement of women out-side their homes. The average family sizein the district is eight. Interestingly,Mewat is at the top in terms of the pro-portion of the child population (22.78 percent), which is an indicator of a level ofhigher dependency on the earning mem-bers of each household. This in turn cre-ates pressure on the limited resourcesavailable to an individual as a member ofa particular household.

The men in Mewat are mostly truckdrivers, who are away for number ofdays, and hence most of the householdpressure falls on the women. The moth-er involves the elder daughter in sup-porting the family. The elder daughtertherefore does not get timeto go to school, whichreduces the literacy rate ofwomen. Education is notconsidered an importantresource and thus does notfeature on the priority listof inhabitants.

Large family size com-bined with low incomeleads to low nutrition levelsfor the women, resulting inpoor health. Poor medicalfacilities and the absence of nurses anddoctors play havoc with their health.Sewage flows in open drains on bothsides of the road. Swarms of mosquitoeslead to many diseases like malaria.

The major source of cooking fuel isfirewood (48 per cent). Firewood gather-ing not only consumes a considerableamount time for women and children,limiting other productive activities, butits usage also results in emission of car-bon and methane, which are powerfulclimate change pollutants. The high lev-el of dependence on kerosene for lightingand firewood for cooking carries serioushealth and environmental hazards in thecase of Mewat.

Women work extensively on farmsbut are not identified as farmers, andland inheritance and ownership is patri-archal in nature. The women work forup to 20 hours a day, but continue tohave low incomes.

There is a need to scale up efforts toimprove women’s empowerment in theregion, as in more than two-thirds ofthe villages there is a huge gender gap inliteracy, with women spending sub-stantial amounts of time in fetchingwater and collecting firewood for fuel.

Thus, substantial investment in waterinfrastructure for drinking and farm-ing purposes should be of the highestpriority in the region, as it has adverse-ly affected all dimensions of develop-ment, such as living standards, agricul-ture, gender equality and so on.

The Haryana government on its parthas made many efforts to improve liv-ing conditions in Mewat by openinghospitals, anganwadis, schools and col-leges and developing infrastructure, buthas still not been able to bring abouteffective change.

Despite so much effort over so manyyears, the condition of women has notimproved much and Mewat continuesto be at the bottom among all ofHaryana’s districts in terms of develop-ment. A change in the thinking of socie-ty as a whole is needed.

The statistics reveal that women aremore disadvantaged than men. If datafor males and females are disaggregat-ed, it is clear that women are muchworse off than men in terms of educa-tion, health, income and so on. Theyperform a lot of unpaid work like caringfor children, cooking, cleaning, fetch-ing water, and caring for the elderly.This has to be valued and methods ofsupporting women who contribute to

the nation through unpaidwork need to be identified.

A more realistic waywould be to identify areasof public spending thatwould yield more advan-tages to women and girls.We would then have to worktowards improvising poli-cies to provide more fundsin the identified areas,which will provide anadvantage to women and

girls. In the case of Haryana, budget allo-cations for Sustainable DevelopmentGoals (SDG) will have to be viewedthrough a gender lens.

Gender budgeting is the gender-sen-sitive formulation of policies and plans,allocation of resources, impact assess-ment of policies and corrective follow-up action to address gender disparities.Providing non-government organisa-tions in Mewat with funds for women tostart small mustard plants (Mewat isblessed with acres of mustard fields)would increase women’s incomes.

SDG-1 featured a budget allocationto eradicate poverty. This can be givena gender twist and women of eachhousehold can be provided with food-grains to reduce poverty. Many moresuch practical innovations can reducethe gap between male and femaledevelopment indicators and improvethe district as a whole. Changes in poli-cies, even without actually increasingthe district’s budget, can have far-reaching effects.

The writer is with the National Institute ofFinancial Management, Union Ministry of Finance

On Tuesday, the Reserve Bank of India (RBI) imposed curbson the activities of the Punjab and Maharashtra CooperativeBank (PMC) for a period of six months. The decision cameafter the central bank discovered certain irregularities in thebank, including the under-reporting of non-performing assets(NPAs). While the restrictions imposed by the regulator, undersection 35A of the Banking Regulation Act, are aimed at safe-guarding depositors interest, and preventing a run on thebank, such moves, which are seen as penalising depositors,can end up having the opposite effect, denting trust in coop-erative banks and increasing the risk of a contagion.

Reportedly, the crux of the problem is the bank’s exposureto a real estate firm, which itself is currently undergoinginsolvency proceedings. On its part, the regulator has appoint-ed JB Bhoria, a retired senior RBI official, as administrator ofthe bank. A forensic audit could shed light on its asset-liabil-ity mismatch. Cooperative banks are under joint supervisionof the RBI and states. And while the RBI has signed MoUs withstate governments, unless state governments cooperate ineffecting regulations, supervision is likely to be ineffective.Clearly, there were no early warning signs of trouble in this

case. Instances such as these are likely to raise calls for review-ing this regulatory framework and giving more powers to theRBI to oversee these entities. But the larger question over theabsence of a framework for timely resolution of financialfirms remains.

The Indian Express, September 27

Turning disruption into growth

The Right to Forget Delicate balance between privacy and free expression

Concerted actions across all stakeholders could create a unified push for a thriving automotive industry

RBI action on PMC amountsto penalising depositorsRegulatory framework governingcooperative banking must be revisited

With onion prices risingsharply in the past fewweeks, one of the most basiccontradictions in Indianpolitical economy is mani-festing itself once again.Urban consumers areunhappy to pay more foronions, which have becomescarce and expensive, thanksto late sowing and rains dis-rupting supply chains.Political parties and govern-ments have rushed in to bothexploit and assuage thisanger. Exports have beenbanned, and the governmentis planning to offload itsstocks. Such steps will bringdown prices to some extent.What about farmers, though?This was their opportunityto make some windfall gains.Do remember that tepid foodprices have been the biggest

reason for low inflation inthe last few years. Food buy-ers have gained at the cost offood sellers. And this has puta severe squeeze on farmincomes. Even if left unat-tended, the onion price rallywould have reversed insome time.

There are ways to resolvethe contradiction. If farmersare denied a windfall gain bythe government to keep infla-tion under check, then thereshould also be a provision toensure that there are no wind-fall losses at the time of a glut.Bumper harvests are moreunfair to vegetable farmersbecause middlemen squeezeprices paid to farmers, with-out passing on the entire gainsto consumers.

Hindustan Times, September 27

Politics of onion price riseInflation vs farmers’ incomes trade-off

The All India Survey onHigher Education 2018-19shows that, generally speak-ing, women’s enrolment hasrisen in higher education. Theincrease, from 47.6 per cent in2017-18 to 48.6 per cent in2018-19, is in step with theincrease of approximately oneper cent in the gross enrol-ment ratio within the sameperiod, while the rise in theenrolment from scheduledcaste and scheduled tribegroups is slightly, and heart-eningly, sharper.

Does increased enrolmentin higher education mean thatthe standards of school educa-tion have improved? So far,there has been no such indica-tion — reports of achievementlevels in schools are quitealarming. What proportion ofstudents in the highest levels of

study comes from non-gov-ernment schools, or, morespecifically, are women? Thepercentage of women scholarsin India’s institutions of nation-al importance is a poor 24 percent. The potential of educatedyoung people must find fullexpression in satisfying workand living conditions after theyget their degrees: Is India readyfor that? Educated women area positive force in a nation; isIndian society ready to letthem fulfil their potential with-out being beaten, tortured,raped and killed? Against allthese cautionary concerns,however, there must be hopethat those being educatedtoday will exert their agencyand use their expertise forchange in the future.

The Telegraph, September 27

Boost for women’s education They can be a force for social change

Why gender budgetingis necessary in India

> OTHER VIEWS

OPINION 11>

Volume XIII Number 28MUMBAI | 29 SEPTEMBER 2019

Car bodies on an assembly line. Manufacturers will now need to build capabilities through partnershipsGender budgetingis the formulationof policies andplans, allocationof resources,impact assessmentand correctivefollow-up actionaimed ataddressing genderdisparities

12 MUMBAI | 29 SEPTEMBER 2019 1>

Share notes to prevent errors,Cabinet secy tells ministries

PRESS TRUST OF INDIANew Delhi, 28 September

The Supreme Court on Saturday setup a five-judge Constitution benchheaded by Justice N V Ramanawhich will commence hearing fromOctober 1 on a batch of pleas mount-ing legal challenges to the Centre’sdecision to abrogate provisions ofArticle 370 that gave special status toJammu and Kashmir. The benchalso comprises Justice S K Kaul,Justice R Subhash Reddy, Justice BR Gavai, and Justice Suryakant.

The hearing by the Constitutionbench will commence from October1, an official source said.

The five-judge bench will exam-ine the constitutional validity of thescrapping of the article’s provisionsand the subsequent presidentialorders on it, the source added.

A bench headed by Chief JusticeRanjan Gogoi on August 28 hadreferred the matter to a five-judgeConstitution bench. Several petitionshave been filed challenging theCentre’s decision abrogating Article370 provisions and bifurcating thestate into Union Territories ofJammu and Kashmir, and Ladakh.The UTs will come into being onOctober 31. Petitions have also beenfiled by the National Conference, theSajjad Lone-led JK PeoplesConference and several other indi-viduals, including the first plea filedby advocate M L Sharma.

The petition on behalf of the NCwas filed by Lok Sabha MPsMohammad Akbar Lone and Justice(retd) Hasnain Masoodi. Lone is aformer speaker of the J&K Assemblyand Masoodi a retired judge of theJammu and Kashmir High Court. In2015, he had ruled that Article 370was a permanent feature of theConstitution.

Other pleas include the one filedby a group of former defence officersand bureaucrats. They have alsosought directions declaring the pres-idential orders of August 5 “uncon-stitutional, void and inoperative’.

The plea was filed by professorRadha Kumar, a former member ofthe Home Ministry’s Group ofInterlocutors for Jammu and

Kashmir (2010-11), former IAS offi-cer of J&K cadre Hindal HaidarTyabji, Air Vice Marshal (retd) KapilKak, Major General (retd) AshokKumar Mehta, former Punjab-cadreIAS officer Amitabha Pande and for-mer Kerala-cadre IAS officer GopalPillai, who retired as the Union homesecretary in 2011. A petition has alsobeen filed by bureaucrat-turned-politician Shah Faesal, along with hisparty colleague and formerJawaharlal Nehru UniversityStudents’ Union (JNUSU) leaderShehla Rashid.

There are other petitions chal-lenging the Centre’s decision onArticle 370. The apex court on August28 had listed the petitions connectedwith Article 370 and issues arisingafter its abrogation.

The NC leaders submitted thatthe Presidential Orders paved theway for application of entire provi-sions of the Constitution in Jammuand Kashmir and also have the effectof nullifying Article 35A and com-pletely abrogating Article 370.

While challenging the Centre’sdecisions the two MPs have sought adirection to declare the Act and thePresidential Orders as “unconstitu-tional, void and inoperative”.

PRESS TRUST OF INDIARamban (Jammu), 28 September

A top Hizbul Mujahideen ‘com-mander’, wanted in connectionwith the assassination of a seniorBJP leader and an RSS functionary,was killed along with two other ter-rorists in a nine-hour operation inwhich a jawan lost his life inRamban district of Jammu andKashmir on Saturday, officials said.

The terrorists, identified asOsama and his associates Zahidand Farooq, were gunned downafter they tried to escape from ahouse where they had barged inwhile being chased by securityforces following a brief exchangeof fire in Batote area along Jammu-Kishtwar national highway earlythis morning, they said, adding ahouse-owner was also rescued afterthe encounter ended.

Osama was the brain behindseveral sensational incidentsincluding the killings of senior BJPleader Anil Parihar and his brotherAjit Parihar on November 1, 2018and RSS functionary ChanderkantSharma and his PSO on April 9, offi-cials said. He was carrying a rewardof several lakhs of rupees and wasalso wanted in three weaponsnatching incidents in Kishtwartown, which was declared terror-ist-free over a decade ago.

Despite repeated attempts tomake the terrorists surrender, theterrorists tried to escape from thehouse while firing indiscriminate-ly on the forces and were eliminat-ed in the encounter, they said.

“All the three terrorists werekilled in the gunfight, while anarmy soldier also achieved martyr-dom,” Jammu-based Army PRO Lt Col Devender Anand told PTI.

The deceased soldier wasidentified as Naik Rajinder Singhfrom Jaisalmer. Two policemenwere injured in the gunbattle,officials said.

The success for security forcescomes days after InspectorGeneral of Police, Jammu,Mukesh Singh said that four casesof killings and weapon snatchingin Kishtwar district have beensolved with the arrest of threeHizbul Mujahideen activists.

Late & over-budget, newsubmarine triggersProject 75-I stake rise AJAI SHUKLANew Delhi, 28 September

On Saturday, Defence MinisterRajnath Singh commissionedinto service the Navy’s 15thconventionally powered,diesel-electric submarine, INSKhanderi. Built in MazagonDock Ltd, Mumbai (MDL) intechnology partnership withFrench shipyard Naval Group,this is the second of sixScorpene submarines theNavy contracted in 2005 for~18,798 crore.

Singh described the com-missioning as “a proud momentfor the nation, the Indian Navyand MDL”. In fact, INS Khanderiis being delivered more than sixyears late, well over cost andwith several defects that remainto be resolved.

When the Khanderi firstsailed out of Mumbai for sea tri-als on June 1, 2017, it was expect-ed to join the naval fleet by end-2017. However, the trial teamfound dozens of shortcomingsthat MDL and Naval Group ha-ve grappled with for over twoyears. While the Navy’s vice ch-ief, Vice-Admiral G Ashok Kum-ar, insists the Khanderi is now a“fully combat capable subma-rine”, Navy sources say it is be-ing commissioned with severalshortcomings still unresolved.

According to previousreports that there were 35defects that still remained to beresolved. Of these, 29 could nothave been resolved during themonsoon period, since theyrequired testing in absolutelycalm seas — or what is called“Sea State-1”.

Nor is the Khanderi beingcommissioned with a fullcomplement of its primaryweapon, the torpedo. Thisafter the government can-celled the purchase of 98 tor-pedoes from Italian firm,WASS, because its group com-pany, AgustaWestland, wasaccused of bribing Indian offi-cials to win a contract for VVIPhelicopters.

As an emergency stopgap,German firm Atlas Elektronikwas contracted to modernise 64

torpedoes, bought in the 1980sand 1990s for the Navy’s fourShishumar-class submarines.This meagre quantity is nowbeing shared with the Scorpenesubmarines being com-missioned. By 2022-23, whensix Scorpenes will have beencommissioned to supplementthe four Shishumar-class boats,there will be just six torpedoesfor each submarine.

Besides these, the Navyoperates nine Russian-originconventionally powered Kilo-class submarines, one nuclearpowered attack submarine (INSChakra) and a nuclear powered,nuclear missile submarine, INSArihant. That is well short of theNavy’s assessed requirement of24 conventionally powered sub-marines and six nuclear pow-ered attack submarines.

Yet, there is delay and con-fusion in the proposal to buildsix more conventional sub-marines, with “air independentpropulsion” (AIP) that wouldallow them to remain sub-merged for up to two weeks,compared to just 36-48 hoursfor a diesel-electric submarine.When a submarine is sub-merged, it is far harder to detect.

The new proposal, called

Project 75-I, envisages selectingan Indian firm as “strategic part-ner” (SP). Chosen SPs will bid tobuild the six AIP submarines inpartnership with a foreign “orig-inal equipment manufacturer”(OEM) that offers a suitable sub-marine design and transfer oftechnology.

In response to a navyenquiry, five Indian entitieshave submitted Expressions ofInterest (EoI) for being the SPin Project 75-I. These includeMDL, Larsen & Toubro (L&T),Reliance Naval and Engin-eering (RNaval), HindustanShipyard Ltd, Visakhapatnam(HSL), and a proposed specialpurpose vehicle (SPV) consist-ing of HSL and Adani Defence.

Navy sources say only L&Tand MDL are realistic con-tenders, since financiallystressed RNaval and HSL do notmeet the financial criteria andthe HSL-Adani SPV remains tobe formally incorporated.

The more difficult choice isbetween the five firms thathave submitted EoIs for selec-tion as the chosen OEM. RubinDesign Bureau (Russia) hasoffered its Amur submarine,Thyssenkrupp Marine Systems(TKMS, Germany) its Type 218boat, Naval Group (formerlyDCNS, France) its ShortfinBarracuda, Navantia (Spain) itsS-80 and Daewoo (South Korea)its KSS-3 submarine.

Of these, only Rubin, TKMSand Naval Group are consideredto have a chance. The NavantiaS-80 is grappling with seriousweight imbalance issues, whilethe Korean submarine is anuntested design. Indian navalsubmariners are almost unani-mously convinced of the supe-riority of the TKMS Type 218,the design of which is optimisedfor the shallow Baltic Sea, whichhas similarities with theArabian Sea, where the waters40 kilometres off Karachi arejust 40 metres deep. The Type218 is also reputedly the mostsilent design. However, it isprobably the most expensive ofthe three.

More on business-standard.com

INS Khanderi, the Navy’ssecond Scorpene submarine,which Defence MinisterRajnath Singh commissionedin Mumbai on Saturday

ARCHIS MOHANNew Delhi, 28 September

Earlier this month, the Cabinet Secretariatwrote to all Union ministries and depart-ments to complain that they do not share

draft cabinet notes, which makes it difficult todetect “deficiencies” and “inconsistences”. Aday later, the Ministry of Law and Justice issueda gazette notification to correct 52 errors in theJammu and Kashmir Reorganisation Act, whichParliament had passed in the firstweek of August. This was just one ofseveral instances of poor draftingof Cabinet notes and bills in therecent past.

On September 11, the CabinetSecretariat wrote to all ministriesand departments to read up para-graph 55 of the “Handbook ofWriting Cabinet Notes”. It states that“a copy of the draft note should nec-essarily be forwarded to the PrimeMinister’s Office (PMO) as well as CabinetSecretariat at the time when notes are sent forinter-ministerial consultations and their com-ments awaited for two weeks”. It states that com-ments, if any, received from the PMO or CabinetSecretariat “should be duly taken into accountwhile finalising the note”.

The Cabinet Secretariat letter said that there“have been some instances where the draft cab-

inet notes have not been shared with cabinetsecretariat while circulating them for inter-min-isterial consultations.” It said, “This makes itdifficult for this office to detect procedural defi-ciencies, and inconsistencies in the proposal,as well as to monitor the time frame stipulatedfor inter-ministerial consultations”. It asked min-istries and departments to “strictly adhere” tothe instructions in the handbook.

On September 12, the Law and JusticeMinistry issued a corrigendum to correct 52errors in the J&K Reorganisation Act. Some ofthe mistakes were misspelt words, for example‘notwithstanding’ spelt ‘nowwithstanding’ and‘shariat’ as ‘shariet’. In the one that Parliament

had passed, “Institutions Act, 2004”became “Institutes Act, 2005”, “1909”became “1951” and “the Prohibition ofBenami Property Transactions Act,1988” became “the BenamiTransaction (Prohibition) Act, 1988”.

Apart from the Cabinet Secretariat,the legislative department of the Lawand Justice Ministry does vetting ofordinances, draft legislations and rulesafter the pre-legislative consultationas well as inter-ministerial consulta-

tions are over. Other instances of corrections issued include

the one on Thursday when the Law and JusticeMinistry issued a corrigendum to correct typo-graphical errors in the Taxation Laws(Amendment) Ordinance, 2019, which theCentre issued on September 20. On February 21,the Centre issued an ordinance on banning ofunregulated deposit schemes, and corrections,

although for minor mistakes, had to be issuedon February 28.

At times, minor corrections are made whenone House of Parliament suggests these, whilethe other has already passed the Bill. OnAugust 13, the Ministry of Law and Justiceissued a corrigendum for a couple of correc-tions in the National Medical Commission Actof 2019. The Lok Sabha passed the Bill on July29 and the Rajya Sabha, with minor amend-ments, on August 1. The health minister on thefloor of the House requested members to notpush for a vote on amendments, and promisedto include their suggestions at the time offraming of rules.

In February 2018, the law and justice ministryissued corrections for the National Bank for Agr-iculture and Rural Development (Amendment)Act, 2017, and the Insolvency and BankruptcyCode (Amendment) Act, 2017. It also issued a cor-rigendum, although for a minor mistake, for theFinance Act, 2018 in April of that year.

In April 2018, the law ministry had to notifycorrections in the Daman and Diu Municipalities(Amendment) Regulation Act since “misbehav-iour” in the text of the Act was spelt “misbehav-ior”. In the Andaman and Nicobar Islands(Municipal) Amendment Regulation, 2018,“inquiry” was corrected to “inquire”.

Corrections can have to be carried out yearsafter the original law is passed. In May this year,the Ministry of Law and Justice issued a corri-gendum for an amendment relating to cooper-atives law that Parliament passed in 2011. In thetext of the law, it had to issue a correction that “astalement” should be read as “a stalemate”.

5-judge SC bench tohear pleas againstrepeal of Art 370

PHOTO: AJAI SHUKLA

Chief Justice Ranjan Gogoi onAugust 28 had referred thematter to five-judge Constitution bench

The bench will be headed byJustice N V Ramana

Justice S K Kaul, Justice R SubhashReddy, Justice B R Gavai,and Justice Suryakantare the othermembers

Hearing on the issue tocommencefromOctober 1

THE CASE HISTORY

Top Hizbulleader, 2 othermilitants killedin Ramban

On September 11,the CabinetSecretariat wroteto all ministriesand departmentsto read upparagraph 55 ofthe “Handbookof WritingCabinet Notes”

PAN-Aadhaarlinking dateextended toDecember 31PRESS TRUST OF INDIANew Delhi, 28 September

The deadline to link permanent account num-ber (PAN) with Aadhaar hasbeen extended till Dec-ember 31, a Central Boardof Direct Taxes (CBDT)order said on Saturday.

Earlier, the deadline wasSeptember 30.

This is the seventh timethat the government hasextended the deadline forindividuals to link theirPAN with Aadhaar.

The CBDT has extendedthe date for linking PANand Aadhaar from Sep-tember 30to Dece-mber 31and a noti-ficationhas beenissued onFriday inthis con-nection,the policy-makingbody for theIncome-Tax (I-T)Depar-tment said.

It is now mandatory tolink the two unique IDs forincome tax purposes. TheSupreme Court, in Sep-tember last year, had de-clared the Centre’s flagshipAadhaar scheme as constitu-tionally valid and held thatthe biometric ID wouldremain mandatory for the fil-ing of I-T returns and allot-ment of PAN.

Section 139 AA (2) of theIncome Tax Act says thatevery person having PAN ason July 1, 2017, and eligibleto obtain Aadhaar, mustintimate his Aadhaar num-ber to tax authorities.Aadhaar is issued by theUnique IdentificationAuthority of India (UIDAI)to a resident of India andPAN is a 10-digit alphanu-meric number allotted bythe IT Department to a per-son, firm or entity.

The J&K Reorganisation Acthad over 50 mistakes

This is the7th time that theCentre hasextendedthedeadlineforindividualsto linktheir PANwithAadhaar