Innholdsfortegnelse for 20-May-2018 i Business Today

INTHREE, StoreKing, eHaat and RubanBridge. They are not household names like Amazon, Flipkart, Snapdeal or ShopClues, say. But these are e-commerce companies nonetheless, which are trying to build significant businesses by tapping rural demand in India. Some of them like RubanBridge are still small, while others like StoreKing are significant in size. StoreKing clocked revenues of ₹1,200 crore last year, and expects to double that this year. All these companies have figured out that the rural consumption story is quite robust, despite the vagaries of the monsoon, and sluggish growth of rural wages in the past four or five years. StoreKing estimates that the rural retail market (physical) constitutes over half of India’s total retail market, which is likely to be $650 billion, and growing at 13-14 per cent annually.…

THE MEGA-consolidation in the telecom sector has started to unfold in the most gruesome way for fringe players who are finding it challenging even to wind up operations. According to reports, Norwegian telco Telenor may be forced to file for bankruptcy if it fails to secure regulatory approvals for acquisition by market leader Airtel. Telenor filing for bankruptcy could also jeopardise Airtel’s plans to strengthen its position in the three-player telecom fight. Earlier, Chennai-based Aircel filed for bankruptcy under NCLT after its failed attempts to settle the matter with lenders. Aircel and its units have an estimated debt of ₹50,000 crore that it owes to financial and operational lenders. As consumers shift to big operators, telcos such as Telenor and Aircel have been incurring heavy losses. The lenders, both unsecured…

IT'S NOW largely up to the court to facilitate the sale of Essar Steel. On April 27, the lenders of Essar Steel decided to give additional seven days to the first-round bidders — ArcelorMittal and the Numetal consortium — to comply with the eligibility criteria and for revising their bids. ArcelorMittal will have to repay the dues (which total ₹7,000 crore) of Uttam Galva and KSS Petron to become eligible as it held stakes in both the companies when they defaulted on loans. Numetal will have to drop erstwhile promoter Rewant Ruia’s Aurora Enterprise from the consortium. Even if ArcelorMittal repays, it will see counter bids from Numetal, the VTB bank-led consortium in which Sajjan Jindal's JSW Steel replaced Ruia. In a letter to the lenders, Numetal had earlier said…

ALTHOUGH PRODUCTIVITY GROWTH HAS SLOWED IN MOST OF THE ADVANCED NATIONS, THEIR LEVELS OF OUTPUT PER WORKER STILL TEND TO REMAIN NOTABLY HIGHER THAN THAT OF INDIA Economic growth originates from two main sources. The first lies in getting more people to work and putting in more capital while the second is associated with enabling our workers to produce more efficiently, which means increased productivity. Since there are limits to the amount of additional labour and capital that can be used, improved productivity is the key to long-run growth. With the recent debate on trends showing falling productivity levels across developed nations gaining momentum, emerging economies are now presented with a call to make significant improvements in productivity levels to sustain progress. Going by the estimates modelled by the International…

Geopolitical assertions about the power of the renewables to usher in greater co-operation among countries are being falsified by recent developments. If anything, renewables have been pivotal in sparking what many refer to as the US-China trade war while several new players emerging as competitors in the sector may well lead to increased trade tension. The potential role of conventional energy resources in sparking conflicts among countries has been proven, historically, over time. However, when renewables came to the fore in the global energy space, it was argued that conventional geopolitics around conventional energy resources might die its natural death as the control of resources – the primary cause of conflicts – was virtually absent in renewables. It was also hoped that the countries’ common end goal of combating climate…

IF PRIYANK SUKHIJA, the promoter of First Fiddle Restaurants, was not a restaurateur, he would probably be working with Google Maps or Apple Maps. He knows prime properties on India’s high streets and in malls like the back of his hand. When everybody was neglecting New Delhi’s Connaught Place (CP), he opened a series of restaurants there. The reason – location. “Every city has a centre. New York has Times Square, London has Oxford Street. The city centre of Delhi is CP. It is huge. If anybody from South and West Delhi enters CP, he enters via Baba Kharak Singh Marg, and the first thing he sees is Lord of the Drinks [a brand owned by Sukhija]. Enter from Janpath, and the first thing they see is Teddy Boy [Sukhija’s…

The Indian car market is significantly different from those in other large countries. We are growing at 8-10 per cent annually while other markets, including China, have plateaued. With car penetration of 24 per thousand compared to 500 per thousand in Europe, the potential for growth is large. The nature of our infrastructure in cities has led to the market being dominated by small cars not exceeding four metres. Government policy also supports small cars because they have lower fuel consumption and emission. The large production volume of small cars enables India to export a large number of such cars. India’s two-wheeler population is estimated to be 150 million with sales in 2017/18 at around 20 million. Two-wheelers consume about 62 per cent of total petrol with the rest going…

ARTIFICIAL INTELLIGENCE (AI) IS DISRUPTING LIFE AND WORK, PROMPTING GOVERNMENTS AND POLICYMAKERS TO TAKE NOTE OF ITS POTENTIAL AND FORMULATE WAYS TO HARNESS ITS POWER FOR GREATER COMMON GOOD. LAST AUGUST, THE CENTRE SET UP A TASK FORCE TO EXPLORE THE POSSIBILITIES OF USING AI FOR INDIA’S ECONOMIC TRANSFORMATION. THE 18-MEMBER TASK FORCE, HEADED BY V. KAMAKOTI, PROFESSOR AT THE DEPARTMENT OF COMPUTER SCIENCES, IIT-MADRAS, HAS BEEN ASKED TO COME UP WITH SUGGESTIONS TO DRIVE DEVELOPMENT IN AI RESEARCH, DEVELOPMENT AND APPLICATIONS. THE FIRST REPORT SUBMITTED BY THE PANEL WAS RELEASED RECENTLY. K.T.P. RADHIKA SPOKE TO V. KAMAKOTI ON THE TASK FORCE, ITS MISSION, AND AI IN INDIA. EDITED EXCERPTS: What was the modus operandi of the AI taskforce? A: We identified 10 domains ranging from manufacturing, healthcare, agriculture and…

HUAWEI’S P-SERIES phones have been redefining the smartphone camera. The P9, launched two years ago, was co-engineered with Leica – the German camera manufacturer – and had a dual lens set-up that captured sharp images, including ones with bokeh effect. The P20 Pro takes it up a notch with its formidable AI-powered Leica triple camera set-up at the rear – 8-MP sensor with telephoto lens, 40-MP RGB sensor with 5x hybrid zoom and a 20-MP monochrome sensor. While it may seem confusing as to what to use when, it really isn’t. All one has to do is select the mode and get clicking. All the three lenses work in tandem – the 40-MP sensor captures colours, 20-MP sensor focusses on depth effect and details, while the 8-MP camera works on…

Art The Slayer of Evil TYEB MEHTA'S ‘Durga Mahishasura Mardini’ is that rare work – a painting by the master that has never been seen before. Gaurav Bhatia, Managing Director of Sotheby’s India, noticed it in the home of his father’s friend in Kolkata and realised its value. This one of a kind work of art forms is the centre piece of Sotheby’s first auction in India in December. Mehta painted it while at Shantiniketan in West Bengal when he could see Durga everywhere in the aftermath of the 1992/93 riots in Mumbai while he was in Shantiniketan. So there she is, wrapped in white, referencing the colours of the Indian flag, in a work that is as powerful as it is timely. Mehta’s work does well in auctions. In…

ITR FILING Get Ready To Share More Information The Central Board of Direct Taxes has come out with modified ITR forms for AY2018/2019, which will require salaried individuals to provide a detailed breakup of the salary. Those in business will have to give their GST numbers and turnover amounts. The new Sahaj form (ITR Form-1), filed by individuals with income up to ₹50 lakh, seeks salary break-up in the same format as available in Form 16. Taxpayers must share details of allowances that are not tax-exempt, the value of perquisites, profit in lieu of salary and deductions claimed under Section 16. Earlier, NRIs could also use this form to file their returns. But now they will have to use ITR Form-2. Individuals and HUFs (Hindu Undivided Families) with income under…

The word infrastructure might conjure up images of projects stuck or construction abandoned. But road construction in the country is an entirely different story. The significant ramp-up of road projects has seen road construction players drive in the fast lane. Order books have risen to all-time highs, with many companies having orders about four times their sales, which gives earnings assurance for the next three-four years. Road construction stocks have started reacting favourably to this. Some, such as KNR Constructions and Dilip Buildcon, have been surging for quite some time. Others have started rising only recently. For instance, IRB Infrastructure has risen 40 per cent in the past three months. Companies in this space have started seeing a small but evident re-rating of their valuations. As against the past price…

In its guidelines for P2P lending institutions – they are now notified as non-banking financial companies (NBFCs) – the Reserve Bank of India (RBI) has not only defined the scope of their activities but has also specified the prudential norms regarding maximum leverage, aggregate and single-participant limits, maximum loan tenure, fund transfer mechanism, grievance redressal system and disclosure requirements, which should address some of the challenges faced globally. Moreover, a P2P platform seeking registration should have a net owned fund of at least ₹2 crore, an effective step to weed out non-serious players. Here are the RBI regulations that will help cap the risks of P2P participants. 1) The aggregate exposure of a lender to all borrowers at any point of time, across all P2Ps, shall be subject to a…

The fact that Pay Commission recommendations, when implemented by the government, result in higher demand for goods and services has been known for a long time. It would also impact inflation, at least partially, because some goods and services would be part of the CPI basket. Shortly after the 7th Pay Commission came out with its recommendations, the Reserve Bank of India (RBI) estimated that these would directly impact the headline CPI by 150 basis points, and by another 40 basis points as a result of indirect impact. This impact would largely be because of housing and transportation sectors, and it would be spread over a period of time. Now a Mint Street Memo, authored by Praggya Das, Director of Monetary Policy Research, estimates that there has been a 35…

THE GOVERNMENT has stepped up work on the draft Labour Code on Social Security. Once in force, the code will benefit at least 50 crore workers ranging from domestic helpers to factory employees. Currently, about six crore employees in the organised sector enjoy social security benefits such as PF and health insurance. The proposed code will amalgamate 15 labour laws that govern PF, state insurance schemes and social security for the unorganised sector. While the move will serve as an effective campaign tool in an election year, the corporate sector is likely to welcome it as the proposed restructuring provides more scope for private participation. For instance, the draft suggests allowing private insurance firms and the right to choose fixed-term contract hiring over permanent jobs. If it can keep both…

INDIA EXPORTED $302.8 billion worth of goods during FY2017/2018, a 9.78 per cent rise over the previous year. The nonpetroleum, non-gems and jewellery category in the export basket was valued at $222.45 billion, an increase of 10.73 per cent. What is encouraging is the fact that this growth figure covers a period that saw India go through the birth pangs of one of the biggest reforms, the implementation of the Goods and Services Tax (GST) and an increasingly vigilant institutional lending system. It is fair to say that Indian exporters, largely, weathered through. The government can now prioritise those segments that are still languishing. An extra push will help labour-intensive sectors that are still in the negative growth territory due to banks tightening lending norms or the ones facing cash…

MANUFACTURING LESSONS WHAT: Conference on Manufacturing Competitiveness in Textile & Apparel WHEN: May 25, Mumbai WHAT TO LOOK FOR: Most of the textile and apparel manufacturing units have small capacities and low manufacturing efficiencies. This CII conclave aims to bring together stakeholders and policy makers to deliberate on devising a strategy for manufacturing excellence and growth. MANAGING DEBT WHAT: Rising Tide of Debt: Risk, Resilience, Responsibility WHEN: May 28-29, Brussels, Belgium WHAT TO LOOK FOR: The event is jointly organised by the European Commission and the World Bank Group. It will facilitate discussion of issues in public debt management in a changing global environment, faced by developing countries. It is targeted at policy-makers, government debt managers, civil society organisations, among others. TAPPING SOLAR ENERGY WHAT: CII Goa Conference on Solar…

FACEBOOK, reportedly, has no plan to incorporate the provisions of the European Union law, called General Data Protection Regulation (GDPR), in all geographies. It will just take measures on similar lines. India will have to formulate its own data privacy law that is stringent, instead of relying on Facebook to mend things. Section 43A of the (Indian) Information Technology Act, 2000, is not equipped to manage issues related to data breach and privacy. With reports confirming that political parties in India, too, sought the services of data analytics firm Cambridge Analytica to manipulate public opinion in their favour, the need for a digital privacy to protect Indian citizens has never been more pressing. The regulatory bodies in India can take a leaf out of the model laws from GDPR to…

WHEN CHOOSING A CEO, boards typically take into account the particular circumstances the company faces: Is it in need of a turnaround, say, or will it be scaling for growth? For a CFO position, they might ask, Are we about to do an initial public offering, or are we planning to grow by acquisition? In such cases, boards generally favour candidates with direct experience leading organisations through the situation at hand. But when hiring for and promoting people into lower-level leadership jobs, companies typically don’t pay much attention to the contextual challenges specific to the role. They tend to prefer jack-of-all-trades candidates with varied backgrounds – a tack some in HR dub the “best athlete” approach. A broad new quantitative study from the Washington-based research and advisory firm CEB (acquired…

YOUR THOUGHTS are not going to be your own if you dare to don AlterEgo, MIT Media Lab’s new wearable. The white gadget hooks around your ear and extends to just under your lips, looking like something one might see on a patient in a hospital bed. AlterEgo is fitted with electrodes whose job is to measure tiny, unseeable facial movements that are known to occur when we think in words. These neuromuscular signals, triggered by internal verbalisations, tally with the words they represent when spoken aloud, which means if you measure the movements, you know the words and, therefore, the thoughts of the person. The signals are fed to a machine-learning system that has been trained to correlate particular signals with particular words as part of the experiment at…

IF YOU ARE WORKING eight hours a day, five days a week (assuming you take a complete break during weekends, which is quite unlikely), you end up sitting at your office desk 2,100 hours a year. And during those hours, how you sit will most certainly impact your wellbeing. When the posture is not right, you will end up overusing some muscles and underusing others, thus causing muscle inefficiency. It may start with some nagging syndromes such as lower back pain, pain in the legs or a feeling of numbness, but could have severe consequences if not dealt with early and conclusively, warns Shruti Bangera, Senior Subject Matter Expert in Physiotherapy at Portea, a leading provider of home healthcare services. If untreated, such conditions may lead to kyphosis, an upper…

Interest rates on bank deposits are at a decade low, and those on small savings schemes are close to a 40-year low. This has forced people to look for alternatives, one of which is peer-to-peer, or P2P, lending. Globally, P2P lending has been around for a decade, starting around the 2008 financial crisis. However, in India, it started four-five years ago, but without guidelines or recognition from regulators, which limited its popularity. However, last year, the Reserve Bank of India, or RBI, came out with regulations on P2P lending. Since then, it seems to have picked up pace. First, let us understand what is P2P lending. As the name suggests, it is lending of money by one person to another with the helo of a collaborator, which is a fintech…

Taxation Ravi Ranjan: I have recently opened a demat account and occasionally trade on stocks. I have short-term capital gains, which are now taxed at 15 per cent. Can you clarify how the taxation happens? Will it be calculated separately and added to the total taxable amount or will the short-term capital gains be added to my income and then taxed as per my tax slab? Chetan Chandak, Head of Tax Research, H&R Block India, replies: Short-term capital gains are gains from selling short-term assets such as shares held for less than 12 months. In this case, taxation on the amount from share sale is done as per Section 111A that specifically says all short-term capital gains arising from the sale of listed equity shares and equity-oriented mutual funds will…

HOME LOAN: Floating Rate; Interest Tenure - Up to 20 years For Salaried Person FIXED DEPOSIT For amount less than ₹1 Crore (Regular) SMALL SAVINGS SCHEMES Source: India Post for small savings schemes, for others, Deals4Loans; *For quarter ending June 2018 CAR LOAN: For New Cars, Tenure - 7 years EDUCATION LOAN: Loan Amount - Up to ₹7.5 lakh Tenure - 15 years PERSONAL LOAN: Tenure - Up to 5 years Loan Amount - Up to ₹15,00,000…

225% GLOBAL DEBT AS PER CENT OF GDP IN 2016 105% DEBT AS PER CENT OF GDP IN ADVANCED ECONOMIES, LEVELS NOT SEEN SINCE WORLD WAR II Global debt has risen sharply since 2001… in $trillion WORLD ADVANCED ECONOMIES UNITED STATES EMERGING MARKETS CHINA DEVELOPING COUNTRIES The country classification in the Fiscal Monitor divides the world into three major groups — 35 advanced economies, 40 emerging market and middle-income economies, and 40 low-income developing countries ..driven mainly by non-financial private sector debt Global debt (% of GDP) Source: Global Debt Database and IMF staff’s calculations 43% CHINA'S CONTRIBUTION TO INCREASE IN GLOBAL DEBT SINCE 2007 63% CONTRIBUTION OF THE NON-FINANCIAL PRIVATE SECTOR DEBT 13 PERCENTAGE POINT INCREASE IN LOW-INCOME DEVELOPING COUNTRIES’ DEBT IN LAST FIVE YEARS 4.4% THE OVERALL DEFICIT…

AVIK SAHA, CO-CONVENOR of Jai Kisan Andolan campaign, has had a new routine from April 3. Every day, he collects and shares the real prices farmers fetch in mandis (agricultural markets) for a crop – he monitors about 20 crops – on the social media. The “MSP (minimum support price) Alert” initiative reveals the difference between the government fixed MSP and the actual money farmers take home. The results, so far, indicate that the spot prices farmers get when they sell their produce in major mandis, across India, are much below the MSP for all the crops Recently, Saha and his team worked out a formula to calculate what this means for the farmers’ promised revenue at a consolidated level. For instance, they estimate that by April 5 the tur,…

INDIAN GOVERNMENT SPENDS 1.2 PER CENT OF GDP ON HEALTH, WHICH IS LOWEST AMONG BRICS NATIONS CAPITALISM 101 stipulates that prices for products/services are set by market mechanisms. Buyers try to get the lowest prices possible and sellers try to get the highest. Depending on supply and demand, they eventually negotiate a deal. Not so with healthcare where prices are made up depending on who the payer is. Healthcare expenditure as a percentage of gross domestic product (GDP) is the highest in the US at 17.5 per cent where the availability of medical insurance has driven up the costs steadily for years now. Healthcare expenditure in India is just 4.9 per cent of GDP, but 75 per cent of this is paid as an out-of-pocket expense by private citizens. The…

As the Indian economy grew over the past two decades, the automotive sector has grown from a small, protected industry to be a growth driver for the country. While it is still overshadowed by the Chinese automotive industry in scale, India has made impressive progress. It is already the largest two-wheeler (carrying internal combustion engines) market globally and is among the top five markets for four-wheelers. Indian automotive executives form a material employee pool of global automotive leaders. India is also home to some of the important R&D programmes of global auto companies. Within the country, the auto industry contributes significantly to the economy and employment. It currently accounts for 7 per cent of the country’s GDP and is expected to rise to 12 per cent by 2026. Since automotive…

OVER the past few years, news has become severely biased and, at times, outright fake. As technology has helped people create and spread fake news, it is only fitting that tech should fight against it. That is what a group is trying to do, according to the science site Futurism. At an online publication called Knowhere News, an experiment is on to take the bias out of news reports, using artificial intelligence or AI. Here is how it works. An AI system spots popular news stories online and scans hundreds on the same topic. Facts are then extracted from those while extremely negative or positive stories are weeded out. The new report is then presented to human editors who give it a final glance and if needed, make corrections, trying…

ORGANISATIONS today are mostly technology-driven, but they need to look at how their people are faring in such environments and focus on office ergonomics. In fact, ergonomics and its implications on the body are gaining importance as an area of study in physiotherapy. There are broadly two seating concepts. One is the kneeling chair concept, or the Balans, developed in the 1970s, and the other is the conventional seating or Mandal seating, attributed to Danish surgeon A.C. Mandal. Also, research is on to dispel the notion that standing is better than sitting. Standing for long hours could be bad for the spine as it can cause the pelvis to rotate forward. It may lead to lumbar lordosis, an inward curving in the lower spine region and a bend towards the…

CO-CHAIRMAN AND CEO, DR REDDY’S LABORATORIES Q. The biggest challenge you faced in your career A. Very early in my career, I had to take charge of a group company and handle a management crisis. On my first day, more than 75 per cent employees quit, showing their solidarity with my predecessor. It was tough, but from then on, I felt a deep desire to build an organisation that could thrive through change – change in owners, employees, products, technology. All my efforts in the 30 years of business life have been driven by that desire. Q. Your best teacher in business A. One is our founder, late Dr K. Anji Reddy, who always focussed on the big picture. And the other is my father (G. Harischandra Reddy), a stickler…

A wrong booking decision could set you back by a tremendous margin, especially if you are planning a family holiday. Check out these tips to make sure that your memorable vacation remains light on the pocket. When checking flight ticket rates and deals online, use the incognito mode to avoid dynamic pricing. If lack of funds is delaying your booking, use the HFF (hold for free) option to reserve seats without any immediate payment and pay at a later, pre-selected date. Opt for low-cost airports closer to the destination for cheaper flights. For instance, flights to Thailand that cost Rs 17,000-19,000 from Delhi or Mumbai will cost Rs 9,000 from Kolkata. Set price alerts using apps and web options such as Google Flights or Kayak. Compare the prices you get…