Business News

A powerful industry conquers the US tax system

Business News - 2 hours 54 min ago
There were two weeks left in the Trump administration when the Treasury Department handed down a set of rules governing an obscure corner of the tax code.Overseen by a senior Treasury official whose previous job involved helping the wealthy avoid taxes, the new regulations represented a major victory for private equity firms. They ensured that executives in the $4.5 trillion industry, whose leaders often measure their yearly pay in eight or nine figures, could avoid paying hundreds of millions in taxes.The rules were approved on Jan. 5, the day before the riot at the U.S. Capitol. Hardly anyone noticed.The Trump administration’s farewell gift to the buyout industry was part of a pattern that has spanned Republican and Democratic presidencies and Congresses: Private equity has conquered the American tax system.The industry has perfected sleight-of-hand tax-avoidance strategies so aggressive that at least three private equity officials have alerted the IRS to potentially illegal tactics, according to people with direct knowledge of the claims and documents reviewed by The New York Times. The previously unreported whistleblower claims involved tax dodges at dozens of private equity firms.But the IRS, its staff hollowed out after years of budget cuts, has thrown up its hands when it comes to policing the politically powerful industry.While intensive examinations of large multinational companies are common, the IRS rarely conducts detailed audits of private equity firms, according to current and former agency officials.Such audits are “almost nonexistent,” said Michael Desmond, who stepped down this year as the IRS’ chief counsel. The agency “just doesn’t have the resources and expertise.”One reason they rarely face audits is that private equity firms have deployed vast webs of partnerships to collect their profits. Partnerships do not owe income taxes. Instead, they pass those obligations on to their partners, who can number in the thousands at a large private equity firm. That makes the structures notoriously complicated for auditors to untangle.Increasingly, the agency doesn’t bother. People earning less than $25,000 are at least three times more likely to be audited than partnerships, whose income flows overwhelmingly to the richest 1% of Americans.The consequences of that imbalance are enormous.By one recent estimate, the United States loses $75 billion a year from investors in partnerships failing to report their income accurately — at least some of which would probably be recovered if the IRS conducted more audits. That’s enough to roughly double annual federal spending on education.It is also a dramatic understatement of the true cost. It doesn’t include the ever-changing array of maneuvers — often skating the edge of the law — that private equity firms have devised to help their managers avoid income taxes on the roughly $120 billion the industry pays its executives each year.Private equity’s ability to vanquish the IRS, Treasury and Congress goes a long way toward explaining the deep inequities in the U.S. tax system. When it comes to bankrolling the federal government, the richest of America’s rich — many of them hailing from the private equity industry — play by an entirely different set of rules than everyone else.The result is that men like Blackstone Group’s chief executive, Stephen A. Schwarzman, who earned more than $610 million last year, can pay federal taxes at rates similar to the average American.Lawmakers have periodically tried to force private equity to pay more, and the Biden administration has proposed a series of reforms, including enlarging the IRS’s enforcement budget and closing loopholes. The push for reform gained new momentum after ProPublica’s recent revelation that some of America’s richest men paid little or no federal taxes.The private equity industry, which has a fleet of almost 200 lobbyists and has doled out nearly $600 million in campaign contributions over the last decade, has repeatedly derailed past efforts to increase its tax burden.The IRS commissioner, Charles Rettig, who was appointed by President Donald Trump, declined to be interviewed for this article. But in testimony before the Senate Finance Committee on Tuesday, he acknowledged that the agency wasn’t doing enough to scrutinize partnerships.“If you’re a wealthy cheat in a partnership, your odds of getting audited are slightly higher than your odds of getting hit by a meteorite,” Sen. Ron Wyden, the committee’s chairman, told Rettig at the hearing. “For the sake of fairness and for the sake of the budget, it makes a lot more sense to go after cheating by the big guys than focus on working people.”Yet that is not what the IRS has done.A Lucrative DistinctionPrivate equity firms typically borrow money to buy companies that they see as ripe for turnarounds. Then they cut costs and resell what’s left, often laden with debt. The industry has owned brand-name companies across nearly every industry. Today its prime assets include Staples, Petco, WebMD and Taylor Swift’s back music catalog.The industry makes money in two main ways. Firms typically charge their investors a management fee of 2% of their assets. And they keep 20% of future profits that their investments generate.That slice of future profits is known as “carried interest.” The term dates at least to the Renaissance. Italian ship captains were compensated in part with an interest in whatever profits were realized on the cargo they carried.The IRS has long allowed the industry to treat the money it makes from carried interests as capital gains, rather than as ordinary income.For private equity, it is a lucrative distinction. The federal long-term capital gains tax rate is currently 20%. The top federal income tax rate is 37%.The loophole is expensive. Victor Fleischer, a University of California, Irvine, law professor, expects it will cost the federal government $130 billion over the next decade.Back in 2006, Fleischer published an influential article highlighting the inequity of the tax treatment. It prompted lawmakers from both parties to try to close the so-called carried interest loophole. The on-again, off-again campaign has continued ever since.Whenever legislation gathers momentum, the private equity industry — joined by real estate, venture capital and other sectors that rely on partnerships — has pumped up campaign contributions and dispatched top executives to Capitol Hill. One bill after another has died, generally without a vote.An Unexpected EmailOne day in 2011, Gregg Polsky, then a professor of tax law at the University of North Carolina, received an out-of-the-blue email. It was from a lawyer for a former private equity executive. The executive had filed a whistleblower claim with the IRS alleging that their old firm was using illegal tactics to avoid taxes.The whistleblower wanted Polsky’s advice.Polsky had previously served as the IRS’s “professor in residence,” and in that role he had developed an expertise in how private equity firms’ vast profits were taxed. Back in academia, he had published a research paper detailing a little-known but pervasive industry tax-dodging technique.Private equity firms already enjoyed bargain-basement tax rates on their carried interest. Now, Polsky wrote, they had devised a way to get the same low rate applied to their 2% management fees.The maneuver had been sketched out a few years earlier by the Silicon Valley law firm Wilson Sonsini Goodrich & Rosati, in a 48-page presentation filled with schematic diagrams and language that only a finance executive could love. “Objective,” one slide read. “Change Management Fee economics to achieve Carried Interest tax treatment, without reducing GP cash flow or adding unacceptable risk.”In a nutshell, private equity firms and other partnerships could waive a portion of their 2% management fees and instead receive a greater share of future investment profits. It was a bit of paper shuffling that radically lowered their tax bills without reducing their income.The technique had a name: “fee waiver.”Soon, the biggest private equity firms, including Kohlberg Kravis Roberts, Apollo Global Management and TPG Capital, were embedding fee-waiver arrangements into their partnership agreements. Some stopped using fee waivers when they became publicly traded companies, but the tax-avoiding device remains in wide use in the industry.“It’s like laundering your fees into capital gains,” said Polsky, whose paper argued that the IRS could use long-standing provisions of the tax code to crack down on fee waivers. “They put magic words into a document to turn ordinary income into capital gains. They have zero economic substance, and they get away with it.”That was why the whistleblower was getting in touch.The Three WhistleblowersPolsky began talking with the former private equity executive, whose IRS claim accused three firms of illegally using fee waivers. (Whistleblowers receive a portion of whatever the IRS recovers as a result of their claims.)Before long, Polsky heard from a second whistleblower. And then a third.The whistleblowers — whose previously undisclosed claims are not public but were reviewed by The Times — had independently obtained dozens of private equity and venture capital firms’ partnership agreements from former colleagues in the industry, laying out the fee waivers in great detail.The arrangements all had the same basic structure. Say a private equity manager was set to receive a $1 million management fee, which would be taxed as ordinary income, now at a 37% rate. Under the fee waiver, the manager would instead agree to collect $1 million as a share of future profits, which he would claim was a capital gain subject to the 20% tax. He’d still receive the same amount of money, but he’d save $170,000 in taxes.The whistleblowers, two of whom hired Polsky to advise them, argued that this was a flagrant tax dodge. The whole idea behind the managers’ compensation being taxed at the capital gains rate was that they involved significant risk; these involved almost none.Many of the arrangements even permitted partners to receive their waived fees if their private equity fund lost money.That was the case at Bain Capital, whose tactics a whistleblower brought to the attention of the IRS in 2012. That year, Bain’s former head Mitt Romney was the Republican nominee for president.Another whistleblower’s claim described fee waivers used at Apollo — one of the world’s largest buyout firms, with $89 billion in private equity assets — as being “abusive” and a “thinly disguised way of paying the management company its quarterly paycheck.”Apollo said in a statement that the company stopped using fee waivers in 2012 and is “not aware of any IRS inquiries involving the firm’s use of fee waivers.”Prompted at least in part by the whistleblower claims, the IRS began examining fee waivers at a number of private equity firms, according to agency documents and lawyers who represented the firms.This would be the last time the IRS seriously examined private equity, and it would not amount to much.Codifying a Tax DodgeEarly in his first term, President Barack Obama floated the idea of cracking down on carried interest.Private equity firms mobilized. Blackstone’s lobbying spending increased by nearly a third that year, to $8.5 million. (Matt Anderson, a Blackstone spokesman, said the company’s senior executives “are among the largest individual taxpayers in the country.” He wouldn’t disclose Schwarzman’s tax rate but said the firm never used fee waivers.)Lawmakers got cold feet. The initiative fizzled.In 2015, the Obama administration took a more modest approach. The Treasury Department issued regulations that barred certain types of especially aggressive fee waivers.But by spelling that out, the new rules codified the legitimacy of fee waivers in general, which until that point many experts had viewed as abusive on their face.To the frustration of some IRS officials, private equity firms now had a road map for how to construct the arrangements without running afoul of the government. (The agency continued to review fee waivers at some firms where whistleblowers had raised concerns.)The Treasury secretary at the time, Jacob Lew, joined a private equity firm after leaving office. So did his predecessor in the Obama administration, Timothy F. Geithner.Inside the IRS — which lost about one-third of its agents and officers from 2008 to 2018 — many viewed private equity’s webs of interlocking partnerships as designed to befuddle auditors and dodge taxes.One IRS agent complained that “income is pushed down so many tiers, you are never able to find out where the real problems or duplication of deductions exist,” according to a U.S. Government Accountability Office investigation of partnerships in 2014. Another agent said the purpose of large partnerships seemed to be making “it difficult to identify income sources and tax shelters.”The Times reviewed 10 years of annual reports filed by the five largest publicly traded private equity firms. They contained no trace of the firms ever having to pay the IRS extra money, and they referred to only minor audits that they said were unlikely to affect their finances.Current and former IRS officials said in interviews that such audits generally involved issues like firms’ accounting for travel costs, rather than major reckonings over their taxable profits. The officials said they were unaware of any recent significant audits of private equity firms.No Money OwedFor a while, it looked as if there would be an exception to this general rule: the IRS’s reviews of the fee waivers spurred by the whistleblower claims. But it soon became clear that the effort lacked teeth.The agency did not audit most of the 32 private equity firms that were the subject of one whistleblower’s claims, according to an IRS document reviewed by The Times. So far, the agency appears to have recovered only small amounts in back taxes, including a total of less than $1 million from two firms, according to two people familiar with the audits. (A handful of audits are ongoing.)In 2014, the IRS began auditing the fee waivers used by Thoma Bravo, a large San Francisco private equity firm that owns companies like McAfee and JD Power, according to records reviewed by The Times. One of the whistleblowers had asserted that Thoma Bravo managers were avoiding taxes by claiming their waived fee income was capital gains, even though it entailed negligible risk.Agents tried to impose back taxes and penalties on Thoma Bravo, the records show. The company appealed. An internal IRS review panel sided with Thoma Bravo. The challenge was over. “We are not proposing any adjustments” to the company’s tax returns, an IRS official in the agency’s Chicago office informed Thoma Bravo in a July 2018 letter, reviewed by The Times.A Thoma Bravo spokesman declined to comment.Kat Gregor, a tax lawyer at the law firm Ropes & Gray, said the IRS had challenged fee waivers used by four of her clients, whom she wouldn’t identify. The auditors struck her as untrained in the thicket of tax laws governing partnerships.“It’s the equivalent of picking someone who was used to conducting an interview in English and tell them to go do it in Spanish,” Gregor said.The audits of her clients wrapped up in late 2019. None owed any money.The Mnuchin CompromiseAs a presidential candidate, Trump vowed to “eliminate the carried interest deduction, well-known deduction, and other special-interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers.”But his administration, stocked with veterans of the private equity and hedge fund worlds, retreated from the issue.In 2017, as Republican lawmakers rushed through a sweeping package of tax cuts, Democrats tried to insert language that would recoup some revenue by collecting more from private equity. They failed.“Private equity weighs in so consistently and so aggressively and is always saying that Western civilization is going to end if they have to pay taxes annually at ordinary income rates,” said Sen. Ron Wyden, D-Ore.While White House officials claimed they wanted to close the loophole, congressional Republicans resisted. Instead, they embraced a much milder measure: requiring private equity officials to hold their investments for at least three years before reaping preferential tax treatment on their carried interests. Steven Mnuchin, the Treasury secretary, who had previously run an investment partnership, signed off.“We were trying to strike a balance between protecting the tax base with making sure that we didn’t inadvertently penalize legitimate business and investment activity,” said George Callas, who was senior tax counsel to Paul Ryan, the House speaker.It was a token gesture for an industry that typically holds investments for more than five years, according to McKinsey. The measure, part of a $1.5 trillion package of tax cuts, was projected to generate $1 billion in revenue over a decade.Private equity cheered. One of the industry’s top lobbyists credited Mnuchin, hailing him as “an all-star.”Fleischer, who a decade earlier had raised alarms about carried interest, said the measure “was structured by industry to appear to do something while affecting as few as possible.”Months later, Callas joined the law and lobbying firm Steptoe & Johnson. The private equity giant Carlyle is one of his biggest clients.‘The Government Caved’It took the Treasury Department more than two years to propose rules spelling out the fine print of the 2017 law. The Treasury’s suggested language was strict. One proposal would have empowered IRS auditors to more closely examine internal transactions that private equity firms might use to get around the law’s three-year holding period.The industry, so happy with the tepid 2017 law, was up in arms over the tough rules the Treasury’s staff was now proposing. In a letter in October 2020, the American Investment Council, led by Drew Maloney, a former aide to Mnuchin, noted how private equity had invested in hundreds of companies during the coronavirus pandemic and said the Treasury’s overzealous approach would harm the industry.The rules were the responsibility of Treasury’s top tax official, David Kautter. He previously was the national tax director at EY, formerly Ernst & Young, when the firm was marketing illegal tax shelters that led to a federal criminal investigation and a $123 million settlement. (Kautter has denied being involved with selling the shelters but has expressed regret about not speaking up about them.)On his watch at Treasury, the rules under development began getting softer, including when it came to the three-year holding period.In December, a handful of Treasury officials working on the regulations told Kautter that the rules were not ready. Kautter overruled his colleagues and pushed to get them done before Trump and Mnuchin left office, according to two people familiar with the process.On Jan. 5, the Treasury Department unveiled the final version of the regulations. Some of the toughest provisions had vanished. Among those was the one that would have allowed the IRS to scrutinize transactions between different entities controlled by the same firm. The result was that it became much easier to maneuver around the three-year holding period.“The government caved,” said Monte Jackel, a former IRS attorney who worked on the original version of the proposed regulations.Mnuchin, back in the private sector, is starting an investment fund that could benefit from his department’s weaker rules.A Charmed MarchEven during the pandemic, the charmed march of private equity continued.The top five publicly traded firms reported net profits last year of $8.6 billion. They paid their executives $8.3 billion. In addition to Schwarzman’s $610 million, the co-founders of KKR each made about $90 million, and Apollo’s Leon Black received $211 million, according to Equilar, an executive compensation consulting firm.The industry’s lawyers have largely decoded the 2017 law and discovered new ways for their clients to avoid taxes.The law firm Kirkland & Ellis, which represented Thoma Bravo as it successfully fought the IRS, is now advising clients on techniques to circumvent the three-year holding period.The most popular is known as a “carry waiver.” It enables private equity managers to hold their carried interests for less than three years without paying higher tax rates. The technique is complicated, but it involves temporarily moving money into other investment vehicles. That provides the industry with greater flexibility to buy and sell things whenever it wants, without triggering a higher tax rate.Private equity firms don’t broadcast this. But there are clues. In a recent presentation to a Pennsylvania retirement system by Hellman & Friedman, the California private equity giant included a string of disclaimers in small font. The last one flagged the firm’s use of carry waivers.The Biden administration is negotiating its tax overhaul agenda with Republicans, who have aired advertisements attacking the proposal to increase the IRS’s budget. The White House is already backing down from some of its most ambitious proposals.Even if the agency’s budget were significantly expanded, veterans of the IRS doubt it would make much difference when it comes to scrutinizing complex partnerships.“If the IRS started staffing up now, it would take them at least a decade to catch up,” Jackel said. “They don’t have enough IRS agents with enough knowledge to know what they are looking at. They are so grossly overmatched it’s not funny.”
Categories: Business News

Four IPOs to hit Dalal Street this week

Business News - 2 hours 54 min ago
NEW DELHI: The IPO market is getting back on track after a lull of two months, with four companies launching their initial share-sales this week to raise Rs 9,123 crore collectively. The last initial public offering (IPO) was that of Macrotech Developers (erstwhile Lodha Developers), which opened during April 7-9. Shyam Metalics and Energy Ltd and Sona BLW Precision Forgings (Sona Comstar) will launch their IPOs on Monday, while Krishna Institute of Medical Sciences and Dodla Dairy will be open for public subscription on Wednesday, information with exchanges showed. In addition, Clean Science & Technology expects to hit the primary markets in the first week of July 2021 with IPO size of Rs 1,500 crore, while India Pesticides is likely to come out with its public issue this month or July, Yash Gupta, Equity Research Associate at Angel Broking, said. "The equity markets are flushed with liquidity and retail participation is at an all-time high. It is difficult to imagine a better time frame for small and mid cap companies to raise public money. So, it is quite natural for companies to tap the IPO market," Naveen Kulkarni, Chief Investment Officer, Axis Securities, said. The companies are raising funds to retire their debt, funding capital expenditure requirement and for general corporate purposes. Auto component maker Sona Comstar's Rs 5,550-crore IPO comprises fresh issue of shares amounting to Rs 300 crore and an offer-for-sale (OFS) aggregating up to Rs 5,250 crore by selling shareholder Singapore VII Topco III Pte Ltd, an affiliate of the Blackstone Group Inc. The issue, with a price band of Rs 285-291 a share, will open on June 14 and close on June 16. The Rs 909-crore IPO of Shyam Metalics and Energy Ltd, leading integrated metal producing company, consists of fresh issuance of equity shares worth up to Rs 657 crore and an OFS to the tune of Rs 252 crore by existing shareholders. The price band has been fixed at Rs 303-306 per share for the IPO, which will open for public subscription during June 14-16. Krishna Institute of Medical Sciences' IPO comprises fresh issue of shares aggregating up to Rs 200 crore and an OFS of up to 2,35,60,538 equity shares from promoters and existing shareholders. Those offering shares in the OFS include General Atlantic Singapore KH Pte Ltd, Dr Bhaskara Rao Bollineni, Rajyasri Bollineni and Bollineni Ramanaiah Memorial Hospitals. The company has set a price band of Rs 815-825 a share for its three-day initial share-sale, which will conclude on June 18. At the upper end of the price band, the IPO is expected to fetch Rs 2,144 crore. The IPO of Dodla Dairy comprises fresh issuance of shares worth up to Rs 50 crore besides an OFS of up to 1,09,85,444 equity shares by TPG Dodla Dairy Holdings Pte Ltd, Dodla Sunil Reddy, Dodla Deepa Reddy and Dodla Family Trust. The leading dairy company in South India has fixed a price a band of Rs 421-428 a share for its initial share-sale, which will open for public subscription on June 16 and conclude on June 18. At the upper end of the issue price, the IPO is expected to garner Rs 520 crore. Shares of these companies will be listed on BSE and NSE. According to Angel Broking's Gupta, this will be a very good opportunity for the retail investors to make money due to listing gains in a very short time of period. So far this year, 17 firms have come out with IPOs to raise Rs 17,503 crore. Apart from this, companies including Utkarsh Small Finance Bank, Glenmark Life Sciences, Rolex Rings and Seven Islands Shipping have received Sebi's go-ahead to float the IPO. Moreover, around 26 companies are awaiting Sebi's approval to launch the initial share-sale, data with Sebi showed. Sandeep Bhardwaj, CEO, Retail at IIFL Securities said that the great IPO story of FY21 will continue well into FY22. There is enough liquidity in the system and robust investor appetite for primary issues."Also the pandemic has reset businesses across industries and many rising sectors will look to tap the markets," he added.
Categories: Business News

FPIs invest Rs 13,424 crore in June so far

Business News - 2 hours 54 min ago
NEW DELHI: Overseas investors pumped in a net Rs 13,424 crore so far in June as risk-on sentiment improved with declining Covid-19 cases and hopes of early opening of economy. Depositories data showed that foreign portfolio investors (FPIs) invested Rs 15,520 crore in equities during June 1-11. "The robust net inflows over the last two weeks could be attributed to the improvement in investor sentiments on the back of consistently falling coronavirus cases in the country and hopes of an early opening of the economy," said Himanshu Srivastava, associate director - manager research, Morningstar India. At the same time, FPIs withdrew Rs 2,096 crore from the debt segment during the period under review. The total net inflow stood at Rs 13,424 crore. This comes following a net withdrawal of Rs 2,666 crore in May and Rs 9,435 crore in April. For the inflows in June, VK Vijayakumar, chief investment strategist at Geojit Financial Services, added that it appears from fourth quarter corporate figures that a cyclical recovery in Indian economy is imminent post the progressive unlock that is happening now. "The FPI activity was centred around IT, financial and energy sectors," noted S Ranganathan, Head of Research at LKP Securities. Overall, the MSCI Emerging Markets Index has lost 0.91 per cent this week, noted Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities. Giving an overview of other emerging markets, he said Thailand, South Korea, Indonesia and Philippines saw month to date FPI inflows of $188 million, $140 million, $138 million and $125 million, respectively. On the contrary, Taiwan saw month to date FPI outflows of $829 million. As per Chouhan, going forward, FPI flows may remain strong in the medium term as India is at a cusp of growth revival path. Interestingly, low interest rates, better exports outlook and revival in global economy is a good combination for India's economic revival, he said. Going forward, vaccination is expected to ramp-up, continuous decline in Covid cases, acceleration in consumer spending, healthy monsoon season and normalisation of overall situation could be expected, he added.
Categories: Business News

Kejriwal announces new norms; shops to open

Business News - 2 hours 54 min ago
The Kejriwal-led Delhi government has decided to introduce new norms to further keep COVID-19 in check. The news comes even as the number of cases has declined over last month. According to the CM, preparations are being made for a possible third wave.After 5 am tomorrow, all activities will be allowed except some activities that will be prohibited and some activities that will be done in a restricted manner. A detailed order is expected soon. Here's what we know:Schools, educational institutions including coaching centers will continue to remain closed in Delhi even as all shops in markets and malls will open from tomorrow from 10 am to 8 pm. The restaurants can be opened with 50 percent capacity.Spas, gyms, Yoga institutes will remain closed. Public parks and gardens will also remain closed.There will be 100% attendance of group A officers and 50% for the remaining in government offices. Essential activities will continue as before.Social, political, sports, entertainment, academic, cultural, religious festival gatherings prohibited. Religious places to be opened but no visitors will be allowed. Weddings not allowed in public places like banquet halls or hotels, but will be allowed only at court or homes with not more than 20 people. Only 20 people allowed at funerals.50% capacity to be allowed in Delhi Metro as well as buses. In autos, e-rickshaws, or taxis, not more than two passengers allowed to ensure social distancing.Swimming pools, stadiums, sports complexes, cinema theaters, multiplexes will remain closed.While weekly markets in Delhi can open from tomorrow, only one market will be allowed in each zone.If spike in Covid cases is observed in next week, restrictions will again be imposed on markets and restaurants.
Categories: Business News

India handed over 577 intruders to B'desh since 2018

Business News - 2 hours 54 min ago
In a gesture of mutual cooperation and emphasis on the well-being of the border populations of both countries, India has handed as many as 577 Bangladeshi intruders to the neighbouring country since 2018, and the numbers this year have been quite good in the first five months, with over 100 people returned to their country.Officials in the Border Security Force (BSF) said these intruders were caught and handed over to the Border Guard Bangladesh (BGB) -- the border guarding force of the neighbouring country, which shares 4,096 km borders with India.As the India-Bangladesh border is considered to be the most peaceful International Border, both countries ensure to maintain their relations and such good will gestures are shown from both sides during the flag meetings of the border guarding forces of the two nations.Of these 577 Bangladeshi intruders, there were women, children and men belonging to the villages located near to the borders. Most of the times, these illegal infiltrators sneaked into the Indian territory by crossing the International Boundary (IB) in search of jobs. The villagers could sneak into the Indian territory, as most portions of the India-Bangladesh border, the fifth-longest land border in the world, are porous.The India-Bangladesh border connects 262 km in Assam, 856 km in Tripura, 318 km in Mizoram, 443 km in Meghalaya, and 2,217 km in West Bengal.As per the data, 480 of these intruders had entered into the Indian territory through West Bengal, 71 through Tripura, 18 via Meghalaya and eight through Assam. All the 577 intruders were handed over to Bangladesh between January 1, 2018 and May 21 this year.As many as 129 Bangladeshis were held by the BSF this year till May 21 and were handed over to the BGB. Of these, 116 had entered into India through West Bengal, nine via Tripura, three through Meghalaya and one through Assam. The figures this year so far indicate that illegal entry may touch or cross the maximum of 262 illegal infiltrations noted in 2018.In 2020, 116 Bangladeshis were caught and handed over to the BGB. Of them, 91 had entered through West Bengal, 17 through Tripura, five via Assam and three through Meghalaya.In 2019, 70 intruders were held and handed over to Bangladesh, the lowest. Of these, 38 illegal entries were noted through West Bengal, 19 via Tripura, 12 through Meghalaya and one through Assam.A total of 262 Bangladeshis were returned back to their country in 2018, the highest so far. Of them, 235 had entered into the Indian territory through West Bengal, 26 through Tripura and one through Assam.Earlier this month, the BSF had sent back a Bangladeshi teenager who had strayed into the Indian territory. The 12-year-old youth, identified as Hasanur Jamal Abhik, was handed over to the BGB during a flag meeting between the two border guarding forces at the BSF Border Outpost Dawki and BGB Border Outpost Tamabil. A resident of Savar area in Dhaka district, the Bangladeshi teenager was found roaming in Dawki village on June 6 by the locals, who handed him over to the police. He was handed over to the BGB on June 7.To overcome this problem, as well as to prevent illegal trafficking of cattle, humans, drugs, fake Indian currency notes (FICN) and many more things, the Ministry of Home Affairs had in 2017 decided to employ a technological solution, besides the physical presence of BSF personnel.In January 2018, the information and technology wing of the BSF undertook project BOLD-QIT (Border Electronically Dominated QRT Interception Technique), under the Comprehensive Integrated Border Management System (CIBMS), and completed it in record time with the technical support of various manufacturers and suppliers.BOLD-QIT is a project aimed to install technical systems under the CIBMS, enabling the BSF to equip the Indo-Bangla border in the unfenced riverine areas of the Brahmaputra and its tributaries with various kinds of sensors.Now, the entire span of the Brahmaputra has been covered with the data network generated by Microwave communication, OFC cables, DMR communication, day and night surveillance cameras and intrusion detection systems.These modern gadgets provide feeds to the BSF control rooms along the borders and enable the paramilitary force's quick reaction teams to thwart any possibility of illegal border crossing and crimes.At various places, it is not possible to erect border fences due to geographical barriers, and the Indian government is taking help of electronic gadgets like these to secure the India-Bangladesh border from illegal infiltraion.
Categories: Business News

Uncertain future for children orphaned in pandemic

Business News - 2 hours 54 min ago
Losing a loved one is never easy but if one were to compare, there would not be a loss that could quite match the severity of losing one's parents, especially for dependent children.The death of a parent strips away the child of not just the emotional blanket of comfort, but also in several cases takes away the financial support, leaving their futures in a lurch.According to the National Commission for Protection of Child Rights (NCPCR), 3,621 children have been orphaned during the pandemic, and over 26,000 children have lost one parent.Ten-year-old Shatakshi Sinha is one of them.She lost her father to COVID-19 less than a month back and is trying to get her life back to normal, but her mother Kalpana Sinha said "nothing will ever be normal again", and who could argue?The sole breadwinner of the family, her 57-year old-husband -- an editor at a Hindi publishing house -- was gone almost in a night's span, without even getting a chance at proper treatment, and now she is at a loss for ideas to secure her daughter's future."He had low grade fever and a slight cough, which actually got better in a few days, but one morning he suddenly collapsed. Although we managed to revive him then… after scrambling for an ambulance and a bed for hours, by the time we reached the hospital, we had lost him," Kalpana said."I remember my little daughter running after the ambulance, pleading with me to take her along," she added, barely managing to keep it together.The challenge with Shatakshi's situation now is that even though she still has a mother to take care of her, the financial support has gone."I have always been a housewife. How am I suddenly supposed to start working? Honestly, I don't even know what I can do. And even if I do find a job, where will I keep my daughter while I am away. We live in times where no one can be trusted," Kalpana said.However, she has filled in a form seeking free education at her daughter's school under the Delhi government's scheme instructing schools to waive the fees for children who have lost their parents to COVID-19, but she hasn't heard anything yet.The story of Gaurang (13) and Daksh Gupta (6), who live in Uttam nagar, is not very different.Their father, again the only earning member in the family, was an e-rickshaw driver making a living one day at a time, but his death has pushed the family to the depths of hopelessness.Life was already a challenge with dipping incomes due to the lockdown. The boys' parents had decided to take the younger son out of school, and shift the older one to a government one to make managing finances a little easier, but before anything could happen, tragedy struck."My younger son keeps asking about his father, and I do not have an answer. The little one was really close to him... the elder boy has become indifferent."I don't know what to take care of. My children, their futures, or myself. I am so clueless and scared," said Madhu Gupta, the mother.Like Kalpana, Madhu too has applied at her older son's school for his education to be made free, but nothing has come out of it yet.A lot of this cluelessness, the widows said, was also because they have nowhere to turn to for guidance. Relatives helped for a few days after the deaths, but not anymore.In another tale of the cruel twist of fate, three siblings -- aged nine, 11 and 13 -- lost both their parents to COVID-19 in the first week of May.To make things worse, their landlord refused to let their tenancy continue unless they paid rent.Thankfully, their uncle, a welder, came to their rescue and took the three children in."They are my sister's children and I love them. I want to ensure they get an education and have a bright future, but there is only so much that I can do."I do not earn enough to fend for three children. I want the best for them, but I will need help," said Mohammad Asif, who also has to take care of his seven-month pregnant wife.In an attempt to provide help to caretakers like Asif, and non-earning single parents like Kalpana and Madhu, Bachpan Bachao Andolan (BBA), an NGO led by Nobel laureate Kailash Satyarthi has been identifying children rendered orphans during the pandemic for almost a year now.They recently launched a distress helpline asking people to report orphaned children when the death toll increased drastically during the second wave.Kalpana said she managed to get in touch with a BBA volunteer who assured her help, and is hoping to hear from them soon.Earlier this month, the organisation also sought the Delhi High Court's assistance to get information on the number of children who have been orphaned during the pandemic in the capital."While our workers have been trying to locate and provide relief to such children by giving them food and shelter wherever necessary, it is important to understand that our organisation too has limitations."We have got in touch with state government authorities to provide these children with long-term support. It is the primary responsibility of the government to care for these children," said Manish Sharma, Director, Bachpan Bachao Andolan.
Categories: Business News

Turmoil in Rajasthan over ‘phone tap’ salvo

Business News - 2 hours 54 min ago
Phone tapping charges have come back to haunt the Chief Minister Ashok Gehlot led government in Rajasthan, with Congress MLA Ved Prakash Solanki alleging that some legislators have talked about their phones being tapped.Without naming any MLA who levelled the phone tapping charge, Solanki, a staunch supporter of Congress leader Sachin Pilot, said the legislators also fear of being trapped by various agencies."I do not know if my phone is being tapped or not. Some legislators have told me that their phones are being tapped. I am also not aware if the state government is involved in phone tapping. Many officials told them (legislators) that it seems that there are efforts underway to trap them," Solanki, a legislator from Chaksu assembly constituency, told reporters on Saturday."Some of these MLAs have also informed the chief minister of the matter," he said.Solanki said he does not know whether the MLAs have technical knowledge or there is some App through which they come to know that their phones are being tapped.Reacting to the remarks, BJP state president Satish Poonia charged that the Congress is intimidating its MLAs.“Today again a Congress MLA is saying that many MLAs say their phones are being tapped and spying is happening. Congress should tell who these MLAs are? The Congress is intimidating its own MLAs," Poonia tweeted.In a tweet, Deputy Leader of Opposition Rajendra Rathore charged that the state government was once again trying to intimidate public representatives.In July last year, Pilot and 18 Congress legislators had rebelled against chief minister Gehlot. One of the accusations they levelled was about illegal phone tapping. The charges gained ground when some audio clips of telephonic conversations were shared by Gehlot's officer on special duty (OSD) Lokesh Sharma.The audio clips were later handed over to Rajasthan Police's special operations group (SOG) to investigate charges that some legislators were trying to topple an elected government through horse trading.The SOG ultimately closed the case after the Congress high command intervened to resolve the issues between Gehlot and Pilot.
Categories: Business News

With Trump gone, NATO wages climate war

Business News - 2 hours 54 min ago
If the U.S. military were a nation state, it would be the world's 47th largest emitter of planet-warming greenhouse gases, a 2019 study found.Though the British universities of Lancaster and Durham took account only of emissions from fuel usage in their study, it pointed to the huge impact that armed forces across the globe are having on the earth's climate.Facing a battle against global warming, NATO has for the first time made it a central focus of planning and strategy.Leaders of the Western military alliance are set on Monday to agree on a climate action plan to make their armed forces carbon-neutral by 2050, and to adapt to threats posed by global warming.NATO diplomats say efforts to focus on climate change were stymied during Donald Trump's U.S. presidency. He called climate change a "hoax" and pulled the United States out of the international Paris Agreement to fight climate change.Trump also expressed a lack of trust in the North Atlantic Treaty Organisation, and in 2018 threatened to withdraw the United States from the alliance formed in 1949 to contain a Soviet military threat.Now, with U.S. President Joe Biden prioritising climate action, the diplomats said NATO was able to act on concerns that climate change is a threat both to transatlantic security and to alliance personnel."This is a defining challenge of our time, and we must be an organisation that leads on it," a senior European NATO diplomat told Reuters.POLLUTERSNATO member states' militaries have long been aware that climate change will have huge security implications, expected to include increased migration, flooding at coastal NATO bases and a larger Russian presence in the Arctic as sea ice melts.But, to reduce their own climate-warming emissions from fossil fuel use, the member states require reform at the centre of the alliance because NATO sets fuel standards across the organisation.By committing to eliminate its net CO2 emissions by 2050, NATO's action plan would align the organisation with the pathway to deliver the Paris Agreement's goal of limiting global warming to 1.5 degrees Celsius (34.7°F).Meeting that goal will mean reducing military emissions that are often exempted from countries' carbon emissions targets - no mean feat for the U.S. Department of Defense, the world's single largest consumer of petroleum, according to research in 2019 by Neta Crawford at Boston University.While experts say EU countries under-report emissions from national militaries, a study commissioned by the European Parliament calculated in February that the carbon footprint of EU military expenditure in 2019 was about 24.8 million tonnes of carbon dioxide equivalent - about the same as the CO2 emissions released by around 14 million cars.A German defence expert, who declined to be named, said a main battle tank such as Germany's Leopard 2 guzzles 400 litres (106 gallons) of diesel in the field to cover just 100 km (62 miles). The average fuel consumption in the United States of a light-duty civilian vehicle was 9.4 litres per 100 km in 2018, according to a 2020 International Energy Agency report.Tank warfare also risks being tougher under global warming. During a NATO exercise in Poland in 2019, temperatures in German Ozelot tanks rose above 40 degrees Celsius, and soldiers could spend only a few hours at a time inside, a military source said.Some NATO allies are working to reduce electricity use or are integrating climate prediction models into military missions. Germany has its first carbon-neutral barracks, producing energy almost completely from geothermal power and solar panels. The Dutch military can use solar panels instead of diesel generators during operations.'CRISIS MULTIPLIER'NATO Secretary-General Jens Stoltenberg and U.N. Secretary-General Antonio Guterres have described climate change as a "crisis multiplier".Militaries are also expecting more operations in climate-vulnerable regions, as troops are called on to help tackle climate-driven natural disasters. Such crisis management is one of NATO's fundamental tasks, because of its ability to provide food supplies and logistical and medical support quickly.In 2018, eight of the 10 countries that host the largest number of personnel involved in multilateral peace operations were in areas highly exposed to climate change, according to a study by the Stockholm International Peace Research Institute.Allies are also testing more equipment to operate in extreme cold. Durability of assets on the battlefield has always been a priority, European defence sources told Reuters.Stoltenberg, a former U.N. special envoy on climate change, began pushing for a NATO climate agreement after Biden replaced Trump, diplomats said. Allies have yet to decide how much climate-related investment to fund jointly at NATO."The security policy community now sees more clearly that climate change is a driver of conflict," said Jamie Shea, a former senior NATO official now at the Friends of Europe think tank in Brussels.Because military assets take decades to develop and have a longer life than civilian vehicles, one of NATO's biggest contributions in the medium term, experts say, will be in increased use of synthetic fuels instead of fossil fuels.Produced from water, CO2 and renewable energy, synthetic fuels do not produce sulphur or nitrogen pollution and still have a high energy density. NATO's standard fuel to power planes or ships is kerosene, one of the more polluting fuels.The German military, the Bundeswehr, may start adding synthetic fuel to traditional fuel in several years.Electric tanks, however, are not an option."It will prove difficult to install charging stations on the battlefield in time before the fighting starts," said a German defence source who declined to be named.
Categories: Business News

ITC to expand Welcomhotel brand to 25 hotels

Business News - 2 hours 54 min ago
Amid COVID-19 pandemic and slump in the hospitality industry owing to lockdown and travel restrictions, ITC Hotels is optimistic about domestic tourism prospects and planning to increase the number of properties under the brand Welcomhotel. The Rs 45,000 crore hospitality arm of ITC, said it was planning to increase the number of properties under the brand Welcomhotel to 25 in a year's time from 19 now. "ITC Welcomhotel will be a 25 property brand over next 12 months," an ITC official told . The brand opened two properties in a span of six months. Welcomhotel Tavleen Chail was unveiled on Thursday and Welcomhotel Shimla about six months ago. And Welcomhotel Ahmedabad and Welcomhotel Port Blair were relaunched in March quarter. "Collaborating with like-minded partners who bring unique hospitality experiences has further strengthened ITC Hotels footprint across the length and breadth of the country," ITC executive director Nakul Anand said. The pandemic induced lockdowns had blown hard on the hospitality sector and not all were able to sail through. Hyatt Hotels Corporation has suspended operations at Hyatt Regency hotel in Mumbai, and said the property will remain closed till further notice. "With no funds forthcoming from Asian Hotels (West) Ltd, the owner of Hyatt Regency Mumbai, to sustain the operations of the hotel, a decision has been taken to temporarily suspend all operations for Hyatt Regency Mumbai," the hotel had said. With the addition of the premier mountain resort at Chail, a managed property of Welcomhotel brand, the brand currently boasts a portfolio of around 19 properties across India, officials said. ITC said its hotel business segment EBITDA was in March quarter at Rs 25 crore against breakeven in previous quarter and extreme focus on cost reduction and controllable cash fixed costs down 41 per cent in FY21. Analysts speaking about the future said hotel majors are gearing for the rush with vaccination going on steadily and economy opening up gradually, demand will spurt after the long lull. The railway reservations have already jumped 230 per cent. Airlines also expect a similar spurt in demand. "Vocal for locals is gaining more ground as people prefer to travel motorable distances post pandemic. Hence, domestic tourism is on the rise. At ITC Hotels we have always showcased destination India and this is the appropriate opportunity to cater to the public demand for experiential stays," an ITC official said. ITC Hotels has 100 properties across four brands in over 70 locations. BSM RG RG
Categories: Business News

Tamil Nadu notifies Renault Nissan industrial dispute arbitration

Business News - 2 hours 54 min ago
The Renault Nissan Automotive India Private Ltd and its workers' union have created a history by going in for an arbitration to settle wage revision and other aspects, said a union official.The Tamil Nadu government recently published the terms of reference for arbitration on the dispute between car maker Renault Nissan Automotive and its union Renault Nissan India Thozhilalar Sangam (RNITS).This is the first time an industrial dispute in a multinational company will be decided by arbitration under the Section 10A of the Industrial Disputes Act 1947 in this part of the country, a union official told IANS.Renault Nissan Automotive India Private Ltd is the car production joint venture between French company Renault and Japan's Nissan Motor Company.The arbitrator is retired Madras High Court Judge P. Jyothimani and the fee will be Rs 150,000 per sitting to be paid by the company.The arbitrator will decide on the 53 demands raised both by RNITS (38 demands) and Renault Nissan Automotive management (15 demands).
Categories: Business News

Inflation numbers, IPO season among key factors that may guide market this week

Business News - 2 hours 54 min ago
New Delhi: The domestic equity market witnessed a historic week as bulls dragged benchmark indices to new record highs. Both BSE Sensex and NSE Nifty50 scaled new lifetimes levels as banking and financial counters contributed significantly.The immediate resistance levels for Nifty50 are 15,850 and 16,000 while key support levels for the index are 15,500 and 15,300, said Mohit Nigam, Head- PMS, Hem Securities.The tone of the market was upbeat following favourable local cues and optimism in global markets. Declining Covid cases, easing restrictions, strength in corporate results and a positive note by the Department of Economic Affairs on the impact of second wave of Covid boosted sentiments on Dalal Street last week.On the global front, the market was awaiting key events including European Central Bank's (ECB) policy meeting, which has raised its growth forecast while pledging liquidity support. US inflation numbers eased worries as the current surge is transitory and insufficient for the Fed to taper its bond-buying policy."In the coming week, India’s inflation data for May, which is expected to be elevated, will be the key economic driver in the domestic market. On the global front, the Fed’s monetary policy meeting will be in focus as the market awaits its stance on continuing stimulus measures," said Vinod Nair, Head of Research at Geojit Financial Services.Here are key factors that may steer the market this week:Inflation numbersIndia will release its data for wholesale price index (WPI) and consumer price index (CPI) for May this week. Inflation numbers are likely to increase as fuel prices have spiked.In April, WPI numbers shot to a 11-year high of 10.05 per cent, whereas India's retail inflation likely rebounded to 5.30 per cent in May. RBI has projected retail inflation at 5.1 per cent in 2021-22.US FOMC meetThe Federal Open Market Committee's (FOMC) two-day meeting is a big event for markets in the week ahead. Although the Fed is not expected to take any action, tweaks in interest rate forecasts are likely. The Fed is expected to signal a taper well before it takes any action. The results of the meeting are expected on Wednesday.The Federal Reserve will also release its industrial production index data and retail sales for May on Tuesday.Four IPOs in a weekAfter a two-month pause, India’s primary market is getting ready for action as four companies- Sona Comstar, Shyam Metalics, Dodla Dairy and KIMS Hospitals- have lined up initial public offerings in the coming week, looking to raise a total of ₹9,132 crore from share sales."The IPO market is getting ready for 6 new IPOs in a couple of months. We expect this will be a very good opportunity for retail investors to make money due to listing gains in a very short period," said Yash Gupta, Equity Research Associate, Angel Broking.UnlockingSeveral states are poised to lift more restrictions and ease down curbs in the next phase of unlocking. Major states like Maharashtra and Delhi may have more relaxations on cards, while Karnataka will unlock in phases from June 14.Covid CasesIndia's tally of daily Covid-19 cases has witnessed a steep fall in the last couple of weeks, with infections falling below one lakh-mark a day. It is a big relief for authorities and Dalal Street traders. As cases decline, hopes of economic recovery are likely to increase.India reported 80,834 new Covid-19 cases, with 1,32,062 discharges in the last 24 hours, as per the Union Health Ministry. The toll due to the disease rose to 3,70,384 with 3,303 fresh fatalities.Technical Outlook"Nifty has rallied more than 10 per cent from the recent low. Hence, a mild pullback cannot be ruled out given that the market is rallying on a slowed-down momentum, which can be properly visualized with the help of negative divergence in RSI on the daily timeframe. As long as the benchmark index is trading above 15,400, we suggest traders to maintain a bullish bias on the market," said Nirali Shah, Head of Equity Research, Samco Securities.
Categories: Business News

Rising shipping costs fire up prices from coffee to toys

Business News - 5 hours 55 min ago
The skyrocketing price of shipping goods across the globe may hit your pocketbook sooner than you think -- from that cup of coffee you get each morning to the toys you were thinking of buying your kids.Transporting a 40-foot steel container of cargo by sea from Shanghai to Rotterdam now costs a record $10,522, a whopping 547% higher than the seasonal average over the last five years, according to Drewry Shipping. With upwards of 80% of all goods trade transported by sea, freight-cost surges are threatening to boost the price of everything from toys, furniture and car parts to coffee, sugar and anchovies, compounding concerns in global markets already bracing for accelerating inflation.“In 40 years in toy retailing I have never known such challenging conditions from the point of view of pricing,” Gary Grant, the founder and executive chairman of the U.K. toy shop The Entertainer, said in a interview. He has had to stop importing giant teddy bears from China because their retail price would have had to double to add in higher freight costs. “Will this have an impact on retail prices? My answer has to be yes.”A confluence of factors -- soaring demand, a shortage of containers, saturated ports and too few ships and dock workers -- have contributed to the squeeze on transportation capacity on every freight path. Recent Covid outbreaks in Asian export hubs like China have made matters worse. The pain is most acutely felt on longer-distance routes, making shipping from Shanghai to Rotterdam 67% more expensive than to the U.S. West Coast, for instance.Rail And Container Shipping Operations At Berlin's Behala Inland Port Often dismissed as having an insignificant impact on inflation because they were a tiny part of the overall expense, rising shipping costs are now forcing some economists to pay them a bit more attention. Although still seen as a relatively minor input, HSBC Holdings Plc estimates that a 205% increase in container shipping costs over the past year could raise euro-area producer prices by as much as 2%.At the retail level, vendors are faced with three choices: halt trade, raise prices or absorb the cost to pass it on later, all of which would effectively mean more expensive goods, said Jordi Espin, strategic relations manager at the European Shippers’ Council, a Brussels-based trade group that represents about 100,000 retailers, wholesalers and manufacturers.“These costs are already being passed to consumers,” he said.Prices for customers are rising in other ways, too. For instance, anchovies from Peru have largely stopped being imported into Europe because with the higher freight costs they’re not competitive relative to what’s available locally, Espin said. Also, European olive growers can no longer afford to export to the U.S., he said.83477936Meanwhile, shipping bottlenecks and costs are hurting the transport of arabica coffee beans, favored by Starbucks, and robusta beans used to make instant coffee, which are largely sourced from Asia.Few industry observers expect container rates to retreat much any time soon. Lars Jensen, CEO of consultant Vespucci Maritime in Copenhagen, said on a Flexport Inc. webinar last week that there’s “zero slack in the system.”Cost of containers has soared raising risk of higher retail pricesClosely held French shipping company CMA CGM SA, which raked in net income of $2.1 billion in the first quarter compared with $48 million in the year-ago period, indicated recently that it expects “sustained demand for the transportation of consumer goods” to continue throughout the year.Freight costs are more painful for companies that move clunky, low-value items like toys and furniture. “If they are bulky products it means you can’t get very many in the container and that will have a significant impact on the landed price of the goods,” said The Entertainer’s Grant.For some lower-value furniture makers, freight now makes up about 62% of the retail value, according to Alan Murphy, CEO of consultant Sea-Intelligence in Copenhagen.“You simply can’t survive on this,” he said. “Someone is bleeding very hard.”Companies are desperately trying to work around the higher costs. Some have stopped exporting to certain locations while others are looking for goods or raw materials from nearer locations, according to Philip Damas, founder and operational head of Drewry Supply Chain Advisors.“The longer these extreme shipping freight rates last, the more companies will take structural measures to shorten their supply chains,” Damas said. “Few companies can absorb a 15% increase in total delivered costs for internationally traded products.”Some firms in Europe are resorting to extreme methods, like using truck convoys to get products including automotive parts, bikes and scooters from China, said Espin at the European Shippers’ Council.Euro-area producer prices have accelerated sharplyCentral bankers have so far been sanguine about the phenomenon, arguing that the rise in consumer prices tied to supply hiccups won’t last. European Central Bank President Christine Lagarde said on June 10 that while supply-chain bottlenecks would push up production prices and the headline inflation rate is expected to rise further in the second half of this year, the effect will fade.Several factors explain the relative lack of concern. Shipping costs only constitute a small fraction of the final price of a manufactured good, with economists at Goldman Sachs Group Inc. estimating in March -- when China-Europe rates were about half of current levels -- that internationally they made up less than 1%.To top that, companies have annual contracts with the container lines, so the prices they’ve locked in are considerably lower than the headline-grabbing spot rates. Although the latest round of contract negotiations in May reflected the stronger spot market, HSBC trade economist Shanella Rajanayagam said that “the longer-term rates are much much lower than the spot rates, even if they are feeding through.”With the end of lockdowns consumer demand is likely to shift to services from goods, but “the risk of course is that higher shipping costs persist -- especially given ongoing shipping disruption -- and that producers become more willing to pass these higher costs on to consumers,” Rajanayagam said.While many economists note that even a full pass-through of higher shipping fares to consumers will have a marginal effect on headline inflation, Volker Wieland, a professor of economics at the Goethe University in Frankfurt and a member of the German government’s council of economic advisers, warns that they might not be sufficiently factored in.“Even if the order of magnitude is smaller than estimated, the dynamic builds over a year and has significant effects,” he said. “That means there’s a danger we’re underestimating the impact.”(With assistance from Manisha Jha, Mai Ngoc Chau and Jasmine Ng)
Categories: Business News

Need science, not superstition to fight Covid

Business News - 5 hours 55 min ago
It is modern medicine which is today saving millions, and it is scientists and doctors who have discovered, in a dramatically compressed time span, the only proven protection against coronavirus, namely the Covid vaccine. In a stunning achievement for science, the vaccine has been developed in less than a year. It is science which is enabling us to understand whatever little we know of SARS CoV-2 and its variants. Yes, allopathy (like democracy) may be an imperfect system, but in a health crisis it gives human beings the best fighting chance.Health Minister Dr Harshvardhan’s criticism of Ramdev’s anti-doctor remarks — the minister used the anodyne words “unfortunate and inappropriate” — were surprisingly mild. The minister should have spoken up much more strongly in defence of India’s doctors, many of whom have sacrificed their own lives to treat Covid patients. But then Ramdev was once a key member of the India Against Corruption alliance which brought down the UPA and he’s part of the wider saffron establishment. Ramdev has launched his own Covid cure, the “Coronil kit”, even though the WHO has stated it had not certified any traditional cures for Covid, and Harshvardhan attended Ramdev’s Coronil press conference.Those who pour scorn on the medical and scientific community’s struggle against Covid are delegitimising the scientific process. Science invites questions, submits to scrutiny and accepts evidence-based corrections if new data is proved valid. Science builds trust because its processes are transparent. Ramdev hasn’t provided scientific evidence on why he’s convinced allopathy doesn’t work, he simply dismisses it based on claims of absolute truth, religious dogma and his own magical certainties. Where science prizes accurate data, the ‘anti science’ mentality promotes a disregard of data and denial of factual realities. Disseminating this kind of ‘anti-science’ mindset is a terrible disservice to India and can lead to people venting irrational rage against medical workers.But why blame only Baba Ramdev? Over the years, many politicians have confused medicine with mythology and science with superstition. Minister Shripad Naik once said yoga could cure cancer, while MP Sadhvi Pragya Thakur declared that cow urine could cure Covid although she was herself airlifted from Bhopal to a speciality Mumbai hospital for treatment. PM Modi cited Ganesha as an example of plastic surgery existing in ancient times. HRD minister Ramesh Pokhriyal once said an Indian sage had conducted nuclear tests and Tripura CM Biplab Deb asserted the internet existed in the Mahabharat. These may be myths and beliefs, but they’re not evidence-based facts.India was founded as a modern republic based on the Enlightenment values of reason, rationality and evidence-based truths as guides to progress. Without these values and the much-maligned Nehru’s commitment to scientific temper, India would neither have a space programme, nor would its scientists and engineers be equipped to work in global scientific institutions. In a country where superstitions and unthinking practices can hurt the most vulnerable, leaders have a moral responsibility to spread evidence-based knowledge and not undermine public trust in science. If they do, semi-literate populations could lapse into quackery, blind faith, vaccine hesitancy and refusal of medical protocols.Rants against “foreign” medicines in times of a global fight against Covid are also out of place.There is no reason why yoga and Ayurveda with its dizzying array of remedies cannot easily co-exist with allopathy, each complementing the other. Traditions often have a modern resonance. The Krishna-Arjuna dialogue in the Bhagavadgita consisting of fearless open questioning captures the essence of the scientific temper. In a health emergency, India desperately needs cutting-edge science and skilled allopathic doctors with their proven abilities to save lives. This is not the time for prime time ‘babagiri’ or ‘anti-science’ diatribes against doctors, but a time to stand with our corona warriors. After all, Baba Ramdev and politicians are protected by celebrity status and special security, but who will protect the exhausted doctor toiling alone in hospital wards?
Categories: Business News

Farmers 'reinforce' protest site against rain

Business News - 5 hours 55 min ago
As the protest continues on the borders of the national capital against the three contentious farm laws passed by the Central government, the farmers, taking a note of the extreme weather conditions, and to guard themselves against the rain and storm, have set up a concrete wall around the tent.The farmers decided to reinforce their 'camp' after a recent storm and rain blew off the tents.The farmers had to experience strong weather condition on the Ghazipur border.Beli Bhati, a resident of Gautam Budh Nagar, has come to extend his support to the farmers. "A solid wall has been built to prevent the wooden boundary from collapsing. We farmers do not even know how much more time it will take because Tikait ji has started the movement," he said."Also, we have set up our temporary home in a container, have an office and a double bed for the night."A wooden boundary has been made around the container, and to strengthen the boundary, a small wall has been set up using cement and bricks.Also, to cope up with the soaring mercury levels, the farmers have installed coolers and ACs in their tents.
Categories: Business News

Why G7’s global minimum corporate tax won’t work

Business News - 5 hours 55 min ago
The Group of 7 rich nations has agreed on a new global framework for ending low-tax havens by having a minimum corporate tax of 15%, and by sharing the excess profits of the 100 largest companies with the countries where they operate. This aims to stop giant companies from shifting their profits to low-tax havens via what are basically shell companies.Libertarians believe countries should be free to compete for foreign investment using low tax rates. However, the phenomenal expansion of giant companies paying zero or very little tax has raised a public furore that governments can no longer ignore, not even those complicit in tax havens. An IMF research paper estimated that $12 trillion of global corporate investment was “just phantom investment” to avoid tax.A meeting of 140 countries at the end of June will seek agreement on a new global tax framework, and delegate further work on rules to the G20. The Organisation of Economic Cooperation and Development has long attempted a global framework for a fairer tax regime, noting that in a digital age companies can do business of billions in a country and pay no taxes there. Till now, the US, home of the biggest digital companies, has opposed such reform.Some countries, including India, have already started taxing digital MNCs on the basis of their revenue, not on profits (which on paper can be zero). The Trump administration threatened India and other such countries with retaliation. But President Biden has now agreed to global tax reforms. These will cover the 100 biggest companies and not be restricted to digital companies, which would disproportionately hit US firms.Optimists think the era of tax havens is finally ending. I am more cynical. The hurdles for enforcing or even defining a minimum tax are formidable. How exactly will any country be penalised for non-participation, or for creating grey areas and loopholes? Who will enforce such penalties, through what mechanisms, and how will the penalties be shared among other countries?MNCs and their lawyers will create loopholes, often with the collusion of governments. Britain has long connived in creating tax havens in British territories like Bermuda, British Virgin Islands, Cayman Islands, and the Channel Islands. The US is estimated by some researchers to be the biggest money laundering centre in the world. Former European Commission President Jean Claude Juncker says the light-touch regulations of US states like Delaware are comparable to what Caribbean tax havens do.Switzerland became rich by attracting global black money, protected by strict bank secrecy. Other countries like Singapore, Ireland, Mauritius, and the Netherlands attracted massive investment though low taxes. Amazon colluded with the Luxembourg government to create financial rules allowing zero tax.The rise of money laundering by jihadists and mafia has induced the US to force some tax havens like Switzerland and Luxembourg to relax their secrecy rules. Public outrage has created additional pressures for reforms. But enormous counter-pressures will come from MNCs and their parent countries — including members of the G7 — to connive in creating loopholes and grey areas. The supposed reforms may end up benefiting mainly lawyers fighting complex cases forever.A 15% minimum corporate tax will hit not just tax havens but countries, including India, that offer tax breaks for specific purposes — export industries, investment in backward areas or Special Economic Zones, green investments, R&D, accelerated depreciation, and sundry other legitimate incentives. Besides, trusts, philanthropies, pension funds, government companies for special political purposes, and many other financial entities pay concessional or zero tax. Even if the nominal corporate tax rate is 30%, some companies (including new and small ones, not just giants) pay zero tax because of legitimate tax incentives.Most countries will insist on continuing tax exemptions and exceptions. This may make the supposed 15% minimum corporate tax a farce in practice. Lawyers will create a thousand ingenious entities and schemes to misuse even the noblest exemptions.The simplest, most honest solution is to decree an Alternative Minimum Tax of 15% regardless of tax breaks. Any country wishing to attain political or social goals through special incentives will have to do so through budgetary grants, not tax concessions. Politically, this will be hotly opposed. Lobbies will argue for exceptions and exemptions for trusts, pension funds, and a variety of such entities. I predict long delays before concrete implementation, and many loopholes.However, in the interim, countries like India should be able to continue taxing digital giants on the basis of revenue generated in India, not profits, and not suffer US retaliation. That will be a positive outcome.
Categories: Business News

PM seeks G7 support for TRIPS waiver

Business News - 5 hours 55 min ago
India on Saturday sought support of the G-7 forum for TRIPS (Trade-Related Aspects of Intellectual Property Rights) waiver and expressed appreciation for the support extended by the G7 and other countries during second wave of Covid hereThese views were expressed by Prime Minister Narendra Modi in the first Outreach Session of the G7 Summit. Modi also explained India’s successful use of open source digital tools for contact tracing and vaccine management, and conveyed India's willingness to share its experience and expertise with other developing countries.The session, titled ‘Building Back Stronger - Health’, focused on global recovery from the coronavirus pandemic and on strengthening resilience against future pandemics. During the session, the Prime Minister expressed appreciation for the support extended by the G7 and other guest countries during the recent wave of COVID infections in India, ET has learnt. He highlighted India's ‘whole of society’ approach to fight the pandemic, synergising the efforts of all levels of the government, industry and civil society. The Prime Minister committed India's support for collective endeavours to improve global health governance and sought the G7's support for the proposal moved at the WTO by India and South Africa, for a TRIPS waiver on COVID related technologies. Calling for global unity, leadership, and solidarity to prevent future pandemics, Prime Minister emphasized the special responsibility of democratic and transparent societies in this regard.The PM will participate in the final day of the G7 Summit on Sunday and will speak in two Sessions.TRIPS Council, a WTO panel focusing on intellectual property, which includes patents on technological know-how like vaccines and the processes to manufacture them, wrapped up a two-day meeting on Wednesday with an agreement to start a text-based process to pull together proposals about improving the fight against Covid-19.New, informal talks will start next week among members of the panel, with an eye to pulling together a report for a meeting of WTO ambassadors on July 21-22. Last fall, India and South Africa had floated the proposal for a temporary easing of patent protections for Covid-19 vaccines, therapies and tests--known as an IP waiver--and later revised the proposal which is now backed by over 60 countries.
Categories: Business News

5 stocks add more than Rs 1 lakh cr in m-cap

Business News - 5 hours 55 min ago
NEW DELHI: Five of the 10 most valued companies together added Rs 1,01,389.44 crore in market valuation last week, with IT majors Tata Consultancy Services and Infosys grabbing the limelight. While Reliance Industries Limited, Tata Consultancy Services, Infosys, Hindustan Unilever Limited and Bajaj Finance were the gainers, HDFC Bank, HDFC, ICICI Bank, State Bank of India and Kotak Mahindra Bank witnessed erosion in their market valuation. The valuation of Tata Consultancy Services (TCS) jumped by Rs 47,551.31 crore to reach Rs 12,10,218.64 crore, becoming the biggest gainer among the top-10 companies. Infosys added Rs 26,227.28 crore to take its valuation to Rs 6,16,479.55 crore. The market capitalisation of Reliance Industries gained Rs 14,200.35 crore to Rs 14,02,918.76 crore and that of Bajaj Finance rose by Rs 7,560.02 crore to Rs 3,69,327.31 crore. The valuation of Hindustan Unilever Limited went higher by Rs 5,850.48 crore to Rs 5,56,041.95 crore. In contrast, HDFC's valuation declined by Rs 10,968.39 crore to Rs 4,61,972.21 crore and that of HDFC Bank dipped Rs 8,249.47 crore to Rs 8,20,091.77 crore. ICICI Bank's market capitalisation diminished by Rs 4,927.52 crore to Rs 4,40,035.66 crore and that of State Bank of India witnessed an erosion of Rs 3,614.47 crore to Rs 3,83,356.69 crore. The valuation of Kotak Mahindra Bank dipped Rs 2,924.02 crore to Rs 3,55,927.86 crore. In the ranking of top-10 firms, Reliance Industries was leading the chart followed by TCS, HDFC Bank, Infosys, Hindustan Unilever Limited, HDFC, ICICI Bank, State Bank of India, Bajaj Finance and Kotak Mahindra Bank. During the last week, the 30-share BSE benchmark jumped 374.71 points or 0.71 per cent.
Categories: Business News

New demands made on luxury concierge services

Business News - 5 hours 55 min ago
Whether arranging a Michelinstar meal on an iceberg or planning a private trip to exotic destinations, luxury concierge services manage to make the impossible a reality for its HNI customers. But these requests existed in the pre-pandemic era. Since the second wave of Covid-19 hit, the nature of the demands have changed — ranging from a private jet for quick access to medical help, a personalised app to share one’s health parameters with doctors, getting celebrity yoga instructors, to even preparing a will. “Health is the new luxury for HNIs,” said Mishti Bose, founder of New Delhi-based Quintessentially India. “Since April, shopping for designer clothes, footwear, watches, exotic travel and dining has been replaced by spending on medical equipment for home use, air ambulances and home gyms. The rich have also replaced commercial f lights with charter planes for domestic travel.” As you wishBanks such as American Express Banking Corp have noted a shift towards emergency, health-related queries and household essentials. “Prior to the second wave, we also witnessed pent-up travel demand,” said Manoj Adlakha, senior vice-president and CEO of American Express (India). “Most cardmembers preferred to drive but we also saw charter requests pick up. Luxury hotels were preferred due to safety concerns.” These days, extravagant requests such as yacht charters and lavish parties have been replaced with wellness and private nature treks, said Dhan Chitnis and Prasheen Lodia of Goa-based luxury concierge service Yours. App-solutley SafeWhile a majority of Indians took to online shopping last year, the uberrich steered clear of apps. “The well-heeled don’t want to shuffle a million apps,” said Dipali Sikand, founder of Bengaluru-based LesConcierges and ClubConcierge. “Home is the focus now. They want us to get everyday essentials, groceries and vegetables. They want their turmeric from Meghalaya and cinnamon from Kerala instead of a local store. They want online medical consultations but only with doctors in the US and UK. Many tidied their legal papers and even wrote their will recently,” added Sikand. Staying ahead While it has been a challenge meeting these luxurious needs, concierge companies are not complaining. “The requirement for personal concierge will increase as an executive assistant and other personal assistants will find it difficult to deliver in the current circumstances,” said Amit Makker, group head, luxury travel services at Unbound Meetings and Incentives.
Categories: Business News

Why the mental health of athletes should be valued

Business News - 5 hours 55 min ago
"I have snapped at a journalist,” says Viswanathan Anand. The chess grandmaster recalls a 2013 press conference where the questions were getting progressively difficult. A Norwegian journalist pushed him about his comeback in a match Anand was trailing. “I said, ‘I am sorry you don’t understand English.’ He was very happy because this was exactly the reaction he wanted — to show that I was seething inside. That is exactly what he got. Afterwards, I felt I had let myself down,” says Anand. Sportspersons have always had a complex relationship with the media, with the latter often being accused of “kicking people when they’re down”, as tennis player Naomi Osaka recently said, when she pulled out of the French Open to focus on her mental health. The 23-year-old World No. 2 was fined $15,000 for skipping the news conference after her first-round victory at Roland Garros. Organisers and officials said postmatch press sit-downs were part of the package. How has the unique serve and volley between journalists and sportspersons — a non-sport sport, a postmatch game — played out for Indian players? ‘TOUGH WHEN YOU LOSE’ “By and large, sports journalists are understanding. There are always a few who lack basic sports experience or human sensitivity,” says billiards and snooker champ Pankaj Advani. “Journalists need to ask questions in a way that’s respectful of the athlete’s emotions and state of mind.” Advani looks at press conferences as part of the job, and the media, like fans and federations, as something he can’t control. “The only thing that is in our control is our performance,” he says, wishing though that post-match press conferences were a “more fun, educative exercise than a gruelling, attacking, controversial one”. Tennis player Rohan Bopanna says he finds it difficult to prepare for live press conferences because of unpredictable questions. “I go with the flow and speak my mind. [But] when you are representing your country for a long time, you know a lot of the journalists. There is mutual respect,” he says.83476795Advani adds that humour can be the bridge between hard questions and frayed emotions. “I love the way [Novak] Djokovic and [Roger] Federer change the tone of serious conversations by adding humour,” he says. Bajrang Punia, wrestler and World No. 1 in the 65 kg men’s category, says, “I ask for tentative questions. It reduces my stress before an actual interview. I am also more comfortable speaking in Hindi; it brings out my natural responses.” ATHLETES COME FIRST Sports marketing managers say that the mental health of their athletes is the priority, especially in the midst of a pandemic. Mustafa Ghouse, CEO of JSW Sports and a former pro tennis player, points out some factors contributing to stress. “The uncertainty around competitions, the feeling of losing the best years of peak performance and sitting at home because of the pandemic while peers return to training, can be frustrating,” he says. Namrata Parekh, cofounder of sport marketing agency Meraki Sport & Entertainment, shares an instance of a player who was mentally and physically drained after her performance in the Asian Games and wanted to skip the press interactions. “Some of the press understood, some complained, and a few threatened the manager with repercussions because of the player’s ‘attitude’. Calls were made to the national federation to put pressure on the athlete. Thankfully, the federation did not push her. Please note, she didn’t lose. She had won,” says Parekh. Neha Mathur Rastogi, CEO, WordsWork Communications Consulting, says there’s also a growing empathy among the media and brands on what it takes to be an athlete, adding, “Once a rarely any conflict.” SELF-IMAGE VS SELF-ESTEEM Writer Deepak Chopra says a match outcome can have a deep impact on the mood of an athlete or any person in the limelight. “Osaka was right in taking the action that she did. Being in the spotlight with her mental distress would have only aggravated it further,” he says. “Today’s media maximises profit through melodrama. Instead of participating in solutions they are, in fact, guilty of creating mental anguish by focusing only on the outcome rather than on the grace and process in both the athletic and entertainment fields.” Life coach Anand Chulani, who has worked with sportspersons like Grand Slam winner Serena Williams, says that every athlete he has worked with has had some version of anxiety. “We need to look at athletes with some compassion and see them for who they are, not some fantasised version of them,” he shares. While Chulani calls Osaka’s decision to pull out of the games “courageous”, Neerja Birla, founder of mental healthcare foundation MPower, says the incident has been an eye-opener. It’s time to value the mental health of athletes far more than contractual media obligations and commercial commitments, she says. Dr Sahir Jamati, head of the Psychology Department at Mumbai’s Masina Hospital, also says it’s important to identify mental fatigue. “Few may not even have a particular diagnosis, but have symptoms of poor mental health like overwhelming aggression or frustration,” he says. Needless to say, each sport star employs a unique approach in interacting with the media. For badminton champ Kidambi Srikanth, it is answering questions with honesty. “There have been times when I am asked questions for which I am yet to find answers for. The important learning is to stay calm and composed. They are doing their job and I need to know how to do mine.”
Categories: Business News

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