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Updated: 1 hour 5 min ago

A look at the enormity of the task that faces Modi as time runs out

1 hour 5 min ago
Every morning, in front of the DDA park in Delhi’s Mayur Vihar, she loads her cart with fresh vegetables. Tomatoes and peas, cucumbers and radishes, and bunches of coriander leaves. Her regular customers trickle in, calling her Amma.Her cart almost empties out by evening. The 50-year-old, feisty vegetable vendor can be temperamental with her haggling customers. Unlettered, she often fumbles with her calculations. Then the buyers help her out, adding this and multiplying that. What they don’t know is her name: Lalita Devi. And her story.She grew up, poor and unschooled, in Azamgarh, Uttar Pradesh. She got married in her early teens and moved to Delhi, but life in the capital turned out to be hard. Her husband left her when she was in her 30s, leaving her to take care of her two daughters and a son. 62963929 “I started a tea stall,” she says. It didn’t bring her enough money and she began selling vegetables. “God is kind. I have a decent life. Who would have given a job to an unskilled, illiterate person like me? I can now manage my family,” she says. Her daughters, aged 20 and 25, are at home. Her son, 22, helps her out with the vegetable cart. How much does she earn? She doesn’t know but she says it is enough to feed her family and pay the rent of Rs 3,000. A long way away in Tripura, Abhishek Saha has another story to tell. The 33-year-old was a sales executive with the pharmaceutical company Cipla in Bengaluru. Two years ago, he returned to his hometown Agartala to set up Babuana Tea Stall. He sells sandwiches and three types of tea, charging `10-40 a cup, and tops it up with great service. “I have junked a regular job to be an entrepreneur. It gives me freedom to do things my way,” he says. Saha, who gets 400-plus customers daily, has big plans: “I want to expand first to Guwahati and then to Bengaluru.” 62965212 Self-employment is common in India. Sometimes, it is out of choice, like Saha’s. But more often, it is out of compulsion, like Devi’s. They represent two ends of the spectrum of India’s self-employed, which is 47% — almost half — of India’s 470 million workforce. Based on government data, about 215 million people are self-employed (See Who are India’s Self-Employed?). They include street vendors, rickshawpullers, carpenters, plumbers, chaiwallahs, grocers, taxi drivers, doctors, accountants and pakorawallahs. 62965220 Most of the self-employed are below the economic radar. They are homeless, office-less and unbanked. They are vulnerable and footloose and live on the fringes. They rarely figure in government policies or statistics, or even statements.Economics Wrapped in Politics Now, change is afoot. Prime Minister Narendra Modi wants India’s self-employed to be visible, counted and strengthened. Last month, selfemployed pakoda sellers made headlines when Modi said, “Youth selling pakora outside… and earning `200 a day also means creation of jobs.” Never mind the political storm it created. For millions of self-employed workingliving on the fringes, getting on the nation’s radar is a good start. If India has to progress, mainstreaming its self-employed will be an important stepping stone. In the second most populous country with 470 million workforce, employment today is a hot button issue. A year away from the general election, Modi knows that confronting it head-on rather than sidestepping it may be a smarter strategy. 62965226 Modi’s statement on pakora sellers wasn’t a random remark. It was seconded by BJP president Amit Shah in Parliament. The backdrop is a growing realisation that the government or, for that matter, any future government, will not be able to create formal jobs for over 6-7 million joining the country’s workforce annually. In 2016-17, actual jobs created were 4.1 lakh as against the BJP’s electoral promise of creating one crore jobs annually.There is an attempt in the NDA government to look at the problem from a different angle. From demonetisation to GST, formalisation of the economy has been a constant theme for the Modi government. With 80% of the workforce engaged in the cash-heavy informal sector, the attempt has been to integrate them into the country’s economy. And, while in transition, why shouldn’t this huge chunk of the workforce get counted on the economic map? Why shouldn’t a domestic help earning Rs 15,000 a month or a cab driver with a monthly incomeas high as Rs 50,000 figure in the government’s job statistics? 62963898 This begs the question: what constitutes a formal sector? The Economic Survey 2018 defines formal employment as, one, where the employers are providing some kind of social security (like EPF and health or life insurance) to their employees, and, two, where firms are part of the tax net. Pakora sellers find no place here. Not yet. According to the first definition based on social security, 31% of India’s non-agricultural workforce, 75 million out of an estimated at 240 million, have formal employment. According to the employers-in-the-tax-net definition, 54% (or 127 million) of the non-agricultural workforce is in the formal sector.Counting self-employed among those having jobs may become contentious, but this line of thinking is likely to dominate the political discourse before the next Lok Sabha elections. Some government officials in the know say that the Union labour ministry is contemplating a formula under which 40-50% of the 104 million beneficiaries of the Pradhan Mantri Mudra Yojana) could be statistically bracketed as employed if an ongoing survey demonstrates that people have become self-employed after availing of the loan. Mudra loans (up to Rs 10 lakh) are disbursed for non-agricultural activities, including dairy, poultry and beekeeping. 62963899 Technology, the Job SlayerCreating jobs is India’s biggest worry and it will only get worse. The NDA government is coming to terms with it.According to a Bloomberg News analysis, India is expected to have a billion people aged between 15 and 64 years of age by 2027, which means the world’s largest — and youngest — workforce. As the economy progresses, millions of people employed in lowproductivity farm sector will have to be moved to higher-productivity non-farm jobs. Barring China, this scale of migration has no precedent in history. Unfortunately, the opportunity that China had – to turn into the world’s factory that could absorb millions of the country’s agri-workers — may not be available for India. This is the age of Brexit and deglobalisation championed by US President Donald Trump and export barriers are set to rise. 62963930 Meanwhile, technologies like robots and 3D printing has jump-started a re-shoring of manufacturing facilities back to the developed world. India’s IT industry is in a crisis, with technological changes forcing them to pivot or perish. While experts disagree on the degree of disruption technology will cause, the automation wave is certain to cull jobs across geographies and sectors. Amid all this, the sharing and gig economy is growing by leaps and bounds, forcing a debate on the fundamental question of who is an employee. In the US self-employed workers today stand at 34% and are forecast to touch 43% by 2020. This trend is already playing out in India, with cab-hailing apps like Ola and Uber employing 5,50,000 and 3,50,000 drivers respectively in India as of July 2016, according to Statista.These convulsions of change notwithstanding, India historically has had a problem creating jobs. Its employment elasticity – number of jobs created per percentage of GDP growth — has been among the lowest. It is now declining – from 0.3% between 1991 to 2007, it has halved today. Partly, this is because India’s growth, dominated by the services sector and not labour-intensive manufacturing, has had a bias for skilled workers. 62965231 With little options, a majority of India’s workforce is engaged in informal, unorganised, low-income, low-productivity jobs. Says Manish Sabharwal, cofounder, Teamlease: “This is not self-employment. This is self-exploitation. They need to be moved up from subsistence-based livelihood.” He makes the distinction between good self-employment and bad self-employment: “Policy makers in India should focus on increasing formal wage employment and good self-employment.” (See column “End Self-Exploitation”) Entrepreneur vs Self-employed Often, “self-employed worker” and “entrepreneur” are interchangeably used. But there is a difference. “Self-employment in advanced countries is different from that in developing countries,” says Delhi-based Majid Nomaan, senior employment specialist, ILO.In developed countries where social security is available, self-employment is more about entrepreneurship. “In societies with high poverty, self-employment is more about seeking livelihood for survival,” he adds. According to PRICE (People Research On India’s Consumer Economy), of the 281 million households in India, 108 million are selfemployed of which 55 million (20%) are engaged in farm-related activities, 10 million (4%) are petty traders like street-side vendors, 26 million (9%) are shop owners or traders, and 14 million (5%) are non-professionals like cab drivers and carpenters. Just 3 million or 1% are well-paid professionals like doctors, architects and accountants. “Self-employed isn’t a homogeneous group. Income instability is their biggest problem. One serious illness can set them back by years,” says RK Shukla, director, PRICE. 62963900 Gurbachan Singh, visiting faculty at the Indian Statistical Institute, gives another reason why some people opt for self-employment. “It is linked to the country’s financial infrastructure. A more developed financial sector leads to less self-employment,” he says. Poor avenues for financial investment or little knowledge of how to go about it makes many opt for self-employment. The scope of tax evasion makes it even more attractive. Mainstreaming the Margin India’s self-employed will remain humungous. A KPMG report expects micro, small and medium enterprises (MSMEs) to play a critical role in creating jobs. It forecasts them chipping in 15% to the GDP by 2020, up from 8% today, BUT creating half of the total new jobs. This will more than double the current MSME workforce of 106 million. This won’t be an aberration. Globally, developed economies lean heavily on a strong MSME to chase growth and create jobs. In countries like Germany, US, UK and Singapore, MSME contributes over 40% to the GDP. It is also an employment engine — creating 67% of total jobs in Brazil, 62% in Germany, 53% in the US and 52% in the UK. The Modi government is tackling the job issue with a four-pronged strategy. Investments, policy initiatives and sector focus will be evaluated on the basis of their job-creating capabilities. 62963871 A new industrial policy is likely to be unveiled in April-May (See “ A New Industrial Policy is On the Job ”). If government officials in the know are to be believed, the focus of the policy will be on finding ways to gainfully employ the youth who enter the workforce every year, apart from checking job losses triggered by Industry 4.0, the global phenomenon of automation in manufacturing. Formalisation of the informal sector is another area where the government is focusing. The intention is to widen tax base. Under the new GST regime, the number of indirect tax payers rose by 50% or by 3.4 million. The government is pushing for digital transactions including the UPI even as it is incentivising employers to hire staff on rolls. Under the Pradhan Mantri Rojgar Protsahan Yojana, employers are incentivised to register in the EPFO: the government will pay 8.33% (it is 12% in labour-intensive textiles sector) of PF contribution for all new employees enrolled in EPFO in the first three years. 62963882 Post demonetisation, the Ministry of Labour held 1.5 lakh camps over six months, opening 49.6 lakh bank accounts for workers, nudging employers to transfer wages electronically. On a base of 80 million employees’ provident fund subscribers, a recent report expects the count to rise by 7 million in 2017-18. “If we want growth with jobs, the push has to be on small industries, and not on the middle or the top,” cautions Arun Maira, former member of the now disbanded Planning Commission, who last week attended a roundtable on the draft industrial policy. Adds Prantik Ray, professor (finance), XLRI: “The difficulty to access financial products is one of the key reasons why the self-employed are not able to move ahead.” This is where Mudra scheme fits in. “The biggest beneficiary of initiatives like ease of doing business will be the MSMEs. They bear the biggest brunt of the inefficiencies in the system,” says Nitin Atroley, office managing partner (north), KPMG India. The government is said to be looking at measures to tackle the NPA and insolvency issue in the MSME sector as well. A host of schemes has been rolled out to improve the quality of life of the self-employed: the National Health Protection Scheme, which will cover 10 crore poor households, the low-cost Pradhan Mantri Jivan Jyoti Bima Yojana (life insurance) and the Pradhan Mantri Suraksha Bima Yojana (accident insurance), and the Jan Dhan Yojana aimed at financial inclusion. Will this help? India’s job problem is huge and complex with no easy answers. The NDA government, in its last year, is short on time. And India’s jobseekers short on patience. In politics, perception management is as important as the change on the ground. Expect the Modi government to lean on both as it braces for the next general elections. 62964359 62964222
Categories: Business News

Gadkari writes for ET: What made US & China what they are is now turning India around

1 hour 5 min ago
By Nitin GadkariThe most tangible evidence of a nation’s progress is its infrastructure and that’s essentially what India lacked, which eventually hampered our growth rate and made us uncompetitive in terms of logistics cost.Infrastructure sector is a key driver of the Indian economy. We have already seen how highways turned around the US economy and how port and shipping sector gave a much-needed impetus to China. Unfortunately, none of these could be replicated in India in the post-Independence period.Barring the tenure of NDA I, roads, highways, shipping, water resources and river development never got importance in the government’s scheme of things. When the Narendra Modi government took over in 2014, the government had its priority cut out. Highwayto-growth and port-led development became missions. The government’s mission of ease of doing business has now been expanded to ease of living, as announced in the recent Union budget. Infrastructure is key to both.There has been an unprecedented three-fold hike in infrastructure lending since 2014. For the next financial year, the estimated budgetary and extra-budgetary expenditure on infrastructure has been increased to Rs 5.97 lakh crore.India will require investments of over $4.5 trillion by 2040 for the development of its infrastructure, according to the Economic Survey 2017-18. Infrastructure sector includes power, bridges, dams, roads and urban infrastructure development. Realising the synergy required, we have formed a group of infrastructure ministries that meet frequently to figure out solutions to problems and smoothen the process.This year we will be constructing a little less than 10,000 km of national highways that will be the highest ever India has ever constructed and almost double of what was constructed in a year during UPA days.The government’s ambitious highway development plan has the potential to add 3% to the GDP and provide 10 million jobs.Overall, we plan to build almost 60,000 km under Bharatmala. In phase one, we will build 34,800 km at the cost of Rs 5.35 lakh crore. The remaining 25,200 km would be taken up in phase two. We will complete phase one by 2022 and the awarding of projects should be done before 2019.The work on expressways and economic corridors would be taken up first on priority basis. We will have around 50 economic corridors with a total length of 9,000 km where the majority of freight traffic would move.Water ReformsThe finite water resources of our country are under pressure due to increasing population, urbanisation, industrialisation, water pollution and overuse. Sustainable use of water resources is the need of the hour. To strike a balance between water use and development, India has embarked on a water reform journey with a focus on policy reforms, water governance and swift execution. River development in general and Ganga rejuvenation in particular have found new strength under this regime. In a bid to enhance agricultural productivity by covering more area under irrigation and strengthening distribution networks in an integrated manner followed by its effective monitoring, the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) was launched in 2015 at an estimated cost of Rs 77,595 crore. PMKSY is a core scheme of the National Development Agenda and one of the flagship projects of Prime Minister Modi.The herculean task of Ganga rejuvenation found a new vigour in 2014 with the launch of Namami Gange programme. A budget outlay of Rs 20,000 crore was approved by the cabinet. For the first time, clean Ganga mission became a 100% centrally funded scheme.Transport Tech of FutureAt the rate at which vehicular traffic is growing in India, we will need another Rs 1 lakh crore in the next few years to add additional lanes to our national highways. The need of the moment is to promote public transport and not just build roads.We have already brought out tenders for personalised rapid transit system between Dhaula Kuan in Delhi and Manesar in Haryana. This stretch is among the most congested routes in the country. It’s a pilot project but we are open to having new transport technologies such as Metrino, hyperloop and maglev (magnetic levitation). Along with this we want to bring in world-class bus services run on clean fuel.The focus of this government is not just development but sustainable development. We want to bring in electric mobility and alternate fuel in full force in another decade. Companies are being encouraged to introduce such vehicles and the government is incentivising companies and buyers. As both will find alternate fuel more economical, the segment would grow on its own.Modern Trade HubsIndian shipping industry plays a crucial role in the economy as nearly 90% of trade by volume is done through sea. Indian shipping is poised to acquire new dimensions in terms of infrastructure development and operational efficiency.Significant steps have been taken in the areas of infrastructure development, capacity expansion, work efficiency and technology induction. 289 projects of `2.17 lakh crore have been awarded under Sagarmala. There is an accentuated thrust on the setting up of SEZs and Coastal Economic Zones around major ports. SEZ at JNPT and Smart Industrial Port Cities at Kandla and Paradip are already under implementation.As land for national and state highways becomes scarce and the cost of constructing roads, flyovers and bridges goes up, inland water transport assumes great significance. We are exploring the use of rivers for the transport of cargo and people. A countrywide blueprint has been made for national waterways, multimodal terminals and freight villages and logistics hubs centred on water transport.We are also exploring coastal shipping and cruise tourism. The movement of cargo through coastal shipping has inherent advantages over road and rail as it is more cost-effective, causes less pollution, reduces congestion on land and can cater to huge parcel sizes.A multi-pronged action plan has been proposed to turn India into a major destination in cruise tourism.(The author is the Union Minister for Road Transport, Highways, Shipping & Water Resources)
Categories: Business News

Gujarat likely to hike excise duty on liquor by 50% to 100%

1 hour 5 min ago
AHMEDABAD: Brace up for paying more for liquor in dry Gujarat. After tightening liquor laws, the state government has now trained its guns on hiking excise duty on liquor to discourage people from consuming alcohol.Sources close to the development said that the Gujarat government is likely to increase excise duty on liquor sold from the official permitted shops by 50% to 100%. 62966180 Currently, the government charges Rs 25 to Rs 100 excise duty per proof litre of spirit which includes Indian Made Foreign Liquor (IMFL) and imported foreign liquor; wine and beer.If the hike is effected, liquor officially sourced from permit shops can become expensive by Rs 37.50 to Rs 200 per bottle depending on the percentage hike and the kind of liquor.“The state government has proposed to increase the rates by 50% to 100% in each category of liquor. The decision on exact quantum of percentage hike in excise and other duties is pending decision which will be finalized shortly. A formal announcement is likely to be made soon by the government,” sources close to the developments added.Sources indicated that hike could also be effected in transportation charges and assessment fee.Gujarat has 58 permit liquor shops and the state government had earned a revenue of Rs 32.5 crore in excise duty in 2015-16 and Rs 38.9 crore in 2016-17.Profit from permit shopsGujarat has 58 permit liquor shops and the state government had earned a revenue of Rs 32.5 crore in excise duty in 2015-16 and Rs 38.9 crore in 2016-17.The excise income is expected to cross Rs 45 crore in 2017-18 fiscal, officials said.“More than increasing its revenue inflow, the objective of hiking exciseon liquor isto give out a signal that government wants to discourage citizens to consume liquor,” sources added.Market sources said that the hike in excise duty will resultin pricesjacking up in the black market as bootleggers are three time the price of liquor sold in the permit shops.
Categories: Business News

PNB scam: How Gokulnath Shetty issued LoUs at a frenetic pace

1 hour 5 min ago
As Gokulnath Shetty, the retired deputy manager of Punjab National Bank (PNB) arrested on Saturday for defrauding the public sector bank to help Nirav Modi and Mehul Choksi, approached the end of his tenure, the frequency with which he issued letters of undertaking (LoUs) to the two diamond traders reached feverish proportions.According to data shared by PNB, which is at the centre of an over Rs 11,300 crore fraud involving the diamond czars, at least 143 LoUs were issued in 63 days, starting March 1, 2017, compared to around 150 issued since 2011, when the alleged fraud began. The frenetic pace, in fact, may appear like frenzy if one were to exclude Sundays, the second and fourth Saturdays of a month, and bank holidays during the period. In terms of the amount involved, however, the first 150 LoUs that relate to PNB’s case against Nirav involved around Rs 6,500 crore, while the 143 accounted for a tad over Rs 3,000 crore.The CBI’s probe will focus on the reasons behind the spurt in numbers; especially whether the urgency reflected Shetty’s anxiety to provide maximum assistance to the diamantaires before he lost access to SWIFT, the international money-transfer switch. The banker has been accused of fraudulently using the switch to issue LoUs to Nirav and Mehul so they could access money from other banks based on PNB’s guarantee.The CBI’s FIR underscores that some of the LoUs were issued for as many as 360 days, against the norm of 90 days.Shetty retired at the end of May last year and investigators suspect that by issuing long-tenure LoUs, the PNB deputy manager may have tried to ensure the fund flow to Nirav and Choksi continued for at least another year.By last March, the operation had become so brazen that a dozen or more LoUs were issued on certain days. On an average, between March 1 and May 2, 2017, more than two LoUs were issued every day with Choksi’s outfits being the beneficiaries. For this period, data for Nirav’s outfits were not immediately available.For instance, on March 21, 2017, PNB issued 10 LoUs on behalf of Choksi’s three firms — Gitanjali Gems, Gili India and Nakshatra Brands — to Bank of India’s Antwerp branch, asking it to allow the firms to pay for their imports. On the basis of these LoUs, the three companies received credit ranging from $200,000 to $300,000, documents analysed by TOI showed. The very next day, another 14 LoUs were issued in favour of Choksi’s companies to the same bank branch, with the value estimated between $190,000 and $290,000.Similarly, between March 1 and 10, 2017, 33 LoUs were issued to the SBI branch in Mauritius, followed by another half a dozen between April 29 and May 2. SBI’s Frankfurt branch was also asked to allow credit facilities to Choksi’s companies on the basis of 21 LoUs issued between April 5 and 12. The LoUs were issued to overseas branches of other Indian banks in Hong Kong and Bahrain as well. Interestingly, most of the LoUs were used by the accused companies the same or the next day. “...The frequency is suspicious,” said a source, adding that details of some LoUs were missing.Sources said that during questioning, a PNB employee, Manoj Kharat, admitted that this was happening regularly and many other PNB officers had done this earlier.Most of the LoUs issued in 2017-18 financial year were actually renewal of previously issued letters.
Categories: Business News

What I read this week: Is poor health holding India back?

1 hour 5 min ago
Not all is in the pink of health and India is facing severe healthcare crisis as spending remains very low. This would hamper the potential of the country, if the issues are not addressed timely. Inflation both locally and globally is bouncing back and is causing concerns in the global markets. Meanwhile, as the electrification theme gets bigger and powerful, surprisingly copper seems to be emerging as the winner in this upcoming megatrend.Like there is a halftime at superbowl, financial markets are currently in the same phase and the journey is set to become bumpy so fasten your seatbelts and there is a lurking risk of inflation from China, yes China, which is yet to be priced by asset marketsI reiterate that this is only a sampling of some of the best content I read through the week, with a dash of my own thoughts. Until next week...The health-growth linkage(Source: India’s healthcare crisis holding back national potential)India needs to focus much more on healthcare spending as its primary and secondary healthcare systems lack basic infrastructure and are inadequate and tertiary cares are overburdened. India’s spending on healthcare is just 1.4% of the GDP, the lowest among BRIC nations and less than neighboring countries such as Sri Lanka and Nepal. The National Health Policy has estimated an increase in health expenditure to 2.5% of India’s GDP by 2025.India is currently facing many healthcare problems and progress on improving health outcomes has been slow. It has the highest population of children stunted (low height for age), at 48.2 million in 2015-16. Nearly 52.5 million Indians were impoverished due to health costs in 2011–almost half of the world’s impoverished population annually. India’s infant mortality rate of 41 deaths per 1,000 live births in 2015-16 is poorer than Bangladesh and Nepal and the African countries of Rwanda and Botswana. Over seven in ten Indians are not covered by insurance resulting in high proportion of out-of-pocket expenditure on health. In 2016, three in five deaths were from lifestyle diseases.Although the government expenditure on health has increased over the past decade, it still remains very low. Unless the public healthcare infrastructure is improved considerably, India would continue to face developmental challenges and be unable to achieve its national and global potential.How big is the risk from inflation(Source: Inflation on the horizon & electrification, the upcoming megatrend)Markets are becoming more concerned as quantitative tightening is leading to inflation rather than deflationary trends. Rising commodity prices, higher gold prices, Global PMI index (ended in 2017 at near 7 year high) and weak dollar are clearly signaling that we are tipping towards inflation. It seems we are now entering the third stage of inflation - price inflation after monetary and asset price inflation. This transition period should be a stress test for markets as quantitative tightening will increase in the months ahead.Another reason for commodity price increase especially copper is Electrification. Electrification theme is getting bigger, powerful and is here to stay. Saudi Arabia and Norwegian State Pension Fund have pledged to invest a trillion dollars out of their future oil revenues; divesting from oil and focusing on innovation and technology, specifically electrification and green energy. Copper should significantly benefit from electrification and will grow at a CAGR of 4-5% over the next 20-30 years as compared to about 3%-3.5% historically.This should continue to support higher prices as 50% of primary copper supply comes from 25 copper mines, mostly commissioned 70 or 80 years ago and there has been no scientific advancement in extraction and future supplies will need to come from countries that don’t have a historical understanding of copper mining. As the world increasingly moves towards electrification, copper is the commodity that will win the marathon.The real risk to the bond market(Source: The Halftime Show)There is no doubt that lower US taxes are expected to have a positive impact on the real economy, although critics view that the tax cuts will add significantly to the American debt pile thereby causing a debt crisis for the country.However, there is an enormous demand for USD and American debt and there isn’t enough of USD to spread around. Ironically, it is the world’s reliance upon USD and USD debt that will eventually cause the USD to lose its reserve status. This will occur – but first other currencies and sovereign debt will enter crisis first. The biggest worry and concern in the money world today isn’t tax cuts, trade wars or even the current stock market jitters. Instead, the greatest worry is the slowdown of money printing by the world’s central banks and rising long-term rates that would result in significant losses in the bond markets potentially measuring in trillions.The real risk with the bond markets is what happens in Europe and the elections in Italy in March. Should Italy leave the Euro, run their own parallel currency, or even demand changes to the Maastricht Treaty – the ECB will be shaken to its core. The moment the sovereign debt crisis re-escalates in Europe, bonds everywhere around the world will decline sharply. And, the effect in emerging markets will be even more severe due to their reliance on the USD. However, the major point for investors to understand is global central bank monetary policies, combined with horrible domestic government fiscal policies has created a financial environment that will not be kind. Yes the USD is a part of the global web, however due to the way the USD is constructed – it is LAST in line to experience any restructuring. The Euro will be first, followed by Yen with USD remaining as the last one standing. Of course, the ride through these crises will not be smooth.The bigger threat from the dragon land(Source: China inflation -- A global risk)The risk of China exporting inflation remains real and this inflationary impulse could well show up in G10 inflation before it did in China’s own CPI measure. Some have asked whether it is mostly commodities that are responsible, but findings show that non-commodity export price inflation has a bigger sway. This is to be expected, as commodities make up only 5% of China’s total exports.The annual data estimates show that Chinese non-commodity export price inflation explains 16% of the common trend in major economies’ inflation; commodity export price inflation explains 12%. Finally, it is worth thinking about how inflation will manifest itself. One possibility, of course, is surprise acceleration in Chinese CPI inflation. The other is that much less watched Chinese export price inflation gathers pace while CPI inflation rises by a lot less.Underlying inflationary pressures in China are building and likely to be passed on to the global consumer. Chinese export price inflation in renminbi accounts for one-fifth of the variation in the common inflation trend in the major economies (US, UK, Germany, Japan, France, Italy, Sweden, Canada and Switzerland). The common trend in major countries’ inflation itself explains about two-thirds of the average rate. So the overall impact of Chinese export price inflation on global inflation is around 13%.And if it starts doing so in coming quarters, fixed-income markets are not prepared or priced for it, even after the recent spasms. Global bond markets have had an inauspicious start to 2018 with yields rising across all developed markets. The recent sell-off in equities caused markets to question pace of Fed rate rises in 2018. The US FOMC members still predict an orderly tightening of rates in 2018 and for now, the market agrees. The risk/reward is tilted towards bets on accelerating inflation and rising yield spreads.
Categories: Business News

Diamond tycoons who got embroiled in controversies

4 hours 6 min ago
Diamonds were their best friends. From Nirav Modi, who is at the centre of a Rs 11,400 bank fraud, to Michel Desaedeleer, who profiteered from blood diamonds, here are the diamond tycoons who got embroiled in controversies. 62963932 62963936 62963945 62963953 62963962 62963973 62963979
Categories: Business News

Sorry Donald Trump, but Harley-Davidson needs India despite high import duty

10 hours 7 min ago
When US President Donald Trump hosted Harley-Davidson executives at White House in February last year, he waxed eloquent: “Harley-Davidson is a true American icon, one of the greats... Whenever I go, whenever there’s a motorcycle group, oftentimes it’s a Harley.And the sound of that Harley is a little different.” Later, in his first joint address to the Congress, Trump hinted at a “country” that was slapping 100% import duty on Harley-Davidson bikes. He was referring to India; the tariff that year was not 100% but 75%.Last week, Trump was more forthcoming in his attack as he slammed India for charging a high 50% duty on Harleys as against 0% that America charges on Indian motorcycles. The US president threatened India with a “reciprocal” tax.Even the American president seeking 0% duty on the iconic motorbike brand failed to unmask the harsh reality: Harley needs India. 62962230 A look at Harley’s financial performance shows it is on a downslide. While its sales in America, its home country, fell by 8.5%, the bikemaker met a similar fate across other markets globally: a 7.7% fall in Asia Pacific, which includes India; 2.6% drop in Latin America; and an overall 6.7% in global sales.What’s even more alarming for the American cult brand is the rate at which its sales skid in the last quarter of 2017 in the US: a steep 11.1%. During the same period, its Asia Pacific numbers fell by a staggering 11.8%.Clearly, Harley is going through a rough patch, and the turbulence is not going to ease even if India brings down customs duty to 0%. In fact, the threat of a “reciprocal” tax also lacks bite. Reason: India’s two-wheeler export to America is not even a percent of its total global exports.Trump’s sweeping statement, point out tax experts, ignores the numbers in question. “How many motorcycles are imported from India to the US is the real question,” says Sarika Goel, partner, indirect tax at EY India. Except for some exports by Royal Enfield, there isn’t really much, she adds. 62962265 In 2016-17, India exported 2,440 bikes to America, which includes 150 bikes above 500 cc engine capacity. Though in numbers it looks big, in terms of value, it turns out to be a meagre $5.98 million. Even though the units doubled from April to November last year — 4,480 units — there were just 80 bikes above 500 cc that were exported, according to a Ministry of Commerce data.A contrasting number, on the other hand, shows why Trump is feeling anguished. Motorcycle import from the US to India, above 500 cc, has dipped from 1,820 units in 2016-17 to 790 units in April-November last year. In terms of value, fall is from $11.60 million to $5.96 million.Harley bikes in India, to put things in perspective, start with an engine capacity of 749 cc and are available from Rs 5 lakh and go up to Rs 54 lakh. According to a report by The Economic Times last August, Harley’s market share in India in the premium luxury segment dipped from 92.3% in FY13 to 56.4% in FY18 till June. While the Indian market for 500 cc and larger bikes grew more than fivefold between fiscal 2013 and 2015, the next two fiscal saw a cooling down of the segment, according to the report.Auto experts reckon that even a 0% duty won’t change the ground reality for the legendary American bike maker.“People are tempted to opt for Enfield over Harley due to the price tag,” says Amit Kaushik, managing director (India), Urban Science, a Detroit-based auto consultancy firm. Though a 0% duty might make Harley bikes more appealing, the fact remains that the price still remains an issue. Kaushik, however, points out that any drastic fall in rates might give a tough time to the local Indian brands as well as global players operating in the premium luxury segment.While the purpose of a zero-import duty for Harley is to bring it much closer to Indian-made top-end motorbikes, it’s easier said than done. “The Harley comes at a price tag that is big, and gets bigger as it touches the top end,” says Harish Bijoor, brand strategist. Even a zero import duty will keep its price much higher than that of the Indian-made motorbike. “India is conveniently used as a whipping boy whenever there are talks of jobs being taken away from developed countries,” he says. India, Bijoor adds, is also invoked to talk about restrictive import practices faced by developed nations.“But blaming India will only help US president whip up domestic sentiment,” says Bijoor. It won’t help Harley have a smooth ride here.
Categories: Business News

Maharashtra may be in for a radical political rejig as BJP looks to go solo

10 hours 7 min ago
It has been an eventful month in Maharashtra politics. First, Shiv Sena chief Uddhav Thackeray announced on the birth anniversary of his father Bal Thackeray that his party would snap ties with the Bharatiya Janata Party for the national and state elections scheduled in 2019.That was followed, a few days later, by the Nationalist Congress Party president Sharad Pawar leading a rally of leaders like Hardik Patel, Omar Abdullah, Sharad Yadav and D Raja to “save the Constitution”.While this was an attempt to unite the Opposition against the BJP-led National Democratic Alliance in the general election, the presence of former Maharashtra chief ministers Prithviraj Chavan and Ashok Chavan, both from the Congress, also signalled an alliance between the NCP and the Congress in the assembly polls. On February 6, leaders from both the parties said as much, after a meeting in Mumbai, though the alliance is not formal yet. The Congress and the NCP were allies for 15 years from 1999, when the NCP was formed.62963056 They won three state elections together and the NCP was also part of the Congress-led United ed Progressive Alliance government in Delhi between 2004 and 2014. But they parted ways before the October 2014 assembly election. Was the regrouping of the two parties timed to take advantage of Uddhav Thackeray’s statement?Bargaining Tactic?Prithviraj Chavan does not think so. “Shiv Sena’s calculation is not really a factor (in our decision).Defeating the BJP will not be possible if we fight separately.” The two parties won 83 seats between them, out of a total 288, and polled over 35% of the votes in 2014. “Whether they (the BJP and the Shiv Sena) fight together or separately does not matter. Together, we have always defeated them,” says NCP member of the legislative assembly and spokesperson Nawab Malik, referring to the elections of 1999, 2004 and 2009.Pawar, a four-time chief minister, offered outside support to the BJP in 2014, when the latter fell short of a simple majority. But then the Sena joined the government. Despite being part of the ruling dispensation, the Sena has acted more like an opposition, with Thackeray and his partymen criticising the BJP’s state and central leadership constantly.(The Shiv Sena is also part of the BJP-led National Democratic Alliance at the Centre.) The Sena is unnerved by the rise of the BJP in Maharashtra.62963073 In 2009, for the first time in their 20-year alliance, the BJP won more assembly seats than the Sena. After the BJP won a simple majority in the 2014 general election, the party was not happy with the old seat-sharing agreement and sought more seats to contest in the state polls. When the Sena did not budge, the national party decided to go it alone and ended up winning almost twice as many seats as the Sena. Some say Thackeray is unhappy about having to play second fiddle to the BJP in the state and that he often resorts to posturing and his latest announcement could be just that. When the alliance was in power in 1995-99, the Shiv Sena held the chief ministerial post.Nitin Birmal, a political analyst, calls the Sena’s recent decision a bargaining tactic for the assembly election.There have been reports of discussions between the BJP and the Shiv Sena after Thackeray’s announcement.But Arvind Sawant, a Shiv Sena MP and spokesperson, says he is not aware of any such meetings. “The question of fighting the election with the BJP does not arise when our leader has said we will fight it alone.”State BJP spokesperson Madhav Bhandari also denies attempts to placate the Sena. The two parties took each other on in last year’s municipal corporation elections and the BJP won eight out of ten corporations and bagged just two seats fewer than the Sena in Mumbai.Tricky PoliticsBesides retaining the Sena in the alliance, the BJP government will also have to deal with the Maratha issue carefully. Marathas who, along with an associate community called Kunbis, are believed to account for a third of the state’s population, took out 58 rallies across the state between August 2016 and August 2017. They called for a slew of demands to be fulfilled by February 10. The protests began as a response to the alleged rape and murder of a 15-year-old Maratha girl by three Dalit men in Kopardi in Ahmednagar district in July 2016.62963475 Among the key demands are capital punishment for the three men; amendments to the SC/ST Prevention of Atrocities Act, 1989, to prevent Dalits and tribals from misusing it; and quotas in education and jobs. A special court in November convicted the accused and awarded them the death sentence, which they can appeal against in the Bombay High Court. Amendments to the SC/ST Act, a Central law, will require the approval of Parliament. And, while chief minister Devendra Fadnavis has assured the protestors of a positive outcome on their reservation demand, it is not going to be easy.The previous government, just before the 2014 election, introduced a 16% reservation in education and jobs for Marathas under the “economically and socially backward category” but it was stayed by the Bombay High Court five months later, as the cumulative quotas were way beyond the Supreme Court-mandated ceiling of 50%. The matter is still sub judice.Virendra Pawar, an organiser of the Maratha rally in Mumbai, says the government will grant reservation at a time politically advantageous for the BJP. “Even the Congress-NCP government did it after they lost the Lok Sabha election.”62963488 Leaders of the movement will meet in Jalgaon on February 24 to decide the next course of action.“Our movement has not been violent like the Jat, Gujjar and Patel protests. But if our demands are not met by March-April, we can’t say what people will do,” says Aurangabad-based Vinod Patil, who has been part of the protests.The Maratha community is mostly agrarian and at the root of their demand for quotas is farm distress, which will be the opposition’s key plank in the election, which some speculate may be clubbed with the Lok Sabha polls, scheduled for April-May 2019 but could be advanced. Around 80% of the area used to grow cotton, a key cash crop, which is affected by pink bollworms, and the government has been criticised for its poor implementation of its farm loan waiver scheme. Just over a third of the 89 lakh eligible farmers have reportedly been covered under the scheme.As a result, the rural voter is now leaning toward the Congress and the NCP, believes Birmal. “Marathas in western Maharashtra and Marathwada are returning to the NCP.”The NCP got 25% and 32% of the Maratha-Kunbi votes, respectively, in the two regions in the last state election. Birmal says the next election will be similar to the recent polls in Gujarat, where the BJP did well in urban constituencies, but the Congress gained in rural areas.“The Congress and the NCP have tried to raise the Maratha issue in the local elections. This divisive politics will not help them,” says Bhandari.The BJP will also closely monitor the fallout of the mishandling of the Bhima Koregaon controversy.On January 1, clashes broke out between Dalits and Marathas at Bhima Koregaon near Pune when the former gathered in large numbers to mark the 150th anniversary of a battle in which soldiers from the Mahar community helped the British defeat Peshwa Baji Rao II of the Maratha confederacy. Protests by Dalits followed in Mumbai and Thane.The issue could be raked up closer to the election as Dalits comprise more than a tenth of Maharashtra’s population. Ramdas Athavale, a Dalit leader in Maharashtra, is a junior minister in the NDA government.The Congress-NCP combine is wooing smaller parties which were or are part of the BJP coalition.Maharashtra Swabhiman Paksh’s Raju Shetti, a Lok Sabha MP and former BJP ally, has been criticising the BJP and has been making overtures to the opposition.Moreover, Nana Patole, a former BJP Lok Sabha MP from the state, recently quit the party and joined the Congress, and there is speculation about what sidelined BJP leader Eknath Khadse’s next step will be, though he has said he will not quit the party.The BJP and the Shiv Sena could still fight the polls together and cracks could develop in the Congress-NCP relations. It is still early days. And there is no telling — at least not yet — which way the voters will lean.
Categories: Business News

How the Rs 11k crore Niravgate will affect the Indian diamantaires

February 17, 2018 - 11:37pm
Dinesh Navadiya, 58, knows Antwerp in Belgium very well. He says he is acquainted with almost all the 500-plus diamond trading families in the city. The diamond merchant from Surat visits Antwerp, 53 km from the capital Brussels, at least once a month. His first visit was in 1995 — as a buyer of rough diamonds. The jewel trade in Antwerp is centuries old and was traditionally dominated by the Jews. Over the last few decades, families from northern Gujarat settled in Antwerp and have virtually taken over the diamond trade. Antwerp and Surat in Gujarat are like sister cities, linked through the trade in precious stones like diamonds, pearls and other gems. Medium and small-scale units of Surat find strong business and financial support from their Antwerp brethren. A former president of the Surat Diamond Association, Navadiya has business relations with many in Antwerp and often finds it easier to raise funding from banks and institutions there than in India. Financiers in the Flemish city treat businessmen like him at par with locals and offer credit on good terms. Around 29% of rough diamonds that come to India for cutting and polishing come via Antwerp. The relations between the two also have shades of grey. Nirav Modi, the high-flying jewellery designer now on the run from Indian law-enforcement agencies for defrauding Punjab National Bank, is also from Antwerp. Though Modi shifted base to India and then possibly to the US , his family is still based in the diamond city of Belgium. He is not the only person of Indian origin from Antwerp and in the diamond trade who is in trouble. 62963758 Take, for instance, the case of Jayam NV and its promoter Mihir Mehta, another Antwerp-based diamond trader. Last May, the ICICI Bank UK took Mehta to court in London for default on loans totalling $8 million, according to the bank’s lawyer Zaiwalla & Co. The case details reveal that Mehta was also part of a group trial of around 103 companies in Antwerp in 2015, on allegations of tax evasion. Mehta said in the London court that action by Belgian income-tax authorities was political in nature. The allegations against these 100-odd companies, however, will sound familiar in India. It’s one of round tripping, arranging exports and imports to avoid paying taxes. There are more examples: an investigation was opened in 2011 against 170 diamond traders in Antwerp for stashing away money in Geneva. 62963767 Antwerp’s alter ego in India, the Mumbai-Surat stretch, has had as much if not more brushes with the law and trouble with the banks. One of India’s largest bank defaults, before the Modi-PNB case came to light, was the Rs 6,800 crore Winsome Diamonds promoted by Jatin Mehta (See Diamonds to Dust). Industry insiders let on that there are many cases of default that do not make it to the headlines, but have bankers tearing their hair. Senior Supreme Court advocate MV Kini feels the trade in diamonds and other precious stones, by its nature, is susceptible to fraud. Kini, who had led PNB’s charge against Winsome in courts, and is on the legal panel of all public sector banks of India, says he sees plenty of cases of wilful defaults and fraud by diamond traders every year. “Diamonds as a security are susceptible to fraud. It’s almost intangible. Bankers have no expertise in estimating the value of either rough stones or polished jewels and are not trained to differentiate between synthetic diamonds and natural ones either. As a moveable asset class, where lots of precious stones can look very similar, there is more chance of fraud and duplication,” he says. Bankers Don’t Trust No wonder then that bankers in India have learnt not to trust the diamond trade, notwithstanding how much money seems to have been lost because of Nirav Modi. A director in one of the premier gems and jewellery industry organisations in India lets on that many international banks do end up at its offices looking for details of Indian jewellers who have disappeared with money as well as other collaterals. Navadiya partly blames the banks. “Whenever we borrow from banks, there is a stringent clause to meet certain turnover targets. These targets force some jewellers to show exports to their own companies abroad, which they later bring back as imports.” 62963775 Round-tripping can serve many other purposes. He laments that instead of losing money on one jeweller like Nirav Modi, if PNB had loaned the same amount to MSME operators, at least 1,000 of them could have availed loans of Rs 10 crore and prospered. Today the industry is worried. Be it Mavji Patel, managing director of the country’s largest diamond exporting company Kiran Gems, or Nitin Khandelwal, chairman, All India Gem & Jewellery Trade Federation (GJF), everybody is concerned that the NiravModi scam will put their business in trouble and tarnish the image of the industry. Mavji Patel, whose Rs 10,000 crore operation gets only Rs 2,400 crore as working capital credit from banks, wonders how Nirav Modi’s exposure could go up to Rs 11,000 crore. He says the meteoric rise of Modi had perplexed many in the trade. “We could not even gauge how he operated but we could see fancy stores under Nirav Modi brand name coming up,” he says. Pramod Agarwal, chairman of Gems & Jewellery Export Procover motion Council (GJEPC), says: “On the one hand GJEPC is struggling to garner financing to gem and jewellery exporters, especially in the SME export sector, who are required to give high collateral for the limit sanctioned to them, and on the other, one finds this kind of clear advances (LoU) being provided by a bank without any safeguards — this speaks volumes of irregularities that need to be thoroughly investigated.” 62963787 There is also a desire to distance the diamond trading industry from Nirav Modi. Vipul Shah, a former chairman of GJEPC, points out that Modi was neither a diamond trader nor was he involved in cutting and polishing diamonds; he was more a jewellery designer and retailer. Traditional traders of gems looked upon diamantaires like Nirav Modi and Mehul Choksi of Gitanjali with suspicion as they became brands, raised money through IPOs and charted a different course with a larger appetite for funding. Khandelwal, who heads the retailers’ body GJF, agrees: “Even after submitting documents, the banks often turn down our credit demand. Our members ask for loans ranging between Rs 1 crore to Rs 20 crore but their demands are scrapped. Now PNB has given Rs 11,300 crore to Modi without checking any details. On the one hand, the government is vociferous about compliance, and on the other banks are lending money without checking any documents. What a dichotomy.” This uneasy relationship with the banks means much (some say up to two-thirds) of the diamond trade remains outside official channels in India. Sanjay Kothari, a former chairman of the Gems & Jewellery Export Promotion Council, claims that large parts of the industry is well regulated and now under the goods and services tax and rarely operates through letters of credit but prefers direct shipment credits and invoicing. However, that does not prevent individuals from indulging in illegitimate practices. He says: “In this industry, if tomorrow you come with 50 rough gems from somewhere and want them polished, you will find takers.”Disappearing Acts There are disappearing acts in the local level too. Take a case from 2016 for example when the police circulated photographs of a woman, for buying diamonds from a number of traders in Malad, Mumbai, and Surat and doing a disappearing act, with payments pending. No names were disclosed, neither of the main protagonist nor of half a dozen women employees who worked much the same way — entice traders to hand over diamonds and then vanish. 62963793 The intensely competitive Indian diamond industry is a magnet for the unscrupulous, says Edahn Golan, Dallas-based diamond industry analyst and founder of Diamond Research & Data. Golan says the Indian industry has a drive to succeed internationally, a willingness to cooperate with local competitors to achieve goals, the ability to develop technology and knowledge and, of course, low labour costs that the West can’t compete against. “But, most importantly, Indian diamond industry has a fierce and burning desire to succeed, which is quite impressive. Such a business environment also attracts people who are less than honest. It is the responsibility, of the diamond industry to flush these elements out and stop doing business with them. If the industry won’t take bold and necessary steps against scammers, it will hurt everyone and poison demand for diamond in consumer markets.” So, what happened to the lady who vanished after buying diamonds? Navadiya told ET Magazine that the case was solved.The trading community found the lady. She blamed her husband for the problems. Whatever gems she had were handed back and the issue was sorted out. The police was not involved in the case any further. This is probably what Golan was warning against — especially since there seemed to be a record of such behaviour in her family in the past. Navadiya, however, insists that issues of the community must be sorted out within.Clean Up May be it is time to have more transparency. A decade back the gems and jewellery giant De Beers had forced some structure into the industry by insisting that procurement, polishing and marketing of precious stones be organised into separate entities, instead of all of it operating like a family business. Mavji Patel is worried that the Modi scam has opened up at the wrong time. “It comes at a time when demand has started picking up in the US, Far East and India,” he says. The diamond industry was actually poised for a period of growth and higher prices, especially after a bad domestic year affected by demonetisation and GST implementation. Paul Zimnisky, independent diamond analyst based in New York, forecast a supply contraction of 4% and a simultaneous growth of 2-4%, boosted by US and Chinese demand. He says, “I would argue that the fundamental picture is pointing towards one that will allow for higher diamond prices this year.” While efforts are on to get to the bottom of Nirav Modi’s operations and assets he may have in India, there are at least a couple of concrete suggestions that can help improve the future of borrowing in the diamond trade. The GJEPC has suggested that banks make a greater use of its resources, especially a database that has the KYC details of 6,000 members. An official of GJEPC indicates that banks rarely make use of it. “From GJEPC, we had raised questions when banks had reconstructed loans of Nirav Modiowned Firestar Diamond. But the banks never consulted us,” the official said. The other suggestion comes from advocate MV Kini who says that banks should now stop using diamonds as collateral and insist on other kinds of more tangible assets like real estate for loans to the industry. The cleaning up of the Indian diamonds industry will be key because of another reason. Antwerp’s primacy as a global trading hub is under challenge. Dubai, especially, is challenging Antwerp’s dominance. Maybe it’s time India too put up its hand.
Categories: Business News

IBA to approach RBI seeking clarity on PNB liability

February 17, 2018 - 11:37pm
The Indian Banks' Association (IBA) will approach the Reserve Bank of India (RBI) to seek clarity on how the losses will have be managed after the Rs 11,400 crore fraud which has engulfed state owned Punjab National Bank (PNB).In an acrimonious meeting at the State Bank of India headquaters in Mumbai lenders tried to shift blame on liabilities arising out of the fraud to PNB.PNB CEO Sunil Mehta was present in the meeting through a video conference.Only banks which have been impacted by the counterparty risks arising out of the fraud were called to the meeting.Bank of India CEO D Mohapatra, ICICI executive director NS Kannan, Allahabad Bank CEO Usha Ananathasubramanian and IBA CEO VG Kannan were among the bankers present.The IBA meeting lasted more than four hours and lead to heated arguments between PNB and others on who will bear the losses."PNB stuck to its stand that only bonafide commitments will be paid. Other banks didn't agree and argued that PNB has to pay," said a person present at the meeting.IBA will now make a presentation on this to the RBI, most likely on Tuesday as banks in Mumbai are shut on Monday. PNB has acknowledged the fraud from its Brady House branch in Mumbai but it has remained non committal on its liabilities.
Categories: Business News

Indian firms seek stake in Iranian oil field: Oil Min 

February 17, 2018 - 11:37pm
Oil minister Dharmendra Pradhan said on Saturday that Indian companies seek a stake in Iran's South Azadegan field.Speaking alongside his Iranian counterpart Bijan Zanganeh at a conference in New Delhi, Pradhan added that Indian firms would raise their oil purchases from Iran in 2018-19.For his part, Zanganeh said Iran hoped to continue to export 2.1 to 2.2 million barrels per day beginning around April and to sell 500,000 bpd to India in the next fiscal year.
Categories: Business News

Jivi 4G smartphone to cost Rs 699 under Jio offer

February 17, 2018 - 11:37pm
Low-cost handset maker Jivi Mobiles today said its 4G smartphones will be available for customers at an effective price starting Rs 699 a unit under an offer from Reliance Jio."It is for the first time that Reliance Jio has tied up with an Indian homegrown mobile phone brand for the cashback offer to its customers. With this cashback in place, we shall be able to offer our range of 4G VoLte smartphones to our customers at an effective price starting Rs 699, the lowest in India as of now," Jivi Mobiles CEO Pankaj Anand said in a statement.Reliance Jio is offering Rs 2,200 through "Jio Football Offer" on the entire range of 4G VoLte smartphones across 22 brands including Jivi Mobiles.The Jio offer is valid on first recharge done between February 15 to March 31, 2018 using new smartphones.The moment a customer does a Rs 198 or Rs 299 recharge for the first time, till March 31, a total of 44 vouchers of Rs 50 will be credited to the customers MyJio account.These vouchers can be redeemed instantly against subsequent recharges of Rs 198 or 299 on MyJio.The Jivi Mobile 4G smartphone, Energy E3, with effective price of Rs 699 is available in market for Rs 2,899 a unit. It has dual 4G SIM slot, 4-inch screen, 5 megapixel rear camera and 2 mp front camera.The top end 4G smartphone model from Jivi Mobile , Prime P444, is available in market for Rs 4,799 and after the offer it will cost Rs 2,599 a unit to customers, as per the statement.
Categories: Business News

Modi govt betting big on blockchain tech to make land disputes a thing of past

February 17, 2018 - 8:36pm
Niti Aayog, the government’s premier think tank, is looking to bring out a discussion paper on the prospective use of blockchain technology in areas such as land records and electronic health records.The discussion paper, likely to be brought out within a month, will have extensive reports on the proof of concepts (PoC) studies carried out to check if land records can be synced with registration offices for better governance and whether electronic health records can be made more transparent.Blockchain is an infrastructure where a distributed digital ledger is maintained by a network of computers or nodes. This means information of a financial or nonfinancial transaction is shared with a decentralised network and validated by the entire network. Therefore, a blockchain framework, not being managed centrally, effectively reduces the chances of data manipulation and leaves lesser scope for a hacker to corrupt one system.“Where we lag is enforcement of contracts and registration of land in the ease of doing business index. Seventy per cent of our district civil cases are related to land disputes. This is due to inefficient linkage between the registration system and record of rights system. Niti will do two-three PoCs utilising blockchain technology to make this process simpler by putting the transaction online and making land transactions transparent and secure,” said Aalekh Sharan, officer on special duty to CEO, Niti Aayog.“This will have the effect of converting a record of transactions into the record of rights. We will measure the results of those PoCs to learn from them and make future implementation even better,” he added.
Categories: Business News

Here’s a 10 point programme that can power Congress to victory in 2019

February 17, 2018 - 8:36pm
Two disclaimers right up front. One, the purpose of this column is not to endorse Congress or downplay BJP. Neither is it to suggest either of them as the better alternative. Two, the personalities mentioned in this column haven’t influenced it in any form. Some of us do actually write for the love of analysis and to understand the world better. So conspiracy theorists may try their luck somewhere else. Herds who support a leader blindly may also feel unsettled with this column. They are advised to go back to their WhatsApp groups.With that out of the way, let me try to address the question being asked a fair amount – “Does Congress actually have a chance in 2019?” To be fair, even now the odds of Modi losing are low. However, the answer to the question is yes.Congress can win if it makes some changes and gets into campaign mode on a war footing immediately. They may already be too late, but here is a 10 point game plan that could work.One, anoint a PM candidate. The best bet right now seems to be Sachin Pilot. Yes, Rahul Gandhi is the leader. However, there are enough reservations about him among fence sitting voters, the 5% swing vote, which Congress needs to upset an election.Sachin has several things going for him. First, he is young, something the other side doesn’t have. Second, the way he talks, his neutral accent and his mannerisms make him seem sharp, and connect better to an average Indian than Rahul. Third, he has a support base in Rajasthan, which Congress might (and has to) win, enabling it to set the stage for 2019. Fourth, although coming from a dynasty, there is some semblance of merit in promoting him to PM candidate. Fifth, Sachin will be fresh. This works for media, social media and young voters.Two, Rahul backs the PM candidate. He can’t wish away his silver spoon. However, he can be seen as respecting talent if he fully backs his PM candidate. Sachin’s elevation cannot be a palace coup. This cannot be overemphasised. Rahul is the guy who is giving Sachin to the people. It’s the combo that works.Three, focus on the issues that have hurt people. Modi has worked hard. He is also not seen as corrupt. Many of his schemes were well-intentioned. It’s very hard to attack someone like this. What can work are areas where he may not have delivered to the high expectations he had set himself. Not silencing divisive voices, and keeping India unsafe is one. Choking the economy and not creating enough jobs can be another. An environment where Indians don’t feel as free is one more. Continuous addition of taxes on existing taxpayers is a recent one.Four, come with your own story. It isn’t enough to criticise BJP. What would Sachin (with Rahul’s backing) do differently? Will he open the economy further? Will he make it a crime for public representatives to make communal statements? Will he bring in another RTI like game changing reform to curb corruption? Just two or three issues that matter would be enough.Five, don’t be seen as anti-Hindu. One of the reasons people were upset with Congress was that it would ignore Hindu sentiments to nurture its minority voter base. Minority votes are in the bag already. Congress needs to come up with a lighter, non-danda maar version of modern Hinduism, that is aspirational for the new generation yet satisfactory for traditionalists.Six, alliances, alliances, alliances. Congress is too weak at the moment to go it alone. It needs to form alliances and give up more power than it may want to. As long as there’s a no-scam guarantee from coalition partners – because scams bring governments down – it will pay to have as many tie-ups as possible. Seat arithmetic will be crucial. It worked in Bihar but failed miserably in UP. Find that balance.Seven, cull old names. We all know who they are: Congress leaders who represent old Congress arrogance and elitist attitudes. One such leader can negate the good work of ten others. They must be out.Eight, chase that fence sitter vote. There are millions of first time voters, and new voters who are not sure who to vote for. That’s what makes the difference. BJP, despite some groaning, did promote Modi despite the presence of more senior BJP leaders. The reason? Modi could pull that vote. Whatever the hierarchy is, if the candidate can pull in a few percentage points of extra votes, he is the face. Simple.Nine, go digital. Rallies still matter. However, with every election, the impact of digital campaigning is increasing. Does Congress have the content ready for 2019? Short video clips, pictures, data – all that can be easily passed around on phones and is interesting to watch will be important. Get to work on it now.Ten, don’t be evil. The above points are all ways to win elections. But in your heart, try not to be evil. Yes, power is poison, but you don’t have to make it more poisonous than it need be. Genuinely care for India and Indians, and the results will come.Of course, the above is by no means an indication BJP needs to or is likely to lose. However, a great democracy is when even the opposition has a good chance. And it is important to know how exactly that chance can be converted to a victory. May the best party win!
Categories: Business News

Indian banks may take more than $3 bln hit from PNB fraud: Tax dept

February 17, 2018 - 8:36pm
Indian banks could take a hit of at least $2.7 billion from loans and corporate guarantees provided to Punjab National Bank in a $1.77 billion fraud case, the tax department said on Saturday. As of March 2017, banks had extended loans and guarantees worth 176.32 billion rupees ($2.74 billion) to companies tied to billionaire jeweller Nirav Modi and his uncle Mehul Choksi, the tax department said in a note seen by Reuters. But the total hit to Indian banks "may well exceed" that amount the department said in its note.Gitanjali and Firestar hit headlines on Wednesday after stateowned Punjab National Bank disclosed that it spotted fraudulent transactions of Rs 11,400 crore involving Choksi, Modi and a few of the bank’s employees. The cash was ostensibly used to buy rough diamonds, pearls and other precious stones for jewellery making. Mehul Choksi also reduced his stake in Gitanjali Gems from 31.04 per cent to 27.76 per cent in the December quarter. Currently almost all his stake is pledged with lenders. In fact, Gitanjali’s woes started long back. In 2013, market regulator Sebi banned Choksi and 25 other entities from accessing the capital market for alleged share price rigging.
Categories: Business News

About 5 crore jobs to be created by next year: MSME Minister Giriraj Singh

February 17, 2018 - 8:36pm
NAGPUR: Union Minister of State for Micro, Small and Medium Enterprises Giriraj Singh today said five crore employment opportunities would be created in the country by next year, adding that employement creation was not being perceived because of the country's large population. He was speaking at the 'National SC-ST Hub State' conclave organised here by his ministry. Stressing that jobs just did not mean government ones, Singh said that employment opportunities were also being created because of the Mudra (Micro Units Development and Refinance Agency) loan scheme that had made people self-employed. He said that some sections were mocking these initiatives, alluding to the furore over Prime Minister Narendra Modi's comment that even those selling "pakodas" were part of the cycle of employement generation. "It is PM Modi's dream to create jobs through self employment," Singh said. Singh, while speaking about the recent scam that has hit a nationalised bank, said that Non-Performing Assets (NPAs) of the banking sector was in the region of Rs 52,000 crore but went on to add that the portion of NPAs pertaining to the MSME sector was about 1.5 per cent of the Rs 70,000 crore lent to the latter. "Bankers should think about why the level of NPAs is so less in the MSME sector. They should provide need-based finance to MSMEs where even after a high rate of interest, the recovery is very good," Singh said.
Categories: Business News

Nirav Modi & uncle Choksi were readying plans for an IPO this year

February 17, 2018 - 5:36pm
Both Nirav Modi and his uncle Mehul Choksi had planned to hit the D-Street this year to raise money from the public for their companies. Modi’s flagship Firestar Diamonds and a subsidiary of the Choksi-promoted Gitanjali Gems were to debut this year. These fund-raising plans will now be consigned to oblivion as both promoters have fled the country, according to bankers.It is now clear from the financials of the companies promoted by the two that the earnings and assets of the businesses would be grossly insufficient to settle the fraud amount of Rs 11,400 crore with Punjab National Bank.The net profit of Gitanjali Gems plunged from Rs 595 crore in FY 2013 to Rs 166 crore in FY 2017. Over the same period, the company’s debt increased from Rs 5,239 crore to Rs 8,254 crore. Although the company had a sales turnover of Rs 16,571 crore in FY 2017, its raw material cost — at Rs 16,616 crore — exceeded sales.The company reported stock adjustment income of Rs 1,478 crore mainly on account of the merger of a wholly-owned subsidiary Gitanjali Exports Corporation, under pooling of interest. The huge raw material cost indicates that the company worked on wafer-thin margins.While Nirav Modi appointed bankers for his Firestar Diamond initial public offer (IPO) last year, Gitanjali Gems’ arm Nakshatra World received capital markets regulator Sebi’s go-ahead for an IPO last November.In the case of Firestar International, net profit rose 27 per cent to Rs 455 crore in FY 2016 over the previous year. The company had debt of Rs 3,509 crore at the end of FY 2016. The company’s net worth was 2,808 crore as on March 31, 2016. Its sales rose 21 per cent in FY 2016 to Rs 12,511 crore, but raw material cost alone was Rs 11,569 crore.Gitanjali and Firestar hit headlines on Wednesday after stateowned Punjab National Bank disclosed that it spotted fraudulent transactions of Rs 11,400 crore involving Choksi, Modi and a few of the bank’s employees. The cash was ostensibly used to buy rough diamonds, pearls and other precious stones for jewellery making. Mehul Choksi also reduced his stake in Gitanjali Gems from 31.04 per cent to 27.76 per cent in the December quarter. Currently almost all his stake is pledged with lenders. In fact, Gitanjali’s woes started long back. In 2013, market regulator Sebi banned Choksi and 25 other entities from accessing the capital market for alleged share price rigging.Between March 2009 and April 2013, Gitanjali share price rallied almost 1900 per cent from Rs 32.50 to Rs 649.70. However, following the Sebi ban, the stock plunged 90 per cent to Rs 65.42 on August 13, 2013. After the PNB fraud, it has declined 40 per cent to trade at Rs 37.55 on Friday.Macquarie Finance and Morgan Stanley and LIC are some of the shareholders in Gitanjali Gems.
Categories: Business News

From cakewalk then to tight contest now, how the script for 2019 has changed for Modi

February 17, 2018 - 5:36pm
By Amulya GanguliFor the Bharatiya Janata Party's supporters, the growing belief that the party is no longer as favourably placed as before must be both bewildering and disheartening.They must be wondering what could have gone wrong when the BJP was looking forward to not only a comfortable victory in 2019 but was also planning to celebrate the 75th year of India's independence in 2022.The talk of a "New India" under the BJP's near-permanent control was in the air with both Nitish Kumar and Omar Abdullah from two opposite sides of the political spectrum saying that Narendra Modi faced no challenge.Yet, the scene has changed. What is more, it has happened so over a rather short period of time. Among the reasons for it may be the BJP's electoral setbacks in, first, the Chitrakoot assembly byelection in Madhya Pradesh in November last year, the near-defeat it faced in the Gujarat assembly polls in the following month and finally the huge margins by which it recently lost three byelections in Rajasthan.Before these contests, the successes of the Congress's student wing in the Delhi University and of a leftist union in the Jawaharlal Nehru University student union elections over the Akhil Bharatiya Vidyarthi Parishad (ABVP), the saffron brotherhood's student wing, were significant pointers to the emerging trends.The new scenario has now led to conjectures about a fall in the BJP's number of Lok Sabha seats to 200/220 from the present 282 in a House of 545. Since these figures have been mentioned by a saffron scribe, it is obvious that assessments on these lines are currently on in the BJP. Another scribe has identified the absence of effective speakers other than Modi as one of the factors behind the BJP's slide in popularity.Perhaps one of the first to say openly that the Modi magic was fading was a Shiv Sena spokesperson, who also noted the change in Rahul Gandhi's "body language" and his transformation into a credible leader. Not long after, the Sena decided not to align with the BJP in 2019.BJP's old ally is not the only party to begin thinking of greener pastures. The Telugu Desam Party, too, has expressed its displeasure over the "neglect" of Andhra Pradesh in the Union Budget. To forestall a rupture, BJP has offered Shiv Sena 144 seats in Maharashtra in an assembly of 288 seats, but the generous gesture is more indicative of the BJP's nervousness than of magnanimity.So, what went wrong for a party which was riding high during the first three years of its tenure?First and foremost reason is its failure to usher in the promised "achhe din" or better days because of a sluggish economy. The scene might have been better but for the twin blows of demonetisation, which dealt a blow to small businesses, and the shambolic rolling out of the Goods and Services Tax (GST), which also unsettled the traders and businessmen.The second reason is the widespread rural distress which eroded the BJP's influence in Gujarat. As a party essentially of urban lower middle class areas, the BJP's connection with the countryside has never been very strong. In its Jan Sangh days, the party once even forgot to adopt a resolution on agriculture till the lapse was noticed at the last minute.Modi is now said to have sought the advice of farming experts to reach out to the cultivators. But the move is unlikely to pay immediate political dividends.To compound the BJP's problems, the Bharatiya Mazdoor Sangh (BMS), the Sangh Parivar's labour wing, has raised the red flag over the "disappointing" Union Budget.Another explanation for the BJP's woes is undoubtedly the inability to control the saffron goons, who have been running amok to impose their diktats on diet, inter-faith romance and film scripts, among other things.The rampages of the cow vigilantes have hit the meat and leather industries and resulted in ageing cows being let loose by their owners to roam the countryside and city streets to forage on their own. Hence the proposal to impose a fine on the "guilty" owners.The result is the prevalence of an atmosphere of intolerance of the kind which made a section of the intelligentsia return the awards which they had once won in protest against the deteriorating state of affairs in the country.Perhaps the BJP's only solace at the moment is that its opponents haven't been able to get their act together. Moreover, the fissures in their ranks are palpable with a rift in the Communist Party of India-Marxist (CPI-M) over whether to align with the Congress in an anti-BJP front, and the Bahujan Samaj Party (BSP) teaming up with the Janata Dal (Secular) in Karnataka on the eve of the assembly elections.There are also said to be reservations among the senior opposition leaders about accepting Rahul Gandhi as the leader of an alliance.Karnataka will be the next big electoral battle for the BJP. If it can dislodge the ruling Congress in the state, it will be able to brush aside the party's setbacks in Gujarat and Rajasthan. Otherwise, the road to 2019 will seem steeper.(Amulya Ganguli is a political analyst. The views expressed are personal. He can be reached at amulyaganguli@gmail.com)
Categories: Business News

Rourkela Steel Plant initiates project to use waste plastic in road construction

February 17, 2018 - 5:36pm
Steel Authority of India's Rourkela Steel Plant has initiated a new project of utilising waste plastic in road construction, the first such initiative taken up in Odisha.As a pilot project, a one km stretch of road between Rourkela Club to Shaktinagar Chowk in Sector-2, Rourkela has been constructed mixing shredded waste plastic in road tar. Rourkela Steel Plant initiated the process as per Indian Road Congress Guidelines, an official statement said.After door to door collection of domestic garbage, waste plastic is segregated at different intermediate garbage stations spread across the Steel Township, which is then collected and transported to an exclusive store at Sector-15 constructed for this purpose. The plastic waste material is shredded thereafter using the facilities of local recyclers, and transported to Hot Mix Plant to mix with the aggregates used for tar concrete. When the aggregate is heated,the plastic gets coated uniformly over the aggregate within 30 to 60 seconds, giving an oily look. The plastic-waste-coated aggregate is mixed with hot tar and the resulting mix is used for road construction. Rourkela Steel Plant's initiative comes at a time when it is carrying out road repair jobs in the township using in-house road tar. SAIL said its plants have plans to lay more such green roads with waste plastic in the coming months, in a significant step towards Swachh Bharat.Plastics pose a serious threat to environment since most of them are non-bio degradable. An estimate says that out of the total plastic waste generated in India, about 60% gets recycled, while the rest 40% litters and chokes the environment. Burning of plastic in the open also causes serious health hazards for the people around as it emits carcinogenic gases.Studies have revealed that waste plastic has great potential for use in road construction.
Categories: Business News

Vijay Rupani inaugurates Air Odisha's first flight under UDAN scheme

February 17, 2018 - 5:36pm
AHMEDABAD: Air Odisha today launched its maiden flight under the Centre's UDAN scheme, linking Mundra with Ahmedabad in Gujarat. Chief Minister Vijay Rupani launched the inaugural flight of the Bhubaneswar-based airline. Air Odisha, which started services as a non-scheduled operator in November 2012, was granted the flying permit by the DGCA to launch flights under the Ude Desh Ka Aam Nagrik (UDAN), the Centre's regional connectivity scheme (RCS), on last Tuesday. It has bagged 50 routes under the RCS. Air Odisha is starting services from Ahmedabad to Jamnagar, Mundra and Diu in the first phase of its operation under the UDAN scheme. Of these, the Mundra-Ahmedabad service took off today. Mundra, in Kutch district, houses a mega private port. "It is the realisation of the dream of Prime Minister Narendra Modi. UDAN aims to provide air facility to the common man through regional connectivity. "Till now, Rajkot, Bhavnagar, Jamnagar, Surat were all connected to Mumbai, but with this service, these cities will be connected to Ahmedabad also (as part of Air Odisha's Gujarat network plan)," Rupani told reporters on the sidelines of the event. The airline has deployed a 19-seater Beechcraft 1900D on the Ahmedabad-Mundra-Jamnagar route. Ahmedabad-based firms GSEC Aviation and Monarch Networth Capital have made investments in Air Odisha and Air Deccan, whose founder G R Gopinath was also present on the occasion. An Air Deccan official said the Prime Minister is likely to inaugurate Air Odisha's flight connecting Ahmedabad and Diu on February 25. Air Odisha will also provide connectivity from Ahmedabad to Bhavnagar and Bhavnagar to Surat in coming days, the official said. Speaking at the event, founder of Air Deccan G R Gopinath, said it was a "dream come true" moment for him to see the venture taking off. Gopinath said his air charter company had sought permission to fly on this route in 2013 but the then UPA government did not give him the go-ahead due to political reasons. Modi, who was then Gujarat Chief Minister, was scheduled to inaugurate the flight, said the pioneer of low- cost flying in India. "We made announcement and hoardings were put up. Mr Modi was supposed to inaugurate it...Two days before inauguration, the aircraft (bought for this) were stopped by the then (UPA) government (in Dubai). "There were political consideration not to allow the service to take off," alleged Gopinath. "It dashed our dream and we lost a lot of money. I then told Mr Modi that 'I will come back to Gujarat when you become the prime minister'," he said. Under the UDAN scheme, Air Odisha plans to connect cities like Bhubaneswar, Utkela, Raipur, Ranchi, Gwalior, Lucknow, Kanpur, Varanasi, Ahmedabad, Surat, Bhavnagar and Selam, among others.
Categories: Business News

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