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SUNDAY, 21 JANUARY 2018

12 pages in 1 section WORLD P8 BACK PAGE P12
MUMBAI (CITY)
~10.00
VOLUME XI NUMBER 45
FACEBOOK WILL ALLOW USERS TO HOLLYWOOD HOPES TO UP
RANK CREDIBILITY OF NEWS THE GAME IN 2018

US GOVT SHUTS DOWN

ON TRUMP’S FIRST
ANNIVERSARY AS PREZ
ONGC to buy HPCL stake Centre ready to take
a hit over crop MSP
for ~370 billion
Deal to help government surpass disinvestment target this fiscal year
SANJEEB MUKHERJEE
New Delhi, 20 January

The Union Budget 2018-19 is likely to

give freedom to states to intervene in
SHINE JACOB agriculture markets so that prices don’t
New Delhi, 20 January MEGA DEAL SHAREHOLDING PATTERN AS OF DEC 2017 crash sharply, but the Centre may have
| Government (central / state) | FII | LIC of India to bear up to 40 per cent of the losses
The US government shut down on Saturday | Insurance | Mutual fund | Financial institutions /

after President Donald Trump and Congress
failed to reach a deal on funding for federal
agencies, highlighting the country’s deep
political divisions. This was Trump’s first
anniversary as president. For the first time
since October 2013 — when a similar
stand-off that lasted 16 days kept only
essential agency operations intact —
federal workers were being told to stay at
home or in some cases to work without pay
until new funding is approved. 9>
BS SPECIALS
‘Elections will
create a change’
RAJEEV CHANDRASEKHAR tells Aditi Phadnis
about representing Bengaluru, his views on
Aadhaar, and issues that could dominate the
assembly elections in Karnataka 10 >
17 dead in firecracker
factory fire in Delhi
Seventeen people are feared dead after a
fire ripped through a two-storeyed factory
in outer Delhi's Bawana industrial area this
evening, a Delhi Fire Services official said.
The police have so far confirmed nine
deaths. The official said, the blaze, which
started from a firecracker factory, had been
brought under control.
ECONOMY P4
Surfing in the sky maybe,
but airlines cold to calls
Domestic airlines are evaluating the
Telecom Regulatory Authority of India’s
(Trai) recommendations to allow on board
Wi-Fi, but high cost and price sensitivity
may deter them from rolling out the
service. “In-flight connectivity is a difficult
business case to make for domestic airline
operations. The aircraft are smaller, there
are less passengers and flying time is not
that long,” said Stephen Tame, chief
advisor (IT) at IndiGo.
COMPANIES P2
Mahindra Two Wheelers
tries to recover
Mahindra Two Wheelers (MTWL), the ailing
subsidiary of Mahindra & Mahindra (M&M) ,
is trying to re-invent itself. The aim is to
reduce its loss in this financial year to below
~1 billion; it lost ~4.7 billion in 2016-17. It
plans to launch variants of its Mojo
premium motorcycle in the coming
quarters; it also has a new BSA bike in the
works, apart from a Jawa motorcyle.
S
tate-run Oil and Natural Gas
Corporation (ONGC) will acquire
the 51.1 per cent government
stake in Hindustan Petroleum
Corporation (HPCL) at a cost of ~369.15
billion. The deal is expected to be com-
pleted by the end of this month.
ONGC will pay the government
~473.97 per share, at a premium of over 10
per cent of the 60-days’ weighted aver-
age price of HPCL's scrip. The deal
will help the government surpass the
disinvestment target of ~725 billion for
2017-18, for the first time since 2009-10.
As of January 11, the total disinvestment
proceeds for the current fiscal year stood
at ~543.3 billion and this will be for the
first time since 2009 that a government
will be surpassing its disinvestment tar-
get. Since it is a related-party transac-
tion, the market regulator Securities and
Exchange Board of India (Sebi) has
already granted exemption for an open
offer in November last year.
The deal will also have a positive
effect on the government’s disinvest-
ment target. Against a budgeted disin-
vestment target of ~725 billion, the
Centre could garner anything between
~900 billion and ~1 trillion now, which
could go some way to make up for the
shortfall in other revenue items such as
the goods and services tax.
ONGC said in a statement on
Saturday that its board had considered
the proposal on Friday and a share pur-
chase agreement with the President for
acquiring the 778 million equity shares
of HPCL (51.11 per cent) was signed.
“Requisite approval from the share-
holders of ONGC for the related-party
transaction will be sought by ONGC after
the execution of the share-purchase agree-
ment. The acquisition has been made on
RBI moots US-style trading platform for distressed assets FM to skip Davos
ABHIJIT LELE
Mumbai, 20 January
Reserve Bank of India (RBI) Deputy
Governor Viral Acharya has suggested
setting up of a online trading platform for
selling distressed assets to ensure trans-
parency and better price discovery.
Indian Banks’ Association (IBA),
Association of Asset Reconstruction
Companies (ARCON) and credit rating
agencies (CRAs) can join hands to estab-
lish the equivalent of the US Loan
Syndication and Trading Association
(LSTA) for this purpose, Acharya said at
an ASSOCHAM event on asset recon-
struction in Mumbai on Saturday.
Such an arrangement would provide
disclosure on credit events, digitisation of
loans and legal documents and stan-
dardisation along the way. Besides, it also
provides online bidding platforms for
the sales to take place, ASSOCHAM state-
ment quoted Acharya as saying.
The RBI deputy governor said stake-
holders should at least discuss whether
there was value to building something
like this as the US had built the LSTA
over a period of time. South Korea had
built a similar structure during the crisis
suffered by states due to the Minimum
Banks | Retail | Others % of holding Support Price (MSP) of a crop.
The proposal is being seen as
67.8 51.1 a move to address the continuing rural
HPCL
distress.
The scheme could cover all com-
RELIEF TO FARMERS
ONGC 24.8
modities for which the Centre fixes MSP, | Centre to bear loses upto 40% of
11.8
except wheat and rice. There won’t be MSP of a crop whose price has
9.2 8.8 any cap on the quantity to be purchased dropped
by the states.
2.0 1.0 2.6 0.4 5.2 3.1 6.9 3.2 2.1 Perishables like onion, potato and | In case of hilly and Northeastern
tomatoes won’t states, the compensation can
SHARE MOVEMENT Base=100 come under the extend to upto 50% of MSP
purview of the pro- | The compensation will cover
gramme either, for losses suffered by states in
the time being, it is
procurement and distribution of
learnt.
agriculture commodities
The Central
ONGC HPCL share would include | It will include expenditure
CONSOLIDATED compensation for losses suffered by incurred on procurement,
DATA in ~ billion FY15 FY16 FY17 FY15 FY16 FY17 states on procurement of crops, their storage, interest cost and ancillary
Net worth 1,804.5 1,978.1 2,211.9 136.1 166.6 210.7 storage, sale, interest cost and other expenditure
ancillary expenses.
Total debt 539.4 455.0 579.0 369.2 221.6 221.3 | At present, Centre operates two
For instance, chana’s MSP for the
Current assets 711.1 579.6 475.0 303.5 238.7 288.3 2017-18 rabi season has been fixed at programmes called MIS and PSS to
Current liabilities 809.5 752.4 638.0 275.3 222.1 267.9 ~4,400 per quintal. If a state suffers a loss help states intervene in the
Market capitalisation 2,624.8 1,837.3 2,374.8 220.1 266.0 533.8
while procuring, storing and distribut- market
ing it, the Centre will compensate it at
the rate of ~1,760 per quintal. The
Source: Capitaline Compiled by BS Research Bureau
remaining will have to be borne by the shares 50 per cent of the losses suffered
an arm’s-length basis. The transaction is state government itself. by the states, but a formal approval is
exempt from the requirement to make an The big advantage of the proposed needed from it before a state can start
open offer,” the statement said. scheme, which is being called ‘Market purchasing.
A top ONGC source said, “We haven’t Assurance Scheme’ (MAS), is that it will The disposal of procured agriculture
yet finalised we will be financing the
deal. We have a good cash balance.
‘THE DEAL WILL give operational freedom to states to
intervene in agriculture markets to pur-
commodities too has to be in coordina-
tion with the Centre, which results in
Approvals from shareholders are in HELP HPCL ADD chase directly from farmers as soon as unnecessary delay.
place to borrow up to ~250 billion. In MORE REFINING prices start falling instead of waiting for Under MIS in 2017-18 financial year,
addition to this, the option of selling
CAPACITY’ a formal approval from the Central gov- data shows that till December 18, the
stakes in GAIL (India) and Indian Oil are ernment. In fact, that has been the case Central government spent around
also available. We may go for a mix of M K SURANA, with existing price support programmes ~13.87 billion from its kitty to help states
these options.” ONGC currently holds Chairman and MD, HPCL like Market Intervention Scheme (MIS) procure over 920,000 tonnes of onions,
13.77 per cent stake in IOC and 4.87 per and Price Support Scheme (PSS) as well. potatoes, red chilies and garlic.
cent in GAIL. Turn to Page 4 > PAGE 2 In both MIS and PSS, the Centre too Turn to Page 4 >
CONTINUOUS RISE IN GROSS markets for these assets. to improve recovery prospects. The for Budget
NON-PERFORMING ASSETS The loan sales could occur for risk
transfers perhaps even prior to default
recovery rate, which is a good indicator
of the effectiveness of ARCs, is expected
~ trillion because recovery adds stress for players to rise from 38 per cent earlier to
who want to come in even before an IBC 44-48 per cent, CRISIL said.
8.0 9.5
(9.4%) (10.5%) (Insolvency and Bankruptcy Code) fil- In the last three years, the activity of
ing takes place. It would be helpful in ARCs has grown substantially. According
calculating expected credit losses, to the Reserve Bank of India’s report on
6.0
(7.5%) Acharya said. Trend and Progress of Banking in India,
Meanwhile, rating agency CRISIL in the book value of assets acquired rose
a report on ARCs said gross non-per- from ~1,598 billion in 2014 to ~2,627 bil-
forming assets were expected to rise to lion in 2017. Similarly, security receipts
3.2
2.6 (4.3%) ~9.5 trillion by the end of March 2018 and issued by securitisation companies and
(3.8%) stressed assets were expected to be at ARCs also grew from (worth) ~520 bil-
~11.5 trillion. This provides significant lion in 2014 to ~940 billion in 2017.
business opportunities for ARCs. Banks look towards ARCs as acquir-
Given that banks are expected to ers of their stressed accounts for numer-
make higher provisioning over and ous reasons. One is that some ARCs
2014 2015 2016 2017 2018* above the provisions made for stressed
assets, they may sell the assets at lower
hold a significant exposure in a stressed
company, therefore in certain cases it
*projections
March discounts, thus increasing the capital makes sense that one ARC consolidates Finance Minister Arun Jaitley
Source: CRISIL estimates requirement. the various banks’ credit exposure to
The existing capital base of ARCs will the company. ARCHIS MOHAN & ARUP ROY CHOUDHURY
not support in absorbing the stressed As in the case of Essar Steel and New Delhi, 20 January
and it then became an industry stan- assets available in the market and they Edelweiss ARC; where now Edelweiss
dard for loan sales. are expected to be a part of the multi- ARC is the fifth largest lender to the steel Finance Minister Arun Jaitley was scheduled
It was in the interest of banks to cre- platform business model with co- giant after having bought Essar Steel’s to be one of the key speakers at the India-spe-
ate primary market liquidity in selling investors/large funds to bring in capital, NPA accounts from various banks like cific sessions at the World Economic Forum
loans. That would be also useful for ARCs and stay relevant. HDFC Bank, ICICI Bank, Axis Bank, and (WEF) in Davos, but he will now not be trav-
which may have an interest in secondary The structural changes are expected Bank of Baroda. Turn to Page 4 > elling to the Swiss town. A finance ministry
source said the change in plan was because
the FM was needed in New Delhi to devote
time to the Budget.

GST rate cut: Organised used car players get a margin breather
SOHINI DAS
Ahmedabad, 20 January
Organised dealers, which received a
breather from the GST Council that
lowered the goods and services tax
rate on used cars, said margins would
now improve and the market would
see more discounts.
In its 25th meeting on January 18,
the GST Council lowered tax rates on
29 products and 54 services. Among
these, the GST rate on used medium
and large cars and SUVs was cut from
28 per cent to 18 per cent, and the rate
on small cars and motor vehicles was
reduced from 28 per cent to 12 per
cent. The cess on both these cate-
gories of used cars was removed.
Before the implementation of the
GST, dealers had to pay a value-added
tax (VAT) of 5 per cent.
“These announcements are
expected to be favourable for the used
car market, which saw some disrup-
tions after the GST was imposed.
Earlier, the GST framework had levied
tax rates between 28 per cent and 43
per cent on dealer margins, depend-
ing upon the type of vehicle,” India
Infoline said.
This is expected to be positive for
Maruti Suzuki, which derives a fourth
of its sales volume from the used car
market. The abolition of the cess on
ambulances was positive for Force
Motors, the largest player in that seg-
ment, India Infoline added.
USED CAR MARKET
| The market size of used cars in India is
estimated to be 3.5 million units
| Organised players, who constitute 40%
of the used-car market, say their margins took
a 3-3.5% hit after the GST roll-out
| GST Council on Thursday announced a rate cut
on used cars from 28% to
18% for large cars and SUVs, and to
12% for small cars
| Before the GST, dealers had to pay a value-
added tax of 5 per cent
Shubh Bansal, co-founder and Many players were holding back on
marketing head, Truebil, which clocks big offers as margins were under pres-
a gross merchandise value (GMV) of sure. “The benefits will be directly
~60 million per month, said the pres- passed on to customers and we pre-
sure on margins would now ease. “Our dict an immediate boost in sales.
margins were in the range of 10 per Truebil’s volumes will rise three times
cent, and after the GST implementa- in this quarter,” Bansal added.
tion, these were squeezed by 3-3.5 per Industry sources point out that
cent,” he added. instead of raising selling prices of
He expects discounts and offers used cars, many dealers had chosen
from organised players will back soon. to lower their purchase prices to off-
set the GST.
The country’s largest organised
used car seller with a 72 per cent mar-
ket share, OLX India, welcomed the
decision, saying the move would
boost consumer sentiment and
enhance the ease of doing business in
the pre-owned automobile industry.
“As prices drop, there will be a
higher number of pre-owned auto-
mobiles in the online marketplace to
fulfil the rising demand of end users.
It is a win-win situation for buyers,
sellers and dealers,” said Sunny
Kataria, director, automobile catego-
ry, OLX India.
The used car market in India is
estimated to be around 3.5 million
vehicles per annum. Of these, 40 per
cent are sold through organised
channels.
Unorganised used car dealers were
not affected much by the GST because
many with low turnover were exempt.
These players are now likely to face
the heat as organised players step up
discounting.
Apart from Prime Minister Narendra Modi,
Jaitley was to be one of the six Union ministers
scheduled to attend the WEF. The FM was ear-
lier scheduled to be in Davos on January 24 to
take part in the key “country strategy dialogue
on India”. Commerce and Industry Minister
Suresh Prabhu and Petroleum and Natural Gas
Minister Dharmendra Pradhan were to join
Jaitley in this session.
Sources confirmed the change in the FM’s
itinerary barely 24-hours after the Ministry of
External Affairs (MEA) had held a press con-
ference on Friday to announce that Jaitley
would be travelling to Davos.
PM Modi will be in Davos from January 22 to
23. He is slated to address the inaugural plena-
ry session and is also scheduled to meet 60 of
the world’s topmost business leaders and chief
executive officers at a dinner on January 22.
Modi is the first Indian PM since H D Deve
Gowda in 1997 to attend the WEF. Jaitley will
present the Union Budget, the fifth and final one
of the current the government, on February 1.
Announcing the itinerary of the PM and
other ministers at Davos, Secretary (Economic
Relations) in the External Affairs Ministry, Vijay
Gokhale and Department of Industrial Policy
and Promotion (DIPP) Secretary Ramesh
Abhishek had said on Friday that six Union
ministers, including Jaitley, were scheduled to
attend several of the sessions. Turn to Page 4 >
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2 COMPANIES
>
MUMBAI | 21 JANUARY 2018
SMART RIDE ‘Deal to help
HPCL add more
Mahindra Two
refining capacity’ Wheelers tries
State-run Hindustan Petroleum Corporation (HPCL) is set to go into a
new era with Oil and Natural Gas Corporation grabbing a majority
stake in the company by January end. On the backdrop of that, HPCL
Chairman and Managing Director M K SURANA talks to Shine Jacob
about the deal and likely MRPL acquisition. Edited excerpts
to swing back
Company aims to reduce losses to below ~1 bn this year by
cutting costs and focussing on the premier segment
SOHINI DAS
Ahmedabad, 20 January
ahindra Two
M Wheelers (MTWL),
the ailing subsidiary
of Mahindra & Mahindra
(M&M) , is trying to re-invent
itself. The aim is to reduce its
loss in this financial year to
below ~1 billion; it lost ~4.7
billion in 2016-17.
It plans to launch variants of
its Mojo premium motorcycle
What does this mean to my knowledge, the deal is in the coming quarters; it also
Jaguar Land Rover India rolled out Range Rover Velar in New Delhi on Saturday HPCL? likely to take place by the has a new BSA bike in the
PHOTO: SANJAY K SHARMA The first thing is that HPCL end of this month only. works, apart from a Jawa
has a big marketing set up in motorcyle (expected in FY19).
place. However, we are short Will your focus on the Mahindra’s two-wheeler
of refining capacity. The deal petrochemical sector be business started with the
will bring to the getting a boost? acquisition of Kinetic Motor
table of HPCL fur- We are now not Company’s assets in 2008.
ther refining into petrochemi- However, it has seen falling
capacity. ONGC cals. Recently only, sales and mounting losses over
subsidiary we have set up a years. Several of its products
Mangalore new department (Pantero motorcycle, Duro DZ,
Refineries and for petrochemi- Rodeo RZ, Kine scooters) failed
Petrochemicals M K SURANA cals. The deal will to make a mark and were dis-
(MRPL) is into Chairman and be a substantial continued around 2015. Sales
refining, but has MD, HPCL gain for both the revenue dipped 93.5 per cent
no substantial companies in in FY16. Last year, the compa-
marketing pres- WE MAY petrochemical ny announced it had decided to
ence. Hence, the portfolio as further move away from commuter
deal will be a win- NOT REQUIRE ANY consolidation can segment motorcycles and
win situation for APPROVAL NOW happen. scooters; it would, instead,
both the compa- AND IT IS UPON focus on the premium seg-
nies. Moreover, ONGC TO TAKE What is your take ment. A good move, say ana-
the deal will be an on the pricing of lysts, as it is tough for a new
advantage in SHAREHOLDER the deal? player to compete with estab-
terms of crude APPROVAL IF Pricing has to be lished ones in the competitive
procurement and REQUIRED discussed commuter segment. More so as
marketing supply between the buyer the 100-125cc motorcycle mar-
for both the com- and the seller. ket has come under threat from
panies. They must have done their scooters of late.
I believe that this will be due diligence before the Prakash Wakankar, chief
vital for India’s energy sec- deal. It’s is not fair from my executive officer for the two-
tor, as having a presence in side to comment on that. We wheeler business, detailed
upstream and downstream may not require any several moves already made
will help us to deal with the approval now and it is upon to pare costs and reduce loss.
volatility in crude oil prices ONGC to take shareholder With the Kinetic acquisition,
in a better way. According to approval if required. its field force and the manu-
facturing plant (Indore) had
come to Mahindra. A volun-
tary retirement scheme
(VRS) was announced at the
plant in 2015, which many
opted for. Many older
employees are also in turn
for retirement. “There are
benefits of being a part of a
large conglomerate. As cost
rationalisation, several
employees from the two-
wheeler business have been
absorbed in other lines of
businesses,” said Wakankar.
The company has also
reduced spending on major
marketing events and adver-
tising. Is using the digital
space more and working
with dealers in their catch-
ment areas for promotional
events. “Advertising and
marketing initiatives are
more targeted now,” he said.
With the decision to move
away from the commuter seg-
ment, there is no cost of new
product development for the
mass segment. The develop-
ment of new premium prod-
ucts (BSA and Jawa stable) is
happening through a separate
FIRM HAS REDUCED SPENDING ON
MARKETING EVENTS AND ADVERTISING
FALLING SALES
Domestic sales (April-December)
Models 2017
Mojo 1,050
Centuro 11,953
Gusto 30,345
Exports (April-December)
Models 2017
Mojo 4,097
Centuro 12,179
Gusto 2,835
Source: SIAM
Mahindra Two Wheelers
Figures in ~ million
Year end Net sales
FY15 6,617
FY16 432
FY17 448
Source: Capitaline, Note: PAT (Profit after tax)
Models discontinued
Model
Pantero motorcycle
Duro DZ
Flyte
Kine
Rodeo RZ
* Kinetic had launched the 125 cc gearless scooter Flyte that it had co-developed with
Taiwan based Sanyang Motors in 2007. Kinetic was acquired by Mahindra in 2008
subsidiary, Classic Legends
(CLPL). Mahindra had acquired
the BSA brand through CLPL,
which also has a brand licens-
ing arrangement with Czech
motorcycle maker Jawa for a
few markets, including India.
These moves, however, will
not affect the accumulated loss
of ~28.7 billion, conceded
Wakankar. “Moving towards
premiumisation is the way for-
ward for that,” he said.
Its only premium offering
in the Indian market, the Mojo,
has not done well of late. Its
sales slipped to almost half dur-
ing the first nine months of this
financial year, to 561 units
(from 1,050 in the previous
period). Disappointing, agreed
Wakankar.
After the strategy of mov-
ing away from the mass seg-
ment was announced, there
was some apprehension
among dealers. “All our dealers
did not have the Mojo this year.
We also opened five exclusive
dealerships for the Mojo recent-
ly, which would offer a unique
experience to customers,” said
Wakankar.
The company planned to
launch the Mojo UT, a more
affordable variant. Two more
variants are in the works.
Wakankar said the compa-
ny had maintained that every
Lockheed offers to
make custom-built
fighter jets in India
PRESS TRUST OF INDIA
Washington, 20 January
American aerospace and
defence major Lockheed
Martin has proposed to man-
ufacture custom-built F-16
fighter jets in India, which its
officials say will give Indian
industry a unique opportuni-
ty to become part of the
world’s largest fighter aircraft
ecosystem.
“We plan to introduce two
new words into the lexicon of
international fighter aircraft
manufacturing: ‘India’ and
‘exclusive’,” Vivek Lall, vice
president, strategy and busi-
ness development, at Lockheed
Martin Aeronautics told PTI in
an interview.
“India-specific state-of-
the-art fighter production in
India will be exclusive, some-
thing that has never before
been presented by any other
fighter aircraft manufacturer,
past or present. There will also
be a significant export market
available for Indian-made
fighters,” he said.
Lall, an Indian American
who last year was instrumental
https://t.me/TheHindu_Zone
1
2018 % Change
561 -46.50
3,085 -74.10
9,190 -69.70
2018 % Change
4,981 21.50
8,711 -28.47
3,278 15.62
Profit & loss
PAT account balance
-5,289 -17,808
-6,128 -23,961
-4,716 -28,671
Compiled by BS Research Bureau
Year of launch When discontinued
2013 May 2015 July
2011 Dec 2015 July
2007 Dec* 2015 July
mid-2010 2015 July
2012 June 2015 September
existing owner of a Mahindra
two-wheeler would continue to
get service and spares. Of the
362 service centres last year at
this time, 336 remain. Sales
points have reduced, from 315
last year to 184 now.
“We are not driving out any
dealership or asking them to
close. In fact, we continue to
make and sell the Gusto and
the Centuro range here,” he
said. Some dealers have opted
to go for Mahindra First Choice
Wheels, the used vehicle brand,
which recently began selling
used two-wheelers.
He said he did not wish to
give details on whether there
would be a new chain of deal-
erships for the premium range.
With the Jawa motorcycles
(expected in FY19)
to be launched under the same
brand, that would not bear the
Mahindra name, one might
expect a new chain of dealer-
ships. As for the mass segment
offerings ,Gusto and Centuro,
there was no plan to pull the
plug. “Almost 50 per cent of the
production is exported and in
FY18 we entered some new
markets (East Africa). So, there
is no plan to stop production
at our factory at the moment,”
Wakankar said. Mahindra
exports these vehicles to eight
markets.
in the decision of the Trump
administration to sell top-of-
the-line unarmed drones from
General Atomics, in his previ-
ous capacity.
Noting that the India-spe-
cific fighter on offer and its pro-
gramme’s size, scope and suc-
cess will enable Indian industry
to take advantage of unprece-
dented manufacturing,
upgrade and sustainment
opportunities well into the
future, Lall said the platform
will give Indian industry a
unique opportunity to become
a part of the world's largest
fighter aircraft ecosystem.
“We intend to create far
more than an “assembly line”
in India,” he said.
Lall claimed no other
advanced fourth generation
platform even comes close to
matching the record of real-
world combat experience
and proven operational effec-
tiveness.
“The fighter being offered
specifically to India is uniquely
the best state-of-the-art fight-
er,” he said adding that all three
variants of the F-35 are single-
engine aircraft.
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.
MUMBAI | 21 JANUARY 2018 COMPANIES 3 <

Paper companies hike Nagarjuna Oil Corp

gets 90-day breather
price by 2.5 per cent T E NARASIMHAN
Chennai, 20 January

Nagarjuna Oil Corporation has

received an extension for its
Raw materials like pulp and chemicals have become costlier in three months Corporate Insolvency
Resolution Process (CIRP) for
DILIP KUMAR JHA achieved nearly 1.9 million another 90 days, even as sev-
Mumbai, 20 January tonnes of imported quantity eral public sector and private
of paper during the first half investors are eyeing to bid for
strong investors including
public sector firms, foreign
and Indian investors out of a
total of around 20 investors
to bid for a resolution plan
as per the expression of
interest (EoI) floated by the
resolution professional.
The bidders’ list
includes public sector play-

P
aper manufacturers
have raised their prod-
uct prices by an average
2.5 per cent across all seg-
ments for January to pass on
the increase in raw materials
including pulp and paper
chemicals. This price
increase is the second in
three months after paper pro-
ducers had recovered in
November their 1 per cent
price cut of September.
Prices of specific grade of
paper have gone up between
2 and 5 per cent, however,
depending on grades and
regions in which the mills
operate. With this, prices of
writing and printing paper
have increased by ~1,000-
2,000 a tonne for January.
Paper mills across the
country could pass on the
cost now because this is a sea-
son when demand from book
and notebook publishers
escalates and price increase is
absorbed. During the current
year, however, manufactur-
ers of writing and printing
paper have raised their prod-
uct prices.
“We have raised our prod-
uct prices differently
depending on the region of
our presence. However, aver-
age price increase has been
by around 2 per cent across
all products to match a simi-
lar increase in international
prices. Earlier, we had raised
our product prices by 1 per
cent in November to recoup
the cut we had done in
September,” said V from $650 a tonne around
Kumarswamy, chief financial
officer, JK Paper Ltd.
JK Paper has restructured
its business to make cost of
paper production profitable.
The company has adopted
several cost-cutting measures
over the last few years to turn
ON THE RISE
Import of paper, paperboard and newsprint (‘000 tonnes)
Financial year World
ASEAN
2014-15 2,346.8 158.0
2015-16 2,609.7 243.2
2016-17 3,002.6 345.6
2017-18* 1,886.0 237.8
*Apr – Sept 2017
profitable.
Kumarswamy said that al-
most all of the increase in the
prices of writing and printing
paper would add to the bot-
tom line of the company in
the coming quarters. Other
manufacturers have also
adopted various cost-cutting
measures to reduce their cost
of production and improve
business efficiency.
Meanwhile, major raw
material for paper making
pulp prices have gone up
three months ago to $780 a
tonne now. Besides pulp, coal
prices have also gone up sig-
nificantly as the government-
owned Coal India Ltd has
focused its supply to power
plants. Interestingly, import-
ed coal has also become sig-
Of the world total
China South Korea
299.9 331.0
234.5 367.7
323.5 402.8
292.7 145.9
Source: DGCI&S
nificantly costlier.
“We had no options but to
raise our product prices. Raw
materials including coal and
chemicals prices have moved
up significantly over the last
few months. Of the 2.5 per
cent price rise we have resort-
ed to, only 0.5 per cent would
add to our profit. The remain-
ing 2 per cent would be fac-
tored in for the raw materi-
als. If raw material price rise
continues, we would have to
raise our product prices once
again by March to pass on to
consumers. But the quantum
of price rise would be decided
at the time of increase de-
pending on the market
condition,” said Saurabh
Bangur, vice-chairman, West
Coast Paper Mills Ltd.
“India has already
of the current financial year. the company’s control. The ers, foreign and Indian
Assuming that the same pace extension was approved by the investors, said a source who
continues during the second National Company Law requested anonymity.
half, total import would sur- Tribunal (NCLT), as the In August 2016, Nagarjuna
pass the benchmark figure of process was not completed in Oil Refinery Ltd, the promot-
4 million tonnes this year as the stipulated 180-day period. er of NOCL, said the
compared to 3 million tonnes The NCLT single Bench exchanges that various
last year. Thus, the increase has issued an order extending prospective investors includ-
in 25 per cent from the last the CIRP in response to an ing public sector companies
year,” said Rohit Pandit, sec- application filed by the reso- such as Indian Oil
retary general, Indian Paper lution professional, S Corporation had sought
Manufacturers Association. Rajendran, as per a resolution information on NOCL’s 6-
A recent Icra report said of the Committee of Creditors million metric tonnes per
Coal India had raised its (CoC). The extension, for 90 annum (MMTPA) petroleum
product prices by around 10 days, comes into effect from oil refinery project at
per cent. For the higher January 21. Cuddalore, around 200 kilo-
calorific value G7-G9 grades, The Hyderabad-based metres south of Chennai.
the price increase (including company has attracted inter-
duties and taxes) ranges from est from at least three to four More on business-standard.com
~58 a tonne for the G9 grade,
to ~468 a tonne for the G7
grade. For the lower calorific
value G10-G12 grades, the
price increase ranges from
~58 a tonne for the G10 grade,
to ~210 a tonne for the G11
grade. Non-availability of
coal from domestic sources
has forced paper mills to
resort to import.
Apart from that, major
chemicals including caustic
soda, hydrogen peroxide and
other paper chemicals have
become costlier in line with
specialty chemicals due to
the shutdown of Chinese
plants because of tough envi-
ronmental norms. Chemical
prices have jumped by 20-30
per cent over the last six
months and doubled in the
last one year.
While India meets a major
quantity of its newsprint con-
sumption through imports,
mills in the writing and print-
ing paper segment face low
import competition. Still,
import threat continues to
haunt paper mills. Any sig-
nificant quantum of price
increase would result in a
spurt in imports.

IOC to commission ~27-billion

pipeline by December 2019
NIRMALYA BEHERA
Bhubaneswar, 20 January
Indian Oil Corporation (IOC)
is aiming to commission its
1,212-km dedicated product
pipeline along with optical
fibre cable for evacuation of
white oil products from
Paradip refinery to depots in
Odisha by December 2019.
The total cost of the com-
plete pipeline system along
with associated facilities of
the proposed project is
pegged at ~27.89 billion.
The products to be evacu-
ated are motor spirits, high-
speed diesel, kerosene and
aviation turbine fuel (ATF).
The proposed Paradip-
Hyderabad Pipeline Project
with capacity of 4.5 million
tonnes per annum (mtpa)
provides connectivity to a
new grassroots depot at
Berhampur in Odisha, and
also to Indian Oil’s existing
depots at Vizag,
Rajahmundry and
The products to be evacuated from Paradip refinery are motor
spirits, high-speed diesel, kerosene, and aviation turbine fuel
Vijayawada in Andhra
Pradesh and Hyderabad in
Telangana, along with asso-
ciated facilities at Paradip
refinery and at Rajahmundry
and Vijayawada depots.
The length of the pro-
posed pipeline is about 329
km in Odisha, 723 km in
Andhra Pradesh and 160 km
in Telangana. The proposed
Paradip-Hyderabad Pipeline
project was identified in the
National Perspective Plan
under the Sagarmala
Programme by Prime
Minister Narendra Modi.
“We have received all the
approvals for the project. The
production of pipe manufac-
turing is in process and the
work orders for laying the
pipeline will issue soon,” said
P C Choubey, executive direc-
tor, South Eastern Region
Pipelines, Bhubaneswar.
“This pipeline would give
Indian Oil impetus in further
strengthening the pipeline
network in south eastern
India and ease of movement
and evacuation of POL
(petroleum, oil and lubrica-
tions) from Paradip
Refinery,” he added.
It may be noted that the
country’s largest oil market-
ing company’s 15-mtpa
capacity refinery at Paradip
is spread over an area of 3,345
acres with an estimated cost
of ~345.55 billion. The refin-
ery can process 100 per cent
high-sulphur and heavy
crude oil to produce various
petroleum products, includ-
ing petrol and diesel of BS-IV
quality, kerosene, aviation
turbine fuel, propylene, sul-
phur and petroleum coke. It
is also designed to produce
Euro-V premium quality
motor spirit and other green
auto fuel variants for export.
https://t.me/EStore33 https://www.estore33.com/ https://t.me/TheHindu_Zone
4 YOUR MONEY
>
MUMBAI | 21 JANUARY 2018 1

Temper your expectations BS TUTORIAL

Jayant Pai

While there are anticipation of populist giveaways, the FM’s hands could be tied by fiscal constraints
SONU IYER
T
he country is abuzz with dis-
cussions around the upcom-
ing National Budget to be pre-
sented by the finance minister (FM)
on February 1, 2018. Since we Indians
are an opinionated lot, all of us have
views on what the FM should do or
not do. The Finance Minister is in an
unenviable position of having to
meet multiple expectations ranging
from that of corporates or business-
es seeking “relief” after GST imple-
mentation to individual tax payers
hoping for lower income tax rates.
The barrage of articles on Budget
expectations, including this one,
does seem to suggest that the annu-
al National Budget has become akin
to end-of-season sales where every-
one expects to pick a real bargain.
The government’s initiatives to
broad base tax compliance and
increase tax revenues is yet to yield
significant results. According to sta-
tistics provided by the Income-tax
Authorities (updated in December
2017), only approximately 8 per cent
of the total tax filers have reported
income over ~1 million in financial
year 2016-17, while only approxi-
mately 0.3 per cent of the total tax
filers have reported income over ~10
million.
These statistics tell that many
among us have anyway assumed
and gifted ourselves a perpetual tax
holiday. It also says that only a very
few among us carry the burden of
supporting the country’s need for
tax revenues.
The focus of Budget 2018 has to be
to revive the sluggish economy, create
more jobs, build infrastructure, bal-
ance budgetary allocations in view
of the lower-than-expected GST col-
lections, and integrate various
reforms that have been set in motion.
Yet, it is expected that the Budget will
bring some joy from a personal tax
perspective. Fiscal prudence and
populism may have to be balanced
though. And while income tax slabs
and rates may be favourably ratio-
nalised, the Budget may yet call for
contribution from the rich and super
rich.
Let’s now turn to the expectations
from a personal tax perspective.
Individual tax payers want higher
threshold income exemptions, lower
tax rates, and no surcharge for
ILLUSTRATION:BINAY SINHA
rich/super-rich. Salary earners want
standard deduction and increase in
allowance or perquisite exemption
limits that were set a long time ago.
High income earners, paying tax at
the rate of 35.53 per cent, seek tax
rates comparable to
maximum marginal tax
rates in countries like
Russia, Hong Kong,
Singapore, ranging
from 13 to 22 per cent.
Increase in threshold
exemption liable for
income-tax: Our fiscal
position notwithstand-
ing, it is widely expected
that income-tax slabs
and rates may be rationalised. It is
expected that there will be an increase
in maximum amount of income not
chargeable to tax from the existing
~250,000 to ~300,000. There could
also be some changes in income slabs
and tax rates.
This will help the expectations of a
populist budget as the government
may achieve a two-fold benefit — a
happy common man and revived
demand in the economy. The increase
in personal disposable income will
serve the macroeconomic agenda well
as it will lead to increased expendi-
ture and increased savings. However,
there is a possibility that the FM may
again seek to collect additional tax
from persons with relatively higher
income via increase in tax or surcharge
for those whose incomes exceed ~5
million. Not so good news for the tax-
paying high income earners.
Increase in limit of
Section 80C: Section
80C limit is expected to
be increased from the
current ~150,000 to
~200,000. While reduc-
ing the tax incidence on
individuals, it will also
get them to invest more.
Change in long-term
capital gain tax
regime: Under the cur-
rent regime, there is 15 per cent tax on
sale of listed equity shares in case of
short-term capital gain (holding up to
12 months), and zero per cent tax on
sale of such shares in case of long-
term capital gain (LTCG) (holding
period more than 12 months). The
favourable tax regime was introduced
to encourage people to invest in the
equity markets. Now that they are
doing so, the economists have been
making a case for taxing this income.
With the stock exchange indices
touching new highs, the govern-
ment may agree. There is an ongoing
debate on the revenue foregone
because of non-taxation of income
emanating from sale of listed equity
MANNA FROM FM:
WHAT TO EXPECT
| Tax-free ceiling limit
could move up to ~300,000
| Section 80C deduction
limit could be raised to
~200,000
| Holding period for
long-term capital gains tax
exemption could be hiked
to two years
| All dividend paid to
shareholders could be
made taxable in the hands
of recipients
| Tax exemption limit on
NPS could be hike
shares held for more than one year.
It is said this also creates disparity
between debt and equity investors.
However, the opposite argument is
whether it makes any sense to upset
the market momentum and anyway
there is Securities Transactions Tax
(STT) that continues to be collected
on every transaction of purchase or
sale. STT and LTCG tax on equity
transactions should not co-exist if
at all there is introduction of LTCG
tax.
It is expected that the current tax
regime of “high risk, high returns
and no tax” could change to “high
risk, moderate returns and some
tax”. Alternatively, the government
may continue with the current posi-
tion of no tax on sale of equity
shares, but it may increase the hold-
ing period for non-taxation of LTCG
from listed equity shares from one
year to two.
Change in dividend taxation
regime: It is expected that the gov-
ernment may take away the corpo-
rate route to taxing dividend income,
that is, dividend distribution tax
(DDT), which was introduced in 1997,
and return to the classic system of
dividend taxation, wherein dividend
income is taxed in the hands of the
recipient. After the introduction of
DDT, until 2016, dividend income
was tax free in the hands of the recip-
ients in all cases as the corporates
paid tax prior to dividend payout.
Finance Act 2016 introduced a provi-
sion to tax dividend income in excess
of ~1 million in the hands of share-
holders (individuals, HUFs and firms)
at 10 per cent. It is expected that DDT
may be scrapped and instead divi-
dend may be taxed in the hands of
recipient shareholders.
Removing DDT will also make
profit making and dividend paying
companies happy as their effective
tax rate, which currently stands at 46
per cent inclusive of DDT, will come
down to 34 per cent.
With DDT regime gone, dividend
pay-outs may increase and tax payers
will pay tax according to the applica-
ble income tax slab.
Increase in tax exemption limit
on withdrawal from NPS: Even
after more than 10 years of its intro-
duction, the National Pension
System (NPS) does not seem to
have gained popularity relative to
other retirement schemes such as
the Provident Fund. With the intent
to make NPS more popular and tax
friendly, the government may
increase the current tax exemption
on lump-sum withdrawal from the
NPS from 40 per cent of total
amount payable to 60 per cent of
total amount payable.
Reintroduction of standard
deduction: A large section of
salary income earners have been
pitching for the reintroduction of
standard deduction on salary
income (which was available until
financial year 2004-05). The FM
may well choose to bring this
deduction back at the cost of
removing multiple outdated deduc-
tions on salary income to reduce
the tax burden of this
category of individuals.
The burden of expectations
must weigh very heavily on the FM.
As in the past few years, he is like-
ly to manage all such pressures
well. While making some conces-
sions on the personal income front,
he will, in all likelihood, continue
on the journey of fiscal reforms that
will strengthen the Indian economy
and ultimately benefit us all.
The writer is tax partner and people
advisory services leader, EY India
Financial literacy
1. The Haloid Company is the old name of ___________.
A. Kodak
B. Xerox
C. Barnes & Noble
D. Disney
2. Fat Cat Thursday is a term associated with ___________.
A. Salaries of CEOs
B. Carried interest
C. Profits of fortune 500 companies
D. Salaries of members of parliament
3. Which famous brand did Parle acquire in 1969?
A. Gluco
B. Monaco
C. Bisleri
D. Limca
4. Who dubbed Economics as 'The Dismal Science'?
A. Thomas Malthus
B. Thomas Carlyle
C. Thomas Edison
D. Thomas Friedman
5. Which multinational behemoth is associated with 'Kan
Khajura Tesan'?
A. Citibank
B. Coca-Cola
C. Hindustan Unilever
D. Google
open to external advertisers in 2015.
market HUL's products like Fair & Lovely and Lux, was thrown
local and Bollywood music. The channel, which was also used to
would receive capsules of entertainment that includes primarily
who wished to listen to it had to give a missed call and in return
5. C. HUL launched this unique radio station in Bihar in 2014. Callers
West Indies.
in favour of reintroducing slavery to restore productivity to the
'Occasional Discourse on the Negro Question'. In this, he argued
the 19th century. The phrase first occurred in his 1849 essay called
4. B. The term is a derogatory alternative coined by the historian in
mineral water.
Bisleri soda with two variants—carbonated and non-carbonated
entrepreneur Signor Felice Bisleri and used the name to launch
3. C. In 1969, the Parle Group purchased the brand from the Italian
average CEO earns 120 times the average full-time worker.
median salary earned. This year's survey deduced that the
data highlighting the discrepancy between CEO salaries and the
Thursday of every year as 'Fat Cat Thursday' wherein it releases
2. A. The UK based think tank, High Pay Centre has declared the first
and then Xerox Corporation in 1961.
Company, it was subsequently renamed as Haloid Xerox in 1958
1. B. Founded in Rochester in 1906 as The Haloid Photographic
Solutions
The quiz master is head - marketing, PPFAS Mutual Fund
Send your queries and feedback at yourmoney@bsmail.in

ECONOMY
>

TRAI NOD TO ON-BOARD WI-FI World Bank, > FROM PAGE 1

Surfing in the sky maybe, IMF laud RBI

for tight
supervision
Centre ready to take RBI moots
US-style trading

but airlines cold to calls

ARINDAM MAJUMDER & by the government to permit on-
PRESS TRUST OF INDIA
New Delhi, 20 January

The International Monetary

ANEESH PHADNIS board internet over Indian skies.
New Delhi/ Mumbai, 20 January We are looking forward to help
Lufthansa passengers commu-
a hit over crop MSP platform for
distressed assets
Another reason is that some
Fund (IMF) and the World banks have issues with their
Bank have commended the capital requirements, and
Reserve Bank of India (RBI) therefore selling an NPA

D
omestic airlines are
evaluating the Telecom
Regulatory Authority
of India’s (Trai) recommenda-
tions to allow on board Wi-Fi, but
high cost and price sensitivity
may deter them from rolling out
the service.
The Indian aviation market,
dominated by low-cost carriers, is
mostly served by single aisle nar-
row body planes like Airbus A320
and Boeing 737. The same aircraft
are used by airlines like IndiGo
and SpiceJet for their overseas
operations (Dubai, Colombo,
Sharjah) usually within the three
to four-hour flying range. At pres-
ent, only Air India and Jet
Airways fly long haul routes to
Europe and North America.
“In-flight connectivity is a dif-
ficult business case to make for
domestic airline operations. The
aircraft are smaller, there are less
passengers and flying time is not
that long,” said Stephen Tame,
chief advisor (IT) at IndiGo.
Another senior executive of a
low-cost carrier ruled out the
prospect of providing free in-
THE PROS AND CONS
„ In-flight connectivity is a „ For providing internet
difficult business case to
make for domestic airline
operations, says chief IT
advisor at IndiGo
„ AirAsiaIndia has said it's „ Apart from fixed costs,
ready to offer services that
will enhance in-flight
customer experience
through digital
„ Full-service carriers will
contemplate providing „ Such factors determine
Wi-Fi, based on
passenger feedback
widebody aircraft like Boeing 777
and 787 can be retrofitted with
equipment. On-board connec-
tivity is not only a source of ancil-
lary revenue for airlines but
nicate seamlessly across all points
of their travel itinerary through
FlyNet® services over Indian
skies,” an airline spokesperson
said.
On-board calling
When it comes to allowing in-
flight phone calls, airline execu-
tives in the country are against it.
connectivity, an aircraft It may become a safety issue, as
requires a retrofit and passengers may be making calls
antenna is mounted on while the safety instruction by
fuselage cabin crew is being read out, an
Air India executive argued. “Trai
there are other
has been very liberal in its policy,
but I don’t think DGCA will per-
expenditures related to
subscription of
mit it. This may become a safety
issue,” he said.
bandwidth or Frequent flyers also opposed
entertainment the idea of in-flight calling as it
would make things noisy.
“Hopefully the airlines, when
charges airlines levy on they launch in-flight WiFi, will
passengers exclude Voice Over Internet
Protocol. I will not be comfort-
tures related to subscription of able listening to other people’s
bandwidth or entertainment. private conversations. Imagine a
Such factors determine charges
airlines levy on passengers.
“More and more corporate
lover’s tiff being sorted out on the
seat next to you,” said Ajay
Awatney, a frequent flyer and
for its “remarkable progress
in strengthening banking
supervision”, saying the reg-
ulation by the central bank
has improved in recent
years. The IMF and the
World Bank had released two
separate main reports of the
2017 India Financial Sector
Assessment Programme
(FSAP) in December 2017.
In continuation, the
IMF and the World Bank on
Friday released two detailed
assessment reports (DARs)
relating to the 2017 India
FSAP. The report providing
‘Detailed Assessment of
Observance— Basel Core
Principles for Effective
Banking Supervision’ has
been released by the IMF and
the World Bank.
The report providing
‘Detailed Assessment of
Observance of Clearing
Corporation of India Limited
(CCIL) Central Counter Party
(CCP) and Trade Repository
(TR)’ was released by the
World Bank.
This was the highest ever
funds allocated by the govern-
ment under the scheme in the
last six years starting from
2011-12.
Similarly, under the Price
Support Scheme (PSS) for
oilseeds and pulses, the Centre
along with states procured 1.2
million tonnes of these com-
modities, spending around
~57.43 billion so far as its share.
This too was by far the highest
fund spent on the scheme
since 2012-13. Through this,
FM to skip Davos
around 0.70 million tonnes of
oilseeds have been procured
so far while 0.50 million
tonnes of pulses have been
bought from farmers.
The procured quantity is a
small fraction of the total pro-
duction, leaving millions of
farmers out of the safety net of
official procurement. In 2017-
18 kharif season, prices of all
commodities grown have been
ruling below their state fixed
MSP despite a series of tariff
changes by the government.
account to an ARC—even at a
discount having already made
provisions—would help
maintain or improve the
banks’ capital.
Lenders have made
appropriate provisions for
these NPA accounts over time,
and therefore are willing
to sell their exposure at a
discount.
ONGC to buy
HPCL stake for
~370 billion
The Cabinet Committee on
Economic Affairs had
approved in principle the deal
on July 19 and the alternate
mechanism set up for the
finalising the price, terms and
conditions of the transaction
accorded its final approval on
January 20 this year.

The Cabinet Committee

flight wifi. “Please don’t compare
it to other developed markets, this
is a very price sensitive market
where even full service carriers
are now cutting down on ameni-
ties and luxury,” he said, adding
that not many passengers will be
willing to pay extra for availing
wifi.
However, AirAsiaIndia said
it’s “always ready to offer services
that will enhance ultimate in-
flight customer experience
through digital offerings.” The air-
line did not make any specific
comment on pricing or the impli-
cations of offering voice calls on
the flight. Full-service carriers
said they would contemplate pro-
viding wifi, based on passenger
feedback. “The Trai recommen-
dations have just come, we will
review it and take a decision. Our
increases its value in the mind of
flyers in long-haul routes,” Pankaj
Srivastava, commercial director
at Air India, said. Air India at pres-
ent doesn’t provide on-board
internet.
Last year, Jet Airways began
offering wireless streaming of
entertainment on its Boeing 737
planes. Jet has tied up US-based
Global Eagle Entertainment and
had earlier said it would offer full
broadband satellite connectivity
upon easing of government reg-
ulations. The airline did not
respond to Business Standard
queries on the subject on
Saturday.
For providing internet con-
nectivity, an aircraft requires a
retrofit and antenna is mounted
on fuselage. Apart from fixed
costs, there are other expendi-
flyers see on board wifi as a nec-
essary amenity and are demand-
ing it. So, this might be a neces-
sary business cost, which will
vary based on routes, the type of
aircraft,” said an executive of a
private full service carrier. He said
it may start with a basic pack for
free and later move on to paid
data packs. The free basic pack
will allow receiving and sending
mails and checking WhatsApp.
For instance, Dubai-based
Emirates provides 20 MB free
data for the first two hours after
logging in. Besides that, data
packs are charged at $9.99 for 150
MB and $15.99 for 500 MB data.
Lufthansa charges passengers
anything in the range of ^9 to 17
for on-board internet usage for
up to 24 hours.
“We welcome this initiative
writer of travel blog livefroma-
lounge.com. Even airlines and fly-
ers in mature markets like USA
have opposed the idea of on-
board calling.
Last September US-based air-
line Delta CEO Ed Bastian, when
asked about the prospect of on-
board calling, replied,“never in
my lifetime.” “Lufthansa FlyNet®
system doesn’t support mobile
telephone calls. While Lufthansa
FlyNet® is extremely fast and can
support system Internet telepho-
ny (VoIP), services such as Skype
are not allowed out of considera-
tion for other passengers,”
Lufthansa said.
A Singapore Airlines
spokesperson said internet voice
calls were not blocked by the con-
nectivity system but the airline
did not encourage them.
Market regulator
Securities and Exchange
Board of India (Sebi) in a
statement noted that the DAR
on the observance of basel
core principles commends the
Reserve Bank for the remark-
able progress in strengthen-
ing banking supervision since
the last FSAP.
“It notes that the supervi-
sion and regulation by the RBI
remain strong and have
improved in recent years,” the
Sebi said. The DAR states that
the system-wide asset quali-
ty review (AQR) and the
strengthening of prudential
regulations in 2015 testify to
the authorities’ commitment
to transparency and a more
accurate recognition of
banking risks.
for Budget
Abhishek said Prabhu will
attend nine sessions across
three days, while Pradhan will
attend five sessions. Railway
Minister Piyush Goyal will
attend 10 sessions, Minister of
State in the PMO Jitendra
Singh three sessions and
Minister of State for External
Affairs MJ Akbar will be part
of two sessions.
Abhishek said the large num-
ber of sessions being
addressed by ministers
reflected the importance that
WEF has given to India this
year.The Indian delegation
will organise round table dis-
cussion on financial inclu-
sion, promoting digital
payments, clean energy,
modernisation of Indian
Railways and skill develop-
ment, which will be attended
by union ministers.
on Economic Affairs had
approved in principle the
deal on July 19
The company said no oth-
er regulatory approval was
required for the transaction.
“The acquisition has been
undertaken in furtherance of
the government’s objective to
combine the various central
public sector enterprises to
give them capacity to bear
higher risks, avail economies
of scale, take higher
investment decisions and
create more value for the
stakeholders and create an ‘oil
major’ which will be able to
match the performance of
international and domestic
private sector oil and gas com-
panies,” it said.
https://t.me/EStore33
.
CFS operators tweak logistics
strategy to save costs
Firms shift to unnotified warehousing to escape the brunt of direct-port-delivery
ADITI DIVEKAR
Mumbai, 20 January
C
ontainer freight station (CFS)
operators at Jawaharlal Nehru
Port (JNPT) are converting
their facilities into unnotified
warehouses, mainly because of contin-
ued lower volumes — a result of
increased traction of direct-port-delivery
(DPD) scheme introduced by the port.
“Allcargo Logistics has already con-
verted one of its CFSs into an unnoti-
fied warehouse. Some more operators
such as Gateway Distriparks could fol-
low suit,” sources in the know told
Business Standard. “It will help the
operator to lower its costs by nearly 15
per cent, a significant cost-saving,
especially when volumes are dropping
continuously,” they added.
Allcargo Logistics, part of Avvashya
Group, has two facilities — JNPT 1 and
JNPT Annex — spread over 68 acres at
the port. Of this, JNPT 1 occupies
22 acres, while JNPT Annex, with
45 acres, has developed only 23 acres
as a CFS facility.
“Over the last six-eight months, we
have converted a part of the JNPT 1 facil-
ity into an unnotified DPD yard, which
will cater to storing DPD cargo that does
not need customs monitoring,” said
Executive Director and Chief Operating
Officer Prakash Tulsiani. The official,
however, did not reveal how much por-
tion of the facility has been unnotified.
CFS facilities have to be customs
notified and hence, charge a premi-
um over warehouses that are unnoti-
fied. Labour costs are also lower at
unnotified warehouses compared to a
CFS, which brings down the overall
cost for the facility.
“While converting a part of JNPT 1
into an unnotified warehouse has low-
ered our revenues by two-three per cent,
our costs have also come down by a sim-
ilar percentage,” said Tulsiani.
Allcargo Logistics has no plans to
unnotify its second facility, JNPT
Annex. Tulsiani, too, does not see
more of the JNPT 1 facility come
under the unnotified warehouse cate-
gory as of now.
“We are changing our facilities
MUMBAI | 21 JANUARY 2018
DIRECT-PORT-DELIVERY EFFECT
„ CFS facilities have to be „ Allcargo is
custom notified and converting
hence charge a premium portions of JNPT
over warehouses which to unnotified
are unnotified warehouse
depending on client-based needs.
Earlier we were catering only to ship-
ping line containers but now we have
a pure DPD cargo, third-party nomi-
nation, shipping line container as
well DPD-CFS requirement,” Tulsiani
explained.
“Moreover, a JNPT terminal 4 is
also coming up. Hence, CFS require-
ments remain. Thus, there are no plans
to convert JNPT Annex into an unno-
tified warehouse,” he said.
Gateway Distriparks, with two CFSs,
could also be contemplating unnotifi-
cation of one of its 40,000-square-meter
warehouse in the coming months.
“One of the Gateway Distriparks’
CFS is on long-term lease, which is due
to renewal in the next four-five years.
We could think of getting it out of cus-
toms notification. We are currently in
the wait-and-watch mode,” said a
https://www.estore33.com/
„ Gateway Distriparks, with
two CFSs, is also
contemplating unnotification
of one of its 40,000 square
meter warehouse
source close to the development.
Another CFS operator, Navkar
Corporation, seems to be relatively in
a sweet spot, mainly because of its
railway connectivity.
“There has been no impact of DPD
traction on our revenues. Due to our
rail connectivity, which makes trans-
portation cost one-third compared to
that via road, our hinterland deliveries
directly from the port remains intact,”
said Aneesh Maheshwari, chief finan-
cial officer of Navkar Corporation.
The company has three facilities
at JNPT, spread over 85 acres. Of this,
48 acres has already been unnotified
and hence, is being used for DPD stor-
age and delivery.
“There is no change in our busi-
ness model even after DPD traction
since we had already factored in the
possibility of CFS elimination,” he said.
„ Navkar Corporation to
keep business model
unchanged, mainly
because of its railway
connectivity
Globally, no port has a CFS indus-
try catering to storage of cargo. All
across the world, cargo is directly
delivered from the port to the final
destination. According to the JNPT
website, the share of DPD volume han-
dled in December 2017 has gone up
to 36 per cent from 27 per cent in
February of the same year.
The domestic CFS industry is struc-
tured in a manner where nearly 60 per
cent of its clients are importers who use
the facilities for longer duration of 8-10
days, while the balance is housed by
exporters where the cargo is for a much
shorter duration. With importers are
increasingly availing themselves of the
DPD service, it is this major portion of
CFS operators’ revenue volume that is
taking a hit. JNPT has close to 35 CFS
operators comprising listed as well as
several unlisted entities.
Rlys to push ‘Make in India’
Providing
percentage of
‘local content’
mandatory for
procurement
PRESS TRUST OF INDIA
New Delhi, 20 January
Less than a month after the
Prime Minister’s Office (PMO)
expressed its displeasure over
the non-compliance of ‘Make
In India’ policy by certain
departments, the Railways has
made mentioning percentage
of ‘local content’ mandatory
for bidders to qualify for the
procurement process.
The railway Board, in a let-
ter dated January 12, said in
order to ensure compliance of
the Public Procurement (Make
in India) Order, 2017, bidders
would have to mandatorily
provide details of ‘local con-
tent’ or elements of domestic
manufacturing in the offer
form on the e-procurement
website for all types of tenders,
before quoting rates.
The railways, in fact, was
in the eye of a storm when
domestic steel producers had
objected to the ministry’s deci-
sion to buy rails through a
global tender on December 18,
for the first time.
It led to the rail and the
steel ministries locking
Can’t waive more debts: Punjab CM
PRESS TRUST OF INDIA
Chandigarh, 20 January
The Punjab government on
Saturday said it cannot extend
the debt waiver scheme to all
farmers or waive more than
~200,000 due to lack of support
from the Centre, coupled with
bad finances inherited from the
Akali dispensation.
“Considering the financial
problems which my govern-
ment had inherited from the
Akalis, and also considering
the lack of support on the issue
from the central government,
https://t.me/TheHindu_Zone
ECONOMY 5
PROCUREMENT RULES
„ Bidders would have to
provide details of ‘local
content’ in the offer form
on the e-procurement
website
„ This is to ensure
compliance of the Public
Procurement (Make in
India) Order, 2017
„ The govt issued the order
horns, with the latter alleging
that the move towards a glob-
al tender was against the
‘Make in India’ policy.
The government issued
the Public Procurement
(Preference to Make in
India), Order 2017, in June
last year as part of a policy to
encourage ‘Make in India’,
and promote manufacturing
and production of goods and
it is not possible, at present, to
extend the debt waiver
scheme to more farmers or to
waive more than ~2 lakh,”
appealing the state’s farming
community to shun protest,
Chief Minister Amarinder
Singh, said in a release.
Citing the examples of
Maharashtra (up to ~150,000),
Uttar Pradesh (up to ~100,000),
Rajasthan (up to ~50,000),
Madhya Pradesh (up to
~100,000) and Karnataka (up to
~50,000), the Congress leader
pointed out the extent to which
his government had stretched
<
in June as part of a policy
to encourage ‘Make in
India’, and promote local
manufacturing
„ Recently, domestic steel
producers had objected
to the ministry’s decision
to buy rails through a
global tender on
December 18
services in India with a view
to enhance income and
employment.
In December 2017, a com-
mittee, formed to oversee the
policy, said some of the gov-
ernment institutions had
included certain restrictive
conditions in their bid docu-
ments, which were highly dis-
criminatory against domestic
manufacturers.
itself. Singh appealed to the
farmers not to be misled by the
opposition parties and some
Kisan unions, who were spread-
ing “false propaganda” on the
issue of farm debt waiver.
The thrust, he said, was on
helping small and marginal
farmers, adding that all farm-
ers would eventually be covered
under the debt waiver scheme
once the state’s economy start-
ed stabilising. He added that his
government was reeling under
a debt trap of over ~2 trillion
when he took over from the
SAD-BJP government last year.
https://t.me/EStore33 https://www.estore33.com/ https://t.me/TheHindu_Zone

6 ECONOMY
>
MUMBAI | 21 JANUARY 2018 1

PEOPLE IN THE NEWS BINAY SINHA

High export duty denies Indian Odisha seeks
IT exemption
on trust funds
players edge in chrome ore trade
JAYAJIT DASH et, waived off the 30 per cent export
BS REPORTER
Bhubaneswar, 20 January

The Odisha government has

Bhubaneswar, 20 JANUARY duty. However, the duty was re- asked for income tax exemp-
imposed again on May 26, 2016 pur- tion on interest accrued on

Viewing groceries as a segment for bringing
repeat customers to its e-commerce
platform, Vijay Shekhar Sharma-led Paytm
Mall plans an expansion in this and hopes to
earn $3 billion in GMV from it.
A
steep export duty of 30 per cent portedly due to pressure from the ferro- bank deposits for contribu-
has made exports of low grade chrome industry. tions made to the District
chrome ore and chrome concen- Ferro-chrome producers say chrome Mineral Foundation (DMF).
trates unviable. This has led to African concentrates are already being used by In one of the pre-Budget
countries such as South Africa and the industry and the lower grade chrome demands, the state's finance
Gabon stealing a march over India in ore (chromite content of 15-42 per cent) minister Shashi Bhushan
seaborne chrome trade. Until a few years needs to beneficiated. Behera has sought exemption
back, India was a significant player in "We believe no raw material that is of DMF funds from income
chrome ore trade, especially chrome consumed by the domestic ferro alloys tax as such funds are used for
concentrates that fetched good premi- industry should be exported except for direct benefit and develop-
ums in the export market. value added products. In case of chrome ment of the people living in
With exports no longer lucrative, the concentrates, which is a value added areas affected by mining
inventory of low grade chromite, which product and also used by the industry, operations.
has no use in the domestic market, had we are of the view that there should be a "In Odisha, DMF Trust
piled up to 2.5 million tonnes at mine cap on its exports", said J K Chatterjee, Boards have been constituted
heads by the end of 2015-16. Low grade secretary general with the Indian Ferro in all the 30 districts. The
chromite has no direct use in the ferro India’s domestic consumption of chrome is in the range of 2.4-2.5 million tonnes Alloy Producers' Association (IFAPA). income tax authorities have
chrome industry and, hence, gets accu- The country's domestic consump- deducted tax from one of the
mulated. Besides, the infrastructure cre- will help utilisation of installed capaci- Indian Mineral Industries (Fimi) is learnt tion of chrome is in the range of 2.4- DMF Trust accounts and also
ated to enrich it into chrome ore con- ty, provide employment to local people to have written to the Ministry of 2.5 million tonnes. The ferro chrome issued notices to others on the
centrates also lies underutilised due to a besides spurring economic develop- Finance, pitching for removal of export producers use friable chrome ore and interest income of the Trusts.
fragile demand. ment of the area where low grade ore duty on chrome ore in the Budget for chrome concentrates in the ratio of The state government has
While chrome ore exports are taxed can be processed or beneficiated for 2018-19. "If export duty cannot be ratio- 70:30. Production of one tonne of fer- requested the Government of
at 30 per cent, there is no duty on ferro- exports. High grade ore which is a pre- nalised, the government should think ro chrome needs 2.4 tonnes of chrome India on several occasions to
chrome where unhindered exports are cious mineral exported in the guise of of levying some import duty on chrome ore/concentrates along with 3,800- exempt interest earnings of
happening. An industry source said: ferro-chrome must be restricted to safe- ore", said a Fimi official. 4,000 units of power. Around 70 per DMF Trust Board from
"There is a need to provide level-playing guard domestic producers and the coun- To boost mining and exports of cent of the ferro chrome manufac- Income Tax (IT), Behera said.
field to chrome concentrate producers try's economic interests." chrome ore and chrome concentrates, tured in the country is exported, Flagging the issue of farm
and rationalise export duty on it, this Mining lobby body Federation of the Union government in 2016-17 budg- mostly to China. loans, the minister said avail-
ability of bank credit without
collateral and third party
guarantees would go a long

Importers, exporters meet to sort out antibiotic issue in shrimps
NIRMALYA BEHERA
Bhubaneswar, 20 JANUARY
A high-level meeting of Indian
and European stakeholders
engaged in the seafood sector is
slated to take place later this
month in Goa to discuss solu-
tions for complying with food
safety regulations in the pro-
duction and trade of shrimp.
The meeting is slated to be
Gautam Adani-led Adani Group, which has held on the sidelines of India
International Seafood Show to
invested ~ 7.5 billion in West Bengal, is be held in Goa from January 27
looking to set up a Mundra-like port in the to 29, 2018.
state and double its investment there over Over the last 10 years, the
EU Directorate-General for
five years Health and Food Safety (DG
Sante) is increasingly focused
on Indian shrimp.
There was a growing con-
cern that the EU is seriously
worried over the use of antibi-
otics in Indian shrimps- a fact
that has surfaced at regular
intervals in its findings. It is also
dissatisfied with the response it
got from the Indian authorities
and is, thus, considering a ban.
In last November, a delega-
tion from the EU was on a task
to audit the control systems
put in place to govern the pro-
duction of exportable fishery
products in India and exuded
satisfaction on the quality of
shrimp production.
In 2016, the EU changed the
necessary number of fish
way in providing access to
long-term credit to farmers.
"Government of India
exports inspected from 10% to Dutch Fish Importers to ensure that standards are should set up a separate cred-
50%, among other actions tak- Association (ViV) ,the maintained into the future, said it guarantee trust fund prefer-
en to control the export of Danish Seafood Association , Ivan Bartolo, president of the ably under Nabard (National
antibiotic-contaminated among others. European Seafood Importers Bank for Agriculture & Rural
shrimp to the EU. The aim is to create a and Processors Alliance . Development)," Behera said.
The high-level shared understand- In addition to the national Opposing the central gov-
meeting is likely EU accounts for ing of the current sit- level, regional stakeholder ernment's move to change
have representa- about 18 per uation and to devel- meetings and an awareness dates for monthly release of
tives from Embassy cent of the op a strategy to limit campaign about proper antibi- tax devolution, Behera said the
of Kingdom of the country's the use of antibiotics otics use by shrimp farmers decision will adversely affect
Netherlands, seafood in the Indian shrimp will also be undertaken. the finances of the states as a
European importers exports valued sector in order to EU accounts for about 18 per major proportion of expendi-
Klaas Puul, Seafood at $5.7 billion comply with applica- cent of the country's seafood ture on account of salary and
Connection, and ble regulations, said a exports valued at $5.7 billion. pension is incurred in the first
Nordic retailers, Marine trade source. Members of SIPA are likely week of the month. The Union
Product Export Development The dialogue will facilitate to attend the event. There government has recently
Authority (MPEDA) Seafood “continuation of the trade may be discussion on issue changed the release date of tax
Exporters Association of India between India and the EU. SIPA pertaining to export of quali- devolution to states from the
(SEAI) , Seafood Importers and has a mandate to improve ty seafood to EU, said an first working day of the month
Processors Alliance (SIPA), the seafood safety and security and Indian source. to 15th of every month.

HEALTH
>
1

FIT & PROPER

Your weekly health guide
Sound therapy may train Statins may help
prevent scar tissue in
Alternative the brain to ignore tinnitus eyes, says study
Therapies for
PRESS TRUST OF INDIA the most serious common
London, 20 January retinal disorder which may at
LISA RAPAPORT These patients were asked to worst lead to blindness," said

treating pain
20 January listen to the sound print each Statin medication — com- Docent Sirpa Loukovaara
night and adjust the volume to monly used to lower choles- from the University of

VIDHU SINDWANI
Team Leader, Physiotherapy
AktivHealth
Any intervention or treatment
used in place of conventional
medicine is termed as
“Alternate therapy/medicine”.
Alternative therapy, which
encompasses a variety of dis-
ciplines, including acupunc-
ture, yoga, bio-feedback, mas-
sage, mind-body techniques,
is becoming increasingly
common in managing pain.
Acupuncture, an ancient
Chinese practice, which
involves inserting fine nee-
dles into the body, has been
shown to be very effective in
conditions like fibromyalgia
and osteoarthritis. WHO cur-
rently lists more than 30 con-
ditions that can be managed
by Acupuncture. Therapeutic
touch and Reiki healing are
considered to activate the
self-healing processes of an
individual. In addition to
pain these techniques
have also been proved to
reduce anxiety and improve
stress management.
Mind-body techniques
These include mindful medi-
tation, transcendental medi-
tation et cetera, and have
become common outside of
their spiritual contexts. These
techniques help to reduce pain
and manage stress by clearing
your mind and focussing on
your body's perception of pain
and other signals. Biofeedback
is a pain management tech-
nique that teaches a patient to
control normally involuntary
body functions like blood
pressure or heart rate.
Electromyography (or EMG)
measures muscle tension and
is the type of feedback that
has been identified to be help-
ful in pain, especially
chronic headaches.
Hypnotherapy
It’s an alternative therapy that
is used to promote relaxation
and induce an alternate state
of consciousness. It involves
learning how to use your
mind and thoughts to man-
age emotional distress,
unpleasant physical symp-
toms like pain, and also habits
or behaviours. It has been
shown to be especially effec-
tive in repetitive strain
injuries and cancer pain.
Chiropractic therapy
Although widespread, it’s still
considered as an alternative
therapy. Chiropractic therapy
involves studying the rela-
tionship between different
body structures and altering
their alignment, particularly
the spine, in order to alleviate
pain. It is most commonly
used to manage disc and nerve
related pains. Massage
involves manipulation of
body's soft tissues to influence
muscles, circulation and lym-
phatic systems. Various kinds
of massage techniques includ-
ing deep tissue, sports mas-
sage, ayurvedic massage and
hot stone massage are now
being used to relax the body
while relieving muscle inflam-
mation and pain.
With an increase in the
popularity of alternative ther-
apies it is important to ensure
that one seeks proper med-
ical advice before turning to
any such therapy.
A
sound-emitting device
worn in the ear during
sleep may train the
brain to ignore an annoying
chronic ringing in the ears, a
new study suggests.
People with the disorder,
known as tinnitus, who slept
with the in-ear devices felt
less bothered than patients
who used bedside noise
machines, researchers found
in a study funded by the
device manufacturer.
Tinnitus is the perception of
sound that has no source out-
side the head, and it’s often
caused by exposure to loud
noise. While sound therapy is
one of the treatments doctors
recommend, research to date
has offered a mixed picture of
how well this works at reducing
how much people notice ring-
ing in their ears.
For the current study,
researchers randomly assigned
60 patients with tinnitus to
sleep with one of three sound
therapy devices: a customised
in-ear device that played
No link between violent video games and behaviour: study
PRESS TRUST OF INDIA
London, 20 January
Scientists have found no evi-
dence to support the theory
that video games make play-
ers more violent.
In a series of experiments, with
more than 3,000 participants,
the researchers demonstrated
that video game concepts do
not 'prime' players to behave
in certain ways and that
increasing the realism of vio-
lent video games does not nec-
essarily increase aggression in
game players.
The dominant model of learn-
ing in games is built on the
idea that exposing players to
concepts, such as violence in a
sounds matched to the ringing
sounds patients typically
heard; an in-ear device that let
patients select a pre-set sound;
or a bedside noise machine.
After three months of treat-
ment, patients with all three
types of sound therapy report-
ed being less bothered by ring-
ing in their ears. However,
people with the customised
in-ear device reported a
greater reduction in the per-
ceived loudness of tinnitus
than other participants.
“By listening to this sound
while sleeping, the idea is the
game, makes those concepts
easier to use in 'real life'.
This is known as 'priming', and
is thought to lead to changes
in behaviour.
The researchers from the
University of York in the UK
expanded the number of par-
ticipants in experiments, com-
pared to studies that had gone
before it.
They also compared different
types of gaming realism to
explore whether more conclu-
sive evidence could be found,
according to the study pub-
lished in the journal
Entertainment Computing.
In one study, the participants
played a game where they had
to either be a car avoiding col-
brain will learn to ignore the
tinnitus,” said lead study
author Sarah Theodoroff, a
researcher at the VA Portland
Health Care System
and Oregon Health and
Science University. “This study
lends additional support that
sound-based therapy helps
reduce tinnitus distress,”
Theodoroff said by email.
With the customised in-ear
device, participants created a
tinnitus “sound print” by using
software to identify the sounds
that most closely matched the
ringing they heard in their ears.
lisions with trucks or a mouse
avoiding being caught by a cat.
Following the game, the play-
ers were shown various
images, such as a bus or a dog,
and asked to label them as
either a vehicle or an animal.
"If players are 'primed' through
immersing themselves in the
concepts of the game, they
match the loudness of tinnitus.
People who got the other in-ear
device could choose settings
with white noise, band noise or
a combination of the two. They
were asked to select the noise
option and volume level that
felt most comfortable.
Similarly, patients who
received the bedside noise
machine were asked to choose
a comfortable sound and vol-
ume. If they shared a bed-
room, they were told it was
fine to include their partner
in their selection.
Both in-ear devices in the
study were Levo System
products. The study was
funded by Baker Group LLP,
which manufactures Levo
System devices.
One drawback of the study is
that it lacked a control group
of patients who didn’t receive
sound therapy. It also didn’t
directly compare sound ther-
apy to other interventions for
tinnitus like cognitive behav-
ioural therapy or hearing aids.
REUTERS
should be able to categorise the
objects associated with this
game more quickly in the real
world once the game had con-
cluded," said David Zendle,
from the University of York.
"Across the two games we did-
n't find this to be the case.
Participants who played a car-
themed game were no quicker
terol levels — could also pre-
vent the formation of scar
tissue inside the eye, a study
has found.
The research examined
renewed surgeries among
5,709 eye patients who were
admitted to hospital for a vit-
reoretinal surgical procedure
between 2008-2014.
The novel results indicate
that use of statin medication
at the time of surgery was asso-
ciated with a 28 per cent reduc-
tion in the risk of renewed sur-
gery among patients who
underwent a primary vitrecto-
my to treat retinal detachment.
However, statin medication
was not found to be associated
with a reduced risk of renewed
surgery in the other vitreoreti-
nal disease groups involving
retinal surgery, such as age-
related macular pucker forma-
tion, or vitrectomies per-
formed to treat diabetic
retinopathy.
"It seems that statin treat-
ment is beneficial in the treat-
ment of retinal detachment,
at categorising vehicle images,
and indeed in some cases their
reaction time was significantly
slower," Zendle said.
In a separate, but connected
study, the researchers inves-
tigated whether realism influ-
enced the aggression of
game players.
Research in the past has sug-
gested that the greater the real-
ism of the game the more
primed players are by violent
concepts, leading to antisocial
effects in the real world.
"Our experiment looked at the
use of 'ragdoll physics' in game
design, which creates charac-
ters that move and react in the
same way that they would in
real life," Zendle said.
Helsinki in Finland.
"This means that systemic
statin medication may be ben-
eficial not only in the preven-
tion of cardio-vascular dis-
eases, but also in terms of eye
health," Loukovaara said.
According to the study,
published in the journal Acta
Ophthalmologica, the benefits
of statin medication on retinal
detachment patients is proba-
bly due to the effect of the
statin medication on reducing
the inflammation inside the
eye and hindering the forma-
tion of scar tissue.
"At the moment there is no
safe drug treatment that could
prevent the formation of scar
tissue inside the eye, so we
should study the potential ben-
efits of statins in this area,"
Loukovaara said.
"It's possible that in future,
retinal detachment patients
thought to benefit from the
treatment would receive statin
medication as an implant or as
an injection inside the eye,"
Loukovaara added.
"Human characters are mod-
elled on the movement of the
human skeleton and how that
skeleton would fall if it was
injured," he said.
The experiment compared
player reactions to two combat
games, one that used 'ragdoll
physics' to create realistic char-
acter behaviour and one that
did not, in an animated world
that nevertheless looked real.
Following the game the players
were asked to complete word
puzzles called 'word fragment
completion tasks', where
researchers expected more vio-
lent word associations would
be chosen for those who played
the game that employed more
realistic behaviours.
https://t.me/EStore33 https://www.estore33.com/ https://t.me/TheHindu_Zone

.
MUMBAI | 21 JANUARY 2018 IN DEPTH 7 <

A
t 30, with a degree in liberal arts, a
satisfactory job in the United States, a
green card and the great American
dream staring him in the face, Vikas
Jhunjhunwala found himself in the midst of a
mid-life crisis — a decade earlier than he
would’ve perhaps liked.
While in the US, Jhunjhunwala had been
studying, absorbing and finding himself
more and more drawn towards what
economists and visionaries such as C K
Prahalad and Muhammad Yunus were
advocating: focusing on the base of the
pyramid. The double bottom line concept —
doing well and doing good both at the same
time — was a powerful magnet for
Jhunjhunwala. A Marwari baniya by birth, he
felt some “defective gene” was playing up.
So in 2005, Jhunjhunwala headed back to
India and joined the micro finance sector. He
worked with Unitus and learnt the ins and
outs of a sector that was in its infancy at the
time. “The micro finance sector in India — the
way it unfolded — was like the poster boy of
the double bottom line theory,” he says,
adding that there was much to learn from
being a part of this wave.
After eight years in the sector,
Jhunjhunwala quit in 2013 and worked with
the Aam Aadmi Party (AAP) for a year. Those
were heady days for the party and like many
others, he believed that being a part of it
was like being involved in a “second

PHOTOS: COURTESY SUNSHINE SCHOOL

freedom movement”.
However, once the nascent frenzy around
AAP dissipated, Jhunjhunwala left the
political outfit and started eyeing the
affordable education sector. On conducting
further research on the subject, he soon
realised that two fundamental shifts had
taken place. One, it wasn’t only the middle-
class and the rich who were moving from the
government school system to the private

A new lesson in affordable

sector; the poor, too, had woken up to the
value of a quality education and were as likely
to move their children out of free government
schools if they found a better option — even if
it wasn’t free.
Two, unlike the 1960s and the ’70s when

even senior bureaucrats and other successful
persons graduated from government schools
and the quality of education that they offered
was deemed decent enough, this was by and
large no longer true. “The system was and is
broken,” says Jhunjhunwala, now 43.
To make things worse, private budget
schools, when compared to their private
counterparts, weren’t doing too well, either —
simply because the bar was so low. “You don’t
have to offer anything significantly better as it
is all relative. So most of the budget private
schools get away with offering something that
is just marginally better than the free option,”
explains Jhunjhunwala. Several average
budget private schools in urban areas are like
kirana shops, peddling wares that are slightly
better than what the ration shops are selling.
This mismatch resulted in an increase in
demand for private budget schools. The
supply, however, was stagnant. With
government policy creating high entry
barriers in the sector, the quality was
deteriorating as costs continued to rise.
Jhunjhunwala says that the profit margins for
some private schools in urban areas continue
to be as high as 80 per cent.
Mohit Satyanand, co-founder of InLingua,
the language school chain whose branches
are spread across Delhi,
says that despite the fact
that people are moving In February 2015, Sunshine promoters set up their first
their kids from free public “prototype” school. In the first academic year (2015-16),
schools to private schools, it had 54 students enrolled across four grades paying
the education delivered by monthly fees between ~500 and ~800
budget schools is not
demonstrably better.
“There is a huge entrepreneurial gap for high-
quality budget schools. If the right model is
found, the market opportunity and social
benefits are massive,” he feels.
This void was somewhat filled by
Jhunjhunwala, who, with two Teach for India
education
alumni, took the plunge in 2015 with his first
Sunshine School in New Delhi’s low-income
Mehrauli-Kishangarh area, which has a
population of 300,000-400,000 people. Ever
since, by bringing his education and
experience from the corporate world to the
By offering quality education that is inexpensive, Sunshine School is out to
make a difference, writes Anjuli Bhargava
table, Jhunjhunwala has been attempting to
professionalise and run schools as they ought
to be — not like kirana shops.
Bright beginning
In February 2015, Sunshine promoters set up
their first “prototype” school. In the first
academic year (2015-16), it had 54 students
enrolled across four grades paying monthly
fees between ~500 and ~800. In each
subsequent year, it doubled enrollments with
120 students in 2016-17 and 260 students
The school has already broken even
operationally and established itself as
one of the best schools in the Mehrauli-
Kishangarh neighbourhood. A second
school will open in Noida next year
(with 17 teachers) in 2017-18. By 2025,
Jhunjhunwala wants to be able to reach
10,000 students.
The school has already broken even
operationally and established itself as one of
the best schools in the Mehrauli-Kishangarh
neighbourhood. A second school will open
in Noida next year. Although the promoters
are putting in their own money in the first
couple of schools, the surplus generated
from the existing schools will be used to
fund the new ones and they will leverage this
to get debt financing.
The schools are looking to attract interest
from members of the urban “aspirational”
class who cannot afford the fees charged by
budget private schools. This is the section of
the society that runs micro-businesses
(vegetable vendors, corner shops), or work in
blue-collar jobs (security guards and drivers).
Most are economic migrants from rural areas
with little or no primary education. The idea
is to run neighbourhood schools (under the
Sunshine School brand) in dense urban slums
and reach out to these families that live less
than 1 km from the school.
To make a qualitative difference, the
schools will use the Teach for India
pedagogy, one that Jhunjhunwala studied
and worked with for a while before adopting.
The curriculum, though, will be the
standard NCERT.
Satyanand says that in his experience,
teacher training and management
“ownership” are crucial. Both are missing in
the case of government schools and teacher
training is absent in most “budget” schools.
Sunshine, he believes, has both aspects
firmly dealt with. At Sunshine, every
Saturday is off for students and is devoted to
training teachers.
If teachers are being trained well, they
are also earning better than what
Sunshine’s competitors pay. Satyanand has
a 6 per cent acceptance rate in terms of job
applications — there is an abundance of
women wanting to teach. More than the
income, a teacher’s job is more acceptable
within the family and wider community. It
allows women to leave the house during the
day, they usually won’t work with men,
enhances their earnings through tuitions
and the students at the school also become
part of the pool of students who come to
them for after-school tuitions.
“We are not doing anything dramatic. We
are just trying to do what a good, well-run
organisation would do,” says Jhunjhunwala,
adding that the primary difference is in the
intent. If you mean well, what you offer will
stand out.

IMO
EC RECOMMENDS DISQUALIFICATION OF
20 AAM AADMI PARTY MLAS
Sharad Yadav @SharadYadavMP
@ArvindKejriwal Disqualification of AAP MLAs
was undemocratic as they were not even heard
which is against natural justice. Constitutional
bodies in d country are being misused now a
days.Appeal to public to deeply think
about which hands d country will be secured
in future.
Mamata Banerjee @MamataOfficial
A Constitutional body cannot be used for
political vendetta. The 20 AAP MLAs were not
even given a hearing by the Hon EC. Most
unfortunate. This goes against the principles of
natural justice.At this hour we are strongly with
@arvindkejriwal and his team
K C Singh @ambkcsingh
#AAPOfficeOfProfit President Kovind gets 1st
chance, as per his oath, to defend the
constitution. Await HCourt ruling on its legality
before approval & ask EC meanwhile to list
other defaulters for similar action, irrespective
of party in power.
Rajdeep Sardesai @sardesairajdeep
21 AAP MLAs disqualified under a nebulous
'office of profit' rule; disqualify them for office
of misuse if proven. If they have received
privileges, withdraw them. Disqualifying them
is a disproportionate response IMHO. #AAPMLAs
VIRAT KOHLI NAMED ICC PLAYER OF THE YEAR
Sachin Tendulkar @sachin_rt
No surprises there at all. You deserved it. Many
congratulations, @imVkohli! #ICCAwards @ICC
Ashwin Ravichandran @ashwinravi99
Congratulations to @imVkohli on becoming the
ODI cricketer of the year and the Icc cricketer of
the year. Huge recognition for your hard work
and perseverance.
Manish Pandey @im_manishpandey
Congratulations Champ @imVkohli for
sweeping @ICC Awards - Another feather in the
cap #ICCAwards
Harsha Bhogle @bhogleharsha
Amidst the troubles in South Africa a big honour
for Virat Kohli as the ICC Cricketer of the Year. And
much deserved too.
SC ASKS FOUR STATES TO REVOKE BAN
ON SCREENING OF PADMAAVAT
Shirish Kunder @ShirishKunder
If the Government can't control those
threatening violence against #Padmaavat, they
must outsource it to the banks. Banks will call
and message them every day, as they did to us
for #Aadhaar, until they get fed up and give up.
Prashant Bhushan @pbhushan1
SC strikes down the ridiculous ban by 4 BJP
States on screening of Padmavat even after
Censor board had cleared it. Kudos to SC for
upholding freedom of Speech
Chetan Bhagat @chetan_bhagat
SC states censor approved #Padmaavat can't be
banned by states. Great decision. Every story
can't be told how bullies want it. Artists, just as
anyone else, have freedom to express in India.
Komal Nahta @KomalNahta
The SC judgement in Padmaavat case is such a
tight slap on the faces of the state governments
which had banned the film. Red letter day and
historic judgement for not just
SanjayLeelaBhansali but for the film industry
and lovers of cinema all over!
In China’s Atomic City, memories haunt the ruins
The site celebrates the patriotism of thousands of scientists and labourers, but dark aspects of its
history go unmentioned
CHRIS BUCKLEY & ADAM WU
20 January
A mong the yak herds and Tibetan
Buddhism prayer flags dotting the
windswept highlands of northwest-
ern China stand the ruins of a remote,
hidden city that vanished from the
maps in 1958.
The decaying clusters of work-
shops, bunkers and dormitories are
remnants of Plant 221, also known as
China’s Los Alamos. Here, on a moun-
tain-high grassland called Jinyintan
in Qinghai Province, thousands of
Tibetan and Mongolian herders were
expelled to create a secret town where
a nuclear arsenal was built to defend
Mao Zedong’s revolution.
“It was totally secret, you needed
an entry pass,” said Pengcuo Zhuoma,
56, a ruddy-faced ethnic Mongolian
herder living next to an abandoned
nuclear workshop, whose family once
supplied meat and milk to the scien-
tists. “Your mouth was clamped shut
so you couldn’t talk about it.”
That changed in the 1990s, when
“Atomic City,” as it is now billed,
became a patriotic showpiece, cele-
brating the scientists and labourers
who worked in the harsh, breathtaking
conditions on a plateau 11,000 feet
above sea level. They built China’s first
atomic bomb, detonated in 1964, then
its first hydrogen bomb, tested in 1967,
and they helped develop missiles to
carry the warheads.
Today, veterans of the project
proudly speak of how they helped to
forge China’s nuclear shield. A muse-
um, still forbidden to foreigners, tells
visitors that the weapons were made to
The decaying clusters of workshops, bunkers and dormitories are remnants of Plant 221, also known as China’s Los Alamos
fend off American and Soviet aggres-
sors encircling China. A statue of Mao
gazes paternally over the square of the
main town, where thousands of peo-
ple still live.
“At the time, China’s social condi-
tions and international position were
a bit like North Korea now,” said Liao
Tianli, a writer who visits Jinyintan
once or twice a year and has inter-
viewed scientists who worked on
the project. ”
Yet even as the scientists have won
recognition for their work, lifting some
of the secrets of Plant 221, other dark
parts of its past remain muffled in offi-
cial silence and censorship. Building
nuclear weapons here came at a griev-
ous cost, and a few survivors and
researchers have tried to exhume the
layers of history unmentioned in the
memorials and displays.
The herders and farmers who were
moved for the project endured star-
vation, executions and brutal expul-
sions. Political paranoia engulfed the
REUTERS
project itself, and thousands of scien- 1953. In warm months, the grasslands
tists and technicians were persecut- burst into luxuriant green, and
ed. Some veterans have said that the Tibetan and Mongolian herders have
nuclear workers were not adequately for centuries guided yaks and goats
protected against radiation, or given over the pastures.
effective care after they fell But after 1958,
ill from cancer. The herders and Jinyintan disappeared
“If nobody spoke out, farmers who were from Chinese maps.
then this episode of histo- moved for the project Scientists and their
ry would still be buried,” endured starvation, Soviet advisers, who
said Wei Shijie, 76, a retired executions and helped China with its
physicist who worked in a brutal expulsions embryonic atomic pro-
detonation and explosives gram until the two
workshop at Plant 221 during the Communist powers’ bitter split in
1960s. He wrote a lightly fictionalised 1959, chose the site, and thousands of
memoir describing the persecution of Tibetans and Mongolians who lived
workers there, and he has called for here were the first to be sacrificed for
better medical care for retirees from the project.
the project. The Plant 221 museum says those
“Behind the halo of building the herders moved voluntarily, helped
two bombs and launching a satellite, by the government and rewarded
many people made agonising sacri- with thousands of sheep. But the
fices,” Wei said. “Much of that sacrifice bucolic images are belied by the
was unnecessary.” account of a police officer who inves-
The beauty of Jinyintan has been tigated what happened.
celebrated in song, and in a film from © 2018 The New York Times News Service
https://t.me/EStore33 https://www.estore33.com/ https://t.me/TheHindu_Zone
8 WORLD
>
MUMBAI | 21 JANUARY 2018 1

Facebook will allow users Alphabet chiefs pledge

to scour more content
to rank credibility of news
SHEERA FRENKEL & SAPNA MAHESHWARI the user-generated ranking system "is a
as elections loom
San Francisco, 20 January massive abdication of its social respon- MARK BERGEN
sibility, as a vital platform, to be a good 20 January

F
acebook said on Friday that it custodian of the Fourth Estate globally."
planned to prioritise high-quality Other experiments that Facebook The chief executive officers of ‘We don’t want
news on the social network by has tried with news in the past have Alphabet’s Google and You- people to reject
allowing its users to rank news sources sometimes gone awry or had unintend- Tube pledged to scour videos technology.
that they see as the most credible and ed consequences. For example, a recent and other content more closely Technology is
trustworthy. test to remove all news publishers from for misleading news and inap- the source of
The initiative, which follows an over- the News Feed and to place them under propriate messages on their progress’
haul that Facebook announced last a separate tab in six countries, including web services ahead of elections SUNDAR PICHAI
week to emphasise posts, videos and Bolivia and Slovakia, yielded an unex- in the US later this year.
CEO, Google
photos shared by friends and family, will pected result of magnifying the amount "We have more elections
not increase the amount of news on the of fake news on the platform. coming, so we’re all working
social network. But the move has impli- In his post on Friday, Mr. Zuckerberg harder," Google CEO Sundar
cations for what news will be consumed said the newest change "will only shift Pichai said during an interview
on Facebook, potentially favouring the the balance of news you see towards at an event in San Francisco on
most familiar names in media that are sources that are determined to be trust- Friday hosted by MSNBC and
seen as the most credible, while tilting ed by the community." Recode. "We feel a huge sense
away from lesser-known and less-trust- Facebook said news would be pri- of responsibility." distributing false stories online. global company. We operate in
ed outlets without solving the issue of oritised according to the new ranking Later this year, midterm Meanwhile, YouTube is facing many countries. People dis-
whether news could still be distorted. system starting Monday, before elections will determine which one of the worst crises in its agree."
"There's too much sensationalism, expanding globally. Some Facebook party runs Congress, now con- roughly 18-year existence after Still, Pichai said extra scruti-
misinformation and polarisation in the users have already been asked to rank trolled by Republicans. advertisers found their mar- ny of technology companies is
world today," Mark Zuckerberg, the trustworthiness of news sites which YouTube chief Susan keting messages running important to maintain trust.
Facebook's chief executive, wrote in a appear on the social network. In one Wojcicki said the online video alongside extremist and offen- "We all need to be careful,"
post on Friday. "We decided that hav- survey, people were asked if they recog- service is trying to hire as many sive videos. YouTube has also he added. "We don’t want peo-
ing the community determine which nised a number of websites and then employees as possible to scru- been swept up in investigations ple to reject technology.
sources are broadly trusted would be asked, ""How much do you trust each of tinize videos in tandem with into whether Russia used social Technology is the source of
most objective." these domains?" They were able to computers running artificial- media to influence the 2016 progress."
The shift is another signal of choose from a range of answers, includ- intelligence software to identi- presidential election. Artificial intelligence is the
Facebook's ability — this time using the ing entirely, a lot, somewhat, barely fy and quickly remove offen- "All of us are obviously very most important technology,
collective power of its more than two ‘There's too much sensationalism, misinformation and polarisation and not at all. sive and inaccurate material. upset that somebody could and the source of much anxiety
billion members worldwide — to play in the world today,’ Mark Zuckerberg, Facebook's chief executive, wrote The Silicon Valley company said it "It has to be humans and have influenced the election," about how work and broader
kingmaker with publishers. Many pub- in a post on Friday REUTERS would continue polling users to refine you need to have those Pichai said. However, he human society will change, the
lishers have long relied on Facebook to and select which news outlets garnered machines," she said. warned that it’s difficult for CEO added.
reach audiences, and they largely react- opinions on trustworthiness might be probably face more difficult questions the most trust. It declined to say how Google’s search engine and such a large company to decide "It’s fair to be worried about
ed with disappointment last week when open to manipulation. as it rolled out the new ranking pro- many people were polled or which news its news-aggregation service what is true or false. "Drawing AI," Pichai said. "I don’t think
the company said it would play down "It is absolutely a positive move to gram globally. outlets they were asked about. have been criticised for show- the line is becoming increas- any single company should
news over all. start to try to separate the wheat from "What will happen in situations "As part of our ongoing quality sur- ing misleading answers and ingly hard," he said. "We’re a control it." BLOOMBERG
The move is also the most recent by the chaff in terms of reputation and use where a community determines that a veys, we asked a diverse and represen-
Facebook to counter charges that not brands as proxies for trust," said Jason news source is trustworthy, but that tative sample of Facebook users across
enough was being done to stamp out Kint, the chief executive of Digital news source is censored, or illegal, in the US to gauge their familiarity with,
fake news and disinformation on its Content Next, a trade group that repre- that country?" asked Mr. Kaye, noting
platform. The company sents entertainment and that in many parts of the world, govern-
and trust in, sources of news," said Todd
Breasseale, a Facebook spokesman. "We
Twitter finds 1,062 more Russia-linked accounts
was dogged by criticism in Facebook said news news organisations, ments controlled all official news chan- boost links from sources with high trust
late 2016 after the presi- would be prioritised including The New York nels while independent news sources scores and demote links from sources SELINA WANG in addition to 2,752 accounts ing our platform,” the company
dential election that too according to the Times. "But the devil's in were outlawed or forced to publish pseu- with low trust scores." 20 January Twitter found and disclosed said in the post. “We have since
many false stories attack- new ranking system the details on how they're do-anonymously. Zuckerberg has been moving last year. made significant improve-
ing Hillary Clinton had starting Monday, going to actually execute In the past, he added, Facebook Facebook toward taking more responsi- Twitter said it found another All the IRA-related ments, while recognizing that
spread on its site, that way before expanding on that." has abided by local rules where it bility for what shows up on the social 1,062 accounts linked to accounts have been suspend- we have more to do as these
affecting the election's out- globally He continued, "How operates abroad. network, especially after the criticism the Russian government- ed and the company is sharing patterns of activity develop and
come. Last year, Facebook does that get hacked or "What will Mark Zuckerberg do when over the 2016 election and the interfer- backed Internet Research information about them with shift over time.”
also acknowledged that Russian agents gamed? How do we trust the ranking the needs of the community, in what it ence by Russian agents. Earlier this Agency accused of trying to congressional investigators Twitter also said its second
had used the site to spread divisive and system? There's a slew of questions at determines is trusted news, are different month, he described his 2018 goals as influence the 2016 US presi- who are reviewing potential assessment found another
polarising ads and posts. this point." from what the government determines. including "making sure that time spent dential election. manipulation in the 2016 elec- 13,512 Russian-linked automat-
The same criticism has also The new system could also poten- Who will Facebook side with?" said Mr. on Facebook is time well spent." The social media company tion. During the time period ed accounts, for a total of
engulfed other social media compa- tially favour publishers who are partisan. Kaye. In Friday's post, he hinted that rank- said it’s emailing notifications Twitter investigated, the 3,814 50,258, that tweeted election-
nies such as Twitter, which on Friday Facebook users, asked to rank which Raju Narisetti, the chief executive of ing the credibility of news sources was to 677,775 people in the US who identified IRA-linked accounts related content during the 10
said it was emailing notifications to news they most trust, could choose sites the Gizmodo Media Group, the unit of just one step, with more potential followed one of these accounts posted 175,993 Tweets, about weeks before the 2016 election.
677,775 people in the United States that that speak most clearly to their person- Univision that operates Jezebel and oth- changes to come. or retweeted or liked a Tweet 8.4 per cent of which were Last year, when Twitter first
they had interacted with Russian prop- al beliefs, in effect reducing the promi- er sites, said there was a "great irony" "I've asked our product teams to from these accounts during the election-related. disclosed the existence of these
aganda accounts around the time of nence of publishers who try to main- that Facebook, which has traditionally make sure we prioritise news that is election period, according to a “After the 2016 election, we accounts, the company said the
the 2016 election. tain an objective tone. left decision up to an algorithm that trustworthy, informative, and local," he blog post Friday. That’s almost launched our Information bots were responsible for about
For publishers, Facebook's new rank- David Kaye, the United Nations' incorporates the behaviours of its mem- wrote. "And we're starting next week 1 per cent of Twitter’s 69 mil- Quality initiative to further 1.4 million automated, election-
ing system raised immediate concerns, Special Rapporteur on freedom of bers, would open the decision-making to with trusted sources." lion monthly active users in the develop strategies to detect and related tweets.
including whether crowdsourcing users' expression, said that Facebook would its users on such a matter. He added that © 2018 The New York Times News Service US The new IRA accounts are prevent bad actors from abus- BLOOMBERG

Merkel coalition on the line as Chinese electric-car maker set up

German SPD votes to talk or walk by BMW alums seeks $400 million
BIRGIT JENNEN & PATRICK DONAHUE
20 January
Chancellor Angela Merkel’s
coalition plans face a make-or-
break vote this weekend as the
Social Democrats decide
whether to help usher in her
fourth term or walk away from
government and risk pushing
Europe’s biggest economy fur-
ther into political uncertainty.
Germany’s oldest political par-
ty is split over its future direc-
tion, and those divisions will
play out at a national conven-
tion on Sunday in Bonn, where
delegates are set to vote on
whether to move forward on
another government with
Merkel or go into opposition.
Investors are bracing for the
outcome, with the euro forecast
to drop if the SPD bows out. A
“No” vote would rob Merkel of
coalition options and force her
to choose between a minority
government or a repeat election.
Social Democratic Party
head Martin Schulz, lawmak-
ers and key labor chiefs lobbied
the 600 delegates over the past
week to back the leadership’s
proposal to begin formal coali-
tion talks, saying the party can
achieve more if it stays in gov-
ernment. Kurt Beck, a former
SPD chairman, said he expects
the plan to pass with about 60
per cent of the vote.
“The party is very divided,
like many Social Democratic
parties across Europe,” Guntram
Wolff, director of the Brussels-
based Bruegel research group,
said in an interview, predicting a
“very tight” vote. Berenberg
economist Holger Schmieding
said there’s a “better than even
chance” of SPD backing.
On the table is a 28-page pol-
icy outline agreed by the two
sides in a marathon session on
January 12. SPD delegates must
decide if it’s a sufficient basis
on which to forge a common
platform for government, even
though many of them blame
the party’s role as Merkel’s jun-
ior partner over the past four
years for its electoral decline to
a post-World War II low.
BLOOMBERG
BLOOMBERG
20 January
Byton, the Chinese electric-
car start-up founded by for-
mer BMW executives, is seek-
ing about $400 million in a
new round of funding, peo-
ple with knowledge of the
matter said.
The Nanjing-based compa-
ny, which showcased a con-
cept car at the Consumer
Electronics Show in Las Vegas
this month, has been reaching
out to potential investors to
gauge their interest, according
to the people, who asked not to
be identified because the
information is private.
Byton, formerly known as
Future Mobility, this month
unveiled an electric SUV that
uses facial recognition to
unlock doors, Amazon’s Alexa
to entertain and a 49-inch
screen across the dashboard. Its
first model will be available for
sale next year starting at
$45,000, compared with a
$35,000 base price for Tesla’s
Model 3.
No final agreements have
been reached, and details of
the fundraising plan could
change, the people said. A rep-
resentative for Byton declined A Byton electric car at the CEC in Las Vegas REUTERS
to comment.
Byton received $200 mil- August. China Harmony New BMW’s i8 electric car and
lion from a Suning Holdings Energy Auto Holding is also an worked at the German maker
Group fund and some state- investor in Byton. for about 20 years. Kirchert was
owned firms in Jiangsu The company’s chief execu- in charge of marketing at
province, Chief Operating tive officer, Carsten Breitfeld, BMW’s local venture in China
Officer Daniel Kirchert said in was a leading engineer for and worked at Nissan’s Infiniti.

Farewell, but not the end for 747s
ZACH WICHTER
20 January
There may be no airliner as
recognisable as the Boeing
747, the world's first jumbo
jet, with its iconic hump of
an upper deck. For aviation
fans, the introduction of the
“Queen of the Skies" was a
triumph of engineering and
grace: unprecedented size
and speed with spiral-stair-
case international glamour.
But the airline business
has changed, and the giant
plane has become more
expensive to operate. A cou-
ple of weeks ago, the final
747 flight by any commer-
cial United States airline
took to the sky.
Like so many others
before it, the plane was head-
ing to the Southwest to retire.
A passer-by at Atlanta's
Hartsfield-Jackson Inter-
national Airport might have
noticed something unusual
as Boeing 747 No 6314
pushed back from the gate
for the last time. Onlookers
in the terminal waved
farewell as the plane, oper-
Norwegian Airlines’ fastest transatlantic flight
ated by Delta Air Lines, tax- but to say "I do." They did, But even faster flights than this record-breaking one may be right around the corner
ied out to the runway. somewhere over Memphis.
Undeterred by the chilly "I'm going to cry before RACHEL TEPPER PALEY research team, told Bloomberg that
weather, even members of today is over," said Rebecca 20 January growth in air travel and distances flown
the ground crew pulled out Johnson, one of the flight “will drive the demand for broadly
their phones to memorialize attendants on board. "It's To the envy of plane-weary travelers available faster air travel,” making it
this flight in photos. just part of aviation history. everywhere, passengers aboard a possible for companies to “offer com-
On board was a small To be a part of it is kind of Norwegian Airlines flight from New petitive products in the future.”
group of passen- awe inspiring." York to London on January 15 were NASA is aiming for a sound level of
gers - mostly Delta The airline Four hours treated to a pleasant surprise: They 60 to 65 A-weighted decibels (dBa),
employees. Paul business has after takeoff, the arrived 53 minutes ahead of schedule, which is roughly the volume of a high-
Gallaher was serv- changed, and jumbo jet was cir- making theirs the fastest transatlantic way-bound luxury car or background
ing as first officer. the giant plane cling above cotton flight ever recorded on a subsonic com- conversation in a lively restaurant.
Earlier in his car- has become fields in Arizona's mercial aircraft. The final flight time: Then again, why settle for super-
eer, as a pilot for more expensive Sonoran Desert, five hours and 13 minutes. sonic travel when you can have hyper-
Northwest Air- to operate preparing to make The good time came thanks to bet- sonic travel? Elon Musk’s proposed
lines, he had hel- its final approach ter-than-expected weather conditions SpaceX Air would ostensibly fly
ped fly a fleet of brand-new to Pinal Airpark, where its and a hefty tailwind, which helped through space at 17,000 miles per
Northwest 747s from Boeing next chapter would begin. the Boeing 787-9 Dreamliner gain hour, potentially landing a New
to the airline's base in Minne- The 747 revolutionized three minutes over the previous Yorker in Shanghai in 39 minutes flat.
apolis. Delta inherited those the way people traveled record, held by a 2015 British Airways In September, Musk said the flight
planes when the companies when it began service in route that spanned five hours and 16 should cost no more than the current
merged 10 years ago. Like No 1970. Mark Vanhoenacker, a minutes. Still, the Norwegian flight’s price of a full-fare economy seat in a
6314, he would retire when pilot for British Airways and captain said an even-faster time may A Boeing 787 Dreamliner passenger aircraft operated by Norwegian Air Shuttle traditional aircraft, which at the time
the flight touched down. the author of "Skyfaring: A be in the cards. at Gatwick Airport outside London was $2,908 from China Eastern
Back in the cabin, Gene Journey With a Pilot," wrote “We were actually in the air for just Airlines. There are still plenty techni-
Peterson, another Delta 747 in The New York Times last over five hours, and if it had not been sprightly 3.5 hours and ceased opera- But there’s hope yet for those des- cal, logistical and business questions
captain, and Holly Rick, a year that the aircraft took for forecasted turbulence at lower alti- tion in 2003. Supersonic air travel, perate to shave more time off their New in the air (sorry!) on whether this
flight attendant, had other advantage of economies of tude, we could have flown even faster,” while faster, is fairly controversial: It York to London route: NASA would be a feasible option for the aver-
plans. They had met when scale to make long-distance said Captain Harold van Dam at can create such unpleasant ground- announced in 2017 that it would accept age traveler.
they were on a 747 charter air travel affordable to the Norwegian in a statement. level disturbances as shattered win- bids for construction of a demo model In the meantime, if you’re looking to
flight crew in 2009. Now they masses for the first time. The time is nothing compared to dows, cracked plaster and very con- for a supersonic aircraft with a low-lev- speed up your next trip across the
prepared to walk down the © 2018 The New York Times what was possible on the Concorde, fused farm animals. For this reason, el sonic boom. pond, your best bet is to pray for a
aisle - not just to their seats, News Service the sky-high-priced supersonic plane supersonic travel has mostly been Peter Coen, project manager for gnarly tailwind.
that could cross the Atlantic in a banned since 1973. NASA’s commercial supersonic BLOOMBERG
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.
MUMBAI | 21 JANUARY 2018 WORLD 9 <

US government shuts down

The immediate impact of the government shutdown was eased somewhat by its timing, starting on a weekend
Potential Buffett
heir on what may
RICHARD COWAN
Washington, 20 January be the start of his
T
he world’s most power-
ful government shut
down on Saturday after
President Donald Trump and
Berkshire stake
the US Congress failed to REUTERS ceed Buffett, was appointed
reach a deal on funding 20 January vice-chairman to oversee
for federal agencies, high- insurance operations such as
lighting the country’s deep Greg Abel, considered by Geico auto insurance and
political divisions. many investors the top con- General Re reinsurance.
For the first time since tender to succeed Warren Abel reported holding his
October 2013 — when a simi- Buffett as Berkshire Berkshire stake indirectly for
lar standoff that lasted 16 days Hathaway’s chief executive the benefit of his family.
kept only essential agency officer, reported owning about Berkshire Hathaway Energy
operations intact — federal $2.1 million of the conglomer- said about a year ago that
workers were being told to ate’s stock. Abel owned a stake in that
stay at home or in some cases Abel, who along with Ajit unit that could be converted
to work without pay until new Jain was named a Berkshire into Berkshire stock worth
funding is approved. vice-chairman and director more than $400 million at
The shutdown began a last week, disclosed his stake a the time.
year to the day after Trump day after Jain reported a $109 Omaha, Nebraska-based
was sworn in as president. million ownership stake. Berkshire said last week that
His inability to cut a deal The stakes were disclosed relevant factors in its succes-
despite having a Republican in regulatory filings. sion planning were that both
majority in both houses of Abel, 55, who has run the possess “integrity, business
Congress marks arguably the Berkshire Hathaway Energy savvy, an owner-oriented atti-
most debilitating setback for his unit, was appointed vice- tude and a deep genuine inter-
crisis-plagued administration. chairman to oversee non- est in Berkshire”.
Democrats had insisted insurance operations such as Buffett, 87, has run
that any bill to renew govern- the BNSF railroad, Dairy Berkshire since 1965 and has
ment funding also contain per- Queen ice cream, Fruit of not signalled any plans to leave
manent protections for approx- the Loom underwear and soon. He owns roughly one-
imately 700,000 young, NetJets planes. sixth of the company, com-
undocumented immigrants Jain, 66, Berkshire’s top prising most of what Forbes
who were brought illegally into reinsurance executive and the magazine said on Friday is his
the United States as children. other strong contender to suc- $91.6 billion fortune.
Last week, Trump rejected a
bipartisan Senate deal that
would have accomplished that
as well as hand the White US Capitol is seen shortly after the beginning of the government shutdown in Washington, US, on January 20 REUTERS
House $2.7 billion in new mon-
ey for immigration enforce- at Trump. Republican and
ment at America’s borders. Democratic leaders were
Minutes before Friday’s expected to renew negotiations
midnight deadline for a fund- on Saturday in the hope of
ing deal, Trump’s White House restoring government financ-
All that the shutdown has shut down
issued a statement blaming ing before Monday. CHRISTOPHER FLAVELLE year funds, will continue; so ing to an agency plan posted Health
Democrats for the shutdown. The immediate impact of 20 January will activity that Congress has in December. About half the staff at the
“We will not negotiate the sta- the government shutdown was specifically exempted. Perhaps The SEC plans to keep Department of Health and
tus of unlawful immigrants also eased somewhat by its tim- Visitors to national parks will the largest exemption is any operating its Edgar corpo- Human Services will be fur-
while Democrats hold our law- ing, starting on a weekend be prevented from using the function deemed “necessary rate-filing system. But it loughed, according to a plan
ful citizens hostage over their when most government full-service restrooms. Tourists for safety of human life or pro- won’t approve registrations posted on the department’s
reckless demands,” it said. employees normally do not won’t be able to get into the tection of property”. for investment advisers, issue website Friday. The resulting
The shutdown was cement- work anyway. National Air and Space For as long as it contin- interpretive guidance, or changes will reverberate
ed when the Senate, meeting No matter the timing, the Museum after Sunday. The ues, the shutdown demon- review many pending appli- across a range of functions Greg Abel BLOOMBERG
late into Friday night, blocked a Defence Department said its Internal Revenue Service will strates the nearly endless cations or registrations for that affect the average person.
bill to maintain the federal gov- combat operations in stop issuing refunds, but it will ways in which the federal new financial products.
ernment’s funding through Afghanistan and other military also stop conducting audits. government has come to At the 675-person Law enforcement, courts
February 16. activities would continue, while
The vote was 50-49, well federal law enforcement offi-
short of the 60 needed in the cers also would remain on duty.
100-member chamber to vault Without a quick deal, most
At first glance, the tangible affect the economy, the Commodity Futures Trading
consequences of the latest financial sector, the work- Commission, the country’s
government shutdown may place and the environment. main swaps regulator, the
seem less than overwhelming. vast majority of activity will
The law exempts from the shut-
down those employees who are
deemed necessary to protect
life or property. Most types of
Tom Petty died
the bill over a procedural hur- day-to-day operations in the
dle. Four Republicans joined federal government will be dis-
most Democrats in killing the rupted. Hundreds of thousands
After all, the mail will still get Treasury
delivered, airport control tow- The Treasury Department,
likewise grind to a halt.

ers will still be staffed and the which includes the IRS, will Business and economy
law enforcement and criminal
justice fit into that category. of accidental
drug overdose
measure. A fifth Republican, of government employees will border patrol will continue to send home more than 83 per The shutdown is likely to post- National security and
Senate Majority Leader Mitch be put on temporary unpaid guard the country. But in ways cent of its 88,268 workers. pone the release of market- foreign affairs
McConnell, voted “no” too, but leave, including many of the large and small, the shutdown About 1,000 employees moving economic data. At the Defense Department,
only as part of a parliamentary White House’s 1,700 workers. that began at midnight Friday will stay in place to manage military personnel are
manoeuver to make it easier to Trump’s administration could touch almost every debt, monitor domestic and Workplace safety expected to report for duty, THE ASSOCIATED PRESS and an antidepressant.
bring another bill to the floor. said it planned to keep nation- aspect of American life. international financial mar- and labour but won’t get paid until the New York, 20 January Among the medications found
The breakdown ended a al parks open with rangers and The Commodity Futures kets and policy coordination. Many programmes at the shutdown ends. As for civil- in his system were fentanyl
long day of closed-door meet- security guards on duty. The Trading Commission will stop Another 2,800 workers are Department of Labor designed ian workers, those perform- Tom Petty died last year and oxycodone. An acciden-
ings in Congress and at the parks were closed during the investigating new victim com- exempt from the shutdown to help workers will stop. ing activities excepted from because of an accidental drug tal overdose of fentanyl was
White House. Even as they last shutdown in 2013, upset- plaints and taking fresh action to avoid any disruptions with Other federal offices designed the shutdown, such as pro- overdose that his family said also determined to have killed
promised to work on getting the ting many tourists and result- against suspected wrongdoers. debt borrowing functions, to protect workers’ rights will tecting property or lives or occurred on the same day he Prince in April 2016.
government back up again as ing in the loss of $500 million in The National Labor Relations debt collection, investment, also close their doors. supporting combat opera- found out his hip was broken Petty suffered from
soon as possible, Republicans visitor spending in areas Board will stop investigating debt accounting and Social tions, will likewise have to after performing emphysema, a
and Democrats blamed each around the parks and at the charges of workers’ rights Security disbursements. Energy and environment work; the rest can stay home. dozens of shows fractured hip and
other for the predicament. Smithsonian museums. being violated. The Bureau of Oil, gas and coal companies That doesn’t mean the with a less seri- knee problems
Senate Majority Leader No one is likely to be on Land Management will stop White House should see little impact on day- department isn’t affected. ous injury. that caused him
Mitch McConnell joined hand, for instance, to manual- issuing permits for oil and gas The Executive Office of the to-day operations, as several A shutdown can mean His wife and pain, the family
Trump in attacking Democrats. ly wind an historic clock out- drilling. The Federal Aviation President will be dramatically federal agencies dip into non- halting maintenance of daughter said, but he was
“What we’ve just witnessed side the US Senate chamber. Administration will stop issu- pared down, according to a lapsing appropriations and use weapons and other defence released the still committed
on the floor was a cynical deci- Many Capitol maintenance ing approvals for drones. memo released on Friday exemptions to ensure most systems. Payments also stop results of Petty’s to touring.
sion by Senate Democrats to workers also were being The Justice Department night. The memo called for permits keep flowing and for a range of services, includ- autopsy via a He had just
shove aside millions of instructed to stay home. will suspend civil litigation. reducing the total number of inspectors don’t stop examin- ing everything from money to statement on his wrapped up a
Americans for the sake of irre- The shutdown will start to The government will stop workers in the office to 659, out ing drilling rigs and coal mines. contractors to death benefits Facebook page, tour a few days
sponsible political games,” have more serious conse- issuing Social Security cards, of about 1,715 people on staff. for families of those killed in moments before before he died in
McConnell said. quences on Monday as govern- and anyone trying to visit a Transportation the line of duty. Another casu- coroner’s officials October at age 66.
Senate Democratic Leader ment employees ranging from US military cemetery overseas Securities and Exchange The transportation system will alty of a shutdown: at mili- in Los Angeles “On the day he
Chuck Schumer said his party financial regulators and tax col- will find themselves barred at Commission function at close to its normal tary bases around the coun- released their died, he was
took significant steps to reach a lectors to scientists and civil- the gate. Operations at the Securities level, at least initially. try, so-called commissaries — findings and the informed his hip
deal, including raising the pos- ian staff at the Pentagon will Agencies have no shortage and Exchange Commission The Federal Aviation what civilians might call gro- rocker’s full autopsy report. had graduated to a full on
sibility of funding for Trump’s have to stay away from work. of options for declaring some are set to be sharply curtailed. Administration’s air-traffic cery stores — will shut down, Dana and Adria Petty say they break and it is our feeling that
proposed wall along the US Early on Saturday, of what they do exempt from Despite collecting fees division will continue guiding a complication for families at got the results from the coro- the pain was simply unbear-
border with Mexico, which they McConnell offered up a new the shutdown. Government from participants in the mar- flights and the Transportation remote locations. ner’s office earlier in the day able and was the cause for his
have ardently opposed. plan. Instead of the February functions that don’t depend on kets it regulates, Wall Street’s Security Administration will The effects of a shutdown that the overdose was due to a over use of medication,” his
“It’s almost as if you were 16 end date for the temporary annual appropriations from main regulator will shrink its operate airport security check- on foreign and trade policy variety of medications. family’s statement said,
rooting for a shutdown,” spending bill, he proposed Congress, for example activity staff to about 300 employees points, according to the agen- may be minimal. The coroner’s findings adding that he performed
Schumer said in comments on February 8. financed by user fees or multi- from almost 4,600, accord- cies’ plans. BLOOMBERG showed Petty had a mix of pre- more than 50 concerts with a
the Senate floor aimed directly REUTERS scription painkillers, sedatives fractured hip.

As bitcoin sinks, crypto bros party hard on a blockchain cruise

BLAKE SCHMIDT
20 January
When 600 cryptocurrency
enthusiasts set sail from
Singapore on Monday night for
their second annual
Blockchain Cruise, the price of
bitcoin was hovering comfort-
ably above $13,500.
By the time their 1,020-foot-
long ship pulled into Thailand
on Wednesday, for an afternoon
of bottomless drinks and cryp-
to-focused talks on a sun-
soaked private beach, bitcoin
had cratered to $10,000.
The group of mostly young
men, many of whom became
wildly rich — at least on paper
— as bitcoin and other
digital tokens skyrocketed last
year, had in all likelihood just
lost millions.
But if anyone was fazed,
they didn’t show it. The party
rolled on as the sangria and Red
Bull flowed, bitcoin-themed rap
music blared and drones filmed
it all from above.
“Nothing goes up in a
straight line,” explained Ronnie
Moas, the founder of Miami
Beach-based Standpoint
Research, who was one of the
event’s speakers on
Wednesday. In a best-case sce-
nario, he said, bitcoin could
jump to $300,000 in as little as
seven years.
For sceptics of the crypto
craze, it’s hard not to see all
this as another sign of runaway
exuberance — a repeat of the
boosterish Las Vegas securiti-
sation conference, immor-
talised in The Big Short, that
preceded the subprime mort-
gage meltdown of 2007. But
the steadfast optimism on dis-
play at this week’s Blockchain
Cruise also carries a warning
for anyone betting on a cryp-
tocurrency crash: It’s going to
take more than a 50 per cent
drop in bitcoin from its
December 18 high to drive out
the diehards.
“This is something that
you either believe in or not,”
said Moas, who has become a
crypto-celebrity after issuing
stratospheric price forecasts
for bitcoin.
The cruise’s eclectic list of
speakers included Jose Gomez,
a former aide to the late
Venezuelan President Hugo
Chavez; Kaspar Korjus, the
head of Estonia’s e-residency
programme (which may issue
its own cryptocurrency); and
Jorg Molt, an early digital cur-
rency backer whose claim to
hold 250,000 bitcoins (worth
$2.8 billion at the current price)
couldn’t be verified.
But perhaps the biggest
draw was John McAfee, the
anti-virus software pioneer
with a checkered past. In 2012,
while living in Belize, McAfee
had run-ins with local police
for alleged unlicensed drug
manufacturing and weapons
possession, but was released
without charge. At one point,
Belize police started a search
for him as a person of interest
in connection with the murder
of his neighbour. McAfee said
he was innocent and that he
fled Belize because of persecu-
Participants listen to a speaker
tion by corrupt officials.
He now helps run MGT
Capital Investments, a small-
cap tech company with a bit-
coin mining business. He has
become a cryptocurrency
evangelist on Twitter, touting
the technology and various
BLOOMBERG
tokens to his more than
700,000 followers. Coinsbank,
the digital currency exchange
and wallet operator that organ-
ised the cruise, made him a
headline speaker.
On Wednesday, McAfee
blamed the recent market
slump on unfounded fear of
government intervention. He
urged cryptocurrency holders
— one of whom sported a “Buy
The Dip” t-shirt — to stick with
their bets.
“You cannot force a ban on
a distributed system,” McAfee
said in an interview after his
speech. “It’s like how do you
ban smoking weed? You can’t
ban it. People will come back.”
Not every conversation on
the Blockchain Cruise revolved
around cryptocurrencies.
Attendees, unsurprisingly, had
plenty to say about blockchain
— the distributed ledger tech-
nology that underpins bitcoin
— and its potential to improve
industries from finance to
health care.
Charity was also a topic
raised by speakers including
Moas, who urged the audience
to donate some of their new-
found wealth and help reduce
global inequality.
Many attendees have far
more than they need.
Rowan Hill, a former coal
miner in Australia, said he
retired by 26 after getting in on
the crypto boom early. After
the cruise, he’s heading to
Japan for a four-week snow-
boarding trip.
“A lot of people can’t stand
the price swings” in digital cur-
rencies, Hill said, donning a
fedora and sunglasses as he
lounged on the beach. “The
average person just sells, and
they lose out.”
Joe Stone, an Australian
who invests in digital assets,
said market declines are easier
to bear in the company of fel-
low enthusiasts. For many on
the cruise, the next stop is
another cryptocurrency con-
ference in Bangkok.
“There’s nowhere I’d rather
be,” said Stone, after a late night
of mingling at the ship’s cigar
bar over whiskys. “Otherwise
I’d just be at my computer.”
BLOOMBERG
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10 DEMOCRACY AT WORK
>
MUMBAI | 21 JANUARY 2018 1

DID THEY REALLY SAY THAT?

CHATTERBOX

Restricted entry CHECKLIST

Here’s the back story to the first ever public press conference held by four Supreme Court
judges. How did the political parties react? We know that CPI leader D Raja called on Justice
CRYPTOCURRENCY IN JANUARY, 2018: WHAT REGULATORS ARE SAYING
Chelameshwar. The Congress president summoned the party’s legal brain trust—P South Korea’s chief of the Financial Services in cryptocurrencies by taking a stake in foreign
Chidambaram, Salman Khurshid, Kapil Sibal, Manish Tewari and Vivek Tankha. Abhishek Commission: “(The government) is considering both funds should await further clarification from CVM”.
Manu Singhvi was in Mumbai at the time. It looked for a political-legal response. The BJP shutting down all local virtual currency exchanges or China (unnamed officials): “The government plans to
went in for a more political response with the Narendra Modi-Amit Shah team consult- just the ones who have been violating the law”. block domestic access to homegrown and offshore
ing mainly one lawyer — and a key troubleshooter — Arun Jaitley. It was later Attorney Deputy Prime Minister of Singapore, Tharman platforms that enable centralised trading. Authorities
General KK Venugopal who came out and said the matter had been solved. BJP’s spokes- Shanmugaratnam: “When it comes to money will also target individuals and companies that
men were initially told to lie low, but once their absence became conspicuous, they were laundering or terrorism financing, Singapore’s laws provide market-making, settlement and clearing
told to restrict their comments to whether the judges should have gone public or not. do not make any distinction between transactions services for centralised trading”.
effected using fiat currency, virtual currency or other US, SEC Chairman Jay Clayton: “A number of
Rahul’s foreign trip novel ways of transmitting value. MAS, Singapore’s concerns have been raised regarding the
Rahul Gandhi is planning overseas trips to other countries in the Middle East, Singapore financial regulator and central bank, will not cryptocurrency and Initial Coin Offering (ICO)
Canada and Europe, after his engagement with the Bahrain diaspora. The objective of these distinguish between transactions conducted in fiat markets, including that, as they are currently
trips will be to meet the Indian community, build a relationship with heads of states, share "I think it is time that we started and cryptocurrency in seeking to enforce its laws. All operating, there is substantially less investor
what the Opposition’s view on India is and understand from different stakeholders, appreciating the virtues of humour in financial institutions will be subject to the protection than in our traditional securities
including businesses, what kind of reform and systemic changes they are seeking from politics. I think it is time that we stopped same regulations”. markets, with correspondingly greater
India. Will this include a view on intractable legal and tax disputes that many big companies tilting at windmills" Brazil’s securities regulator, CVM: “Local investment opportunities for fraud and manipulation.
have with the government? Will Gandhi address (and offer) an alternative dispute reso- Congress spokesperson Abhishek Manu Singhvi on Prakash funds are prohibited from buying cryptocurrencies. Investors should understand that to date no initial
Javadekar's charge that ''hugplomacy" was an offensive
lution mechanism to companies like Kingfisher and Vodafone? The Congress is not say- word, January 15 in New Delhi
Cryptocurrencies cannot be considered financial coin offerings have been registered with the SEC”.
ing, but watch this space. assets. Local funds interested in investing indirectly SOURCE: INTERNATIONAL NEWS MEDIA

OPINION timony to a failure of the state government in

the agricultural economy.
KENNETH JUSTER
You are a Malayali representing Karnataka.
Are there times when you feel conflicted ?
inside or outside Parliament, no legislative
backing for it and, most importantly, there was
not one word uttered during UPA on the legal
accountability for the authenticity of this bio-
metric database. As a result, thousands and

US counts on all What is your contribution to the BJP’s efforts

to build coalitions in Kerala?
crores of public money was spent on creating a
biometric database which conducted very poor
As a son of an Air Force officer — I was born in verification of identities and did not and still

partners for fair one place away from home (Ahmedabad) — does not have any details of citizenship. The
and having lived all over the country. I saw only time Aadhaar was scrutinised was by the
myself as an Indian and not as this or that till I standing committee on finance of which I was

and balanced trade entered politics when this became a frequent a member, and the standing committee right-
question. I am a Bengalurean and represent and ly concluded that this database was going to be
serve the city and state proudly. In Parliament, ineffective even for the purposes of directing

L
et me turn to a second pillar in building out our strategic part-
nership — our economic and commercial relationship. India is
in the midst of an economic surge as it integrates more fully into
the global economy. In turn, the US trade and investment relationship
with India continues to grow. Bilateral trade has gone from approxi-
mately 20 billion dollars in 2001 to 115 billion dollars in 2016. Of course,
given the size of our respective markets, there is still plenty of room to
expand the flow of goods and services in both directions and, in the
process, for trade to become more reciprocal.
The United States counts on all of our partners to work with us to
ensure fair and balanced trade. We are concerned about persistent
trade deficits, including the one we have with India. We welcome steps
by India to continue its reform agenda, expand market access, and fur-
ther enhance the protection of intellectual property. And we want to work
with India to expeditiously resolve trade and investment disputes. In our
view, fully free and fair trade will support and accelerate Prime Minister
Modi’s effort to improve India’s long-term growth rate in a sustained way.
In this regard, the Prime Minister’s determination to move India further
up on the World Bank’s Ease of Doing Business index is inspiring.
“America First” and “Make in India” are not incompatible. Rather,
investing in each other’s markets will be mutually beneficial — it will
increase our economic interactions and volume of trade, lead to col-
laboration on emerging technologies, and create jobs in both countries.
But let me go further and suggest that it is time to put a strategic lens on
our economic relationship — just as we have done with our defense rela-
I have represented Bengaluru and Karnataka as subsidies and recommended that it must be
a state with unflinching and unambiguous com- merged with the National Population Register.
mitment. I take my duty to the people, who The current government inherited this unver-
send me to the Parliament, seriously. ified database and instead of throwing it out and
I was also given a responsibility to expand the wasting public money, it moved to address its
footprint of the NDA in Kerala and I believe 2016 shortcomings. It brought the Aadhaar Bill, repo-
assembly election expansion from 5.5 per cent to sitioned it as a subsidy-delivery platform and
almost 15 per cent was consistent with that. Of encouraged parliamentary debate. It has devel-
course, this was a result of many factors including oped a strategy to use Aadhaar and other tools to
BJP’s growth and entrants of parties like Bharath launch a sharp attack on the vexed and cursed
Dharma Jana Sena (BDJS) into NDA. I have problem of leakages, ghost and fraudulent
enjoyed that challenge and that I have made an claimants to public subsidies. It has addressed
impact seems obvious by the recent vicious the issue of lack of verification and fake entries by
attacks on me by the Left and their mobs includ- making UIDAI statutorily responsible for verifying
ing attempts to arrest me for tweeting recently. I the entries through Section 3.3 of the Act.
am very confident that in the general elections But this is where the problem starts. The Act was
2019 non-NDA parties will have to demonstrate passed in 2016 and before 2016, 100 crore entries
significant political results in Kerala. were in the Aadhaar database. That does not come
under Section 3.3. Who was responsible for verify-
Your other area of interest is the defence ing these hundred crore entries before it is used as
ILLUSTRATION: BINAY SINHA
forces. You put great effort in an identity for elections, bank
pushing for One Rank One accounts and for entering airports
Rajeev Chandrasekhar tells Aditi Phadnis about representing Bengaluru, his views on Aadhaar, and Pension (OROP). But there has through the CISF?
issues that could dominate the assembly elections in Karnataka hardly been any progress in the The question of rampant fake
other part of defence, that is Aadhaar entries is a real one and it

‘Elections will
tionship. A number of US companies have reported increasing diffi- the Make in India programme. is a direct consequence of the slop-
culties conducting business in the largest market in the region — China. Given the nature of the global RAJEEV CHANDRASEKHAR py way in which this database was
Accordingly, some companies are downgrading their operations there, defence industry, does this Member of Parliament, built. As far as I know, there has
while others are looking with great interest at alternative markets. even have a future? Bengaluru been no disclosure, or audit reports
India can seize the strategic opportunity — through trade and A robust defence industry and of UIDAI or Aadhaar, and no prose-

investment — to become an alternative hub for US business in the
Indo-Pacific region. Accelerating the economic and regulatory reform
process already begun by Prime Minister Modi will help ensure that
India is seen as an increasingly efficient, transparent, and well-reg-
ulated market. This will further promote growth and development.
Continued reforms and trade liberalisation will also enable Indian
products to more readily become part of the global supply chain,
thereby accelerating job creation. There are many benefits to grow-
ing our bilateral economic relationship and making India a region-
al hub for US business. We saw on display at the recent Global
Entrepreneurship Summit in Hyderabad the critical and positive
impact that an enabling environment for innovation has on a nation’s
economy. America is a leader in entrepreneurship and innovation,
and already has extensive linkages with India in the technology sec-
tor. Opening India’s market further to US trade and investment will
spur our collaboration on many emerging technologies that will
drive and protect our economies, including those related to advanced
manufacturing and cyber security.
Greater US trade and investment, combined with a strong envi-
ronment protecting intellectual property, will lead to increased
flows of capital and further sharing of intellectual know-how.
Technological transformation needs a constant upgrade, which
occurs when countries are involved in unimpeded international
economic and data flows.
Increased openness to US goods and services, and an expanded
presence of US companies, will also stimulate private sector invest-
ment in improved infrastructure and overall connectivity. As an
example, US companies have innovative technologies that could
support India’s ambitious goal to create 100 smart cities across the
country. In addition, a US-India joint venture is already producing
locomotives that meet global emissions standards to modernise
India’s railways. And civil aviation is another important area where an
create a change’
technology eco-system is vital for India. In that cution of any enrolment agencies that have
way, the vision and goal of Make in India is a created these fakes.
good one and must succeed. The only different Then, there is the question of the mandatory
suggestion I have been making repeatedly is and non-mandatory uses to which Aadhaar
that Make In India must include defence pub- should/could be put. I believe that Aadhaar can be
lic sector undertakings (DPSUs) as well as pri- and must be developed into the gateway to deliv-
You claim to represent urban Bengaluru. In that these elections would create a change in vate companies. Creating companies with er subsidies, because the poor and the needy are the
your view, what needs to be done to the city. I have made it my business to fight and these kind of capabilities and knowhow isn’t ones that are suffering from leakages in subsidies.
improve the lot of those who live in help citizens in their fight to reclaim Bengaluru trivial and I have always believed that the So, I personally don’t subscribe to the view that
Bengaluru? Especially women? and hope that this would end in electing 28 quickest option is to reform and boost DPSUs there is anything against Aadhaar being made
Members of Parliament (MPs) that are elected MLAs representing Bengaluru and give them an equal oppor- mandatory. But Aadhaar should be made manda-
to Rajya Sabha (Council of States) primarily in May 2018 committed to Aadhaar should be made tunity to modernise and tory after ensuring that making it mandatory does
represent the state that elects them i.e. in my cleaning up our city. mandatory after become cutting-edge compa- not mean exclusion of any poor and needy from
case, Karnataka. In addition, MPs can choose ensuring that making it nies like ISRO in India or IAI in subsidies or services that the government provides.
a district and so I represent Bengaluru — a Karnataka is riven by rural dis- mandatory does not Israel etc. This could, in addi- So, a roadmap to ensuring non-exclusion is impor-
responsibility that I take very seriously — a tress. The damage done by mean exclusion of any tion, encourage private com- tant, with some predetermined conditions prece-
city where I have lived most of my life. demonetisation is yet to end. poor and needy from panies to also build and grow. dent before Aadhaar can be made mandatory.
Bengaluru in the last five years has taken a What is your economic blue- subsidies or services that And then, if the government wants to use the
serious beating. Dying and polluted lakes, print for Karnataka as a state? the government You gave a remarkably cogent database as the gold standard identity for access
crumbling infrastructure, potholed roads, Karnataka’s rural distress and provides. A roadmap to speech on the perils of the to sensitive areas, or for entering the financial sys-
garbage and public health crises, traffic and farmer financial crisis have ensuring non-exclusion flaws in Aadhaar. Much of tem, if the entry correspondingly is unverified, is
transportation chaos, record number of citi- very little to do with demon- is important what you said in 2016 is now fake or fraudulent, who is responsible? This is the
zens filing PILs against goverment “projects” etisation. Its a combination of coming true…. question that the UIDAI must answer. I have
that no one but contractors seem to want and lack of any serious reforms in agricultural and My views on Aadhaar have been remarkably already referred to the ease with which Aadhaar
a general unsafe atmosphere for children and farming economy and the water/irrigation cri- consistent since 2010 when I have raised issues numbers can be acquired, and a variety of other
women created by out of control commercial- sis caused by Karnataka government’s terri- relating to Aadhaar flaws and its weak archi- agencies have also proved this, including
isation of residential areas. Topped off by a ble handling of river water dispute legal cases tecture, and most of those issues are coming reporters. In any event, the case in Supreme
city governance that seemed to have been cap- in the Mahadayi/Mandovi and Cauvery tri- true today. The UPA government spent thou- Court should provide the direction on future
tured by vested interests and hence the hope bunals. The high farmer suicide is a tragic tes- sands of crores on Aadhaar with no debate shape and safeguards of Aadhaar.

Journey from Delhi slums to Jamaica

enhanced partnership will help advance both of our economies.
Increased heft in our economic relationship would necessarily pro-
vide a broader and deeper, long-term US commitment to India and
the Indo-Pacific region. This would complement our growing defense
and counter-terrorism partnership, and moderate any policy differ-
ences that might arise along the way.
A final point with regard to this pillar is that a strategic view of our
Sixteen-year-old Nisar Ahmed, son of a rickshaw-puller, who has made it to Usain Bolt’s training academy,
economic relationship could eventually lead to a roadmap for a US- tells Sneha Bhattacharjee he will continue to struggle to find his place in the sun
India Free Trade Agreement. To be sure, we are a long way right now

from that aspiration, and there are many intermediate steps to be tak-
en. But we should find creative ways to use our Trade Policy Forum
and our Commercial Dialogue to enhance understanding, build con-
fidence, and solve problems. As with our experience with high tech-
nology exports and the Next Steps in Strategic Partnership, a vision of
where we want to go could help spur the resolution of many of today’s
trade and investment disputes and signal to international companies
that India is fully open for business. A third pillar ripe for enhanced
strategic cooperation is energy and the environment. With the pro-
jected growth of India’s economy, the increasing size of its popula-
tion, the rise of its middle class, and the urbanisation of its landscape,
India’s energy needs for sustainable and inclusive development
are going to be substantial for many years to come.
The US is uniquely positioned to offer India a comprehensive
energy partnership. This includes all forms of energy — coal; crude
oil; natural gas; and nuclear power; as well as technology related to
clean fossil fuels, smart grids, energy storage, and renewable
resources. Indeed, last year the US exported its first major shipment
of crude oil to India. The US can also help provide the supporting
services, infrastructure, and technology that are necessary for
India’s efforts to further develop domestic sources of energy and
enhance energy security.
The US-India Strategic Energy Partnership will convene early this
year at the Ministerial level, and we look forward to welcoming Energy
Secretary Perry to New Delhi. One highlight is our joint work on pow-
er and energy efficiency. As India strives to bring stability to its
expanding power grid, US companies offer the technology and expert-
ise to meet the demands on overloaded transmission and distribution
systems. Our environmental collaboration extends to the oceans and
maritime areas, consistent with Prime Minister Modi’s commitment
to the blue economy. Indeed, these efforts could be expanded on a
regional basis in order to protect the broader marine environment.
Edited excerpts from US Ambassador to India Kenneth Juster's speech
US-India Relations: Building a Durable Partnership for the 21st Century
in New Delhi, January 11
A
typical train journey in India can be a Kingston Club.
numbing experience: all the hutments Youngest among the three children of
and shanties, along both sides of the Saifikunisha and Nankuh, Nisar had the ‘ath-
tracks, where people live with basic facilities. letic’ talent in him since the beginning, say
Sixteen-year-old Nisar Ahmed belongs to his parents. Showing their small yet spotless
Bada Basti of Azadpur, Delhi, one such abode, Saifikunisha recalls how her three
colony. His mother is a domestic help, his children grew up together sleeping on the
father a rickshaw-puller. But Nisar had a gift very floor where now we stood talking.
that his school spotted early. He can run. Despite a knee problem that requires her to
Among nine others chosen from across the shun work, Saifikunisha never stopped work-
country, Nisar will be soon ing as she saw her son work hard to
heading to train at the Racer’s achieve his dreams. “Doctors have
Track Club in Kingston, advised me against straining my legs,
Jamaica, where the sporting leg- but I have to do it because I don’t
end Usain Bolt was trained. want my son to suffer,” says an emo-
Athletics was a chance tional Saifikunisha. Their poverty did
encounter for Nisar, who had not let them deter Nisar from carry-
neither taken part in a sporting ing on the mantle that he had
event nor trained under special acquired on his own. “Nisar’s sir
coaches. “One day, our Physical THE OTHER brought food, especially ghee and
Education sir came to the class
and asked if anyone was inter-
INDIA other protein-rich food that we could
hardly afford, for him,” she says,
ested in taking part in district- adding how important it was for
level championships,” recalls Nisar. “I just Nisar to eat good food in order to build stam- DETERMINED (Left) Nisar working out at the gym; (right) His parents, Saifikunisha and
raised my hand and sir noted my name and ina for running. Nankuh, at their house in Azadpur
class,” he says, adding, “I was the only one to “He has the talent to be an Olympian,”
secure a medal for my school at says the proud father sitting in the 10x10 school, Government Boys Senior Secondary and then return home,” says Nisar, who has
that event”. shanty, adding, “all he needs is the support School in Ashok Vihar. For him, his school been shelling out money from his own pock-
It was then that his teacher, Surinder from the state government and the sports has been a big support in all his endeavours. et to fund the gym expenses.
Singh, started training him and thus began ministry.” “Whatever we had, we have given “I don’t think I would have managed to pull The urge to excel and achieve something
his first steps towards Jamaica. “I took part in it to our child, now it is up to the authorities everything off if it had not been for their sup- bigger than what he has till now keeps this
the GAIL Indian Speed Star and was among to help my son reach where he belongs,” the port,” he says. It is not before 9 or 9.30 in the teenager going. “My achievements are very
the top nine students to have been select- frail rickshaw-puller adds. night that he heads home. “I leave for small when compared to those who have won
ed,” adds an excited Nisar. It was at this event A typical day in Nisar’s life begins at 5 Chattrasal Stadium, where I undergo training laurels for the country but are still struggling
that he broke the under-14 record and was am. After offering his namaaz, and morning for Commonwealth Games, straight from my to make their mark due to lack of facilities and
identified, along with eight others, to train at workout, the 16-year-old heads out to his school. After the training, I go to the gym support from the government,” Nisar says.
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>
OPINION 11
Volume XI Number 45
MUMBAI | 21 JANUARY 2018

Engineering gender equity

in aligning this quota (which kicks in after
accounting for women who gain admission
on the merit list) with the existing 49.5 per
cent quota for Scheduled Castes, Scheduled
A quota for women in IITs is unlikely to work Tribes and Other Backward Classes is but one
dimension of the issue.
The bigger doubt is whether this “quota
fectly competent to compete with men on
their own terms.
Second, even though increasing the pro-
portion of female students in some of the
world's most prestigious engineering insti-
tutes may earn the government brownie
points for positive social engineering, yet it
tution close to home and so on). The second
aspect of the issue lies at the other end of the
value chain: in the companies that hire engi-
neers. That most companies are loath to hire
women engineering graduates is a self-evi-
dent truth; incredibly, this gender bias is alive
and kicking in the technology world as well,

T
he diktat of the ministry of human
resource development to the Indian
Institutes of Technology (IITs) to
ensure that at least 14 per cent of
their seats go to women in the session starting
July 2018, rising to 20 per cent by 2020, is
imbued with the best of intentions. But, as a
solution for ensuring gender equity in higher
engineering education, it is flawed. This is
not to deny the skewed gender ratio in engi-
neering courses, in general, and the IITs, in
particular. The world over, engineering, like
economics, has traditionally been a “guy
thing” and India is no exception. In the United
States, for example, 20 per cent of engineering
school graduates are women. India is, in fact,
ahead here, with women accounting for 28 per
cent of the applicants for the Joint Entrance
Examination last year. Drilled down to the
prestigious IITs, the numbers certainly reflect
poorly on their concern for gender equity —
ranging from 6.5 per cent in IIT Kanpur to
14.7 per cent in IIT Mandi.
So, in that sense, the plan to add at least
550 “supernumerary” seats, admissions for
which will begin once the existing seats are
filled up, appears to address an implicit gen-
der bias. The complexity this exercise involves
system” will further the cause of female engi-
neers in any meaningful way. Women admit-
ted via this route will have to cope, for one
thing, with the visceral resentment general
category students harbour against “quota” stu-
dents — a fact that is unlikely to enhance
women’s reputation in competing on a level
playing field. Women students are unlikely to
appreciate this — just as much as senior
women executives did not appreciate the
directive of the ministry of corporate affairs to
reserve one board position for women. At this
level, women believe themselves to be per-
will not address the bigger issue of societal
norms that impact aspiring women engineers.
This begins at the graduate-application stage.
One indicator: a dipstick survey by IIT Mandi
showed that a smaller percentage of women
who qualified actually joined the IITs. In 2016,
for instance, 2,200 female candidates ranked
above the IIT cut-off, but only 38 per cent of
them joined against 68 per cent for men. A
good part of the reason, investigation revealed,
was that female candidates’ choices were con-
strained by parental and societal restrictions
(such as being pressured to choosing an insti-
which is known to hire more women than the
traditional engineering disciplines.
The Indian technology industry has just
26 per cent of women in engineering roles and
more than half of them quit tech to switch to
roles such as marketing, consulting or product
management. The glass ceiling here is easy to
spot: male engineers move into managerial
positions after six-plus years compared with
eight-plus years for women. When the “forwa-
rd linkages” for female engineers are so weak,
will a backward linkage such as an expensive
IIT education make a significant difference?

Infrastructure push key to growth Restrictive laws will

India will need an annual investment of ~10-15 trillion in infrastructure over the next five years, drawn from
the public and private sectors, to sustain the desired rate of economic growth
stifle drone industry
HUZEFA TAVAWALLA & and have undergone thorough ground
AISHWARYA PUNDIR training and practical training, equiva-
lent to the one undertaken by the aircrew

Public spending should be stepped up substantially not only on roads, railways and waterways, but also on public housing and agri-infrastructure
CHANDRAJIT BANERJEE the National Highways Authority of India.
Availability and procurement of land remains a con-
imum off-take of power from stranded capacities, (b) cre-
ating a unified market for power by acting as a nation-
I
n 2014, the Directorate General of of a manned aircraft or a private pilot
Civil Aviation (DGCA) issued a public licence holder. However, these require-
notice announcing its intention to ments will not apply to drones weighing
release guidelines to regulate the civil less than two kg. Further, the permission
use of unmanned aircraft. The notice of the DGCA needs to be sought prior to
clarified that until the formulation of selling or disposing of any drone.
regulations, a blanket ban will be levied
on the civil use of drones by private par- Shortcomings
ties. Further, in 2016 the Directorate The process for obtaining drone
General of Foreign Trade (DGFT) also approvals is largely through the sub-
restricted the import of drones. The civil- mission of physical forms. Considering
ian use and import of drones was thus that this is the age of digitisation, the
banned in India. application and approval process should
In 2016, the DGCA released draft be digitised.
guidelines which proposed to legalise In addition, the guidelines do not dif-
the flying of drones and at the same time ferentiate between drones used for edu-
regulate them. However, such draft cational or recreational purposes and
guidelines never became law and were commercial purposes. In most drone-
replaced by new draft guidelines released regulated countries, the level of compli-
in 2017. The civil use and import of ances depends on the purpose for which
drones continues to be banned in India drones are used.
as of now. As per news reports, these Also, the guidelines mandate security
draft guidelines (subject to industry’s clearances from the MHA and verification
input) are poised to become drone law in of the character and antecedents of the
India in early 2018. remote pilot from the local sub-division-
al police officer. The verification of char-
Key features acter and antecedents could be justifi-
These draft guidelines apply to the oper- able. However, security clearances from
ation and import of remotely piloted air- the MHA could result in the approval
craft systems (RPAS), which process becoming time-con-
includes drones. The cate- A balanced suming and bureaucratic.
gorisation of such drones is approach that Further, the guidelines
based on their maximum adequately have levied a bar on foreign
take-off weight and they are regulates the use citizens and Indian compa-
classified into categories of drones and at

T
he Union Budget will be presented at a time when
India’s economic growth is likely to have bot-
tomed out. The game-changing Goods and
Services Tax (GST) has been implemented successfully
albeit with some implementation hurdles which are
being sorted out. Along with GST various other reforms
and policies have been implemented with the intent of
building a more productive and efficient economy. In
this backdrop a focus on development of infrastructure
and raising resources for financing the infrastructure
push should be one of the highlights of the Budget to be
presented in less than two weeks.
As per our estimate, as much as ~10-15 trillion of
annual investment in infrastructure over the next five
years will be needed to sustain the desired rate of eco-
nomic growth. This expenditure must be judiciously
divided between the public and private sectors, with
the latter being brought into sectors and projects where
earning returns is feasible.
However, the conditions have to be right for the pri-
vate sector to invest. Projects should be awarded to the
private sector only after securing key sovereign clear-
ances. Large amounts of resources that are currently
locked in arbitration need to be freed up by ensuring
contractual sanctity and an effective dispute resolution
mechanism. Implementing the Kelkar committee rec-
ommendations on revitalising the public-private part-
nership model could be a good start.
Of course, public spending needs to be the key driv-
er. It can be amplified substantially not only in frontal
sectors like roads, railways and waterways, but also in
sectors such as public housing and agri-infrastructure.
The private sector can supplement the government’s
effort in infrastructure projects in many ways. A sound
policy on asset recycling could help generate funds
needed by the government. Identified public assets can
either be marked for outright sale or leasing out for
operation and maintenance to specialised private play-
ers, much like the TOT (Toll-Operate-Transfer) model of
tentious issue. Multiple planned and upcoming projects
are facing hurdles in urban and semi-urban areas, lead-
ing to projects being stalled or capital locked in arbitra-
tion. The Confederation of Indian Industry (CII) has
suggested the setting up of a Land Bank Corporation
which can act as a definitive publicly available invento-
ry of central government land holdings.
Multiple public entities such as the Railways, air-
ports, defence services and port authorities and so on
can hold land parcels in prime urban spaces, which are
often underutilised. A Land Bank Corporation will lead
to increase in transparency with regard to monetisa-
tion of such land parcels. Such an inventory should
have all details of each land parcel,
There is a need including legal title and restric-
to upgrade tions, if any. While industry will
railway get access to all available
infrastructure resources, public entities will be
and increase the able to attract a better value for
availability of their assets, thus benefiting both
freight wagons. parties.
This will give a Electricity and power is an
huge fillip to important sector for a growing
Make in India economy, but is facing stress.
There is lack of demand from dis-
tribution companies for thermal power, leading to
increase in stranded assets and rise in NPAs from the
power sector. Thermal power is facing stiff competition
from renewables, which have become cheaper in recent
years, leading to increased pressure for renegotiation of
longer-term power purchase agreements (PPAs). We at
CII have suggested the setting up of a National Power
Distribution Company (NPDC) on the “one nation, one
market” philosophy, much like GST.
State-level distribution companies tend to buy pow-
er from the cheapest source, overlooking long-term
strategic and diversification concerns, something an
NPDC can help overcome. A national power distribution
company could help in many ways, by (a) ensuring min-
al price point and (c) addressing strategic concerns
around diversification of power generation. The gov-
ernment should also address the financial viability of the
sector, as NPAs of power generators and loans of state
distribution companies are having an adverse impact on
state Budgets.
There is an urgent need to upgrade railway infra-
structure and increase the number of freight wagons. At
present, we face a shortage of wagons, which in any
case need modernisation. A government policy for
procuring new-generation freight wagons from the pri-
vate sector could be a boon for the sector. First, it would
free up additional resources towards the upgrade and
maintenance of railway infrastructure. Second, it would
likely earn more revenues for Indian Railways through
increased haulage. The third benefit would be to
increase the supply of wagons for IR customers who
otherwise would have considered road transport alter-
natives. Additionally, Indian wagon manufacturers will
be revived with new orders, new technologies and new
designs, thereby giving a huge fillip to the Make in India
programme.
Over the past three years, the government has
brought in various reforms such as demonetisation,
GST, the Banking Regulation (Amendment) Act, the
Real Estate Regulatory Authority and initiatives such as
ease of doing business, infrastructure investment and
bank recapitalisation, along with a host of other social
reforms aimed at building a solid foundation for the
economy to grow and prosper.
All these measures have instilled hope and optimism
for the future, along with increased expectations from
the government for the upcoming year. Industry is hope-
ful that this track record will be continued, with prom-
ising initiatives to be taken in the Union Budget for
2018-19.
The writer is Director General, Confederation of Indian
Industry
nies owned by foreign com-
that range from nano drones the same time panies, from owning drones.
(less than 250 grams) to large encourages the This restriction will most
drones (greater than 150 kg). drone industry likely discourage foreign
The first step towards will maximise the drone players.
owning a drone (not falling benefits to be Lastly, requiring the
under the guideline derived from remote pilot to obtain the
exemptions) is obtaining a this new-age same level of training as that
Unique Identification technology required of the holder of a
Number (UIN), subse- private pilot licence could be
quently followed by obtaining a drone construed as unreasonable.
flying permit (UAOP).
The exemptions for issuance of UIN Conclusion
and UAOP (for civilian use) are mainly Drones are a new-age technology with
offered to drones weighing less than two applications spreading across various sec-
kg (nano and micro drones), provided tors and industries. Many Indian start-
they are flown within 50ft and 200ft ups are also looking to provide enterprise
(respectively), along with certain other drone solutions and have already started
limitations as detailed in the guidelines. catching the attention of big corporations.
For obtaining a UIN, among other However, one cannot ignore the safety
requirements, the applicant must sub- concerns and issues arising from the use
mit details of the operator, specifications of drones.
of the drone, purpose and area of opera- While we wait for the DGCA to release
tions, security clearance from the min- the final regulations, the draft guidelines
istry of home affairs (MHA), and verifi- in their current form may be overly
cation of the character and antecedents of restrictive and lay down procedures
the remote pilot(s) from the local sub- which would only increase the adminis-
divisional police officer. trative burden of the regulators.
In addition, for obtaining a drone fly- Thus, a balanced approach should be
ing permit, the applicant must submit adopted which adequately and efficient-
the UIN number and related details, ly regulates the use of drones, but at the
copy(ies) of MHA clearances, details of same time maximises the benefits to be
the remote pilot(s) along with their train- derived from them and encourages the
ing records, permission of the owner of drone industry.
the land used for drone take-offs/land-
ings and other government-related per- Huzefa Tavawalla is head of the international
missions. commercial law practice, and Aishwarya
To be eligible to fly a drone, a remote Pundir is a member of the technology practice
pilot is required to have attained 18 years group, at Nishith Desai Associates

> OTHER VIEWS

Price deficiency payments the State must protect free speech Big promises
way forward in agriculture SC order on Padmaavat welcome But land scarcity a tricky issue in Bengal
More farmers can be covered, with no The State cannot choose sion enshrined in Article The Bengal Global Business least a part of the gap is the
need for government procurement between protecting freedom
of expression and preserving
19(1)(a) of the Constitution.
The interim order, which
Summit 2018 concluded on a
positive note. The state has
land issue, which remains
unresolved. The state gov-
law and order. It has a duty paves the way for Padmaavat been promised investments ernment’s position on land
States have generally shown more sensitivity and imagination to do both. This is the core to be released on January 25, amounting to almost ~2.2 acquisition is arguably the
than the Centre in dealing with agricultural issues, including message of the Supreme is in line with a series of judi- trillion. This number, even fairest strategy. Yet staying
responding to the crisis from falling crop realisations. Thus, Court order staying the noti- cial decisions. In the current though it is a tad less than aloof may not always help;
we have the Madhya Pradesh (MP) government’s Bhavantar fications and decisions of four controversy, the filmmakers what was signed for in 2015 both landowners and indus-
Bhugtan Yojana, a scheme that pays farmers the difference states to prohibit the screen- agreed to change its name and 2016, is still quite trialists need some help in
between the official minimum support price (MSP) and the ing of the film Padmaavat, from Padmavati to Padmaa- impressive. Even if a quarter closing deals. The land issue
average modal or most-quoted rate in markets for any crop. and directing them to ensure vat. The new title indicates it of it sees the light of day in is acute in a densely popu-
And unlike physical procurement, which entails additional that law and order is main- is based on a medieval poem the forthcoming year, it will lated, land-scarce state. The
costs of handling and storage, Bhavantar money is directly tained during its exhibition. on a legendary Rajput queen be a remarkable achieve- problem has been com-
credited into farmers’ bank accounts. It enables covering Gujarat and Rajasthan have and not any historical per- ment for the Mamata pounded by the legacy of the
more farmers even without a single tonne being bought by government support to producers does not involve direct notified a ban, while Haryana sonality. They also agreed to Banerjee government. political battle around the
government agencies. market intervention. To the extent the government simply and Madhya Pradesh have several cuts suggested by a However, there is a large Nano project in Singur.
The Congress government in Karnataka under Mr pays the difference between the MSP and the market-deter- indicated they would follow special panel formed by the gap between promise and There could be issues related
Siddaramaiah has, likewise, been giving a ~5-per-litre incen- mined price, such schemes are less market-distorting, while suit. What troubled the court CBFC. The Supreme Court practical reality. The prom- to infrastructure, like roads
tive to milk farmers over and above the rate that dairies are also more economical and equitable than programmes requir- was that creative freedom has indicated where the con- ised Jindal steel plant, whose and power, labour and work
paying — which is again transferred separately to their ing physical purchases and stocking. For all the risks of price could be so easily prohibited stitutional duty of state gov- foundation stone had been ethos. The way forward
accounts. The scheme has partially helped insulate manipulation by market players — which, just as in stocks, by the state citing a possible ernments lies. It is now up to laid by the former chief min- depends on the wisdom and
Karnataka's producers from the current crash in milk prices, isn’t beyond regulation — there is no doubt, though, that risk to public order. It needs them to live up to that ister, Buddhadeb Bhatta- foresight of the state’s polit-
which has hit their counterparts in Maharashtra and other deficiency payments are the way forward. no reiteration that summary expectation. charjee many years ago, will ical leadership.
states more hard. Both MP and Karnataka are essentially bans on films violate the free- not see the light of day. One
operating price deficiency payment programmes, wherein The Indian Express, January 19 dom of speech and expres- The Hindu, January 19 reason that could explain at The Telegraph, January 19
https://t.me/EStore33 https://www.estore33.com/ https://t.me/TheHindu_Zone
12
>
MUMBAI | 21 JANUARY 2018 1

Hollywood hopes to up SWEET BEGINNINGS TO BUDGET EXERCISE

the game in 2018

With major tent-pole releases slotted for 2018, studios hope to continue to
witness growth from the segment, despite challenges in exhibition
URVI MALVANIA
Mumbai, 20 January

O
ver the past three years, one of the
most significant developments at
the Indian box office has been the
increasing clout of Hollywood titles.
Commanding close to 13 per cent of the
total box office revenue in 2017, the genre
has seen a spike in footfalls, revenue and
consequently, a definite spike in interest by
multi-national studios in India as a market.
Experts believe that 2018 will be an inter-
esting year as Hollywood tries to grow the
base it has built for itself, while battling
challenges quite different yet similar to ones
it already does.
The year gone by was perhaps one of
the most significant for Hollywood as it for-
tified the power of franchise films further.
The top-five performing films from the West
were all franchise films — two being super-
BLOCKBUSTER SHOWS
hero franchises, one horror and two in the Top 5 Hollywood movies of 2017
thriller category. At the same time, there FAST & FURIOUS 8 (April 14, 2017) JUMANJI: WELCOME TO THE JUNGLE*
were films like Logan which may not have (December 29, 2017)
Number of Screens: 1,900
broken records at the box office, but gave
confidence to studios for releasing R-rated Box office: 1.28 billion Number of screens: 1,157
(A-rated in India) projects in India viably. Box office: 656 million Union Minister for Finance and Corporate Affairs Arun Jaitley at the halwa ceremony to mark the commencement of Budget
THOR: RAGNAROK (November 3, 2017)
Vivek Krishnani, managing director, printing process for the Union Budget 2018-19 in New Delhi on Saturday. Minister of State for Finance, Shiv Pratap Shukla, and
Sony Pictures Entertainment (India) or SPE, Number of screens:1,307 ANNABELLE: CREATION (August 18, 2017) Finance Secretary, Hasmukh Adhia, are also seen PHOTO: PTI/PIB
says while franchise films have proven to Box office: 766.7 million Number of screens: 1,159
have a particular pull at the movies, locali- Box office: 630 million
sation continues to be the key to increase SPIDER-MAN:HOMECOMING (July 7, 2017)
Number of screens: 1900
IPL auction: Stokes, Ashwin among
footfalls for Hollywood films. “We’ve had a *Jumanji is still running in theatres
Source: Trade sources
great year. Two of the top-five performing Box office: 750 million
films this year have been from our studio,

and localisation has played a big role. For
both Spider-man: Homecoming and
Jumanji we ensured the dub scripts in
Indian languages had local/colloquial ref-
erences. This way, the film does not sound
foreign; it gives a local touch. The strategy’s
success can be gauged from the fact that we
actually added around 25 screens for
Jumanji in its third week!”
The power of localisation was witnessed
in 2016 when Disney’s Jungle Book raced
ahead of many native Hindi films to clock
~1.88 billion at the box office, the Hindi ver-
sion contributing more than ~1 billion. In
2017, the impact of localisation only grew as
studios sharpened focus on making films
more palatable for audiences in India
through smart scripting of the dubbed ver-
sions. A part of it was also seen in the mar-
keting when, for example, SPE released the
trailer for Spider-man: Homecoming in 10
Indian languages.
The share of Hollywood in the overall
box office pie surged in 2017 to 13 per cent,
according to industry estimates. Around a
decade back, its share was around five per
cent, and five years back around seven per
cent. A robust push on localisation of con-
tent and innovative marketing has helped
to accelerate growth of Hollywood’s share at
the Indian box office. A fraction of growth
in share has also come from a tepid outing
Bollywood has had at the box office in the
past couple of years.
Vijay Singh, chief executive officer, Fox
Star Studios, said, “The approach towards
marketing Hollywood films has also
changed over the years, budgets have
become aggressive, keeping in mind the
local competition and increasing market
share of English movies. Major spends are
now diverted towards digital and social
media with a targeted approach to reach
out to the fans, depending on the scale, like-
ability, awareness for the same.”
SPE’s end of the year release Jumanji
saw some interesting innovations in mar-
keting. The studio placed a motion sensor
automated snake at malls and movie halls.
The installation took after a sequence in
the film where the characters are required
to get something important from under a
snake. In the mall/theatre activation, the
motion sensor automated snake would rear
its head every time someone put their hand
close to its ‘nest’.
“Lack of availability of talent (actors) to
be present in person means we have to be
innovative and think out of the box. Posters
and hoardings will only get you so many
eyeballs. It is how you integrate the con-
tent into the marketing to create enough
intrigue to drive footfalls that matters,”
Krishnani says.
In 2018, Hollywood studios in India will
hope to build on the progress the genre has
made over the past few years. Franchise
films will continue to dominate the calen-
dar, with big-ticket movies like Avengers:
Infinity War and Aquaman being released,
along with titles from the X-Men (Dark
Phoenix and Deadpool 2), Marvel (Black
Panther) and the Hans Solo movie in the
Star Wars saga called Solo: A Star Wars
Story.
“The year 2018 should be another good
year for Hollywood and it’s going to be a big
year for sequels. From the Fox stable, we
have one of the most anticipated sequels of
this year — Deadpool 2 (May 18) — apart
from a few other exciting sequels, including
Maze Runner 3, The Dark Phoenix (X Men
franchise) and Predator. We also have quite
a few big original launches, including James
Cameron’s Alita: Battle Angel and Red
Sparrow,” Singh says.
More on business-standard.com
16 marquee players
PRESS TRUST OF INDIA
New Delhi, 20 January
Troubled England all-rounder
Ben Stokes and Indian off-
spinner Ravichandran Ashwin
are among the 16 marquee
players for the upcoming IPL
(Indian Premier League)
Players’ Auction in Bengaluru
on January 27 and 28.
Australian speedster
Mitchell Starc and England
captain Joe Root are also
among the top foreigners who
will be under the hammer in
the auction.
Root’s entry in the marquee
list is an indication that
England and Wales Cricket
Board has finally understood
what their players want.
Stokes was cleared to play
for England again on
Wednesday despite being
charged with affray. He was ear-
lier suspended by the England
and Wales Cricket Board (ECB)
from international duty for his
involvement in an incident out-
side a nightclub in September
that reportedly left a man with a
fractured eye socket.
While more than 1,000
players had registered for the
auctions, the Board of Control
for Cricket in India (BCCI) has
pruned the list to 578 players.
The players have been
bracketed into 8 distinct slabs
as per their profiles. The slabs
for internationals (Indian and
foreign) are ~2 billion, ~15 mil-
lion, ~1 billion, ~7.5 million, and
~5 million, respectively, while
uncapped players are base-
priced at ~4 million, ~3 million,
and ~2 million, respectively.
“A lot of strategising and
number-crunching is involved
before a cricketer is picked at
the IPL player auction. The
dynamic nature of the auction
makes it unpredictable and
exciting,” IPL Chairman Rajiv
Shukla said. “The eight fran-
chises have given us an indica-
tion of what their core would be
with their Player Retentions and
IPL 2018 Player Auction will be
an important step towards the
creation of a successful team.
The marquee list is full of star
players, but I am also looking
forward to the uncapped Indian
players who have proved their
mettle in the earlier editions of
the VIVO IPL and are sure to
attract high bids.”
Among the 16 marquee
players bracketed into M1 and
M2 (marquee list) categories,
current India players Ashwin,
Shikhar Dhawan, Ajinkya
Rahane are in the top marquee
list along with Stokes, who is
again expected to trigger a
bidding war.
Currently the world’s pre-
mier fast bowler Mitchell Starc
and T20 match-winner Chris
Gayle are also in the M1 cate-
gory. Some of the veteran
internationals in the second
tier of the marquee list (M2)
are Harbhajan Singh, Gautam
Gambhir and Yuvraj Singh.
With 13 Indian players in
the ~2-billion bracket, after a
long time franchises will get to
choose from current India
players. Murali Vijay, Kedar
Jadhav, KL Rahul, Yuzvendra
Chahal, Dinesh Karthik are in
the top wishlist of the fran-
chises along with Afghan sen-
sation Rashid Khan Arman.
South African pace spearhead
Kagiso Rabada is in the ~15-mil-
lion bracket while Brandon
McCullum and Faf du Plessis
are priced at ~2 billion and
Chennai Super Kings have
their Right to Match Cards.

How a TV serial watched by 400 mn changed gender beliefs in rural India

SWAGATA YADAVAR (INDIASPEND.IN) How popular entertainment became who opposed her even rammed a car
20 January a tool for social messaging against her legs. But Khushwaha persist-
Why is popular entertainment being used ed and today, ten girls from her village go
In Pratapgarh, a village that could be any- to deliver critical social messages on gen- to college.
where in the Hindi belt, a young man, der rights? Because it can reach and con- In Chhattarpur village in Bihar, a few
Ravi, gets to know that his wife, Seema, is vince the target audience fast, according to men formed a group and vowed to stop
pregnant with a girl child, third time in a activists. domestic abuse, plan their families and
row. He wants her to get an abortion Here are some discouraging trends in help their wives with housework. “Ghar
because he wants a male child. He forces women’s empowerment: In 2015-16, only mein haath bataeinge, hum khana bhi
Seema to accompany him to a doctor who 53.5 per cent women in the reproductive banaenge (We will help our wives in
agrees to conduct the abortion though the age-group used modern methods of con- chores, we will also cook),” was their slo-
foetus is past the 20-week deadline for a traception, a decline from 56.3 per cent in gan.
medical termination of pregnancy. Seema 2005-06, according to National Family
undergoes the abortion but is critical, hav- Health Survey-4 data. In 2015-16, 28.8 per The show expands, but funding has
ing lost a lot of blood. She is rescued by her cent of married women faced spousal now run out
sister Sneha, an idealistic young doctor violence, the figure is 31.1 per cent in When the makers of the serial found
who rushes her to the hospital and threat- rural areas. that 40 per cent of their viewers were
ens to call the police. Poonam Muttreja, executive director between 15 and 24, the ministry of
This is the plot of the fourth and fifth of the PFI and a 40-year veteran of the health and family welfare requested
episode of Main Kuch Bhi Kar Sakti Hoon development sector, said she was disap- them to include the government’s ado-
(I, a woman, can achieve anything), a soap pointed and frustrated at how little organ- lescent programme, Rashtriya Kishor
produced by Population Foundation of isations such as hers had impacted social Swasthya Karyakram (RKSK), National
India (PFI), a Delhi-based pop- norms and attitudes. Most Adolescent Health Programme, in the
ulation research and advoca- information education com- second season.
cy organisation. munication initiatives had The second-season’s focus was on teen
What marked this soap shown little impact, she said. problems. It talked about Prita, Sneha’s
apart was its use of education- AN Then, on a visit to a Gates The plot stayed real but pushed for Pradesh. The show was also converted to to loss of opportunity before the show; sister, and the challenges she faced run-
entertainment, or ‘edutain- indiaspend.org Foundation conference on social change radio, with readings from Sneha’s diaries, after the first season, the numbers rose to ning a girl’s football team in the village.
ment’, to talk about women’s STORY behaviour change communi- The series used characters who reflected and broadcast on 230 All India Radio sta- 43 per cent. Farhan Akhtar, Bollywood actor and
reproductive health and gen- cation, she became aware of rural reality-Sneha’s brother, Purab, is an tions. It was also translated into 12 lan- Only 2 per cent men felt that marriage director, volunteered to be a sutradhar or
der rights. Through its protag- the impact of entertainment unemployed alcoholic who beats his wife guages for regional telecast. meant loss of opportunity before the narrator in the second season and talked
onist Sneha Mathur, the series dealt with education, or edutainment as it is called. and doesn’t think about contraception. To reach ‘media-dark’ regions of Uttar show; the numbers grew to 31 per cent about gender equality after each episode.
topics such as child marriage, age at first In South Africa, Soul City, a television Despite this, Sneha’s aunt prefers him over Pradesh, Bihar and Madhya Pradesh-areas after the first season. “We, then made eight films around the
pregnancy, spacing, family planning, sex series in the 1990s, talked about a range of his sisters. Purab’s wife, Ratna, has three with little TV-a radio adaption was broad- There was also a shift in beliefs about six themes of the [RKSK] programme of
selection, quality of healthcare and health and development issues such as children, is pregnant again and has little cast using six community radios. the age at a woman should have her first nutrition, sexual and reproductive health,
domestic violence. HIV/AIDS, rape, disability and alcoholism decision-making power. child before the start of the show, 57 per gender equality, mental health, prevent-
The serial ran for two seasons on the and created positive impact on people’s But the serial shows Purab reforming Impact: Disapproval of early cent of mothers-in-law voted in favour of ing injuries and substance abuse,” said
national channel, Doordarshan, from 2014 behaviour. into a responsible and positive character. marriage for girls rose from 23 per 21-25 years. After the first season, 86 per Muttreja.
to 2016 and was watched by 58 million Could such an approach work in India? “People are tired of showing evil moth- cent to 43 per cent cent agreed that this age bracket was ide- PFI researchers created the name
viewers in its first season, according to With this thought, Muttreja sought the ers-in-law and daughters-in-law plotting To assess the impact of the serial after the al for motherhood. ‘Saathiya’, meaning friend, for peer edu-
television audience measurement and expertise of Arvind Singhal, a US-based against each other,” said Muttreja. “They first season, the PFI undertook an evalua- The show also appears to have reduced cators who run the programme. CDs of
Indian readership survey. The two sea- communication and social change expert. are ready for positive content that talks tion of 30,000 households in Bihar and the number of women who believed that the films were made part of the kit dis-
sons and their reruns together reached Singhal used the concept of “positive about real-life issues.” Madhya Pradesh. These two states a girl shouldn’t return to her parental tributed to peer educators.
over 400 million people, according to deviance” in the show. This meant nudg- The makers used multiple tools to account for 15 per cent of India’s popula- home once she marries-from 45 per cent After the last episode ended in 2016,
Doordarshan. ing communities to re-discover tradition- increase the series impact-TV, radio, social tion and are in need of greater awareness at the start of the season to 28 per cent the makers found it difficult to find fun-
The project, funded by United al wisdom and act on it. Singhal and media and celebrity spots. about family planning. after it ended. The series also convinced ders for a third season, despite the show’s
Kingdom’s Department of International Muttreja documented 60 cases of those Each episode ended with a message It was found that the programme many female viewers that it was not okay popularity. There is little corporate fund-
Development, Gates Foundation and sup- who had defied regressive social norms and a quiz and a number on which to give reached 36 per cent of TV-owning and 72 for men to hit their wives on the suspi- ing available for projects that revolve
ported by United Nations Population but stayed rooted in their communities. a missed call. When called back, respon- per cent of radio-owning population in cion of infidelity — 66 per cent supported around behaviour change, said Muttreja.
Fund, managed to change attitudes, “We made sure that the serial had great dents could either answer the quiz or par- these two states. Of its viewership, 52 per the ‘punishment’ before the show, and it The makers calculated the cost of pro-
according to a 2015 PFI study. aesthetics like a Hindi film because we ticipate in a discussion. The serial received cent were women. came down to 44 per cent afterwards. duction, outreach, promotion and inter-
While 73 per cent women knew about wanted to be aspirational,” said Muttreja. 1.4 million calls from across the country As we said earlier, the show helped There are other instances of how the active voice response service and the
the legal age of marriage before the show, The team approached theatre and film over two years. Men and women called boost awareness about critical gender show’s protagonist inspired communities. reach (400 million as per Doordarshan), at
their numbers increased to 83 per cent director Feroz Abbas Khan, who made and shared their opinions, poems and issues. Among women with married chil- In Nayagaon village in Madhya Pradesh, ~1.08 per capita for both seasons or ~0.72
after the first season, the study found. films such as Gandhi, My Father, to direct vowed to change. The calls were recorded dren, awareness about the legal age of where no girl had ever gone to college, per capita per year.
Before the serial, 57 per cent men cited the series. The script took a year and a and analysed. marriage was 59 per cent before the start Ladkuwar Khushwaha, a 16-year-old girl
the fear of side-effects for not using mod- team of 12 experts, ranging from sociolo- ‘Sneha Clubs’, where viewers discussed of the series, rising to 80 per cent after the decided to continue her studies after Reprinted with permission from
ern methods of contraception. This num- gists to gynaecologists and theatre artists, issues raised, were formed with the help of show was screened. Around 23 per cent of school. While her parents supported her, IndiaSpend.org, a data-driven, public-interest
ber fell to 32 per cent after the first season. contributed. 10 non-profits in Bihar and Madhya these women felt that early marriage leads the village objected. It is alleged that those journalism non-profit organisation