SEPTEMBER 2019, Rs 50

SEPTEMBER 2019, Rs 50

EDITORAMIT BRAHMABHATT

ASSISTANT EDITORSHRIVATSA JOSHI

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Editor: Amit Brahmabhatt

Volume XV, No 3Issue date September 1-30, 2019Released on September 1, 2019

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CONTENTS

YOUR GATEWAY TO INDIA INC.

www.indiabusinessjournalonline.com

INDIA BUSINESS JOURNAL SEPTEMBER 2019 3

Guest Column ..........36Economic Terrorism: Informal

economy,whilebenefitingpoorersections,plays a

damning role of supportingterrorism and other anti-socialactivities.Management Mantra .........38"Passion Is An ImportantIngredient for success": ArunNagpal, Co-Founder, Mrida GroupGlobal Wrap-Up ..........40A quick round-up of news andcurrent affairs across the worldReaders' Lounge ..........44Catch up with new book launches- The Rise Of Goliath- Selfie Of Success- The Right To Sanitation In India

Star Talk ..........46Forecast by Bejan DaruwallaKnowledge Zone ..........48- Rajiv Kumar,

Finance Secretary- Interoperability- Spiritual Corner: Adjust EverywhereHot Seat ..........50Ishita Yashvi, Co-Founder,Cross Border Kitchens

Viewpoint ..........4Stimulus Package For An AilingEconomyNews Round-Up ..........6A brief on news, tie-ups,appointments and awardsOil & Gas ..........14Charged Up: The Indian

hydrocarbonsector isbubblingwithenthusiasm,thanks to the

government's industry-friendlymeasures and huge growthprospects in the sector.Agriculture ..........16Seeds Of Unrest: Cotton farmers areup in arms against the government'sstringent action against thosegrowing HTBT seeds.Textile ..........24Blue Revolution: With new clothing,innovative designs and customisedgarments, Indian denim companiesare trying every trick in the book tograb a larger share of the market.Spotlight ..........34Welcome Changes: Recentamendments to the IBC Code seekto plug the loopholes and make thebankruptcy law more focused andvibrant.

NEW RELIANCEAs Mukesh Ambani aims totransform Reliance, he replicatesthe success strategies of textileand petroleum to lead the way inhis new ventures of telecomand retail.

COVER STORY

26

MAHARASHTRA'sDEFENCE GAMBITWith cogent policies and asuitable ecosystem, the highly-industrialised State ofMaharashtra is also fast turninginto a major hub for defencemanufacturing. 18

SPECIAL FEATURE

Finally, the government reacted to the gloom-and-doom narrative around theeconomy. Late last month, Finance Minister Nirmala Sitharaman announced

a slew of steps to kickstart growth and restore sentiments of the business com-munity, in particular. The much-awaited stimulus package had arrived at last.

The Centre rolled back the additional surcharge on Income Tax for bothforeign and domestic institutional investors announced in the July 5 Budget.The finance minister assured that violation of corporate social responsibility(CSR) would be treated only as a civil liability and as a criminal offence.

There were many incentives for the automobile industry, which has beenpassing through the worst of times with sharp fall in sales and heavy joblosses. An additional 15 per cent depreciation was allowed, taking the total to30 per cent, to boost flagging auto sales. The earlier proposed increase inregistration fee for new petrol and diesel cars and two-wheelers has beendeferred to June 2020. Ms Sitharaman also assured consumers that their BS-IVvehicles bought before March 31, 2020 would not face de-registration after thenew BS-VI emission norms would come into effect from April 1, 2020.

Besides, the stimulus package included upfront bank recapitalisation ofRs 70,000 crore, with a promise to reduce the cost of credit for consumer goodsand working capital. The Angel Tax provision, which had got the startupsworked up, was promised to be withdrawn. And there was further assurance ofeasing business environment by simplifying formalities around GST.

Coinciding with the stimulus package was a booster dose from the RBI. Thecentral board of the RBI decided last month to accept the recommendations ofthe Bimal Jalan Committee and transfer Rs 1.76 lakh crore to the governmentthis fiscal year should signal a welcome end to the conflict between the fi-nance ministry and India's central bank on at least the issue of quantum oftransfers to the exchequer. With the debate on the RBI's transfer of excesscapital settled, the government should quickly and judiciously utilise thiswindfall gain for public investment and revive the sputtering growth enginesof the economy.

Days after announcing the stimulus package, the government rolled out thered carpet for foreign investors and further opened the doors to foreign directinvestment (FDI). The stringent condition of local sourcing of 30 per cent forsingle-brand retail was set aside. Besides, the government allowed 100 percent FDI in commercial coal mining and in contract manufacturing through theautomatic route. FDI in contract manufacturing is particularly aimed at attract-ing global vendors looking to diversify supply chains as the US and Chinabattle it out in a trade war.

The most welcome part of the stimulus package is the government's readi-ness to abandon the we-know-it-all attitude and respond to concerns voicedby the industry. The measures send out a positive signal of the Modigovernment's willingness to engage with the reality on the ground. However,it remains to be seen whether this somewhat hectic infusion of funds intobanks, and through them hopefully to some NBFCs and MSMEs, will neces-sarily lead to a pick-up in credit growth. It also needs to be seen whether thesemeasures will have the desired impact in terms of bringing back investmentand consumption demand in the economy.

Consumer spending needs to pick up for businesses to feel persuaded toborrow and invest, and that cannot realistically be expected if jobs are lostmore than they are generated. The Centre must create jobs and invest in high-multiplier sectors such as railways, besides social infrastructure. A more con-genial business environment alone will not do the trick.

Booster Shots

Consumer spending needsto pick up for businessesto feel persuaded toborrow and invest, and thatcannot realistically beexpected if jobs are lostmore than they aregenerated. The Centremust create jobs and investin high-multiplier sectorssuch as railways, besidessocial infrastructure.A more congenial businessenvironment alone will notdo the trick.

VIEWPOINT

Finance Minister NirmalaSitharaman: Delivering a mini-Budget

4 SEPTEMBER 2019 INDIA BUSINESS JOURNAL

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NIIF gets $2 billion fromforeign pension fundsNational Investment andInfrastructure Fund of India(NIIF) has received fundingcommitment of up to $2billion (over Rs 14,000 crore)from an Australian and aCanadian pension fund.AustralianSuper, the nation'slargest superannuation fund,and Ontario Teachers'Pension Plan of Canada havesigned agreements to invest$1 billion each in the NIIFMaster Fund. In a statement,NIIF has that the agreementsinclude commitments of $250million each in the MasterFund and co-investmentrights of up to $750 millioneach in future opportunities,alongside the fund.

India world's second-largest scrap importerIndia has emerged the world'ssecond-largest scrapimporter, toppling SouthKorea, even as the country isin the process of drafting acomprehensive metal-recycling policy. Scrapimports increased by 35 percent in the first half of this


Arun Jaitley, the formerfinance minister andstalwart of the BharatiyaJanata Party, passed awaylast month at AIIMShospital in New Delhi. Hewas 66 years old.Mr Jaitley was unwell for alarge part of the last twoyears, and had undergone akidney transplant surgery

OBITUARIES

last year. During theNarendra Modi government'sfirst term in office,Mr Jaitley was seen as theprime minister's 'go-to' man.As finance minister, hepresented five UnionBudgets of Modigovernment's first term. Alawyer by profession,Mr Jaitley was among theleaders who were jailed bythe Indira Gandhi govern-ment during the Emergency.As finance minister, he wascentral to most of thegovernment's reforms, such asthe GST and the IBC Code.

Arun Jaitley (28-12-1952 - 24-08-2019) Sushma Swaraj (14-02-1952 - 06-08-2019)

Sushma Swaraj, 67, theformer Union minister forexternal affairs and seniorBJP leader, passed away lastmonth after suffering acardiac arrest. Ms Swaraj,who entered politics in themid-1970s, was the firstprominent woman leader ofthe BJP. A powerful oratorwho was fluent in both Hindi

and English, she was at onepoint widely viewed as afuture prime ministerialface of the party.As Leader of Opposition inthe Lok Sabha during theUPA tenure, Ms Swarajhad made a mark forherself.As foreign minister, she hadbeen one of the most-followed politicians onsocial media.She had won the hearts ofmany distressed people byresponding to their calls forhelp on social media almostround the clock.

2 lakh laid off by autodealers in 3 monthsAround two lakh jobs havebeen laid off across automo-bile dealerships in thecountry in the last threemonths as vehicle retailersattempt to tide over the

impact of unprecedentedsales slump, according toindustry body Federation ofAutomobile Dealers'Associations (FADA). Mostof the cuts have happened infront-end sales jobs. With noimmediate signs of recovery,

FADA fears that the job cutsmay continue, with moreshowrooms being shut in thenear future. It has soughtimmediate intervention fromthe government, such asreduction of GST, to providerelief to the auto industry.

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Verbatim...year to 3.87 mt. Shipmentsfrom the United ArabEmirates was up 27 per centto 7,11,544 tonnes, whilethose of the United Kingdommore than doubled to5,30,104 tonnes. However,supplies from the US weredown 7 per cent to 3,01,330tonnes. Scraps are used asinput by secondary steelmanufacturers for producingrebars used in construction.

Kerala Cabinet nod forRs 66,079-cr rail corri-dor The Kerala Cabinet hasgiven the go-ahead to build aRs 66,079-crore, semi-high-speed rail corridor along a532-km-long track, connect-ing Kasaragod in the north toThiruvananthapuram in thesouth by 2024. The megainfrastructure project wouldbe implemented by theKerala Rail DevelopmentCorporation Ltd (KRDCL), ajoint venture of the Keralagovernment and the RailwaysMinistry. A feasibility studycarried out by Paris-basedSystra as the generalconsultant for the railcorridor has projected theinternal rate of return as 5.6per cent and 8.1 per cent for30 and 50 years respectively.

Curbs lifted on contractfarming produce Personsand entities engaged incontract farming agreementswith farmers are exemptedfrom the existing licensingand restrictions on stocklimit and movement offoodstuff under the EssentialCommodities Act, 1955, agazette notification has said.The notification adds that theRemoval of LicensingRequirements, Stock Limitsand Movement Restrictionson Specified FoodstuffsOrder, 2016 of the EssentialCommodities Act is amendedin favour of contract farmingpurchasers. It may be

recalled that the ModelContract Farming Act passedin 2018 had promised toremove the restrictions oncontract farming.

Relief for startups as capon DVR shares raised TheCentre has sweetened thedeal for startups and othercompanies with regard toissue of shares with differen-tial voting rights (DVR).Promoters of Indiancompanies can now issue amuch larger proportion ofshares with such rights,helping them retain controlover their companies even asthey raise equity capital frominvestors. The cap on DVRshares has been raisedupwards to 74 per cent ofthe total voting power fromthe existing 26 per cent.Another key change is theremoval of the earlierrequirement of distributableprofits for three years for acompany to be eligible toissue shares with DVRs.

Pricing of TV channelunfair to viewers: TRAIBroadcasters and distributionplatform operators (DPOs)are misusing pricing flexibil-ity "to throttle marketdiscovery of TV channelprices by giving hugediscounts on the bouquets",the TRAI has observed. Thetelecom regulator is now setto take a relook at imposingcurbs on discounts offeredby broadcasters on theirchannel bouquets. It hasreleased a consultation paperlast month, seeking viewsfrom stakeholders on theissue. The regulator believesthat in the absence of anyrestrictions on discounts onbouquet offerings,broadcasters are making theprices of their a-la-cartechannels "illusory", and thatthis is impacting consumers'choice.

"I think that the clearmessage of thestimulus package isthat this is agovernment thatlistens and thegovernment thatcares."

K SubramanianK SubramanianK SubramanianK SubramanianK SubramanianCHIEF ECONOMIC ADVISER


"One has to maintaina positive sentimentand capitalise on the

opportunitiesbecause the mood of

doom and gloom isnot going to help

anyone."

Shaktikanta DasShaktikanta DasShaktikanta DasShaktikanta DasShaktikanta DasGOVERNOR, RBI

"Most countriesthink that climate

change is the crisisof the future. But

global warming andrising temperaturessignal to us that we

are entering anunknown area."

Jamshyd GodrejJamshyd GodrejJamshyd GodrejJamshyd GodrejJamshyd GodrejCHAIRMAN, GODREJ

& BOYCE

"The main concernnow with the push fore-vehicles is that it isthe endgame for theoil industry. We donot believe that.Does it mean that itis business as usual?The answer is no."

M K SuranaM K SuranaM K SuranaM K SuranaM K SuranaCMD, HPCL

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R KABIL to scout formineral assets abroadNational AluminiumCompany (NALCO),Hindustan Copper (HCL)and Mineral ExplorationCorporation (MECL) haveformally inked a joint venture(JV) agreement to formKhanij Bidesh India (KABIL)to scout for strategic mineralassets, like lithium andcobalt, abroad. The JVcompany will be involved inacquisition, exploration andprocessing of strategicminerals abroad for commer-cial use and for supply tomeet domestic requirement.While NALCO will hold 40per cent stake, HCL andMECL will have equity shareof 30 per cent each in the JVcompany. While 12 strategicminerals have been identified,the initial focus will be onlithium and cobalt assets.

Government to transferBSNL's debt to SPV Thegovernment is mullingtransfer of land assets andloans of loss-making BSNLto a special purpose vehicle(SPV) in an effort to makethe State-owned telecomcompany a debt-free entity.However, BSNL employees'union has alleged that theland parcels proposed to betransferred to the SPV at avalue of Rs 20,210 crore arein prime locations in bigcities and are "grosslyundervalued". The BSNLmanagement has denied theallegations, saying that thevaluation has been done onlyon an indicative basis andfinal valuation will be donebefore disposing of theproposed land parcels.

Finally, HPCL classifiesONGC as promoter State-run oil refiner HPCL hasfinally agreed to recogniseONGC as its promoter afterthe SEBI warned of "appro-

ONGC lines up Rs 83,000 cr for 25 projects ONGC isinvesting around Rs 83,000 crore in 25 major projects to boostoil and gas production, which has stagnated over the last years.Some 15 of these projects are currently under execution and willdirectly contribute to oil and gas production. The cumulative oiland gas gain from these projects is expected to be over 180 mt ofoil and oil equivalent gas in their lifecycle. India's largest oil andgas explorer produced 24.23 mt of crude oil in 2018-19 and25.81 billion cubic metres (bcm) of natural gas from its domesticfields. Another 10.1 mt of oil and 4.736 bcm of gas was pro-duced from its overseas assets.


priate action" if the marketregulator's advice on the issuewas not heeded by August13. HPCL's decision, made inan announcement to thestock exchanges last month,puts to rest the controversyover ONGC's status after ithad bought the government's51.11 per cent stake in the oilrefiner for Rs 36,915 crore inJanuary 2018. For six,consecutive, quarterly,shareholding-pattern filingsto stock exchanges, includingthe latest for the quarterended June 2019, HPCL hadlisted ONGC as a publicshareholder.

NBCC not to invest inAmrapali's projects NBCChas said that it will not investany money in completingdebt-laden Amrapali's stalledprojects. In July, theSupreme Court had askedNBCC to complete pendingprojects of the AmrapaliGroup at an 8 per centcommission. Replying to aninvestors' query NBCC's

Executive Director (Finance)Yogesh Sharma said that thetotal estimated investmentrequired was aroundRs 8,500 crore, including 8per cent project managementconsultancy margin forNBCC. "This funding will bearranged by the SupremeCourt through its variousmechanisms which it isoperating through theAmrapali group of compa-nies," Mr Sharma said.

BEL's new facility to boostmanufacturing BharatElectronics' (BEL) newfacility is expected to turnaround the fortunes of thecompany's Navi Mumbaiunit. BEL's unit has been inthe business of manufactur-ing shelters and masts andoverhauling of hydraulicsystems of T-72 tanks. Thenew facility will boost theunit's manufacturing andtesting capabilities incomposites, a new areawhich has been identified byBEL for diversification. The

facility will be used to carryout in-house designing andmanufacturing of componentsusing Glass Fibre ReinforcedPolymer (GFRP) and CarbonFibre Reinforced Polymer(CFRP) composites forvarious naval applications,submarines, aircraft andshelters.

IOCL to invest Rs 2 lakhcrore in 7 years Indian OilCorporation (IOCL) will beinvesting Rs 2 lakh crore inthe next seven years to"provide comprehensiveenergy solutions to diverseuser groups". IOCL Chair-man Sanjiv Singh has saidthat this investment will beacross segments, such asrefinery expansion, newtechnologies for clean fuelsand enhanced output, andrefinery petrochemicalsintegration. "IOCL isaggressively leveraging itsR&D expertise to move intohorizon technologies, such as2G and 3G ethanol, biofuels,coal gasification, H-CNG,hydrogen fuel cells, andbattery technologies, amongothers," Mr Singh has said.

HPCL's battery-swapproject for EVs Bracing fora future with less-pollutingfuels, oil refiner HPCL isplanning a pilot programmefor swapping batteries ofelectric two- and three-wheelers at its outlets byDecember. The initiative isaimed at helping thecompany maintain its grip onthe electric vehicle (EV)segment that is set to grow ata rapid pace amid focus ofpolicy-makers on cleanerfuels. The ultimate capacityof the programme has notbeen decided. Two- andthree-wheelers account forabout two-thirds of HPCL'ssales. These two types ofvehicles now make up morethan 80 per cent of allautomobiles on roads.

NEWS ROUND-UP

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Uflex is Aon BestEmployer Company for2019 Uflex, India's largest,fully-integrated, multina-tional, flexible-packagingmaterials and solutionscompany and global player inpolymer sciences, has beennamed Aon Best EmployerCompany based on employ-ees' experience for 2019.Launched in 2001, the AonBest Employers' Programmeis a global study thatrecognises employers'excellence worldwide."Aon's certification confirmsthat our efforts to make ourcompany a great place towork - where the workforceis highly connected andempowered - is reapingrewards beyond our fourwalls," AnantshreeChaturvedi, the vice-chiarman and CEO ofFlexFilms and chief culturalofficer of Uflex, has said.

GIC to invest Rs 4,400 crin nine IRB projectsSingapore's sovereign wealthfund GIC will investRs 4,400 crore in a privateinfrastructure investmenttrust controlled by IRBInfrastructure Developers.As a part of the transaction,IRB will transfer nine of itsBOT (build, operate,transfer) assets into theinvestment trust, in whichIRB will hold the controllingstake of 51 per cent. Theportfolio spans 1,200 km inHaryana, Uttar Pradesh,Rajasthan, Gujarat,Maharashtra and Karnataka.Three of these projects haverecently become operational,and the remaining six areunder various stages ofconstruction. Five of theassets under construction arefour- to six-lane projects.

Wipro wins five-yearCanada airport dealSoftware services major

struggling overseas subsidiar-ies, Tata Steel (Thailand)Public Company andNatSteel Holdings, has hit aroadblock due to delay ingetting regulatory approvals.Last month, TS GlobalHoldings revealed that it hadterminated the definitiveagreement signed with HBISGroup Co to divest itsequity stake in Tata Steel(Thailand) Public Companyand NatSteel Holdings for$327 million. The completionof the deal would havehelped transfer a majorportion of Tata Steel's debtin South-East Asian businessto the new joint venturecompany. The deal did notgo through as HBIS failed toget requisite approvals fromChinese authorities.

Nestle to set up Rs 700-crfactory in Sanand NestleIndia is setting up its ninthplant in the country inSanand, Gujarat, with aninitial investment of Rs 700crore over two years. "Thismarks a significant step inenhancing our manufacturing

footprint in line with ourcommitment to Make InIndia," Nestle Chairman andManaging Director SureshNarayanan has said. Hefurther adds: "The state-of-the-art, environmentally-sustainable plant for Magginoodles will involve an initialinvestment of nearly Rs 700crore over the next two yearsand generate employment forabout 400 people. We arekeen to embrace diversitythrough at least 50 per centwomen employees."

Adani slots Rs 10,000-crcapex for airports AdaniEnterprises (AEL) hascommitted an investment ofRs 10,000 crore for itsairports venture through itssubsidiary, Adani Airports,to be made over seven years.By April 2020, the companywill take over three of the sixairports it had won bids forand make an upfrontpayment of approximatelyRs 1,600 crore, with anadditional Rs 2,000 crore tobe made later. The threeairports projects are expectedto start generating revenuesfrom April 2020. Of the sixairports, AEL has beenawarded three and is awaitingStates' approvals for theother two, while for oneairport in Kerala, it is facinglitigation from the Stategovernment.

Kia Motors' first SUVrolls out of AP plant KiaMotors last month rolled outits mid-size SUV Seltos,manufactured at its facility inAnantapur, Andhra Pradesh.The company furtherannounced the commence-ment of mass production ofthe Seltos in India aftertesting the vehicle over 20lakh km in different climaticconditions and some of themost challenging terrains inthe country, according to a

NEWS ROUND-UP


OnePlus to put Rs 1,000 cr in R&D centre Chinesesmartphone company OnePlus opened its first R&D centre inIndia in Hyderabad. Over the next three years, the companyplans to grow the Hyderabad facility into its biggest R&D cen-tre globally with investments to the tune of Rs 1,000 crore. Theheadcount will rise to 1,500 from over 200 today. The 1,86,000-sq ft facility, spread across five floors, is to play an importantrole in critical areas with focus on development of artificial intel-ligence (AI) and machine learning in OnePlus products. OnePlushas five other R&D centres in Shenzhen, Shanghai, Taipei,Nanjing and Santiago.

Wipro has announced that ithas won a five-year,strategic, IT and businesstransformation contract fromADM Aeroports deMontreal. ADM operatesYUL Montreal-TrudeauInternational Airport, thethird-largest airport inCanada, and YMX Interna-tional Aerocity of Mirabel.According to Wipro, thepartnership will transformADM's airport operationsthrough Wipro's integrated,service-delivery model,airport-domain expertise andhyper-automation, poweredby the Wipro HOLMESartificial intelligence plat-form. The contract will alsodeliver ready-to-deploy,digital airport assets, enabledby an ASQ-driven frame-work, to help ADM realiseits vision of making YUL aworld leader in terms ofpassenger experience andairport operations.

Tata Steel calls off dealwith China's HBIS TataSteel subsidiary TS GlobalHoldings' bid to sell off its

media release of the automo-bile company. The firstSeltos was rolled off theassembly line by Korea'sAmbassador to India ShinBong-kil and Kia MotorsIndia MD and CEOKookhyun Shim.

Mahindra to shut plantsfor 8 to 14 days Mahindra& Mahindra (M&M) willkeep its plants shut for 8 to14 days in the July-September quarter as demandremains weak and inventoryat its dealers remains higherthan normal. In the April-June quarter, Maruti Suzuki,Toyota, Honda Cars Indiaand Tata Motors had cutproduction by 7 to 18 percent year on year. This is thesecond consecutive quarter inwhich the Mumbai-basedautomaker will be trimmingproduction. The companyhad observed no-productiondays across its plants for upto 13 days in the April-Junequarter.

Coffee Day to sell stake inIT park The board of CoffeeDay Enterprises (CDEL) hasdecided to sell its nine-acretechnology park in Bengaluruto bring down its debtburden. CDEL is the holdingcompany of Coffee DayGroup companies. Privateequity (PE) giant BlackstoneGroup has emerged as one ofthe top contenders to buythe Global Village Park,owned by Tanglin Develop-ments, a unit of CDEL. TheNew York-based PE in thepast week restarted talks tobuy Tanglin Developments.The CDEL board is lookingto sell CDEL's assets, trimits debt and ensure smoothcontinuation of its businessesafter its founder and ownerVG Siddhartha's death.

Renault to drive in e-carinto India by 2022 Renaultplans to launch an electric car


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(e-car) in India by 2022.Kwid's electric version iscurrently running in China. Itwill be introduced in India,Renault India CEO and MDVenkatram Mamillapalle hassaid. Electric vehicle (EV) isrequired in India, but howfast it will be adopted is thequestion, as the ecosystem isstill being developed,Mr Mamillapalle pointedout. "Launching an EV iseasy, but creating anecosystem is the critical issuethat needs to be managed notjust by manufacturers of carsbut also by local and Centralgovernments."

NRAI slams Zomato forwalking out of talksNational RestaurantAssociation of India (NRAI)has decried food aggregatorZomato for coming out oftalks to resolve differencesover deep discounting. Therestaurant body also addedthat other platforms hadrejigged their offers to cutdiscounts. In a statement,NRAI thanked food

aggregators, such as Dineout,Eazydiner, Magicpin andNearbuy, for rejigging theirfeatures to eradicate the deepdiscounting epidemic.However, Zomato hasdecided to cut all ties bysaying that it is logging out ofthe restaurants' #logoutcampaign.

Maruti eyes CNG toreplace small diesel carsMaruti Suzuki India, thecountry's largest car-maker,is looking at CNG to fill inthe space vacated by smalldiesel engine cars in thefuture. The company had inApril this year announcedthat it would stop sellingdiesel cars from April 2020,when BS-VI is implementedin the domestic market. Ithad cited feasibility issuesfor stopping sale of dieselcars after cost escalation dueto new emission norms.Diesel cars account for about23 per cent of the total sales ofthe company in the domesticmarket. Maruti currentlyoffers its popular models, such

Massive accounting fraud at CG Power A financial fraudworth thousands of crores has been detected at the GautamThapar-promoted CG Power and Industrial Solutions. Lastmonth, the company informed stock exchanges that an investi-gation by an independent law firm had found that some employ-ees had carried out unauthorised transactions, which led to apotential understatement of not only the liabilities of CG Powerbut even advances to related and unrelated parties of the com-pany and the group. "The total liabilities of the company andthe group may have been potentially understated by approxi-mately Rs 1,053.54 crore and Rs 1,608.17 crore respectively ason March 31, 2018.

as Alto, AltoK10, Celerio,WagonR, Dzire and Ertiga inCNG option.

Tata Sons' new entity togroom startups The TataGroup has formed a newentity called Tata Digital,which has been formed toincubate new digital busi-nesses. The new entity hasbeen set up to take advantageof the growing startupecosystem in the digitalsegment. Tata Sons ChairmanNatarajan Chandrasekaranhad earlier said that Rs 1,000crore would be infused intothe new vertical. "Thecompany will create anumber of digital platforms.The first platform is alreadybeing built, and the next twoto three platforms are in theprocess of being developed,"Mr Chandrasekaran had said.Pratik Pal has been ap-pointed the CEO of TataDigital.

EPFO set to launche-inspection systemEmployees' Provident FundOrganisation (EPFO) willlaunch an e-inspectionsystem that will simplifyinspection process andensure that organisationswith open communicationwill not be subject tophysical inspection untilabsolutely necessary. EPFOhas proposed to limit theinquiry period to a maximumof two years in order tocurtail harassment. Thecountry's largest pensionfund is also looking at analternative authentication vis-a-vis the employees' databaseto address the issue of someemployees who are unable togenerate a 12-digit UniversalAccount Number. EPFO isalso setting up a society ofself-regulating consultants,similar to The Institute ofChartered Accountantsof India.

Banks' NPAs grow againin June 2019 quarter Badloans across India's lenderssaw an uptick in the April-June 2019 period, reversing afour-quarter declining trend.While fresh slippages - thistime from sectors, like non-bank lenders - picked up,banks continued to provisionaggressively against badloans, leading to strongerbalance sheets. Gross non-performing assets (NPAs)across the country's listedbanks rose 3.4 per cent overthe previous quarter toRs 9.30 lakh crore at the endof June 2019. Gross badloans had peaked at Rs 10.23lakh crore in the fourthquarter of 2017-18. State-runbanks saw a 3.3 per centincrease in bad loans in thefirst quarter of 2019-20 overthe previous quarter. Theincrease across private bankswas marginally higher at4 per cent.

Ujjivan files papers forRs 1,200-cr IPO UjjivanSmall Finance Bank isplanning an initial publicoffer (IPO) to raise Rs 1,200crore. The company filed adraft red herring prospectuswith the SEBI last month.The bank has appointedKotak Mahindra CapitalCompany, IIFL Securitiesand JM Financial as book-running lead managers to theissue.

RCap in talks to sell 11%in mutual fund unit AnilAmbani-led Reliance Capital(RCap) is in talks withmultiple investors to sell itsremaining 11 per cent stakein Reliance Nippon LifeAMC (RNAM). Accordingto sources, RCap hasinitiated talks withBlackstone, KKR,Brookfield, Mubadala, TAACapital and General Atlanticfor the stake sale. Of the 43per cent equity in RNAM,

Govt gets RBI's Rs 1.76-lakh cr surplus bonanza The RBIboard has approved transfer of Rs 1.76 lakh crore of surplusreserves to the Central government. The surplus transfer, whichis 1.25 per cent of the GDP in 2018-19, comprises of Rs 1.23lakh crore of surplus for 2018-19 and Rs 52,637 crore of excessprovisions identified according to the revised Economic CapitalFramework (ECF) adopted at the meeting. RBI, in consultationwith the government, had constituted a six-member expert com-mittee, headed by former RBI Governor Bimal Jalan, in Decem-ber last year to review the extant ECF of the central bank. Thesurplus transfer assumes significance amid slowing economicgrowth and rising global uncertainty.

RCap has sold 11 per centthrough two offers-for-sale(OFS) in the past twomonths. RCap is in theprocess of selling another 21per cent to its Japanese JVpartner, Nippon LifeInsurance Company. Afterthis transaction, RCap willbe left with 11 per cent stakein RNAM, which it is nowtrying to sell.

RBI unveils norms forlive-testing products TheRBI has prescribed fit-and-proper criteria for selectionof participants for entry intothe regulatory sandbox forlive-testing of new productsor services in a controlled ortest-regulatory environment.The central bank's newguidelines are aimed atfostering responsibleinnovation in financialservices. In its final EnablingFramework for RegulatorySandbox, the RBI hasmandated participants toeither be a company

Besides, the bank is likely toget funds from the govern-ment during the financial yearfor pushing up credit growth.

PSBs discuss ways ofreaching $5-trillion goalEighteen public sector banks(PSBs) came togetherrecently in Pune as a part ofthe second round of theideation exercise to help Indiabecome a $5-trillion economyin five years. The heads of all18 PSBs and Sujata Iyer, thejoint director in the Depart-ment of Economics andStatistics of the Maharashtragovernment, and RBIrepresentative M K Moonwere present at the meeting.The first stage of the bottom-up consultation process togenerate ideas and reviewperformance of banks andtheir alignment with nationalpriorities was conducted atthe regional level on August17 and 18 by all PSBs,involving all branches withintheir regions' jurisdiction.

BoB mulls co-originatingloans with NBFCs Bank ofBaroda (BoB), India'ssecond-largest public sectorbank, is betting big on co-originating loans with non-banking finance companies(NBFCs) and fintechcompanies. In this regard,BoB has entered intoalliances with Srei EquipmentFinance and ECL Finance tooffer joint loans for infra-structure equipment andMSMEs. The bank is in talkswith more NBFCs andfintech companies to leveragethe model of co-originatingloans. According to the RBI'sguidelines, all scheduledcommercial banks - excludingregional rural banks and smallfinance banks - can engagewith NBFCs to co-originateloans for creation of prioritysector assets.

incorporated and registered inIndia or banks licensed tooperate in India, the entityshould have a minimum networth of Rs 25 lakh and thepromoters and directors ofthe entity should be fit andproper.

Syndicate Bank eyesRs 4,000-cr NPA recoverySyndicate Bank expects tomobilise Rs 4,000 crore fromrecovery of non-performingassets (NPAs) during thecurrent financial year. Therecovery is likely from casesbefore the National CompanyLaw Tribunal under theInsolvency and BankruptcyCode (IBC) and resolution ofcases at the bank level,including one-time settle-ment, according to SyndicateBank Managing DirectorMrutyunjay Mahapatra. Thebank has recovered aboutRs 800 crore in the firstquarter, and the target forFY20 is Rs 4,000 crore,Mr Mahapatra has said.

FIN

AN

CE

NEWS ROUND-UP


IBJ BUREAU

The Indian energy sector is inthe midst of high-octane devel-opments. Major policies un-

veiled by the government and grow-ing demand for energy have made thecountry's hydrocarbon sector attrac-tive for foreign investors.

"India's energy sector has repeat-edly received funding from sovereignwealth funds, pension funds andlong-term strategic investors fromWestern and Asian countries," Min-ister for Petroleum and Natural Gasand Steel Dharmendra Pradhan hasstressed. Speaking at Bloomberg NEFSummit in New Delhi last month,Mr Pradhan has added that the grow-ing demand for energy in the countrymakes India an attractive destinationfor foreign investments.

The government has targeted theeconomy to grow to $3 trillion this year(FY20) and aims to get the economycross $5 trillion dollar by FY24. Thetall target will have to be undoubtedlysupported by affordable and sustain-able energy. And India will have to tapevery source of energy to reach the

ambitious goal and sustain the similargrowth rate for the years ahead.

The petroleum minister points outthat India remains a bright spot in theglobal economy. With strong domes-tic economy and supportive policyenvironment, the government is com-mitted towards achieving holistic, in-clusive and sustainable economic de-velopment. "We have taken severalmeasures to overhaul the hydrocar-bon sector to ensure energy securityfor the country while pursuing a greenpath to progress," Mr Pradhan hasadded.Boost for E&PMr Pradhan has emphasised that thecountry's upstream sector is an im-portant focus area for the govern-ment. In fact, several transformativepolicy reforms have been undertakento revitalise the hydrocarbon explo-ration and production (E&P) ecosys-tem. All these policy measures havebeen designed to establish conducivebusiness environment, facilitate moreinvestments and boost domestic oiland gas production.

At the centre of the policy mea-sures unrolled in the E&P segment is

the new Hydrocarbon Exploration Li-censing Policy (HELP). The HELP al-lows an upstream player to exploreboth conventional and unconven-tional oil and gas resources, includ-ing coal bed methane, shale gas andoil and gas hydrates under a single li-cence. It has also replaced the profit-sharing framework, under the New Ex-ploration Licensing Policy (NELP),with the revenue-sharing model andgiven marketing and pricing freedomfor crude oil and natural gas produced.

Besides an open acreage policy -Open Acreage Licensing Policy(OLAP) - allows interested entities tobid for blocks of their choice at anytime of the year with the help of a com-prehensive database of the country'skey sedimentary basins available forauctioning. Moreover, gas pricing re-forms have been introduced and in-centives have been offered to raisedomestic output.

In the downstream sector, petroland diesel prices have been freed fromgovernment control. The deregulatedrefining sector has catapulted Indiato become the fourth-largest refiningcapacity in the world.

Charged UpThe Indian hydrocarbon sector isbubbling with enthusiasm, thanks tothe government's industry-friendlymeasures and huge growth prospectsin the sector.


OIL & GAS

Green energyThe government's policy is not merelylimited to enhancing the country's hy-drocarbon production. It is con-sciously aimed at harnessing cleanenergy sources and technologies. "Ina drive to provide energy access toall in a sustainable manner, our gov-ernment has taken a big responsibil-ity by making global commitment toreduce emission intensity by 33 to 35per cent of our GDP from the 2005 lev-els. One of the main strategies thatIndia is planning to adopt towardsachieving this goal is by having 40per cent electricity generation capac-ity from non-fossil, fuel-based energyresources by 2030," Mr Pradhan hasdisclosed.

Interestingly, this government hasadded a social dimension to its clean-and-green energy mission. Thegovernment's commitment towardsclean energy has been extended be-yond electricity to cooking gas or liq-uefied petroleum gas (LPG). In this di-rection, Pradhan Mantri UjjwalaYojana has transformed the lives ofmillions of poor households by en-suring access to clean cooking fuel atvery affordable rates. "More than 75million (7.5 crore) LPG connectionshave been provided under the UjjwalaYojana so far, which has resulted inenhancing the LPG penetration in In-dia to around 95 per cent as against56 per cent in May 2014. The UjjwalaYojana has saved millions of womenand children from the health hazardsof smoky kitchens," notesMr Pradhan.

A promising gas economy hasbeen given a boost, with thegovernment's measure to spread citygas distribution (CGD) networkacross the country for cooking as wellas transportation. The oil ministerpoints out that only 20 per cent of thepopulation was covered under CGDnetwork in 2014, but with the successof the 10th round of CGD bidding, thenetwork will expand to nearly 70 percent of the country's population.

After the winners of the 10th round

of bidding deliver on their commit-ments, the CGD network will be avail-able in 228 geographical areas, com-prising 402 districts spread over 27States and Union Territories. More-over, the winners of the recently-con-cluded 9th and 10th CGD biddingrounds are expected to bring in aroundRs 1,20,000 crore to roll out the net-work across the country.

"We are promoting use of CNG, bio-CNG and LNG in transportation sec-tor, apart from providing a big pushfor e-vehicles (electric vehicles). Weare setting up bio-refineries and tar-geting newer sources of ethanol. Theethanol-blended programme will en-able oil marketing companies to

"We have taken several measuresto overhaul the hydrocarbonsector to ensure energy securityfor the country while pursuing agreen path to progress."

DHARMENDRA PRADHANPetroleum Minister

The promising gas-based economyhas received a leg-up, with CGDauctions attracting bids from topgas companies.

sell 10 per cent blended petrol,"Mr Pradhan has added.Big developmentsThe government's attempts toenergise the country's hydrocarbonsector have begun gradually bearingfruit. In March, Mr Pradhan hadlaunched the third round of mega oiland gas auction under the OLAP atthe Petrotech conclave in UttarPradesh's Greater Noida. Threemonths later, OIL, Vedanta Oil and Gas,ONGC, IOCL and a consortium of RIL-BP, among others, have won oil andgas blocks.

However, the country could not getbig oil companies into the upstreamsegment even this time despite launch-ing the OLAP bidding at Petrotech, areputed meet of global oil and gas gi-ants. In fact, for more than two de-cades since opening up the country'sE&P, India has been trying to attractglobal oil giants. Perhaps the feat mayfinally be achieved sooner than later,with the government unveiling a se-ries of industry-friendly measures.

The new policies have started en-couraging private participation acrossthe entire oil and gas value chain. Inthe meantime, India is becoming anattractive destination for foreign di-rect investment (FDI) in the sector.Many foreign companies, like SaudiAramco - which is setting up the mega,60-mtpa Ratnagiri Refinery and Pet-rochemicals in coastal Maharashtra inpartnership with Abu Dhabi NationalOil Company (ADNOC), IOCL, HPCLand BPCL - ADNOC, Total, Exxon-Mobil, BP and Shell, are looking toincrease their investments across thevalue chain.

It is also a good beginning for thepromising gas-based economy, withCGD auctions attracting positive re-sponse and bids from top gas compa-nies. After the past few years of lull,the Indian hydrocarbon sector is bub-bling with enthusiasm, thanks to thegovernment's industry-friendly mea-sures and huge growth prospects inthe sector.


IBJ BUREAU

Farmers in Maharashtra havebeen staging protests of a dif-ferent sort in the past three

months. In the past, farmers' agita-tions would revolve around betterprice and market access for their prod-ucts and loan waiver. But the recentprotests are against the government'stough measures in curbing sowing ofherbicide-tolerant BacillusThuringiensis (HTBT) cotton seeds,which have not yet been approvedby the authorities for cultivation.

In a first in the country in June thisyear, a farmer was arrested in a villagein Buldhana district of Maharashtrafor being in possession of bannedHTBT cotton seeds. A case was filedagainst the farmer for violating vari-ous provisions of the Indian PenalCode (IPC), 1860, the Seed Act,1966, and the Environment (Protec-tion) Act, 1989.

Senior district officials have re-vealed that the farmer possessedpackets of HTBT cotton seeds, whichcontained stamps and marks from

Seeds Of UnrestCotton farmers are up in arms against the government'sstringent action against those growing HTBT seeds.

Gujarat. However, the farmer who, wasarrested goes on to add that the seedswere procured from the local market.Meanwhile, activists of the ShetkariSanghatana have declared that moreHTBT plantings will be held in thecotton-growing regions of the Statein protest against the Stategovernment's "anti-farmer actions".According to industry sources, HTBTcotton seeds are coming toMaharashtra's farmers from Gujaratand Andhra Pradesh through a well-established network.

"The Centre must provide freedomof technology to farmers. Suicide offarmers is an indication of the patheticcondition in the agriculture sector.The government must not only per-mit but also encourage cultivation ofGM crops", stressed ShetkariSanghatana President Anil Ghanwat.Blooming HTBTAt present, only GM (geneticallymodified) crops permitted by the cropregulator - Genetic Engineering Ap-praisal Committee (GEAC) - are allowedto be grown in India. The GEAC hasnot cleared the production of HTBT

cotton so far. Sale, storage, transpor-tation and usage of unapproved GMseeds are punishable offence underthe Rules of Environmental Protec-tion Act, 1989. Also, sale of unap-proved seeds can attract action un-der the Seed Act of 1966 and the Cot-ton Act of 1957. The EnvironmentalProtection Act provides for a jail termof five years and a fine of Rs 1 lakhfor violation of its provisions.

The Union Ministry of Agriculturehad recently told the Lok Sabha that saleof HTBT cotton seeds had been reportedfrom three cotton-growing States -Maharashtra, Gujarat and Telangana.The ministry had further added that theHTBT cotton seeds are not approvedfor use in the country.

The ministry had informed the LokSabha that the Department of Biotech-nology had constituted a Field Inspec-tion and Scientific Evaluation Com-mittee to investigate the productionof Bt cotton seeds with unapprovedgenes. The committee had found thatunapproved cotton was grown, on anaverage, on 15 per cent of the cotton-cultivable area in Andhra Pradesh,Gujarat, Maharashtra and Telangana,and 5 per cent in Punjab during the2017-18 season.

Furthermore, according to govern-ment data, in the current Kharif sea-son (2018-19), around 88.27 per centof the 122.38 lakh hectares of cottonarea was under BT cotton. Over thepast 16 years, the BT cotton technol-ogy has retained its ability to controlall bollworm diseases, except pinkbollworm.

"The Centre mustprovide freedomof technology tofarmers. Thegovernmentmust not only

permit but also encouragecultivation of GM crops."

ANIL GHANWATPresident, Shetkari Sanghatana

AGRICULTURE


Though the GEAC had cleared BTbrinjal in October 2009, the then min-ister for environment and forests(MoEF), Jairam Ramesh, had put it onhold soon after. Today, BT brinjal isbeing illegally cultivated in Haryanaand supplies from Bangladesh alsofind its way into the Indian market,point out farmers.

Agriculture authorities in theStates are unable to take stringentmeasures to curb the spread. Farmersare using the BT seeds because anunobtrusive seed mafia ensures itsavailability. Now, with the growingmovement against the ban on GMcrops, more farmers are likely to usethese seeds, rendering the restrictionsa farce.

A big advantage with HTBT cot-ton seeds is that it cuts costs drasti-cally. According to cotton growers,25 per cent of the cost on irrigatedfarms and 20 per cent of the cost onrain-fed lands goes towards remov-ing weeds, which grow along with thecotton plant and affects its growth.Pesticides can be used to kill theweeds, but it can also kill the plant.This is why growers go in for manualor mechanical weeding. By opting forHTBT cotton, they save these costs.

Overcoming biasesMeanwhile, farmers, agriculture sci-entists and activists are all split intotwo groups, with one supporting GMseeds and the other opposing them.Suman Sahai, an activist and founderof Gene Campaign, does not approveof the movement among a section offarmers to openly grow HTBT cotton.

"This is blatant violation. There is ascientific procedure to be followed forreleasing new seeds for cultivation.Farmers have not only broken the lawbut also made the country breach in-ternational bio-safety conventions,"notes Ms Sahai.

On the other side, Deepak Pental,an eminent biotechnologist and formerDelhi University vice-chancellor, ar-gues: "So far, no transgenic crop hasbeen found to be harmful to the envi-ronment. The Central government,though, has avoided a decision onGM varieties of brinjal, mustard andHTBT cotton. For farmers, they haveno option as little is being done tosave their crops from pests andpathogens."

Productivity for cotton in the coun-try, in the meanwhile, has gone up from191 kg per hectare in 2002-03 to 477

Unauthorised HTBT accounts for 15% of cotton area in Andhra Pradesh,Gujarat, Maharashtra and Telangana and 5% in Punjab.

kg per hectare in 2017-18. The pro-duction of cotton in the country hasalso increased from 8.62 million balesin 2002-03 to 34.89 million bales in2017-18 due to the adoption of Btcotton, according to the Ministry ofAgriculture.

There is another important issuewith GM crops. For instance, intro-duction of GM cotton has resulted inthe concentration of cotton seed pro-duction to a small number of compa-nies. This increased concentration hasled to reduced biodiversity of thecrop. There is the need for increasedinvestment in agricultural universitiesto ensure the development of high-yielding varieties of crops suitable formechanised harvesting. This wouldreduce nearly 30 per cent of the costof cultivation and help the farmer.

There is no point in blindly sup-porting or opposing GM seeds. Un-fortunately, the government hasswept under the covers the GEAC'sobservations earlier that Bt Brinjaland GM Mustard are safe to consumeand also recommended the release ofthe GM crops. Instead GM crops mustbe subjected to strict and thoroughregulatory tests. And once these GMcrops clear the regulatory tests, thereshould not be any delay in making itavailable to the farmers.

"This (farmersgrowing HTBTseeds in protest) isblatant violation.There is a scientificprocedure to be

followed for releasing new seedsfor cultivation."

SUMAN SAHAIFounder, Gene Campaign

"So far, no transgeniccrop has been foundto be harmful to theenvironment. TheCentral government,though, has avoided

a decision on GM varieties of brinjal,mustard and HTBT cotton."

DEEPAK PENTALEx-Vice-Chancellor, Delhi University


DEFENCE GAMBITWith cogent policies and a suitable ecosystem, the highly-industrialised State of

Maharashtra is also fast turning into a major hub for defence manufacturing.

MAHARASHTRA’s

DR P ANBALAGAN

The defence sector in India hasbecome paramount over theyears by virtue of various

geopolitical affairs that have grappledit over the years. India has the third-largest army, the fourth-largest airforce and the seventh-largest navy inthe world. It is the fifth on the list ofthe world's biggest military spenders,and its military expenditure grew to$55.9 billion last year.

The Central government has madeit a priority to turn India into a robustdefence base under the Make In In-dia initiative by virtue of the countrybeing one of the world's top defenceimporters. A self-reliant Indian aero-space and defence sector is crucialfor the success of Make In India ini-tiative, making it one of the priority

sectors for the Make In Indiaprogramme. The Make In India initia-tive has clearly been the guiding prin-ciple for a change in Defence Procure-ment Policy (DPP), and it reflects veryclearly in the DPP released in 2016.

Being at the forefront ofindustralisation in the country andtaking cues from the Make In Indiainitiative, Maharashtra has identifiedaerospace and defence as the prioritysector. The State has always been atthe forefront of industralisation in In-dia and continues to do so. The Stategovernment has come out with theMaharashtra State Aerospace andDefence Policy 2018-23 to incentiviseand promote investment in the sec-tor. Armed with the dynamic defencepolicy and ably assisted byMaharashtra Industrial DevelopmentCorporation (MIDC) - the nodal

agency for development of industrialinfrastructure - Maharashtra is gear-ing up to transform the State into amajor defence hub of the country.Robust defence climateMaharashtra has aligned itself withthe country's vision of attaining self-reliance in defence manufacturing. Inline with this vision and its defencepolicy, the State government has builta robust ecosystem, which is conducivefor the development of defence clusters.

With its continued efforts, the Statehas been successful in attracting bothpublic and private sector investmentsin the defence sector. Some of the keydefence players, like Hindustan Aero-nautics Limited (HAL), Bharat Dy-namics Limited, Bharat Earth MoversLimited (BEML), Bharat Forge, AshokLeyland and Mahindra and Mahindra(M&M), L&T and the Tata Group,

SPECIAL FEATURE

DEFENCE GAMBIT


have already invested in the State'sdefence sector. Besides, Nagpur hasbeen developed as an emerging aero-space hub with presence of compa-nies, such as Boeing, Solar Industriesand BrahMos Aerospace.

Maharashtra has developed dedi-cated defence hubs across Pune,Nagpur, Nashik, Aurangabad andAhmednagar. The State envisions tobuilding up defence manufacturing fa-cilities in these five hubs or clusters.With 10 ordnance factories in Khadki,Dehu Road, Bhandara, Chandrapur,Varangaon, Bhusawal and Ambajhari,the State boasts of housing the high-est number of ordnance factories inthe country. The five defence clus-ters will be supported by the existingordnance factories.

The State is collaborating with vari-ous institutes to skill, upskill andreskill its manpower in order to pro-vide skilled manpower to the defencemanufacturing facilities. In this en-deavour, the State is home to insti-tutes for combat engineering equip-ment and for education, training andresearch, such as Defence Researchand Development Organisation(DRDO), Defence Institute of Ad-vanced Technology and NationalDefence Academy. Vehicle Research

and Development Establishment(VRDE), a laboratory of DRDO, hasits base in Ahmednagar. A defenceindustrial hub has also been proposedin the State.

Besides world-class defence insti-tutions, the State scores well on in-frastructure and connectivity fronts,with a string of ports and airports andan excellent railway and road network.The State has a well-developed so-cial, physical and industrial infrastruc-ture. Apart from 16 airports, it has twomajor and 48 minor ports. It is strate-gically located with a vast coastlineof 720 km, which is an importantfactor in facilitating inter- and intra-regional trade.

Maharashtra houses one of India'sbusiest airports and the busiest port.The hinterland districts of the State arewell connected with an established

road and rail network. It also has a well-developed power supply grid.Maharashtra's infrastructure sectorhas grown significantly over the lastdecade, with a substantial rise in thenumber of industrial clusters and pub-lic-private partnership (PPP) projects.

An economic powerhouse,Maharashtra's Gross State DomesticProduct (GSDP) at current prices ac-counted for 14.1 per cent of India'sGross Domestic Product (GDP) in2018-19, the highest among all States.The GSDP grew at a compound an-nual growth rate (CAGR) of around12 per cent from 2011-12 to 2018-19 toreach $380.04 billion.

The growth in Maharashtra's GSDPhas been higher than the growth ofthe national GDP for most of the years,except in 2014-15 and 2015-16. Themajor contributor to the State's GSDPis services, followed by industry andagriculture and allied industries.

Mumbai, the State's capital, is thecommercial capital of India and hasevolved into a global financial hub.The city is home to several globalbanking and financial services com-panies. Pune, another major city in theState, has emerged as the educationalhub. Maharashtra has emerged as akey hub for IT and information tech-

Maharashtra houses one of India'sbusiest airports and the busiest port.

Maharashtra'sDefence Gambit

Well-developed social, physical and industrial infrastructure

Progressive reforms across land, labour, electricity, environment, etc

One of the largest talent pools in India with 16 lakh studentenrolment per year

The number one FDI destination in India, cumulative FDI inflow inMaharashtra from April 2000 to June 2019 was $127.08 billion.

Contributing 14 per cent of India's GDP, the highest among all States

Ease of doing business with online, single-window system forapplications

MIDC the nodal point of contact for end-to-end support

Investor-friendly policies and robust fiscal incentives for megaprojects, anchor units and MSMEs

State key hub for auto, IT, ITeS, defence and electronics, etc.

Advantage Maharashtra


tors to invest into various sectors inthe State, thereby contributing to theoverall development of the economy.According to the Department for Pro-motion of Industry and Internal Trade(DPIIT), cumulative foreign direct in-vestment (FDI) inflows in the Statestood at $127.08 billion between April2000 and June 2019, making the Statethe country's number-one FDI desti-nation. Total exports from the State

touched $72.71 billion during 2018-19.The State government has put in

place several industry-friendly mecha-nisms. MAITRI (Maharashtra Indus-try, Trade And Investment FacilitationCell) is a dedicated investors' facilita-tion cell, which acts as a sole point ofcontact for getting necessary approv-als, No Objection Certificates (NoCs)and registrations for setting upprojects. Besides, there is a single-window clearance mechanism, withsingle-window access systems at thedepartment level to ensure transpar-ency and efficiency of project-clear-ance process, including online avail-ability of information to reduce delays.

The government provides severalincentives, prioritisation schemes andservices to promote all-round indus-trial development within the State.These incentives have further beenstrengthened in the new industrialpolicy of 2019. The Maharashtra In-dustrial Policy, 2019 has included apackage scheme of incentives to de-velop industries in the aspirational ordeveloping regions of the State. Theincentives offered are based on areacategorisation or employment genera-tion. The time duration of the incen-tives also varies based on the areacategorisation. Aspirational districtsand areas where there are no indus-tries are given a higher time period toreceive the incentives.

The existing industrial ecosystemwithin Maharashtra is best suited tocater to the current and forthcomingindustrial requirements. The ecosys-tem takes into account various fac-tors and parameters which companieslook at before investing in a State.Maharashtra also offers customisedecosystems, depending on the sec-tors which companies consider whileinvesting in a State.

Under the Maharashtra State Aero-space and Defence Policy 2018-23, theState government provides incen-tives to defence industrial units basedon the classification of industrialunits. Units eligible to be classified

SPECIAL FEATURE

MIDC is by far one of the mostexperienced, credentialed, large-scale, industrial developmentagencies in India.

Network of 13 chemicalzones, 25 common effluenttreatment plants, 32 IT parksand nine SEZs

Continuously upgradingfacilities across 288 MIDCindustrial areas

Helpdesks to ensure thatnone of the complaints is leftunattended

Online tracking of files toensure quick clearances

A total of 295.7 km of roadsbuilt in the past four years

Total average quantity ofwater supplied to industrialareas at 1,482.45 mld in thepast four years

Ensuring that development isresponsible and sustainable

MIDC: Growth Catalyst


nology-enabled services (ITeS), de-fence, electronics and captive busi-ness outsourcing industries.

Maharashtra is home to the largest,skilled manpower in the country. Ac-cording to the recent Economic Sur-vey of Maharashtra 2018-19, the Statehas 942 industrial training institutes(ITIs) with a capacity to train 1.39 lakhstudents. The State also has 668 tech-nical graduate institutes with a totalintake of more than 1.5 lakh and 733post-graduate institutes having a to-tal intake of more than 59,000. Thesetechnical institutes and institutions ofadvanced learning offer a diverse andtalented pool of manpower for currentand prospective investors.

The State is blessed with abundantnatural resources, which are essen-tial for the economic well-being andregional balance. Besides, the Statehas a progressive and forward-look-ing government, which continuouslystrives to create conducive invest-ment climate for industry andenterprise.Incentives galoreThe Maharashtra government hasseveral policies in place to ensure theright business climate in the State.These policies aim to motivate inves-

Strong DefenceEcosystem

Nagpur has been developed as an emerging aerospace hub with presenceof world renowned companies in MIHAN SEZ.

as anchor industries should acquiremega or ultra-mega project status.These units should have a confirmedorder book of $100 million as on thedate of application. The State canqualify up to five anchor units on thefirst-come-first-serve basis with theobjective to set up five defence clus-ters in Pune, Nashik, Nagpur,Ahmednagar and Aurangabad. Theseanchor units will be eligible for a dis-count on purchase of land in additionto other incentives which the indus-tries are eligible under the industrialpolicy. Anchor units will get a dis-count of 25 per cent on purchase ofland within MIDC areas in A and Bregions and 50 per cent in other loca-tions. Additionally, 20 per cent ofland can be utilised for setting upvendor units.

Defence projects in order to be eli-gible to be classified as mega projectsshould have an investment of Rs 250crore in A and B areas or provide di-rect employment to 500 people. Forthe rest of Maharashtra, to be classi-fied as a mega project, the minimuminvestment should be Rs 100 crore, orthey should have direct employmentgeneration potential of 250 people.The admissible investment period forthese investments is eight years in Aand B regions and 10 years for therest of Maharashtra. Investment in-curred in erection of test range andstorage facilities will be considered asa part of admissible project cost forgranting incentives. Expenditure ontest range and storage facility up to20 per cent of total project cost or Rs100 crore, whichever is lower, will beconsidered for granting incentives.

There are also a basket of incen-tives available for defence invest-ments which qualify under the micro,small and medium enterprise (MSME)segment. The incentives for suchMSME units are 100 per cent fixedcapital investment subsidy for a pe-riod of 10 years and interest subsidyon term loans for acquisition of fixedassets. Here, the maximum interest



One of the first States to haveits own aerospace anddefence policy

Dedicated defence hubsacross Pune, Nagpur, Nashik,Aurangabad and Ahmednagar

Key defence players in bothpublic and private sectorsalready present

State home to the highestnumber of ordnance factoriesin the country

Close proximity of talent poolsto defence hubs

R&D facilities, clusters andassociations for knowledgeexchange across defence hubs

Attractive incentives forinvestment in Maharashtra'sdefence sector

Maharashtra home to thelargest, skilled manpower inthe country

Rs 1,000-crore fund to boostinvestment in defence andaerospace sector

subsidy that can be granted is 5 percent per annum. There are also fiscalincentives for MSMEs for technologyupgrade, patent registration and cer-tifications. Besides, the State willsanction Rs 15 crore as its share un-der MSE-CDP scheme for 20 or moreMSMEs forming a special purposevehicle (SPV). There is also financialassistance to the extent of 15 per centof the project cost or to a maximum ofRs 15 crore for setting up common fa-cility and defence-related infrastruc-ture in the cluster.

The Maharashtra government hascreated a corpus of Rs 1,000 crore toboost investment in the defence andaerospace sector. This fund, known asthe Maharashtra Defence and Aero-space Fund (MDAF), will provide ini-tial working capital to MSMEs workingin the defence and aerospace sector.The MIDC touchMIDC has been playing a vital role incatalysing investments into the State.The nodal agency also acts a cruciallink between the government and theState to facilitate interactions betweenthe State government and the inves-tors. It provides businesses with in-frastructure, such as land, roads, wa-ter supply, drainage facilities andstreet lights. With its network of 13chemical zones, 25 common effluenttreatment plants, 32 IT parks and ninespecial economic zones (SEZs), MIDChas been in the forefront of the mas-sive industrialisation unfolding acrossMaharashtra.

Maharashtra's Growth To India's Growth.

FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19

India GDP Growth in %Maharashtra GSDP Growth in %

The growth in the State GSDP has been higher than the national GDP formost of the years except in 2014-15 and 2015-16.

About 45 per cent of the water provided to industriesin MIDC areas comes from MIDC-owned dams.

Focusing on sustainable development, MIDC's 13 chemicalzones have been commissioned with 19 CET plants.

Over the years, MIDC has sincerelyworked on its philosophy - Prosper-ity to all through industrialisation.Being one of the largest industrialpromotion agencies in India, with oneof the largest land banks in the coun-try, MIDC uses a strong network ofofficers deployed in every part of theState to monitor, improve, develop andreport on all infrastructure facilities inMIDC areas. A dedicated reviewmechanism on a weekly basis ensuresthat all critical issues are highlightedand resolved as quickly as possible.

In addition, to providing a speedyresolution of all complaints, MIDC hasset up helpdesks in order to ensurethat none of the complaints is leftunattended. The details for address-ing specific issues are displayed onthe MIDC website (https://

www.midcindia.org/by-midc-depart-ment). Another important enabler forspeedy resolution has been technol-ogy. This has enabled the agency tocheck for delays quickly, identify thecause, track the file and ensure that itis resolved at the earliest.

MIDC is by far one of the most ex-perienced, credentialed, large-scale,industrial development agencies inIndia and looks after the needs of oneof the most industrialised States inIndia - Maharashtra. With tremendousdemand, in an ever-changing land-scape of industrial requirements, theindustrial infrastructure provider en-sures that individual industry de-mands are met even as it continuouslykeeps upgrading its facilities acrossthe 288 MIDC industrial areas.

Over the last four years, some of

the key infrastructure works under-taken by MIDC include increasingwater supply for industrial use, build-ing more common effluent treatmentplants for sustainable manufacturingand adding linking infrastructure, likeroads, etc.

In terms of connectivity, MIDC hasbuilt a total of 295.7 km of roads in thepast four years. Besides, water sup-ply in MIDC's industrial areas is nowabundant, with a total average quan-tity of water supplied touching almost1,482.45 mld in the last four years.Moreover, MIDC has increased itswater supply at critical industrialhubs, such as Talegaon, Chakan,Phaltan, Waluj, Supa and Warora.

As a part of the nodal agency's fo-cus on sustainable development, 13chemical zones have been commis-sioned with 19 common effluent treat-ment plants. Furthermore, MIDC alsolooks after several special industrialzones, which include IT parks, SEZs,food parks and textile parks, amongother industry-specific zones. MIDChas been constantly endeavouring tomeet and surpass the industry's ex-pectation and ensure that quality in-frastructure is provided across indus-trial areas.

MIDC has always believed thatsustainability is the key to future, andin doing so, it has taken up many ini-tiatives which are necessary. One ofthe key features that differentiatesMaharashtra from other States is that

SPECIAL FEATURE


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A Quick Glance At Defence LandscapeBeing one of the most industrialised States in the country, Maharashtra has companies which spanacross all the manufacturing sectors. Maharashtra has an existing defence infrastructure along withdefence clusters. The State has a well- structured defence infrastructure in the following clusters:

PUNEDefence institutes: There are many institutes for indigenous development of combat engineering equipmentand for education, training and research, such as DRDO, Defence Institute of Advanced Technology andNational Defence Academy.

Ordnance factories

Private sector defence players: L&T, Tata Motors, Bharat Forge and Mahindra, etc

Associations and clusters: Defence Equipment Manufacturers' Association

Naval defence: Shipbuilding manufacturer Mazgaon Docks has been established in Mumbai.

AURANGABADGreaves Cotton has strongpresence in defencemanufacturing in the region.

NASHIKPublic sector units in NashikHome to prominent public sectorcompanies, like HAL, whichmanufactures Russiancombat aircraft

Maharashtra ensures that the neces-sary development is responsible andsustainable, point out many investorswho have invested in Maharashtraand many other States. About 45 percent of the water provided to indus-tries in MIDC areas comes fromMIDC-owned dams.

The industrial infrastructure pro-vider has taken a number of measuresin the past to promote sustainability.MIDC has built an effluent collectionsystem within the premises of thecommon effluent treatment plant inTaloja. Repairs to various structuresin water treatment plant in Patalgangaare underway. The corporation is alsoconstructing a 36-mld water treatmentplant in Mahad. With the State gov-ernment betting big on the defencesector, MIDC has turned its focus on

the defence sector to makeMaharashtra a major defence base.Defence hubMaharashtra is set to welcome thefourth Industrial Revolution. It envi-sions to becoming a $1-trillioneconomy by 2025. As a leadingindustrialised State, Maharashtra hasalways met and often surpassed theneed of the industries, be it for the in-dustries present in the State, countryor for new global businesses lookingfor a conducive business environment.

In its efforts to promote investmentin thrust sectors, the Maharashtragovernment has come up withMaharashtra Industrial Policy 2019.The policy identifies aerospace anddefence manufacturing as one of thethrust sectors.

Meanwhile, MIDC has been striv-

ing hard to accelerate industrial de-velopment across the State. TheState's nodal agency for investmentpromotion has been continuouslyproviding information access to all thestakeholders, and in doing so, it hasidentified a number of reform areas topromote ease of doing business.

Progressive industrial policies,coupled with efficient and support-ive administrative structure of MIDChave helped the State in successfullybagging the highest FDI in the coun-try successively, and this is likely tocontinue for many years. TheMaharashtra government and MIDC,in the meanwhile, are scripting a newsuccess story revolving around thedefence sector. It would be a matterof time before Maharashtra turns itsdefence ambitions into reality.


AHMEDNAGARVehicle Research andDevelopment Establishment(VRDE), a laboratory of DRDO,has its base in Ahmednagar

NAGPUREmerging aerospace hub:

Presence of companies,such as Boeing (parts

manufactured by TAL),TAL, Solar Industries and

BrahMos Aerospace

Significantly suitable formaintenance, repair and

overhaul (MRO) activities as well as an aircraftmanufacturing base

Reliance Defence has acquired 289 acres of land inMIHAN for a greenfield aerospace equipment

manufacturing centre, Dhirubhai Ambani Aerospace Park

Associations and clusters:Defence cell of Vidarbha Industries Association


TEXTILE


Blue RevolutionWith new clothing, innovative designs and customisedgarments, Indian denim companies are trying everytrick in the book to grab a larger share of the market.

IBJ BUREAU

Cheer is back in the organised,Indian, denim market. Afterbattling glut during the past

few years, the Indian denim industryis happy that the demand-supply gaphas begun to narrow. Besides, risingdemand for denim and addition ofmore premium products are expectedto improve margins of the domesticdenim industry.

The capacity of denim - the blue,cotton-twill fabric used for makingjeans garments and many other prod-ucts - in the domestic market had sud-denly shot up a few years ago. Withannual exports at hardly around 250million metres, the Indian market wasleft to deal with the remaining capac-ity, creating a glut in the domesticdenim market. This had led to shrink-ing margins for even some of the topdenim-makers.

The domestic denim capacity iscurrently roughly about 1,800 millionmetres a year, making India one of the

world's leading denim fabric manufac-turers. Fortunately, no majorgreenfield investments are happeningin the sector, and this provides themuch-required respite for glut-hitdenim companies.

"With no new investment in sightand capacity rationalising, gross mar-gins could improve by 3 to 4 per centthis year," reveals Sharad Jaipuria, thechairman and managing director ofGinni International, a major denimmanufacturer in India. Mr Jaipuria,who is also the president of DenimManufacturers' Association furtheradds: "There was a mismatch in de-mand and supply. But in the lastcouple of years, due todemonetisation and GST (Goods andServices Tax), the denim market hasseen a slowdown, and the overcapac-ity is getting adjusted. Moreover, nonew capacities or fresh investmentsare likely to come up. Hence, the ex-cessive capacity that got accumu-lated over the years is now gettingutilised gradually."

The conclusion of a recent report ofIndia Ratings and Research (Ind-Ra),the country's leading rating agency,matches with the views ofMr Jaipuria. The rating agency revealsthat sub-optimal utilisation levels willnot entice any players to start invest-ing before FY22, given that the currentcapital expenditure (capex) will requiretwo to three years to stabilise. This mayfurther result in the denim companies'operating margins improving moder-ately to 10 to 11 per cent in FY20.

"Margins of the denim sector areon the cusp of gradual improvement,owing to focus on premium productsand vertical integration. Return ofwholesale and consumer demand forbasic denim in domestic market andexports for value-added denim togradually improve capacity utilisation.While the basic denim over capacitywill persist in FY2020-FY2022, the im-proved demand outlook will underpinbenefits from operating leverage andenable transmission of raw materialcost inflation to an extent," points outMahaveer Shankarlal, the associatedirector (Corporate Ratings) of Ind-Ra.Exciting journeyThe Indian denim industry is rela-tively young when compared to itsWestern peers. Interestingly, the firstIndia-made denim came out of a saree-printing machine of Arvind's mill inAhmedabad in 1987. This denim wasused by Arvind Chairman and Man-aging Director Sanjay Lalbhai -nick-named the Denim King - to churn outthe company's branded jeans, FlyingMachine.

Of course, jeans garments, mainlytrousers, were present in India evenbefore 1987. Jeans garments - whichwere not so omnipresent then as theyare today - in India in the 1980s weremainly retailed by global brands, suchas Lee, Lee Cooper, Levi's and Wran-gler. A few local manufacturers too madethese garments by importing denim.

Arvind's indigenous denim set offa blue revolution in India by the early1990s. Two Indian denim fabric and


"KKCL can quickly churn out anydesign based on the dynamicneeds in fashion. We also have40 international designers onboard, and they have expertisein Turkish, Chinese and Italianfashion."

KEWALCHAND JAINCMD, KKCL

"Margins of the denim sector areon the cusp of gradual improve-ment, owing to focus on premiumproducts and vertical integration."

MAHAVEER SHANKARLALAssociate Director, Ind-Ra

"With no new investment in sightand capacity rationalising, grossmargins could improve by 3 to 4per cent this year."

SHARAD JAIPURIACMD, Ginni International

"The customer is spoilt forchoice. But in a category, likedenim, stickiness is high. Oncethe buyer is comfortable with thefit, quality, design and priceoffered, he or she largely stayswith the brand."

SANJAY VAKHARIACEO, Spykar Lifestyle

garment manufacturers - Kewal KiranClothing (KKCL) and Spykar -emerged around that time and wenton to become true-blue Indian jeansbrands that have challenged the domi-nance of global brands.

Meanwhile, denims are now an in-nate part of the Indian fashion scene.From metros to the most remote ofsmall towns, this blue fabric is all per-vasive today. It has become the go-to-fashion preference of individualsacross all walks of life - irrespectiveof gender and age, thanks to a rapidpace of globalisation in India, facili-tated by cable TV then and the socialmedia now.

Both global and Indian brandshave been keeping tabs on the chang-ing demand dynamics of the domes-tic denim market. In fact, the credit foracceptance and growth of denims canbe attributed to the advent of newclothing, like pants, jeggings andathleisure collection, which haveplayed a phenomenal role in drivingthe growth for the denim segment.

With tough competition, marketleaders have before them the chal-lenging task of maintaining their lead-ership position. This includes havingto innovate constantly and actingswiftly to market research reports onchanging trends. Most of the denimcompanies in India have been ensur-ing that their focus is on a young au-dience who is looking for global fash-ion, great quality and attractive pricepoints. "Competition helps you to beon your toes. The customer is spoiltfor choice. But in a category, like denim,stickiness is high. Once the buyer iscomfortable with the fit, quality, designand price offered, he or she largelystays with the brand," stresses SanjayVakharia, the Chief Executive Officerof Spykar Lifestyle, which retails jeansgarments under the Spykar brand.

Denim companies have also beenfocusing innovative designs to graba larger share of the market. "KKCLcan quickly churn out any designbased on the dynamic needs in fash-

ion. We also have 40 internationaldesigners on board, and they haveexpertise in Turkish, Chinese and Ital-ian fashion," discloses KewalchandJain, the Chairman and managing di-rector of KKCL, which sells denimunder the Killer Jeans brand.Big growthIn the meantime, there is consolida-tion of unorganised, small, garmentplayers following demonetisation andimplementation of the GST. As a re-sult, denim manufacturers in theorganised sector have increased theirgarmenting facilities.

Large- and mid-size denim players

are likely to continue increasing theshare of premium and high-value-added denim fabric as the oversupplysituation has prolonged and squeezedmargins in the mass segments.

The denim market in India is worthRs 30,000 crore currently and is ex-pected to grow at a CAGR (compoundannual growth rate) of 15 per cent by2023 amounting to approximatelyRs 54,000 crore. With young Indiansleading the race to grab the blue gar-ments, the denim market could sur-pass the 2023 revenue-growth targetmuch before the stipulated time.

COVER STORY


NEW RELIANCEAs Mukesh Ambani aims to transform Reliance,

he replicates the success strategies of textile and petroleumto lead the way in his new ventures of telecom and retail.

IBJ RESEARCH BUREAU

It was yet another annual gen-eral meeting (AGM) of RelianceIndustries (RIL) with megaplans lined up last month. Ad-dressing the AGM in Mumbai,

RIL Chairman and Managing Direc-tor Mukesh Ambani listed out the RILGroup's new ventures and partner-ships amid cheers from its investors.

Mr Ambani revealed that theMumbai-headquartered companywould sell a 20 per cent stake in RIL's

the Forbes' World's Billionaire list of2019, outlined RJio's four new growthengines - Internet of Things (IoT) forthe entire country, home broadband,enterprise broadband and broadbandfor small and medium enterprises(SMEs). The Reliance chairman alsoannounced the launch of RJio's JioGigaFiber, the high-speed, fixed-line,broadband services, from September5, which woulddrive the telecomcompany's four new ventures.

During RIL's 42nd AGM last month,Mr Ambani also announced a part-

“The future of India –and also the future ofReliance – had neverlooked brighter to methan now. As India isgetting transformed

into New India,Reliance will also

transform itself intoNew Reliance.”

MUKESH AMBANICMD, RIL

oil-to-chemicals business to SaudiArabian Oil Company (Saudi Aramco).The 62-year-old RIL chief alsostressed on the Rs 6,22,809-crore, di-versified, business conglomerate'sfocus on its two consumer-facingsegments - telecom and retail. Headded that its telecom venture, Reli-ance Jio Infocomm (RJio), and its re-tail subsidiary, Reliance Retail, wouldbe listed on stock exchanges in thenext five years.

Mr Ambani, the richest Indian and13th richest in the world according to

NEW RELIANCE


RIL: Business VerticalsRIL continues to be a significant global player in the integrated energy value chian while establishingleadership positions in the retail and digital services business in India.

REFINING AND MARKETINGThe robust operational performance, superior configuration and consistenthigh utilisation of refineries at Jamnagar complex have helped RIL outperformthe Singapore refining benchmark.

Crude throughput: 68.3 mmtRevenue: Rs 3,93,988 crEBIT: Rs 19,868 cr

DIGITAL SERVICESJIo has built a world-class all-IP data, strong future-proof network with thelatest 4G LTE technology.

Ranked: #1Revenue: Rs 46,506 crEBIT: Rs 8,784 cr

MEDIA AND ENTERTAINMENTNetwork 18 is a media and entertainment company with its foothold intelevision, filmed entertainment, digital business, magazines, etc.

People in India reached by Network18 TV channels: 800+ millionRevenue: Rs 5,116 crEBIT: Rs 52 cr

PETROCHEMICALSOwns and operates one of the most integrated petrochemicals facilitiesglobally, with a portfolio comprising polymers, polyesters, fibreintermediates, aromatics and elastomers.

Highest-ever Petchem production: 37.7 mmtRevenue: Rs 1,72,065 crEBIT: Rs 32,173 cr

OIL AND GAS (E&P)Upstream portfolio in India includes operations in conventional deepwateracreages and the unconventional coal bed methane (CBM) block.

RIL’s share of domestic production: 58.9 bcfRevenue: Rs 5,005 crEBIT: Rs 1,379 cr

.................................................................................................................................................................................................................

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.................................................................................................................................................................................................................

RETAILIndia’s largest retailer by reach, scale, revenue and profitability.

Fastest growing retail company in the world: 6th (Global Powers of Retailing 2019, Deloitte)

Revenue: Rs 1,30,566 crEBIT: Rs 5,546 cr.................................................................................................................................................................................................................

.................................................................................................................................................................................................................

All figures are for financial year 2018-19

COVER STORY


nership with Microsoft. The partner-ship will result in RJio completely mi-grating all its internal workforce toMicrosoft Office 365, which will in-clude all the cloud-based collabora-tion tools. RJio will also port all itsexisting software applications usedwithin the company to MicrosoftAzure Cloud.Well-oiled movesThe big plans come close on the heelsof RIL completing its largest capitalexpenditure (capex) programme. TheFortune-500 company has investedabout Rs 3.50 lakh crore of capexacross businesses, such as refining,petrochemicals, retail and telecom.Moreover, a bulk of this capex ofaround Rs 2.50 lakh crore, has beendeployed in RJio for creation of an ex-haustive digital network to offer low-cost, high-speed mobile and broad-band connectivity to customers.

With most of the capex completeand new capacity creation in place,Mr Ambani is looking at new partner-ships, stake sales and restructuringof a few business divisions, amongothers, to put RIL, the country's most

valuable company by market value,on a new level of growth. Thecompany's oil-to-chemicals strategyis one among the major overhauls setin motion to make its oil and gas andpetrochemicals businesses - contrib-uting a lion's share of a whoppingaround 68 per cent of RIL's total rev-enue - more dynamic and more rel-evant to the future.

Under the oil-to-chemicals strat-egy, RIL plans to eliminate most ofthe unprofitable fuels produced at itstwo refineries in Jamnagar, Gujarat,and churn out only high-value prod-ucts, such as aviation turbine fuel(ATF) or jet fuel used in aeroplanesand petrochemicals. It is a well-thought-through strategy amid taper-ing demand for low-value fuels - suchas petrol and diesel - massive refineryexpansion plans of public sector oilcompanies - leading to supply of suchfuels overshooting demand - an ag-gressive push by the government infavour of eco-friendly fuels as well aselectric vehicles.

The two, big, recent deals in the oiland gas sector are also a part of theoil-to-telecom conglomerate's shift

towards the next level of highergrowth. In the first deal, SaudiAramco's purchase of 20 per centstake in the oil-to-chemicals businessof RIL for Rs 1.03 lakh crore pegs thecompany's most valuable businessdivision at $75 billion (overRs 5,30,000 crore).

The 20 per cent stake acquisition inRIL's oil-to-chemicals division by SaudiAramco is significant in many ways."The deal will convert long-term rela-tionship between RIL and Saudi Aramco- which has been supplying oil toReliance's Jamnagar refinery since itsinception on every single day for 20years - into long-term partnership,"Mr Ambani said. The transaction willcover all of RIL's refining and petro-chemicals assets, including its 51 percent stake in the recently-announcedfuel retail JV BP.

According to the deal, SaudiAramco, the world's largest oil pro-ducer, will supply 5,00,000 barrels perday (bpd) of crude oil to RIL's twinrefineries in Jamnagar. This will pro-vide security of supply to Reliance ata time when the global crude oil mar-

Reliance is targeting to derive 50% of its total group revenue from non-oil businesses from the current 32%.

Jamnagar Refinery


ket is clouded with uncertainties fol-lowing the US-Iran tension as well asthe ongoing tariff war between the USand China. The deal will also providea pricing advantage to RIL as keysupplier Saudi Aramco will also be aninvestor in the business.

The Saudi Aramco deal furtherbolsters RIL's formidable crude oilsourcing capabilities. It is this sourc-ing skill that has traditionally givenReliance an edge over many othercompetitors and aided its gross refin-ing margin (GRM) - the difference be-tween the cost at which crude oil ispurchased and the price at which pe-troleum products are sold - and prof-its year after year. "The deal wouldprovide much-needed capital for RIL'soil-to-chemicals expansion plans in aphased manner over the next decade,"points out Gagan Dixit, the vice-presi-dent and oil and gas analyst ofElara Capital.

The second deal involves RIL form-ing a fuel retail joint venture (JV) withthe UK's BP, with RIL set to get Rs7,000 crore from the British petroleumcompany for buying a 49 per centstake in the JV. The JV will take over1,400 retail fuel stations run by Reli-ance, along with its aviation fueloperations at more than 30 airportsacross India. The partners also planto expand the fuel retailing networkto 5,500 stations over the next fiveyears. The new venture will alsolook into innovative retailing mod-els, like mobile-fuelling units andhome delivery.

The new partnership betweenRIL and BP is an extension of theirearlier tie-ups in the oil and gassector. The two companies hadfirst joined hands in 2011, with BPacquiring a 30 per cent stake fromReliance in some of the latter's ex-ploration blocks and forming a gassourcing and marketing partner-ship. Later, in 2017, the two com-panies had signed agreements toexplore options to work togetherto develop alternative fuels and

mobility businesses.According to Ajay Bodke, the CEO

of PMS Prabhudas Lilladher, "Thisprogramme to pursue deleveraging inbusinesses such as oil-to-chemicals,fibre and tower aggressively andemerge as a zero-debt company in thenext 18 months will strengthen theconsolidated balance sheet, leadingto strong valuation re-rating of theRIL stock."

Consumer venturesOil, gas and petrochemicals apart, RILhas sharpened its focus on its con-sumer-centric businesses of telecomand retail. Mr Ambani proudly pro-claimed that RJio had amassed over34 crore subscribers in less than threeyears, thus becoming the country'slargest telecom operator. Outliningthe next level of growth in the telecomand broadband internet segments, MrAmbani added: Revenues from RJio's

four new engines will start kickingin during this financial year itself."

After disrupting the mobile ser-vices segment with RJio,Mr Ambani, fondly calledMukeshbhai in the corporate world,has set a new date of September 5to make waves in the broadbandinternet segment. The September 5rollout of Jio GigaFiber, RJio's high-speed, fixed-line or landline, broad-band services, will have plans start-ing at Rs 700 per month for 100-mbps speed. The plans will go upto Rs 10,000 per month, dependingon the data plan. Full details of thetariffs are set to be disclosed closerto the launch date.

The broadband connection willcome bundled with over-the-top(OTT) streaming video services.

RJio grew at a rapid pace, fuelled by largecapex of over Rs 2.5 lakh crore on rolloutof infrastructure.

Next Big MovesOil-to-chemicals strategy to phase out low-value productsand manufacture only high-value petrochemicals and ATF

20% stake sale in oil-to-chemicals business to Saudi Aramco to bring down debt and secure crude oil supply of 500,000 bpd

Adding 5,500 fuel stations in JV with BP

RJio to launch Internet of Things, home broadband,enterprise broadband and broadband for SMEs

Free voice calls, 4K LED television and 4K set-top boxwith JioGigaFiber

First Day First Show service for RJio’s premium broadband users

Reliance New Commerce, Reliance Retail's e-commerceventure, to empower kirana stores

RJio setting up data centres in tie-up with Microsoft

COVER STORY


Voice calls on the landline telephonegiven with the broadband connectionwill be free. Jio GigaFiber customers whoopt for the annual plans, called Jio-For-ever plans, will get an HD or 4K LEDtelevision and a 4K set-top box free.

Interestingly, RJio's premiumbroadband users will also be able towatch movies the same day they arereleased in theatres through a servicecalled First Day First Show. "For thefirst time in India, we are introducinga disruptive concept for watching newmovies. Premium Jio GigaFiber cus-tomers will be able to watch movies intheir living rooms the same day thesemovies are released in theatres. Weplan to launch this service in themiddle of 2020," Mr Ambani hadannounced.

According to RJio, it had soft-launched its broadband services lastAugust and received interest from 1.5crore users. Services were started on atrial basis in 5,00,000 homes. The broad-band services include landline tele-phony, multi-party video-conferencing,home security, smart-home solutions,gaming and TV channels.

With its fixed-line, broadband planset for September-5 rollout, RJio haschosen Microsoft for cloud solutions.RJio will also be building new datacentres across the country and rop-ing in Microsoft to provide cloud so-lutions at these data centres. The

country's largest telecom operatoralso has plans to offer IT solutions tosmall, medium and large enterprisesjointly with Microsoft. The initial twodata centres, which can house ITequipment consuming up to 7.5 mwof power, are being set up in Gujaratand Maharashtra. These are targetedto be fully operational in the calendaryear 2020.

Reliance, in the meantime, is in theadvanced stage of smartly combiningentertainment and online shoppingand offering them on a single platformwith RJio's Jio GigaFiber. Back in April2016, RIL's retail arm, Reliance Retail,had rolled out its online shoppingportal, Ajio.com. With this portal, Re-liance Retail had joined many otherbrick-and-mortar retailers to startonline shopping.

Going several steps ahead,Relaince Retail is now all set to rollout its e-commerce venture, RelianceNew Commerce, with an aim to be-come one of the top-20 retailers glo-bally. "Our beta trials with thousandsof merchants across multiple loca-tions in the country established thepremise of New Commerce with sig-nificant increase in sales and improve-ment in margins for the participatingmerchants. We are now getting readyto roll out the platform on a largerscale," the RIL Chairman revealed.

Reliance New Commerce aims at

RIL'RIL'RIL'RIL'RIL'sssss KEY PERFORMANCE INDICA KEY PERFORMANCE INDICA KEY PERFORMANCE INDICA KEY PERFORMANCE INDICA KEY PERFORMANCE INDICATORSTORSTORSTORSTORS

Analysts' Views“The Saudi Aramco dealwould provide much-neededcapital for RIL’s oil-to-chemicals expansion plans ina phased manner over thenext decade.”

GAGAN DIXITVice-President,

Elara Capital

“This programme to pursuedeleveraging in businessessuch as oil-to-chemicals, fibreand tower aggressively andemerge as a zero-debtcompany in the next 18months will strengthen theconsolidated balance sheet,leading to strong valuation re-rating of the RIL stock.”

AJAY BODKEChief Executive Officer,

PMS Prabhudas Lilladher

“There is a vertical andhorizontal integration togenerate value. Retail and Jioare in the process of that valuecreation.”

JAL IRANIAnalyst,

Edelweiss Financial Services

FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19

TURONOVERTURONOVERTURONOVERTURONOVERTURONOVER

3,88

,494

2,93

,398

3,30

,180

4,30

,731 6,

22,8

09

Rs crore

NET PROFITNET PROFITNET PROFITNET PROFITNET PROFIT

23,5

66

25,1

71

29,9

01

34,9

88

39,5

88

Rs crore

NET WORTHNET WORTHNET WORTHNET WORTHNET WORTH

2,18

,482

2,31

,556

2,58

,511

2,89

,798

3,24

,644Rs crore


integrating producers, merchants andconsumers through a new digital plat-form of RJio. Mr Ambani points outthat New Commerce is a massive $700-billion opportunity that will empowerkirana (street-corner stores) stores insmaller towns digitally and enablesmall traders and shopkeepers to growby using Reliance's digital technologyand infrastructure.Total disruptionMeanwhile, the hydrocarbon sector,which forms the core business of RIL,is passing through tough times. Geo-political tension, ongoing trade warbetween the US and China, growingprotectionism around the world andglobal economic slowdown have ledto depressed crude oil price. More-over, tilt in government policy infavour of cleaner and greener energysources across the globe has furthersubdued the crude oil market.

Depressed crude oil price hasdented refinery margins and profitsof hydrocarbon companies, like RIL.It is in this context that Reliance'sstress on non-oil, consumer-centricbusinesses assumes importance.Mr Ambani is looking at telecom,broadband internet and retail sectorsto hedge the risks posed by the hy-drocarbon sector and thus keep RIL'sgrowth story intact.

Reliance is targeting to derive 50per cent of its total group revenuefrom non-oil businesses, which cur-rently make up 32 per cent of the grouprevenue. Incidentally, both telecomand retail are the market leaders intheir respective sectors. "There is avertical and horizontal integration togenerate value. Retail and Jio are inthe process of that value creation,"points out Edelweiss Financial Ser-vices analyst Jal Irani.

In fact, RJio's growth is simply in-credible since its inception in 2016. Ina matter of mere three years, thetelecom subsidiary of Reliance hasemerged as the country's largesttelecom operator and the world's sec-ond-largest telecom company. It

to shut down operations as RJio madeits way to the top. Tata Teleserviceswas acquired by Bharti Airtel, whileVodafone and Idea merged togetherto protect their turf against the on-slaught of RJio.

RJIo's surge to the top was not justabout cut-throat competition, trig-gered by tariff war. The telecom armof Reliance grew at a rapid pace, fu-elled by large capex of over Rs 2.5 lakhcrore on rollout of infrastructure andwidespread marketing. Besides, itscored high on the technology frontby investing in Long-Term Evolution(LTE) 4G. RJio also unveiled innova-tive plans with free calls bundled withdata at dirt-cheap tariffs. This forcedRJio's competitors to cut voice anddata charges and unleashed a datarevolution across the country.

If telecom has made a splash, RIL'sretail venture recounts yet anothergrand success story. In FY19, Reli-ance Retail became the first Indianretail company to achieve total rev-enue of over Rs 1,00,000 crore afterreporting total income of Rs 1,30,556crore in the financial year under con-sideration. The retail company's totalrevenue grew by a whopping 89 percent in FY19 as against Rs 69,198 crorein FY18.

In FY19, Reliance Retail became the first Indian retail company to achievetotal revenue of over Rs 1,00,000 crore.

would not be an exaggeration to saythat RJio has disrupted the marketbeyond recognition.

RJio entered the sector with rock-bottom tariffs and started a brutal tar-iff war, which took a heavy toll on thedomestic telecom sector. This year, itfirst dislodged Bharti Airtel and thenVodafone Idea to occupy the secondand first spots respectively in the In-dian telecom market. MukeshAmbani's younger brother AnilAmbani's Reliance Communications -once an undisputed leader in the In-dian market - and Aircel were forced

The grand scale of operation thatReliance is associated with todaywas Dhirubhai's way of stunninghis competitors.

Incidentally, Reliance Retail's FY19top line was almost four times that ofthe Future Group, the country's sec-ond-largest organised retailer. More-over, the turnover of Reliance Retailwas more than that of all the top In-dian organised retailers put together.The landmark revenue of 2018-19 alsoplaced Reliance Retail into the list oftop-100 global retailers.

What has put Reliance Retail milesahead of its competitors is the grandsize and scale of its operation. Withnearly 10,644 stores in 6,700 cities, thecompany's retail area spans approxi-mately 23 million sq ft, while it has awarehousing capacity spread across10 million sq ft.

Besides, its presence across for-mats has been yet another factor forReliance Retail's leadership positionin the market. With Reliance Fresh, Re-liance Smart and Reliance Market(food and grocery), Reliance Digital,Reliance Digital Express Mini storesand Jio stores (consumer electronics),Reliance Trends, Trends Women,Project Eve, Reliance Footprint andReliance Jewels and Ajio.com (fash-ion and lifestyle), RIL's retail arm ispresent across the entire value chainof the retail sector.

In addition, the company also op-erates a large number of partner-brandstores across the country. With the

acquisition of Hamleys this year, Re-liance Retail has transformed into aglobal retailer with presence in 18countries.

A varied mix of products has helpedthe retailer in risk diversification. Be-sides, cross-selling opportunitieshave helped it serve its customersbetter. Moreover, a one-stop-shopsolution has attracted more footfalls,leading to an uptick in average trans-action size per customer.

In short, if the RIL Group compa-nies' unmatched successes are to besummed up in three words, they are:Dhirajlal Hirachand Ambani orDhirubhai Ambani, the founder-chair-man of Reliance. The Reliancepatriarch's special mention is certainlynot to discount the expertise and ef-forts of his elder son Mukesh Ambaniand his battery of top executives.

However, Dhirubhai's foresight,energy and brilliant strategies devel-oped over six decades ago have madewhat Reliance is today. Returning toMumbai in 1957 after a stint with agas station in Aden, Yemen, Dhirubhaistarted a yarn-trading business froma small 500-sq ft office in Mumbai.Soon, diversifying into import and ex-port of nylon, rayon and polyester,Dhirubhai entered manufacturing bysetting up a textile mill in Naroda,Gujarat.

The success of Vimal fabric brandcatapulted him into the limelight.However, the Reliance patriarch hadto take on the established businesshouses of Mumbai, then Bombay. Hisgrit, determination and winning strat-egies ensured that Reliance and Vimalsoon became a household name. Thegrand scale of operation that Relianceis associated with today wasDhirubhai's way of stunning his com-petitors. A case in point was the mam-moth IPO of Reliance Textile Indus-tries in 1977, which, in a way, spawnedequity culture in India and broughtsmall investors to the stock exchange.Disruption of the existing market withnew technologies and deep dis-counts was another tool that Reliancehas honed over the years.

Be it the Patalganga plant for manu-facturing polyester yarn filament, orthe Jamnagar petrochemicals and in-tegrated refinery complex - the world'slargest refinery at a single location -Reliance came to be synonymous withgrand scale and size. Dhirubhai andhis sons - Mukesh and Anil - set sightson new ventures, including telecomin 2002.

After the split of the RelianceGroup between brothers Mukesh andAnil in 2006, following the death ofDhirubhai in 2002, RIL was left withpetroleum and petrochemicals busi-ness. Mukesh Ambani employed thesame, old, winning strategies of scaleand size and disruption to make retailforay and re-enter telecom and leadthe way.

Addressing RIL's AGM last month,Mr Ambani had said: "The future ofIndia - and also the future of Reliance- had never looked brighter to me thannow. As India is getting transformedinto New India, Reliance will alsotransform itself into New Reliance." Iftextile and petroleum fired up RIL inthe past decade, telecom and retailcould be the drivers of New Reliancein the next decade.

After mobile services, Jio GigaFiber is set to make waves in thebroadband internet segment.

COVER STORY


IBJ BUREAU

The latest amendments to the In-solvency and BankruptcyCode (IBC) make an earnest

attempt to remove interpretative am-biguities and make the law more vi-brant. The Lok Sabha passed the In-solvency and Bankruptcy Code(Amendment) Bill, 2019 early lastmonth with eight amendments after anearly three-hour-long discussion.The Rajya Sabha had passed the Billin late July.

After the President's approval lastmonth the Bill has become the Insol-vency and Bankruptcy Code (Amend-ment) Act, 2019. This is the third timethat the government has brought inamendments to the IBC since its en-actment into law in 2016. "IBC hasbeen effective in the two-and-a-halfyears of its functioning, and abehavioural change was visible in thecorporate sector after itsimplementation," Finance MinisterNirmala Sitharaman had said replyingto the discussion on the Bill inthe Parliament.

The Insolvency and BankruptcyCode, 2016 is one of the most signifi-cant measures undertaken by the gov-ernment to address substantial in-crease in the level of distressed debtin India. The IBC Code is a remark-able step towards resolution ofstressed assets. However, certaincritical inconsistencies and gaps be-came evident, given various legal pro-ceedings initiated in respect of cor-porate insolvency resolution pro-cesses (CIRP). This necessitated theParliament to address those loopholesby bringing in the latest amendmentsto the bankruptcy law.Major changesThe amended IBC Act seeks to en-sure timely admission of insolvencycases and their completion within afixed deadline. The amendment intro-duces judicial discipline by making itmandatory for the National CompanyLaw Tribunal (NCLT) - the bankruptcy

Welcome ChangesRecent amendments to the IBC Code seek to plug theloopholes and make the bankruptcy law more focusedand vibrant.

ceipt. In the event of a failure to doso, the NCLT is now required to recordthe reasons in writing for the delay indetermination of default. This amend-ment therefore seeks to ensure thatthe 14-day period is only extended inexceptional cases and not as a matterof routine.

The amendment provides that theCIRP must mandatorily be completedwithin an overall timeline of 330 daysfrom the insolvency commencementdate, including all or any extensionsgranted as well as any litigations andrelated legal proceedings. Addition-ally, for an ongoing CIRP, in case the330-day overall timeline has alreadybeen breached at the time the amend-ment comes into force, the amendmentprovides for an additional relaxationof 90 days as a transitionary measure.The earlier deadline was of 270 days.However, many CIRPs were exceed-ing this overall 270-day limit on ac-count of legal proceedings initiatedeither against the corporate debtor,the committee of creditors (CoC) orthe resolution professional.

The most important changebrought by the amended bankruptcy

Clarity on corporaterestructuring through mergerand demerger

Time-bound disposal ofresolution application

Timeline for completion ofCIRP increased to 330 days

Voting by an authorisedrepresentative on behalf ofcertain classes of financialcreditors

Clear-cut rules for distributionof payments under theresolution plan

Resolution plan binding on allstakeholders

CoC empowered to take acall on liquidation

Powers of CoC enhanced forall aspects related toinsolvency resolution

Eight AmendmentsTo IBC Code

court - to pass an order, admitting orrejecting a resolution applicationwithin 14 days from the date of its re-

SPOTLIGHT


law is in terms of the inter-creditordistribution of payments during CIRP.Prior to the amendment, the IBC Codeprovided that payment to operationalcreditors under a resolution plan mustnot be less than the amount that theoperational creditors would have re-ceived in a liquidation scenario.

However, the amended legislationhas included an additional require-ment, stating that the payment re-ceived by operational creditors mustnot be less than the higher of the fol-lowing: the amount such operationalcreditors would have received in theevent of a liquidation of the corpo-rate debtor according to Section 53 ofthe IBC Code; or the amount suchoperational creditors would have re-ceived if the amount distributed un-der the resolution plan was distrib-uted in accordance with the priorityspecified as per the liquidation planunder Section 53 of the IBC Code.

The new IBC Code clarifies that anauthorised representative of a particu-lar class of financial creditors will votein the CoC on behalf of all financialcreditors represented by him accord-ing to the decision taken by a vote ofmore than 50 per cent of the votingshare of the financial creditors of suchclass who have cast their vote. Sucha majority vote within a class of credi-tors will be counted as a 100 per centvote from that class of creditors infavour of or against a voting item.With this amendment, the voting pro-cess for CIRPs involving a large num-ber of financial creditors, such ashomebuyers, beneficiaries of securi-ties or deposits held with a trustee, issimplified.

The resolution plan under theCIRP will also be binding on the Cen-tre, the States and the local authori-ties. Under the IBC Code, once a reso-lution plan is approved, it is bindingon all stakeholders. This amendmentaims to capture this spirit by specifi-cally providing that a resolution planwill also be binding on the Centralgovernment, State governments or

any local authority to whom debt inrespect of payment of dues is owed.This amendment will reduce delayscaused by the government or any lo-cal authority, raising demands post-approval of a resolution plan. It alsoclarifies that once a resolutionplan is approved, it is binding on themas well.Timely amendmentsStatistics related to insolvency reso-lution, meanwhile, are not too encour-aging. Nearly 53 per cent of the CIRPscompleted till the end of March 2019

have ended in liquidation, and solu-tions have been found for only 13 percent of the troubled companies. More-over, the average realisation by finan-cial creditors as a share of the admit-ted claims has been a mere 43 per centfor the period till March 2019, accord-ing to data from the Insolvency andBankruptcy Board of India (IBBI).

Worryingly for lenders, nearly athird of the insolvency cases beingprocessed have already taken over270 days. The stipulated 270-daydeadline has been breached in 362 ofthe 1,143 ongoing corporate insol-vency resolution cases. The inordi-nate delays have prompted banks tosell their stressed exposures to assetreconstruction companies. Bankerspoint out that the delays have hurttheir cash flows badly. Much of thedelay has been caused by frequentlitigation brought about by promot-ers, prospective buyers and opera-tional creditors, all looking to get abetter deal. Differences in the ap-proaches and viewpoints of thejudges on the various benches of theNCLT have also resulted in delays.

Amid the bleak numbers, the recentamendments to the IBC Code put theCoC in the driver's seat, bring clarityon the primacy of secured creditorsover unsecured creditors in the recov-ery of dues and set stringent timelinesfor the resolution and litigation pro-cess. The principle that it must be leftto the CoC to formulate a resolutionplan and also decide the amount thathas to be paid to unsecured creditorshas merit.

Law-making is the prerogative ofthe Parliament, and bankruptcy courtsmust stop acting on their own tochange provisions in the IBC Code.The message from the recent amend-ments is loud and clear. It declaresunwaveringly that insolvency courtsmust get their act together to makethe bankruptcy code work for swiftresolution of corporate distress.

"IBC has been effective in thetwo-and-a-half years of itsfunctioning, and a behaviouralchange was visible in thecorporate sector after itsimplementation."

NIRMALA SITHARAMANFinance Minister

Bankers point out that delays inresolution of bankruptcy caseshave hurt their cash flows badly.


SURESH SHARMA

The term "financial terrorism" or"economic terrorism" mayseem to be unknown or fictional

to many. They believe that marketscannot be manipulated to destabilisethe economy of a State. Financial ter-rorism or economic terrorism has beena common tactic used by State or non-State actors usually by secretly ma-nipulating a nation's economy.

Unlike "economic warfare", it mayrequire diverse, harmonised, sophis-ticated and massive undermining ac-tions in order to disrupt the economicand financial stability of a State by agroup of States or a society for ideo-logical, political or religious motives.These actions, if undertaken, may beof violent nature or not but the con-sequences are devastating for anyeconomy. They could have either im-mediate effects or carry psychologi-cal effects, which, in turn, have eco-nomic consequences. However, eco-nomic sanctions can be named as theunconcealed examples of economic

Economic TerrorismInformal economy, while benefiting poorer sections,plays a damning role of supporting terrorism and otheranti-social activities.

terrorism in the last decades.Recently, Venezuela accused the

US of economic terrorism as the USimposed new restrictions on Venezu-ela, blocking its government assetsand threatening anyone dealing withit with secondary sanctions. The sanc-tions target Venezuela's governmentassets in the US as well as individu-als, companies and countries doingbusiness with Caracas. In an execu-tive order signed by US PresidentDonald Trump, the US governmenthas declared: "All property and inter-ests in property of the government ofVenezuela that are in the UnitedStates... are blocked and may not betransferred, paid, exported, with-drawn, or otherwise dealt in."Underground economyNow, coming to informal or the un-derground economy, it is a paralleleconomy, which is pseudo and darkin nature. The underground economyconducts covert activities and can-not be officially perceived and cansubsist as a hidden part of a State's

economic structure. It includes unin-formed production in sectors, like in-dustry, agriculture, domestic trade,tourism, hospitality, transportationand cargo, finance and insurance andpublic or social services.

Some world economists supportthis form of economy as it has ben-efits of numerous kinds. The under-ground economy can help progressthe well-being and standard of livingin certain societies. On the other side,some economists argue that an un-derground economy has adverse ef-fects on companies in the governmentsector as it incurs extra costs. Work-ers get additional jobs in the dark eco-nomic sphere which results in de-creased worker productivity in publiccompanies. This obviously affects thenational income.

It's a well-known fact that there isa connection between the under-ground economy and internationalterrorist activities and support forperpetrators of violence worldwide.Given the economic relation of the un-derground economy with economiccrimes, the governments in somecountries have established specialbodies - like Enforcement Directorate(ED) in India - to arrest the perpetra-tors of money laundering and revealthe association of economic crimeperpetrators with local or internationalterrorism.

A study has explained the profit-ability of mafias resulting from theunderground fragments in some coun-tries that have reached 50 per cent ofthe national income (Gross NationalProduct or GNP). Some economistsbelieve that the undergroundeconomy has earned about $110 bil-lion in profits. There are many in-stances in the world economy, wherewe can infer that the undergroundeconomy has controlled the economyof a developing country through blackmarkets.


GUEST COLUMN

The UN records that money laundering carried out by undergroundeconomic actors has reached around $500 billion.

Laundering moneyMoney laundering is increasing yearafter year around the world with exist-ing monetary developments. Eco-nomic actors, like land mafia, drug traf-fickers and money-laundering brokers,have been able to increase their rev-enues manifold through black market,currency trading, gold trading, liquor,gambling, prostitution and drugs.

Drug traffickers regularly invest inassets by moving their capital abroadthrough foreign investment compa-nies. These companies exist in coun-tries that are safe for money launder-ers. These countries, like the UK, area safe haven for corrupt individualslooking to launder the proceeds oftheir illicit wealth, enjoy a luxurylifestyle and cleanse their reputations.The stealth companies in these coun-tries make loan transactions to recyclecapital, which is then handed over tothe smugglers and drug traffickers.

The United Nations (UN) recordsthat money laundering carried out byunderground economic actors, drugtraffickers and black market manag-ers has reached $120 billion to $500billion. It is disastrous that companiesthat engage in money laundering ac-tivities, both foreign and local, are very

(The author is an advocate of theSupreme Court of India.)

difficult to be audited and tracked bythe government authorities.

These companies are engaged onlyin the field of money laundering thatcomes from drug transactions, gam-bling, prostitution and all kinds ofdark and covert crimes. They can cam-ouflage by making investments inproperties and assets worldwide.These activities or white-collar crimesare loaded with unlawful acts, such as

corruption and other forms of crime thatinclude unlawful trading activities in-volving import of products without pay-ing import duties; prostitution and traf-ficking syndicate; smuggling goodsand weapons through borders; illegalcurrency trading; illegal granting of vi-sas to criminals who have fled fromother countries; smuggling of bogusmoney and securities and withdrawalof the same in destination country.

Money laundering has developedinto a principal weapon that not onlyspreads over third-world countries buthas also flourished in developedcountries that have caused wide-spread economic problems. But some-times, this informal economy hashelped the developing countries toupkeep the poorer sections of theirpopulation. It provides income andemployment to all people regardlessof education, experience, etc, that aformal economy is deemed to be rely-ing on. Most people who are em-ployed also find themselves engagedin the informal economy to supporttheir living expenses. No wonder, theexpanse of this informal economy isreally mind-boggling.

Underground economy canhelp progress the well-beingand standard of living incertain societies.

Workers get additional jobs inthe dark economic sphere.

But this results in decreasedworker productivity in publiccompanies.

This obviously affects nationalincome.

There is a connectionbetween undergroundeconomy and internationalterrorist activities.

Dark World OfUnderground Economy


Drug traffickers regularly invest in assets by moving capital abroad through foreign investment companies.

As a young boy, Arun Nagpal used toaccompany his father to scores ofvillages across Maharashtra. The co-

founder of the Mrida Group had picked upthe first lessons of rural development in thoserural visits, as his father was a serious prac-titioner of rural welfare and development.

Following his father's footsteps,Mr Nagpal is fully engaged with rural devel-opment through his Mrida Group. His NewDelhi-based Mrida Group is a social busi-ness venture that seeks to build sustainable,scalable and financially-viable business mod-els aimed at holistic rural development.

Earthspired, Mrida's FMCG brand, offersa range of healthy, multi-grain, millet-basedflour, cookies, and Amaranth-based, healthysnacks and more products from the heart ofrural India. In a free-wheeling conversationwith Mr Nagpal, Sharmila Chand finds outthe Mrida Group chief's management prin-ciples and practices that have made him asuccessful social entrepreneur.Your five management mantrasI would actually look at four managementmantras - very specifically in the context ofthe social entrepreneurship journey that I amengaged in. I call them the 4Ps of success,namely Passion, Purpose, Performance andPerseverance. To be truly successful, eachone has its own unique role to play, indi-vidually and in conjunction with the other(s).A game that helps your careerDuring my college days, rowing was my sportof choice, and I had competed at the AsianClub level in Pairs. Rowing is a very competi-tive team sport, and it has taught me the val-ues of teamwork, stamina and perseverance,apart from developing a never-give-up ornever-say-die attitude in the sport and mov-ing forward, in real-life situations as well.Turning point in your career life

"Passion Is An ImportantIngredient for success"

"To be trulymotivated, youhave to workwith passionand withcommitment -and thispassion andcommitmentmust comefrom the heart,from deepwithin."

I would not really point out any one definingmoment that led to a transformation in mycareer. It was a logical progression of a ca-reer path, moving towards a defined objec-tive rather than one "Aha" moment. Gettinginto social entrepreneurship arose from abelief that my circumstances and the eco-system that I was fortunate enough to havegrown in were important factors that led meto the successes that I achieved in my ownlife. It seemed but natural that I should domy bit to create a similar facilitating ecosys-tem for underserved individuals and commu-nities at the bottom of the pyramid and forothers who may not have been as fortunateas I had been.Secret of your successFor me, it was a combination of the valuesystems and the upbringing that one wasfortunate enough to have imbibed. I wouldsay that what I am today is maybe 20 to 25per cent because of me and as much as 75 to80 per cent because of the ecosystem that Iwas fortunate to be a part of. Even today, Iderive a great deal of inspiration and learn-ing from the very people at the bottom of thepyramid, whose lives we seek to impactthrough our work at Mrida.What is your philosophy of work?To be truly motivated, you have to work withpassion and with commitment - and this pas-sion and commitment must come from theheart, from deep within. I work best on thingsthat I firmly believe in and thoroughly enjoydoing. Finally, the journey is as important, ifnot more than, the destination - if the jour-ney is pleasant and enjoyable, it will clearlyreflect in the results.Any particular person you admireThere are so many individuals and situationsthat inspired and helped me become what Iam today. However, the two main inspirationsin my life have been my father and a Jesuit

ARUN NAGPAL, Co-Founder, Mrida Group

MANAGEMENT MANTRA


Finally, when your sights are set high, it isvery likely that everything will not happenthe way you want it to. There will be ob-stacles along the way, points where you willstumble, where circumstances will seem tobe conspiring against you and preventingyour progress. And that is when persever-ance needs to kick in - that single-mindedcommitment towards an objective, that never-say-die, never-give-up spirit, which will en-sure that you endure the humps along theway, and reach your objective(s).Your message to youngstersGo for it! Follow your heart and follow yourpassion. Believe in yourself and your dreams.Love what you do, and Do what you love.Think about the 4Ps. Focus not just on yourdestination, but on enjoying the journeythere. For sure, you will make it!

priest from Switzerland, Fr Alfonse Oesch,who taught me in school. My father, Dr R LNagpal, was a horticulturist, who worked withthe Maharashtra government and with whomsome of my earliest memories as a child in-volved travelling to remote villages of theState where he helped farmers and villagefolks improve their lot in life. That was myfirst introduction to rural India and to theconcept of development. Till the very end -he passed away about five years ago at theage of 94 - Dad remained extremely passion-ate about rural development and about a vil-lage-oriented, bottoms-up approach as thekey to real development of the country. As apriest, who left behind a prosperous, privi-leged life in Switzerland, Fr Oesch taught meat a very impressionable age, the values andthe principles of selflessness, hard work andperseverance.Your fitness regimeI like to be particular about staying fit, thoughI must confess that I end up straying fromthat path at times. I do (try to) hit the gym atleast thrice a week. Since I travel a lot, some-times up to 15 to 20 days in a month, I ensurethat I put in some brisk walking, typically 7to 10 km a day.Your five business mantrasI would again go back to my four manage-ment mantras that will apply here as well -the 4Ps of Passion, Purpose, Performance andPerseverance.

Passion is one of the first and most impor-tant ingredients for success. There is very littlethat you cannot do, if you seek it with a senseof passion - a fire in the belly or Jazba, Josh,Junoon, whatever you may like to call it.

Now, passion in itself will soon get frit-tered away, if it is not directed towards a spe-cific objective or a clearly-defined purpose.That purpose will help you direct your pas-sion in the right direction, channel your en-ergy in the right manner and help you achieveyour objective.

Once you have the passion and the pur-pose, you need to measure yourself againstobjectives constantly and where you are ascompared to where you set out to be. That iswhere performance comes in - measuringyour progress and making necessarycourse corrections that may be called for fromtime to time.

"I would actually look at four management mantras- very specifically in the context of the socialentrepreneurship journey that I am engaged in.I call them the 4Ps of success, namely Passion,Purpose, Performance and Perseverance."


GLOBAL WRAP-UP


Salesforce to acquireClickSoftwareSalesforce is buying fieldservice software companyClickSoftware for a tidy$1.35 billion. This deal comesjust days after Salesforceclosed a hefty $15.7-billiontransaction by acquiringTableau. The ClickSoftwaredeal could help Salesforcebeef up its field serviceoffering, which falls underthe service cloud umbrella. Inits June earnings report, thecompany had reported thatservice cloud had crossed the$1-billion revenue thresholdfor the first time. Thisacquisition is designed tokeep those numbers growing.The deal is expected to closeby the year-end and issubject to the normalregulatory approval process.

Trump wants US tobuy Greenland

made their mark in historyfor such grand ideas.OPEC sees bearish oiloutlook for 2019OPEC has delivered adownbeat oil market outlookfor the rest of 2019 aseconomic growth slows. Ithas highlighted challenges in2020 as rivals pump more,building a case to keep up anOPEC-led pact to curbsupply. In a monthly report,OPEC has cut its forecast forglobal oil demand growth in2019 by 40,000 barrels perday (bpd) to 1.10 millionbpd and indicated that themarket will be in slightsurplus in 2020. The bearishoutlook is due to slowingeconomies amid the US-China trade dispute anduncertainty over Brexit.S Korea to removeJapan from trade listSouth Korea has decided toremove Japan from a list ofnations receiving preferentialtreatment in trade. This isseen as a retaliatory move toTokyo's recent decision todowngrade Seoul's tradestatus. South Korean TradeMinister Sung Yun-mo saidlast month that the govern-ment was removing Japanfrom the country's 29-country white list because ithad failed to upholdinternational principles whilemanaging its export controlson sensitive materials. SouthKorean officials have notspecified what they saw asJapan's problems in exportcontrols.Vietnam keen on 5Gsans HuaweiVietnam is intent on beingthe first ASEAN nation toprovide a 5G network -without China's techpowerhouse HuaweiTechnologies. The ViettelGroup, Vietnam's largestmobile carrier owned by theDefence Ministry, will

UBS mulls overhaul, jobs at stakeAlmost a year af-ter taking over atthe UBS Group,investment bankco-heads PieroNovelli and RobKarofsky areworking on their

first shake-up of the business. Mr Novelli, who runs deals,is considering a reshuffle of his leadership, as he and tradingchief Karofsky seek to revamp a division that has postedvolatile results in the past year, according to people famil-iar with the matter. Their plans could entail hundreds of jobcuts. The discussions are preliminary, and a final decisionhas not been made. UBS is seeking to boost collaborationbetween deal-makers and the wealth management unit.

GE accused of masking financesA prominentw h i s t l e b l o w e rworking with ashort-seller has ac-cused GeneralElectric (GE) ofmasking financialproblems. Harry

Markopolos, who had raised concerns over investmentmanager Bernie Madoff before his Ponzi scheme was ex-posed, has said that GE has understated liabilities in itsinsurance unit and has not properly accounted for its in-vestment in Baker Hughes. Mr Markopolos has said thatGE's insurance unit will need to increase its reserves imme-diately by $18.5 billion in cash with an additional non-cashcharge of $10.5 billion when new accounting rules take ef-fect in 2021.

Verizon to sell Tumblr to AutomatticVerizon has agreedto sell Tumblr toWordPress ownerAutomattic for anu n d i s c l o s e damount. Verizon,which first ac-quired Tumblr in

2017 after it purchased Yahoo, started to explore a saleearlier this year. Automattic reportedly bought Tumblr forless than $3 million, according to Axios, a stunning drop invalue from the $1.1 billion Yahoo paid for it in 2013. Tumblrwas once a hugely-influential force in the blogging and so-cial media sphere, but it became less so under Yahoo andthen Verizon's ownership. Meanwhile, platforms, likeInstagram, Snapchat and YouTube, moved to fill the voidand become much larger cultural forces as a result.

US President Donald Trumphas expressed an interest inbuying Greenland, theworld's biggest island andself-ruling territory ofDenmark. While theseriousness of his intentionsis unclear - and the responsefrom the other side of theimagined transaction was asturdy "no" - the proposalraises questions as towhether such a transaction iseven feasible. A real estatebaron before his turn topolitics, Mr Trump has ahistory of analysinggeopolitical issues throughthe lens of a propertydeveloper. Besides,Mr Trump surely knows thatother US presidents have


Amgen to purchase Celgene's drugAmgen will buyCelgene Corp'spsoriasis drugOtezla for $13.4billion in cash. Thiswill clear the wayfor Bristol-MyersSquibb to go aheadwith its $74-billion deal for Celgene by the end of the year.Amgen, which announced the deal last month, is paying ahefty price for the drug, according to analysts and inves-tors. However, there is also another view that Otezla, whichbrought in sales of $1.61 billion last year, will deliver growthfor Amgen right away. Thousand Oaks, California-basedAmgen has said that it expects Otezla's sales to grow atleast in the low-double digits over the next five years.

US ban may cost Huawei $10 bnHuawei has saidthat the companymay face a hit of$10 billion on itsoverall smartphonesales revenue in2019 due to theongoing hostilityby the US. The UShas threatened a ban on the company's equipment allegingsecurity concerns. "The scenario is not as pessimistic asRen (co-founder and Chief Executive Officer Ren Zhengfei)had said. Maybe, that was a forecast in the worst case ofscenario. Now, the situation is much better than forecast.The business of the company could be over $10 billion lessthan expected in case of smart devices sales," Huawei Ro-tating Chairman Eric Xu has said.

Siemens buys Corindus for $1.1 bnS i e m e n sHealthineers isbuying CorindusVascular Roboticsfor $1.1 billion, thecompanies haveannounced lastmonth in the big-gest acquisition since the Siemens' subsidiary listed on thestock exchange last year. US firm Corindus develops ro-botic systems for minimally-invasive vascular therapy pro-cedures. The systems produced by Corindus, which is basedin Massachusetts with approximately 100 employees, al-low doctors to guide catheters and stent implants with con-trolling modules. The deal is expected to close by the end ofthe year. Corindus made a loss of $35 million last year onrevenue of $10.8 million.

Hasbro to snap upPeppa Pig ownerPeppa Pig owner Entertain-ment One has been snappedup by US toymaker Hasbrofor $4 billion. This is thelatest acquisition of a UK-listed firm by a foreigncompany taking advantage ofa weakened pound. Hasbro,which owns popularfranchises, including MyLittle Pony, Monopoly,Scrabble and Cluedo, has saidthat the deal will expand its"family-oriented storytelling"portfolio.

VW eyes stakes inChinese auto cosVolkswagen is exploringpotential investments inChinese automotive suppli-ers, as it seeks access to keytechnology in the world'slargest car market. Optionsunder discussion includebuying equity stakes or forgingjoint ventures with Chinesesuppliers, and the Germanauto-maker has been examiningseveral possible targets,including battery-makerGuoxuan High-Tech Co.

100 cos shift from UKto NetherlandsNearly 100 companies haverelocated from Britain to theNetherlands or set up officesthere to be within theEuropean Union (EU) due tothe United Kingdom's (UK)planned departure from thebloc, a Dutch governmentagency has said. Another 325companies worried aboutlosing access to the Europeanmarket are considering amove, the NetherlandsForeign Investment Agency(NFIA) has said. "Theongoing growing uncertaintyin the United Kingdom andthe increasingly clearerpossibility of a no deal arecausing major economicunrest for these companies,"NFIA Commissioner JeroenNijland has said.

deploy Ericsson's equipmentin Hanoi and Nokia'stechnology in Ho Chi MinhCity. It will use 5G chipsetsfrom Qualcomm and anotherUS company. The carrier,which uses Ericsson andNokia for its 4G network, isalso developing its ownequipment. Vietnam's smallercarriers, such as MobiFoneCorp and Vinaphone, appearto be shying away fromHuawei as well.

UBS turns bearishon stocksUBS Global Wealth Manage-ment has expressed pessi-mism about equities,following escalated tradetension between the US andChina. The Swiss assetmanagement company hasbeen underweight on equitiessince the European debtcrisis. UBS, which overseesmore than $2.48 trillion ofinvested assets, is the world'slargest wealth manager."Risks to the global economyand markets have increased,following a renewedescalation in US-China tradetensions," said UBS GlobalChief Investment OfficerMark Haefele.

China hikes tariffs on$75-bn US goodsChina last month announcedtariff hikes on $75 billion ofUS products in retaliation forUS President DonaldTrump's latest plannedincrease. This has furtherdeepened a conflict overtrade and technology thatthreatens to tip a weakeningglobal economy into reces-sion. China also will increaseimport duties on US-madeautos and auto parts, China'sFinance Ministry hasannounced. Tariffs of 10 percent and 5 per cent will takeeffect on two batches ofgoods on September 1 andDecember 15, the ministryhas said in a statement.

READERS' LOUNGE


A Nation Of DisruptionsThis engaging book is the story of 12 disruptions that have changed India.

What can best illustrate India's journey in the lastseven decades? It is disruptions. Almost everydecade of India's history since Independence

has been marked by major disruptions.India became independent through an act of disruption

- Partition - that killed millions in communal violence andturned many more into refu-gees. The turn towards a modelof State-led economic develop-ment delivered as big a shockto the economy as did the foodcrisis or the spike in crude oilprice. If the Emergency in 1975shook the foundations ofIndia's democracy, the unprec-edented balance-of-paymentscrisis of 1990 turned Indiatowards a path of economicreforms.

Just as the reservation of jobsfor backward castes changedthe idiom of India's politics, the

movement for building a temple for Ram drove India closer tobecoming a majoritarian State. No less disruptive have beenthe telecom revolution, the banking crisis, demonetisationand the launch of the Goods and Services Tax.

The book walks the reader throughthe political shenanigans that markedthe partition of India and analyses themotives of the protagonists of the dis-ruption - Jinnah, Nehru as well asMahatma Gandhi. The story of a fledg-ling democracy grappling with the dev-astating fallout of the Partition andattempting to build a strong robusteconomy is riveting.

Policy-makers adopted an approachof aggressive Statism, with the Stateshowcasing huge public sectorprojects as temples of modern India,nationalising the Imperial Bank of In-dia and taking over Air India, a com-

AuthorA K BHATTACHARYA

PublisherPENGUIN PORTFOLIO

Pages: 360

Price: Rs 699

THE RISE OF GOLIATH

mercial airline. However, the focus on industrialisation tothe exclusion of all else sowed the seeds of the disruption- a severe food shortage crisis, which ultimately neededthe Green Revolution as solution - that had to follow.

Author A K Bhattacharya notes in this book that not allof the dozen disruptions he has identified had a maleficeffect on India. Some of them - for instance, the GreenRevolution, which harnessed agricultural research in thecause of helping the nation acquire self-sufficiency in food- were by and large a force for good.

That benign verdict of the Green Revolution standsdespite the criticism that it gave rise to income inequali-ties among Indian farmers. Besides, it laid the foundationfor a regime of "minimum support prices" and input subsi-dies. These have over time been hard-coded into the DNAof the economy and have had an adverse effect on thecountry's finances.

The strength of the book, which is peppered with lively,anecdotal back-stories that bring the narrative alive, is inthe manner in which it contextualises these defining mo-ments against the backdrop of India's politics, society andeconomy. The author also does a masterly job of distillingthese narrative strands through the filter of his perspec-tive and offering meaningful insights into the impact thatthe events and processes had on the economy and onIndian businesses.

The author also mulls over the 'whatifs' of the historical events, giving thenarrative a somewhat quirky 'the road-not-travelled' perspective. Would webe living in undivided India if Jinnahhad not prevaricated or if Nehru hadstuck a little longer with his ideal of aunified undivided India? Such 'what-if' scenarios make the book lively.

How did these disruptions impactIndia? How did they influence the riseof this Goliath? This is the story oftwelve disruptions that changed India.The book also provides a peek intothe kind of disruptions India couldface in the coming years.

About the authorA K Bhattacharya, AKB to every journalist, set the bar for business reporting as chief of bureau at the Economic Times in theearly 1990s, when economic reforms raged. AKB went on to become the editor of the Pioneer and the Business Standard. Heis currently the Business Standard's editorial director and writer of two long-running columns.


Challenges Of Sanitation THE RIGHT TOSANITATION IN INDIA

About the editorsPhilippe Cullet is professor of international and environmental law at the SOAS University of London. Sujith Koonan isassistant professor of law at the University of Delhi. Lovleen Bhullar is a doctoral candidate at the SOAS University ofLondon.

So far, success books spoke on only achieving the de-sired visions and planned goals regarding wealth,

prosperity, fame, establishment of business empires, big po-sitions, or tips to achieve anything you want in life, complet-ing the objectives, accomplishing the plans, reaching thecareer goals, accumulating abundance, the dos and don'ts.

The book fills the mind with positive, inspiringaffirmations that can usher success into one's life. AuthorBurra Venkatesham has studied the illusive pattern thatmakes for success and employed it in his personal life,with incredible results. Now, he shares his treasure troveof in-depth knowledge on the subject in an easy-to-readand immensely-inspiring book.

But this book speaks about success in 360 degrees,which is its USP. It encompasses all the angles of success,providing various insights and comprehensive perspec-

tive of the world of success. Everyone,who wants to reach success, shouldread it to know the unimaginable and fas-cinating aspects of success.

The book presents a holistic view ofthe success in a poetic and philosophi-cal way with fluid style. The aspirant of

All About Success

AuthorBURRA VENKATESHAM

PublisherPRATAP CHOWDARY

Pages: 170

Price: Rs 299

SELFIE OF SUCCESS

success cannot so far imaginewhat the side-effects of suc-cess will be and what the sinsof success will be. The suc-ceeding real-life storieshighlight each concept in asubtle way.

The references to the lifeand times of luminaries, fromMahatma Gandhi to Escobar,Jack Ma to Ramoji Rao, OprahWinfrey to Michael Jackson,offer insights on what makesfor success. The book strivesto educate, inspire, motivate and also forewarn the readerabout success. The language is simple and easy to com-prehend, reaching out to people of all ages.

This is a unique book on success because the soul ofsuccess itself speaks directly to you from the depths of itsstory. As success speaks from its heart, it is like a face-to-face conversation with ease and grace. This book is amust-read for its lucid style and unique taking, as well asits comprehensiveness.

About the authorBurra Venkatesham is an IAS officer, who has served right from a sub-collector to home secretary in various capacities. He iscurrently secretary of youth advancement, tourism and culture in the government of Telangana.

The right to sanitation has been recognised domestically for more than two decadesand progressively integrated into the international human rights law framework since

the beginning of the century. The recognition of the right itself is not a matter for debatesince the courts have repeatedly affirmed its existence as a right, deriving from thefundamental right to life. Key issues arise in the context of conceptualisation and realisationof the right and relate to the existence and the scope of a law and policy framework for therealisation of the right to sanitation for all. The issues also related to the scope of theright, the links with other rights, such as health and gender equality, as well as issues ofspecific relevance in the Indian context, such as manual scavenging and more, generally,caste-based discrimination and exploitation linked to sanitation work.

This book represents the first effort to conceptually engage with the various dimen-sions of the right to sanitation. It analyses the right to sanitation in India in the broaderinternational and comparative setting. In a context where sanitation challenges are moresevere in India than in many other countries, this book is the first step towards a betterunderstanding of the right to sanitation and its multiple dimensions in India.

EditorsPHILIPPE CULLET,

SUJITH KOONAN &LOVLEEN BHULLAR

PublisherOXFORD UNIVERSITY

PRESS INDIA

Pages: 304

Price: Rs 1,295

CANCER

STAR TALK

ARIES Mar 21-Apr 20

Much enjoyment and healthy atmosphere inthe family is on the cards. You may benefitfrom some financial help. You will also be ableto control your expenses during the month.

Those who are in the habit of taking decisions in a hurryshould be careful before making any significant decisions,especially regarding professional matters. This month willbring with it amazing real estate deals. Employees will haveto work really hard.

Jun 22-Jul 22

There are chances of financial growth due toyour astounding performance in your profes-sional career. You will realise that business isgrowing. You will benefit if you are an em-

ployee. Your financial stability is all set to get strongerand more satisfactory. If you have applied for a loan, it willbe sanctioned. However, you still need to aim to minimiseyour expenses. Your plans to spend quality time with chil-dren at some hill station will be possible. Your efforts inany positive direction will give you a fruitful result.

Family atmosphere will really be unhealthy inSeptember. You will find that something is miss-ing and may find the behaviour of your chil-dren different. You may not get expected fi-

nancial help but will be able to have good control overexpenses. Those who are in the habit of taking quick deci-sions would be rewarded. This month may not be benefi-cial for property dealings. Taurians will experience aver-age health and may have to become conscious by involv-ing themselves in physical activities, advises Ganesha.

TAURUS Apr 21-May 21

Family atmosphere will remain disturbed. Youwill have to become conscious of your healthby doing physical activities, like walking orYoga. You may benefit from your professional

career, making your family atmosphere healthy and happy.Your financial condition will get stronger. You may getfinancial help from some reliable sources. You will be ableto have great control over expenses during the month.You may have to struggle hard to accomplish your taskseither in job or business. People involved in travel-relatedjobs will face more difficulties.

May 22-Jun 21GEMINI

You will be lucky enough to get a promotionfor your excellent output and behaviour, butyou wouldn't be satisfied with the monetarybenefits. You will get the desired cooperation

and help from your friends and younger siblings. How-ever, you may find a few differences of opinions with yoursiblings. You will wisely be able to keep a balance be-tween your income and expenses. You will increase yoursavings this month. You will have to control your anger,or it will affect your health.

LEO Jul 23-Aug 23

Aug 24-Sep 23

You may have to remain absent from yourworkplace, which will affect your productiv-ity. You may remain gloomy for certain daysbecause of excess workload. You may lose your

important clients. You may invite your friends to yourhouse to have a get-together. You may get a good re-sponse and respect from your younger brother or sisters.You may have to spend a considerable amount on thetreatment of your family members or yourself. Your care-lessness with respect to your health will disturb yourwhole routine. You will have to be ready to make heftypayments towards hospital bills.

VIRGO

This month there will be satisfactory progressin your career, either as an employee or abusinessperson. You will be burdened withmore and more workload as you discharge

your official responsibilities. One after another, health is-sues may disrupt your exercise schedule, making youweaker. Your efforts to minimise expenses and save some-thing during the month will go in vain. Most of the stu-dents will not be in any position to concentrate on stud-ies. Your plan of going abroad or on a long journey mayget postponed, or you may have to cancel your tickets.You may get a job transfer.

LIBRA Sep 24-Oct 23

September will bring with it some good newsregarding your job. You will be one of the bestperformers in the company that you are cur-rently working. Businesspeople will be able

to expand their business and may appoint more staff. Youwouldn't be able to maintain cordial relations with yourfriends' circle and younger siblings. If you're planning togo abroad on a work permit, then your wish will be ful-filled. You may not have any health issues, but unlimitedhours of work may make you extremely tired. You will haveto apply a special kind of skill to control your expenses.

SCORPIO Oct 24-Nov 22



You may feel like your career is not moving inthe right direction. In fact, chances of an un-wanted transfer are high. Even businesspeoplewill not be satisfied with their progress. We

advise you never to give up on your dreams. Eventually,everything will be alright. Your financial position won't beof any help. You will find your income decreasing andyour expenses increasing. In between all of this, only yourhealth will support you. Other than that, you may have tospend on home renovation. You may have to pay higherrent. The progress of your children will not be satisfactory.

Feb 19-Mar 20

Financially, September will be great. You willmake astonishing wealth management plans.You may even invest your money. Clearing ofany outstanding loan will be much easy. You

may buy valuable electronic items for your home. Peopledealing in the stock market or investment and broking inshares may get fabulous returns. You may benefit by rent-ing out your property with a higher rent. You may face anawkward situation while resolving the issues among chil-dren, siblings, and mother. You may face problems relatedto skin diseases or complications in your brain. Aged per-sons may face difficulties in hearing clearly.

AQUARIUS Jan 21-Feb 18

Libra crypto-currency is a digital currencythat Facebook intends to launch, whose value may

stabilse over a period of time. On the 18th of June,Facebook had announced that they intended to pro-pose a digital global currency that is less volatilethrough a decentralised blockchain, which will be inthe market in the first half of 2020. Ganesha makes useof astrological analysis to predict the future of LibraAstro analysisThe conjunction of four planets - Sun, Rahu, Mercuryand Mars - signifies that there can be three combina-

tions that can impact the market in a big way. First ofall, both Sun and Mars include the fire element andare aggressive as well. The combination of these plan-ets may lead to a lot of aggressive trading and high-est of volatility.

Combination of Sun and Rahu will create an illu-sion and confusion in terms of its price. This develop-ment may create a lot of queries related to the govern-ment and, the support from the government may belacking as well. Besides, the Mars-Rahu combinationwill create a lot of stress, and people will have to bevery careful while trading, as even a small mistake canmake one incur financial loses.

In spite of these three negative combinations ofthe planets, Mercury is in its own house. This willgenerate a lot of volume, and people will be convincedmore logically. Overall, the Libra crypto-currency willhave to stand firm in the market and go through a lotof struggle till June 18, 2026. The period there on-wards will see quite some success. So, both investorsand companies will need a lot of patience and carebecause the horoscope seems quite weak.

Libra will have to go through a lot of struggle tillJune 18, 2026.

Be Patient, GaneshaCautions Libra's Investors

CAPRICORN Dec 22-Jan 20

September is all set to bring good tidings forcouples. Your terms with your spouse will bepleasant, and married life will go on smoothly.Your dream of going on an assignment as a

representative of the company may not come true. Yourbusiness tour for the development of business will notgive any expected benefits. You may be selected for pro-motion, but that may get delayed. You may have to spendan extra amount either out of your savings or by taking aloan from bank or relatives. Your health will keep on ham-pering your work, warns Ganesha.

PISCES

Your health will remain normal for most of themonth, except for some seasonal issues orstomach issues from consuming unhealthyfood from outside. If you have been sick for a

long time, you are sure to recover soon. You will be in aposition to make financial progress by saving money. Butif you lose control over your expenses, things will getworse than ever. A tiny little mistake at work will make yourepeat the same task more than twice. Your relations withyour beloved will improve. If you have a partnership busi-ness, you will not have the expected growth.

SAGITTARIUS Nov 23-Dec 21

KNOWLEDGE ZONE

Barely three weeks after taking overas finance secretary last month,

Rajiv Kumar will be overseeing a ma-jor operation. Last month, Union Fi-nance Minister Nirmala Sitharamanannounced a major stimulus packageto boost the ailing Indian economy. Itwill be up to Mr Kumar to ensure thatthe stimulus package gets theeconomy back on track.

The major challenge apart,Mr Kumar, who was until recently fi-nancial services secretary, has had toassume this big responsibility amidan abrupt exit of his predecessor,Subhash Chandra Garg. Mr Garg, whowas shunted to the Power Ministryas secretary, has sought voluntaryretirement.

A lot is now riding on the shoul-ders of the new finance secretary -the seniormost among the five secre-taries of the Union Finance Ministry.Mr Kumar, the 1984-batch, Jharkhand-cadre, IAS officer, is a veteran in thepower corridors of the North Block. ABSc and LLB graduate, along with amaster's in public policy and

the 59-year-old bureaucrat had initi-ated several of reforms in thecountry's banking sector to clean upthe bad loan mess and make publicsector banks (PSBs) stronger.Mr Kumar had spearheaded thegovernment's larger plan of consoli-dating a few bigger banks, startingwith Bank of Baroda's merger withDena Bank and Vijaya Bank, making itthe third largest PSB in the country.

He had also overseen a recordamount of capital infusion into PSBsto beef up banks' capacity to lend.Besides all this, Mr Kumar had been apart of the Union Budget-making ex-ercise thrice. Mr Kumar was a part ofthe crack team of the Union FinanceMinistry that played a key role in tak-ing ahead Mr Modi's plan of financialinclusion, aimed at boosting creditaccess and job creation, through thegovernment's varied schemes, suchas the Pradhan Mantri Jan DhanYojana and the MUDRA Yojana.

In his new role as the finance sec-retary, Mr Kumar will continue to ad-dress the crisis in the country's bank-

sustainability, Mr Kumar has had overthree decades of experience in publicpolicy and administration across vari-ous sectors.

Since taking over as the financialservices secretary in September 2017,

F A C T SF O R Y O U

INTEROPERABILITY

In June this year, the Bombay StockExchange (BSE) and the Metropoli-

tan Stock Exchange of India (MSEI)had announced that they had becomeinteroperable. The National Stock Ex-change (NSE), in the meanwhile, hadadopted interoperability in a phasedmanner, with its equity cash and de-rivatives segments and its currencyderivatives segment going live in aphased manner.

So, what is interoperability, andwhat happens when stock exchangesbecome interoperable? Interoperabilityis a mechanism that allows market par-ticipants to choose any clearing cor-poration to settle their trades, irre-

through Metropolitan Clearing Cor-poration of India. Thus, participantswho traded on multiple exchanges hadto necessarily arrange for margin andcapital separately at each of the threestock exchanges and their respectiveclearing corporations. This resultedin inefficient use of capital and highcosts. Hence, the Securities and Ex-change Board of India (SEBI) decidedto link all the clearing corporations inthe securities market and allow con-solidation of the clearing and settle-ment function at any one of them.

The SEBI had laid down guidelinesfor a world-class interoperable frame-work for clearing corporations in No-vember 2018.

Operationalising such an inter-link-age was a very complicated and hi-tech process, as it entailed intercon-necting all three stock exchanges andclearing corporations and marrying

spective of the exchange where theyexecuted their trades. Earlier, tradesexecuted on the NSE were cleared andsettled only through its subsidiary,NSE Clearing. Transactions on theBSE were settled through its subsid-iary, Indian Clearing Corporation(ICCL), and those on the MSEI

Interoperability results in efficientuse of capital by cutting trading costs.

AT THE HELM


RAJIV KUMAR

Solution for Having Saidthe Wrong Thing

Dadashri: Making adjustments in worldlyinteractions has been referred to as Gnan(Knowledge) in the current times. Yes,adjustments should be made. Even if yourattempt to adjust fails, you should stilladjust. Now, to speak is not under yourcontrol. Do you not end up sayingsomething hurtful sometimes? Afterspeaking, you immediately realise that youmade a mistake. You will not refrain fromknowing, but at that time, you fail to goback and adjust things. You shouldimmediately go to him and tell him, "Dearfriend, I happened to speak harshly earlier,it was a mistake. So please forgive me."When you do this, it becomes adjusted. Isthere any problem in this?

Adjustment can be Made Everywhere

Questioner: Oftentimes, it happens thatI have to adjust with two people at thesame time over the same issue. Then, atthat time, how can I manage everything?Dadashri: You can take it [the adjustment]with both. Oh, if you had to take it withseven people, you would still be able totake it. If one of them asks, "What did you plan for me?" Then youwould answer, "Yes, I will do as you said." You should say the sameto the other person, "I will do as you say." Nothing is going to happenoutside of vyavasthit (the result of scientific circumstantial evidences).Therefore, any which way, do not start a quarrel. Adjustment is thekey. With 'yes' there is freedom. Even if you say 'yes' to someone,nothing is going to happen outside of vyavasthit. But if you say no,then you invite a lot of problems!

If a husband and wife both make a firm resolve that, 'I want toadjust', then both will find a solution. If he or she insists a lot, thenyou should adjust, and you will have the solution. If you provoke adog once, twice, or even thrice, it will maintain your reputation, butif you keep provoking it, then it will bite you. Even the dog will cometo realise that the one who provokes daily is worthless, is shameless.This is worth understanding. Do not create any problems, adjusteverywhere.

The one who has learnt the art of adjustment, has turned from theworld and onto the path of liberation (moksha). When an adjustmentis made, that is considered Gnan. The one who has learned to makeadjustments has sailed free. You are bound to suffer whateversuffering comes your way, but the person who has learnt to makeadjustments will not have any problems; the accounts will becomeclear. If you encounter a robber, and you misadjust, he will then beatyou. Instead, you should decide that, 'I want to adjust and get mywork done'. Then you can ask him, "Sir, what is your wish? Look here,I have set out on a pilgrimage." You have adjusted to him.

When your wife has cooked a meal, it is a blunder to find faultwith it. You cannot find such faults. You talk as if you do not makemistakes! How to adjust? Adjustments should be made. Should younot make adjustments with the one you have to spend the rest ofyour life? If someone is hurt by you, how then can you call that thereligion of Lord Mahavir? And family members should not be hurtwhatsoever.

Spiritual Corner Adjust Everywhere

For more information on Dadashri's spiritual science,log on to www.dadabhagwan.org. Also visit kids.dadabhagwan.org


ing sector. Most of the banks havecleaned up their books. However,both private and public sector bankswill have to take tough measures toreduce the problems of non-perform-ing assets (NPAs) that are plaguingthe banking sector.

Getting non-banking finance com-panies (NBFCs) back on their feet isone major issue that needs to be takenup by the new finance secretary andhis team of officers. BesidesMr Kumar will be playing an activerole in supervising policies pertain-ing to regulators, such as ReserveBank of India, Pension Fund Regula-tory and Development Authority aswell as Insurance Regulatory and De-velopment Authority of India.

When not busy with the issuesrelated to the country's finance andeconomy, Mr Kumar is busy immersedin Indian classical music. The top bu-reaucrat is also an avid trekker. Mean-while, getting the economy back inshape is no less a trek for Mr Kumar.And the trekker and veteran bureau-crat seems to be more than preparedto take this trek too.

To be continued…

PUJYA DADASHRI

their technologies and systemsseamlessly. Therefore, this is one ofthe biggest changes in the history ofIndian exchanges since the introduc-tion of dematerialised settlements andderivatives trading through ex-changes in the early 2000s. But thistime around, this change may evenbe bigger and better as it is a giantleap towards the creation of "onemarket" involving multiple players.

Interoperability among clearingcorporations will benefit all stakehold-ers, particularly brokers and ex-changes. With interoperability now inplace, trading members not just get toclear their trades through a clearingcorporation of their choice, but it alsois about choosing their risk manage-ment. Interoperability would also re-duce membership costs and bringabout healthy competition of clearingcorporations.

COMPILED BYDR NIRU MAA

HOT SEAT

Send feedback to [email protected]


How do you define yourself?A doer and painful non-procrasti-nator who loves to create newerexperiences and consumerjourneysWhat is your philosophy of life?Treat your work as your religion -derive pride and joy from it.What is your passion in life?Providing employment andcreating value through businessWhat is your managementmantra?Lead by example.A business leader you admirethe most…Ratan TataYour strength…I am a doer. I don't let failuresweigh me down.Your weakness…I am too emotionally invested inmy work.Your kind of music…Retro, Deep HouseYour favourite holidaydestination…TurkeyGolf or Bridge or…GardeningFormal suit or casual attire…Semi-casualYou are a tough, serious boss or…I am a fun person to work with.I like to laugh openly along withmy team.What do you enjoy the most inlife, generally?When I am not working,I like decorating and cleaningmy home.How do you de-stress?I suffer from OCD (Obsessive-Compulsive Disorder). So, myde-stressing is mostly cleaning,gardening or shopping.Your mantra for success…Work hard and pay your dues.Your dream…To employ as many people andcreate a successful food-techunicorn that brings disruption inthe cloud kitchen industryTen years from now, where dowe see you?Seeking new targets andimproving upon what we haveachieved

She's self-confident, articulate, poised and unstoppable. With over 15 years of experience in marketing, public relations and the mediaindustry, Ishita Yashvi, the co-founder of Cross Border Kitchens, has

a meaningful understanding of consumer behaviour, buying patterns andmarketing strategies.

Her stints in the media industry include some of the most prominentmedia houses, like the Outlook Group, the ANI & the Images Group.Ms Yashvi has also worked with marquee brands, such as DLF Retail andForest Essentials.

During her journey so far, she has been a part of several start-ups andhence enjoys facing new challenges, learning and implementing newprojects. The year 2018 brought a turning point in her life, as it marked astart of her new journey as an entrepreneur. She co-founded Cross BorderKitchens, a New Delhi-based F&B tech start-up, which owns multiple, food-delivery brands operated through cloud kitchens owned and operated bythe company. In an insightful interaction with Sharmila Chand, Ms Yashvisheds light on her personal life, her likes, dislikes, strengths andweaknesses.

ISHITA YASHVICo-Founder, Cross Border Kitchens

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