Innholdsfortegnelse for May 8, 2016 i Business Today

ONLY A FRACTION OF THE FUNDS THAT WERE TO BE SPENT WITHIN THEIR JURISDICTION WAS HANDLED BY THE PANCHAYATS The Narendra Modi-led NDA government may be right in delegating more responsibilities down the hierarchy and even prodding Panchayats to take important decisions and manage funds at their levels, but have the village bodies been empowered to handle the enormous responsibilities that come with it? Budget 2016 has earmarked a 2.87-lakh-crore grant to gram panchayats (GP) and municipalities in line with the 14th Finance Commission recommendations – a quantum jump of 228 per cent for the current financial year compared to the preceding five fiscals. This translates into an average assistance of 80 lakh per GP and 21 crore for each urban local body. That’s a lot of money. But have…

ONE BIG PROBLEM, SAY EXPERTS, IS COMMODITISATION OF THE BUSINESS OF GENERICS, WHICH IS FORCING COMPANIES TO INVEST IN NICHE SPECIALTY AREAS Last year saw India’s top pharmaceutical companies go through one of their most challenging, if not the worst, periods in recent memory. Over the past 12 to 18 months, many have got warnings from the US Food and Drug Administration, or USFDA, for not conforming to certain good manufacturing practices. The list includes Sun Pharmaceuticals, Dr Reddy’s, IPCA Laboratories, Cadila Healthcare, Cadila Pharmaceuticals and Mylan Laboratories. This forced them to put in place costly corrective measures even as sales to their biggest market was affected. The US accounts for 40 per cent-plus sales of most big Indian pharmaceutical companies. In 2014/15, for instance, Dr. Reddy’s 47 per cent…

Nikhil Dey, a renowned social activist who has been working with peasants in the villages of Rajasthan for decades, is finding more disgruntled poor around him these days. It all began with the decision of Rajasthan government to make Aadhaar-based authentication mandatory for supply of subsidised foodgrains through the public distribution system (PDS), a couple of months ago. While the objective of biometric authentication was to ensure that the subsidised foodgrains (wheat at 2 and rice at 3 a kg) reaches the real beneficiary by avoiding leakages, the process seems to have made life difficult, instead of making it easy, for most beneficiaries in Rajasthan. “If you see what is happening in ration (PDS) shops in Rajasthan, the POS machines that are meant to identify the people are a complete…

AAJAR KHAN: Stays with his wife and two children in Delhi. Joined Ecom Express in 2015 and makes `10,000 a month. He uses the money for his children’s education It is the morning before Christmas. On-demand delivery company Quickli’s small hub in Delhi’s Kalu Sarai is abuzz with 10 just-hired men. They get red jackets and Santa hats for a “feel-good factor”. There aren’t any holidays – when the rest of India celebrates, delivery companies must work. Right now, everyone is gearing up for a training. Trainer Arpo Ghosh switches on a projector, as the men take their seats. The next one hour is about a lot of must-dos and must-haves. “Always keep 1,500 in cash for spot payments.” “The mobile needs to be fully charged and 3G connection is…

In its 33 years of existence, Maruti Suzuki India has launched scores of vehicles, a number of them iconic. So, why should the launch of one more – the compact SUV Vitara Brezza in early March this year – matter? It is because the Vitara has achieved a landmark – that of 98 per cent localisation – the first vehicle from the Maruti Suzuki stable to do so. And that in turn has been made possible by the increasing emphasis the company has placed on research and development (R&D) in India. The Vitara was created by a team of Indian engineers led by C.V. Raman, which has been working on the project since 2010, at a total investment of `860 crore. “Our local engineers have done a decent job with…

“We are making efforts to ensure that the project-end appraisals become compulsory”Sucharita Palepu, Global Head, People Practices, Tech Mahindra In October 2015, Noida-based HCL Infosystems decided to move away from its annual rating system and introduced a Personal Unit Level Self-Evaluation (PULSE), a weekly feedback mechanism where employees were to fill in a set of 22 yes-no questions on the company’s intranet to record their performance. “We wanted a cultural change and wanted people to take more ownership, unleash their full potential and give their best,” says Premkumar Seshadri, Managing Director, HCL Infosystems. “Since the feedback exercise has to be done weekly, we ensured the questions don’t take more than three minutes to fill. However, the managers need to take an hour out and fill the forms for each of…

When a company claims to be working on a flagship smartphone for close to two years, you expect something spectacular. And Xiaomi’s latest lives up to the expectation, especially for the price it comes for. On paper, the Xiaomi Mi 5 is as powerful as the latest flagship from Samsung and is the first smartphone with Qualcomm Snapdragon 820 processor to be launched in India. However, Xiaomi has only launched the 3 GB RAM with 32 GB internal storage variant in India. The review unit I received had some bugs and heating issues, but Xiaomi was quick to replace it. Mi5 is capable of supporting heavy graphic games without heating issues. I shot 4k videos and edited them on the phone itself, without any lag. For those looking for synthetic…

For the domestic automobile industry, it is going from bad to worse. It was already reeling under the three-month ban on the registration of diesel cars above 2,000 cc in Delhi-NCR, which was to end on March 31. Now, the Supreme Court is considering a 30 per cent Environment Compensa-tion Charge (ECC) on diesel cars to lift the ban. The passenger car industry had just started showing signs of a recovery with the best five-year growth figures of 7.24 per cent in 2015/16. But with Delhi-NCR accounting for 20 per cent of the volumes for high-end diesel cars, the proposed tax, if imposed, would literally kill the segment. Sale of diesel cars above 2,000 cc had slumped to a five-year low last fiscal. Talks of lifting the ban, however, come…

CAUSE AND EFFECT POLICY GUIDELINE A marketplace will merely offer a platform for brands to sell their products and will not exercise ownership over the goods to be sold The marketplace will not be allowed to hold inventory or sell its private brands An e-commerce entity will not permit more than 25 per cent of sales affected through its marketplace from one vendor or its group companies E-commerce marketplaces will not directly or indirectly influence the sale price of goods and services IMPACT If a consumer has a complaint about a product bought on a marketplace, it has to be addressed by the individual brand only Private labels constitute almost 15- 20 per cent of the revenue of most marketplaces Companies such as Flipkart and Amazon have stakes in seller…

£1. One Pound Sterling. Or just about US $1.41. Which is less than `100. That’s the price at which Tata Steel sold off its Scunthorpe steel plant, its mills in Teesside and Northern France, an engineering workshop in Workington, a design consultancy in York, and a bulk terminal and associated distribution facilities to Greybull Capital. These assets represented its loss-making long products division, employing 4,400 people. It represented roughly one-fourth of the Tata Steel UK business – the erstwhile Corus Plc – which the group had picked up after a bruising bidding war in 2007 for $12 billion (`53,000 crore then). Apart from the token amount, Greybull Capital – a private investment firm – will also take over ‘relevant liabilities’, mostly working capital-related. Analysts say there is no transfer of…

Automation and robotics is in. Amazon’s Prime Air could be the future of delivery: the firm says it is designed to safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles, or drones. This could be awhile away, but warehouses are now heavily automated in the rest of the world, including China. According to a report from Research and Markets, in 2015 the market size of automated logistics system in China approximated RMB 58.3 billion, up 25.7 per cent from a year earlier. Do Indian firms match up? They are not thinking drones, at least – jobs wouldn’t be lost to the machine right away. “Drones on a hardware technology front cannot be cost-effective, reliable as well as safe at the same time,” says Arpit…

“India will soon be another home market for us” Malaysia-based IHH Healthcare Berahad is the world’s second-largest healthcare provider on the basis of market capitalisation. It is also one of the largest healthcare chains in Asia with three subsidiaries — Parkway Pantai Ltd, Acibadem Holding and IMU Health. It is a strategic investor in Apollo Hospitals, whose rival, Fortis Hospitals, tried to take over Parkway some years ago. Parkway recently bought Hyderabad-based Continental Hospitals and tertiary care chain Global Hospitals. Dr. Tan See Leng, Managing Director and Chief Executive Officer of IHH Healthcare and Group Chief Executive Officer and Managing Director of Parkway, spoke to BT’s P.B. Jayakumar on plans for India, Fortis’ takeover attempt and investing in Apollo. How do you view the changes in India’s healthcare market? Have…

$11.37 BILLION worth pre-orders for Tesla’s new Model 3, nearly two years before the electric sedan goes on sale. The $35,000 price tag and the Model 3’s 215-mile range were key to the 325,000 people who booked the car. MONSOON ON THE WAY! Everyone – and not just the farmer – is waiting for a good monsoon. And IMD Director General Laxman Rathore brought a collective smile to India’s lips by predicting an above-normal – 106 per cent of average – monsoon this year. The economy can breathe a sigh of relief. WATER, WATER, NOWHERE… …except on the cricketing fields of IPL. But the Bombay High Court’s order to hold all matches post April 30 out of Maharashtra has cheered concerned citizens, and brought on a logistical nightmare for the…

"THIS KIND OF DOWNGRADES WAS LAST SEEN IN 2012/13 WHEN WE SAW A BIG SHIFT IN THE EXTERNAL ENVIRONMENT" Pawan Agrawal, Chief Analytical Officer, Crisil The UK-headquartered Standard Chartered Bank, with large operations in India, is scouting for buyers for $1.4-billion stressed loans given to Indian companies. The news, especially the quantum of the stressed loans, came as a surprise to many, as only public sector banks, or PSBs, which have more than two-third share in deposits and advances, had been hogging the headlines for bad loans all these years. Standard Chartered is not alone. Several foreign and private banks are working overtime to sell bad loans as they come to terms with the stress in their loan books, taking tough decisions wherever required. “They are not going to wait…

ONE PROBLEM IS THAT THESE ARE CIVIL OFFENCES AND SO FOREIGN COUNTRIES DO NOT USUALLY COOPERATE WITH THE INVESTIGATORS The recent leak of papers of a Panama-based law firm that helped people and companies open companies and trusts in tax havens has added fuel to the politically sensitive issue of black money. However, investigations into names revealed in earlier such exposes have rarely led to prosecutions or detection of big unaccounted money. In fact, in many cases, the people named were not found to have done anything wrong as opening companies or trusts in tax havens is not illegal per se. According to the finance ministry, in a similar expose in 2013 by the International Consortium of Investigative Journalists (ICIJ), the organisation behind the Panama leaks too, names of 700…

he recovery of the Indian economy (among other things) hinges on two key factors: growth in investments – both public and private sector – and an uptick in consumer demand. While the government is making sure that one side of the investment wheel keeps moving, the other wheel, which is private investments, is still stuck. Underutilised capacity, weak demand, a cautious banking sector, and over-leveraged books of large corporations are affecting fresh investments by the private sector. The situation on consumer demand is not hunky-dory either. Two years of weak monsoon have crippled rural demand. The latest Business Today-C fore Business Confidence Survey seems to echo these macro-economic concerns. In the January-March period, the index registered a straight fifth quarter fall. The survey shows that, on a scale of 100,…

Just as it seemed SKS Microfinance was getting back on its feet, it has received a body blow once again. It had applied for a small finance bank (SFB) licence, but while eight of the 10 entities the Reserve Bank of India (RBI) awarded these licences to were micro-finance institutions (MFIS), SKS Microfinance was not one of them (See Left Out). Indeed, of the 10 leading MFIS in the country, one, Bandhan, has become a full-fledged bank, while another eight will shortly be converted into SFBS. SKS Microfinance is the only one left out. Why did this happen? “The company didn’t get fit and proper clearance from the concerned agencies,” says an RBI official on condition of anonymity. SKS Microfinance failed to get a clearance because its President, S. Dilli…

BUSINESS: Helps companies comply with sexual harassment laws FOUNDED IN: September 2014 FUNDING: Bootstrapped ( 1.50 crore) NO. OF CLIENTS: 90 KEY CLIENTS: Hexaware Technologies, Balaji Telefilms, Emirates, Voltas The tongue-in-cheek and seemingly innocuous comment by eminent lawyer Harish Salve in the Supreme Court in 2014 raised the hackles of opposing counsel Indira Jaisingh. “The interjections by the learned senior counsel ... are always delightful,” Salve had said, referring to Jaisingh, a noted jurist. Jaisingh took umbrage at the use of the word “delightful”. She wondered whether Salve would use a similar expression for men and described it as a “sexually coloured” comment. “She may well be right ... the evaluation of a charge of sexual harassment would depend on the manner in which it is perceived,” the judge observed…

The auto industry has had to face many speed bumps – the Supreme Court ban on big diesel engines, advancement in emission norms and the infra cess… It is disappointing that the industry’s demand on reducing excise duty has not been addressed and additional taxes like infrastructure cess have been imposed, which will further affect the price and, consequently, the demand. Despite the constraints, the luxury car segment in India will grow as it’s still very young, at around 1 per cent of the total market, compared to 10-15 per cent in established markets. How will the Budget provisions impact Audi's longterm plans of a strong footprint in India? The budgetary proposals have no doubt dampened the spirit of the luxury car market, though we are betting on the next…