Innholdsfortegnelse for 22-Apr-2018 i Business Today

THE US President Donald Trump has threatened to wage a trade war against countries he perceives to have an unfair trade advantage to correct the trade deficit of his country. He wants to throw up protectionist barriers so that manufacturing returns to the US, and more Americans get jobs that are currently being outsourced. So far, he has imposed steep tariffs against imports of steel and aluminium, and slapped additional tariffs on 1,300 goods imported from China. He has complained about India’s trade policies and made it more difficult to get a H1B (temporary work) visa, which was used heavily by the Indian IT services companies. He has also threatened to wage trade wars against the European Union (EU), and other countries. In turn, China has retaliated by imposing its…

THE ‘FIXED-TERM EMPLOYEE’ notification from the government is a classic example of leaving all sides dissatisfied. The new amendment to the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018, will allow corporate India to employ and deploy labour for a fixed duration. It helps companies during peak seasons or when they have specific targets to meet. It also means they do not have to carry the burden of extra labour in lean times. Labour unions, including the RSS-backed Bharatiya Mazdoor Sangh, are furious at what they see as a clever circumvention of India’s commitment to ILO in 1976. Worse, it may pave the path to ending ‘permanent jobs’, the unions fear. The Labour Ministry has indicated its willingness to discuss the matter, but until things are sorted out, the unions…

UPON LANDING at the New Delhi’s Indira Gandhi International Airport, Roberto Azevedo, Director General of the World Trade Organization (WTO), got the first shock of his trip. The airline misplaced his bags. Azevedo, who had come from Geneva to attend an informal meeting of the WTO on March 19-20, had to buy some clothes before getting on to the discussions among WTO members at a time when the US and China are erecting newer trade barriers and free trade is under siege from countries preferring to go solo or in small groups rather than follow the rule-based global trading system that the WTO represents. The ominous background of the talks — a global trade war triggered by the US move to slap tariffs on at least $50 billion Chinese imports,…

INDIA’S SMALL STEEL producers and processors – commonly called the secondary sector – face strong competitive challenges for survival and growth. These industries across the steel vertical chain – from those using iron-ore to produce sponge iron to those rolling out finished steel – exhibit high degree of product diversity, non-homogeneity and quality differentiation. They also show significant variation in technology use, level of integration and scale of operation. From common rebars to highly sophisticated and complex cold rolled galvanised or color coated sheets and coils, the sector caters to a very diverse range of end users. Their exposure to the market and dependence on external finance are widely differentiated too. This is why they are differently affected by government policy or market shocks. The structural rebalancing of the market…

PEOPLE with blindness or acute visual impairment use canes, guide dogs or the help of others. Their individual connection with the cities they live in is restricted. Microsoft has an interesting and innovative solution to offer. Soundscapes, a smartphone app, aids the blind while they walk in their city. It requires them to use earphones. Soundscapes offers the user voice guidance about the shops and places around – a store, an upcoming intersection, a museum or a landmark. Not navigation, but the app is meant to orient the person better and make it possible to be more in touch with the things around, including in conversation with others. The innovative bit about the voice cues is that they are directional and recorded in 3D (directional audio; left, right or front).…

AFTER MAKING A MARK in the water purifier segment, Kent has launched a portable air purifier Kent Alps+. This rectangular air purifier comes with a real-time air purity monitor, and the PM 2.5 level is displayed (using colours and numbers) on the digital screen added to the front cover. The controls, such as power button, timer settings (two, four and eight hours), fan speed (auto, slow, medium and high) and ionizer, have been placed on top. The Alps+ comes with three layers of filters – the primary filter removes large particles, the specially treated carbon filter removes odour and the third antibacterial HEPA filter removes bacteria and PM 2.5 pollutants. On high speed, the purifier worked well in a room size of 40 sq. ft. – the PM 2.5 level…

EVEN THE WORLD’S most beautiful and civilised travel destinations are not free of light-fingered thieves waiting to snare unwary tourists. A little caution will ensure you don’t end up falling in their trap. The one thing you need to take care of the most is your passport and other travel documents you can’t afford to lose. Thieves are known to use these craftily for a bit of quick blackmail, returning them only on payment. Don’t just take scans and upload them somewhere safe online, but avoid taking them out of your hotel room unless absolutely necessary. Even there, putting them in a safe or locked bag is ideal. As for keeping cameras and other valuables safe, stay in physical contact with your bag and use a smart lock if you…

HEALTHCARE Insurance Cover For Overseas Treatment New India Assurance, the biggest public sector general insurance company, has come up with a new policy called New India Global Mediclaim Policy that covers the cost of being treated in overseas hospitals. Treatments covered under this policy include heart surgery, cancer therapy, neurosurgery, organ transplant and bone marrow transplant. Anyone with a domestic health insurance cover of ₹8 lakh and above from any insurance company is eligible for the new policy. The buyer can choose between a $500,000 cover for treatment in Asia or a $1 million health cover for overseas treatment anywhere in the world. However, there is a lifetime limit of $2 million. It enables the insured to get a second opinion from one of the world-leading medical centres, ensures cashless…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVES Cognizant’s Bank Freeze Raises Spectre of Tax Terror The positions taken by the Income Tax Department are contrary to law and without merit, says the company businesstoday.in/cognizant-bankfreeze Is DTH Losing Steam? Most of the DTH companies today are profitable, but growth is pretty much stagnant businesstoday.in/dth-market Why the Old Guard Is Leaving Tata Mukund Rajan's new move indicates that he would re-emerge as an entrepreneur with a business venture businesstoday.in/tata-mukund.rajan Is Urjit Patel's Demand for Greater RBI Control Over PSBs Fair? For reforming the PSBs, the government must make sure that rules and regulations are same for both private and public sector banks businesstoday.in/rbi-psb UltraTech Offer: Will the Insolvency Law Crumble? It is a testing time for the much-hyped bankruptcy law, as there…

WILL THE government accept a key recommendation of the Insolvency and Bankruptcy Code (IBC) review committee? It suggests that homebuyers and financial creditors be given equal status. It means if a company defaults and its assets are sold, the homebuyer and the financial creditor will have equal claim. The pressure is mounting from agitated homebuyers with whom the courts are inclined to be sympathetic, but the move will be a big climbdown from what began as a dispassionate commercial law. Moreover, the law has already been tinkered with, diluting many of its powers when the government banned all promoters from bidding for their companies in the resolution process. Frequent meddling by the government, RBI and other courts have already diluted the discretionary power that financial creditors had throughout the process.…

INTENSE competition among the telcos is hurting the government’s earnings from the sector. Since September 2016, when Reliance Jio started its services commercially, the telecom sector revenues have taken a hit. As a result, the government’s revenues are sliding as well, including its income from licence fees and spectrum usage charges. For instance, the government earned ₹4,314 crore in licence fees in the quarter ending June 2016. In the December 2017 quarter, the earnings slipped to ₹3,104 crore. As of now, telcos pay taxes and levies of about 29-32 per cent to the government, including 18 per cent GST, 8 per cent licence fee and 3-6 per cent Spectrum Usage Charges (SUC). All these items seem to have taken a hit, and market experts predict a delay in the recovery…

THE LAST TIME the government tried to implement the E-way bill system, the GST Network (GSTN) crashed on the first day itself (February 1) and the bill had to be deferred. Now that it is coming back, the government is hoping there will be no further hiccups. Until now, the tax collection data shows that it will take some time for the monthly revenues from GST to reach the government’s projections. The government also expects that the E-way bill will help in cutting tax evasion and thus, help raise collections. So far, the worry is that the number of firms filing under GST is just 69 per cent of the number of tax registrants. The GST is still a work in progress and so is the E-way bill. If the…

27-28 GETTING CONNECTED WHAT: India Telecom 2018 WHEN: April 27-28, New Delhi WHAT TO LOOK FOR: The 10th edition of the India Telecom is the leading international ICT platform to connect, debate, network and share knowledge. It is jointly organised by the Department of Telecommunications, Ministry of Communications, Government of India and Federation of Indian Chambers of Commerce and Industry (FICCI). 26 INTELLECTUAL PROWESS WHAT: India Intellectual Property Convention WHEN: April 26, New Delhi WHAT TO LOOK FOR: On the occasion of World Intellectual Property Day, the Confederation of Indian Industry or CII is organising this event, which will showcase India’s intellectual property prowess to the global community. It will bring about the top Indians in IP, powered by strong case studies and examples. 3 PHARMA R&D WHAT: Pharma Conclave…

HIGHER TARIFFS ON CHINESE STEEL and aluminium mean excess supply in global market, price crash, dumping of steel in growing markets such as India. RETALIATORY ACTION BY MAJOR TRADE PARTNERS of the US by increasing tariffs and entry barriers will create problems for Indian exporters, unless special exemptions are granted INDIA WILL BE COMPELLED TO SPEED UP bilateral trade pacts, may have to dilute stand on several issues, including intellectual property, agriculture, e-commerce, to get favourable results in other areas COMPULSION TO REDUCE TRADE DEFICIT means allowing more US imports, irrespective of the impact on local industries STRICTER VISA RULES TO POSE a challenge to Indian IT outsourcing companies…

The cycles used in the bike sharing business are normally hybrid unisex cycles that are custom-made according to industry needs. The cycles are mostly fitted with solar panels, IoT-enabled locks, anti-theft systems, GPRS and adjustable seats. Most companies use tube-less tyres and attach special bells to handles. “Maintenance costs are fairly low, around ₹50 per month,” says Gupta of Mobycy. Most companies prefer buying cycles from Indian manufacturers, while there are some who import from China.…

“IN THE MIDDLE OF DIFFICULTY LIES OPPORTUNITY”-Albert Einstein OVER THE PAST EIGHT YEARS as the Indian steel industry went through volatile times, the battle between the Sajjan Jindal-owned JSW Steel and Tata Steel to emerge as the country’s largest steelmaker has gathered steam. JSW is the largest domestic steelmaker now and has been ramping up capacity aggressively. Eight years ago, in FY2010 both Tata Steel and JSW were neck to neck in domestic capacity. Tata Steel produced 6.44 million tonne (MT) steel within the country and JSW was marginally behind at 6 MT. Jindal saw an opportunity in the downturn and raced ahead of Tata in capacity creation, putting up additional capacities at its Vijayanagar plant in Karnataka, and acquiring the 3.3 MT facility of Ispat Industries in Maharashtra. In…

TOSHIBA'S NEW wireless earphones give music lovers and fitness buffs much to love. Whether it is Bryan Adams’ Summer of ‘69 or Coldplay’s Something Just Like This, the earphones render clear vocals with balanced mids and deep bass across genres. But at high volume, clarity takes a hit. The soft ear tips are comfortable to wear and don’t fall out during brisk walking or running; the snug fit also keeps out noise. The earpieces have built-in magnets that keep them locked together when not in use or when hanging around the neck by a sturdy cable that doesn’t get tangled easily. One can power the earphones on or off by tapping the rear of the earpieces together. The in-line remote placed on the cable connecting the earpieces has volume and…

HEALTH APPS seem to have taken over our lives. Every smartphone comes with a health app or two, and doctors tell us they can be immensely beneficial if used as a smart diary and a timely reminder. So, pick any app that suits your needs. Even the one on your mobile is good enough as long as it can collect health data. Ideally, you should opt for features that measure your steps and give a speedometer count and track weekly and monthly trends. It can act as a great motivator, enabling you to match your health parameters with your target. Many of these apps can help people suffering from chronic ailments – medical conditions such as diabetes or hypertension that will require lifelong medication and careful monitoring of blood pressure,…

The New Wealth of Nations By Surjit S. Bhalla Simon and Schuster Pages: 224 Price: ₹599 THE MERE TITLE OF THE BOOK is intriguing enough to pick it up. And the name of the author only goads you to open and read it. If you are expecting Surjit S. Bhalla’s latest release The New Wealth of Nations to take the arguments in Adam Smith’s 1776 magnum opus An Inquiry into the Nature and Causes of the Wealth of Nations – shortened as The Wealth of Nations – further, you’d be making a mistake. The former has adorned bookshelves of economics students across the world for a long time. Comparing the two would mean injustice to this book and to Bhalla. The primary argument Bhalla makes in the book revolves around…

737.18 MILLION Number of transactions on the UPI platform between April 2017 and February 2018 ₹85,659 CRORE Value of transactions on the UPI platform between April 2017 and February 2018 AMITABH KANT, CEO of National Institution for Transforming India (NITI) Aayog, hit the nail on the head. “My view is in the next five-six years, you will see the death of physical banks,” he said at an IAMAI event last year, pointing out how low-cost Internet-based transactions and proliferation of mobile phones could soon kill cash and disrupt today’s incumbents. It may sound overambitious, but NITI Aayog’s principal advisor Ratan Watal provided supporting statistics, saying that digital payments grew 55 per cent in volume and 24.2 per cent in value in FY2016/17 over FY2015/16. A recent report by investment banking firm Credit…

Aashish Somaiyaa, CEO of Motilal Oswal AMC, talks to Teena Jain Kaushal on a range of issues that could influence the capital market in 2018. Q: What are the key challenges facing the Indian market going ahead? A: I believe FY19 will be challenging without a doubt due to political developments. Markets do not like uncertainty and prefer continuity, irrespective of the political environment. Continued news flow on the political front will result in an upside cap on the markets. On the other hand, relative deterioration in macros, external conditions and some acceleration in demand will result in rising interest rates making fixed income a relatively attractive asset class compared to the recent past. All of this will result in range-bound or at least significantly lower returns in equities in…

Aloke Roy, a 43-year-old professional working for an MNC, and his homemaker wife Mahua, 37, live in Delhi with their 11-year-old daughter Anulekha. They have a house in Kolkata for which they have an outstanding home loan of ₹16 lakh and the EMI amounts to ₹18,000. Roy is also servicing a personal loan of ₹1 lakh with an EMI of ₹3,154, which will run for the next 34 months. Roy has a term insurance cover of ₹40 lakh (split into three policies out of which the premium of one policy cover worth ₹20 lakh is paid by his employer) plus a few assets, including his EPF deposits and the family’s fixed deposits worth ₹3.3 lakh. Mahua also co-owns a property with her sister. However, they do not have any equity…

THE FACEBOOK-Cambridge Analytica affair, the Aadhaar case currently being heard by the Supreme Court and the controversy over data collected by NaMo and other apps have brought privacy concerns of individuals into sharp focus once again. The five-judge bench of the Supreme Court, during the Aadhaar hearings, has said that there is a need for a robust law to protect the sensitive information of the citizens. Many people have pointed out that India is moving rapidly on its digital journey without adequate laws and regulations to protect its citizens. So far, the only protection available is under the Privacy Rules framed under the Information Technology Act, 2000. The privacy rules framed in the IT Act are badly worded, and overlook a lot of loopholes that companies can exploit. The maximum…

FROM APRIL 2020 the top 500 companies in India have to split the posts of chairman and MD/CEO as recently mandated by capital markets regulator SEBI. PRIME Database, in an analysis of 1,670 companies, found that 640 of them had the same person serving as Chairman and MD/CEO. Family-owned businesses have a more serious problem with ‘the family’ calling the shots even when the firms employ professionals as CEOs/MDs, experts say. Although these new guidelines are a step forward, sceptics think that actual implementation is likely to be cosmetic. It now boils down to how much freedom or power will be granted to the new CEO/MD. And what is there to prevent family members from assuming the roles of both chairman and MD/CEO or calling the shots from outside the…

FED HIKES RATE, RAISES GDP FORECAST The US Federal Reserve has increased its key interest rate from 1.5 per cent to 1.75 per cent, the highest since 2008. It is the first big decision by its new Chairman Jerome Powell and the sixth rate hike since Federal Open Market Committee started raising rates from near-zero in December 2015. Fed has also raised GDP forecast, and now the economy is expected to grow at 2.7 per cent and 2.4 per cent in 2018 and 2019, respectively. US, REST OF THE WORLD RETALIATE AGAINST RUSSIA In a worldwide backlash against Russia for its alleged involvement in the spy poisoning row, as many as 20 countries, including the US, the UK, Canada and the EU nations are expelling Russian diplomats. US President Trump…

UNION COMMERCE MINISTER Suresh Prabhu is extremely busy these days. Barely five days after he played host at one of the biggest mini-ministerial conferences of the World Trade Organization (WTO) attended by representatives from 52 countries on March 19-20, he sat down with his Chinese counterpart, Zhong Shan, for the India-China Joint Group on Economic Relations, Trade, Science and Technology to discuss ways to boost trade. The mini-ministerial was not expected to achieve any breakthrough; it was an effort by WTO member countries to stay engaged after the failed ministerial conference in Argentina in December 2017. At the end of the meeting, the participants re-affirmed their faith in the rule-based multilateral trading system (See Frozen Trade on page 40). The Prabhu-Zhong meeting was more interesting. The joint group was meeting…

India is involved in 23 cases as complainant in the WTO’s dispute settlement body. It is defending 25 complaints against it, and is involved as a third party in 129 cases, making it among the most active in protecting its trade interests The 2018 Union Budget raised basic customs duty on a host of items such as mobile phones, TV components, furniture and certain automobile parts 2017 - Relief package for exporters by extending the Advance Authorization/Export Promotion Capital Goods/100% EOU schemes for sourcing inputs, etc, from abroad as well as domestic suppliers. During the mid-term review of the Foreign Trade Policy, export incentives under Merchandise Exports From India Scheme were increased by 2% for labour intensive and MSME sectors, leading to additional annual incentive of ₹4,567 crore. Make in…

1986 US, Japan and European nations thwart China's entry; ask it to reform first 1995 WTO formed with 123 countries at Marrakesh, Morocco. 2001 Doha Development Round starts China joins WTO as full member 2016 Donald Trump becomes US president, pulls out of Trans-Pacific Partnership Nov 2017 US, India, Australia and Japan form Quadrilateral to challenge China in Asia and Africa Feb 2018 US hikes tariffs on steel and aluminum imports 1946 GATT, World Bank & IMF formed. GATT is a platform to discuss trade and tariff issues. 1986 Uruguay Round begins. Countries agree to start negotiations extending the trading system to services, intellectual property, agriculture and textiles 1992 EU, US sign Blair Accord – ironing out differences in the agriculture sector 1995 China gets observer status 2015 At Nairobi…

On the web, which way is cyber security headed, in terms of the kind of challenges and how industry is dealing with them? A: What happens when you are adopting cloud is that you may select an infrastructure platform like Amazon or it could be a little telecommunications company and they are providing you data centres. One thing that is important across these outcomes is that you are still responsible for your users and data that the enterprises are custodians of. Users can be employees, customers, guests or partners. You are responsible for their identities, protecting them from inappropriate access, along with the data that the company gets. Criminals are active. What you see from Petya, WannaCry, some nation states are tampering with elections. So, in terms of the need…

Q: How much online competition do you face? A: Online-only competitors such as Alibaba and JD.com are potent market forces. They can offer lower prices and wider assortments. But our physical stores have a long-term, trusted reputation, and our in-store customers can try on clothes, smell perfumes, listen to electronics, and play entertainment systems before purchasing. This helps us fend off online competition. Q: Were you surprised by the conclusions in the research? A: We expected that home-to-store distance would be an important variable in offline shopping, because faraway customers incur higher travel costs to visit our stores. But we were quite surprised by how much distance affected channel migration. The research changed how we think about promotional coupons within and across channels. Q: What do you do differently? A:…

A NEW APP THAT GOES by the inexplicable name Otter, to be precise Otter Voice Meeting Notes, can record and also do the exhausting job of transcribing. It can be downloaded for free (for now) on both the Apple store and the Google Play Store. Otter uses voice recognition and artificial intelligence (AI) to not just record everything that is said in a meeting but also transcribe it almost in real time. What one is left with is a set of meeting notes and voice recordings, all neatly separated by different voices, and all transcribed and time-stamped. OTTER USES VOICE RECOGNITION AND ARTIFICIAL INTELLIGENCE TO NOT JUST RECORD EVERYTHING THAT IS SAID IN A MEETING BUT ALSO TRANSCRIBE IT IN ALMOST REAL TIME Using Otter is simple. Sign in, for…

SUCCESS in the health app market depends on five key components – adopting the right business model, distribution through mobile penetration, access through better bandwidth and quality connectivity, consumer’s access to capital and scalable technology stack. According to Jay Krishnan, CEO of T-Hub that claims to be the country's fastest-growing start-up engine with the largest incubator and corporate accelerator, some of these factors are now addressed by the government (India stack) and a large number of private and public players. But the basic economics, says Krishnan, remains the same. A business must ensure that its customer acquisition cost (CAC) is lower than the lifetime value (LTV). A good rule of thumb is the ratio of 1:3. It is also one of the biggest challenges faced by the companies in the…

The Subtle Art of Not Giving a F*ck By Mark Manson Harper Collins Price: ₹499 Catalyst By Chandramouli Venkatesan India Portfolio Price: ₹299 Elon Musk: How the Billionaire CEO of Spacex and Tesla is Shaping Our Future By Ashlee Vance Virgin Books Price: ₹699 Attitude Is Everything: Change Your Attitude Change Your Life! By Jeff Keller Collins Price: ₹199 I Do What I Do By Raghuram G. Rajan HarperBusiness Price: ₹699 *Top books by sales for Mar 12-27, 2018; Includes only books released after Jan 1, 2015; Information provided by amazon.in…

If you have ever been tempted to buy a stock that has dipped sharply, think again. Sure, there are many stocks where investors press the panic-sell button because of some negative news. Some may even fall to levels that may look extremely cheap. But remember that there’s a lot of volatility out there, and sometimes volatility in negative news-driven stocks can continue for a long time. If you have been watching the markets, you may have seen that stocks such as Punjab National Bank (PNB), Gitanjali Gems, Fortis Healthcare, PC Jeweller, Lupin and Sun Pharma have been in choppy waters for some time now. So, question that inevitably pops up is — have their prices fallen far enough to warrant an investment? While these stocks may look tempting, it is…

Taxation Mohit Agarwal: I have sold a property worth ₹50 lakh and invested part of the proceeds in equities. Do I have to buy another property to save capital gains tax or is there any other way out? Also, what will be the tax implication? Chetan Chandak, Head of Tax Research, H&R Block India, replies: Assuming you have sold an immovable property and held it for more than two years before the sale, you can claim tax exemption as stated below. Exemption u/s 54 is available if you sell a residential house and reinvest the capital gains to purchase/construct a new residential property in India. It should be done within two years, in case of a purchase, and within three years, in case of construction, from the date of sale.…