Innholdsfortegnelse for 29-Jul-2018 i Business Today

THE GOODS AND SERVICES TAX (GST) has just completed a year, and it has been an eventful journey. It is showing signs of settling down, but it will be probably a year or more before all the glitches and annoyances that have come to the fore after the rollout are actually sorted out. It has not turned out to be the good and simple tax that Prime Minister Narendra Modi promised people, though it is also hardly the Gabbar Singh tax that Congress President Rahul Gandhi dubbed it. No one had expected the rollout of the GST to be smooth. It was after all the biggest tax system change since Independence. Too many decisions – including which product would attract what tax – were left till the last possible minute.…

GREEN SHOOTS in the hospitality sector coupled with buoyancy in the primary market has paved the way for Initial Public Offerings (IPOs) in the hotels sector. Two hotel chains – Bharat Hotels, which operates The LaLiT brand, and Chalet Hotels, owned by Mumbai-based K Raheja Corp have filed IPO papers. The public issues are expected to raise over ₹3,000 crore combined. The major part of the proceeds will be used to repay loans, though the K. Raheja Corp may use some part for expansion. Both chains have different business models. The LaLiT owns and manages its own properties – 14 luxury and mid-market hotels – while Chalet develops hotels and ties up with international hospitality brands like Marriott International to manage their hotels. In April, mid-market brand Lemon Tree Hotels…

WTO SAYS TRADE WARS MAY SLOW GLOBAL GROWTH Global growth is under threat from tit-for-tat trade sanctions of the world's economic powers, the World Trade Organization has said. The system of agreed trade rules was at "potentially large risk," it said, adding that the world economic growth was "in jeopardy". The trade war was sparked after US President Donald Trump ordered tariffs on steel and aluminium imports from the EU and China. 'HARD BREXIT' MAY FORCE JLR TO SHUT UK OPERATIONS Jaguar Land Rover (JLR) has said a "hard Brexit" will cost it $1.59 billion a year, curtailing its future operations in the United Kingdom. "We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees," JLR Chief Executive…

1) The Founders Namita Shah, Bhaven Shah and Aman Sanghavi. Namita is a chartered accountant, a CPA from the US and a lawyer with exposure to cybersecurity. Bhaven, a CA and a lawyer who was earlier associated with KPMG and EY, has worked extensively with judicial and quasi-judicial authorities and the BIFR. Sanghavi is a certified mediator from insurance and management background. 2) The Trigger “It’s the overload and the wastefulness – 40,000 cases filed every day, about 3.3 crore pending cases and yearly loss of about ₹80,000 crore due to hearings and the consequent loss of business. Preventing full-blown litigations could be one way out of this. That is why we have built Presolv360, a fast and cost-effective online platform (the company is registered as Edgecraft Solutions) for review,…

Further rationalisation of taxes: The list of goods and services in the 28% tax bracket needs to be pruned. The 12% and 18% rate categories need to be converged into one. Cesses needs to be removed Expansion of the GST horizon: Some goods and services have to be brought into the GST ambit, like petroleum products, electricity and property Simplification of return filing: The final return filing mechanism is still one year away. The government has now dropped a hint that they may go for annual returns instead of monthly filings Fine tuning of GSTN: The GSTN must now shift its focus on improving user interface, improving of error messages and devising tools and methodologies to help tax authorities improve tax compliance…

A LITTLE AFTER NOON ON JULY 22, 2014, the website of India’s largest online marketplace Flipkart crashed. Over half a million users had logged in to get their hands on a Mi3 smartphone being launched by a then relatively unknown Chinese brand – Xiaomi. The entire stock of 10,000 units was sold out in minutes. Exactly a week later, Xiaomi had another online flash sale. This time round, it sold 10,000 smartphones in less than five seconds. Xiaomi had brought to India the concept of flash sales that it had pioneered in China. It used this strategy to launch a series of bestseller mobile devices. “That is when we realised we were on the right path. If half a million people turn up without any advertising but through word of…

PE EXECS TEND TO JUDGE VERY QUICKLY WHETHER A NEW HIRE IS WORKING OUT. COMPARED WITH PUBLIC COMPANY DIRECTORS, THEY ARE QUICK TO ENGINEER A FAILING CEO’S EXIT – AND WHEN THEY THINK BACK, THEY OFTEN WISH THEY’D MOVED EVEN MORE QUICKLY CORPORATE BOARDS often say that succession planning is their top priority, but at publicly traded companies, directors rarely get to turn that planning into action: The average CEO tenure at S&P 500 firms is nearly 10 years. That’s in sharp contrast to the private equity world. PE firms hold investments in dozens of companies, and after making an investment, they nearly always replace the CEO. As a result, although a typical public company director might help hire a CEO a few times in a career, veteran PE executives…

The Subtle Art of Not Giving a F*ck By Mark Manson Harper Collins Price: ₹499 Catalyst By Chandramouli Venkatesan India Portfolio Price: ₹299 Thinking, Fast and Slow By Daniel Kahneman Penguin Price: ₹499 Attitude Is Everything: Change Your Attitude… Change Your Life! By Jeff Keller Collins Price: ₹199 A Century is not Enough: My Roller-coaster Ride to Success By Sourav Ganguly Juggernaut Price: ₹699 *Top books by sales for June 20-July 5, 2018; includes only books released after Jan 1, 2015; information provided by…

THE GOVERNMENT'S decision to hike the Minimum Support Price for 14 crucial Kharif crops may be well intentioned but isn't well thought out and simply isn’t good enough. The decision affects farmers in poll-bound states - Rajasthan, Madhya Pradesh, and Chhattisgarh along with Maharashtra, Odisha, Karnataka, Uttar Pradesh, and Andhra Pradesh. Only ₹33,500 crore was provided for the additional MSP. Going by last year’s procurement figures an additional ₹11,500 crore will be needed. Presumably, procurement in an election year will only be higher. But that would require massive infrastructure upgradation to procure, transport, store and distribute. In most markets, farmers struggle to get even the MSP on almost all crops except paddy and the rabi wheat. They inevitably sell at much lower prices to private players. States, meanwhile, lack the infrastructure…

MINING BARON Anil Agarwal’s $1 billion share buyback offer of Vedanta Resources cheered up shareholders in London as the share price shot up by 26 per cent in the morning trade to over 800 pence. The 825 pence a share delisting offer is almost 28 per cent premium to its closing price on June 29.The delisting plan translates into capital benefits to the promoters and will cut some slack to Agarwal’s firms exposed to critical scrutiny abroad. The buyback move, however, failed to spike share prices of the group’s two large companies-Vedanta Ltd (VL) and its subsidiary Hindustan Zinc (HZL) - in India. Domestic investors say the move will help only its promoters and the group doesn’t need foreign capital for acquiring assets any longer. With $5.6 billion cash reserves…

IN JUST ONE MONTH, there have been several major developments at IDBI Bank. The leadership issue is settled with the appointment of B. Sriram, who till recently was the MD of India’s largest bank – SBI. The capital issue is also resolved with the likely entry of insurance behemoth LIC as the majority shareholder at the bank. So what’s next? IDBI now has to expand and exploit the safe-bet retail business to improve its share of retail banking both in terms of retail advances, as also low-cost current and savings accounts (CASA). It also needs to accelerate its digital offerings, focus on HR reforms and leadership development. The bank is already on a drive to sell non-core assets to reduce its burden with more liquidity at its disposal for lending,…

The Gross Value Added (GVA) numbers for 2017/18 grew by 6.47 per cent, the slowest in four years since the Narendra Modi government took over. Even as the numbers for the first quarter of 2018/19 are awaited, all trends show that even this jump would not have been possible without the government spending more. While Gross Domestic Product (GDP) is a measure of the value of goods and services produced in an economy in a given period, GVA is what accrues to the producer before the product/service is sold. The GDP equals GVA plus indirect taxes minus subsidies. One of the constituents of GVA is public administration, defence and other services. It is a good representation of the government in the economy. Take a look at the top graph that…

What kind of tax buoyancy have you seen because of GST? Experts say GST collection figures do not mean much unless the government comes out with relevant comparative figures. That comparative figure is given in Mr. (Arun) Jaitley’s blog. We have compared the nine-month (2017/18) GST collection with the pre-GST period. The growth rate is 12 per cent annualised. We have compared that with taxes subsumed within GST. The tax buoyancy is not much. We need to keep watching. How has GST data helped boost direct tax collections? We hear that advance personal income tax collections in the first quarter have gone up 44 per cent. How much of that is due to GST? It is difficult to ascertain how much of this growth is due to GST. But it…

THE ABILITY to look right through a wall is a distinctly uncomfortable thought and so far, the stuff of science fiction. Nevertheless, such ‘X-ray’ vision could have important uses, which is why researchers have been trying to get a good peep for some time. Now, MIT’s Computer Sciences and Artificial Intelligence Laboratory might be on to something. Led by Professor Dina Katabi, the project called RF-Pose is geared towards gaining a better understanding of people’s posture and movement and could help the elderly who are prone to falls and injuries or benefit those suffering from conditions that affect motor coordination such as muscular dystrophy or Parkinsonism. It is thought that monitoring their movement could ensure timely assistance and help make fine adjustments to medication. The research leverages the fact that…

A FIRST FROM ONEPLUS, the Bullets Wireless is an impressive Bluetooth earphone. It has a rubberised neckband with two small compartments and a long foldable cable connecting the earbuds. There is an in-line remote with volume control and multifunction button near the left earbud, which is convenient to access. Used to play and pause music, skip tracks and answer calls, long press on the multifunction key activated the voice assistant that isn’t just restricted to Google Assistant. The slightly angular earbuds are a snug fit, and with the neckband balancing the weight, Bullets Wireless is comfortable to wear for long durations. The only concern was the long cable as it often brushed across my face – it could have been slightly smaller. OnePlus too has added magnets to the earbuds…

LE CREUSET is known for its stylish take on cookware. But this time, the French brand has outdone itself and launched a wine-and-cheese collection, which is in a league of its own. The latest collection showcases the Le Creuset LM150 Lever Model, so easy to use and ever so stylish in the bar. Again, the lightweight Le Creuset Waiter’s Friend Corkscrew is compact and easy on the eye when one is entertaining important guests. The showstopper, however, is the Vitesse Wine Fountain, which is chic and theatrical. True to its fame, the brand has seamlessly blended functionality with luxury in the bar.…

“A LEADER'S SUCCESS IS DIRECTLY PROPORTIONAL TO HIS OR HER LEVEL OF INVOLVEMENT” Q. The biggest challenge you faced in your career A. When I joined GNFC, it had ₹7,000 crore liabilities and more than ₹2,500 crore unproductive non-operational assets, resulting in the first-ever loss (over ₹450 crore) in its four-decade history. The challenges included cost/time overruns, high debt service obligations, litigation, inventory, competition from international players and stagnation of existing businesses. Taking a moribund organisation to the present level of highest-ever profit before tax has been tough but satisfying. Q. Your best teacher in business A. I have learnt the most through experience and being hands-on. While I have trusted my team for recommendations and opinion, I have also worked hard to learn on the job. I feel I…

CLEAN ENERGY AND MORE WHAT: CII Clean Tech & Mobility Summit 2018 WHEN: August 3, Noida WHAT TO LOOK FOR: CleanTech is an important component in India’s energy planning in an effort to cut or eliminate emissions and wastes. All sources and forms of renewable energy have significant potential in India. The Indian government is focussing on electric vehicles to combat rising pollution levels in metros. In this backdrop, CII is organising the fourth edition of its Clean Tech & Mobility Summit. CITIES AND DEVELOPMENT WHAT: Conference on Urban Development and Economics in the Developing World WHEN: August 7-8, Shanghai, China WHAT TO LOOK FOR: Harnessing the potential of urbanisation to contribute to economic development is critical and raises questions of fundamental policy importance. The Asian Development Bank is organising…

EACH BRAND has a different social media policy. But most have a single-line brief for their marketing teams and digital agencies -- “Don't touch anything political or religious.” While this strategy helped brands avoid controversies in initial days of social media, it might not be foolproof anymore. Telecom major Airtel had to face a backlash last month when it did not take a stand about a religious controversy involving its customer care on Twitter. Cab aggregator Ola, too, faced a similar situation, but fared better as it took a stand. What should be the ideal strategy when a brand lands in a political or religious controversy on social media? Should it sweep it under the carpet or voice out its stand? The experts are divided. Advertising industry veteran K.V. Sridhar…

The way GST has been designed and implemented shows how the federal structure in India is systematically undermined. The major issue in the fiscal federalism in India is the fiscal imbalance between states and the centre. The resource mobilisation potential is concentrated with the Centre while socio-economic responsibilities are with states. Now, over time what has happened is that the states’ potential of resource mobilisation has been undermined. If you look at taxes which have been subsumed by GST, 60 per cent of the taxes were collected by states and 40 per cent by the Centre. Though in some years, it was 55:45 in favour of states, but states share has always been higher. I always wanted the rate split to be 60:40, but what we have got is a…

It has been over a year since the implementation of the Goods and Services Tax (GST) and more than 20 months post demonetisation but the heat and dust has not settled. At least, that’s evident from the latest Business Confidence Index (BCI) survey conducted in the April-June quarter. Some 65 per cent business leaders surveyed are unhappy with GST while another 64 per cent remain critical of demonetisation. In the June ending quarter, the BCI — on a scale of 100 -- dropped marginally to 49.3, compared to 50.6 in the previous quarter and 47.3 in the quarter prior to that. Market research agency C fore quizzed 500 CEOs and chief financial officers across 12 cities for the survey. The fall in the first quarter of 2018/19 highlights the reversal…

Most employ proprietary algorithms that analyse consumers’ credit scores and connect them to a suitable service provider. They also do the initial KYC by checking records through the Aadhaar system Partner banks also help these platforms by providing them data for testing their algorithms to make them more robust Some have made a model that tells consumers their chances of approval against each lending option that’s available to him and, hence, helps him take an informed decision.…

AI HAS OFTEN BEEN lauded for its super intelligent performance across sectors. Now, we can add the art of debate to that list. This time, IBM demonstrated its Project Debater in San Francisco as a voice-enabled AI system on a big panel was pitted against humans in two debates. And it fared alarmingly well. Not everyone has the courage or the skill to debate. One of the reasons is that it needs a wealth of information to put forth an argument. And that is precisely where a computer can outdo a human. Once it is fed vast volumes of data, arguments and logical deductions, responses and rejoinders, it needs no time to think as humans must. Layer that with natural language and humour, and it is in a unique position,…

THE REAR OF HONOR 10 has been crafted using 15 layers of 3D glass in vivid blue that reflect subtle shades of purple at different angles. Some loved the design, referred to as Aurora Glass, while many hated it. The front is dominated with the 5.84-inch screen with a notch, with 2280x1808 pixel resolution and great colour reproduction. The ultrasonic fingerprint sensor placed below the display has been seamlessly merged into the bottom bezel with a very light visible outline. This ultrasonic underglass fingerprint scanner works well, unlocks even with wet hands. The device is pretty much operable using a single hand but the soft finish at the rear makes it slippery. Just like the other flagship smartphones from Huawei and Honor stable, even the 10 is powered by octa-core…

CEO – Chess Master or Gardener? How Game-Changing HR Reforms Created a New Future for Bank of Baroda By Anil K. Khandelwal Publisher: OUP India Pages: 388 Price: ₹750 IT IS A HUGE POSITIVE for management that more business leaders are writing about what they did and what they learnt. Former Bank of Baroda (BoB) Chairman, Anil Khandelwal, has also contributed to this genre. Just as every human life is unique, so is every career and every leadership journey. And management resembles a performing art rather than science. Future managers must read and internalise the stories challenges and joys experienced by other leaders. More so, because in spite of the media hype, there are no born business heroes just as there are no born batsmen. It is sheer grind and…