Innholdsfortegnelse for 26-Aug-2018 i Business Today

THE BAD LOAN problem for Indian banks has defied solutions despite multiple efforts by the government and the Reserve Bank of India (RBI) over the years. Way back in 2002, the Securities and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (Sarfaesi Act) was passed in the hope that it would lead to an orderly solution. Unfortunately, when banks and asset reconstruction companies tried to use it, defaulters went to court. Pretty soon the Act became non-functional in practice. Even while the government was enacting the Sarfaesi Act, RBI had issued guidelines (in 2001) for the Corporate Debt Restructuring (CDR) scheme. The scheme was to allow restructuring of debt to firms, on a case-by-case basis, to allow them to turn around companies. However, the overwhelming majority of firms,…

HOW MUCH DOES the monetary policy affect demand, especially at the state level? And how effective is increased government spending on economic output? An RBI Working Paper by Garima Wahi and Muneesh Kapur, focused specifically on state level data, seeks to give the answers. The author’s empirical analysis concludes that higher interest rates reduce demand and lower interest rates support economic activity, not only at the national level but also at state levels. More interesting is the effect of fiscal policy. Higher public investment boosts non-agricultural output while higher revenue and fiscal deficits crowd out private investment – and its effects are particularly felt in low-income states. Unlike other studies, the authors say their study could not find any benefits of higher fiscal deficit even in the short term.…

AFTER A FOUR-YEAR easing cycle, interest rates are now gradually increasing. In just two months, the Reserve Bank of India (RBI) has hiked the repo rate by 50 basis points to 6.50 per cent on the back of inflation worries. The biggest threat is the inflation outlook showing no signs of receding below the targeted 4 per cent CPI. Higher crude oil prices are also playing havoc with macros like rising trade deficit, widening current account deficit, and depreciating currency. The recent rise in minimum support prices (MSP) and the staggered impact of HRA will add inflationary pressure in the economy. Various geo-political tensions especially the trade and currency wars between the United States and China have also raised risks, significantly weakening the value of the Indian Rupee. The situation…

FOR AIR INDIA, it’s back to square one. After months of unsuccessful attempts at selling the ailing national carrier, the government decided to pump in additional money. The Civil Aviation Ministry has sought Parliament approval to inject some ₹ 980 crore into AI in the current fiscal for a 10-year turnaround plan (TAP) beginning 2012. AI reportedly asked for ₹ 2,121 crore equity infusion to pay vendors; it has already received some ₹ 27,195 crore from its approved TAP kitty - ₹ 30,000 crore. A corresponding improvement in performance could justify previous “bailouts”. AI posted operating profits of ₹ 105 crore in 2015/16 – and more operating profits in the subsequent years – after nearly 10 years of registering losses. But that’s expected to change as market conditions turn unfavourable…

About a month ago, our annual publication detailing the FY2018/19 budgets of 20 states has revealed that the real fiscal spending (by the Centre and states) is estimated to grow at 6.6 per cent in the current financial year, the slowest pace in four years and much lower than the approximate 11 per cent in FY2015/16. The conclusion has been based on the budget estimates (BEs) provided by the states and the Centre. As the general election is about a year away and 11 states, cumulatively accounting for about 40 per cent of the national GDP, are going to polls by 2018-end or in 2019, there have been doubts about the credibility of BEs, especially for the states. Thus, the validity of our conclusion is also under question. So, we…

WO YEARS AGO, the landmark Insolvency and Bankruptcy Code (IBC) appeared to have handed a silver bullet to bankers for a quick resolution of the vexed problem of stressed loans. The Act did manage to create a sense of fear among corporate defaulters, but failed to maximise the value of assets for creditors and achieve a time-bound resolution. While it is too short a period to jump to any conclusions, the government changed track a few days ago by giving the green signal to a new five-pronged approach under “Project Sashakt” (or Empowerment). Under this, the government wants to set up one Asset Management Company (AMC) -- a Bad Bank in common parlance, which would take over the stressed assets first, and try and nurse them to health. (Later there…

YOU DON’T own your data, your data can reside in a foreign land – and, you could be liable for withdrawing consent. Those are just some of the shocking clauses in the much delayed “The Personal Data Protection Bill 2018” architected by the Justice Srikrishna Committee. Despite submitting a draft report way back in November 2017, this is far from a complete Bill. “The Bill could have been prescriptive. But it’s still very open-ended,” says Vidur Gupta, Partner, Cyber Security, Government, Ernst & Young India. In fact, a few from the 10-member panel say the committee did not even consider the Telecom Regulatory Authority of India (Trai) recommendation that ownership rests with the individual (data principal in this Bill), everybody else is a mere custodian. Instead, who owns the data…

Vivek Somareddy claims that over 70 per cent of Amazon’s orders are coming from Tier-II and III cities such as Kanchipuram, Secunderabad and Surat. In fact, ShopClues has reportedly been selling over 5,000 refurbished phones every month this year in Tier-II and III markets, 35 per cent higher than the average last year. “The market is seeing a lot of traction, especially from rural and small town customers. In the next five years, they might dominate the market” says Hitendra Chaturvedi, CEO, GreenDust.…

Earlier in her career, Gretchen Van Vlymen – who was then an HR manager at a company in Chicago – decided she was ready to ask her boss for a promotion Her first step was determining the role she wanted: “I looked at where there were gaps in the company that need to be filled,” says Gretchen. “I knew that if I could connect my own career path to the company’s overarching goals, it would make my promotion more compelling for upper management.” After a period of reflection, she zeroed in on a new role: VP of HR. The job would involve managing the HR team, and also recruiting and hiring for the company itself. Before talking to her boss, Gretchen created a “resume of accomplishments”, which included numerous examples…

INNOVATIONS TO improve the good old traffic light have been few and far between. One of these, recently pilot-tested in Hamburg, involves light assistants that show drivers recommended speeds for different phases of the road ahead so that the journey means less stopping at traffic signals and a smoother, more fuel-efficient ride. Enough data has been collected for the project to be implemented, recommending green times to drivers. In Los Angeles, a system of intelligent traffic lights is planned for 1,500 intersections. Touted as a solution for smart cities, it involves a large control cabinet that will help the lights adapt to situations and control guide lights for bikes, crosswalks and more. Portland, too, is testing a system to reduce waiting time. India is also supposed to get Japanese traffic…

EARLIER THIS YEAR, we reviewed Dyson’s Pure Cool Link air purifier, one of the top products in terms of design and functionality. But the recently launched Pure Cool brings in several improvements, stepping up the performance. Traditionally, air purifiers are square or rectangular, but Pure Cool has a circular base with a rectangular, bladeless fan at the top, which looks compact and chic. Unlike its predecessor, the bladeless fan cannot be detached from the base. The assembling part is easy, though – I had to fit in the filters and lock the circular base that took me less than a minute. The Link had a small button along with airflow display levels at the bottom. But this one features a coloured, circular display that shows PM 2.5 reading in real-time…

TREATING foot/heel pain (plantar fasciitis) takes time, but help is at hand. The use of platelet-rich plasma therapy for soft-tissue healing has become quite popular over the past fourfive years, says Dr Shashi Kanth. In this procedure, a patient’s own blood platelets are injected into the affected area and the healing process is faster, compared to steroids. As for treating bunion, open surgery is a standard procedure where the bone gets realigned. In cases where the big toe is both deformed and arthritic, the joint is fused completely with minimal invasive surgery. It helps correct the deformity and ensures pain relief although there will be no movement in that joint. Stem cell therapy is also useful for those suffering from non-healing ulcers caused by diabetes.…

The People Vs Tech: How the internet is killing democracy (and how we save it) By Jamie Bartlett Publisher: Ebury Press Pages: 256 Price: `499 THE PEOPLE VS TECH by Jamie Bartlett is an intriguing revelation because of the harsh reality of modern technocracy and its impact. Going through the initial pages, I came across this interesting observation, “Democracy is analogue rather than digital. And any vision of the future that runs contrary to the reality of people’s lives and wishes can only end in disaster.” Bartlett says he is referring to western democracies, but many of his observations resonate with the Indian context. The book is a quick, light read with a dark message. It talks about the dangers posed by so much of data controlling our lives and…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVES Tata Motors’ Downward Spiral in the Stock Market Continues on Worries About Europe As part of the new strategy, the company has shut down manufacturing operations in Thailand; nearly closed Nano production; and increased prices of passenger cars in India businesstoday.in/tatamotors-strategy GST, IBC May Help India Scale Higher in World Bank’s Ease of Doing Business Ranking The introduction of the GST and enactment of IBC are considered to be the two key parameters where India made significant progress during 2017/18 businesstoday.in/wb.ranking-india How to Merge Public Sector Banks Merger of banks based on geography will result in lesser disruption in terms of rationalisation of branches and people. The merger of weak banks can be done once the bad assets are out of the system…

ANOTHER round of Goods and Services Tax (GST) rate cuts have been effected by the governing body GST Council, which met recently in Delhi for the 28th time. The rates of around 88 goods have been reduced. With this rate cut, the government has finally yielded to a long-standing demand to reduce the taxes on sanitary napkins from 12 per cent to nil. On the face of it, the move looks like a great step leading to sharp price cuts and promoting menstrual hygiene. There is, however, a catch. Under GST, if any goods and services are exempted, the manufacturer and service providers lose the right to claim credit on the tax paid on inputs. The input tax thus becomes a cost for the manufacturer, which will then obviously be…

BOOSTING UP TOURISM WHAT: Uttar Pradesh Travel Mart WHEN: Aug 26-28, Lucknow WHAT TO LOOK FOR: Uttar Pradesh wants to be a global tourist destination. As part of the event, there will be B2B meetings between Indian sellers and foreign buyers. SMART RAILWAYS WHAT: Smart Railways Conclave WHEN: Aug 28, New Delhi WHAT TO LOOK FOR: The conclave will provide a platform to discuss key trends and developments, examine main challenges and highlight emerging opportunities in terms of projects/investments in Indian Railways. WATER WOES WHAT: World Water Week 2018 WHEN: August 26-31, Stockholm, Sweden WHAT TO LOOK FOR: The annual World Bank event will focus on the world's pressing water issues. Experts, practitioners, decision-makers, business innovators and young professionals from diverse sectors and countries will congregate in Stockholm to network,…

TWITTER HAS, OVER the years, emerged as a communications and information channel rather than a social networking site. This could be the reason why the company labels its app under the ‘news’ category on Google Play. The company has undoubtedly carved a niche in the segment and started the year on a positive note by registering the first-ever net profit and 335 million monthly active users. In its latest quarterly results, profits stood at $100 million. While Facebook and Instagram are clear leaders in India, Twitter has held its position among the top five and also reported a 17 per cent rise in revenue in FY2016/17. As per data from analytics company comScore, Twitter’s total digital population in India was 56 million in May 2018 compared to 21 million in…

Patrice Caine, Chairman and CEO of the Thales Group, speaks to Business Today’s Prosenjit Datta and Manu Kaushik on the next big areas and what makes India attractive. Edited excerpts: Is Thales a government company? The French government owns 26 per cent in it. PATRICE CAINE: We are privately listed on the Paris Stock Exchange. We have two large shareholders, but they do not own Thales. Dassault owns 25 per cent and the French state 26 per cent. Your electronics are at the heart of most of the systems. In defence, do you work directly with armed forces or contractors of armed forces? Both. We are in five domains. Defence is 50 per cent and civil is 50 per cent. We have many civil customers such as airlines, satellite operators…

Tom Gimbel, Founder and CEO, LaSalle Network, a staffing and recruiting firm headquartered in Chicago, has requested – and granted – many promotions over the course of his career. “The biggest lesson I’ve learned is that no one is going to hold your hand,” he says. “You have to own your career.” Years ago, when he was a salesperson at a David Green Associates, he decided to ask his manager for a promotion. The timing was right: He had just finished a stellar year of sales. “I was not only hitting but exceeding my metrics and what was expected of me,” he recalls. But before talking to his boss, Tom did some homework on the role that he wanted: national sales manager. “I spent a lot of time understanding what…

50% The share of affordable housing in new launches in the past one year 27% Growth in affordable housing sales between January and September 2017 (y-o-y); overall residential housing contracted 33 per cent 32% Growth in loans for EWS category houses for HDFC in 2017/18; for the LIG category, it was 42 per cent 5% Margins in the affordable housing space, considered low by most private players 2,37,000 Units built by private sector players in affordable housing that are lying unsold across seven cities…

THE WORLD’S SMALLEST reflective liquid-crystal display device in full HD has a long name. Sony calls it SXRD241A, which is a compact portable projector displaying distortionfree images even on a curved surface. Sony has used its fine pixel pitch technology that reduces the pixel pitch to achieve high resolution. Dot pitch, a specification for computer displays, printers, image scanners or other pixel-based devices, describes the distance between dots or subpixels on a display screen. It is measured in millimetres and a smaller number means a sharper image. The company has also used improved light-shielding, an all-new field-sequential colour technique and its original SXRD technologies developed for 4K home projectors, resulting in high resolution, high brightness and high contrast. As the projector is portable and able to use any surface, it…

THE ‘NOTCH’ HAS BEEN ALL the rage for some time now, often considered a clever way of packing loads of technology such as the front camera and the sensors, to flaunt a bigger, near-bezel-less display. The latest iPhone X has it as well as most Android replicas, but Vivo Nex has managed to drop it. It sports a bold new design, squeezing in a 6.59 inch Super AMOLED display with almost non-existent bezels (the one below the display is thick) and ensuring 91.24 per cent screen-to-body ratio. Watching videos on a bezelless display is pure delight. And it has been quite an immersive experience when I further zoom in for a full-view YouTube video. To achieve the bezel-less display, Vivo has dropped the front speaker grill and introduced a motorised,…

The Power of your Subconscious Mind By Joseph Murphy Amazing Reads Price: `199 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 Factfulness: Ten Reasons We're Wrong About the World - and Why Things Are Better Than You Think By Hans Rosling Sceptre Price: `399 *Top books by sales for July 17-August 1, 2018; includes only books released after Jan 1, 2015; information provided by amazon.in…

FINALLY, THE financing costs of Reliance Industries (RIL) skyrockets. In the first quarter, RIL’s financing cost has risen by 217 per cent year-on-year to ₹3,550 crore. The petroleum giant has invested ₹33,267 crore in three months until June in digital and petrochemical businesses and that drove the gross debt to ₹2.42 lakh crore. The company has invested over ₹2 lakh crore in building the Jio network and around ₹1.5 crore in expanding its petrochemicals’ capacities. Thanks to the investment, the revenue of petrochem increased by 58 per cent to ₹40,287 crore and profit before interest and tax (PBIT) almost doubled to ₹7,857 crore. The Jio return, however, is not that lucrative. Its operating revenue was ₹8,109 crore, and its EBIT was ₹ 1,708 crore – a substantially lower return on…

A HORMONE to facilitate safe childbirth and lactation in women has been rampantly misused by the dairy industry to increase milk production in livestock. It is also being used to increase fruit and vegetable production. A preventive step came when the government announced that now only one public sector company – Karnataka Antibiotics and Pharmaceuticals Limited (KAPL), will manufacture, and sell Oxytocin. The restriction, however, may cause severe supply constraints for human patients as the demand so far has been met by over a dozen companies through a countrywide retail sales network. The fact that KAPL could not ramp up its production by the July 1, 2018 deadline set by the government is testimony to this fact. In a country where 130 mothers die in every 100,000 childbirths, the government…

APPLE VALUED AT $1 TRILLION Apple has become the first publicly traded US company to be valued at $1 trillion. The historic milestone follows Apple’s strong Q3 figures, including a surge in revenue to $53.3 billion and the sale of 41.3 million iPhones. Its stock has also risen 23 per cent this year. Chinese oil giant PetroChina hit $1 trillion in market cap in 2007 and Saudi oil firm Aramco is valued at $2 trillion but is not yet public. T-MOBILE, NOKIA SIGN LARGEST 5G DEAL T-Mobile US has signed a $3.5 billion deal with Nokia to build 5G wireless network gear for the mobile carrier in the world’s largest 5G deal yet. T-Mobile, the country’s No. 3 mobile carrier that has recently agreed to a merger with Sprint, says…

THE OFT-REPEATED CATCHWORD ‘desperate times call for desperate measures’ has origins in an old saying: ‘For extreme diseases, extreme methods of cure are most suitable.’ Pinstriped bankers around the world couldn’t agree more. The world has often resorted to extreme methods when faced with a mountain of bad debt. In the last decade, China created four asset management companies (AMCs) (or Bad Banks in banking slang) to house stressed loans. Even after a decade and a half, these four AMCs are happily writing more business. Almost four dozen region-specific AMCs have come up in the last five years, buying bad loans from local Chinese banks. In the late 90s, the Indonesian government was more clinical. It transferred all the bad loans at zero value to a restructuring agency. This was…

AMAZON LAUNCHED its certified refurbished category in India last year. And already, it has become one of the rapidly growing segments for the e-retailer. The refurbished mobile phones segment, in particular, is on a tear, claims Amazon India. “We sold as many certified refurbished products in the first three months of 2018 as we did in the first nine months post launch,” says Vivek Somareddy, Director – Seller Services, Amazon India. “There is a promising customer demand across categories including smartphones, laptops, headphones, watches, small appliances and Kindle e-readers.” Amazon is not alone. ShopClues, eBay (now part of Flipkart) and Snapdeal have had dedicated refurbished categories for the past few years and the e-tailers are seeing brisk business. Research firm Counterpoint estimates that the global market for refurbished smartphones alone…

ASKING FOR A PROMOTION can be nerve-wracking. But when you think you’re ready for the next step, it’s important to say so. How do you prepare for that conversation with your boss? What information should you have at the ready? And how exactly do you make your case? “Asking for a promotion makes you feel vulnerable,” says Sabina Nawaz, the global CEO coach, leadership keynote speaker, and writer. “You’re not in control; you’re putting yourself in the hands of your manager to be judged – and you might be judged not worthy.” You may fret that you’ll be “bugging your boss” or come across as greedy and “self-serving”. But, to advance in your career, you’ll need to learn to advocate for yourself, says Joseph Weintraub, Founder and Faculty Director, Babson…

DOS Think about the position you want and how it aligns with the objectives of your organisation and manager Prepare a memo that clearly outlines your proven track record and provides concrete metrics on the impact you’ve had Ask your boss for regular feedback and advice on how you can get to the next level. DON’TS Assume that asking for a promotion is a one-and-done discussion. It is usually a series of ongoing conversations Play the “other offer” card recklessly. That tactic often has a negative impact on professional relationships Get discouraged if you don’t get what you want right away. Be patient.…

The introduction of the Real Estate (Regulation and Development) Act (RERA), 2016, is a watershed development as it has brought the hitherto unregulated sector under the regulated ambit. For a sector with no precedence of a dedicated tribunal, it means a significant granular change at the national and state governance level. The aim is to provide transparency and order to the sector and redress grievances. Now that RERA is a year old, it is a good time to analyse how it has shaped the sector. Let us look at the achievement first. As of April 2018, more than 27,000 projects have been registered under RERA, indicating that a significant number of developers have adhered to the regulations. Registering under RERA means there is clarity on deliverability and completion timelines, which…

Indian real estate sector has witnessed a significant transformation over the past decade, which has been further accelerated by the government’s reformative steps to usher in Acche Din. Whether or not that has happened as per expectation is debatable. But, yes, a new regulatory environment is being created with the implementation of several disruptive policies. The Real Estate (Regulation and Development) Act (RERA), 2016, Goods and Services Tax (GST), Real Estate Investment Trusts (REITs), Benami Transactions (Prohibition) Amendment Act, 2016, and Pradhan Mantri Awas Yojana have all happened in the last four years. And they are ushering in greater transparency, accountability, financial discipline and efficiency, which will have positive impact on the realty sector. The market size of the realty sector is expected to touch $180 billion by 2020 and…

MOST CORPORATE employees make it a point to be well shod – in dress shoes, heels, pumps and even espadrilles depending on the occasion. But not even the most expensive footwear could help if you are suffering from conditions that may require corrective footwear, medication and surgery. “A normal foot is one where the toes are aligned and straight, there is no deviation and the arch below the foot is normally maintained. But either due to trauma or weakness in foot muscles, the arch under the foot could collapse, leading to what is called a flat foot. Some are also born with them,” says Dr G. Shashi Kanth, Consultant Orthopaedic Surgeon and a specialist in joint replacement and sports injuries at CARE Hospitals, Hyderabad. Women tend to suffer from hallux…