20 million back in the job in May as lockdown eases
About 20 million workers came back into employment in May as the government eased the nationwide lockdown to counter Covid-19 outbreak.
By ET Bureau | Updated: May 27, 2020, 01.23 PM IST
NEW DELHI: About 20 million workers came back into employment in May as the government eased the nationwide lockdown to counter Covid-19 outbreak, according to an update by the Centre for Monitoring Indian Economy or CMIE. CMIE report said India's employment rate was up 2% in May to 29% from 27% in April. CMIE had estimated 122 million people had lost their jobs due to nationwide lockdown since March 25.
“This two percentage point increase implies that about 20 million people may have been added to the count of those that are employed,” CMIE said, adding implicitly that the loss of 122 million in April may have narrowed down to 102 million in May. “If 20 million jobs have indeed been repaired, we have made significant progress. But, the remaining challenge is five times larger at 102 million,” it added.
According to CMIE, increasing labour participation rate (LPR) week after week in May, touching 38.8% for the week ended May 17, shows that a fairly large number that had technically left the labour market in April is returning back. LPR had fallen to 35.6% in April from 41.9% in March after which it gained ground in May.
Workers coming back
CMIE’s Consumer Pyramids Household Survey shows that while the count of employed shrunk by 122 million in April, the number of people willing to work but not actively seeking jobs swelled by 77 million to 89 million in April from 12 million in 2019-20.
"These are the potentially unemployed but technically not considered unemployed,” it said, adding that since these people are willing to work, they can easily join the labour force and start looking for jobs if employment conditions improve even marginally.
According to CMIE, the weekly estimates of May suggest that there is a migration of labour from the ‘willing but not looking for jobs’ category to the ‘willing and looking for jobs category’. “The discouraged workers seem to be coming back to look for jobs. This is good news,” CMIE said, adding that weekly data also suggests that this influx into the labour markets is succeeding in finding jobs.
CMIE, in the normal course, conducts a multi-stratified survey using a monthly sample size of 1,17,000 individuals who are visited in person and interviewed. However, since the lockdown, the sample size has been reduced to 11,000-12,000 individuals and people are being interviewed over phone.
Retail, fast food biz reboot faster in small towns
Avik Das | TNN | May 25, 2020, 13:47 IST
BENGALURU: Small towns are leading the way in helping retailers and quick service restaurants restart business after nearly two months of closure, as many of them are part of the green zone where economic activity can resume.
While sales and footfalls in small town stores would not match those in the metros, retailers say it is at least reassuring to get customers walk in and make purchases.
Benetton India CEO Sundeep Chugh said sales and footfalls have been 15-20% more than what the company had anticipated across stores in Andhra Pradesh, Kerala, Goa, Pondicherry and Panchkula. About 26 of their 310 stores are now open. Titan reopened about 50 of its Tanishq jewellery stores earlier this month, mainly in the smaller cities, but also in Bengaluru. “The footfalls in the smaller cities have been relatively better compared to Bengaluru, where it is about 25-30% (of that before the pandemic),” said Ajoy Chawla, CEO of the jewellery division.
Many are relieved that at least Bengaluru has let brick-and-mortar stores open. Mumbai and Delhi are expected to remain out of bounds for some more time. “There seems to be renewed hope and enthusiasm in the retailer community as the machine has started moving,” said Shubhranshu Pani, MD of retail services at property consultancy JLL India.
Jubilant FoodWorks, which runs the franchise of Domino’s Pizza and Dunkin’ Doughnuts, has opened 938 stores, covering 87% of its pre-lockdown area. “We are starting to see a full recovery in the delivery part of business in smaller towns, which have picked up much better,” said chairman Shyam Bhartia in a post-earnings conference call.
Puma has opened about 63 of its 378 stores across the country. General manager (Southeast Asia) Abhishek Ganguly said, while footfalls have come down drastically, what is encouraging is the conversion ratio. Vineet Gautam, CEO of Bestseller India — which sells Vero Moda and Jack & Jones brands — also said the conversion rate has shot up considerably because people are coming in with a clear intent to buy.
There’s pent up demand because of the two-month shutdown. While in normal times shopping was a form of entertainment and people did a lot of window-shopping, consumers are now stepping out only if they need something. “People are definitely buying and with a purpose. Our basket size has now gone up to Rs 4,000 from Rs 2,800 previously,” said J Suresh, MD and CEO, of Arvind Fashions, which has opened 100 stores out of its 1,200.
The govt seeks to push domestic manufacturers up the value chain. But that needs a lot of work on the ground
Besides consistency in policy, the success of the strategy would need relief from what the industry calls ‘disabilities’ from poor infrastructure and inefficient logistics
Employees at a Lava mobile phone manufacturing unit in Noida which resumed operations on 12 May after 40 days of closure due to the lockdown (Photo: PTI)
NEW DELHI : The sales head of an Indian consumer products company got cracking, a day after Prime Minister Narendra Modi advocated that India become self-reliant and become “vocal for their local". He circulated a survey with two questions among his contacts on LinkedIn.
“When buying a new product, what would be your preferred choice?
a) Economically priced Made-in-China product.
b) Competitively priced Made-in-India product."
Jessie Paul, founder and CEO of Paul Writer, a marketing services firm, saw the questionnaire. “I think it was to gauge market sentiment. But both the questions don’t make sense," she told Mint. Why is that? A consumer will vouch for the brand, not its place of origin, she explained. “I will buy it irrespective of where it is made because I trust the brand."
On the other end of the spectrum are domestic manufacturers like Sunil Vachani, chairman and managing director of Dixon Technologies (India) Ltd, a contract manufacturer. “Vocal about local is the first step in hardware," he said, adding “What Y2K was for Indian software companies, post-covid would be for the hardware industry. It has made us realize that we have to be self-reliant." Indian software companies made a killing debugging Y2K, called the millennium bug, from computer systems worldwide.
Multinationals and their advisers, meanwhile, are grappling to understand the ideological underpinnings of the term “self-reliance". There are several doubts. Is self-reliance a swadeshi movement that would eventually lead to a boycott of foreign-owned brands? Or is it just about targeting Chinese products? After all, Rashtriya Swayamsevak Sangh-backed Swadeshi Jagran Manch has been campaigning against dumping from China.
Or could it be just a repackaging of Make in India, a campaign that launched in September of 2014 with an aim to make India a global design and manufacturing hub? Some feel an era of import substitution could well and truly kick in—this government has increased duties over the past four years in order to give protection to domestic industry. What then would be the chances of India slipping into some form of economic isolation that resembles the pre-1991 era ?
Baijayant “Jay" Panda, national vice-president of the Bharatiya Janata Party (BJP), stressed that self-reliance is definitely not a return to that era. “In the decades of the 1950s through the 1990s, we were on the wrong side of globalization. Now, we should not be again on the wrong side of the curve when the world is looking at a different model. In the last several years, the world seems to be moving away from the unfettered globalism of the previous several decades," he said.
He went on to add: “We are going to be part of the global trading mechanism with the level of openness global economies have today as opposed to what they had 10 years ago. And we would take advantage of the opportunities by helping our players get a leg-up."
The winners of the post-covid industrial strategy, therefore, could be Indian manufacturers. Even small ones—at least on paper.
Finance minister Nirmala Sitharaman fired the first salvo on 13 May. “Indian MSMEs and other companies have often faced unfair competition from foreign countries," she said during a televised address. “Therefore, global tenders will be disallowed in government procurement up to ₹200 crore (about $25-26 million)."
While this seems a significant move, the reality is a bit more complicated.
With the $26-million cap, global companies cannot bid for many government contracts, many of which are in the range of $10-20 million. Many companies will lose 80% of their government contracts, said an executive from a multinational manufacturer in India who did not want to be identified. “However, I doubt if the smaller Indian companies can benefit—the capabilities, skill sets, funding of the MSMEs are not the best," he added, suggesting that government departments could be short changed with poor supplies.
Moreover, there appears to be no consistency in policy. Many government contracts also have criteria that favour large firms—in telecom, for instance. While small firms are ostensibly going to benefit, the long-term stability of this policy shift remains to be tested.
As things stand, the new version of Make in India seeks to protect domestic manufacturers and push them up the value chain.
Since Make in India’s first version launched in 2014, India has primarily become an assembly hub in industries such as mobile phones, lighting and consumer electronics. In other words, manufacturers assembled products from imported electronic components to meet domestic demand. Assembly created jobs. Nonetheless, the domestic value addition continued to be low at under 30%.
Make in India 2.0 is likely to press the accelerator on vertical integration, where the component supply-chains are coerced to be local because of import substitution. “Yes, there will be a lot of import substitution going ahead, but the second step is localizing the supply chain because a high level of components is still imported," said Sunil Vachani of Dixon.
Nevertheless, import substitution does not mean the government is giving up on export dreams either. The idea is to help domestic companies get to scale, first. “Till such time you build that scale, you are not going to be competitive. So it is about protecting from imports till you reach scale," said R. Jagannathan, editorial director of Swarajya.
How easy will it be to be protectionist on one hand and achieve export competitiveness on the other side? Well, both can be theoretically achieved in certain sectors.
Amit Khandelwal, director of the Jerome A. Chazen Institute for Global Business at Columbia Business School, said that the economic rationale behind import substitution is to generate learning and economies of scale within a country. “Both of those forces could lead to efficiency gains that make your exports competitive in global markets. However, the history of import substitution working is very mixed (and for India, it fared poorly). It can work in specific sectors, but I would say the guidance on which sectors it could work is not particularly well understood," he said.
Besides domestic scale, export competitiveness in the Indian context would mean offsetting what the industry calls “disabilities". Poor infrastructure and inefficient logistics lead to higher costs, for instance. According to United Nations Conference on Trade and Development (UNCTAD), in 2018, the median time spent by a container ship during one port call in China was 0.62 days versus 0.93 days in India.
Besides logistics, disabilities in India include higher cost of finance, lack of quality power and limited design capabilities. According to industry bodies, India’s electronics manufacturing sector runs a disability of up to 11% versus competing nations.
China and more
Invest India, the national investment promotion and facilitation agency, has a busy website replete with gamified data, state and sectoral analysis, case studies, news and many reports. One of its latest, Great Places For Manufacturing In India, is a handbook crafted along with real estate services firm JLL India.
A section focuses on “Covid-19 & opportunities post-pandemic", marketing India as one of the most viable locations for business continuity planning for multinationals re-thinking their supply-chains. “India, on account of its large domestic market and low-cost production base is well-positioned to host new investments in a range of sectors," the report stated. One of the carrots is the country’s “very large domestic market—as big as 18% of the world population along with prospects of a manufacturing export hub to the rest of 82%".
In fact, nearly all conversations with industrialists and industry bodies have an element of the “China opportunity". The new Make in India rides on hope. “We see an opportunity in the crisis," Chandrajit Banerjee, director general of Confederation of Indian Industry (CII), said. “We are seeing some changes in the labour laws already. Contractual sanctity would be very important for global companies. Besides, we need certainty in reforms. This is the right time for India to take those steps to attract global capital," he added.
The focus obviously is on sectors that can provide plenty of jobs. “Textiles is one industry where we should be able to make for ourselves and the world. The other sectors to focus must be leather and the footwear (because it involves small companies), furniture, agricultural/marine products and electronics (India runs up a huge import bill here)," he added.
Apart from these, the Invest India-JLL report stated that India is well-positioned to host new investments in pharmaceuticals, medical devices, automobiles, capital goods, electrical machinery, chemicals and petrochemicals, plastic products, and telecom equipment among others.
Close to the historic ruins of the Vijayanagar empire in Karnataka’s Hampi, Krishna Prasad Chigurupati and his wife Uma owns a vineyard that produces Chardonnay, Sauvignon Blanc, and Cabernet Sauvignon, among other wines. “Profit-wise, in wine making, we are always in the red," said Chigurupati, who is also the chairman and managing director of pharma company Granules India Ltd.
The pharma industry saw red last year when China suddenly increased the prices of pharmaceutical intermediates by 30-40%. Intermediates are key starting materials that go into the manufacturing of active pharmaceutical ingredients or APIs. “India used to make everything from scratch. Then, our pollution norms started getting tougher and we found it easier to buy from China around 1985-90s," Chigurupati said. Intermediates are chemical products and their production pollutes the environment. “Now, the pollution norms in China have become tougher, which is why prices shot up," he added.
Self-reliance in pharmaceuticals, in vogue because of covid-19, would imply India restart intermediates production. How feasible would that be? “If I get a premium of 5-10% on the API price, I can do it in India. If customers don’t pay that premium, the only way to manufacture would be for the government to subsidize the project cost—up to 25%," Chigurupati said.
Every industry, similarly, needs a different playbook to achieve vertical integration or self-reliance.
For instance, Kulin Lalbhai, the executive director of apparel maker Arvind Ltd, said that there is an opportunity to repeat the success story around personal protective equipment (PPEs) in other segments of the textiles industry. As the epidemic hit, the textiles industry partnered with the government. Factories that made jeans, suits and shirts were repurposed with new machinery. India now produces 400,000 PPEs a day.
PPE is a sub-set of technical textiles— India imports a chunk of technical textiles, worth nearly $16 billion a year. While India has done well in fabrics and home textiles, there are pockets where it has little scale. Lalbhai sees an opportunity to become globally competitive in both technical textiles and man-made fibres.
The playbook in textiles can’t be simply subsidies. The government has got to work on preferential access, given the covid-19 fallout. “Global trade may have different alignments in time to come. Beyond India being ready from a supply-side, it would help if we take advantage of these alignments. If there are trade agreements with the western world, it can lead to a step change in Indian exports," Lalbhai said.
The three large markets for textiles are the US, UK and EU, where competing countries such as Bangladesh and Vietnam have preferential access. A level playing field globally next needs to be supplemented with good infrastructure assets. “Then it becomes a powerful cycle," he added.
The govt seeks to push domestic manufacturers up the value chain. But that needs a lot of work on the ground.Besides consistency in policy, the success of the strategy would need relief from what the industry calls ‘disabilities’ from poor infrastructure and inefficient logistics
Farmers Will Grow What Markets Want: What Modi Government’s Agriculture Reforms Will Achieve
by Sivakumar Surampudi - May 27, 2020, 5:34 pm
The farm sector is destined for stirring changes, in the aftermath of the FM’s recent policy announcements. Here’s a look at how it will impact the ground realities.
Someone once quipped, “We won’t be able to capture the opportunities presented by the twenty-first century food consumer, if Indian agriculture continues to operate with the twentieth century institutions.”
This post explains why I believe that the agri reforms announced by the Central Government recently are far-reaching and transformative.
More importantly, how the reforms have been conceived differently this time, which gives us hope that the reforms will actually make an impact on the ground.
But before I do that, let me explain the origin of these regulations, and what has changed since then, warranting the reforms, so you have the context.
India: 1950s to 1970s
Much of the policy and regulatory framework of India’s food and agricultural economy was built in an era of shortages, and an environment where institutional arrangements were inadequate. So,
Government played an active and direct role to achieve self-sufficiency in food – largely rice and wheat. Public institutions were created to undertake agricultural research, provide extension services to the farmers, produce seed & fertilizer, procure farm produce at minimum support prices, and public distribution of food.
Essential Commodities Act was put in place, to control hoarding and black marketing, and ensure availability of products to consumers at fair prices.
States established Mandis (Market Yards) under Agriculture Produce Market Committee Act, to facilitate competitive price discovery and protect farmers from exploitation by village-level traders.
While all these laws and institutions successfully delivered the desired outcomes, there were some unintended consequences too. For example, the direct role played by the government created a production-driven supply chain system with a focus on raising yields and no incentive to the farmer in improving quality beyond the basic.
The unpredictability of invoking Essential Commodities Act, hanging like the Sword of Damocles, did not let the industry mature into globally competitive scales. The APMC Act too did not let the relationship between the farmers and the food processors or retailers evolve into value chain partnerships, because the compulsory auction system kept it transactional.
While the incomes of farmers certainly went up compared to the prior period because of these interventions, they also remained far lower than that of any other source of livelihood. It’s a telling statistic that 80 per cent of India’s poor are farmers.
The India of 21st Century :
Access to basic staples is not any more a concern for a large majority of Indian consumers. With their general awareness increasing and income levels also improving, the consumers started looking for more variety in food, as also better quality.
There’s also a preference for processed and packaged food as they offer convenience while buying as well as consumption. A sizeable segment of today’s consumers is willing to pay higher price for healthy and nutritious food, and is also seeking assurance on safety and hygiene.
These developments offer a great opportunity to diversify farm production to more remunerative crops like vegetables, fruits, nutri-cereals (millets), pulses, and the derived products like milk and meat. To gain from this opportunity, farmers need access to new knowledge in crop management and efficient linkages to input and output markets.
This means a fundamental transformation of the system from being production-driven supply chains led by government, to demand-responsive value chains anchored by consumer-oriented market players.
Given that many of these crops are more perishable than cereals, this also means new investments in processing, storage and handling infrastructure. Such systemic transformation, the linkages along the value chain, and the investments in infrastructure are precisely what the institutions and laws of 1950s-70s obstructed.
Hence the hankering from all stakeholders for reforms in agriculture for over two decades.
What will the reforms accomplish ?
What we have heard from the announcement of the Finance Minister is the intent.
We have to still walk three more steps, viz. (1) read the fine print of the three laws when they are enacted, (2) understand the alignment of different states and political parties with the announced intent, and (3) see the Rules made by the concerned authorities to operationalise these Acts.
But, knowing what we already know today, I have no doubt that the nation will move forward decisively from here.
The announcement on Essential Commodities Act says that the stock limits will be imposed under very exceptional circumstances like national calamities or famine. And that such stock limit shall not apply to processors and other value chain participants, subject to certain norms. Once this is clearly spelt out in the amended Act, this regulation becomes more predictable, the level of risk on investments in infrastructure gets reduced substantially, leading to improved financial viability, attracting more private investments.
It’s also announced that a new central law will be formulated to offer more choices to farmers in selling their produce, including a framework for e-trading. While the APMC Acts and Mandis will remain, this law will effectively remove their monopoly. The resultant competition will make the Mandis also more efficient. This idea, I believe, is a great workaround and more pragmatic, instead of tweaking the APMC Act, as the Model Acts of 2003 and 2017 attempted without much success. The jurisdiction of APMC will be limited to the mandis, and the food processors or retailers will be free to engage with the farmers outside the mandis, to build stronger and longer term relationships that go beyond the auction transactions.
Such engagement will lead to better alignment of crops and varieties based on consumer trends. Farmers will grow what the markets want, rather than trying to sell whatever they produced.
It’s in the interest of the processors and retailers to help farmers raise their productivity, manage crops to produce the desired quality, ensure appropriate post-harvest practices to preserve the product integrity, all of which lead to better farm-gate price realisation.
Sort of a reciprocal dependency that’s more sustainable.
The e-marketplaces will also help in delivering personalised crop management advisory to farmers, besides lowering the costs of accessing input or output markets through aggregation.
With reliable supply chains supporting their investments through such engagement, the private sector can focus on value addition through processing and branding to serve the evolving consumer needs.
The announcement of a new framework of enforceable agreements between farmers and processors, retailers, exporters, aggregators etc. to enable pooling of investments and capabilities to increase farm productivity and improve quality, while mitigating the production and price risk for the farmers is another step in the right direction. The word “enforceability” mentioned in the announcement should translate to institutionalising a swifter and inexpensive dispute resolution mechanism in the Act, in the interest of both the parties. I also hope the fine print in the Act or Rules doesn’t lead to a larger bureaucratic oversight and the consequent delays and additional costs that the agricultural value chains can ill-afford.
The ₹100,000 Crore Fund for farmers, announced by the FM towards the post-harvest infrastructure, as well as the ₹10,000 Crore for Micro Food Enterprises, will complement the downstream investments by the private sector and effectively complete the value chain.
For those who argue that no private investments came into Bihar and a couple of other states when they abolished their APMC Acts, and why things would be any different now, the answer lies in the improved viability due to the scale-play allowed under the amended Essential Commodities Act.
Also, the new approach to trade facilitation law will satisfy those who argue that the state governments cannot walk away from their obligation to provide agri marketing infrastructure after APMC reform, because mandis will very much co-exist and compete for their share of volumes from the farmers.
Sivakumar Surampudi is Divisional Chief Executive of the Agri Business Division at ITC.
More cash, incentives to coax Metro workers to stay on
By Naveen Menezes, Bangalore Mirror Bureau
Updated: May 27, 2020, 06:00 IST
Over 2,500 migrants working for the Namma Metro project in the City are among the two lakh guest workers, who have returned to their home states so far, after the two-month lockdown. Anticipating a mass exodus of more workers, the Bangalore Metro Rail Corporation Ltd (BMRCL) and construction companies are coming up with incentives to discourage labourers from leaving the city.
It’s learnt that many labourers working for almost all companies engaged by the Namma Metro authorities including Simplex Infrastructure, URC Constructions, ITD Cementation India, L&T,NCC and IL&FS have already left the city. While companies that have hired a large number of workers are managing to continue with their work, the projects that had employed only limited manpower have taken a hit.
BMRCL also confirmed that at least 25% of the workforce has either left or is waiting to leave. “Currently, about 6,500 workers are doing construction activity every day. They are being looked after well and they do not want to go back. About 25% of the pre-lockdown workforce of about 9,000 have either left or are waiting for their turn to leave,” Ajay Seth, BMRCL Managing Director, told Bangalore Mirror.
“BMRCL continues to ensure that their healthcare, shelter and food arrangements are made and wages are paid in a timely manner. Wages for the entire lockdown period have been paid. As economic activities are picking up, a very large number are opting to stay back. We expect that those who left might return soon,” Seth said.
The contractors are also coming up with ways to retain their workforce. “We have come up with an incentive plan to encourage workers to stay back. If a worker stays back for three months till August, we have promised to pay an additional Rs 3,000 every month. Many have stayed back,” a contractor said. He also hoped many who left might return once the Railways restart regular services from June.
On an average, an unskilled labourer is paid Rs 15,000 a month while a semi-skilled worker gets Rs 17,500 and the skilled labourer working for the Metro takes home about Rs 20,000. Each company hired anywhere between 500 and 2,500 workers for taking up each Metro project.
There were also complaints against a few companies that they did not look after their labourers well, including not paying of salaries during the two-month lockdown. The BMRCL, however, denied such allegations.
Ramu P, who works for Namma Metro and hails from Bihar, said he wants to go back home and return in two months. “It’s safe back in my village. We hear there are plenty of Coronavirus cases in Bengaluru. I want to be with my wife and children. When the situation returns to normal, I will come back,” he said.
It’s also learnt that the BMRCL had a meeting with all the construction companies last week to understand the ground realities in connection with the workers. At least two projects -- Mysore Road and Kanakapura Road Metro extensions -- were scheduled to be completed this year but these projects are expected to be delayed.
It’s learnt that many labourers working for almost all companies engaged by the Namma Metro authorities including Simplex Infrastructure, URC Constructions, ITD Cementation India, L&T, NCC and IL&FS have already left the city.
FDI in India: FDI inflows surge 18% in 2019-20 to record $74bn
TNN | Updated: May 29, 2020, 11:21 IST
NEW DELHI: India’s FDI inflows, including reinvested earnings, rose 18% to a record $73.5 billion during 2019-20, buoyed by a spurt in inflows into computer hardware & software, telecom, and hotel & tourism, while services, the traditional mainstay, witnessed a decline. Excluding reinvested earnings, inflows were 14% higher at just a shade under $50 billion, which is also an all-time high.
In fact, the large flows acted as a counterweight to low FII inflows during the year, which were estimated at $247 million (on a net basis) during the last financial year. The data naturally led to some celebration in government, given the overall gloomy economic situation and weak domestic investment.
"In another strong vote of confidence in Make in India, total FDI into India grew 18% in 2019-20 to reach $73 billion. Total FDI has doubled from 13-14 when it was only $36 billion. This long-term investment will spur job creation,” commerce and industry minister Piyush Goyal tweeted.
The year saw several large deals, involving overseas, with large inflows expected during the current year as well, with Reliance Jio alone announcing several transactions so far. Besides, some of the earlier announcements such as Saudi Aramco’s stake acquisition in Reliance Industries and Brookfield’s proposed investment in the tower arm are pending. While Maharashtra remained the top destination for overseas investors, Karnataka came second, although da ta for the October-March period was released by the department for promotion of industry and internal trade.
In terms of the countries, Singapore remained the top source for the second straight year, although inflows from the island nation dropped almost 10% to $14.7 billion. Mauritius was a distant second with investments of $8.2 billion routed via India’s close ally, with a sharp spike seen from the Netherlands, with inflows rising 1.7 times to $6.5 billion.
LONDON: Tech titan Google is said to be exploring taking a minority stake in British telecom group Vodafone's struggling India business. The investment in Vodafone Idea will pit the search giant against Facebook which has picked up a stake in Jio Platforms, the firm that houses India's youngest but biggest telecom company, Reliance Jio.
Alphabet Inc's Google is looking to buy about 5 per cent stake in Vodafone Idea Ltd, a new agency reported on Thursday. Both companies refused to comment.
The move by Google follows Facebook and other private equity investors pouring in $10 billion in Jio Platforms, which holds billionaire Mukesh Ambani's telecom firm, Jio. The move assumes significance as Vodafone Idea Ltd (VIL) -- where Vodafone holds just over 45 per cent stake -- is staring at nearly Rs 58,000 crore in unpaid statutory dues.
These dues arose after the Supreme Court, in October last year, upheld the government's position on including revenue from non-core businesses in calculating the annual AGR (adjusted gross revenue) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.
The Department of Telecom (DoT's) as per its own submission to the apex court earlier this year seeking relief in payment tenures, had put dues of three telecom companies -- Bharti Airtel, Vodafone Idea and Tata Group at Rs 1.19 lakh crore. Against this, Bharti Group had calculated its dues at Rs 13,004 crore, Vodafone Idea at Rs 21,533 crore and Tata Group of companies at Rs 2,197 crore.
In March, following an approval by the Cabinet, an application was moved before the Supreme Court (on March 16, 2020) seeking its permission for the licensees impacted by the AGR judgement to pay the unpaid amount of the DoT-calculated dues in annual instalments over 20 years.
Vodafone Idea has been under severe financial pressure, and analysts time and again have cautioned that company's longer-term viability remains under cloud. In December, Vodafone Idea chairman Kumar Mangalam Birla had said VIL may have to shut if there is no relief on the statutory dues.
Migration crisis has turned into a nightmare. Govt need to do something for the unemployed, specially poor and vulnerable.
Massive failure of successive governments and pure incompetence of politicians is in open. a poor labour from Bihar was begging my friend today to give him a job in his hotel. It broke my heart. this world is no place for poor.
India paves way for Apple, others to increase domestic production by removing a clause The government is also in discussions with a third Apple contract manufacturer, Pegatron, to relocate part of its manufacturing to India, the official said.
By Anandita Singh Mankotia, ET Bureau | Updated: May 30, 2020, 09.03 AM IST
ET had reported in its May 11 edition that Apple through its contract manufacturers Wistron and Foxconn could shift a significant portion of its manufacturing facility to India under the proposed PLI scheme.
ET had reported in its May 11 edition that Apple through its contract manufacturers Wistron and Foxconn could shift a significant portion of its manufacturing facility to India under the proposed PLI scheme.
The government has dropped contentious clauses including the evaluation of plant and machinery to be brought from China and South Korea, which had been opposed mainly by Apple, paving the way for the iPhone maker and others like Samsung, Foxconn, Oppo, Vivo, and Flextronics to make a larger play in local production using the production-linked incentive (PLI) scheme.
“The empowered committee of secretaries met on Friday and decided to remove the clause, which evaluated plant and machinery brought into India at 40% of its value, and has agreed to a few other changes so that manufacturing could shift to India in a big way,” an official aware of the discussions at the meeting told ET.
ET had reported in its May 11 edition that Apple through its contract manufacturers Wistron and Foxconn could shift a significant portion of its manufacturing facility to India under the proposed PLI scheme. However, the iPhone manufacturer had raised concerns regarding certain clauses, including valuation of plant and machinery with the government. The government is also in discussions with a third Apple contract manufacturer, Pegatron, to relocate part of its manufacturing to India, the official said.
“The irritants have been resolved,” the official added. Through the scheme, India is trying to attract American investment with pressure on US companies now to diversify manufacturing out of China under the ‘China plus one strategy’.
Among the changes agreed to on Friday were to include the industry in discussions before making any changes to the PLI scheme once these companies have invested and started producing in the country. “Earlier, a clause permitted only the empowered committee to be able to unilaterally change the rules but investors had voiced concerns with this clause,” the official said.
The other changes made include removal of various caps, including another clause which said the government would release the incentive despite the industry meeting its targets only if it had the money to do so. Instead, a clause on force majeure, which permits the companies to seek relief from the targets in time of natural calamities such as Covid-19, has been added.
The government hopes to attract large-scale smartphone manufacturing to India and raise exports out of India to over $100 billion by 2025 from under $3 billion right now.
“Also, the proposed investors had raised concerns on the excessive business information sought by the government, which has been further watered down,” the official said.
The official added that depending upon the production targets achieved by the companies in subsequent years, the government could alter the benefits depending upon the performance of companies.
To avail the graded incentives ranging between 4% and 6% over a five-year period, foreign manufacturers will have to produce high-end phones (with freight on board value of more than $200) of more than Rs 4,000 crore over and above their production level in the base year.
In the second, third, fourth and fifth years, manufacturers will have to produce phones worth Rs 8,000 crore, Rs 15,000 crore, Rs 20,000 crore and Rs 25,000 crore over the base year production value to avail the incentives.
The scheme, which is likely to be notified next week, will give out incentives to both foreign as well as domestic manufacturers over a period of five years. While the eligibility for foreign investors as well as domestic investors varies, a total of Rs 40,951 crore has been earmarked as incentives for companies, which achieve the production and minimum incentive targets.
Mitron app, which has been attempting to tap into both the vocal for local and the anti-TikTok narratives, appears to have not been made by an IIT student, after all.
Well this is little anti climatic but the buyer made the most use of script.
Unfortunately most scripts for mass selling are coded for sale and not from security point of view and the owner has not changed anything we may have some data leak disaster someday if it has not happened already.
Modi indicates restricting imports of goods that can be made in India Modi said a national migrant commission could soon be set up
By Archis Mohan|New Delhi
Last Updated at May 31, 2020 13:10 IST
In his 65th ‘Mann ki Baat’ address, Prime Minister Narendra Modi on Sunday said the pursuit of Atmanirbhar Bharat, or self-reliant India, will take the country to new heights in this decade.
Modi indicated the need to restrict import of goods that can be manufactured in the country, which is also known as import substitution.
The PM spoke of the need to offer a “new paradigm” to offer jobs and self-employment opportunities to millions of migrant workers who have headed home to their towns and villages by setting up cottage and small scale industries.
Modi said a national migrant commission could soon be set up while skill mapping of migrant workers is being done, including by private start-ups.
On the subject of ‘aatmanirbhar’ India, the prime minister chose to read out a letter he received from a listener from Bihar in his ‘Mann ki Baat’ broadcast, which is significant in its content. Modi said Himanshu from Bihar has written to him that “he dreams of the day when India reduces imports to the bare minimum”, be it the import of petrol, diesel, fuels, electronic items, urea or even edible oils.
“I understand his sentiments. There are many products that find their way into the country from outside resulting in wasteful expenditure on part of the honest tax payers. Their substitutes can easily be manufactured in India,” Modi said.
The PM further said that people across the country are taking the reins of the leadership of the Atmanirbhar Bharat’ in their own hands. “Many have mentioned that they have made complete lists of the products being manufactured in their vicinity. These people are now buying only these local products, promoting ‘vocal for local’. In order to encourage ‘Make in India’ everyone is expressing one’s own resolve,” the PM said.
In the context of millions of migrant workers heading back home to their towns and villages, particularly to eastern India, the PM said that “the need of the hour is devising a new solution – a paradigm” in that direction. He said his government is "constantly taking steps in that direction".
He said, for example skill mapping of labourers is being carried out at places, while at other places start-ups are engaged in doing this. He said the establishment of a migration commission is being deliberated upon.
“Recent decisions taken by the Central government have opened up vast possibilities of village employment, self-employment and small scale industry,” the PM said, adding that this will help attain the objective of ‘Make in India’ and ‘self-reliant India’. “Had our villages, towns, districts and states been self-reliant, problems facing us would not have been of such a magnitude as is evident today,” Modi said.
He said it has brought him joy that there is now extensive deliberation in the country on atmanirbhar Bharat, and said there was immense potential to give jobs and self-employment opportunities to people in their towns and villages.
In the context of migrant workers having to suffer because of the lockdown, the PM said it is “representative” of the need for development in the country’s eastern region, which can be become the “growth engine” of the country.
Incidentally, West Bengal and Assam have Assembly polls scheduled for May 2021, and the Bharatiya Janata Party will push for defeating the ruling Trinamool Congress in Bengal and retain its government in Assam.
“It is only the development of the eastern region that can lead to a balanced economic development of the country,” the PM said.
The PM also spoke of the signal service done by his government’s ‘Ayushman Bharat’ scheme to provide treatment. He said the number of beneficiaries have crossed 10 million.
“Do you know what more than 10 million patients means? It means the cumulative population of two Norways and two Singapores have been provided free treatment in such a short time,” Modi said.
He said the poor would have had to cough up more than Rs 14,000 crore if they had to pay for the treatment post-hospitalisation. He said 80 per cent of the 10 million beneficiaries are from rural areas, about 50 per cent are women, and most of the beneficiaries were suffering from diseases which could not be treated with standard medicines. Of these, 70 per cent people have had surgical intervention, he said.
Industrial activity picking up pace in UP; no new tax proposal: Adityanath
UP government eyeing post-covid investments with companies looking to exit China
By Virendra Singh Rawat | Lucknow
Last Updated at May 31, 2020 15:47 IST
Uttar Pradesh chief minister Adityanath on Sunday said the state industrial and commercial activities are picking up pace and it would further gather momentum under the ‘unlocking’ commencing from June 1.
Addressing a web-based media conference this afternoon, Adityanath said the state revenue collection was showing an upward trend vis-a-vis last month, and that there is no new tax proposal for additional mop up to overcome the covid-19 challenge.
“After the four lockdown stages, the proposed unlocking will focus more on the management of the containment zones and provisioning for the doorstep delivery, medical supplies and essential commodities. Most of the activities will be allowed in the non-containment zones,” he said replying to a Business Standard query.
He informed the broad guidelines for unlocking 1.0 will be issued later today, which will aim at opening up more services while ensuring that social distancing and safety norms are adhered to.
The CM underlined the government is speeding up economic and industrial activities, including the mega expressway and dedicated freight corridor projects. “We will be working on the containment zone strategy and to break the coronavirus chain to curb the spread of the disease,” he said adding owing to the lockdown, people are more alert about the safety protocols.
He claimed the state has already started to receive investment proposals post-covid, including an investment by a German company. “We have constituted a dedicated team and a group of ministers to woo investors. We have set up exclusive desks for pursuing investments from the US, South Korea and Japan.”
On the influx of migrants, Adityanath observed the government is committed to providing jobs to all hands by reenergising the state micro, small and medium enterprises (MSME) and other industrial segments.
“Even during the lockdown, several industries remained operations, including sugar mills, brick kilns and cold storages, which collectively employed about 2.5 million workers. Now, an additional 2.7 million workers are employed in the MSME sector, while another 65,000 work force is engaged by big industries,” he claimed.
The CM further said UP would be the largest beneficiary of the central Rs 20 trillion economic stimulus package, and that the state is working to leveraging it for the benefit of the various socioeconomic sectors viz. MSMEs, housing, agriculture etc.
“In the post-covid scenario, India is the best destination for the companies looking to exit China, while UP is poised as the most sought after in India. The state is all geared up to attract new investment, which will contribute towards the building of a new UP,” he noted.
Meanwhile, he claimed investment worth Rs 3 trillion had come to the state over the past three years, while the government is also following up with the other investment proposals, which were made at the UP Investors’ Summit in February 2018, when the state had signed memorandum of understanding (MoU) totalling Rs 4.68 trillion with over 1,000 Indian and foreign companies.
Adityanath underlined UP had deftly managed the covid-19 situation despite being a large state even as he acknowledged the leadership of Prime Minister Narendra Modi in steering India amid corona crisis and establishing India’s credentials at the global stage.
Brazil puts onus on India to “balance” world sugar market
India should implement a more “ambitious” biofuel programme that will help its sugar mills to increase production of ethanol and “balance the world sugar market”, according to Eduardo Leão de Sousa, executive director of Brazilian Sugarcane Industry Association or UNICA.
The average ethanol blending in gasoline (petrol) sold in India is now only around 6 per cent and expected to reach 10 per cent by 2022. “That would reduce your sugar production by 4 million tonnes (mt), which is also the surplus in the global market today. Last year, by producing more ethanol, we took away 10 mt of sugar from the world market, but for which it would have collapsed,” Sousa said in an interview to The Indian Express.
Brazil’s mills in 2019-20 – the season there is from end-April till November, as against mid-October to May for India – crushed 642.7 mt of sugarcane. Only 35% of the cane juice from crushing was boiled and crystallised to produce 29.6 mt of sugar. The balance 65% was fermented and distilled into ethanol, whose production amounted to 35.6 billion litres.
Indian mills, by contrast, crushed 301.18 mt of cane to make 33.16 mt of sugar and just 1.886 billion litres of ethanol in 2018-19. For the current 2019-20 season, sugar and ethanol supplies are estimated at nearly 27 mt and 1.9 billion litres, respectively.
In Brazil, the average ethanol blending in petrol is about 48%. This has been achieved through a mandatory blending policy (not allowing sale of any gasoline having less than 27% ethanol content) and special “carbon” taxes on gasoline (making it attractive to mix ethanol, which is free from such levy).
“All the 40,000-odd fuel stations in Brazil sell either gasoline with 27% ethanol blend (E27) or pure ethanol (E100). Most of our cars are flex-fuel vehicles running both on E27 and E100 (the tax on the gasoline component makes the latter cheaper at times). Even in diesel, we have 12% ethanol blending,” explained Sousa.
A similar “ambitious” ethanol blending programme in India can do four things.
First, it will reduce the country’s oil import bill. “Your import dependence on oil is 80% at present, which is what we also had till the seventies. But last year, 48% of our gasoline was substituted by ethanol. The use of E27 and E100 has enabled us to avoid additional gasoline consumption of almost 310 billion litres in the last 20 years. Had that volume been imported, it would have cost $ 168 billion in real terms,” Sousa pointed out.
Second, India is the world’s fourth largest greenhouse gases emitter after China, US and European Union. Ethanol can cut carbon dioxide emissions by up to 90 per cent compared to gasoline. Third, it can improve air quality in cities. São Paulo’s air pollution has halved in the last 20 years, despite its car fleet increasing more than 80%. “At 30 micrograms per cubic meter, the city’s average particulate matter is one-tenth of Delhi’s. The main reason for it is use of biofuel,” claimed Sousa.
The fourth benefit from Indian mills diverting more cane juice for ethanol is that it will bring down sugar production and prop up global prices. “Ethanol reduces the risk for everybody, including your 50 million cane growers. We want India to adopt mandatory blending, which would give its mills the flexibility to produce more ethanol like our industry and balance the world sugar market. Large cane producers such as India will also help create a global market for ethanol and make it an internationally traded commodity like oil, soyabean or sugar,” added Sousa.
However, the crash in global oil prices – Brent crude has fallen from $ 66 to $ 36 per barrel this year, while trading below $ 20 a month ago – has meant that even Brazilian mills may divert only 55% of their 650 mt of cane likely to be crushed in 2020-21 for ethanol.
As a result, Brazil’s sugar production, which fell from 38.6 mt in 2017-18 to 29 mt and 29.6 mt in the following two seasons, is expected to rise again to 37.5-38.5 mt. Ethanol output from cane is estimated at only around 30 billion litres in 2020-21, as against 35.6 billion, 33.1 billion and 27.9 billion litres in the preceding three seasons.
“We are comfortable producing more ethanol when crude is at $ 60 per barrel. This year, our sugar mix could go up from 35% to 45%,” admitted Sousa. The anticipated higher output from Brazil has, in turn, led to raw sugar prices in New York tumbling to a 12-1/2 years low of 9.34 cents per pound on April 28, before recovering to just over 11 cents now. And that has hurt Indian export prospects as well.