https://t.me/TheHindu_Zone
me/pdf4exams
SATURDAY, 6 JANUARY 2018
30 pages in 4 sections
MUMBAI (CITY)
~10.00
VOLUME V NUMBER 22
THE MARKETS ON FRIDAY
Sensex 34,153.9
Nifty 10,558.8
Nifty futures* 10,573.2
Dollar
Euro
~63.4
~76.4
Brent crude ($/bbl) 67.9##
Gold (10 gm)### ~29,425.0
*(Jan.) Premium on Nifty Spot; **Previous close;
# Over previous close; ## At 9 pm IST;
### Market rate exclusive of VAT; Source: IBJA
UNION BUDGET TO BE
TABLED ON FEBRUARY 1
RUN-UP The Budget session of
TO THE Parliament will commence on
January 29, and the Union
Budget will be presented on
February 1, the Cabinet
BUDGET Committee on Parliamentary
2018-19
Affairs recommended on
Friday. President Ramnath Kovind will
address the joint sitting of the two Houses
on January 29 and the Economic Survey will
be tabled on the same day, Parliamentary
Affairs minister Ananth Kumar told
reporters in New Delhi.
BACK PAGE
Govt blames Cong for stalling triple talaq Bill
>
COMPANIES P2
Bayer-Monsanto merger
under CCI scanner
TheCompetitionCommissionofIndia(CCI)
haslaunchedapublicscrutinyoffiner
detailsoftheproposed$66-billiondeal
betweenBayerandMonsanto,afteraprima
faciefindingthattheproposedcombine
wouldhaveanappreciablyadverseeffect
oncompetitioninIndiainthesegment.
MARKETS P6
ED asks Sebi to probe 2G
firms for insider trading
The Enforcement Directorate (ED) has
sought from the Securities and Exchange
Board of India share transaction details
of companies linked to the 2G telecom
spectrum scam. It has asked the market
regulator to probe these companies
under its insider trading rules.
WORLD P5
Pak minister says no ties
with US after aid freeze
PakistanonFridaysaiditwasbeingtreated
likea“whippingboy”,afterWashington
suspended$1.15billioninsecurityaidand
thedeliveryofmilitaryequipmenttoitfor
failingtoclampdownontheAfghanTaliban
andtheHaqqaniNetworkterrorgroupsand
dismantletheirsafehavens.“Wedonot
haveanyalliance”withtheUS,said
Pakistan’sForeignMinisterKhawajaAsif,
adding:“Thisisnothowalliesbehave.”
ECONOMY P4
Outbreak of bird flu
confirmed in Bengaluru
Anoutbreakofavianinfluenzaintheeastern
partofBengaluruwasconfirmedon Friday.
ButtheKarnatakagovernmentsaidthe
situationwasundercontrolandtherewere
noreportsofmortality.TheNationalInstitute
ofHighSecurityAnimalDiseasesconfirmed
theoutbreakintheDasarahalliarea.
SBI hints at revising
minimum balance
The State Bank of India (SBI) on Friday
said it was looking at revising the minimum
balance amount and penalty charges
in the wake of all-round criticism for
raking in a windfall profit of over
~17.71 billion from customers in penalty for
non-maintenance of monthly average
balances in their savings accounts.
> SENSEX THIS WEEK
Net change 97 % change 0.3
TOP 5 SENSEX GAINERS & LOSERS
Price in ~
GAINERS
Dec29,’17
Coal India
Yes Bank
263.0
315.1
Tata Steel 732.5
Adani Ports & SEZ 404.7
Larsen & Toubro 1,257.0
LOSERS
Maruti Suzuki 9,731.4
Infosys 1,039.3
Bajaj Auto 3,323.2
Hero MotoCorp 3,786.3
Wipro 313.4
Compiled by BS Research Bureau Source:Exchange, Bloomberg
TO OUR READERS
The eight-page commercial feature on
BS Odisha Round Table 2017, being
carried as a separate section, is
equivalent to a paid-for advertisement.
No Business Standard journalist was
involved in producing it. Readers are
advised to treat it as an advertisement.
https://t.
CCh
hgg#
#
184.2
54.0
14.4
COMPANIES P2 WEEKEND SEPARATE SECTION
~63.4**
~76.4** ZUCKERBERG RESOLVESTO YOUNG COUPLES ARE REDEFINING
‘FIX’ FACEBOOKIN 2018 QUINTESSENTIAL INDIAN WEDDINGS
68.4**
~85.0
GDP growth seen at RBI likely to give
additional funds
4-year low of 6.5%
to govt this FY
CSO ESTIMATES FOR FY18 HITDUETOPOORPERFORMANCE Lower growth
PEG GVA GROWTH AT 6.1% OFAGRICULTURE,MANUFACTURING forecast to add to
INDIVJAL DHASMANA fiscal pressure
14 > New Delhi, 5 January
ARUP ROYCHOUDHURY
E
conomic growth in 2017-18 is estimated to slow to a four-year New Delhi, 5 January
low of 6.5 per cent, against 7.1 per cent in 2016-17. This will be
the lowest growth rate under the BJP-led National Democratic LOWEST The Reserve Bank of India (RBI)
Alliance, largely because of the adverse impact of the goods is likely to transfer additional MONEY MATTERS
and services tax (GST) and the lingering effects of demonetisation. UNDER MODI funds to the government this
The first Advance Estimate for India’s GDP growth released by the
GOVT (in % y-o-y) fiscal year. The finance ministry
| The RBI Act says after making
provision for bad debts,
Central Statistics Office (CSO) on Friday showed that the pace of agri- has been seeking ~430 billion
cultural expansion is expected to fall by more than half (from 4.9 per GVA growth GDP growth in dividends from the RBI against and other factors, the balance
cent in the previous year to 2.1 per cent in FY18) due to decline in kharif the ~306.5 billion that the of the profits shall be paid to
output year-on-year. The data also showed massive rural distress as the central bank has already paid the Centre
agricultural output inflation rate (measured by GDP deflators) is for 2017-18. | The RBI has already
expected to fall to 0.7 per cent against 4.1 per cent over this period, a The additional funds would
transferred ~306.5 bn to
development that may set the direction for the give some relief to the govern-
Budget, which is less than a month away. ment as its task of reining in the
the govt this fiscal
WEEKEND
RUMINATIONS: TAX, The overall GDP growth rate is not only pro- 5.4 5.5 6.2 6.4 6.9 7.5 7.9 8.0 6.6 7.1 6.1 6.5 fiscal deficit at 3.2 per cent | The govt was seeking about
DON’T FRIGHTEN, jected to be lower than what was forecast by the of gross domestic product (GDP) ~130 bn in additional
9> 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18*
INVESTORS
GROWTH IN
Economic Survey in the range of 6.75-7.5 per cent,
but is also just a shade higher than the 6.4 per cent *Advance Estimates; Base year: 2011-12 Source: Central Statistics Office
became tougher due to lower
economic growth in nominal
dividend from the RBI
COMING QUARTERS
TO BE HIGHER, SAYS
registered in 2013-14, one of the two years known
MACROECONOMIC PICTURE terms (current prices) than | While the RBI may transfer
more, there is lack of clarity on
for the so-called policy logjam in the previous was estimated in the Budget
T C A ANANT 4 >
United Progressive Alliance regime. | Agriculture rose 2.1% against 8.7% for 2017-18. what that amount could be
PER CAPITA INCOME However, it is much higher than the 5.5 per in FY18 against | Gross fixed capital Among the revenue items in
GROWTH MAY cent in 2012-13, a year known for policy paralysis. 4.9% in FY17 formation, which the finance ministry stares
FALL TO 8.3% 4 >
With this, India might lose the tag of being | Industry grew 4.4% representing at a potential shortfall this year the deficit is retained at the bud-
INVESTMENT the fastest-growing large economy to China if against 5.6% investments, are dividends from state-owned geted number of ~5.46 trillion.
GROWTH TO SEE AN projections of the International Monetary Fund companies, banks, and the RBI. However, with expectations
moved up by 4.5%
UPTICK TO 5.9% 4 > come true. The IMF has forecast China will grow | Services up by 8.3% The combined target is around of shortfall in a number of rev-
against 2.4%
by 6.8 per cent in 2017. against 7.7% ~1.4 trillion. enue items, and higher expendi-
Growth in gross value added (GVA) is projected to fall to 6.1 per cent | The government’s An official has said that the ture in certain categories, the fis-
| Private final final consumption
in FY18, much lower than the RBI's forecast of 6.7 per cent. GVA had
risen 6.6 per cent in the previous year.
consumption expenditure
RBI had agreed to pay an addi-
tional sum but did not elaborate
cal deficit as a percentage of the
GDP could be much higher than
The GST not only impacted manufacturing in the second quar- expenditure, denoting
demand, rose 6.3%
increased by 8.5% what that amount could be. 3.3 per cent.
ter of FY18, when it was rolled out, but also in the first quarter due against 20.8% The RBI had transferred ~131 The data released by the
to pre-implementation jitters. Turn to Page 6 > billion to its contingency fund Central Statistics Office showed
for its accounting year ended that the economy was set to grow
June 2017. The fund represents by 6.5 per cent at constant prices
the amount set aside for meeting in 2017-18. GDP at current prices
Top firms get GST notices on credit depreciation in the value of secu-
rities and risks arising out of
monetary or exchange rate policy
operations. As on June 30, the
is expected to grow to ~166 tril-
lion from a provisional estimate
of ~152 trillion in 2016-17.
The government had by
claims; replies sought within hours
balance in the RBI’s contingency November run up a fiscal deficit
fund was ~2.28 trillion. 112 per cent of the target set out
The first Advance Estimates in the Budget for 2017-18. This is
for GDP growth in 2017-18, the highest deviation from budg-
DILASHA SETH & SUDIPTO DEY
New Delhi, 5 January
directive from the Central Board of Excise
and Customs to tax officers to verify
released on Friday, indicate that
the fiscal deficit as a percentage
et estimates for the fiscal deficit
in the first eight months of a fis-
claims of credit over ~10 million. of the nominal GDP would come cal year since 2008-09, the year of
Goods and services tax (GST) officers sent The dealers who received the notices in at nearly 3.3 per cent, against the global financial crisis.
notices to hundreds of companies across are being asked to submit this information the target of 3.2 per cent, even if Turn to Page 6 >
Gurugram, Mumbai and Bengaluru on amidst numerous statutory return filings
Friday, demanding they reply with exhaus- in the months of December and January.
tive lists of documents within hours. The tax officers have, however, claimed
The notices sent to firms including the deadline to send the replies by Friday
Google India, Honeywell International,
DLF City Centre, Panasonic, Hitachi
evening was not strict, and attributed the
drive to subdued GST collections.
HPCL STAKE SALE HITS VALUATION HURDLE
THROWN INTO A TIZZY Zochen, Yamaha Music India, Suzuki
Motorcycles, leading banks and insur-
They said about 2,000 companies were
taking 90 per cent of input credit and,
The sale of the government’s stake in Hindustan Petroleum
Corporation (HPCL) to Oil and Natural Gas Corporation (ONGC) is
ance companies, among others, pertain hence, the focus was on them. Claims stuckon valuation. According to persons close to the
| Hundreds of firms, including
Google India, Hitachi, asked to to transitional credit claimed for could be higher due to duplication, development, the effort was to close the deal before the
respond by same evening pre-GST stocks. because the companies were registered at end of the month but the government was looking at
The notice, reviewed by Business one place earlier for the purpose of paying getting a higher value for its 51.1 per cent stake in HPCL. A
| Drive labelled unrealistic by Standard, said: “…Your organisation has central excise but were now filing returns meeting regarding this was held at the Department of
tax consultants been marked for preliminary verifica- in each state, they added. Investment and Public Asset Management on Friday,
| Move comes amid slowing tion…in order to ascertain the correctness The documentation requirement an official said. This comes two days after ONGC had sent
of Transitional Cenvat Credit…you are includes ‘Central Excise Return’ Forms 1, a request for proposals to banks for raising a one-year
GST revenue collections
requested to submit the documents on pri- 2 and 3 for January-June 2017, service loan of ~250 billion to acquire the government’s stake in
| Dept also faced with significantly ority by today (Friday) evening positively.” tax return for October 16-June 17, calcu- HPCL. Based on the current market capitalisation, a 51 per
high transitional credit claims The drive — labelled unrealistic by tax lation sheet for credit availed in TRAN- cent in HPCL is valued at ~323 billion. However, reports suggest that after
worth ~1.3 trillion consultants — comes amid slowing rev- 1 application and GST Electronic Credit evaluating the marketing network, physical assets and brand value of HPCL, the
enue collections and significantly high Ledger. In addition, it has asked for a valuation could be around ~450 billion. A report submitted by JM Financial to
| Move follows directive from transitional credit claims worth ~1.3 tril- statement of inputs, work in progress, the government in November valued the assets of HPCL at ~1.14 trillion, which if
the CBEC to verify claims of credit lion. The impromptu verification of doc- and finished goods. accepted may lead to a higher outgo for ONGC at ~580-600 billion. SHINE JACOB
over ~10 million uments and related information follows Turn to Page 6 > & ARUP ROYCHOUDHURY report 2>
Tata airlines gear up for international runways
Vistara to start flying abroad NEWER AVENUES TATA, SINGAPORE AIRLINES
from July, AirAsia India sets
Jan5,’18 % chg
year-end target
Time of commencing Destinations in
international operations first phase
MAY ASSESS BID FOR AIR
278.8
333.1
6.0
5.7 VISTARA INDIA, SAYS VISTARA CEO
ARINDAM MAJUMDER
770.3 5.2
New Delhi, 5 January June 2018 Sharjah, Muscat, Tata Group and Singapore Airlines are open to
424.5 4.9
1,314.5 4.6 Abu Dhabi potentially bidding for the indebted carrier Air India,
Around two years after the government a top official at Vistara, a joint venture owned by the
9,434.1 -3.1
made it easier for airlines to fly abroad, AIRASIA INDIA firms, said on Friday.
two Tata group airlines are preparing to Air India, which was founded in the 1930s by the
1,012.1 -2.6 start international operations. While December Kuala Lumpur, Tata group and nationalised in 1953, is saddled with
3,277.6 -1.4 Vistara, Tata group’s full-service 2018 Bangkok a debt of $8.5 billion. The government agreed last
3,739.3 -1.2 carrier, will begin international June to sell it, after multiple efforts to resurrect the
309.8 -1.2 flights in the second half of this year, its business failed.
low-cost airline AirAsia India is likely to start operations to the short-haul international Leslie Thng, chief executive of Vistara, said at a
follow by the end of 2018. destinations from Delhi and then scale up to news conference on Friday that the companies were
According to the initial plans, both the middle-haul destinations within a nine-hour “open to evaluating bids for Air India”. It was not
airlines will try to take advantage of the strong and 20 aircraft range. After consolidating its market, the airline immediately clear if the companies might bid jointly
markets of its parents Singapore Airlines and for an airline to fly will plan ultra long-haul destinations like the or separately.
AirAsia Bhd. So, Vistara, a joint venture between abroad. While the condition of 20 aircraft west coast of the US. Several private domestic carriers have expressed
the Tatas and Singapore Airlines, will initially start stayed, the requirement of five years of “Initially, we have taken a middle-term view of an interest in buying the beleaguered airline,
with Singapore and destinations in West Asia, domestic operations was waived. While it was three years. By June, we will have 22 A320 planes which still has about a 13 per cent market share in
while AirAsia India will feed into hubs such as heavily opposed by incumbents such as IndiGo, and will start international operations from the India, and is the country’s third-biggest carrier,
Kuala Lumpur, where its parent Air Asia Bhd has a SpiceJet, and Jet Airways, Ratan Tata gave a public second half of this year. Initially, we will look at according to analysts and government reports. Tata
strong presence. statement asking for the change. destinations which are in the four- to five-hour group Chairman N Chandrasekaran said late last
The government had relaxed the 5/20 rule, According to Leslie Thng, chief executive flying range of the A320,” he said. year that the company would be interested in
which mandated five years of domestic operations officer (CEO), Vistara, the airline will initially Turn to Page 6 > bidding for Air India. REUTERS
 https://t.me/TheHindu_Zone https://t.me/pdf4exams

2 COMPANIES
>
MUMBAI | 6 JANUARY 2018 1

IN BRIEF

China bank drops insolvency

petition against RCom
China Development Bank
(CDB), the biggest foreign
lender to India’s Reliance
CCI scanner on Bayer-Monsanto merger
Competition watchdog invites comments within 15 days on how merger can hurt market
SANJEEB MUKHERJEE & AGENCIES
New Delhi, 5 January
competition watchdog said.
“The Commission is not like-
~2,499.4 on Thursday.
Bayer operates in pharma-
STOCK STORY
ly to consider unsubstantiated ceuticals, crop science, con-

T
Communications (RCom), he Competition Commi- objections,” it added. sumer health and animal
on Friday withdrew a ssion of India (CCI) has Bayer said publication of health, with a broad range of
petition seeking to drag launched a public scruti- this form on an acquirer’s web- products in each division.
the indebted telecom ny of finer details of the proposed site was a regular step in a Monsanto is engaged in the pro-
carrier into insolvency. A $66-billion deal between Bayer Phase-II investigation in India duction of agricultural seeds,
lawyer for CDB told the and Monsanto, the two biotech- and did not in any way prejudge herbicides and weed control
National Company Law Tribunal (NCLT) that the Chinese bank nology majors, after a prima facie the outcome of their proposed solutions.
had filed to withdraw the petition. The tribunal allowed CDB’s finding that the proposed com- combination. Bayer had in informing the
plea to go forward. CDB, which is owed around $2 billion along bine would have an appreciably It continued, it said, to fully CCI of the deal in October 2016,
with two other Chinese banks, had filed the petition in adverse effect on competition in cooperate with the CCI. said the “proposed combination
November seeking insolvency proceedings against RCom, saying India in the segment. Monsanto declined to comment. raises no competitive concern in
a large amount of loan principal and interest payments was The deal would create the Bayer expected the proposed any of the overlap products”. In
overdue. After RCom’s debt-reduction plan, including an asset world’s largest seeds and pesti- combination to be closed early India, both entities have a pres-
sale to Reliance Jio, was announced last week, CDB told Reuters cide firm. The CCI places a deal this year. The deal between Bayer ence in production and sale of
Bayer CropScience Monsanto India
that it was in talks with RCom. REUTERS< for public consultation if it is of and Monsanto, both of which vegetable seeds and cotton seeds,
the “prima facie opinion that the have significant presence in beside production and sale of
Eriska Investment combination has or is likely to
have an appreciable adverse
India, was announced in
September 2016, with the entire
non-selective herbicides, accord-
ing to that notice.
Fund sells 2.38% in effect on competition”. shareholding of Monsanto to be “The parties are engaged in
Uttam Galva Steels Prior to this, the CCI had
launched similar public scrutiny
be acquired by Bayer. Monsanto
would then become a fully owned
complementary business prac-
tices and the proposed combi-
Eriska Investment Fund has in the case of Ranbaxy-Sun subsidiary. nation seeks to capitalise on the
sold 2.38 per cent stake in Pharma and Holcim-Lafarge The share price of Bayer synergies arising as a result of
debt-ridden Uttam Galva Reliance Jio merger deals, among others. Cropscience, the Indian listed the complementaries. The par-
Steels through an open Comments on the Bayer- arm of the global major, was ties, therefore, believe it is not
market transaction. slashes rates Monsanto deal need to be sent to quoted at ~3,937.4 at the time. It necessary to definitely con-
According to a regulatory again the CCI within 15 days, with sup- closed at ~4,569.6 on Thursday. clude on market definition for
filing, Eriska Investment porting documents, on how the In the case of Monsanto India, the purposes of the proposed
Fund, which held 5.49 per Reliance Jio has updated its merger can adversely impact the the Indian listed arm, the share combination,” Bayer’s notice
Price on BSE in ~ Compiled by BS Research Bureau
cent stake in Uttam Galva price chart for the third time concerned person or entity, the was then ~2,329.3 and closed at had said.
Steels earlier, sold 3.4 million in two weeks by slashing
shares representing 2.38 per recharge rates by ~50 across
cent of equity stake. The the board and increasing the
shares were sold on January
3 and based on the weighted
average price of ~21.76 of the
data limit available to users.
Jio has been changing its
price points to gain market
‘Regulatory changes in the HPCLstakesalehits
US will not impact us’ valuationhurdle
stock, the transaction is share, while slowly inching
estimated to have been towards a higher average
valued at ~73.9 million. PTI< revenue per user. The new
offer slashed prices across
the 1-GB-per-day data TIGER TYAGARAJAN, chief executive officer (CEO) of global professional services firm Genpact, is confident of a smooth 2018. Be Govtconfidentofcompletingdealthisfiscalyear
Tough to maintain packs by ~50, bringing down it the future of his business or the ever-changing geopolitical situation in US and its global impact, Tyagarajan believes his
Aamby Valley: the price of the cheapest company would be able to sail through it all, he tells Karan Choudhury in an interview. Edited excerpts: SHINE JACOB & HITTING A ONGC had appointed

Official receiver to SC
The official receiver of the
Bombay High Court on Friday
moved the Supreme Court
seeking its directions,
contending it was finding it
difficult to maintain Sahara
Group’s Aamby Valley
properties, which are to be
auctioned. The apex court, on
November 23 last year, had
taken note of the
apprehension that there could
be a possibility of
encroachment and had
directed the official receiver of
the high court to act as the
custodian of Aamby Valley
properties till the conclusion
of the auction. The plea was
mentioned by senior lawyer
Shekhar Naphade, who is
assisting the apex court as an
amicus curiae, before a Bench
which said it would look into
the matter and fix a date of
hearing. PTI<
Tata Steel’s saleable
steel output in Q3
dips to 3.24 mt
Tata Steel on Friday reported a
1.2 per cent drop in saleable
steel production to 3.24
million tonnes (mt) for the
third quarter of the ongoing
fiscal year. It had reported a
saleable steel output of 3.28
mt (actual) in the year-ago
period. The third quarter
production figure of this fiscal
year is provisional. However,
the firm’s saleable steel
output in India in the
April-December period
of FY18 increased to
9.23 mt (provisional). PTI<
data recharge to ~149. A new
category of data packs have
been introduced to give
users 1.5 GB data per day.
BS REPORTER<
Panel slams IndiGo
for rude behaviour
of its staff
A parliamentary panel has
slammed low-cost carrier
IndiGo for “discourteous and
rude” behaviour of its
employees towards
passengers, saying it was an
“institutional” problem, and
urged the ‘market leader’ to
adopt a consumer-friendly
approach. The observations
follow a video that went viral
last year showing IndiGo
ground staff allegedly
assaulting a passenger. PTI<
IMG telecom plan in
process for final nod
by Cabinet: Minister
Ahigh-poweredpanel’s
suggestiononincreasingthe
tenurefordeferredspectrum
paymentsfortelecom
operatorshasbeen
“concurred”bytheTelecom
Commissionand“isunder
processforfinalapprovalby
theCabinet”,theRajyaSabha
wasinformedonFriday.
TelecomMinisterManojSinha
saidtheInterMinisterial
Group(IMG)constitutedin
Maylastyeartoexamine
systemicissuesaffecting
viabilityandrepayment
capacityintelecomsector
hadsubmitteditsreporton
August31,2017. PTI<
TIGER TYAGARAJAN
CEO, Genpact
Howisthecustomerdemandfor
largedealsconsideringthatthere
wasalullinsuchactivitieslastyear?
Not for us. If you see our earnings
call for Q1, Q2 and Q3, we got a great
first three quarters. It’s all been
driven by a lot of our customers
wanting to try digital
transformation. As a result, they
need to find a way to run their
businesses differently. They need to
re-imagine their businesses. So it is
being driven by transformational
services. Our deals have actually got
larger and more complex.
Doyouthinktheregulatorychanges
beingmulledintheUSwillhave
hugeramificationsforthe
informationtechnology(IT)and
businessprocessmanagement
(BPM)sectorinIndia?
It doesnot have an impact on us as
our dependence on visas is limited as
we deliver our services from
operating centres whether in India or
23other countries across the globe.
We are 4,000-plus people in the USin
operating centres which have been
there for 10-20years. These are local
operating people; for us, visa
dependence is not material and
therefore such changes do not
impact us directly.
Otherregulatorychanges,for
exampleinbanking,wouldobviously
requirebankstochangethewaythey
dealwiththoseregulations.Asthey
loosenup,Ithinktheywillhavethe
optiontogrowmore;someofthe
opportunitiesandworkwedointhe
regulatorysidewouldshifttothe
growthside.Regulatorychangesinthe
industryweservewouldchangethe
solutionsweprovide.
Haveyourclientsbegunspendingon
discretionaryITwork?
We are not dependent on
“WE DON’T DEPEND AS MUCH
AS SOME OF THE IT FIRMS ON
DISCRETIONARY IT WORK. FOR
US IT IS ABOUT CONSULTING
AND TRANSFORMATION
SERVICES, LEVERAGING DIGITAL
AND THEN RUNNING MANAGED
SERVICES FOR THEM”
discretionary IT work. Our business
is digital interventions to change the
way the business runs and obviously
there is enough research that shows
that companies are actually taking
money they are spending on
traditional IT and moving it to
digital. Some of that is the kind of
work we are doing. We do not
depend as much as some of the IT
companies on discretionary IT. For
us it is about consulting and
transformation services, leveraging
digital and then actually running
managed services for them.
Whatsortofimpactwould
artificialintelligence(AI)have
onmanpowerdemands?
Thesame amount of work can be
done with lesser people, but more
new types of work needs tobe done.
So that is driving our growth.
Howmuchofre-skilling
areyoudoing?
A lot,butwe’ve been doing
re-skilling for over 20 years. When we
first hiredpeople to do mortgage
processing, they did not know
mortgages, or when we brought in
manpower to monitor data coming
infrom engines, they did not know
what data was coming in. We trained
people to do things that they did not
know anything about. Now we are
trainingpeople to learn AI, machine
learning, robotics; it is just new
programmes thatteach them new
things and the raw material, the
people, are eager to learn. It is partof
the way we run the company.
WhatdothinkofIndia’sBPOpolicy?
CanBPOsbesuccessfullyrun
fromtier-II,tier-IIIandtowns
intherestofIndia?
IthinkifyoudefineBPOasmanaging
processesforotherenterprises,then
theanswerisyes.Indiaasaneconomy
itselfisgoingtogrow.Sodeliveryof
servicestoIndianenterprisesfrom
cost-effective,
high-talenttier-II,tier-IIIand
beyondcitiesisagreatopportunity.
Whether those same towns are
going tobe the ones that deliver
services to global customers is a big
question mark. I don’tknow. I would
argue that those types of roles are
getting done more by machines and
the work that is being done requires
re-skilling and up-skilling, which
more traditional tier-I and tier-II
cities are geared to.
Whatdoyouexpectforyoursectorin
theupcomingUnionBudget?
I do not believe we should run our
business or our industry based on
Budget wish lists. I think an
important thing from the Budget
perspective for the country is how
the does the government, and
all of us citizens and ecosystem
players, actually continue to
help the country grow.
ARUP ROYCHOUDHURY
NewDelhi,5January
ROADBLOCK SBI Caps and Citigroup
as merchant bankers
The Cabinet and Shardul Amarchand
The sale of the government’s Committee on Mangaldas as the legal
stake in Hindustan Economic advisor.
Petroleum Corporation Affairs gave its The Cabinet Committee
(HPCL) to Oil and Natural nod to the on Economic Affairs had
Gas Corporation (ONGC) is strategic sale given in-principle approval
valuation. onJuly19
stuck on
According to persons close (~/share)
for the strategic sale on July
19 last year. HPCL stocks,
to the development, the July19,2017 which were at ~384 a share at
effort was to close the deal that time, have closed at
384
before the end of the month ~414.9 per share on the BSE
but the government was
September1,2017 on Friday. The shares had
looking at getting a higher 493 touched a 52-week high of
value for its 51.1 per cent January5,2018 ~493 on September 9 last
stake in HPCL. 414.9 year. On August 22, the
A meeting regarding this ONGC board had cleared the
was held at the Department ~632 billion deal. Petroleum Minister
of Investment and Public Marketcapof Dharmendra Pradhan had
Asset Management (Dipam) HPCLonFriday said the deal would happen
on Friday, an official said. within this financial year
This comes two days after only.
ONGC had sent a request for Basedonthat,ONGC The government’s non-
proposals to banks for rais- willhavetopay tax revenue is hugely
ing a one-year loan of ~250 ~323 billion dependent on the deal. As
billion to acquire the gov- for51.1percent on January 2, total disin-
ernment’s stake in HPCL. vestment proceeds for 2017-
Based on the current 18 stood at ~538 billion
market capitalisation, a 51 per cent against the target of ~725 billion set
stake in HPCL is valued at ~323 bil- by Finance Minister Arun Jaitley. If
lion, about ~23 billion higher than in the ONGC-HPCL deal works out, this
last July when the Union Cabinet had will be first time since 2009 that the
cleared the sell-off. However, reports government would be surpassing the
suggest that after evaluating the mar- disinvestment target.
keting network, physical assets and “We have time till March 31. The
brand value of HPCL, the valuation ONGC-HPCL deal will be completed
could be around ~450 billion. soon and will count towards this
ThegovernmenthadappointedJM year’s disinvestment proceeds,” a sen-
Financialasthetransactionadvisorand ior official said on Friday.
Cyril Amarchand Mangaldas as the The Centre was hoping to sub-
legal consultant last year. A report sub- stantially overshoot its disinvestment
mitted by JM Financial to the govern- target for 2017-18. Dipam is also look-
mentinNovembervaluedtheassetsof ing at state-owned NBCC buying out
HPCLat~1.14trillion,whichifaccepted the government equity in a construc-
mayleadtoahigheroutgoforONGCat tion PSU. There could be three more
~580-600 billion. initial public offerings, three offers-
“Such a valuation will be a huge for-sale, and a second tranche of the
loss for ONGC. Anything above ~300- Centre’s Bharat-22 exchange traded
350 billion may affect the financial fund.
health of the company. There is lack As opposed to a budgeted target
of coordination among the govern- of ~725 billion, the Centre could garner
ment machineries in this regard. anything between ~900 billion and ~1
Moreover, the valuation by JM trillion, and if these materialise, they
Financials is too high for ONGC,” could go some way to make up for the
said a person working closely with shortfall in other revenue items such
the deal. as the goods and service tax.

Mark Zuckerberg resolves to ‘fix’ Facebook in 2018

Chief executive has set annual personal challenge since 2009; in post, says company ‘has made too many errors’
DEEPA SEETHARAMAN
5 January
For years, Mark Zuckerberg has
announced an annual personal
challenge, from slaughtering his own
meat to learning Mandarin to building
his own artificial intelligence.
His 2018 task might be the most
ambitious yet: Fix Facebook Inc.
In a Facebook post Thursday that
highlights his company’s mounting
difficulties, Mr. Zuckerberg said the
social network has made “too many
errors enforcing our policies and
preventing misuse of our tools.” The
Facebook chief executive, a self-
described optimist about technology,
said promising tools such as
encryption and cryptocurrency could
help counter concerns about the
growing power of technology giants,
but added that they, too, carried risks
that needed to be deliberated.
“The world feels anxious and
divided, and Facebook has a lot of
work to do—whether it’s protecting
our community from abuse and hate,
defending against interference by
nation states, or making sure that time
spent on Facebook is time well spent,”
he wrote. “My personal challenge for
2018 is to focus on fixing these
important issues.”
The goal shows how starkly
Facebook’s situation has changed. In
January 2017, even as criticism was
growing about Facebook’s role in
spreading fake news and
divisiveness during the U.S.
presidential election, Mr.
Zuckerberg unveiled plans for a
SPECIAL
series of trips across the country
to talk to Americans about their
lives and work. The tour sparked
speculation that Mr. Zuckerberg
might want to run for president.
Now Mr. Zuckerberg is focused on
addressing a mountain of risks that
threaten to damage the company he
co-founded in 2004 as a service for
Harvard University students. Today,
more than two billion people log into
Facebook every month and it is one of
the world’s most valuable and
influential companies—power that is
now drawing enormous scrutiny.
Overthepast18months,Facebook
hasbeenlambastedforallowing
objectionablecontent,including
violentlivevideos,andfabricatednews
articlestoproliferateonitsservice.
Last fall, Facebook lurched into
crisis mode after disclosing that
Russia-backed entities used its
platform and advertising tools
to spread divisive messages to
disrupt the 2016 U.S.
presidential campaign. The
admission sparked a rare set of
congressional hearings where
lawmakers grilled officials from
Facebook, Twitter Inc. and Alphabet
Inc.’s Google.
More recently, several former
Facebook executives and employees
have expressed remorse for helping
build a platform that they said was
designed to foster dependence on
Facebook. Those comments
eventually prompted Facebook to
acknowledge that certain types of
social-media use could be harmful to
users’ mental health.
Mr. Zuckerberg said in Thursday’s
post that the current national mood
resembles that of 2009, when he
mounted his first personal challenge
by wearing a tie every day. At the time,
the U.S. economy was in the midst of
recession and Facebook, then five
years old, wasn’t profitable. “It was a
serious year, and I wore a tie every day
as a reminder,” Mr. Zuckerberg wrote.
“Today feels a lot like that first year.”
Many people have lost confidence
in tech giants’ ability to level the
playing field, he said.
Facebookinparticularhasgaineda
reputationforbeingruthlessinits
desiretosquashitsrivals.“Withtherise
ofasmallnumberofbigtech
companies—andgovernmentsusing
technologytowatchtheircitizens—
manypeoplenowbelievetechnology
onlycentralizespowerratherthan
decentralizesit,”Mr.Zuckerbergwrote.
Mr. Zuckerberg’s latest mission
lacks the same kind of concrete goals
as prior challenges, which also
generally have skewed more toward
individual development, such as his
2015 promise to read a new book every
two weeks.
It isn’t clear what it would take for
his 2018 personal challenge to be met,
and a Facebook spokesman didn’t
respond to a request for more
information.
Mr. Zuckerberg said the current
issues facing the company touched on
subjects such as “history, civics,
political philosophy, media,
government, and of course
technology.” He added that he would
be “bringing groups of experts
together to discuss and help work
through these topics,” but didn’t
specify the goal of those conversations
or whom he would invite.
“If we’re successful this year then
we’ll end 2018 on a much better
trajectory,” he wrote.
Source: The Wall Street Journal
 https://t.me/TheHindu_Zone https://t.me/pdf4exams

.
MUMBAI | 6 JANUARY 2018 FINANCE & ECONOMY 3 <

Banks fear ~250-bn MTM loss
RBI approached for of this loss, considering the
fact that their AFS portfolio is
leeway to spread the highest in the banking sys-
tem. “With losses before tax of
the losses over ~56.24 billion during H1FY2018,
some quarters MTM losses will further add to
losses and erode capital ratios
ANUP ROY for public sector banks (PSBs).
Mumbai, 5 January Incontrast,privatebanksarerel-
atively better placed to absorb
New 10-year bond priced at 7.17 %
ANUP ROY
Mumbai, 5 January
The government on Friday introduced a
new 10-year benchmark bond at a coupon
of 7.17 per cent — much lower than the
existing 10-year bond that closed at 7.29
per cent. Against the new bond, ~90 bil-
lion was issued. Against the older 10-year
benchmark, the government had raised
~1.21 trillion. There is always a difference
in yields between two bonds. The older
series, which would no longer be used to
raise funds, get higher yields as traders
add illiquidity premium.
On Friday, the RB I auctioned bonds
worth ~180 billion, of which ~90 billion
was of the new 10-year ones. Investors
bid 281 times for up to ~ 476.4 billion for
the bond, of which RBI accepted 93 bids,
amounting ~90 billion, data revealed.

F
earing a mark-to-market
loss of something
between ~155 billion and
~250 billion in the third quar-
ter, some banks have
approached the Reserve Bank
of India for a leeway of spread-
ing the loss over some quarters.
According to rating agency
ICRA, bank treasuries could
be facing losses of ~155 billion
in the third quarter due to
abrupt yield movement.
But, going by the estimates
of other organisations, ICRA’s
assessment appeared conser-
vative.
Bond market experts have
predicted that the losses could
be as high as ~250 billion.
However, the same banks had
earned more than ~1 trillion in
the six months of the fourth
quarter of financial year 2016-
17 and in the second quarter of
2017-18, the ICRA stated. In the
third quarter, ended
December, the 10-year bond
yields rose 67 basis points. As
yields rise, prices of bonds fall.
The 10-year yields closed at
7.33 per cent at the end of the
December quarter. It is diffi-
cult to estimate without a
granular analysis of each
bank, but the the average
duration of the bond holdings
by banks work out to around
four years. In the duration, the
rise of one basis point roughly
the MTM losses with profit
before tax of ~309.94 billion dur-
ing H1FY2018,” the ICRA state-
ment stated, adding that the
government might need to
increase capital if it intends to
front-load PSBs by recapitalisa-
WHAT IS MARK-TO-MARKET LOSS tion of bonds.
| MTM is an accounting concept used for valuing bonds in Sources in the banking sec-
a treasury portfolio tor said it was unlikely that the
RBI would repeat its 2013 stand
| A bank has three baskets to keep the bonds: Held to andprovideawindowofscopeto
Maturity (HTM), Available for Sale (AFS) and Held for bankstospreadthislossoversev-
Trading (HFT) eral quarters.
| The MTM exercise has to be done for the last two baskets The central bank had
allowedsuchaforbearanceback
| Essentially, a bank has to value its bonds at the existing in 2013 after the RBI
market price, and not the price at which the bonds hiked short-term rates sudden-
were acquired ly to stem a rupee rout following
| So, if a bond was acquired at ~97 and the value of it tantrum talks by the US Federal
now has fallen to ~95, the bank will have to record a Reserve.
loss of ~2 in the trading account to reflect the fair value In July that year, short-term
of the bonds rates 9had spiked 350 basis
points in just two weeks, forc-
| The MTM losses are nominal losses and become actual ing banks to incur huge losses
only when the bank sells the bonds in the market and in their bond portfolios.
crystalise the losses No such drastic measures
were taken this time. The cen-
translates into 6-7 paise loss absorb interest rate move- tral bank has kept its policy
per bond. ments, the recent surge in rates unchanged since August
The loss, as calculated by bond yields is expected to and the market expects a rate
the industry-wide holding, result in MTM losses on the pause to continue for calendar
turns out to be as high as ~300 Available for Sale (AFS) por- year 2018.
billion, said an executive of a tion of their investment port- “If RBI really accepts the
rating agency. However, the folio. The MTM loss for the request of spreading out losses,
conservative estimate of loss- entire banking sector is esti- it would create a precedence —
es could be at least ~250 bil- mated at ~155 billion during so to say. RBI may not want to
lion for the quarter, the execu- the quarter,”ICRA said in a do that,” said a senior banker.
tive added. statement. Public sector banks
“With reduced cushion to would account for 80 per cent

Forex reserves reach new peak

PRESS TRUST OF INDIA
Mumbai, 5 January
Scaling new peaks for the sec-
ond consecutive week, the
country’s foreign exchange
reserves surged by a whopping
$4.444 billion to touch a new
lifetime high of $409.366 billion
in the week to December 29,
Reserve Bank of India(RBI) data
revealed on Friday. In the previ-
ous week, the foreign exchange
reserves had spurted by $3.53
billion to reach $404.921 billion.
The central bank said the surge
was due to a massive spike in
foreigncurrencyassets,whichis
a key component of the
reserves.
Thereserveshad crossedthe
$400-billion mark for the first
time in the week leading to
September 8, last year, but has
since been fluctuating.
In the reporting week, the
foreign currency assets rose by
$4.423billionto$385.103billion.

SBI mulls revising minimum

balance amount and penalty
PRESS TRUST OF INDIA
Mumbai, 5 January
The State Bank of India (SBI)
on Friday said it was looking at
revising minimum balance
amount and penalty charges
in the wake of all-round criti-
cism for raking in a windfall
profit of over ~17.71 billion from
customers in penalty for non-
maintenance of monthly aver-
age balances in their savings
accounts.
The country’s largest
lender, which has over 402
million savings account hold-
ers, had reintroduced month-
ly average balance (MAB)
charges from April 2017 after a
gap of five years.
Accordingly, the bank
demands ~5,000 in MAB in
metros and ~1,000 in rural
accounts, failing which it
charges a penalty.
As a result, between April
and November 2017, the bank
had netted a windfall of
~17.7167 billion, which is more
than its second quarter profit,
as penalties from customers
for non-maintenance of MAB,
finance ministry data showed.
“A review of the monthly
average balance is something
we’ve been looking at contin-
uously since we had brought it
back in April and we have
already brought it down in
October a bit. Now, we are in
the process of reviewing it
again,” MD for retail and digi-
tal banking, PK Gupta, said on
Friday. He said the bank was
doing a comprehensive review
of the MAB and penalty for
non-maintenance of the same,
based on the feedback it has
received and soon announce it
soon.
The bank has a MAB of
~3,000 for the metro and
urban accounts and the non-
maintenance penalty varies
~30-50 plus taxes. For semi-
urban and rural branches, the
amount is fixed at ~2,000 and
~ 1,000, respectively and the
penalty for non-maintenance
is in the range of ~20-40 plus
taxes. SBI has close to 405 mil-
lion saving bank account cus-
tomers.
The bank had reintroduced
monthly average charges from
April 1, 2017, but had to revise
downwards the penalties for
non-maintenance of the min-
imum balance from October
1, after facing backlash from
customers.
While between April and
October, the MAB was ~5,000
for metro accounts, which was
brought down to ~3,000 per
account. The penalty was also
reduced from ~50-100 to ~20 -
40, plus taxes.
It recently said on an aver-
age balance of ~3,000 in the
metros, SBI earned only ~6 a
month whereas for a minimum
balance of ~1,000 in rural, it
earned on ~2 per month which
is meagre compared to the
services offered and the corre-
sponding costs incurred by the
bank.The bank had said sav-
ings bank accounts such as
Prime Minister’s Jan Dhan
Yojana, small accounts and
basic savings bank deposit
accounts, pensioners, minors
and all social beneficiary
accounts are exempted from
MAB requirement.

Rupeehits32-monthhighof63.37
PRESS TRUST OF INDIA
Mumbai, 5 January
The rupee continued its rise for
the second day against the
beleaguereddollarandendedat
a 32-month high of 63.37 on
Friday, up 4 paise on steady
unwinding of the American
currency by exporters.
A record-setting spree on
local bourses too bolstered sen-
timent on the forex trading
front. This is the highest finish
for the home currency since
April 29, 2015, when it had set-
tled at 63.30.
Overall the forex sentiment
got a leg-up ahead of the
advanced gross domestic prod-
uct (GDP) growth estimates for
2017-18, which was released
after the market hours.
The projections are very cru-
cial in view of upcoming Union
Budget and also the first official
full-year growth estimates fore-
cast after the GST regime.
Economic activity regained
its footing in the second quarter
of the current fiscal after the
GDP rebounded to 6.3 per cent
July-September period, send-
ing out a comfort signals about
bottoming out of economic
slowdown. The Indian rupee
has strengthened by 55 paise
since the start of 2018.
Brent crude, an internation-
al benchmark, is trading mar-
ginally downat $67.72 a barrel in
early Asian trade. Domestic
equity markets continued their
new year party with both the
flagship indices conquering
new highs on persistently sup-
portive liquidity driven rally.
Buoyant global cues, too,
supported the upbeat trend as
most Asian bourses had a great
tailwind session after Dow
Jones closed above the 25,000-
mark. Sensex shot up over 184
pointstofinishat34,153.85,while
the Nifty jumped 54 points to
10,558.85.
Extending its bullish
momentum, the rupee opened
on a high note at 63.36 a dollar
againstThursday'scloseof63.41
at the Interbank Foreign
Exchange(forex)marketonsus-
tained selling of the American
currency by exporters and
banks.
 https://t.me/TheHindu_Zone https://t.me/pdf4exams
4 ECONOMY
>
MUMBAI | 6 JANUARY 2018 1

DECODING THE GOVT’S MATH

Investment growth to Agri GVA to fall

see an uptick to 5.9%
ABHISHEK WAGHMARE
New Delhi, 5 January
rowth in invest-
DECLINING PROSPECTS
„GFCF as % of GDP (LHS)
Investment 36
expected to grow 6.3 per
Growth in GFCF (RHS) cent in FY18, as against 8.7
per cent a year before,
8 while the reduction in
to 2.1% in FY18
What do the GDP
growth numbers mean?
SANJEEB MUKHERJEE The first Advance Estimate for gross
New Delhi, 5 January domestic product for FY18 should be
viewed with caution. This is so as it has
Gross value added (GVA) in agriculture and been compiled by extrapolating
allied activities is projected to fall to 2.1 per numbers available on different
cent in FY18 because of an expected drop in variables so far for 6-8 months for the
the rabi harvest, an almost three per cent fall full year. Hence, it is more of a statistical
in kharif production, and on account of a big exercise and does not take into account
base, according to the first advance estimates any new information.
The fact that growth will be 6.5 per

G
rate in FY18 4.9 6.6 of gross domestic product (GDP) for 2017-18
ment is set to 33 1.6 3.4 government consumption cent is significant as it is even lower than
4.5 6
lowest released on Friday.
2.4 MADAN the Economic Survey assumption of

32.6
witness a rise to under Modi 30 4 growth is sharp, from 20.5 More than GVA at constant prices, GVA for
5.9 per cent in govt per cent the previous 6.75-7.5 per cent for the year. Hence, it
27 2
agriculture and allied activities at current prices
SABNAVIS is not expected to be higher than the

30.9
the second half of FY18, financial year to 8.5 per slumped from nine per cent in 2016-17 to 2.8 per

34.1

compared to a 3.1 per cent
growth in the first half,
taking the annual invest-
ment growth to 4.5 per
cent, according to the first
Advance Estimate of
national income for the
financial year 2017-18.
The higher growth in
the second half comes
over a lower base; that of
reduced investment in the
two quarters immediately
after demonetisation (Q3
and Q4FY17).
Total investment in the
country, represented by
gross fixed capital forma-
tion (GFCF), is slated to be
29 per cent of gross domes-
tic product (GDP) in 2017-
18 (~37,651 billion of ~1,3
trillion), lower than the
29.4 per cent in the first
half (April-September).
This means the invest-
ment rate in the second
half of the financial year
Investmentrate reduces in the second
half of 2017-18
H1
Investment rate (%) 29.40 28.60 29.0 At constant 2011-12 prices; * Note: Includes investment
Investment growth (%) 3.10 5.90 4.50 from
(October 2017-March 2018)
is expected to fall below
29 per cent, a slowing in
the later part.
Investments in the sec-
ond half thus, are not
expected to match the
revival in GDP growth in
the last two quarters.
The estimate of GFCF
as a percentage of GDP is
the lowest since 2004-05,
Note: GFCF at
constant 24
2011-12 prices;
All figures in (%)
Household investing
„Household investment „ Other investment *
GFCF figures (~bn)
29,977 31,459
16,221 17,919
13,756 13,540 12,386 13,629 12,930
H2 Annual
‘11-12 ‘12-13 ‘13-14
private and public corporations and from the
government
when it was 28.7 per cent
of the GDP (2004-05
series). The rate has come
down from 31.3 per cent in
the first year under the
current government.
“Investments are unli-
kely to see an improve-
ment. Only a gradual pick-
up is foreseen,” CARE
Ratings said in its report
on the Advance Estimate.
29.5
31.3
0 cent in FY18.
‘12- ‘13- ‘14- ‘15- ‘16- ‘17-
13 ‘14 ‘15 ‘16 ‘17 ‘18
31,949 33,022
19,563 19,392
14-15 ‘15-16
Source: CSO
The share of consump-
tion in GDP has been fair-
ly constant, with private
consumption expenditure
reducing marginally and
government consumption
increasing. Growth in con-
sumption has, however,
reduced and this has been
pulling down overall GDP
growth to 6.5 per cent.
Private consumption is
29.0
Discrepancies in the
estimation of GDP have
shot up again from ~839
billion in FY17 to ~2,004
35,185 billion in FY18. Discre-
pancies as a share of GDP
22,253 rose to 1.5 per cent in FY18,
surprisingly up from 0.7
per cent in FY17, the year
demonetisation was
implemented.
Chief statistician T C A
Anant had attributed the
inevitability of discrepan-
cies to delay in data
reporting and availability,
while talking about the
national accounts of FY16.
Returning to invest-
ment, data on which com-
ponent of capital forma-
tion is expected to cause
the lag is not clear. Data till
2015-16 show household
investments falling over
the years, affecting overall
investment.
cent in 2017-18, which means farm product
prices grew a mere 0.7 per cent in 2017-18 as
against a rise of 4.1 per cent in 2016-17.
A massive drop in agricultural prices, with
most of them ruling below minimum support
prices (MSPs), has been one of major crises the
current government faces.
Despite best efforts, prices have stubbornly
remained lower than the MSP, a factor which
many blamed for the BJP’s poor performance
in the elections in parts of Gujarat.
According to the
government’s esti-
mates, foodgrain
FROM THE
production in the FIELD
kharif season is pro- GVA in agriculture and
jected to fall to allied activities at
134.67 million 2011-12 prices (% YoY)
tonnes as against
2013-14 5.6
138.32 million
tonnes in the previ- 2014-15 -0.2
ous season, due to 2015-16 0.7
fall in pulses output, 2016-17 4.9
while oilseeds pro-
2017-18* 2.1
duction is also
*Provisional as per first
expected to drop. advanced estimate.
More than kharif, Source: MOSPI
the GVA estimates
show that rabi production could also suffer
due to a drop of almost 600,000 hectares in
CHIEF ECONOMIST, base mark, which means it would be
lowest in the past three years. The
CARE RATINGS
effects of demonetisation and GST have
played some role here. Second, capital formation continues to
fall to a new low of 26.4 per cent from 29.3 per cent in FY16 and
27.1 per cent in FY17. This means that the private sector
investment is not expected to pick up this year and will be
showing a declining trend as there is evidence to show the
government spending is on track given the fiscal numbers.
Third, the difference between GVA growth and GDP growth
is 0.4 per cent, which is again significant as it means there is an
assumption that net indirect taxes would be increasing, which
means that GST impact would be positive for revenue
collections and could signal reversal of the present trend
witnessed in the market.
Fourth, the government sector is again the leader in terms
of growth at 9.4 per cent on top of 11.3 per cent last year. Clearly
the overdependence on the government cannot be missed
and this also means until private sector investment picks up or
household consumption increases, fiscal deficits have to be
made flexible to keep growth ticking. This could mean the
government not targeting 3 per cent mark for FY19 but taking
on a number between 3-3.5 per cent depending on the final
outcome for this year.
Fifth, the manufacturing sector is the major
disappointment with 4.6 per cent growth, which should
ideally be in the 8-9 per cent range. This reflects that the
CSO does not expect corporate profit and loss accounts to look
any better in the past two quarters as the value added
numbers are based on their statements. Also IIP growth for the

Per capita income growth may fall to 8.3%
PRESS TRUST OF INDIA ~111,782 showing a rise
New Delhi, 5 January of 8.3 per cent as com-
pared to ~103,219 dur-
India’s per capita income, a gauge ing 2016-17 with the
for measuring living standard, growth rate of 9.7 per
is likely to witness a slower cent,” said First
growth of 8.3 per cent at ~111,782 Advance Estimates of
in the current financial year. In National Income,
2016-17, per capita income had 2017-18 released by the
grown by 9.7 per cent to ~103,219. Central Statistics
“The per capita net national Office (CSO).
income during the current finan- The per capita income in real
cial year is estimated to be terms (at 2011-12 prices) during
wheat acreage because of a shift in area
towards gram in Madhya Pradesh.
“The GVA estimates of this sector have
been compiled using the First Advance
entire year would not really pick up steam.
Sixth, despite a normal monsoon the overall growth of the
primary sector covering agriculture and allied activities would
be lower than last year. Implicit is that the lower rabi sowing
2017-18 is likely to The economic growth is exp- Estimates of production of major kharif crops would not give a robust harvest this time. Last, the reforms in
attain a level of ected to slow to a four-year low of for 2017-18 and targets based on rabi sowings,” real estate could have been a deterrent for this sector which
~86,660 as compared 6.5 per cent in 2017-18, the lowest the official statement said. has kept construction growth at a lower level.
to ~82,269 for the year under the Modi-led government, Madan Sabnavis, chief economist at CARE Assuming this growth number holds, two things can be
2016-17, it said. mainly due to poor performance ratings, said that a lower agri forecast was not said. First, the fiscal deficit number for the year, other things
The growth rate in of agriculture and manufactur- good news for the rabi crop, in which the area being constant, would go up as it was based on higher
per capita income ing sectors. The gross domestic under cultivation has been lower so far, with nominal GDP growth number. Second, we will have to wait for
(real terms) is esti- product (GDP) was 7.1 per cent in wheat being under pressure. one more year to cross the 7 per cent mark, which should be
mated at 5.3 per cent 2016-17 and eight per cent in the TCA Anant, chief statistician, however, possible in the absence of any disruptive reform — which is
during the current preceding year. It was 7.5 per cent laid the blame for lower agriculture definitely not expected.
financial year, as in 2014-15. The Narendra Modi- growth on a certain amount of statistical base
against 5.7 per cent in the previ- led government had assumed reversion. Views are personal
ous financial year, it added. office in May 2014.

Growth in coming quarters to be higher, says T C A Anant

SUBHAYAN CHAKRABORTY
New Delhi, 5 January
While gross domestic product
(GDP) growth has taken a hit
in 2017-18, the government
hoping it would remain above
seven per cent from the final
quarter (January-March) of the
current financial year onwards.
After a big hit on industrial
growth due to introduction of
the goods and services
tax (GST) regime, the current
financial year is now expected
to see economic growth of 6.5
per cent.
On Friday, the government
said it expected economic
growth at current prices to slow
down from the 7.1 per cent of
the previous financial year.
In manufacturing, growth
in gross value added was 4.6
per cent, reflecting the latest
industrial growth figures, said
Chief Statistician T C A Anant
at a press conference. He
added that manufacturers had
anticipated the GST introduc-
tion from July 1 and a slow-
down was a result.
In the current financial
year, economic growth had
started off low at 5.7 per cent in
the first quarter (April-June),
followed by a 6.3 per cent
increase in the second quarter.
The government expects
growth above seven per cent in
succeeding quarters.
On lower agricultural
growth, Anant pointed to ‘a
certain amount of statistical
base reversion to mean’. “Last
year, there was a very high
growth rate, coming off con-
secutive years of drought.
However, in production terms,
volume is expected to be the
second highest in 2017-18 in a
long period of time or maybe
ever,” he added.
He said the latest growth
figures were in fact lower than
the finance ministry’s nomi-
nal expectations for
the current financial year, as
had been presented in the ear-
lier Union Budget. However,
economic trends pointed to implementing the pay com- LAST YEAR,
higher growth in the coming mission report.
quarters. Gross fixed capital formation
THERE WAS A
NITI Aayog Vice-Chairman (GFCF) at constant (2011-12) VERY HIGH GROWTH
Rajiv Kumar picked up on this prices is estimated at ~37.65 tril- RATE, COMING OFF
theme, saying growth could be lion in 2017-18 as against ~36.02
expected to strengthen in the trillion in 2016-17. In terms of
CONSECUTIVE YEARS OF
coming period. For instance, he GDP, the rate of capital forma- DROUGHT. HOWEVER,
said, the manufacturing tion was 29 per cent, against 29.5 IN PRODUCTION
Purchasing Managers’ Index per cent in 2016-17.
(PMI) for December was at a In the second quarter, the
TERMS, VOLUME IS
five-year high of 54, while rate of capital formation EXPECTED TO BE THE
demand in the fast moving con- remained below 30 per cent, a SECOND HIGHEST IN
sumer goods segment was pick- third in a row. Anant had earli-
ing up briskly. er said this figure had to be
2017-18 IN A LONG
Kumar added that the much higher to significantly PERIOD OF TIME OR
higher second half growth set into motion long-term MAYBE EVER
was despite a weaning of pub- investment growth. This time,
lic sector expenditures, which he said private expenditure T C A ANANT
had peaked in 2016-17 due to needed to ramp up. Chief statistician

Tax searches net ~815 million Centre confirms

from jewellery couriers
DILIP KUMAR JHA
Mumbai, 5 January
Officials from the departments of
goods and services tax (GST) and cen-
tral excise jointly conducted searches
on around 200 angadias across the
city and seized around 125 packets of
diamond, gold jewellery and cash
worth ~815 million on Thursday.
Angadias act as couriers in the
diamond trade. They receive packets
from clients, in this case, diamond
processors/sellers and jewellery
manufacturers/traders in Mumbai,
to deliver to other clients in Surat
and other places in Gujarat, and so
on. Their clients in Mumbai and
Surat transact business over tele-
phone. Thereafter, the angadias take
charge of delivering the sealed pack-
ets of diamond, gold and jewellery
between these places.
“We had information on human
carriers carrying some parcels con-
taining gold bars, jewellery, dia-
mond and cash coming in. We veri-
fied the information and started
acting on it. We found around 80
people/carriers carrying cash and
valuables, which they should not
have carried without paying duty,
and we intercepted them. In our
investigation, we found some
parcels are genuine, as applicable
duties are paid on these; a majority
of them are found without proper
papers. While we will release the
parcels on which duties are paid,
outbreak of bird flu
in Bengaluru
Centre collects PRESS TRUST OF INDIA the results, it said.
~380 billion as Bengaluru, 5 January The release said there were
no reports of mortality from the
compensation cess An outbreak of Avian
Influenza in the eastern part
state or any other part of the
country and that the situation
PRESS TRUST OF INDIA of the city has been con- was fully under control.
New Delhi, 5 January firmed, but the Karnataka Principal Secretary, Animal
government said the situation Husbandry Department, Rajk-
The government on was fully under control and umar Khatri told PTI that 940
Friday said it has there were no reports of mor- birds had been culled so far in
collected over ~380 tality in the state or any other 1 km area around Dasarahalli
billion between July and part of the country. by three Rapid Action Teams.
November by levying cess on luxury and The National Institute of Those involved in the
demerit goods under the goods and High Security Animal diseases culling process had also been
services tax (GST) regime. (NIHSAD) in Bhopal confirmed quarantined according to the
A cess is levied on these goods to the outbreak in standard operating
help cover the loss suffered by the states Dasarahalli area. procedure, he said.
on account of roll out of the GST regime. An official release Khatri said they
This is levied on top of the highest tax said birds in some are acting accord-
This is the first mega crackdown on jewellers to check for tax evasion after the rate of 28 per cent on these goods. GST poultry farms in ing to the proce-
GST was implemented in July 2017 was implemented from July 1, 2017. the area started dure and added
The government through GST dying in December that a three mem-
we’d seize the ones on which duties railway station and intercepting car- compensation cess has collected a last year, triggering ber central team
are not paid. We will also give them riers coming via Ahmedabad-bound revenue of ~380 billion for July- panic of avian bird also came to the
opportunity to prove their claims train Gujarat Express.” November, Finance Minister Arun Jaitley flu, following area on Thursday
and ask them to pay duties and fines This is the first mega crackdown said in a written reply in the Lok Sabha. which the area was to supervise the
applicable” said K N Raghavan, com- on jewellers to check for tax evasion Of this, ~72 billion was collected for July, quarantined and process.
missioner, GST and central excise, after the implementation of GST ~78 billion for August, ~80 billion for culling of birds was Surveillance in
Mumbai Central. in July 2017. September, ~71 billion for October and carried out. the 10 km zone is
In a Twitter post, the Indian “The government authorities ~78 billion for November. Jaitley further Samples from a already on, he said,
Revenue Service Officers Association must have got some information on said that the Centre has released ~24 poultry meat shop were sent to adding that Gram Panchayat
said, “Congratulations to officials of the possibility of tax evasion. We are billion to the states to compensate for NIHSAD which confirmed on members, private doctors,
GST Mumbai Central for the surgical sure they would soon clear all pack- losses. Karnataka got maximum December 30 last year that they Asha workers and all three
operation on Thursday and seizing ets after verifying them,” said Anoop compensation from the Centre at ~32 tested positive for H5 strain of Public Health Centres cover-
gold and diamonds worth ~780 mil- Mehta, president, Bharat Diamond billion, followed by Gujarat (~22 billion) Avian Influenza virus, it said. ing this area had been
lion; Indian and foreign currency of Bourse, the country’s premier dia- and Punjab (~21 billion). NISHAD immediately informed and had started the
approx ~35 million by striking at the mond business centre. informed the government of awareness drive.
 https://t.me/TheHindu_Zone https://t.me/pdf4exams

.
MUMBAI | 6 JANUARY 2018 WORLD 5 <

Kalanick to sell a third Pak minister

of stake for $1.4 billion
LIANA B. BAKER AND HEATHER SOMERVILLE
5 January
Uber Technologies co-founder
Travis Kalanick (pictured), who was
ousted as chief executive in June, is
selling nearly a third of his 10 per-
cent stake in the ride-services com-
pany for about $1.4 billion, a person
familiar with the matter said on
Thursday.
Kalanick’s sale is part of a deal
struck by a consortium led by
SoftBank Group Corp which is taking
a 17.5 per cent stake in Uber, mostly by
buying shares from early investors
and employees. SoftBank last week
secured agreements from sharehold-
ers who were willing to sell, and the
deal will close early this year, Uber
said. The SoftBank deal values Uber at
$48 billion, about a 30 per cent dis-
count from its most recent valuation
of $68 billion.
However, the investor consortium
is also making a $1.25 billion invest-
ment of fresh funding at the older,
higher valuation. Kalanick had offered
to sell half of his total shares, but
because there was a limit on how
much SoftBank will buy, he will sell
just 29 per cent, according to the
source. Other investors also did not
get to unload as many shares as they
had hoped because of such wide-
spread interest to sell. The former CEO
owns 10 per cent of the company,
which means his sale will unload 2.9
per cent of Uber shares and earn him
about $1.4 billion, the source added.
A spokesman for Kalanick
declined to comment. SoftBank and
Uber could not be reached immedi-
ately for comment.
The sale would make the Uber co-
founder a billionaire for the first time,
not just on paper. Kalanick has never
before sold shares of the company he
ran for almost a decade, the source said.
The SoftBank deal offers investors and
employees what could be their last
chance to sell shares in a company-
approved transaction before Uber's
long awaited initial public offering,
planned for 2019. The transaction
marks a victory for new CEO Dara
Khosrowshahi, who helped broker the
deal and who will benefit from a deep-
pocketed investor like SoftBank.
REUTERS
says no ties
with US after
aid freeze
AGENCIES
Washington/Islamabad, 5 January
Pakistan on Friday said it was being treated
like a “whipping boy”, after Washington sus-
pended $1.15 billion
in security aid and the delivery of
military equipment to it for failing to clamp
down on the Afghan Taliban and the
Haqqani Network terror groups and dis-
mantle their safe havens.
“We do not have any alliance” with the US,
said Khawaja Asif, Pakistan’s foreign minister,
in an interview with Geo TV on Friday.
“This is not how allies behave.” Asif had
described Washington in a TV
interview the previous day as “a friend who
always betrays”. The freezing of all security
assistance to Pakistan comes after President
Donald Trump in a New Year's Day tweet
accused the country of giving nothing to the
TRAVIS KALANICK’S US but "lies and deceit" and providing
JOURNEY "safe haven" to terrorists in return for $33-bil-
lion aid over the last 15 years. The suspended
| Former CEO initially amount also include $255 million in Foreign
tendered about half of his Military Funding (FMF) for the fiscal year
Uber shares 2016 as mandated by the Congress. In addi-
tion, the Department of Defense has sus-
| Kalanick will sell equity
pended the entire $900 million of the
worth about $1.4 billion to Coalition Support Funds (CSF) money to
SoftBank Pakistan for the fiscal year 2017 and other
| The SoftBank deal values unspent money from previous fiscal years.
Uber at $48 bn "Today we can confirm that we are suspend-
ing national security assistance only, to
| Sale would make Kalanick a Pakistan at this time until the Pakistani gov-
billionaire for the first time, ernment takes decisive action against groups,
not just on paper including the Afghan Taliban and the
| Transaction marks a victory Haqqani Network," State Department
for new CEO Dara Spokesperson Heather Nauert told
reporters.
Khosrowshahi

Warren Buffett optimistic Saudi converts

about US economy Aramco into
THE ASSOCIATED PRESS/BLOOMBERG
joint-stock company
Omaha (Nebraska) 5 January
RANIA EL GAMAL change, which was published
Billionaire Warren Buffett remains optimistic & AZIZ EL YAAKOUBI in a cabinet decree in the
about the US economy and the nation’s Dubai, 5 January kingdom's official bulletin on
prospects for the future. Friday, is a requirement for
Buffett wrote an essay for Time magazine Saudi Arabia has changed the local companies in Saudi
that appeared online Thursday, part of an issue status of its national oil giant Arabia ahead of listing, a sen-
edited by Bill Gates that was dedicated to “The Aramco to a joint-stock com- ior Aramco source, who
Optimists.” In his essay, Buffett explained why pany as of January 1, in a key declined to be named, told
he often says that most American children will step for an initial public offer- Reuters.
live better than their parents. ing planned for later this year. "As a customary step in
Buffett said that even if the economy con- The sale of up to 5 per the preparation process for a
tinues to grow at a modest pace of about 2 per cent of Saudi Aramco, Saudi IPO, Saudi Aramco has
cent a year, the next generation of Americans expected to go ahead in the converted to a joint stock
will fare better because the economy will still second half of 2018, is a cen- company," the source said.
grow faster than the US population does. trepiece of Vision 2030, an "This establishes the frame-
Buffett said American businesses will also con- ambitious reform plan to work to allow future investors
tinue to innovate. reduce the dependence of to hold shares in the compa-
"This game of economic miracles is in its the Saudi economy on oil. ny alongside its shareholder,
early innings. Americans will benefit from far The plan is championed by the government." But it is an
more and better 'stuff' in the future,” Buffett Buffett has long been a believer in America's Saudi crown Prince important step as it shows
wrote. ability to unleash human potential with its Mohammad bin Salman. The the IPO process. REUTERS
Buffett has long been a believer in market-based economy PHOTO: REUTERS
America's ability to unleash human poten-
tial with its market-based economy. He economy just as a rich family takes care of
often devotes part of his annual letter to all of its children.
Berkshire Hathaway shareholders to the “In the years of growth that certainly
topic. lie ahead, I have no doubt that America
But Buffett cautioned that the country can both deliver riches to many and a
needs to help those workers who are dis- decent life to all. We must not settle for
placed by innovation and changes in the less," Buffett said.

NLDIMS organized an informative seminar

N . L. Dalmia Institute of Management
Studies and Research organized an
informative seminar on Certified Credit
Research Analyst program on 21st
December, 2017. This program was con-
ducted by Mr. Biharilal Deora, who has 15
years of experience in credit research strat-
egy and business analysis. With his sheer
dedication and commitment, he is current-
ly serving as an advisor to various single
family offices on credit investments and
governance related issues.
The major objective of this session was
to encourage students to consider Credit
Research as a career option. Mr. Deora also
enlightened the students about the 4 C's of
Credit research namely: Character, Capacity,
Collateral and Covenant.
Management students were made
aware of recent regulatory updates and the
role of credit analyst in the industry. The
event proved to be a great platform for the
students to get the knowledge about credit
industry.

Technology led disruption in financial services

industry- A Panel Discussion at TIMSR
TDecember,
hakur Institute of Management Studies and Research
(TIMSR) conducted a panel discussion on the 16th
2017. The panelists Mr. Sidharth Bhat (Head of
of how financial services are transacted, how customers
are advised, how risks are managed, how investment port-
folios are designed, how services are delivered and various
IT at Aditya Birla Sun Life AMC) and Mr. Biren Parekh (Vice technological innovations in the financial services industry
President at Intellect Design Arena Ltd) discussed on were covered. The panel discussion was followed by Q &
"Technology led disruption in financial services industry" A session with the students. It was an informative experi-
where they spoke about Artificial Intelligence, Omni ence for all of the students at TIMSR.
Channel Experience, Virtual Reality, Cryptocurrency and – Shalini Chaturvedi
more.Topics such as technology is transforming all aspects

5th Asia Pacific Business Conference 2018 SIMSREE

W itnessing the presence of Dr. Deborah Ford,
Chancellor, University of Wisconsin-PS, USA, the 5th
Asia Pacific Business Conference (APBC) successfully con-
cluded on 4th and 5th of January 2018 at Sydenham
Institute of Management Studies, Research &
Entrepreneurial Education. The theme for this year was
"Are Indian Industries equipped to manage changing
Business Scenarios?" Dignitaries like, Mr.Ashish Bhasin,
(Chairman and CEO South Asia Dentsu Net Aegis
Network), Mr. Ashok Sethi(COO and Executive Director
Tata Power), Dr. Hemant Dande(CEO Raptakos Brett) dis-
cussed on changing business strategies with the govern-
ment's effort in the direction of improving ease of doing
business.
Noted American Laureate, Dr. Michele Gee, USA
talked on "The Interconnection of Corporate Social
Responsibility and Social Media: Adapting to Changing
Work Environments". More than 150 participants present-
ed their research in the conference, with a presence of 200
delegates comprising faculties & students form USA, UK,
South Korea, Nigeria, and India witnessed APCG 2018.
Dr. R.K Srivastava, Professor and HOD - Research &
Marketing, Sydenham Management Institute noted such
events as important for a developing economy like India.
According to him, "Such events strengthen the spirit of
research for change in our country, what mankind can
dream, research and technology can achieve."
 https://t.me/TheHindu_Zone https://t.me/pdf4exams

6 MARKETS
>
MUMBAI | 6 JANUARY 2018 1

THE COMPASS
Multiple triggers for real
ED asks Sebi to probe 2G Electronic platform must
for private debt issues of
~2 bn, says Sebi
estate in the current year
Godrej Properties top pick, followed
firms for insider trading PRESS TRUST OF INDIA
New Delhi, 5 January

The Securities and Exchange Board of India (Sebi)

by Prestige and Sobha Sebi initiates probe; looking into trade per cent and 4.4 per cent, respec- on Friday made electronic platform mandatory for
tively, on December 20 over all private placement issues on debt basis that have
RAM PRASAD SAHU positions and role of individuals December 19. On December 21, all
three shares and those of Sun TV
a threshold of ~2 billion. Currently, the mechanism
is mandatory for all private placements of debt
The BSE S&P Realty Index SHRIMI CHOUDHARY day before a Delhi court pro- and Videocon, too, were up securities with an issue size of ~5 billion or more.
was the biggest gainer in 2017, Mumbai, 5 January nounced the verdict in the 2G between 3.8 and 20 per cent over The new norms are aimed at achieving better
more than doubling investor case, which was on December 21. the previous day. and transparent price discovery through the bid-

wealth. While the sector may
not generate the 106 per cent
returns it achieved last year,
brokerages continue to be
bullish on the sector and
expect select stocks to do well
on the back of sector consoli-
dation because of the Real
Estate (Regulation and
Development) Act (RERA),
government thrust on afford-
able housing and expecta-
tions of a demand upturn
after sluggish performance
over the past few years.
Analysts at ICICI
Securities say that with the
implementation of RERA
picking up pace, they expect
larger organised developers
to gain market share in the
residential space and also be
proven execution track
records resulting in substan-
tial market share gains.
Godrej Properties, which
is a key pick for most broker-
ages, had a strong first half in
FY18 with the June quarter
volumes its highest ever and
sales value of ~15 billion,
about 75 per cent of the total
FY17 sales value. With debt
under control and the launch
T
he Enforcement
Directorate (ED) has
sought from the Securities
and Exchange Board of India
(Sebi) share transaction details of
companies linked to the 2G tele-
com spectrum scam. It has asked
the market regulator to probe
these companies under its insid-
er trading rules.
According to sources, the
probe agency is examining
whether these companies were
tipped off in advance as the stocks
of these companies rallied one
Mutualfunds’AUMdown
6.2%inDecember
Confirming the development,
an ED official said an inquiry let-
ter had been despatched to the
market regulator seeking specif-
ic information on movement of
2G scam-related companies
ahead of the pronouncement of
the verdict. Sources said the ED
also asked the regulator to look
into the matter under insider
trading norms.
A special Central Bureau of
Investigation court had acquitted
all key accused in the case,
including former telecom minis-
ter A Raja and DMK Member of
Parliament Kanimozhi, in the
~30,000-crore 2G spectrum allo-
cation scam case.
Shares of Reliance
Communications, DB Realty and
Unitech had gained 35 per cent, 5
NEW INVESTMENT OPTION FOR
Sources said the market regu-
lator has initiated preliminary
investigations based on the ED’s
letter and has sought trade data of
all companies concerned.
“Trade positions of individuals
and promoters are being looked
intoandaccordinglyareportwould
besubmitted,”saidasourceprivyto
thedevelopment.Accordingtohim,
the market regulator would also
look into the role of individuals
associated with the 2G issue and
who might have traded on the
information.
ding process. In a circular, Sebi said “all private
placement of debt securities shall be required to be
made through EBP (electronic book platform) if it
is a single issue, inclusive of green shoe option, if
any, of ~2 billion or more”.
Besides, a shelf issue, consisting of multiple
tranches, which cumulatively amounts to ~2 billion
or above in a financial year would have to opt for the
electronic platform. Further, a subsequent issue,
where aggregate of all previous issues by an issuer in
a fiscal equals or exceeds ~2 billion would need to opt
for the platform. Also, the regulator has come out
with a standard operational guidelines pertaining to
Know Your Client (KYC) and bidding hours for elec-
tronic book providers like stock exchanges.

able to augment their land
bank at reasonable valua-
tions. The other trigger is the
government’s housing for all
scheme with approval given
to more than 6 million hous-
es. This, coupled with home
loan subsidy of about
~250,000 will help reduce the
cost of purchase and improve
affordability, especially for
houses with value less than
~5 million. With property
prices nearly stagnant for five
years, mortgage rates at
almost 22-year lows and
steady per-capita income
growth at round eight per
cent, buying a house is now
more attractive for end users
than it has been at any time
in the past 20 years, say ana-
lysts at CLSA.
The brokerage believes
pipeline remaining strong,
the company, given its strong
brand, is expected to gain
more market share in the top
Indian cities over the next
couple of years. Bengaluru-
based Prestige Estates is also
on a strong wicket, given
robust annuity sales from its
portfolio of rental assets
which is expected to gener-
ate revenues of ~8-9 billion
and ~71 billion of surplus
cash flow from ongoing proj-
ects over the next few years.
This, coupled with other
retail and residential assets,
should keep the revenue
momentum strong. Sobha is
expected to benefit from
improving pace of sales book-
ings and healthy collections.
This, coupled with a strong
launch pipeline, as well as
DEBT INVESTORS
The 7.75% savings (taxable) bonds willl be launched
Debt funds see higher-than-expected redemptions after on January 10. A closer look at the new investment
rally in bond yields; effect not expected to last instrument available for Indian citizens
CHANDAN KISHORE KANT believed to have taken out
Mumbai, 5 January some money from debt port-
folios to avoid/cut losses.
WHO CAN INVEST LIMIT OF INVESTMENT
India’s mutual fund (MF) sec- “It is an aberration and we | NRIs are not | No maximum limit for investment
tor saw one of its worst falls don’t see it continuing. eligible to invest in the bonds
over recent months in assets Sudden steep fluctuations in in these
under management (AUM) bond yields did make some bonds
during December as a sus- investors nervous at the later TRANSFERABILITY
tained rally in bond yields part of December. It is not wor- | Open to | Not transferable
made debt investors nervous. risome and redeemed funds investment by | Not tradeable in the secondary market
The total AUM fell a little will come back by January- individuals
over six per cent to ~21.37 tril- end or February,” said the | Not eligible as collateral for loans from
(including joint banking institutions, non-banking
lion, against ~22.79 trillion in chief executive officer (CEO)
November. This pushed the of a large fund house.
holdings) and financial companies or financial
Hindu undivided
AUM to the level earlier seen
in October.
NET INFLOWS IN MFS Returns in the past one
week, as well as one month, families
institutions

that companies such as
Godrej Properties, Sobha and
Prestige Estates will benefit,
given volume orientation,
flexible business models and
Markets race to record highs;
post fifth weekly gains
The benchmark indices rallied
to record highs on Friday to
continued its upward march
to hit an all-time high of
land bank additions at rea-
sonable prices, should keep
cashflowssteadyandimprove
revenue visibility.
Yield on the government’s
10-year bond, around 6.48 per
cent in early September, was
on a gradual rise. This gained
pace and peaked at 7.4 per
cent in late December, a rise
of about 90 basis points (bps)
in less than four months.
Macro indicators have also
been worsening -- inflation
rising, the government
expected to miss its FY18 fis-
cal deficit target, crude oil
prices rallying, etc.
Fund category Net inflows from debt funds have ranged
(~ bn) from a negative 100 bps to SUBSCRIPTION NOMINATION
50 bps. | A sole holder or a sole surviving holder of
Income -602 | Applications for the bonds
Asked whether money a bond, being an individual, can make a
Equity 149 from debt schemes shifted to will be in the form of nomination
Balanced 98 the equity category, the CEO Bond Ledger Account
Liquid/money market -1,276 said, “No. Typically, debt
| Will be received in the
investors tend to remain in MATURITY AND RATE OF INTEREST
Gilt
Equity ELSS
-5
12
debt funds and there is a very
small fraction of investors
designated branches
of agency banks and | Will have a maturity of
Gold ETFs
Other ETFs
-0.6
-16
who tend to shift money in
MFs while chasing higher
SHCIL 7 years carrying interest
at 7.75% per annum
FoFs investing overseas -1
yields. I believe, balanced
funds will be more on
PERIOD payable half-yearly

end the first week of 2018 with
gains, as investors cranked up
fresh purchases in tandem
with bullish global cues.
The BSE Sensex surged
over 184 points to close at
its lifetime high of
34,153.85, while the broader
NSE Nifty ended at a record
10,558.85.
Sentiment got a leg-up after
the Lok Sabha on Thursday
gave its approval for ~800 bil-
lion of recapitalisation bonds
for strengthening public sec-
tor banks (PSBs), traders said.
The 30-share Sensex, after
opening on a strong footing,
34,188.85, breaking its previ-
ous (intra-day) record of
34,137.97, hit on December 27.
It lost some ground on
profit-booking, before finally
ending at 184.21 points, or
0.54 per cent higher at
34,153.85, smashing its previ-
ous record close of 34,056.83
reached on December 29 last
year. The gauge had gained
176.26 points in the previous
session.
The NSE Nifty also hit a
record intra-day high of
10,566.10 and closed at
10,558.85, up 54.05 points, or
0.51 per cent. PTI
The month saw heavy net
outflow of ~1.64 trillion. The
major portion of outflows
were from debt funds
(income and money market
schemes) to the tune of near-
ly ~1.9 trillion. Fund man-
agers attribute it as the quar-
ter-end phenomenon,
wherein companies tend to
redeem assets in liquid funds
for strengthening their cash
and bank balances for the
quarterly results, beside pay-
ing of advance taxes.
Typically, most of this money
comes back to MFs by or
before the middle of the
Total Inflows -1,641 investors’ radar in 2018.” | Will be on tap till 7.75%
FOFs = Fund of funds, figures in Dec ‘17 There was no major sign of further notice and ~ 1,000 for 7 years ~ 1,703
Source : Amfi
money shifting from debt to issued in cumulative
equity. However, the equity and non-cumulative
upcoming quarter, say (including linked savings
experts. schemes) category saw a dip
forms TAX TREATMENT
However, the outflow from in inflow to about ~160 billion. | Income tax: Interest
debt schemes was also an This is about ~40 bn less than ISSUE PRICE on the bonds will
aberration, mainly on the back the average inflow of recent be taxable under
minimum amount
of a sudden rise in bond yields months.
leading to poor return in debt The balanced category of
of ~1,000 (face the Income-tax
funds. Bond yields and bond funds remained steady and value) and in Act, 1961 as
prices are inversely correlat- collected ~98 bn as fresh multiples thereof applicable
ed. As bond yields rise, prices inflow. Barring this, all other | Will be issued in according to
fall (leading to lower net asset categories saw outflow of | To be issued at par
demat form (Bond the relevant tax
value for schemes) and vice money — gilt schemes, gold that is at ~100
Ledger Account) status of the
versa. Institutional investors or other exchange traded | Will be issued for a bond holder
only
and wealthy individuals are funds.

> FROM PAGE 1

RBI likely to give

additional funds
to govt this FY
The Centre has opted for borrowing
~500 billion this fiscal year through dat-
ed government securities over and
above the budget estimate of ~5.8 trillion
for 2017-18. However, the Centre low-
ered its treasury bill borrowings by ~612
billion. Treasury bills have no impact
on the fiscal deficit, whereas gilts are
used to finance the deficit.
Analysts had estimated the fiscal
deficit for 2017-18 on account of the
higher borrowing to be around 3.5 per
cent of the GDP.
For this year, the Centre is also star-
ing at a tax revenue shortfall of ~400-
500 billion and is under pressure regard-
ing spectrum sales. While direct tax
collection may see a shortfall of ~200
billion due to a corporate slowdown, a
~250-300 billion shortfall is expected in
indirect tax revenue due to the goods
and services tax.
GDP growth seen at 4-year low of 6.5%
The GST also impacted net taxes as
these are projected to grow only 10.9 per
cent in the current financial year against
12.8 per cent in the previous year. The
GST Council had cut rates for over 200
items in October and November, which
might impact collections.
The impact of demonetisation, at
least in the first quarter, compounded
the woes of manufacturing, which is
projected to witness a growth rate of just
4.6 per cent in the current year against
7.9 per cent in the previous year.
However, investment seems to be
reviving a bit with gross fixed capital
formation forecast to rise by 4.5 per cent
against 2.4 per cent.
Services are also projected to go high-
er even as growth in government-backed
public administration, defence and oth-
ers is pegged to fall by 9.4 per cent against
11.3 per cent in the previous year. This
means the government is controlling its
expenditure to rein in the fiscal deficit,
which has crossed the Budget Estimates
by November itself. This dimension was
also shown by government final con-
sumption expenditure, which is project-
ed to fall by more than half.
The other two segments of services,
including financial services, are to grow
higher. However, none of the segments
is projected to grow in double digits in
the financial year. The same was the
case in the previous year, barring gov-
ernment-supported services.
GDP growth is projected to accelerate
to 7 per cent in the second half of the
current financial year from 6 per cent in
the first half. It had grown 5.7 per cent in
the first three months of the current
financial year and 6.3 per cent in the
second quarter.
Chief Statistician T C A Anant said
GDP growth would remain above 7 per
cent from the fourth quarter of the cur-
rent financial year.
The Budget for 2018-19 will assume
specific growth over nominal GDP (GDP
before inflation adjustment) of ~166.27
trillion projected for the current finan-
cial year. The Advance Estimates pro-
jected the economy will grow by 9.5 per
cent against the Budget assumption of
11.7 per cent.
Economic Affairs Secretary Subhash
Chandra Garg said: “GDP growth of 6.5
per cent for 2017-18 implies growth of 7
per cent for the second half. This con-
firms a strong turnaround of the econo-
my. Investment growth of almost twice of
last year indicates investment reviving.”
NITI Aayog Vice-Chairman Rajiv
Kumar said: “GDP growth will become
more robust in 2018-19. The estimates
assume significance in the context of
the fact that higher second-half growth
has come despite a waning of public
sector expenditures, which had peaked
in 2016-17 on account of the implemen-
tation of the recommendations of the
Seventh Pay Commission.”
Aditi Nayar, principal economist,
ICRA, expected Advance Estimates to
be an under-estimation of growth. She
said, “We continue to expect GVA and
GDP growth to print at 6.5 per cent and
6.7 per cent, respectively, in 2017-18.”
However, Ranen Banerjee, partner-
public finance and economy, PwC India,
said if the economy grew at 6.8 per cent
in the third quarter and 7.2 per cent in
Q4 supported by base effects, the
Advance Estimates would be achieved.
“Crude prices could be the only story
spoiler!” he said.
Before 2016-17, Advance Estimates
used to be released in the first week of
February, but these come earlier now
because the Budget presentation has
been advanced. As such, the CSO has
the GDP data of the first half of the finan-
cial year, the index of industrial produc-
tion figures for October, the export fig-
ures for November, and the first Advance
Estimates of Kharif. Most of the figures
for the second half are projections.
Advance Estimates are used for cal-
culating Budget numbers such as tax
receipts and fiscal deficit.
Tata airlines gear up for
international runways
Thng refused to comment on future destina-
tions but indicated the airline plans to fly into
well-established markets rather than virgin
routes. According to senior officials in the civil
aviation ministry, Vistara has already sought
permission to start operations to places such as
Abu Dhabi, Dubai and Singapore. Industry
sources said the airline was looking at Airbus
A330neo through which it would launch desti-
nations in Far East Asia like Tokyo and Seoul.
London is another probable destination. “I
believe that Vistara will stand out among its
competitors in the international market. For
unchartered market, we will have to see if that
makes financial sense,” Thng said.
Experts said Vistara’s gradual expansion
made sense and it would look to increase its
presence in long haul markets through partner-
ships before taking the plunge on its own. “India
sees large origin-destination traffic to places
like London, Singapore, Hong Kong. Vistara
could have a strong presence there once it starts
widebody operations,” said Ameya Joshi,
founder of aviation blog Network Thoughts.
AirAsia India will try to feed into the exten-
sive international network of AirAsia group,

Top firms get GST notices on credit...
“While the scrutiny of transition credits may be
required in some cases, businesses should be given
adequate time to respond with details. Some of the
details being sought by the tax authorities will need
to be worked out with relevant details and, hence, it
would be better if only relevant details are sought
from only those taxpayers who have availed excessive
credits during transition,” said M S Mani, partner,
Deloitte India.
Revenue collections touched the lowest in
November at ~808 billion, substantially lower than
the government’s expectation of ~920 billion each
month. Finance Secretary Hasmukh Adhia took a
meeting of centre and states officers last month to
review the revenue position and to do an analysis for
the first five months since the implementation of the
new tax regime viz-a-viz last year.
“What is unprecedented is that such notices are
being issued to all and sundry, irrespective of any evi-
dence of incorrect filing. It appears that most of the
dealers have been selected on an arbitrary basis and
issued with notices to submit an exhaustive set of
documents,” said Harpreet Singh, partner-indirect
taxes, KPMG.
The GST Council had allowed companies to claim
100 per cent input tax credit by uploading excise
payment invoices for the period before July 1. In
case of unavailability of invoices, the Council had
allowed 40 per cent input tax credit through TRAN-
2. In fact, the limit on input tax credit was raised to
60 per cent from 40 per cent of GST liability on items
with tax rate above 18 per cent in the June 4 meeting.
Besides, the entire 100 per cent input tax credit could
be claimed on high-value items above ~25,000 with
a chassis number.
Tax experts said such notices are issued to curb
malpractices of those dealers that have transferred
unlawful transitional credits. “However, the author-
ities have not been considerate to understand the
time that would be required to collate details like
working sheet for credit availed, source documents
or invoices for the same, statement in respect of
inputs, work in progress and finished goods for the
period,” a tax consultant, several of whose clients
have got such notices, said.
Singh said such a step by the tax authorities to
augment revenue would definitely not help in build-
ing an environment of trust. “It does not augur well
for the government’s image of creating a tax-friend-
ly environment,” he added.
beginning with daily services to Kuala Lumpur
and Bangkok from Bengaluru and Kolkata. Some
of the routes that the airline has sought permis-
sion for are Bengaluru-Kuala Lumpur, Kolkata-
Dhaka, Hyderabad-Kuala Lumpur.
“We are looking at end of 2018 or definitely by
early 2019. Our group airlines have a meaningful
presence in those two cities (Kuala Lumpur and
Bangkok),allweneedtodoistogoandlandthere,”
AmarAbrol,CEOofAirAsiaIndia,said.Theairline,
which currently has 14 aircraft, plans to add at
least eight annually for the next five years.
“The airline has a large network beyond
Kuala Lumpur and Bangkok too and would def-
initely leverage those but availability of bilater-
al will be critical since existing players will also
increase flights this year,” Joshi said.
 https://t.me/TheHindu_Zone https://t.me/pdf4exams
8 ISSUES AND INSIGHTS
>
MUMBAI | 6 JANUARY 2018 1

‘Breaking’ India The politics of vegetarianism BJP has only a solitary MLA in Left Democratic
Front-ruled Kerala, the only state where beef is
openly served in middle-class restaurants.
Predictably, vegetarian Rajasthan and Haryana
The patronage of one of the few public personalities who criticise growing intolerance can are loyal to the BJP. Punjab is the sole exception

T
he greatest rhetorical
and ideological
victory of the
Bharatiya Janata Party (BJP)
and its parent organisation,
the Rashtriya Swayamsevak
Sangh is this: it is now widely
accepted, indeed viewed as
an indisputable fact, that
“caste-based” politics is by
definition bad. This
TICKER rhetorical victory might well
sustain the BJP’s winning
MIHIR S SHARMA streak going forward — and
keep its governments
popular with the middle- and column-writing classes in spite
of their evident failure to perform on the economic front.
This rhetorical victory was not inevitable. You might argue
liberate vegetarianism from bondage to politics associated with bans and lynching
nence from meat and fish. The ban won’t ever be
replicated in Mamata Banerjee’s carnivorous
stronghold where only widows are vegetarian, or
were, when I was young. Even that is changing.
Shock and horror, “even Brahmins in Bengal are
non-vegetarian”, says Kakali Chakrabarty,
deputy director of the Anthropological Survey of
India. She should know. Chakrabarty (literally
“wheels rolling”, signifying emperor) is a Bengali
Brahmin surname.
Unsurprisingly, an ASI survey claims that 98.7
WHERE MONEY TALKS per cent of Bengali men and 98.4 per cent women
are almost as omnivorous as the Chinese who are
SUNANDA K. DATTA-RAY said to wolf down anything that moves. Almost
but not quite. Bhadralok tastes don’t run to dog,
depend on its ecology,” Ms Chakrabarty con-
cludes without dwelling on the link with politics.
But the local tilapia’s identification with both
Christ’s parable of the loaves and fishes and the
fish with a coin in its mouth St Peter caught
indicates an ecumenism that the Sangh Parivar
would disapprove of.
Pork and beef — one forbidden to Muslims,
the other to Hindus — were not traditional cui-
sine. But while the “No Beef” signs on many
cheaper eating houses would delight gau rak-
shaks, Kolkata’s popular kebab shops wouldn’t.
Righteous vigilantes wouldn’t dare approach
expensive restaurants that boast of their veal cut-
lets and underdone steak. But here’s the rub:
to the vegetarian-means-saffron rule: a royal in
the lists (Maharaja Amarinder Singh of Patiala
being chief minister) refutes logic in hierarchi-
cal India.
Vegetarians come in many guises. Lacto-
ovo-vegetarians (eggetarians) eat dairy prod-
ucts and eggs. Lacto-vegetarians eat dairy prod-
ucts minus eggs. Ovo-vegetarians eat eggs but
not dairy products. Vegans shun milk. Many
vegetarians talk of cruelty to animals, others of
depriving the young. The North American
Vegetarian Society and the International
Vegetarian Union celebrate World Vegetarian
Day on October 1. Narendra Modi and Aamir
Khan support International Meatless Day,
November 25.
Such unlikely bedfellows nourish the hope
that India isn’t condemned to a future in baggy

that, with the example of Bihar and Uttar Pradesh before us, no
Indian could conceivably think that caste assertion is a good
idea for society at large. But, on the other hand, I give you south
India. Karnataka invented the politics of mobilisation of Other
Backward Classes or OBCs in the 1970s, and its development
indicators have not exactly suffered, whatever Yogi Adityanath
might want to go there and say. As for Tamil Nadu — a state that
is a success story if ever there was one — it accepted the politics
of lower-caste assertion decades ago. Meanwhile, the state with
the least caste politics for decades was, as it happened, West
Bengal – and those decades are hardly the sort you would want
to point to as an example for the country.
In other words, the notion that caste-based politics and
lower-caste assertion is inherently dangerous, divisive, and
bad for development is utter balderdash. Caste-based politics
succeeds and thrives for a reason: it allows members of
hitherto deprived castes to recognise that they have a clear
voice in governance; caste-based patronage helps fill in the
gaps in India’s notoriously leaky welfare system; and, for
O
ne reason why West Bengal stood rock-
fast against the saffron sweep was that
Bengalis are diehard non-vegetarians.
That’s like garlic to Dracula. It’s not just the
Bharatiya Janata Party’s (BJP) parent Rashtriya
Swayamsevak Sangh that abhors meat, fish and
eggs. The BJP-dominated South Delhi
Municipal Corporation has also forbidden food
stalls to display meat and meat-based edibles.
The reason given is that non-vegetarian food
putrefies quicker than fruit and vegetables.
Some also say vegetarian food is more healthy
and hygienic. Others cite a bogus religious
rationale for Hinduism hardly preaches absti-
LUNCH WITH BS > MANI SHANKAR AIYAR, SUSPENDED CONGRESS LEADER
ants and snakes. As for our feathered friends, it
used to be said a villager’s religion could easily be
identified in rural Bengal: Quacking ducks wad-
dled in a Hindu family’s yard, chicken scam-
pered about a Muslim homestead.
Bengal’s addiction to fish is a national joke.
“Since riverine fish are in plenty, Bengal is a fish
and meat-loving state,” Chakrabarty says. She
rightly stresses “riverine”. The legendary Chief
Minister, Dr Bidhan Chandra Roy, imported
trawlers and tried to popularise sea fish. He
failed although economic necessity has since
forced Bengalis to turn to tuna, sardine and even
the Vietnamese basa. “Food habits of any place
wicked whisper has it these establishments cater
mainly to non-Bengali businessmen who are as
strictly vegetarian at home as they are fervent
worshippers of the lotus. But, then, eyewitness-
es speak of chocolate pedlars surreptitiously
catering to peckish Gandhians even in Sevagram.
Bengal was beaten in the ASI’s non-vegetar-
ian stakes only by Telangana where the BJP
ranks fifth in the assembly with just five legisla-
tors. Among other primarily non-vegetarian
states, Andhra Pradesh has a Congress govern-
ment; Nitish Kumar’s coalition in Bihar doesn’t
count since the BJP wriggled in through the
back door and not the popular vote; while the
shorts and peaked cap munching chana and
marching in the sun. The signs seem ominous.
The non-vegetarian share of the population
fell from 75 to 71 per cent between 2004 and
2014, no doubt in anticipation of the lotus
blooming. Three years of saffron authoritarian-
ism may have thinned the non-vegetarian ranks
even more. But the patronage of one of the few
public personalities to criticise growing intoler-
ance can only liberate vegetarianism from
bondage to politics associated with bans, lynch-
ing and ghar wapsi, and restore faith in the
promise “to promote the joy, compassion and
life-enhancing possibilities of vegetarianism”.

Down but not out

Dalits in particular — as with many Muslims — the primary
issue that they vote on is one of law and order, of protection
from intimidation and random violence. Various forms of
caste-based parties have a natural ability to respond to one or
more of these questions, in varying degrees: Lalu Prasad
might have focused on being the voice of Yadavs, the
Dravidian parties on patronage, and Mayawati’s Bahujan bled, even a little outraged, former habitues. While
Samaj Party on law and order. Over lamb, prawns and noodles, Anjali Puri finds at having his language our food strikes me as
But this is by definition problematic for the politics of
Hindu assertion. For parties like the BJP, the basic structure
the veteran Congressman uncharacteristically deemed offensive. Every
now and then he wonders
uninspired and over-
salted, Aiyar, with fond
that they wish for Indian politics is essentially a replication of rattled but far from abject aloud if he will be allowed memories of being tak-
older hierarchies: with people doing the tasks they are to play a meaningful role en to lunch here, and

assigned by the “natural” order. In general, this is not a
popular form of social or political organisation among those
who have to do all the work. Thus the movement to preserve
and renew these hierarchies —the essential task of the Sangh
Parivar —has to be concealed; and those who would seek to
disrupt this order — caste-based parties and those that give
them succour —have to be attacked.
This implies the near-panic that has taken over the BJP, the
Sangh, and their online soldiers over the past six weeks. Rahul
Gandhi and the Congress are being accused of being dastardly
and Machiavellian caste warriors (this would be the same
Congress that a few weeks ago was pleading with the Gujarat
electorate to see Gandhi as a “janeu-dhari Brahmin”). Why?
Because they stitched together a caste coalition in Gujarat that
was enough for them to claim “moral victory”. And now
because of the unprecedented sight of Dalits marching in
righteous anger through the streets of Mumbai.
For the Sangh Parivar, any form of diversity and
contestation is a threat, because the only form of social
organisation it recognises is a unitary India with a Brahmin
from Nagpur at the top. When the Sangh says it is okay with
Indian Muslims as long as they recognise their essential
Hinduness, that is what they mean: that Muslims and other
minorities need to recognise their place in the natural order
— an order which is very far from being flat. “Secular” politics
— a politics organised around ensuring, first of all, that
minorities of various kinds feel safe in this country — is the
biggest threat to this world view. Any such concern indicates
to the Hindutva right that “India” is not a single unit. There is
no difference, to their mind, between caste-based parties,
“secular” parties, Baptist missionaries and Kashmiri
separatists. All seek to “break India” —an actual term that is
increasingly used by the Indian far right. In other words, the
notion that multiple such groups want a sense of equality,
voice and presence in a diverse polity is practically
treasonous from the Sangh Parivar’s point of view.
What is extraordinary is this basic, anti-politics, anti-
diversity, and irrational view of India has been transformed
into the basic assumption of Indian politics today. An
explanation of the sleight of hand by which this has been
performed will have to wait for another day: but suffice it to say
that the word “governance” has been twisted to mean middle-
class, upper-caste populism. That is why the BJP’s online
warriors today will declare that listening to the Dalit voices in
Mumbai is dangerous, populist, even treasonous. If no secular
or lower-caste party or movement can be truly “Indian”, then
there’s only one force left: the BJP. And that’s exactly what they
want: a one party-state, with only one kind of Indian.
m.s.sharma@gmail.com; Twitter: @mihirssharma
M
ani Shankar Aiyar walks into the House turn as he offers to leave -- even though we are in political life. I am not entertaining journalists
of Ming at the Taj Mahal Hotel in Delhi, now at a table by a window with waiters hov- surprised to hear he has here when he was the
not in his usual kurta pyjama but in ering around us. hopes of contesting the External Affairs’
Delhi Gymkhana Club chic — moss green tweed When I tell him our lunch is still on, and ask next Lok Sabha election. Ministry’s spokesman
jacket daringly mismatched with a purple a few innocuous questions, Aiyar, covering Even at what he calls his says approvingly that
striped tie and a mauve shirt, and a blue pock- his chest with a table napkin, lapses into a “lowest ebb”, it doesn’t come the food “tastes just the
et square. The veteran Congressman, who hit long, colourful reverie on his childhood and naturally to Aiyar to sound same as before”.
the headlines last month for all the wrong rea- Doon School years (“I was the poorest boy at abject. When I ask him if he The restaurant is half-
sons, looks jaunty — and there are flashes of the richest school”), his time at Delhi’s St thinks he will change, he mut- empty, but still seems to
repartee when, for example, he tells a waiter Stephen’s College and Cambridge, and his ters: “A tiger can’t change his attract some of the political-
enquiring about food restrictions, “I have none entry into the Indian Foreign Service. (He stripes.” bureaucratic crowd. Former
except those imposed by (Narendra) Modi.” made a mid-career switch to politics, to join For Rahul Gandhi, Aiyar ambassador KC Singh, shown
Yet on this winter afternoon in the dying Rajiv Gandhi.) There is clearly a promising has nothing but unstinting to the table next to us,
days of 2017, Aiyar is a more rattled man than memoir here — one is being written, in fact — praise. He observes that opts to sit somewhere
the one I met in 2009. Then, he had just lost his but only if Aiyar gets himself a ruthless editor. Rahul’s pride in his Hindu else to give Aiyar more
seat in Mayiladuthurai, Tamil Nadu, in the His effortless recall of every minor twist in his heritage is “exactly the “elbow room”. (He
Lok Sabha elections, and had come across as story means that even after we’ve finished our same” as Nehru’s, quot- possibly imagines I
a pretty good loser – bruised, yes, but also soup — vegetable broth with lemon grass for ing chapter and verse am getting a more
frank, thoughtful, funny. He went on to a six- him, hot and sour for me – and are almost from Discovery of India, exciting interview
year term in the Rajya Sabha, grew more pas- done with our shredded lamb, prawns and as is his wont. “Rahul than I actually
sionate in his defence of Nehruvian values hakka noodles, we are still stuck in 1963. Gandhi cannot be any- am.) When we
and more acerbic in his rubbishing of an However, I am less mystified now about thing but a successor spot a one-time
ascendant Hindutva. why Aiyar would dwell inappropriately on suc- of Nehru,” he declares. Congresswallah
However, this ageing enfant terrible, sought cession in Mughal times while talking about When I mention his — from the
out by the electronic media for his combative- Rahul Gandhi becoming Congress president – temple-hopping in Rajiv Gandhi
ness, also began to achieve a new notoriety he just can’t resist the temptation to lecture Gujarat, and his failure years, no less —
with his carelessly worded insults being milked on history – and why he snobbishly labelled fel- to reach out to lunching near
by the Bharatiya Janata Party (BJP) for electoral low Congressman Ajay Maken, with whom he Muslims during that us, Aiyar says
advantage – famously when he mocked Modi’s was miffed, as “a BA pass from Hansraj campaign, Aiyar says drily: “He was
self-projection as a “chaiwala” and again, College”. Inter-college rivalries are for him a liv- it doesn’t matter. “For one of those
when he called him, last month, a “neech kisam ing thing. More than half a century later, he still tactical reasons you who brought me
ka aadmi” ( lowly person). Modi repackaged takes delight in having made it to the “right” highlight something, here for lunch.”
the comment as a caste slur — no matter that college instead of going to “the other side”. dim the light on some- Shaking his head
Aiyar denied repeatedly that it was one — and Other side, I ask blankly, just to get him to spell thing else,” he says. gravely, he wonders
ILLUSTRATION: BINAY SINHA
exploited it to the hilt in the Gujarat elections. it out. “You know, Hindu College,” the 76-year- “Fundamentally, his aloud how the man —
With a skilful blending of truth and lies, Aiyar old says with a grin. philosophy is the same MJ Akbar, minister for
was turned into a demonic figure. When I ask if it’s true that Rajiv Gandhi was as Nehru’s.” state for external affairs — can
Yet, on his own side, he had few defenders. not his friend at school or college, and they got Given how much energy he expends on live with himself after having joined the BJP.
He was publicly rebuked by Rahul Gandhi, sus- to know each other later, Aiyar confirms this, defending Rahul Gandhi, I am curious to know However, he cheers up when I pick up my
pended by his party and criticised by his peers, and then describes his first encounter with why some of his party colleagues would imply phone to take a picture of him, and allows me
with a newly minted Congressman, the Gujarat Rajiv. “A nervous young boy with puppy dog he wants to backstab him with intentional to quiz him on his outfit. “The Congress has
youth leader Alpesh Thakor, even calling him eyes came up to me, his senior, at school and gaffes. Aiyar’s reply is mock-scholarly and suspended me and I have suspended their
a “BJP agent, pakki baat (sure thing).” asked, ‘Yaar can I have permission to swim,’” acidic: “In all parties, and not just the uniform,” he quips, then adds immediately,
Our lunch gets off to an awkward start when he recalls. “I said yes, thank god. Imagine how Congress, those who rise are considered to “That is off the record.” When I protest, he
Aiyar unexpectedly refuses to answer any ques- different things would have been if I had said have risen unjustly and when they decline, smilingly relents.
tions about the fresh controversies involving what seniors normally said, which is...”. And he there is quiet satisfaction. The Germans call it
him. “Look, I realise now that this was meant quickly bites off the expletive. schadenfreude.” Correction
to be a working lunch,” he says. “But I have to Recalling happier times seems to make The House of Ming, chosen by Aiyar, used Rajiv Mishra, the author of the column ("Can India
think of my own interests, I am in mortal dan- Aiyar pensive about his current predicament. to be a power lunch hub in the 1980s, and with offer power to all?") published on January 5, is
ger not personally, but politically. I can’t speak While he won’t talk about specifics, it’s clear, its almost unchanged decor and attentive serv- managing director of CLP India, and not as mentioned.
of these matters.” Our encounter takes a wacky from his ironic asides, that he is puzzled, trou- ice, it still seems to cast a nostalgic spell over its The error is regretted.

So near and yet so far
to when they’re planted in a large
field,” he said. “They have no brothers
and sisters to grow up with or neigh-
bours that help them grow.” Before I
knew it, I was deep in conversation
with the farmer, marvelling at his store
of practical knowledge.
As we walked around, I marvelled at
his clever use of water channels,
designed to flow throughout the field
as soon as the pump was turned on. “I
PEOPLE LIKE THEM never need to use pesticide,” he said.
“The plants look after each other,” I
GEETANJALI KRISHNA asked if we could buy some, and the
farmer said we could take what we liked
This year, let’s keep an open heart
port other than bicycles, the 100-odd
kilometres to Delhi seemed as far as the
other end of earth.
The conversation got me thinking
about the plight of Indian farmers,
who are far removed from their mar-
ket and altogether too dependent on
the vagaries of the monsoon as well as
the wholesale market. They receive a
mere fraction of the eventual price we
pay in Delhi, for the things they have
grown — which is ironic at a time
when food security has become a mat-
ter of global concern.
Moreover, as I jotted down the recipe
for us in the city, with Sarla falling out of
the car, having had too much cham-
pagne and wanting to purge herself of its
evidence by the roadside. Major calami-
ty was averted — no broken teeth or
limbs — though she has bruises over
her face, and both clothes and car inte-
riors required immediate cleaning.
What the driver thought of his mem-
sahib behaving like the hoi polloi is best
left unsaid.
PEOPLE LIKE US Cousins and kin get routinely drunk
in Bikaner too, as elsewhere, but “living
KISHORE SINGH it up” in Delhi has other disadvantages —
the polluted air and water aren’t the only
morning walks — usually given up with-
in a week — or diets that won’t last the
day, or assurances to sign up for check-
ups: all as chimeric as the sun’s rays
that, at this time of year, are more
notable for their absence than their
presence. Where’s the point in promis-
ing you won’t spend wastefully any
more on clothes, or other rubbish, when
there’s a market to serve? But the num-
ber one resolution, brought in with a
hangover yet just as likely to be broken
in the first 24 hours, is the contract not
to drink again — ever. If people actually
stuck to their resolutions, the world

T
he other day, we found ourselves at ~10 per kilo. We happily bought a car- the farmer’s wife gave me for a lemon hitches, the traffic and long commutes would be a much better place, but also a

in a field of carrots and radish,
somewhere in the boondocks of
Rajasthan. My brother’s citified kids
had never seen any growing, so we
decided to stop. The amiable farmer
was happy to let us uproot some and
we revelled in the chocolatey richness
of earth on our hands and the gargan-
tuan size of the vegetables.
The field had been beautifully mul-
ti-cropped — every inch of it was
planted with carrots, radish, fennel,
mustard, marigold, spinach and
coriander. When I told him I too had a
vegetable garden on my balcony, but
my harvest wasn’t half as healthy and
bountiful as his, the farmer smiled. “I
always feel plants must feel so lonely
planted separately in pots, compared
load of vegetables, and I asked the
farmer where he normally sold his pro-
duce. The wholesale vegetable market in
Alwar, he said, wasn’t very far from his
fields. “I load the produce in a bullock
cart and take it there,” he said. Presently,
as there was a glut of carrots and radish-
es in the market, farmers like him were
being forced to sell their produce for
prices as low as five rupees a kilo.
Perhaps, I suggested, he’d be better
off selling his produce in markets clos-
er to Delhi, where I bought carrots at
~30 per kilo. He looked incredulous:
“Do you know how far it is? I’d have to
rent a tempo to ferry my produce which
would cost as much as the price I’d get
for it in the wholesale market!” For peo-
ple like him who had no means of trans-
pickle with fresh fennel seeds (a surefire
treatment for indigestion, she averred)
I realised that these repositories of our
traditional food and farming wisdom
were likely to die if somehow agricul-
ture weren't made more commercially
viable for people like them.
The farmer had two sons, and I
asked what they did, even though I
somehow knew what he was going to
say. “They both work in Delhi,” he said.
“Farming isn’t for them, they say!” He
looked around at the lush field and
sighed: “After I die, they’ll probably sell
this land to a property developer.” I
sighed too, wondering what we’d even-
tually eat, if all farmers took jobs in the
city and all their fields degenerated into
land for sale.
I
f the start of the year is a portent to
what lies ahead, I’d like to believe
the clear blue skies and the clean air
we’re breathing in small-town Bikaner,
with water so sweet you feel obliged to
have glassfuls even though it’s cold, is
possible in Delhi. The winter sun —
something rare in the smog-choked
capital — is the perfect antidote to big
city stresses and tensions, and its
warmth is soporific, making one nos-
talgic about afternoon siestas and a
slower pace of life. And one is left won-
dering whether those who have the
good fortune of such quiet lives deserve
it nearly as much as we — occasional,
migratory visitors — do?
On the other hand, one can only
hope the year won’t go the way it began
are equally numbing, lending new
meaning to the term edgy living. People
fly off the handle on the road, acquain-
tances are increasingly mugged on the
streets, vehicles routinely get hijacked,
so we’re forced to embark from home
armed with both pollution masks and
Tasers. In Bikaner and similar small
towns, people walk across to each others’
homes without calling ahead to check if
anyone’s home; in Delhi, we spend
months, sometimes years, without
catching up with those on the fringes of
the family. When I was younger, I found
being taken for granted intrusive; now
that I am older, I am less offended by
the invasiveness of the family.
This year began without the usual
resolutions. No false undertakings about
more boring one.
Instead, our New Year’s Day began
with friends who gathered at home for
lunch — some who were visiting from
overseas, others whom we hadn’t met
in a while, still others who dropped in
perchance — as convivial a gathering
in Delhi as it is rare, where even parties
are curated for what one may gain from
them. As cynical as that sounds, grow-
ing older, one new year at a time, also
means letting go of lingering (but for-
gotten) resentments. So, from sleepy
Bikaner, here’s an antidote. This year,
and ever more, let’s vow to keep an
open house and an open heart. And
hope we can drink to that without find-
ing ourselves face down on the road —
like Sarla.
 https://t.me/TheHindu_Zone https://t.me/pdf4exams

>
OPINION 9
Volume V Number 22 ILLUSTRATION BY BINAY SINHA
is, however, a precedent of a Dalit leader like him hail-
MUMBAI | 6 JANUARY 2018 ing from a smaller state but building a formidable pol-
itics in India’s most populous: Kanshi Ram.

WEEKEND RUMINATIONS K anshi Ram, a Punjabi (from Rup Nagar or Ropar

district near Chandigarh), also appeared on the
T N NINAN scene from an unconventional place. He was a sci-
entist in a DRDO lab, started reading Ambedkar and

Tax, don’t frighten, investors built a pan-national union of scheduled caste, back-
ward and minority employees, BAMCEF (the All
India Backward [SC/ST/OBC] And Minority

T
Communities Employees Federation).
he finance minister may well be right in the three claims that he
We saw him initially as a headline-hunter. In the
made while taking part in a parliamentary debate on Thursday: unstable late-1980s he brought together diverse
That reforms like the goods and services tax (GST) will pay off in the groups, including Sikh separatists, on his platform
medium and long term; that India has been the fastest-growing and attracted crowds. But nobody saw him as more

Disquiet on Dalit front

large economy for three years; and that some recent economic data point to an than a nuisance. Soon enough he had outgrown and
upswing in economic activity. Unfortunately, none of these will mitigate the dropped them, in the way Arvind Kejriwal dropped
Anna Hazare, and Mevani, if his politics has to grow,
complexity of the challenges facing him as he prepares his fifth, and this gov-
might have to dump Umar Khalid. As Kanshi Ram
ernment’s final, Budget. realised 30 years ago, there’s no Dalit politics unless
First, there is oil — whose prices have risen to $68 per barrel, a level that no Kanshi Ram was a Dalit Kautilya from Punjab who built heartland’s you are rooted in the heartland, and it can’t grow in
one had anticipated. The impact on domestic oil prices and broader inflation, on conflict with nationalism, or even religion.
the Budget if taxes on petro-products have to be reduced, and on the trade deficit, Mayawati as his Chandragupta. It’s a good playbook for Jignesh Mevani Neither he, nor Mayawati dissed Hinduism or con-
will become clear over time. The dangers are not as yet such as to threaten macro- if he has the skill and ambition verted to Buddhism. As he would tell us at his
baithaks, his “fight was not with Hindu gods, but with
economic stability, as has happened in the past, but they will impact growth. This
Manuwadis”, who denied them to the Dalits. Why
will be the obverse of the growth bonus that the country got in 2014-16, when oil

I
s there a new Dalit factor unfolding in national pol-
prices fell from around $110 at the time that Narendra Modi got elected, to a trough itics? Can what has lately been described as Dalit
of $30 two years ago. GDP growth peaked at 7.9 per cent in 2015-16. assertion disrupt politics in a heavily election-laden
Higher inflation today is threatened also by higher food prices, making it season? And if so, does the rocket have the fuel to last
until May 2019, or will it fizzle and burn out before that?
impossible for the Reserve Bank to cut interest rates in the foreseeable future.
Further: Does Jignesh Mevani personify this new
A higher-than-planned fiscal deficit, which seems to be on the cards, will add to
factor? And next, who is he in political terms — a new
the already rising curve of general government (Centre + states) deficits and pos- Kanshi Ram, or a mere fizzle-like Mahendra Singh
sibly raise bond rates higher than their already elevated levels. Costly money mit- Tikait or Col. Kirori Singh Bainsla (retd)? The Kanshi
igates against faster growth. Ram phenomenon left a deep impact on heartland
The “advance” GDP figure (essentially, the official forecast) for the current politics. The other two, despite wide Jat and Gujjar
financial year, projecting growth at 6.5 per cent, has come up short of earlier support at various points of time, faded away.
The Dalits are approximately 16.6 per cent of the
expectations of 6.7 per cent. Next year’s growth rate is likely to fall short of the
Indian electorate. That makes them a more powerful
7.4 per cent predicted by the International Monetary Fund, but should cross the vote bank than the Muslims. In the pre-1989 years,
7 per cent threshold — helped by the benefit of a low base and by a nascent recov- the Congress could pretty much
ery in exports. While that would be a matter of relief, the fact is that investment take them for granted except in
continues to flag at levels last seen well over a decade ago, and the consumption some states such as Tamil Nadu,
curve is in danger of flattening. So there would be little reason to expect great rev- Kerala, and later West Bengal. As
with the backward castes and the
enue buoyancy, required if the government is to get the headroom for announc-
Muslims, the Congress started los-
ing some pre-election year giveaways. Expenditure control must therefore ing this vote there on.
remain the name of the game — especially since it is not clear when slack GST Unlike the Muslims though, the
revenues will climb back to the budgeted level of ~910 billion per month, with a Dalits never voted strategically or
further growth additive for next year. with a singular purpose of electing
This less-than-rosy scenario for a year that everyone had hoped would one party or keeping another out of
mark a change of mood and performance, after a period of disruption, demands
power. This helped the rise of the NATIONAL INTEREST
BJP. In many key states, including
that the finance minister look for revenue sources that have not been tapped so Uttar Pradesh and Bihar, the Dalit SHEKHAR GUPTA
far. The most obvious of these is long-term capital gains on shares, to match the vote went to parties other than the
tax on capital gains accruing from other classes of assets. The estimates of tax Congress, which suited the BJP. Some, attracted to
forgone on this item run into hundreds of billions, and there is neither fairness Narendra Modi, started drifting to the BJP too.
nor rationality to support continuing with this tax holiday for just one class of Because the Dalit vote became so divided, it lost
much of its weight.
investors, those who put their money in shares. Again, unlike the Muslims, the Dalit vote is so
Such a tax would not be free of risk. The potential impact on the stock mar- widely scattered that it lacks the same ability to shift
ket is obvious, and overseas investors might choose to look elsewhere. If the electoral fortunes in most states, barring Uttar Pra-
impact is severe, the negative wealth effect will affect consumption, and desh. On paper, the Dalit voter percentage is the
therefore growth. However, there are ways of dealing with both risks — for highest in Punjab (32 per cent) but a large number of
these are Sikh and political contests in that two-
instance, by offering inflation neutralisation plus a deferred and phased intro-
party state aren’t really on caste lines. At the same
duction, designed so that the incremental tax burden in any given year will be time, if the bulk of this vote shifts to any one side in
small enough to not upset the market or drive away investors. The introduc- any state, it tilts the balance. The list of questions we
tory tax rate could be as low as 3 per cent, going up to 10 per cent in two stages posed early on, therefore, distils neatly into one: Is
over as many years. today’s Dalit assertion and its leadership, namely
young Jignesh Mevani, capable of bringing about
that consolidation? That will be Disruption.
T he potential rise of Jignesh Mevani can check one
essential box: A charismatic leader with pan-state
appeal. Since the Dalits are quite evenly spread across the
mainland, a party needs a leader to rally them. Until the
mid-1970s, Babu Jagjivan Ram did that for the Congress
party. Since then, the Congress’s failure to produce and
empower a Dalit leader is its biggest failure. We know
that its leader of the house in the Lok Sabha, Mallikarjun
Kharge, is a Dalit, but he is neither empowered, nor
charismatic. The BJP does even more poorly here.
India is at an interesting juncture when the
minorities, Dalits, and tribals do not have any key cen-
tral ministries or chief ministerships, states such as
Jammu and Kashmir and the north-
east and the symbolic presidency
excepted. This is what creates
Mevani’s opportunity. The Modi-
Shah BJP is astute enough to see this
threat. Further, they have the mindset
of an all-conquering super-power, so
they would like to finish a likely threat
as early as possible.
Mevani rose in the wake of the Una
atrocity as a limited, local, Gujarat
phenomenon. Given that the Dalit
population in that state isn’t particu-
larly large, he wasn’t taken seriously as
a political player. His initial politics
seemed overwhelmed by a JNU-ite ideology that
abhors electoral politics. This changed once he decid-
ed to contest. Then he aligned with a national party, in
fact the most bourgeois party of all. As an MLA in
Gujarat, he counts for many more than one. It also
gives him the legitimacy to take the message to other
states. He began with Maharashtra earlier this week.
Mevani has many strengths: Youth, articulation,
fearlessness, proficiency with social media, and polit-
ical and ideological flexibility. Also focus, as in target-
ing the BJP as the one and only enemy for now and
using that justification to align with the rest. He also
has some weaknesses. He comes from a smaller state,
still carries the weight of a pronounced Left tilt, which
never works in the mainland outside of the Republic
of JNU and a couple of other central campuses. There
would we leave our gods to them, that’s what they
want, he would say. And Gautam Buddha? The
Manuwadis will simply put his busts in their temples
as one more to their pantheon of “teytees karod” (330
million). “Kya farak padta hai ek aur se?” (How does
one more bother them?)
His first big political arrival was in the historic
Allahabad by-election in the summer of 1988. V P Singh
had resigned from Rajiv Gandhi’s cabinet and the Lok
Sabha, accusing him of taking Bofors kickbacks and
was seeking election from Allahabad, vacated by
Amitabh Bachchan, in the wake of the same scandal.
It was our first exposure to his kind of plain-speak-
ing Dalit politics. “You’ve lived like animals for 40 ye-
ars,” he would say, “I have come to make you human.”
Three things, however, stood out in the campaign and
the politics he constructed later, installing his pro-
tégée Mayawati in power three times in Uttar Pradesh.
One, he dumped anybody seen even vaguely to be a
separatist, from Simranjit Singh Mann to Subhash
Ghisingh. Second, he repeatedly stated the nationalist
and martial credentials of his family: Eight ancestors in
World War I, two in the second, and two paracomman-
do cousins killed in Operation Bluestar. His campaign
was organised on military lines: Painting brigade, pam-
phlet brigade, even a begging squad whose members
went to Dalit bastis with cans to collect small change as
contributions. The money doesn’t matter, he told us. It’s
just that “once a sweeper gives us a rupee, he will reject
a thousand from the Congress to vote for them”. The
third, and the most important, he spread the tent wider,
attracting other groups under the definition of Bahujan
Samaj. That’s how he created the slogan, vote hamara,
raj tumhara/nahin chalega, nahin chalega. Later, he
and Mayawati realised that to get power they had to co-
opt the Muslims and some upper castes too.
This is what brought them power. It isn’t an easy
playbook, but it’s a playbook nevertheless. Kanshi
Ram was a single-minded political genius, a kind of
Dalit Kautilya with Mayawati as his Chandragupta.
Does Mevani have the same skills, talent, single-
mindedness and ambition to shift to the heartland?
We don’t know yet, but it explains to you why the BJP
and the conservative Hindu elites worry about him.
By special arrangement with ThePrint

A breach of data confidence Star power in politics

the customers’ knowledge.
This was an especially useful way to
game the system since Direct Benefit
Transfers such as gas subsidy payments
able. This might have been happening for
months, which would mean that multiple
copies of that demographic data now exist.
The commoditisation of the method —
exploit this by buying a few hours on a
cloud service and stealing the data of every
other user of that cloud. Plugging this vul-
nerability will be hell. If these vulnerabil-
EYE CULTURE Whether MGR, a Sri Lankan-born
Malayali, Jayalalithaa, Kannada by ori-
KANIKA DATTA gin, NTR or Rajinikanth (also Kannadiga)
today, all of them have followed a similar

and MNREGA automatically flow into the
bank account which is last linked to
Aadhaar. Net inflows are said to have
mounted to over ~1.90 billion in over three
million of these fraudulent accounts.
The second incident came to light a
few days ago. The Tribune described how
VIEWPOINT Aadhaar demographic details were being
made available for the payment of just
DEVANGSHU DATTA ~500. Upon payment, the user received a
log-in where he could enter any Aadhaar
selling the log-in for ~500 — indicates that
scammers have already harvested what-
ever they wanted.
The third and fourth incidents are of a
different order and the scale is also pretty
large. A couple of days ago, security
researchers revealed that two major bugs
exist that leave pretty much every digital
computing device at risk. Apparently, the
companies concerned have all been work-
ing desperately to try and get these fixed
ities have already been exploited, it would
be hard to tell because there would be no
trace of intrusions.
Cloud service providers will have to fig-
ure out radical solutions. Do you replace
every server with a non-vulnerable chip?
Do you live with slow, and potentially vul-
nerable services? Users will also have to fig-
ure what they can live with. The three alter-
natives are slower, somewhat safer services
versus more expensive, faster safer services
S
uperstar Rajinikanth’s dramatic
year-end announcement of his
impending entry into Tamil poli-
tics, adroitly upstaging fellow thespian
Kamal Haasan, raises an interesting
question. The serial drama that is the
Indian political scene should have yield-
ed legions of leaders from India’s vibrant
and thriving film world, you would have
thought. Yet, apart from Tamil Nadu,
where reel-life and real-life have con-
script, a similar path to their political
careers. The huge fan bases they built
up during their acting years in crusading,
superhero roles — in NTR’s case, this
chiefly comprised playing mythological
heroes — morphed into a political fol-
lowing when they entered politics.
Screen personas also transmuted them-
selves into political agendas — anti-cor-
ruption, clean administrations, defend-
er of the poor and the weak and so on.

A
series of recent discovered data
breaches and vulnerabilities could
substantially alter the way the digi-
tal world works. Two of these are huge
breaches that affect every Indian resident.
Two are newly announced vulnerabilities
that affect pretty much every computer
and smartphone currently in civilian usage.
The first incident involved Airtel. It
can only be described as a criminal act
perpetrated on a massive scale. When
new subscribers signed up for the phone
service, or existing subscribers linked
their numbers to their Aadhaar accounts,
the Aadhaar details were used to open
Airtel Payment Bank accounts without
number and receive the associated demo-
graphic information including name,
address, phone number, photograph, and
email, etc. It is easy enough to automate
this process of plugging in numbers and
just scrape the data at high speed.
Apparently the entire biometric data-
base’s demographic data is available,
which means that every Aadhaar signup is
wide open to identity theft. The UIDAI has
said of course that this is not a breach by its
definition because the biometric infor-
mation isn’t compromised.
Assuming you believe that it doesn’t
really matter since every other pertinent
detail about 1 billion-odd citizens is avail-
for the past several months. But these vul-
nerabilities are now in public domain.
The “Meltdown” bug affects most Intel
chips manufactured between 1995 and
2013. It can be fixed by a patch which
could, however, slow machines down a lot
since it affects the way memory works.
Exploiting this is also pretty easy — there
are already a half dozen exploits released
into the wild.
The “Spectre” bug is harder to exploit.
But it is even harder to fix and it affects
Intel, AMD, and ARM processors, which
means that it takes out smartphones, lap-
tops, desktops, and servers. One really
nasty possibility is that somebody could
versus faster, but more vulnerable services.
Meanwhile, chipmakers must be wonder-
ing if class-action suits are on the cards.
The Aadhaar database itself is quite
possibly open to these two vulnerabilities
as well. Given the UIDAI’s lackadaisical
attitude to security, who knows if it will be
fixed? It doesn’t matter anyway. If you
have signed up for the 12-digit number,
you now need to change your name, you
email id, residential address, phone num-
ber, associated bank accounts, etc. But
you can relax, your biometric data is (sup-
posedly) secure.
Twitter: @devangshudatta
verged for decades, and undivided
Andhra Pradesh, over which N T Rama
Rao (NTR) presided — unforgettably —
for more than a decade, the rest of India
has not experienced quite so pro-
nounced an overlap between cinema
and politics.
There have been, to be sure, plenty of
MPs and MLAs from the silver screen
who have taken their chances at the hus-
tings or (mostly) through Rajya Sabha
shoo-ins. Even supernova Amitabh
Bachchan once tried his hand at poli-
tics, beating, to everyone’s surprise
including his own, UP heavyweight H N
Bahuguna in the Allahabad constituen-
cy by a record margin in 1984 before his
suspected involvement in the Bofors
scandal encouraged him to resign his
As demi-gods — indeed, many fans
believed they were god (or goddess)
incarnate — they retained an unshake-
able credibility. It says much for pro-
gressive social attitudes in Andhra that
NTR’s proclivity for cross-dressing did
not dim his star power by even one watt
(even Kamal Haasan risked it only for a
local version of Mrs Doubtfire called
Chachi 420). Both Rajinikanth and
Kamal Haasan can be relied on to follow
this well-worn route. The latter has
already signalled this path with his over-
tures to the Aam Aadmi Party; the former
is still to reveal his hand.
Corruption, the plight of the com-
mon man, the triumph of good versus
evil are central concerns for the rest of
India too, and most actors have played

The urge to make pointless changes
LINE AND LENGTH
T C A SRINIVASA-RAGHAVAN
approach as did the initial skir-
mishes caused by the precipitate
departure of the British.
By the end of the 1980s, bar-
ring Kashmir, the nation project
had been mostly completed. The
Northeast had been persuaded to
become part of the Indian nation
as had been the Sikhs, some of
whom had waged an insurgency
for a Sikh nation (Khalistan)
throughout the 1980s.
India was now a proper nation
with state. This was an extraordi-
Rashtra and Rajya
Some Hindu social and political
groups have always challenged
this approach. They say India is
the only place where 1,000 mil-
lion Hindus live and it should
therefore be a Hindu rashtra.
Emphasising the obvious is not
only unnecessary, it is also the sign
of deep-rooted insecurity. The
RSS, for example, which is the
largest of the Hindu groups men-
tioned above, worries about
“national purpose”, which it
It is possible some of them do
and talk about it in an ignorant
sort of way. But that is also not a
cause for great concern.
Reason: Article 15 of the
Constitution ensures that the State
will not discriminate between cit-
izens on the grounds of “religion,
race, caste, sex, place of birth, or
any of them”. This is sufficient
guarantee for non-discrimination.
I cannot see any BJP or other
government being able to
change that even if they take out
‘Nobel’ this year. He has studied
state religions in detail (data from
188 independent countries) and
come up with some interesting
findings, not the least of which is
that having a state religion makes
no difference to economic growth,
which is agnostic to religion but
responds positively to religiosity.
http://www.nber.org/papers/w104
38.pdf and http://www.nbe-
r.org/papers/w9682.pdf.
He also says that “greater con-
centration of religious adherence
seat. Some have even made it to minor
ministerships. This is par for the course.
But few have gone beyond the sinecures
of Parliament or state Assemblies to cre-
ate memorable political careers.
Think about it: No other states have
had actor-chief ministers — not even
Maharashtra, Karnataka and Bengal, all
centres of powerful local cinema and
theatre traditions — nor has any actor
created seminal political movements as
M G Ramachandran (MGR) did in Tamil
Nadu with All India Anna Dravida
Munnetra Kazhagam and NTR with the
Telugu Desam Party in Andhra.
More to the point, both also left last-
ing political legacies. MGR’s inheritor
was another actor and long-time co-star
the Superman/crusader role in their
heyday. So why do more actors not fol-
low the MGR/NTR route elsewhere in
India? One plausible answer could be
that there’s too much money to be
made in the film world today. Plus,
there are alternatives for those whose
film careers are on the wane: In mod-
elling, endorsements, owning sports
teams and so on. Few would care to
forego all this easy money for the heat
and dust and uncertain rewards of a
political career.
Conversely, it is worth wondering
whether MGR or NTR would have fol-
lowed this path had such post-career
enticements been open to them in their
day. Still, it says much for the political

F
or the last several hundred
years most nations have
struggled with what
Marxists call “state formation”.
Indeed, it forms an entire branch
of Marxist studies.
India, in most things, has had
the opposite problem. It inherit-
ed a strong state in 1947 but, for
well-known and well-under-
stood reasons, struggled to form
a cohesive nation.
The Congress saw this as a
political challenge, not least
because of Mohammad Ali
Jinnah, who demanded a religion-
based nation. India’s diversity also
contributed to the Congress
nary achievement at a time when
other states were collapsing or oth-
er nations being redefined.
One of the most important
contributors to this achievement
was the utter and complete rejec-
tion of the notion by almost all
Indian political parties of a nation-
al or state religion and the accept-
ance of the idea by the Indian state
that religion did not matter in the
overall scheme of things.
This does not mean the
Congress did not bring religion
into its politics. Of course it did.
But it did ensure that it didn’t have
a place in the Constitution, except
pictorially, in the first edition.
thinks is absent in India. It
believes that declaring India
Hindu rashtra will somehow help
in this creation of a national pur-
pose. Will it?
Rashtra, meanwhile, means
nation. It does not mean state,
which is Rajya. Most critics don’t
know the difference, whence the
anxieties.
Although so far they have not
used the term Hindu Rajya, the
question that the RSS/BJP must
answer is whether they are using
the terms interchangeably. I
don’t think so, but an unam-
biguous clarification would help
enormously.
secular and insert Hindu Rashtra
in the Constitution. So declaring
India a Hindu Rashtra would be
an empty gesture.
For that reason alone, it need
not be done. It would be as point-
less as adding ‘secular’ to the
Constitution by the Congress was.
It need not have been done. It
did not make the Indian state
any more or less secular, just
more angst-ridden.
Barro’s research
In this context, I would recom-
mend that everyone read the writ-
ings of Robert Barro, who is said to
be a contender for the economics
is positively related to state reli-
gion, and most of this relation
seems to reflect causation from
religious concentration to state
religion, rather than the reverse.”
This concentration is what is driv-
ing the RSS/BJP, although to what
end it is not clear.
Finally, Barro says that “state
religion is more probable when
the population adheres to a
monotheistic religion. We find this
effect for Muslim adherence”.
Three words — monotheistic,
Hinduism, Muslim — should
ignite a thought in the minds of at
least some people in the BJP, if
not the RSS.
Jayaram Jayalalithaa. Ironically, it is the
turmoil among followers in her party
after her long-drawn death — it is alleged
that she died months before it was offi-
cially declared — that has encouraged
two other prominent actors Rajinikanth
and Kamal Hasaan to declare their polit-
ical ambitions.
NTR’s inheritor in both undivided
Andhra and the rump state is his son-in-
law. Chandrababu Naidu is no thespian,
as those who have met him will confirm.
But he certainly scripted political dra-
ma in his time, removing his father-in-
law and mentor NTR from chief minis-
tership (a revolt that included conspiring
with his sons and a co-brother) and co-
opting the Telugu Desam Party.
movements they created that several
actors continue to be drawn to state
politics.
Or maybe it’s early days yet, and India
will yet get its first actor-prime minister
(though the current one fulfils that role
quite admirably). After all, Hollywood
yielded one Governor (Arnold
Schwarzenegger, of California) and one
president (Ronald Reagan) — two if you
count a movie called Ghosts Can’t Do It in
which Donald Trump, the first reality
TV star to win the White House, acted as,
who else, himself.
Every week, Eye Culture features writers with
an entertaining critical take on art, music,
dance, film and sport
 https://t.me/TheHindu_Zone
14
>
No major gains in
higher education
under NDA: Report
SAHIL MAKKAR
New Delhi, 5 January
T
he All-India Survey on Higher
Education(AISHE)fortheyear
2016-17, released on Friday,
revealed the rates of growth of uni-
versitiesandcolleges,andthenumber
of students enrolled in the first three
years of the National Democratic
Alliance (NDA) government have
beenlowerthaninthelastyear(2013-
14)ofthepreviousUnitedProgressive
Alliance (UPA) government.
The number of universities in
India was 723 in 2013-14, 760 in 2014-
15, 799 in 2015-16 and 864 in 2016-17.
The rates of growth of universities in
2013-14, 2014-15, 2015-16 and 2016-17
were 8.4 per cent, 5.1 per cent, 5.1 per
cent and 8.1 per cent, respectively.
The number of students in high-
er education institutes in the country
was 32.3 million in 2013-14, 33.3 mil-
lion in 2014-15, 34.6 million in 2015-16
and 35.7 million in 2016-17. The rates
of growth in the number of colleges
for 2013-14, 2014-15, 2015-16 and 2016-
17 are estimated to be 7.3 per cent, 3.1
per cent, 3.9 per cent and 3.2 per cent,
respectively.
The gross enrollment ratio (GER)
— the ratio of the number of students
enrolled for higher education to the
total population in the 18-23 age
bracket, considered a major indicator
of a country’s progress in higher edu-
SLOW PACE
Findings ofAll India Surveyon higher education (2016-17)
‘12-13 ‘13-14 ‘14-15 ‘15-16 ‘16-17
Number of universities 667 723
Number of colleges 35,525 36,634 38,498 39,071 40,026
Number of students
enrolled ( in mn) 30.1 32.3
GER (%) 21.5 23
GPI (%) 0.89 0.92
Foreign student
enrollment 34,774 39,517 42,293 45,424 47,575
Note: Gender Parity Index (GPI) is ratio of the female to male in higher education. It is
calculated for the age group 18-23 year
Gross Enrollment Ration (GER) is the number of students enrolled to total number of
people in the age group of 18-23 years;
cation — has not shown a significant
increase in the past three years as
well. The GER for 2016-17 was 25.2
per cent, a slight increase from 24.5
per cent in 2015-16. In 2014-15 and
2013-14 it was 23.6 per cent and 23
per cent, respectively.
“Our aim is to increase the GER to
30 by 2020,” Union Minister for
Human Resource Development
PrakashJavadekarsaidwhilelaunch-
ing the AISHE report. “Our govern-
ment is committed to quality, auton-
omy,innovationandresearch.Wewill
soonbeannouncingmeasurestopro-
videmoreautonomytothosecolleges
anduniversitieswhichhavebeengiv-
en A-plus rating by the National
Assessment and Accreditation
Council (NAAC),” he said.
The NDA government has under-
taken various measures in higher
education, including passing of the
IIM Bill, setting up an agency for the
funding of higher education insti-
tutes, national ranking of the top per-
forming institutes, and announcing
the setting up of 20 centres of excel-
lence. However, all such measures
have mostly benefitted established
and premier institutes such as the
IndianInstitutesofTechnology(IITs),
Indian Institutes of Management
(IIMs), National Institutes of Techn-
ology (NITs) and Indian Institute of
Science (IISc).
A criticism levelled against the
760 799 864
33.3 34.6 35.7
23.6 24.5 25.2
0.93 0.92 0.94
Source: MHRD
government is that it has failed to
allocate more funds to the education
sector in the past three years. The
NDA government’s expenditure on
education in 2014-15, 2015-16 and
2016-17 was 2.8 per cent, 3.1 per cent
and 3.2 per cent, respectively, of the
gross domestic product (GDP). It is
almost on a par with what the UPA
spent on education. The Centre’s
expenditure on education in 2011-12
and 2012-13 and 2013-14 was 3.2 per
cent, 3.1 per cent and 3.1 per cent,
respectively, of the GDP.
The AISHE report further reve-
aled that there was no major change
in the Gender Parity Index (GPI), a
ratio of the number of females to
males enrolled in higher education
institutes. The GPI for 2016-17 was
0.94 per cent, a slight increase from
0.92 per cent in the previous year.
“We are making efforts to increase
the number of female students in
both the IITs and NITs,” the minis-
ter said.
Javadekar also urged teachers to
provide their Aadhaar numbers.
The government is for the first time
counting the number of teachers in
higher education by using their
Aadhaar details. “We have found
70,000-80,000 teachers teaching in
three or four institutions. We have
data on 85 per cent of teachers and
request the rest to provide their,”
he added.
Government blames Congress for
stalling triple talaq Bill
ARCHIS MOHAN
NewDelhi,5January
T
he winter session of
Parliament, one of the short-
estinrecenttimes,cametoan
end on Friday, without the Rajya
Sabha passing the triple talaq Bill.
The Narendra Modi government
blamed the Congress for stalling the
contentious Bill, but asked the party
to support it in the forthcoming
Budget session. The government
ruled out bringing an ordinance.
Parliamentary Affairs Minister
Ananth Kumar said the Cabinet
Committee on Parliamentary Affairs
held its meeting on Friday and rec-
ommended to the President to con-
vene the Budget session from
January 29. He said the Budget ses-
sion will start with the President’s
address to the joint sitting of the two
Houses on January 29, and the
Union Budget will be presented on
February 1. Parliament will break for
recess from February 10 to March 4,
to allow standing committees to
studybudgetaryallocations.Thesec-
ond part of the Budget session is
scheduled from March 5 to April 6.
The Budget session will have 31 sit-
tings. Kumar said the Modi govern-
ment was committed to legislating
RBI ramps up circulation
of low-value notes
SOMESH JHA
New Delhi, 5 January
Nearly half the currency notes circu-
lated by the Reserve Bank of India (RBI)
during the first nine months of 2017-18
were of smaller denomination, such as
~200, ~100 and below, the government
informed Parliament on Friday.
“RBI has informed that nearly 48
per cent of the total currency notes
supplied since April 01, 2017 till
December 31, 2017, are lower denomi-
nation notes,” Minister of State for
Finance Shiv Pratap Shukla said. He
was responding to a query on whether
the government has received com-
plaints related to shortage of lower
denomination notes in automated
teller machines (ATMs). “Denomi-
nation-wise requirement of currency
notes is being monitored by RBI and
https://t.me/pdf4exams
MUMBAI | 6 JANUARY 2018 1
government intended to keep the
potsimmeringontheissuetomalign
his party. Azad said Law Minister
Ravi Shankar Prasad, with whom he
had a long meeting some days ago,
has refused to understand that the
triple talaq Bill in its present shape
was faulty. “It demonises Muslim
PARLIAMENT'S PRODUCTIVITY men, and would become an instru-
| Session had 13 sittings PRODUCTIVITY OF LOK SABHA 91.58%
ment to send them to jail,” Azad said,
pointing out several inconsistencies
over a period of 22 days LS sat for 61 hours 48 minutes; lost in the Bill, particularly its “dracon-
| Lok Sabha passed 13 Bills 14 hours and 51 minutes due to ian” penal provisions.
adjournments; sat late for 8 hours Kumar said those who had pre-
| Rajya Sabha passed 9 dicted that the winter session would
and 10 minutes
Bills be a washout have been proved
| 12 Bills passed by both PRODUCTIVITY OF RAJYA SABHA 56.29% wrong. Not just the triple talaq Bill,
Houses RS sat for 41 hours; lost 33 hours the government would also bring the
Bill to give statutory status to the
| Govt introduced 17 Bills due to adjournments; sat late or
National Commission for Backward
in the Lok Sabha during lunch recess for 3 hours
Castes in the Budget session.
Source: Parliament
Azad and Congress Lok Sabha
member Deepinder Hooda said the
the triple talaq Bill. Government cent, and of the Rajya Sabha, whose government was responsible for
sources said an ordinance on the proceedings were marred by the the impasse in the Rajya Sabha.
issue was ruled out now that the deadlock over Prime Minister Hooda said the Modi government
dates for the next session have been Narendra Modi’s comments about wants to use Parliament as a “rub-
announced. “The Congress showed predecessor Manmohan Singh dur- ber stamp” and has unleashed an
double standards on the issue in the ing the Gujarat election campaign, “ordinance raj”. Hooda said seven
two Houses. There is considerable was 56.29 per cent. He said 22 Bills ordinances were issued each year
anger in the country on the Congress were passed during the winter ses- during the duration of the 13th and
approach,” the minister said. sion, 13 by the Lok Sabha and 9 by 14th Lok Sabhas, which decreased
The minister said the productiv- the Rajya Sabha. However, Congress to 5 ordinances a year during the
ity of the Lok Sabha was 91.58 per leader Ghulam Nabi Azad said the 15th Lok Sabha.
Soon, new ~10 note in
chocolate brown colour
accordingly, indent of currency notes PRESS TRUST OF INDIA Konark on the reverse,
is being revised,” the minister added. Mumbai, 5 January depicting the country's cul-
He said the RBI has also introduced tural heritage," RBI said.
the ~200 note “to ensure balance in The Reserve Bank of India Among the salient fea-
the required denomination-mix of cur- (RBI) will soon bring into cir- tures of the banknotes, on the
rency notes to public.” culation new ~10 denomina- obverse (front) the note will
The share of small denomination tion banknotes in chocolate bear the portrait of Mahatma
currency in the total value of curren- brown colour, which will Gandhi at the centre, the
cy was 13 per cent when the Union have India's cultural heritage Ashoka Pillar emblem on the
government had demonetised high- the Konark Sun Temple as a right, watermarks and num-
value currency notes of ~500 and motif on the reverse side. ber panel with numerals
~1,000 in November 2016. The central bank will growing from small to big on
“The share of lower denomination shortly issue ~10 denomina- the top left side and bottom
notes are going up that will lead to a tion banknotes in the right side.
cleaner economy in terms of transac- Mahatma Gandhi (new) On the reverse (back), it
tions. The share of smaller currency in series, bearing the signature will carry the year of printing
2004 was 53 per cent, which declined of RBI Governor Urjit R Patel, on the left, a Swachh Bharat
to 28 per cent in 2009 and to 13 per it said in a release. logo with slogan, language
cent when demonetisation was The base colour of the note panel, motif of Sun Temple
announced in 2016,” State Bank of is chocolate brown, it said. and denominational numer-
India’s chief economist, Soumya Kanti "The new denomination al 10 in Hindi script
Ghosh, said. has motif of Sun Temple, Devnagari.