OPINION, P6 ECONOMY, P2 ASHOK GULATI The new agri-reform laws free farmers from restrictive policies INTERNATIONAL EDITORIAL DIGITAL ERA 'BRILLIANT MIND' Covid-19 death data may provide some succour, but India's testing still too low & RAT-led in UP, Bihar Neutrality must for platforms, app stores and devices: Sharma Trump nominates Amy Coney Barrett to US Supreme Court CHENNAI, MONDAY, SEPTEMBER 28, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XLII NO. 123, 14 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E 5.65 1.5 Total^ 7.36 Sep^ 0.9 5.6 July 1.7 0 6.0 5.8 Aug 1.3 0.5 June 1.32 1.0 6.2 Full-year target 5.4 12 *Weighted average ^Up to September 18 ■ The government hasn't junked the idea of deficit monetisation but that would be the last resort ■ Some analysts said the government may either keep its overall borrowing target for the full year unchanged or resort to “minor tinkering” requirements to stimulate the economy,theyadded. Importantly, the government hasn't junked the idea of deficit monetisation but that would be the last resort, given the already-elevated level of inflation and other associated risks, the source said. Its decision on deficit monetisation willdeterminethequantumof its additional market borrowing in the second half. Continued on Page 2 ● CAPITAL CRISIS Talks for merger with Clix Group on: LVB FE BUREAU Chennai, September 27 ■ BRANDWAGON, P10 All work and no play Sales of toys and stationery products, categorised as non-essentials, have taken a beating since April ■ eFE, P8 No let-up in cyberattacks Cyberthreats are constantly evolving in order to take advantage of online behaviour and trends ■ PERSONAL FINANCE, P9 Exited NPS pre-maturely? Rejoin NPS subscribers who have exited pre-maturely can continue their account by depositing withdrawn amount ■ INFRASTRUCTURE, P11 Time to make that smart switch Discoms will usher in efficiencies and reduce losses by shifting to smart meters, helping them deal with Covid-19 ■ SCIENCE & TECH, P5 Cloud adoption Relying on cloud computing can accelerate the digital transformation in government THE CAPITAL-STARVED AND loss-making Lakshmi Vilas Bank(LVB)onSundaysaiditwill continue to evaluate the proposedamalgamationoftheClix Group with it adding the mutual due diligence is substantiallycomplete.Thebankis in the midst of a crisis after shareholders on Fridayblocked theappointmentorre-appointment of seven directors to the board including that of S Sundar,MD&CEO. They also voted against the re-appointment of statutory auditors P Chandrasekar LLP,charteredaccountantsand branch auditors.TheAGM saw shareholders approving a resolution authorising the bank to to raise capital via an FPO, rights issue, QIP or any other route and also the increase of the lender’s share capital to `1,000 crore from `650 crore. Inarelease,signedbyindependent director Shakti Sinha,the bank said itwould continue its focusoncapital-lightloanslike gold loans to optimise profitabilitywithoutstrainingcapital funds. Continued on Page 2 The pandemic has accelerated the shift to linking pay with performance SHUBHRATANDON Mumbai, September 27 AN INCREASING NUMBER of companies are rejigging salary structures, across the board, to lowerthe fixed component and raise the performance-based variable component. In these uncertain times, organisations arelookingtolinksalariestothe performance of both the individualand the business. As Amit Vadera,AVP,TeamLease Services observed, the pandemic has accelerated the shift to linking paywith performance.“Thevariablepartof the salary is becoming bigger with employees being judged on their KRAs and paid accordingly,”Vadera said. Viswanath PS, CFO, Randstad India, pointed out that companiescannolongerafford to pay the salaries they used to because the pandemic has disrupted earnings. He cited a March report from Deloitte ILLUSTRATION: SHYAM ■ Nearly a fourth of companies changed their salary structures as per Deloitte ■ There is a shift taking place from “pay for presence in office” to “pay for performance”. whichfoundthatnearlyafourth of companies surveyed had changed salary structures to raise the share of performancelinkedpay.Hitherto,HRconsultantsexplain,thisstructurewas reserved typically for those working in sales orseniormanagement or where there were stiff business or financial tar- CAG COMMENT Cesses help window dress govt accounts PRASANTA SAHU New Delhi, September 27 SPECIAL-PURPOSE CESSES AND surcharges, which have proliferated in recent years, have sub-optimally, if not grossly inadequately, served the intended purposes,as the Centre has used a chunk of Cess receipts Cesses/ rise faster than surcharge overall taxes… collected (` cr) 91,700 FY13 8.8 1,04,300 FY14 9.2 1,15,800 FY15 9.3 1,71,711 FY16 11.8 2,17,844 FY17 12.7 2,03,315 FY18 10.6 3,01,629 FY19 14.5 Cess/surcharge receipts in gross tax revenue (%) Source: Budget papers ..but are increasingly being short-credited to the reserve funds Gap between cesses collected & transfers to designated funds (` crore) FY15 1,10,270* FE SPECIALS 5.95 61,372 ANACUTE RESOURCE crunch andpressuretorolloutmorefiscalstimulushavepromptedthe government to keep alive plans toraiseitsgrossmarketborrowing again in FY21, having already hiked it by 54% from the budgeted level to `12 lakh crore. But any announcements to this effect would be “appropriately timed”, factoring in a preciseassessmentofthedeficit level as well as market anxiety, an official source indicated. Some analysts said the government may either keep its overall borrowing target forthe fullyear unchanged or resort to “minor tinkering” when it announcestheH2calendarlater this week, given that several variables are in a state of flux. However,itmaychoosetotweak itsH2borrowingplanssubstantiallyonlybyNovember,whenit reassesses its finances for the revised estimates,based on the 2.0 6.14 72,941 Former Union minister Jaswant Singh, one of the founding members of the BJP and a close associate of exprime minister Atal Bihari Vajpayee, died on Sunday following a long spell of illness, reports PTI. He was 82. President Ram Nath Kovind, PM Narendra Modi and top leaders paid rich tributes to Singh. BANIKINKAR PATTANAYAK New Delhi, September 27 Gross borrowing (` lakh cr) Yield* (%) RHS More variable pay to be the new norm 62,664 Jaswant Singh passes away; PM leads tributes Announcements to this effect would be “appropriately timed”, factoring in a precise assessment of the deficit level as well as market anxiety CHEQUE MATE 31,384 President Ram Nath Kovind on Sunday gave assent to three contentious farm Bills passed in Parliament last week that have triggered farmers' protest especially in Punjab and Haryana, reports PTI. A gazette notification has been issued in this regard. Centre may hike borrowing in Nov May 1.31 IN THE NEWS Prez gives nod to 3 contentious farm Bills GOING TO MARKET April 0.83 193rd GUNNER'S DAY FY16 FY17 FY18 FY19 Source: Parliament papers, CAG* `1,24,399 crore Crude oil cess receipts in the decade to FY19 retained in CFI, not transferred to Oil Industry Development Board `94,036 crore Secondary and Higher Education Cess levied between FY07-FY18 retained in CFI, the reserve fund -Madhyamik and Uchchtar Shiksha Kosh—never operationalised the proceeds to window-dress its balance sheet and also appropriated these for other uses, going by a series of Comptroller and Auditor General (CAG) reports over the last few years. Ahefty10percentagepoint increase in states’ share of divisible pool of taxes by the 14th Finance Commission (2015-2020) and loss of revenue buoyancy over the last coupleofyearshaveresultedin a cementing of the questionable practice that not only impinges on Parliamentary propriety, but also is legally suspect. Worse,lackofadequatedisclosureintheBudgetorannual accounts of the Centre of the utilisation of cesses collected or the unspent balances thereof, help the government managers hide the actual levels of short-crediting/diversions.Of course,the Centre has this unwarranted luxury only with regard to cesses which it collects (imposts like district mineral funds are being collected by states), but there are indeedalotofsuchlevies,35at last count. Parliament approve a cess on the condition it’s used only to meet the stated objectives like giving financial impetus to a particular sector/area of economy and for use of welfare of a defined section of population. ■ Experts believe the new model is a win-win for both organisations and employees gets.But nowit’s the rule rather than the exception.Siddhartha Gupta, CEO, Mercer Mettl told FEgivenbusinessrisksarerising especially due to Covid-19 induced uncertainties,the performance-linked pay structure is the preferred option. Continued on Page 2 FATAL BLOW Rural, semi-urban see rising deaths Deadly surge ISHAAN GERA New Delhi, September 27 (share of total infections, %) 6.9 ON SUNDAY, INDIA reported a cumulative six million Covid-19 infections and, at 1,000 a day,the countrycould see deaths hitting a staggering one lakh by Thursday. India would become only the third country in the world to have lost over one lakh lives in the pandemic. Daily deaths in older hotspots like Mumbai, Chennai, Bengaluru and Pune are still growing faster than infections in the rest of the country. On Sunday, Mumbai reported 23 deaths per thousand as comparedto thenational average of 12. The share of deaths in rural and semi-urban regions, however, is rising faster. Over the last month, while urbancentres recorded a 5.9 July 27 13.5 11.5 Sept 27 Urban The recovery in spends is led by online transactions, now back at 80%-90% of pre-Covid levels, while swipes at PoS are at 60% and 70% for credit and debit cards, respectively. Banks appear to be risk averse while rolling out new credit cards. Continued on Page 2 Infections rising faster than health infra to be complacent, reports FE Bureau. An FE analysis of statewise health facilities shows the active cases have been rising faster than state’s addition to health infrastructure. ■ Page 2 DELHI MAY SEEM to be on top of the battle against the coronavirus—the state still has 56% of its hospital facilitiesavailable.But given how hospital bed occupancy has nearly doubled in the last one month,it cannot afford FE BUREAU 40 35 30 25 20 15 (%) Retail payments Avg retail payments Byju’s is trying to grow inorganically as we saw from the WhiteHat Jr. acquisition. skill and Iwould sayrightlyso. The deal will also help us accelerate our international expansion,there is promise in other developed markets. They have a good number of students in India and an equally large number of students in the US and otherEnglish-speaking markets. As far as organic growth is concerned, are there any headwinds at all ordoyou justseerunawaygrowth? Initially, our challenge was to create the segment. Even today, the 33 26 Nov Dec 2019 Jan Cheque clearing Feb IMPS Mar UPI Apr 2020 NACH May Jun Jul Card spends/wallets 100 11 11 12 12 10 11 80 2 4 8 13 12 60 15 40 20 87 82 77 70 60 49 0 FY15 FY16 FY17 FY18 FY19 FY20 10 21 23 18 24 Apr Source: NPCI, RBI Others 11 19 23 18 10 14 22 17 9 12 23 18 10 11 24 19 27 May 34 Jun 2020 34 Jul 34 Aug ˆ Effective solutions against COVID-19* Coronavirus for Offices & Institutions Just Call on - 1800 22 72 82 5L `850 # Continued on Page 2 biggest challenge is to create awareness among students that they can learn on their own. In India, most parents think that students need to be spoon-fed. Our approach was always focused on creating a love for learning. Today, a lot more kidsare tryingoutonline learning compared to six months back. In the last five months, we have added more than 25 million free users on the platform compared to just above 40 million in the first four and a half years. (` trillion) Digital payments Avg digital payments ‘We have added 25 million free users in the last five months’ How is the integration progressing? The acquisition of Osmo gave us a very strong offline to online platformwhich is helping us create a hands-on learning format for the younger students, especially in the kids learning segment. WhiteHat Jr. fits well into our growth model—adding more grades, subjects and being in more markets. It has brought us a complementary subject in coding; though not curricular, it is considered by a growing percentage of parents to be an important future Rural 1.5-times increase in deaths, rural and semi-urban districts doubled their death count. BYJU RAVEENDRAN Byju’s has raised a whopping $one billion from investors so far in 2020 and the Edtech player’s valuation has doubled to a little over $11 billion. Founder & CEO Byju Raveendran tells Asmita Dey he believes the bump in users that the platform has seen, post the pandemic, will continue even after normalcy is restored and that the conversion from free to paid users will increase. Excerpts: 75.0 Semi-urban Digital Drive Recovery in online spends 87.1 *As per lab test Washing hands with soap and water or use of an alcohol-based hand sanitizer is one of the recommended measures to help reduce risk of Coronavirus spread. Please follow additional guidelines recommended by health authorities. # Prices excluding taxes ˆUnilever calculation based on Nielsen volume sales information for the total markets (Latest 12 months) Continued on Page 2 CHENNAI
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