ECONOMY, P2 SHOBHANA SUBRAMANIAN Farm support needs to be rejigged to tackle agri pollution PM AT G20 NEW MILESTONE If listed firms' profits are up, and GDP could fall by 8-9%, it shows most smaller/unlisted firms are badly hit J SEDDON & A GULATI NATION, P3 India not only meeting Paris pact targets but exceeding them RBI’s Twitter handle creates record with over 1 m followers NEW DELHI, MONDAY, NOVEMBER 23, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 228, 14 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) 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 5.15 6 10.13 10.25 8 3 4 0 0 -20 -30 Source: Capitaline FE SPECIALS Jan 2020 0 Sept 2020 5 4 2 Government Private Total additional cash outgoings from the budget amount to 1 0 Q3 Q4 FY20 Q1 Q2 FY21 Source: CMIE FY20 of GDP 14.89 FY21 14.79 (Household, in million, SA) (% chg, y-o-y) 4 Work demanded -2 Rural: Agri Rural: Non-agri -4 Employment provided Oct Apr Oct 2018 2019 Source: NREGA, HSBC Apr Oct 2020 $200-M FUNDRAISE Total no. of K-12 students in India The maximum sum assured under the new standard health insurance policy for vector-borne diseases will be `2 lakh ■ INFRASTRUCTURE, P11 Continued on Page 2 Learning to live with change As consumers go digital, competition is becoming fluid across industries, says Cisco’s Sameer Garde ■ PERSONAL FINANCE, P9 Insurance for vector-borne disease Make smart water a reality Holistic water management that employs smart technologies is critical to achieving the goals of the Smart Cities Mission ■ SCIENCE & TECH, P14 RISC and gains Apple's success will spell trouble for Intel. It would also force others to adopt ARM for laptops 270 m 235 m Addressable number of K12 students* 90 m Students taking supplementary tuitions** In 5 years 2.5 m students Either not online or online users but not inclined to pay Complement online with offline 5-7 years = $5 bn *Students without internet and financial access **Current supplementary private spend: $16 bn mentvendorswillbeallowed toparticipateinnext-generation5Gnetworks,Mittalsaid the larger question is that of the nation’s decision and asserted “what the country decides will be accepted byeveryone”. ■ Report on Page 5 QuickPicks HDFC Bank payment services back after outage at data centre HDFC BANK on Sunday said it had restored payment services on its digital channels after an outage at its data centre on Saturday, reports fe Bureau in Mumbai. All through Saturday, the bank's customers complained of being unable to carry out transactions through its ATMs, cards, net banking and UPI channels. PAGE 2 Delay in supply pacts with discoms likely to hit renewable projects THE DELAY in signing power supply agreements (PSA) by Solar Energy Corporation of India (Seci) with discoms for over 20,000 MW of power projects awarded in the last one year is threatening the renewable energy target of 175 gigawatt (GW) by 2022, reports Vikas Srivastava in Mumbai. PAGE 2 Covid deaths rising faster than cases ISHAAN GERA New Delhi, November 22 THE NEWS FROM the hinterland is not all good with fatalitiesincreasingfasterthaninfections. Rural and semi-urban districts now account for 27% of all deaths,up from 25% two months ago. In contrast, the share of infections has fallen from 38% to 36%. In the past month, infections in urban India increased 1.2 times while they went up by 1.16 times in rural India. Again, fatalities in rural districtsincreased 1.2times compared with 1.14 times for urban districts. Sept 22 K-12 ed-tech market in Tariff hike needed: Bharti’s Mittal TELECOM TARIFF hike is needed as the current rates are“unsustainable”andmarket conditions will be seen before a call istaken,telecom czar and Bharti Airtel chairman Sunil Mittal told PTI. Ontheissueofwhetheror not Chinese telecom equip- June Dec June 2019 2020 Continued on Page 2 25 m students Source: HSBC ■ eFE, P8 June Dec 2018 ● RURAL INDIA Valued at $12 bn, Byju’s a class apart Shift to online only high fee structure -6 Continued on Page 2 IN A TRANSACTION that could fetch Byju’s a postmoney valuation of around $12 billion, a clutch of investors,includingBlackRock andTRowe Price,is believed to be infusing close to $200 million into the ed-tech player. This will be the sixth fundraise by the company in 2020; in September,Byju’s had announced a fresh $500-million funding round with new investorslikeSilverLake,Alkeon Capitalandothersatavaluation of just over $11 billion. Byju’s didnotrespondtoFE’squeries. The Bengaluru-headquartered company, whose revenues have grown at a compounded 125% over the past three years to approximately $400 million, has mopped up some $2 billion so far. Apps and tools that aid remote working have seen increased adoption in the last eight months Rural: Overall 2 0 THE LEARNING CURVE Virtual work in progress -0.62 % chg, y-o-y …real rural wage growth moderating FE BUREAU New Delhi, November 22 ■ BRANDWAGON, P10 Sept 2020 (April-September), ` lakh crore 1.8% 35 30 25 20 15 10 Dec 2019 ...expenditure could be contractionary …pvt sector capex anaemic Demand for MGNREGA (New project announcements, ` lakh cr) elevated… 3 -40 Sample of 2,334 companies (excluding banks & financials) Source: RBI 0.33 0.26 -10 FY21 Q1 Q2 -14.98 0 FY20 Q3 Q4 Oct 23, 2020 0.38 0.31 Corp expenditure falls… (Corporate, % chg, y-o-y) Oct 25, 2019 2.4 1.54 Oct 23, 2020 4.09 Oct 25, 2019 20 -57.3 (April) -60 Oct 22 Nov 22 (%) Share of India's total cases (in %) Urban Semi-urban Rural Share of India's total deaths (in %) Urban Semi-urban Rural ` 10 lakh cr Imports planned to be substituted BANIKINKAR PATTANAYAK New Delhi, November 22 ■ Road maps being drawn A STRATEGYTO trim imports of as much as `10 lakh crore or more than a fourth of India’s annual purchases from abroad is in theworks,sources told FE. They added the government is also working on a plan to boost exports in two dozen “priority sectors” through elevated local output. The plan is in syncwith theAatmanirbhar Bharat initiative. Aconcerted push to step up local manufacturing of quality products will be made, mainly through two schemes — production-linkedincentives(PLI) and phased manufacturing plans (PMP). These schemes will not just help create extra capacities byluring large firms and cut imports but also improve exports substantially, a source said.At the same time, as reported by FE, both tariff andnon-tariffmeasureswillbe putinplace,whereverrequired, to target low-grade imports, which will likelyhurt China. If properly implemented,it will be the biggest drive for importsubstitutionindecades. for 24 priority sectors to substitute imports and boost exports via higher local output ■ Sectors include electronics, auto components, textiles, leather & footwear, steel, marine and processed food ■ Most of these sectors to have incentives via either PLI or phased manufacturing plans ■ PLI already declared for 13 of these sectors The 24 priority sectors include electronics,auto components, textiles, steel, aluminium, marine products, ready-to-eat and processed fruit & vegetable (mango, potato, citrus), agrochemical, electricvehiclesandintegrated circuits, toys, furniture, ethanol, ceramics, set-top boxes, robotics, televisions, close-circuit cameras, drones, medical devices, sporting goods and gym equipment. Continued on Page 2 Contracting labour FE BUREAU Firms hire fewer hands There has been a distinct slowing in the addition to the employee base (excluding outsourced labour) from 4.1% in FY19 to 2% in FY20, for a sample of 1,703 companies. The headcount moved from 6.16 million in FY18 to 6.42 million in FY19 and 6.54 million in FY20; IT and banking account for 40% of the workforce. CARE believes the lockdown would have led to significant rationalisation and that the addition of employees in FY21 could be slower than in FY20. Incremental employment of above 1,000 in sectors IT 30,226 Bank Finance 4,440 8,499 8,300 Healthcare 7,796 8,094 Insurance 4,402 8,068 Retailing 4,366 5,234 Iron & Steel 3,362 5,343 Realty 2,634 4,686 Chemicals 1,860 2,062 Consume durables 1,316 23,484 87,084 77,918 60,737 46,321 FY19 FY20 FMCG Source: CARE calculation Illustration by Shyam ● TIGHT BUDGET Outlays for most ministries slashed PRASANTA SAHU New Delhi, November 22 Budgetary expenditure by ministries in Apr-Sept AS THE UNION Budget FY22 preparations get underway, annual budget outlays for the current year have been revised downwards for most ministries, barring two notable exceptions of the ministries of rural development and food and consumer affairs. The spending cuts, as reflected in the revised estimates (REs) for the ministries, are steep in most cases. The squeeze will also reflect on the expenditures by social sector and welfare ministries in the current fiscal. While new schemes requiring substantial bud- (as % of FY21 Budget Estimate) 31 28 30 29 30 54 Revised Estimate 79 102 over Budget Estimate (% change) +57% 31 50 Consumers affairs & food Labour 16 12 -40 Total imports in FY20 Agriculture (Deposits growth, % chg, y-o-y) 12 8.8 40 Small stimulus... …while savings surge (Credit growth, % chg, y-o-y) 9 60 -20 THE SHARE OFwomen in new formal jobs rose to a high of 26% in September from 1822% in earliermonths,the latest payroll data released bythe Employees’ Provident Fund Organisation (EPFO) showed. Of the total 10,47,167 newsubscriberswho joined the EPF scheme in September, 2,72,395 were women. The number of men who enrolled with the EPFwas 7,74,751. Moreover, in contrast with earlier months, when new womensubscriberstotheEPFO were typically from the 22-25 yearsagebracket,inSeptember over 1 lakh or 38% of the new women subscribers were over 35years of age. Notallnewsubscribersjoining in the EPF scheme can be considered to be new jobs since there could be some element of formalisation of the economy with several having held jobs in the informal sector. Suchita Dutta, executive director,Indian Staffing Federation(ISF),attributedtherisein the share of women to their increased participation as healthcare and care-giving workerssincethepandemicand also to the opening up of more opportunities for them in the packagingandfacilitymanagement services sectors. `33.61 lakh cr Govt also working on plan to boost exports in 24 ‘priority sectors’ Women & child -8.8 -12.6 Aug Sept Oct 2020 Two-wheelers Source: Fada 80 SURYA SARATHI RAY New Delhi, November 22 Plans afoot to cut imports by a fourth Tribal affairs PVs July 0 19.7 19.8 19.4 Poor appetite for loans… June 0.2 11.1 12.9 13.6 Aug Sept Oct 2020 Two-wheelers Source: Siam PVs July 100 (IIP, % chg, y-o-y) 17.9 17.5 17 June (Nomura India Normalisation Index) 13.4 13.8 13.7 -60 2.2 …services still weak 62.4 62.6 63.6 -40 -26.8 -45 -28.7 -7.1 -15 -30 -20 20 0 companies came on the back of steep fall in costs rather than higher revenues. If the sum of operating profits and wages (a proxy for GVA) is showing an increase whereas GDPis set to contract by about 8-9% in this period, it means the informal sectoris in poor shape. 75.4 73.3 72.8 9.8 15 November 15 and was trending at 15 pps below pre-Covid levels.Indeed,some part of the ramp-up in production in consumer durables can be attributedwith lowstocks at dealers that needed to be replenished. Also, corporate India’s Q2FY21 profits were impressive, for a large number of Factory output below pre-corona… (Retail sales, % chg, y-o-y -25.2 -37.5 26.4 11.6 14.2 16.9 3 …but retail sales weak -38.3 -40.9 0 -3.9 -15.2 14.2 20 -49.6 -38.6 40 -33 LENDERS TO CG Power and Industrial Solutions have agreed to a one-time loan restructuring to pave way for the Chennai-based Murugappa Group taking over the scam-hit equipment maker, reports PTI. (Wholesale data, % chg, y-o-y) -1.93 CG Power lenders agree on one-time loan restructuring Production ramps up… -5.13 PETROL PRICE on Sunday was hiked by 8 paise per litre and diesel by 19 paise, the third straight day of rise in rates as the firming international oil rates broke a nearly two-month-long hiatus in price revision, reports PTI. Petrol price in Delhi was hiked to `81.46 per litre from `81.38. Diesel rates went up from `70.88 to `71.07 per litre. WHILE THE ECONOMY is no doubt recovering from the lows of the April-June period and the festive season would have spurred consumer spends, there are no indications yet the momentum will sustain after December. With the services sector yet to see a meaningful uptick — sectors such as hotels, restaurants, aviation and retail remain sluggish — the year could end with significant job losses. Analysts at Nomura say business resumption plateaued in the week to More women in the workplace SELF-RELIANCE Social justice Recovery, but a slow one FE BUREAU New Delhi, November 22 IN THE NEWS Petrol, diesel prices rise for third straight day ● FAIR SHARE HRD Fisheries & animal husbandry Skill TOO SOON TO CHEER 1.46 BHAGAWAN SRI SATHYA SAI BABA Consumers affairs & food Rural development OPINION, P6 +41% Rural development -21% 0% Agriculture Labour ^Of estimated cost of `1.41 lakh cr Pradhan Mantri Garib Kalyan Anna Yojana Phase I and II, only half likely to be provided via Budget (RE) this year; part payments to FCI to be deferred or loans arranged getary spending have been unveiled under the stimulus packages — like the PM Garib Kalyan, Anna and Rozgar (EPF support) Yojanas — other centrally schemes are bearing the brunt. An analysis by FE revealed thatdespite the three roundsof stimulus measures announced so far, the FY21 Budget size wouldatbestbethesameasthe budgetestimate(BE)of`30lakh crore.It could even be lower. Continued on Page 2 ONE-STOP SHOP All-in-one Super Apps the new convenience to hook customers FE BUREAU New Delhi, November 22 GIVEN HOW PAYTM has forayedintogaming,itcouldsoon join the club of South Asian SuperApps with members like WeChat,Grab and Gojek.To be sure there are other contenders: Amazon, Reliance Group and Flipkart — all look like they’re aiming to be one. Butit’snotjustthelargerinternetplatforms,moreplayersare moving into new categories; Swiggyisapparentlyexploring other hyper-local categories such as grocery and medicine to turn itself into a ‘convenience’ app and Nykaa is now into fashion and not just beauty. A Super App can attract more customers as also more vendors and verticals; as Goldman Sachs analysts explain; this in turn will bringinmoreuserscreating a virtuous cycle. Diversifying and cross-sellingwould enable platforms to scale up, thereby Super Apps ILLUSTRATION: SHYAM KUMAR PRASAD bringing down the cost of acquiring traffic or customers which, it believes, is the biggest hurdle to profitabilityat Indian internet companies. For consumers, eretailers are now household names and, as experts point out,itwouldbehardfor them to ignore large platforms that sell a range of merchandise and even services.SuperApps that combineservices–frombook- ing tickets to shopping forgroceriesandmakingpayments— make sense as they would create stickiness, believes Ankur Pahwa,partner,EY.And it’s the increasinguserbasethatwould bring down customer-acquisitioncosts.It’spreciselytheslow growth in organic traffic at scale that has stalled the creation of a SuperApp so far. Makers of consumer goods too may want to latch on to a Super App: companies from the Tata Group or the Birla Group, for instance, may want New Delhi to associate with a Super App. In this new environment it would make sense to partner with e-retailing apps rather than be a vendor because,own their own, products can get lost. As Harsha Razdan, partner, KPMG, points out, for any companyif the basket of products is limited, it could lose consumers to marketplaces and other apps very soon. “It’s better to have a partner,” Razdan explained. Continued on Page 2
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