TUESDAY, 31 MARCH 2020

12 pages in 1 section www.business-standard.com

NEW DELHI (CITY)
~9.00
VOLUME XXVI NUMBER 247

THE MARKETS ON MONDAY Chg#

Sensex 28,440.3 1,375.3
Nifty 8,281.1 379.2 COMPANIES P2 ECONOMY & PUBLIC AFFAIRS P4
Nifty futures* 8,290.2 9.1
Dollar
Euro
~75.6
~83.6
~74.9**
~82.5** CAPACITY UTILISATION 0F MIGRANT SITUATION BRINGS BACK
FMCG PLANTS SET TO RISE MEMORIES OF NOTE BAN: DRÈZE
Brent crude ($/bbl)## 22.2## 24.5**
Gold (10 gm)### ~43,700.0 ~200.0
*(Apr.) Premium on Nifty Spot; **Previous close;
# Over previous close; ## At 9 pm IST;
### Market rate exclusive of VAT; Source: IBJA PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

DIRECT TAX SHORTFALL

MAY BE AT 20-YR HIGH Govt’s U-turn on ‘limited Market tumbles amid
oil rout, virus spread
community transmission’
India’s direct tax collection for the current
financial year ending March 31 is likely to see a
whopping shortfall of about ~1.5 trillion
compared to the revised estimates for the first
time in at least two decades, derailing the
government’s fiscal deficit goals. According to
SUNDAR SETHURAMAN INTO THE RED
senior officials, the income-tax department Health ministry says it’s still local transmission; use of the term on its Mumbai, 30 March

estimates the collection to be between

website on Sunday was to highlight government’s “action on field” After posting sharp gains in the previous four trading
~10.5 trillion and ~10.7 trillion against the sessions, the markets once again countered 8,660 -379.2
revised target of ~11.7 trillion. 4> SHUBHOMOY SIKDAR & SOHINI DAS CORONA intense selling pressure on Monday, as the global
Mar 27
New Delhi/Mumbai, 30 March
FACTFILE shutdown due to coronavirus and slump in oil prices points
triggered fresh risk aversion

A
COMPANIES P2
Corporates join hands to
day after a health ministry
document mentioned “limit- 227 new Covid-19 among investors.
The Sensex dropped
BRENT CRUDE
HITS LOWEST
-4.4%
ed community transmission” cases in past 24 1,375 points, or 4.6 per cent,
set up isolation rooms of the Covid-19 pandemic in hours; biggest spike to end at 28,440, while the SINCE NOV 2002
Quarantine facilities are rapidly becoming the country, the government asserted Nifty 50 index declined 379 Oilpricesfellsharply
important as Covid-19 cases steadily mount. on Monday it had reached only a “local 5 deaths recorded points,or4.4percent,toend onMonday,with
The issue acquires significance, given the
acute shortage of beds and rooms to handle
transmission” stage.
Offering little explanation of why the
in past 24 hours at 8,281. Financial stocks
were the worst hit. Global oil
Brenthittingits
lowestin18years.
8,281
confirmed and suspect patients. Apollo phrase “limited community transmis- 1,251 total cases, of prices crashed due to fall in Brentfuturewas Mar 30
Hospitals said it was creating quarantine sion” was used in a standard operating which 1,117 are active demandbecauseoftheglob- down$2.54,or NIFTY 50
and isolation facilities for patients. procedure (SoP) document to transport cases,101curedor al shutdowns. 10percent,at$22.39
a Covid-19 positive patient, health min- Migrants at Raxaul in East Champaran watch the discharged,1migrated After some moderation abarrelby22:51IST, TOP LOSERS
istry’s Joint Secretary Luv Aggarwal reit- in the past few sessions, the afterearlier
32 total deaths
India-Nepal border being blocked on Monday PHOTO:PTI Price in ~ Mar 30 Chg* (%)
ECONOMY & PUBLIC AFFAIRS P4 erated it was only local transmission. selling by foreign portfolio droppingto$21.65
Bajaj Finance 2,242.1 -11.8
RBI notifies ‘fully The term used in the website of the min-
38,442 tests
investors accelerated. On perbarrel. REUTERS

accessible’ G-secs
istry was only to highlight the govern-
ment’s “action on the field”, he said,
No plan to extend done, of which 3,501
Monday, they sold shares
worth nearly ~4,400 crore, fretting over the economic
HDFC 1,558.8 -11.1
The Reserve Bank of India said on Monday
it would issue a series of government
without elaborating.
“We would be the first ones to get
lockdown: Govt were done in the
past 24 hours
impact due to the sudden halt to economic activity.
“Theforecastsreleasedbybrokersandvariousagencies
Tata Steel
HDFC Bank
254.1
831.7
-8.4
-8.0
securities under the ‘fully accessible route’. back to you to explain that, yes, there is The government on Monday said that there was no for the economy and earnings across sectors are all ICICI Bank 313.4 -7.8
These special securities will attract no community transmission in the country immediate plan to extend the 21-day lockdown PM Modi negative,” said Andrew Holland, CEO, Avendus Capital
foreign portfolio investor limits till maturity if need be,” he said. amid fears that the shutdown of businesses across talks to Alternate Strategies. Turn to Page 11 > *1-day change(%) Source:Bloomberg/Exchange
and are the first step towards Indian G-secs The government did not clarify if the country to counter the spread of coronavirus heads of
being listed in global bond indices. there was any intermediate stage may trigger severe economic and social diplomatic
between local and community trans- distress. The clarification by Cabinet missions via video
No extension of financial
mission. A public health expert, howev- Secretary Rajiv Gauba (pictured)
came after hundreds of thousands
conference to learn ‘NEED TO RECALIBRATE THIS AUTO VOLUMES HIT SLOW
year as of now: FinMin
er, said on grounds of anonymity that
chances were high that community of migrant labourers undertook about situation there UNNECESSARY LOCKDOWN’ GEAR, COULD SEE 50% FALL
transmission had started in India. long journeys to their homes. Supreme Court to Givingacontrarianview Auto sales for March could see a
The finance ministry has denied extending “In fact, community transmission In a tweet, the government’s onthesweeping 50 per cent year-on-year decline in
the financial year ending March 31 by three has started in all the countries where Press Information Bureau
hear plea seeking lockdown,BajajAuto volumes, given the lockdown and decline
months. Social media was abuzz with Covid-19 has affected the population,” too clarified the same. PTI food, shelter for ManagingDirectorRAJIVBAJAJtold in footfall during the second half of the
rumours after a gazette notification on the expert said. Turn to Page 11 > migrants today SurajeetDasGuptathatwhen 99.9per month. While sales of passenger vehicles
extending of uniform stamp duty by three centofthemostvulnerableareover65 and two-wheelers were expected to fall
months was issued. Various quarters had
demanded extension of FY20 by three
TELANGANA: 6 WHO ATTENDED POLITICS BEHIND MIGRANTS’ P12 EDIT: TESTING P7
yearsofagetherewasnologicinthis
lockdowninacountrywhere
40-50 per cent, sales of commercial vehicles
are expected to dip 70-90 per cent.
months amid difficulties due to Covid-19.
MARKAZ IN NIZAMUDDIN DEAD JOURNEY BACK HOME TIMES 94percentareunder65. 2 > RAM PRASAD SAHU writes 3>
2 COMPANIES NEW DELHI | TUESDAY, 31 MARCH 2020

STOCKS > Shriram Transport Finance

Fitch downgrades
> Delta Corp
Approves share buyback
> Cipla
Top gainer among Nifty
> Mahindra & Mahindra
Company suspends all
> Bajaj Finance
Lowest level since
IN THE NEWS ratings at ~100 per share Pharma index stocks its manufacturing October 2018; down
via open market operations 50% in March so far
~609.10 CLOSE ~62.45 CLOSE ~432.10 CLOSE ~273.60 CLOSE ~2,242.25 CLOSE
q15.92% DOWN* p4.96% UP* p 5.79% UP* q7.46% DOWN* q11.95% DOWN*
*OVER PREVIOUS CLOSE

>

IN BRIEF
Govt comes out with schemes
for ‘fresh start’ for firms, LLPs
Corporates join hands Capacity utilisation
across FMCG units
Seeking to provide a “fresh start” for
companies and Limited Liability
Partnerships (LLPs), the government
on Monday extended the deadline for
submitting filings without late fee till
in fight against Covid expected to go up
September 30. Besides, the entities
would get immunity from penal
Led by Apollo Hospitals, firms to set up isolation rooms AVISHEK RAKSHIT
Kolkata, 30 March
no clarity if they will be allowed.
However, now I think it will be easier
proceedings with respect to delay in VIVEAT SUSAN PINTO & GIREESH BABU to procure raw materials and improve
submission of requisite filings. The Mumbai/Chennai, 30 March CORPORATE The truncated capacity utilisation operational efficiency at the plants,”
introduction of fresh start scheme for companies and revision in COMMITMENTS across FMCG companies is likely to said an industry executive. According

Q
settlement scheme for LLPs come against the backdrop of the uarantine facilities are rap- ease in the coming week as more trucks to an ITC spokesperson, a “few more
coronavirus pandemic that has also resulted in disruption of idly becoming important (~cr) are set to be available. This comes after days” will be needed for the entire eco-
business activities. In a release, the corporate affairs ministry as Covid-19 cases steadily Tata Group 1,500 the Centre paved the way for transpor- system and processes to be streamlined
said the schemes are part of efforts to provide relief to law- mount in India. The issue acquires tation of both essential as well as non- for movement of essential goods.
abiding companies and LLPs in the wake of Covid-19. PTI significance given the acute short- Paytm 500 essential items. Firms like Emami Agrotech, which
age of beds and rooms to handle Earlier, there was no restriction on had closed plants owing to scarcity of
confirmed and suspect ITC 150 movement of essential items but com- workers and transport, is also reopening
Extend prepaid IAG sells 26% stake Covid-19 patients. Bajaj/ 100 panies faced major challenges of pro- them as it feels logistical challenges can
validity for steady in SBI General Integrated health care major
Apollo Hospitals on Monday said it
Vedanta
curing raw materials as well as packag- now be addressed to a certain extent.
ing them. Moreover, truck scarcity “We are reopening our plants in a
services: Trai for $310 million was launching an initiative called
/HUL/JSW/ added to their woes. According to the phased manner. First, we will start with
Telecom Regulatory Authority InsuranceAustraliaGroup ‘Project Stay I’ to create quarantine Adani/ Federation of West Bengal Truck despatches, and based on how things
of India (Trai) asked telecom (IAG),theJVpartnerinSBI and isolation facilities for coronavi- Torrent/ Operators Association (FWBTOA), of a improve, we will take a call on improv-
operators to extend the GeneralInsurance,hascom- rus patients. PhonePe total of 9 million trucks ing production,” said
validity period of prepaid
users to ensure that
pletedthesaleofitsstakein
StateBankofIndia-promoted
Part of its ‘Project Kavach’ pro-
gramme launched on Thursday, the central server, managed by the hos-
in India, only 4-5 per
cent are currently oper- STEPPING UP Aditya V Agarwal,
director at the Emami
subscribers get uninterrupted
services during the 21-day
generalinsurancefirmto
PremjiInvestandWarburg
initiative has been supported by a
number of corporate, financial and
L&T, RIL, TVS Motor pital, she said. While Oyo, Lemon
Tree, and Ginger are charging
ational.
Industry executives
n Only 4-5% of 9 million Group.
Emami Agrotech
nationwide lockdown. PTI Pincusgroupfor$310million. hospitality majors, making it the first pitchinwithfunds between ~1,200 and ~3,000 per per- feel the new move from
n
trucks plying currently
FMCG firms scaled down
has reopened its plants
SBIsaid,”IAGhascompleted of its kind in the country. son for their stay at these rooms, the Centre will help in Jaipur, Haldia and
Crew being given itssaleof26percentinterest Under the initiative, Oyo, Lemon ThePM-CARESFund,setupfor
Covid-19reliefefforts,sawmore
more partners are expected to join address both procure- production due to Krishnapatnam. It is
scarcity of raw materials
substandard gear: AI inSBIGeneralinlndia.”
BS REPORTER
Tree, and Ginger Hotels will provide
500 rooms in the first phase of the fundspouringinonMondaywith
the programme in the future as
Apollo Hospitals looks to subsidise
ment as well as supply
issues of finished pro- and workers
expected to commence
operations soon. Over
pilots’ union to Puri programme involving five cities for conglomerateslikeReliance it further for the poor. ducts to a certain extent. n Truck movements the past few weeks, all
AirIndiacrew HDFC MF raises patients to stay in isolation. Industries(RIL)andLarsen&
Toubro(L&T)makingfreshannou-
Last week, Tata Trusts, the phil- “I think things on the expected to improve. FMCG firms had redu-
membersare
beingprovided
stake in SpiceJet Hindustan
Unilever (HUL), ncements.RILwilldonate~500
anthropic arm of the Tata Group, and
Tata Sons, the group’s holding com-
logistics front will
improve in the next one
This will better ced production drasti-
cally owing to lower
with to over 5% Deutsche Bank and crore,whileL&Thascommitted pany, committed ~1,500 crore to fight week, which, in turn,
operational efficiency
availability of workers
substandard, HDFCMFhaspickedup0.42per State Bank of India ~150croretothefund.Inaddition, the Covid-19 crisis. The donation will help boost opera- n FMCG companies more and transport. Some
ill-fittingand centstakeinSpiceJet,takingits will take care of the L&Twillsetasideamonthlyoutlay was the biggest sum committed by a tional efficiency in the keen on production of had opted for tempo-
flimsypersonal staketo5.05percent. of~500crorefortheircontract essential items
CORONAVIRUS cost of isolation, labour.RIL’scommitmentis
corporate and its philanthropic arm plants. Although pro- rary shutdowns.
protectiveequipment(PPE)on Accordingtoexchange including cost of towards the pandemic that has duction cannot be at the However, even though
specialflightsbeingoperated disclosure,thetransactionwas PANDEMIC lodging, medical exclusiveofanother~5croreto wreaked havoc across the world. normal level, I antici- transportation of non-
duringthelockdown,aunionof concludedonMarch19.Both care and Wifi, while statefundsinGujaratand Others, including Reliance pate capacity utilisation to improve essential goods was allowed, firms are
theairline'spilotscomplained HDFCBalancedAdvantage Zomato will provide food at these Maharashtra.TVSMotorandits Foundation, Mahindra Group, Bajaj from the current level of 10-15 per cent keen to make essential items like pack-
toCivilAviationMinister FundandHDFCCapitalBuilder isolation rooms. Cities include arms,alsocommited~25croreto Group, ITC and HUL, are also lending to 30-35 per cent,” Mayank Shah, senior aged food, hygiene products and daily
HardeepSinghPuri. PTI Fundboughtthesharesofthe Mumbai, Delhi, Hyderabad, thefund. AMRITHA PILLAY & PTI support in the battle against the pan- category head at Parle Products, told essentials.
airlines. BS REPORTER Bengaluru and Chennai, with demic, committing money, stepping Business Standard. Industry executives feel there is a
Lockdown period to Kolkata to be added next week. week depending on the demand in up public awareness programmes Industry officials noted that owing huge backlog in the market which
be excluded from Suzlon Energy’s Apollo Hospitals and Biocon will each city,” said Sangita Reddy, joint and chipping in with subsidised to ambiguities around defining essen- needs to be addressed first. “Our effort

IBC timeline: NCLAT lenders approve provide medical and testing facilities
at these rooms, with patients
managing
Hospitals Group.
director, Apollo hygiene and healthcare products.
On Monday, Sanjiv Mehta, chair-
tial items, issues on inter-state and is to ensure that consumers, during
intra-state movement of trucks, raw these trying times, are not inconve-
The National Company Law debt resolution plan charged only for medicines they take Those suspected of having Covid- man and MD, HUL, said, “Isolation material procurement and availability nienced on account of shortage and
Appellate Tribunal on Monday SuzlonEnergyhassaidallits during their stay. 19 symptoms can check into these facilities are extremely important to of workers, companies faced both pro- unavailability of essential products. We
directed that the lockdown lendershaveagreedtoitsdebt “Project Stay I is an innovative hotels, book their stays, share their curb the spread of the virus. We are duction and supply issues. have redoubled our efforts to ensure a
period, as announced by the resolutionplan.“StateBankof and scalable programme that uses medical details and escalate quickly delighted to collaborate with organi- “While earlier the Centre and states heightened level of precaution. We
government, would be Indiahasconveyedthatthe existing infrastructure to contain in case they need further attention, sations like Apollo Hospitals to help allowed movement of essential items, have implemented strict protocols for
excluded for the purpose of resolutionplanofthecompany the spread of the virus. We have Reddy said. Their vital health param- create isolation facilities. We believe there are several non-essentials which safety, personal hygiene and sanitation
counting of days for all anditscertainidentified committed to adding up to 5,000 eters will be monitored with the help this will help in augmenting the go into making an essential item. in these select factories and for our
ongoing insolvency matters, subsidiarieswasapprovedby rooms across the country and will of telemedicine and tech-based solu- quarantine system already put in Previously, trucks were reluctant to salesmen and value-chain partners,”
which are time bound. PTI it,”Suzlonsaid. BS REPORTER do so by adding 50-100 rooms every tions that will feed the data into a place by the government.” move these raw materials as there was said an ITC spokesperson.

Only 41% got essential goods Nearly 60% got essential items E-comfirmsshorton
on e-commerce (%)
Able to get
at local stores (%)
Not able to
get anything
delivery executives
Not able to Able to get
everything 5 PEERZADA ABRAR & SAMREEN AHMAD
get anything 16 everything
Bengaluru, 30 March
Not able to 17 25
31
Able to get most Despite e-commerce com-
get most items panies saying they’re resum-
25 items 18 ing their services, many of
13 35 them still face challenges in
Able to get
Not able to 15 Able to get most items delivering even essential pro-
Able to get ducts to consumers. Several e-
get most only a few
only a few commerce companies are
items

KIRANAS BEAT E-COM GIANTS

struggling to get enough of
curfew passes, besides being
Availability at offline Availability on e-commerce short on delivery personnel.
stores stabilising
DURING COVID CRISIS: STUDY channel improving “Given the strong and towns have just packed their
unconditional enforcement of bags and decided to leave,”
Percentage of consumers able to Percentage of consumers able lockdown rules by most local says Rituparna Chakraborty,
get most essential items to get most essential items authorities, the delivery per- president, Indian Staffing
Despiteasignificantgrowthine-commerce’sreachandsalesduringtheongoing sonnel were fearful for their Federation, apex body of orga-
Covid-19crisis,thelocalkiranastoreshaveemergedwinners.Thetraditional 83 68 65 security and didn’t turn up for nised staffing companies and
57 60
tradechannelthatservesover1.3billionpeople,comparedtosome120millionby work. Many of these personnel representing a little over a mil-
e-commerce,hasfaredsignificantlybetterwhenitcomestotheavailabilityof 39 40 are migrants and many have lion contract workers
essentialgoodslikerice,wheat,pulses,milk,sugarandsalt.Obstaclesfacedby gone back to their hometowns employed across 100 staffing
21 — it will be a challenge to bring company members annually.
deliverypersonnelduringtheinitialdaysofthelockdownmighthaveplayeda them back,” said Sachin Tapa- They work with some of
keyroleinitspoorserviceandasuddendipinavailabilityofessentialitemson ria, founder and chairman of the biggest e-commerce firms.
onlinechannelsalsoimpactedmany.Thesituation,however,isimprovingfast, Mar Mar Mar Mar Mar Mar Mar Mar LocalCircles, a leading com- “The Amazons of the world
withover40percentofconsumersnowabletopurchaseessentialitemsonline, 20-22 23-24 25-26 27-28 20-22 23-24 25-26 27-28 munity and consumer plat- and all these e-commerce
comparedtoonly21percentaweekago. COMPILED BY ARNAB DUTTA Source: LocalCircles form which works with various entities could have operated
ministries. by providing essential servic-
In districts across the coun- es, but they don't have enough
try, he says, many delivery hands to successfully deliver,

‘We need to recalibrate this unnecessary lockdown’ people still need to get curfew
passes. This can take days, due
to the manual processes of
granting these. Instead, he
(though) the demand has
increased exponentially,” said
Chakraborty.
While the central govern-

“
Bajaj Auto has, like most others in the your dealers, component suggests, a valid ID card and ment has asked that certain
auto industry, closed its production suppliers, and the distribution letter from the e-commerce procedures e followed uni-
operations. But Managing Director WESHOULDHAVEKEPT system, which are going through company concerned should be formly for e-commerce serv-
RAJIV BAJAJ, in an email interview to
Surajeet Das Gupta, gives his
THESENIORSHOME,CLOSED severe crises?
We can do little other than sup-
accepted by local authorities.
“Also, in different villages
ices, local authorities are fol-
lowing different rules at state,
contrarian views on the complete PUBLICSPACES,ANDALLOWED port, to the best of our ability, where major warehouses of e- city and district levels,
lockdown the government has THERESTOFUSTOKEEPLIFE dealers with interest-free credit commerce firms are located, observes Ankur Pahwa, part-
imposed. Edited excerpts:
MOVINGFORWARD” and suppliers with payments. That
is our plan.
the local sarpanchs are not let-
ting e-commerce delivery
ner for e-commerce and con-
sumer internet at consultancy

“
What do you think are the best- people either enter or go out. EY India. “Also, the staff short-
and the worst-case scenarios for How are you addressing the So, less than half of all e-com- age at warehouses is making
two-wheelers? What is your view WECANDOLITTLEBUT export market because a large merce orders have been deliv- the process of packing and
on the lockdown? SUPPORT,TOTHEBESTOF percentage of your sales comes ered in the country; the major- delivering of products a prob-
The best-case scenario is eight from abroad and that those ity of orders are still pending lem. And, a lot of delivery
weeks of disruption. Nobody OURABILITY,DEALERSWITH markets are also impacted? due to non-availability of the people have concerns about
knows what the INTEREST-FREECREDIT,AND All exports have come to a stand- resources and workers to their security and have gone
worst is. When
99.9 per cent of
SUPPLIERSWITHPAYMENTS” still owing to this arbitrary
lockdown.
deliver these,” said Taparia.
Some of these e-commerce
back to their home towns. A
lot of people are falling out of
the most vulner- companies actually have all the employment-serving
able are above 65, What are the lessons from this on the government approvals curve.” Adding: "Though e-
I see no logic in the way one should do business needed to deliver but are still commerce companies are get-
this sweeping lockdown in a coun- Do you see demand returning after Does the industry have to reduce bigger ones can hold out for a while. after this? stuck. “The situation in e-com- ting a huge amount of orders
try in which 94 per cent are below the lockdown is lifted? How do you its workforce? What are the other The most sensible thing to do would The same, timeless wisdom: Stay merce has nothing to do with and there is a greater amount
65. We should have kept the seniors see growth for this year, and how ways of trimming its sails? be to recalibrate this unnecessary focused. Conserve your resources the employers now. Because of of adoption of people using
home, closed public spaces, and much will it be affected? The smaller ones, which employ the lockdown as soon as possible. and ignore the herd mentality. the announcement of the lock- digital platforms to buy and
allowed the rest of us to keep life It is bound to be a slow and strained majority of the workers, will not be Keep building herd immunity in down, a lot of staff which was consume, there is not enough
moving forward. recovery. able to sustain this onslaught. The How are you planning to support your business and in yourselves. coming from other cities and infrastructure to deliver.”
.
NEW DELHI | TUESDAY, 31 MARCH 2020 COMPANIES 3 <

Traders seek Army help Auto volumes hit roadblock,

likely to witness 50% decline
to distribute medicines
With chemists fearing stock-out of medicines, Centre goes on a war footing
RAM PRASAD SAHU
Mumbai, 30 March IN THE SLOW LANE
Base = 100
Auto sales for March could see S&P BSE Auto Sensex
SOHINI DAS & GIREESH BABU a 50 per cent year-on-year (YoY)
Mumbai/Chennai, 30 March decline in volumes, given the 110
100 100
lockdown and decline in foot-

W
ith the country fear- fall during the second half of 90
ing stock-out of med- the month. While sales of pas- 74.56 80
icines at a retailer lev- senger vehicles (PVs) and two- 70
el, the central government is wheelers were expected to fall 68.76 60
taking steps to ensure supplies 40-50 per cent, sales of com- Mar 2,’20 Mar 30,’20
reach the last mile. Chemists mercial vehicles (CVs) are Source: BSE
associations have already sug- expected to fall 70-90 per cent.
gested that help from the An auto analyst at a domes- the limited activity is largely inventory. While the PV and tries, alternatives are limited.
Indian Army be taken to tic brokerage said the sharp fall due to the transportation of CV segments have inventory The nervousness was reflected
despatch medicines to stock- in volumes, especially in the essential goods, which is not of 12,000-15,000 units, the on the share prices of auto com-
ists and retailers in North India. medium and heavy CV seg- enough to negate the overall same in the two-wheeler cat- panies, including large
Top government officials ment, came on the back of a costs, he added. egory stands at 700,000. exporters such as Bajaj Auto
and industry associations have significant number of cancel- While most analysts expect CARE Ratings estimates the and TVS Motor.
joined social media groups to lations in the last two weeks. India to follow the auto sales value of Bharat Stage (BS)-IV The BSE Auto index was the
monitor the situation closely Given the uncertainty relat- trend in the US, which indicate inventory (of two-wheelers) second biggest loser among
and take swift remedial action. ed to Covid-19 and the impact a 50 per cent in decline in at ~4,600 crore. sectoral indices on Monday,
Jagannath Shinde, presi- of the same on demand over March, Kapil Singh and While the Supreme Court shedding 5.44 per cent. Mitul
dent of the All India the next six months, it does not Siddhartha Bera of Nomura has given a 10-day relaxation Shah of Reliance Securities says
Organisation of Chemists and make business sense for fleet believe April would be worse. that allows dealers to sell their concerns related to the liquida-
Druggists (AIOCD) — a body operators to order more vehi- Citing China’s example, which stock by April 24 (lockdown tion of BS-IV inventory, coupled
that represents 850,000 cles, he added. saw PV sales fall 20 per cent in ends on April 14), it has restrict- with muted volume expecta-
chemists across India — said While there is no shortage of raw material in the country, distribution has become a major Utilisation levels had January and 80 per cent in edsalestoonly10percentofthe tions for March, led to the sell-
the situation in Haryana, challenge because of the nationwide lockdown declined to 50-60 per cent pri- February, they expect sales to unsold BS-IV inventory, which off in auto stocks. Most broker-
Punjab, Himachal Pradesh, or to the lockdown, caused by decline 10-20 per cent in March is not enough, say analysts. ages expect revenues to fall
and Chandigarh is grim and units in clusters like Baddi and uation. “The government will as stockists are not able to req- the slowdown, and may see a and 50-80 per cent in April if Further, given the slow- 30-40 per cent and earnings by
supplies at a retailer level may Sikkim had migrant personnel connect with district collectors uisition,” said a Gujarat-based further dip. While most of the the lockdown is extended. down in overseas markets, 50 per cent for 2020-21, if the
last for the next 10 days or so. manning the operations,” said to ensure free passage. In fact, drugmaker. transport sector has been shut, The other issue is that of especially oil exporting coun- lockdown is extended.
“We have suggested that an industry insider. the home secretary has already Panic buying by patients
the government take the help The problem with man- held meetings with all state has not helped either. Punjab
of the Army if needed to power is not only in chief secretaries. Chemists Association has writ-
ensure medicines reach stock-
ists.
Airlifting of
courier and deliv- Top government
ery services, but officials and
also at a shop level. industry
The DoP secretary
has written to the
state chief secre-
ten to the Drug Controller
General of India seeking time-
ly intervention.
Mistry group eyes $1 bn Saudi Aramco
plans to sell
by pledging Tata stake
medicines In Kolkata’s Bagri associations have taries as well,” said a Tamil Nadu’s chemist wing
has started
in some
market — a major joined social
hub for wholesalers media groups to
senior government
official. He added
said the state has stock till April
8. K K Selvan of Tamil Nadu
pipeline stake
areas. and distributors of monitor the that cargo planes Chemists & Druggist Associ- SaudiAramco,theworld’s
medicines — has situation closely largestoilproducer,iswei-
CORONAVIRUS There
one-month
is
10-15 shops open of and take swift
are also on standby
at the 11 airports.
ation said interstate trans-
portation needs to pick up. He
The Shapoorji Pallonji Group,
controlledbybillionairePallonji
Mistry is trying to use his 18
per cent stake in Tata Sons,
of debt as of September 30,
according to rating assessor ghingthesaleofastakeinits
PANDEMIC stock lying the 500-odd stores. remedial action Manufacturers, said it has taken measures to Mistry and his family, is in pre- which is estimated to be worth ICRA. The company planned pipelineunittoraisemoney
with the The govern- too, are working open more than 80 per cent of liminary discussions to borrow as much as $14 billion, as the asset sales, including solar pow- amidaslumpincrudeprices,
clearing ment is leaving no stone round the clock to ensure the pharmacies in the state. as much as $1 billion to repay Covid-19 pandemic stalls eco- er plants and road assets, in a accordingtopeoplefamiliar
and forward (C&F) agents,” unturned to salvage the situa- medicines despatched from Rajiv Singhal, general sec- maturing debt using part of its nomic activity across the world. bid to reduce debt by as much withthematter.Aramcomay
said Shinde. tion. Top bureaucrats from the factories reach the logistics retary of AIOCD, said, “If the stake in Tata Sons as collateral, However, he may face a hurdle: as ~4,000 crore, a person with needtoraisecashthisyearas
The situation is severe in Department of Pharma- hubs. “For example, manufac- situation continues, we can said people with knowledge of the shares in the unlisted Tata direct knowledge of the matter itconfrontsahistoricroutin
North India as most of the ceuticals (DoP), Ministry of turers of insulin have formed expect shortage in the next 10- the matter. holding company are closely said in August. oilpricesandaburgeoninglist
logistics operation was Health, National Pharmac- groups with their distributors 15 days.” Mistry,whosesonCyruswas held and illiquid. A legal battle Founded in 1865, the Sha- ofspendingobligations.The
manned by migrant labourers eutical Pricing Authority, and are taking real-time One of the C&F agents for oustedaschairmanofTataSons between Tata Sons and Cyrus poorji Pallonji group, which has companyhasreaffirmedits
from Uttar Pradesh and Bihar. Central Drugs Standard updates,” informed an indus- various drug majors, including in 2016, is the biggest single Mistry following his ouster may built some of Mumbai's land- commitmenttopayout$75
Supplies from Himachal Control Organization have try executive. Cadila Healthcare and MSD shareholder in India's largest also deter potential creditors. marks, including the RBI build- billionindividendsthisyear
Pradesh (where Baddi is a man- joined social media groups While there is no dearth of Pharmaceuticals, has said it conglomerate, and is seeking a A representative for Shap- ing, is still better placed than andalsoneedstomakethe
ufacturing cluster) are also low, (WhatsApp) with pharma raw material in the country, has received stocks from other loan as the coronavirus out- oorji Pallonji Group declined to most of its corporate peers, with firstinstalmentforits$70
claimed sources. “Most facto- industry bodies, including for- distribution has become a states, but moving smaller con- breakdelaysaplantosellassets, comment. total revenue of $7 billion for billionacquisitionofastakein
ries there are functioning with mulation makers and bulk major challenge. “We are signments to various districts the people said, asking not to Mistry's Shapoorji Pallonji & the year ended March 2019. chemicalsproducerSaudi
50 per cent manpower. The drugmakers to monitor the sit- unable to despatch the stock has become onerous. be identified. Co had ~9020 crore ($1.2 billion) BLOOMBERG BasicIndustries. BLOOMBERG

‘IT industry adopting new First VRS

tranche of
methods to tackle crisis’ BSNL, MTNL
The world is heading towards a
‘new normal’ due to Covid-19,
disbursed
said Chief Executive Officer and Amid the coronavirus (Cov-
Managing Director of Tech id-19) gloom, there is some
Mahindra (TechM), C P GURNANI. reason to cheer for employ-
In an interaction with Bibhu ees of Bharat Sanchar Nig-
Ranjan Mishra and Debasis am (BSNL) and Mahanagar
Mohapatra, Gurnani said by Telephone Nigam (MTNL).
almost forcing businesses to This is because the Centre
work from home, the has started disbursing the
information technology ~5,000 crore first install-
industry has learnt a lot from ment of the voluntary retire-
this event. Edited excerpts: ment scheme (VRS).
An official said, “All dues
How has the Covid-19 and pending salaries of
affected the IT industry? Is BSNL and MTNL staff have
the industry able to serve been paid and the first
clients working from home? tranche of the VRS package
Asofnow,Indiahasbeenvery worth ~5,000 crore has been
lucky.Eventoday,weare released.” It is learnt that the
talkingabout1,100cases salary for March will be giv-
thoughit’struethatour en to the employees of BSNL
testinginfrastructureisnotas and MTNL on April 3.
strongastheUS.Everyoneis With payment of the
alsoprayingthatwithrising How is it going to be more it benefit TechM, which has VRS package, the monthly
temperature,thepropagation challenging in the ‘post good exposure to the sector? staff cost of BSNL stands at
oftheviruswillbereduced. Covid’ environment? I am not denying this. But, ~600 crore, and for MTNL, it
So,wearenotexpecting Therealityisthegovernment everyone is in crisis. Keeping is ~45 crore. On October 24,
furtherlockdownbut agencieshavenowofficially human capital intact and the the Centre approved a pack-
probablyanewnormalwillbe declaredrecession.Indiahas lights on are important age of ~70,000 crore for BS-
kickedin.Thenewnormalis, spentonly0.3percent(of themes. NL and MTNL and also drew
peoplewillkeepsafe GDP)andtheWorld up a timeline to merge them.
distanceandthey Bankhassuggested Is the sales team still Monetising real estate
willbealotmore countriestospend chasing deals on ground or assets worth ~37,500 crore is
hygienicthanever upto6-7percent.I have everything stopped? part of the overall relief pack-
before. think,thereis Everyoneistalkingto age. It would be used to retire
headroomtokick- everybody.Noconversation debt, upgrade networks and
Is there anything C P GURNANI starttheeconomy. hasstopped.Infact,the offer a VRS aimed at reducing
that the industry Consumers’ numberhasincreased. the firms’ employee strength
CEO & MD,
as a whole has Tech Mahindra confidencecomes However,pleaseremember by half. The relief package
learnt? backveryfast. thatyouarenottalkingto includes a sovereign bond
I divide this into three Infrastructurespendingwill organisations,youareonly issue worth ~15,000 crore, to
chapters. The first one is the increasethecashflow. talkingtoindividuals.They be serviced by the two telcos.
period ‘before Covid’, second ThoughtheB2Bbusinesses (clients)arenothavingtheir Also, BSNL and MTNL
is ‘during Covid’ and third is willtakelittlelonger(tocome boardmeetingsorcommittee will be allotted 4G spectrum
‘after Covid’. We knew that backtoshape),Ithinkthe meetingnow.Everyoneisin at an administered price,
we all have to become doomsayersarebeingvery fire-fightingmode.Overall,I pegged at the 2016 auction
healthy, but we had been negative.Itislessthanayear amproudofmyassociatesfor value. MEGHA MANCHANDA
ignoring it. We knew that we cycleofrecovery. thewaytheyhaverallied.
have to reduce pollution. OfficesinthePhilippinesand
During the pandemic, many Sectors such as hospitality Indiaarenotworking,but
things have become reality. It travel and aviation have noneofmycustomershas RIL to consider
was an opportunity for
TechM and others to take
already taken a huge hit. Are
you hearing anything from
beenimpacted.
fundraising
those decisions, which we
never took. We have now
clients?
Hospitality sector is not a big
Are all employees working
from home? How has it
on April 2
introduced many sector, with less than 3 per impacted productivity? Reliance Industries (RIL) on
collaborative tools and cent of our revenue coming Almost90percentorour Monday said a board meet-
launched workstation as a from this sector. Travel and employeesareworkingfrom ing has been scheduled to
service, remote diagnostics hospitality has also seen home.Theremaininggoto consider fundraising by issu-
networks, content delivery these challenges in the past. officebecauseofdata ing listed, secured/unse-
platforms and omnichannel Besides, this sector has securitynorms.So,the cured and redeemable non-
retail experiences and so on. always been the first one to densityislessthan6percent convertible debentures on a
Many of these platforms get impacted. But, the sector inouroffices.Workfrom private placement basis in
were ready though, we never also bounces back. homehasactuallyhelpedin one or more tranches. The
thought of launching those. enhancingoverall fundraising proposal is to be
Now, they are becoming a We’ve seen more spending productivity.Weareusing considered at board meeting
reality. in the telecom vertical. Will varioustoolstomeasureit. on Thursday. BS REPORTER
4 ECONOMY & PUBLIC AFFAIRS
>
NEW DELHI | TUESDAY, 31 MARCH 2020 1

RBI notifies special G-Secs under ‘fully accessible route’

FPI limit in corporate bonds raised; special CORPORATE BONDS inclusion in global bond indices. This fully for non-resident investors, apart and size. For example, according to
would facilitate the inflow of stable from being available to domestic the criteria of some of these indices,
series to enable inclusion in global indices (Amount in ~ trillion)
foreign investment in Indian bonds.” investors as well,” Sitharaman had in each issuance should be $400 mil-
Current FPI limit 3.17 The RBI did not say what per- her FY21 Budget speech. lion at least, and the total quantum of
ARUP ROYCHOUDHURY liquidity in the overseas markets. centage of the ~8-trillion gross bor- The RBI said all new issuances of thebondsshouldbeatleast$5billion.
New Delhi, 30 March The RBI also raised upwards the Revised limit for 4.29 rowing for FY21 will be through the G-secs of 5-year, 10-year, and 30-year Ministry officials have had sever-
FPI limits for corporate bonds to 15 April-September special securities, but sources said it tenors from FY21 will be eligible for al meetings with the RBI, as well as
The Reserve Bank of India (RBI) on per cent, from 9 per cent, for 2020-21. 2020-21 could be anything between 15 per investment as “specified securities”. the administrators of the global bond
Monday said it will issue certain However, the overall FPI limit in centand20percent.Thismeansany- Some of the global bond indices indices. They have also met banks
series of government securities G-secs of 6 per cent has not been
Revised limit for 5.41 thing between ~1.2 trillion and ~1.6 that could embrace Indian G-secs, if which may act as potential market
(G-secs) under the “fully accessible changed as yet. “The revised limits October-March trillion could be borrowed through all the conditions are met, include makers for the bonds.
route”. These special securities will for FPI investment in G-Secs and 2020-21 these bonds without FPI restrictions. the Bloomberg Barclays Global Government officials as well as
attract no foreign portfolio investor state development loans for 2020-21 The RBI notification follows a Aggregate Index, FTSE Russel Asia bond market analysts said being part
(FPI) limits until maturity and are the (FY21) will be advised separately,” the for non-resident investors. These The ministry tweeted: “This will Budget announcement by Finance Pacific Government Bond Index, and of the global bond indices would help
firststeptowardsIndianG-Secsbeing RBI said. “The RBI shall notify the G- securities will continue to be eligible substantially ease access of non-res- Minister Nirmala Sitharaman regard- JPMorgan Government Bond Index- Indian G-secs attract large funds
listed on global bond indices as the secs that shall be eligible for invest- for investment by residents,” the cen- idents to the Indian government ing the same. “Certain specified cat- Emerging Markets. These indices from major global investors,
Centre looks to attract access cheap ment under the fully accessible route tral bank said in a circular. securities markets and facilitate egories of G-secs would be opened have conditions which favour scale including pension funds.

N CORONAVIRUS EFFECT N

Direct tax shortfall likely Exports stare at hard March;

US, Europe orders disappear
to touch a 20-year high SUBHAYAN CHAKRABORTY
New Delhi, 30 March COVID-19 BLOW
Amount ($ billion)
lockdown. More importantly, smaller busi-
nesses making up the majority of the sector
continue to be harassed by local authority
I-T dept estimates mop-up of around ~10.7 trillion this fiscal year After a sudden growth in February, exports
are fast heading towards a lengthy period of
and police despite the commerce depart-
ment saying exports are a priority sector,” a
SHRIMI CHOUDHARY
New Delhi, 30 March
DECLINING TREND focus of the government is now
not on the economic situation
contraction as buyers cancel major
shipments in foreign exchange (forex)
senior functionary of the Clothing Manufa-
cturers Association of India, said.
*Netcollection (~ trillion) but to arrest the Covid-19 out- earning sectors, fear exporters. While a final notification from the home
9.57

I
ndia’s direct tax collection break, which has halted every “We expect contraction in March. With department regarding which businesses
for the current fiscal year activity and eroded billions. Tax major economies continuing to see sharp can remain open has assured the sector,
ending March 31 is likely to 6.75 7.30 experts, too, feel the priority is rise in cases, the cumulative fall in demand these small businesses remain worried.
see a whopping shortfall of not fiscal math but to contain would spill over into April, causing a bigger Coupled with a lack of liquidity with
about ~1.5 trillion compared to spread of the global outbreak. contraction,” Ajay Sahai, director general export credits having contracted by about
theRevisedEstimates(RE).This “Atthispoint,theimmediate of the Federation of Indian Export 23 per cent in 2019 (January-December)
is set to take place for the first focus is to arrest the Organisations, said. even before the coronavirus outbreak, fac-
time in at least two decades, pandemic and not the A string of order cancellations by tory units look set to make major losses.
derailing the government’s fiscal deficit. Rather, the major clients in the US and Europe — “While the three-month loan moratori-
fiscal deficit goals.
Dec 2019 Jan 2020 Mar 18* Centre and states two major centres of the coronavirus um and 75 basis points cut in interest rates
According to senior offi- 0.7 5.5 5.3 should lend maximum outbreak — is expected to massively would help exporters, the sector has been
cials, the income tax depart- to support venerable
ment estimates total collection
Growth YoY (%)
businesses, especially
CORONAVIRUS hit sectors like engineering goods and
apparel. More than 40 per cent of
the worst hit by the outbreak. The morato-
rium should be extended at least to six
small and medium PANDEMIC India’s engineering exports land up
*As of March 18, total direct tax collection
to be between ~10.5 trillion and stood at ~9.57 trillion months to one year, since the global econ-
~10.7 trillion, against the Target for fiscal year 2019-20 is ~11.7 trillion enterprise and in mak- in both markets, while Indian appar- Totalexports Totalimports omy is set to be slipping into a recession,”
Cumulative
*Net collection: Direct tax collection after refunds
revised target of ~11.7 trillion. Source: I-T department ing them solvent,” said Sudhir el is already under threat from cheaper Ravi Sehgal, chairman of the Engineering
inFY20 inFY20 tradedeficit
However, the exact figures Kapadia, national tax leader, EY BangladeshiandVietnamesealternativesin Export Promotion Council, said.
may come by April 1. The government had set decline of 5.3 per cent over the India. “The government should their primary export destination of Europe.
sofar so far inFY19sofar
Shortfall as a percentage of direct tax collection target of corresponding period in the also focus on relevant sectors “Thisindustryneedsimmediatereliefin 292.9 436.06 143.11 Policy delay
RE for 2019-20 (FY20) is also ~13.5 trillion for this fiscal year previous year. such as hotels, tourism enter- terms of faster clearance of banking and Source: Ministry of Commerce & Industry As a result, total exports again run the risk
likely to be the highest in (FY20) in the Budget Estimates Sources said the tax depart- tainment and aviation, which packing credit, late realisation of export of missing the government’s internal target
recent history. At the estimated (BE), a 17 per cent rise over 2018- menthadstartedmakingefforts are completely shut. All in all, bills, and raising of advance limit to 25 per of $350 billion. India’s total outbound trade
level, it would be from 8.7 per 19. However, during the year, after seeing a drop in the third there is no way any country, cent without any collateral to ease working month,exportsgainedoveralowbase.Also, tally stood at $331 billion in 2018-19. It was
cent to 10.2 per cent of the RE businesses and corporates saw quarter (October-December) including India, can hope for capital constraints,” A Sakthivel, chairman, global oil prices spiked, allowing India to the first time that exports remained above
in FY20. It was 5.3 per cent in significant decline in demand. advancetaxcollectionpayment. taxes and improving fiscal Apparel Export Promotion Council, said. pullinmorereceiptsfromthesaleofrefined $300 billion for two consecutive years.
the previous year. During the This led to job losses and cut in In the third quarter, corporation math. Even if the fiscal deficit Also,thereshouldbenopenaltyonadvance petroleum,”agovernmenttradeexpertsaid. On the other hand, the government is
2008-09 crisis, it was 7.5 per the investment targets. tax mop-up dropped by 5 per widened 1-2 per cent, the focus forex booking and deferment of equated gearing up to announce the extension of
cent of the RE. Further, change in corporate cent. In January, the total col- should be on the survival of monthly instalments by six months to start Lockdown blues the current five-year foreign trade policy
Officialsattributedtheshort- tax structure, coupled with the lection stood at ~7.3 trillion. business,” said Kapadia. with, he added. Exportshavebeenrockedbychroniclabour (FTP) by six months, sources said.
fall to the pandemic. But even Covid-19 pandemic, has In the fourth quarter Sanjay Sanghvi, partner, Exports had caught a rare breather in shortage, arising from a massive exodus of Commerce and Industry Minister
the earlier months of the year worsened the situation. (January-March), advance tax Khaitan & Co, said: “This unfor- February, rising after six months, leading to workers to the rural hinterland. “This issue Piyush Goyal is likely to announce the same
had turned out to be bad for The government had to payment by corporates further tunate development and the hopes of a recovery period beginning soon. continues as people are afraid of not being on Tuesday. The updated FTP was
direct tax collection. revisetheBEdownwardsto~11.7 slipped to 10 per cent. complete lockdown have But, policymakers are not convinced. “Last able to survive for the entire duration of the expected to go live from April 1.
Sources said the Vivad se trillion in the RE on account of The shortfall may widen the derailed the tax collections tar-

Treat oil output as essential service: Regulator to states

Vishwas scheme, expected to reduction in the corporation tax Centre’s fiscal deficit, which is get. This fiscal year will be an
give a leg-up to collections, has rates. This is expected to hit the pegged at 3.8 per cent of GDP in exceptional year for the govern-
not seen a single big entry so exchequer by ~1.45 trillion and FY20,saidagovernmentsource. ment in terms of low tax collec-
far. Since the scheme has been slow down the economy. Fiscal deficit surpassed the tion and growth. However, I SHINE JACOB Exploration Company (HOEC). tial,” went the letter. 11 oil and gas blocks are being
pushed to June, people are like- According to official figures, budget target for FY20 by 28.5 think the first priority for the New Delhi, 30 March Sources say Rajasthan and In addition, the DGH says it offered under this round.
ly to come forward only after the tax office managed to garner per cent in absolute terms by Centre is now to contain the Assam have given clearance, has merged the sixth and sev- Following the lockdown, a
the lockdown is lifted. ~9.57 trillion till March 18, a January itself. However, the spread of this pandemic.” The directorate-general of but those of Tamil Nadu and enth rounds of Open Acreage majority of firms were
hydrocarbons (DGH) has writ- Maharashtra are yet to give a LicencingPolicy(OALP)bidsfor reportedly forced to cut pro-
ten to major producing states to final nod for movement of oil oil and gas blocks. “In view of duction by a tenth as customers
Fitch cuts GDP growth Ind-Ra cuts FY21 growth Nomura lowers 2020 GDP exempt its production from the company staff and material. the lockdown, the EoI (expres- refused to take supplies.

forecast to 4.6% forecast to 3.6% growth forecast to -0.5% ongoing lockdown’s ambit, and The letter had cited a February sion of interest) cycle for “The private sector, too, is
classify the commodity as an 28 notification that categorised RoundVI(endingMarch31)and facing such problems. A lot
Fitch Solutions on Monday slashed its India Ratings (Ind-Ra) on Monday cut its Withnearly75percentoftheIndian essential service. any oilfield work as a public util- Round VII (ending July 31) shall of consumers and factories in
estimate for India's GDP growth in 2020-21 FY21 growth forecast to 3.6 per cent amid economyinlockdown,Nomurahaslowered Rajasthan, Assam, Andhra ity service. “Petroleum and nat- stand merged. A bidding round Assam are not taking sup-
to 4.6 per cent due to weaker private Covid-related worries. It has assumed that 2020GDPgrowthforecastto-0.5percent Pradesh, and Gujarat are all ural gas are essential commodi- would be launched based on plies because of business dis-
consumption and contraction in a full or partial lockdown will continue till YoY from4.5percent.“Weexpectgrowthto major producing areas. The ties under the laws. Domestic EoIs received till July 31,” says ruption. However, we are
investment amid coronavirus outbreak. end of April and economic activities will be slidefrom4.7percentYoYinQ4CY19to3.1per move will help Oil and Natural petroleum crude and natural the DGH on its website. continuing production from
The growth estimate for FY compares with a restored only after May. It expects India to centinQ1CY20andfallto-6.1percentin Gas Corporation (ONGC), gas production is a priority area The final date for bidding our fields,” said P Elango,
4.9 per cent forecast in the current 2019-20 clock a 2.3 per cent growth for Q1FY21, down Q2CY20,”saidSonalVarma,MDandchief Vedanta, Reliance Industries, for the country. Hence, unin- under the fifth round of OALP is managing director of
that ends on Tuesday. PTI from 4.7 per cent forecast in Q4FY20. PTI IndiaeconomistatNomura. BS REPORTER Oil India, and Hindustan Oil terrupted operations are essen- scheduled on April 16. A total of Chennai-based HOEC.

CRISIL SME TRACKER ‘Handling of lockdown brings back DeMo memories’

Chemicals manufacturers
brace for drop in revenues JEAN DRÈZE, a renowned Belgian-
born Indian economist, says migrant
hard to count on their cooperation
from now. The new order will be hard “MOST OF THE
fromtheCentre,including
compensationsforlossesarisingout

SMALL AND MEDIUM ENTERPRISES (SMEs) engaged in

workers are not feeling safe and that is
why they are desperate to go back
to implement.
MEASURES THE oflowGSTcollection.Howwould
theyincursuchhugeexpenditures?
the manufacture of chemicals are expected to be home. He tells Indivjal Dhasmana Why do you say that ~1.7-trillion FM ANNOUNCED This requires urgent initiatives from
hit hard as the industry braces for a decline in the Centre’s new order that labour package, announced by Finance WILL TAKE the Centre, for instance, paying GST
volume and realisations in the next fiscal year
(2020-21), due to the Covid-19 pandemic.
should stay where it is will be difficult
to implement. Drèze was part of
Minister Nirmala Sitharaman,
is inadequate?
EFFECT dues, releasing food stocks, acceler-
ating the relief package and special
SMEs account for 30-35 per cent of the industry academicians and activists who First, it’s not ~1.7 trillion — maybe AFTER THE creditfacilities,andrelaxingtheFiscal
(in value terms), and are clustered around Gujarat, recently wrote to the Centre about the ~1 trillion, after you discount the LOCKDOWN. Responsibility and Budget Manag-
Maharashtra and the Delhi-NCR region. Gujarat
alone houses over 400 chemical units.
situation of the migrant workers.
Edited excerpts:
padding and creative accounting.
Second, the transfers to poor house-
BY THAT TIME, ementAct.Thereisn’tmuchthestates
can do in a hurry, on their own, to
In calendar year holds are too small. Households with- MILLIONS OF mobilise additional resources.
2020, the price of Whydoyousaythedecisiontolock out a ration card will get just ~500 per PEOPLE WILL BE
Brent crude oil is
expected average SHARE OF SMES IN downtheentirecountrywasnot
takenwithproperplanning?
month if they are lucky to be among
the recipients of cash transfers to Jan-
STARVING UNLESS Thesupplyisinsufficient.What
shouldthegovernmentdotonot
$35-40 per barrel, CHEMICALS SECTOR The term ‘lockdown’ is misleading. DhanYojanaaccounts.Itisimpossible THEY HAVE ACCESS allowpricesofessential
compared with $64 It’s more like a curfew, or an attempt- forafamilytoliveonthat.Third,there TO EMERGENCY commoditiestorise?
in calendar year
2019, as multiple
ed curfew. The Prime Minister said so
in so many words on March 22. Few
is no provision in the package for
emergencyrelief,whetherformigrant
ASSISTANCE” Once again, releasing food stocks will
help. Restrictions on the production,
SMEs
headwinds coalesce countries, if any, have such a harsh workers or for those who fall through harvesting, processing, transport and
— a global
slowdown, output
30-35 %
lockdown. The lack of planning has
made things worse. There was no
the cracks of other measures. That is
the biggest priority right now.
marketingoffoodshouldberemoved.
It is startling to hear that in some
war between major mention of any relief measures in the places people have been prevented
crude oil producers, Large players lockdown announcement. The crisis Isthereanyissuewiththepackage Paytm or even ATM cards. To with- the package? from working in the fields or going to
and demand
contraction 65-70 %
of migrant workers also took the gov-
ernment by surprise. The lack of plan-
relatedtothepublicdistribution
system(PDS)?
draw cash from their bank accounts,
they depend primarily on bank coun-
The biggest gap in the finance minis-
ter’sreliefpackageissupportforemer-
theforest.Evenfromthenarrowpoint
ofviewofcheckingthevirus,it’sprob-
following the ning, followed by ad hoc damage con- The big issue is whether the PDS is ters and their outposts, called gency assistance to people at risk of ably better for them to be out there
Covid-19 pandemic, trol, brings up memories of going to hold. With the economy at a business correspondents. But the hunger. Most of the measures she than in their overcrowded homes.
Source: CRISIL Research
to name some. demonetisation. But this situation is standstill, state administra- business-correspondent announced will take effect after the
In the domestic much worse. tions under stress and public system is a health hazard lockdown. By that time, millions of Doweforegofiscaldeficittargetsfor
market, the employees scared of infec- at this time, because it is people will be starving unless they nowandworkonnewamedium-
demand for chemicals is expected to moderate Havethegovernmentsmismanaged tion,itmaybedifficultforthe based on fingerprint have access to emergency assistance. termfiscal-consolidationroadmap?
owing to slowdown in demand from key end-use theissueofthemovementoflabour PDS to function or rather to authentication.Ifbusiness Evenafterthelockdown,manypeople Yes, I think so. When people are about
industries such as automobiles, consumer andotherpoorpeople?Willthe function well. Any gap in the correspondents are out of will be excluded from the relief pack- to die of hunger, you have no choice
JEAN DRÈZE
durables, textiles and construction. Centre’sneworderthatlabour chain could expose large work, there is going to be a age because they don’t have, say, a but to step in big time. In any case, the
Thus, along with a drop in volume, the SMEs are shouldstaywhereitisandthestates numbersofpeopletohunger. Economist big rush to the banks as rationcardoranAadhaar-linkedbank normal rules of fiscal prudence do not
looking at a fall in realisations owing to lower musttakestepstoensuretheir Anotherproblemismanypoorpeople soon as the lockdown is relaxed. The account. Emergency aid could take apply in a situation like this. When
prices of inputs such as crude oil, as the cost well-beingtherebeeffective? are still excluded from the PDS. banks will be jammed, much as hap- different forms such as feeding cen- the lockdown ends, India will be in a
savings will have to be passed on to consumers. To be fair, few people anticipated the pened after demonetisation. If the tres, distributing take-home rations, situation of huge excess capacity and
Furthermore, with recession imminent in the migration crisis. Migrant workers What about issues with people are unable to withdraw mon- andemergencyfundswithgrampan- lack of effective demand. This is the
United States and Europe, exports are expected to should have been given time to reach cash transfers? ey from their accounts, what is the chayats. Many states are working on sort of situation that calls for a large
take a hit, too. Therefore, the revenues of their homes, or support to stay in Cash transfers can help in this situa- useofcashtransfers?Allthiscanprob- this, but they need central resources. fiscal stimulus. Many countries have
chemicals manufacturers are expected to decline in place. The Centre did neither, precip- tion, but most people underestimate ably be sorted out, but it requires care- launched much larger fiscal stimulus
2020-21. Any expansion in operating margins is itating a humanitarian and health cri- the challenge of disbursement. I have ful planning, and it does not seem to Statesareexecutingtheirown packages than India, some of them
expected to be offset by lower top line growth sis. To make things worse, many not seen any serious discussion on it be on the government’s radar screen. packages.However,theyarelimited as large as 10 per cent of GDP. The
because of weak demand. migrant workers were dealt with in sofar.Thepoorgenerallydoesn’thave inscopebecauseofaslowing Indian economy cannot dispense
an authoritarian manner, making it access to fancy payment systems like What else should be done beyond economyandhencelesstransfer with a shot in the arm.
.
NEW DELHI | TUESDAY, 31 MARCH 2020 BS-VI: A NEW REGIME 5 <

Leapfrogging to cleanest fuel in the world

As India shifts to BS-VI emission norms from tomorrow, Business Standard ‘Therewillbeapricehike;auto
looks athowcompaniesraced againsttime to switch over, and theroad ahead
companies can’t sell at a loss’
Amid the nationwide lockdown to check the Covid-19
spread, India will quietly transition into BS-VI, the
most stringent emission standard for the automobile
industry anywhere in the world. RC BHARGAVA,
chairman of Maurti Suzuki India, speaks to Arindam
Majumder about the learning, challenges, and scope
of a price hike in a bruised economy. Edited excerpts:

DoyouthinkthatBS-VIdeadlineshouldhavebeen
extendedbecauseofthelockdown?
Iamoneoftheinterestedpartiesinthis.Somyview
isnotanobjectiveone.Butthefactiswehad
completedthetransformationtoBS-VIbyaboutthe
beginningofFebruaryandmanufacturingofBS-IV
hadceased.Tillthislockdownstarted,wehad
disposedofabulkofBS-IVvehicles.Therewere
somevehicles,whichhadbeenpaidforbutwhich
hadtoberegisteredanddelivered.Thenumberof
unsoldvehicleswasverysmall,maybe40-50for
“OMCs ARE READY WITH THE FUELAND THAT
Maruti.Wehadexpectedthatbeforethelockdown IS ALL WHAT IS NEEDED. STATES COULD HAVE
in10daysorless,wewouldbeabletosell.Wewere NOT RAISED THE ROAD TAX OR HELPED IN
hopingthatbecausethereweresomedistricts
wheretherewasnolockdownwewillbeabletosell.
LOWERING GST TO OFFSET THE COST OF BS-VI”
Now,Isupposewewillbeleftwithacertainnumber R C BHARGAVA, Chairman, Maruti Suzuki India
ofvehiclesthatarenotevenregistered.
consumerfinancebecamemuchmore
HowasIndia’slargestcarmanufacturerdidyou disconcerting.Theincreaseinacquisitioncostin
undergothetransformation? Indiaisbyfarthehighest,comparedtodeveloped
Wehadtodothemaximumamountofworkbecause countries,whetheryoutakeJapanorKorea.
wehadthemaximumnumberofmodelstobe Value-addedtaxinEuropeis19percentbuttaxation
changed.Itwastough.Ithinkeveryfirmfeltthatthe forbigcarsinIndiaisaround60percentwithper
timethegovernmentgavewasverytightandthatit capitaincomeafractionofwhattheyareinEurope.
maynotbepossibletogetalltheengineeringwork Howdoyouexpectsalestogrowathighrates?

Refinery to outlets:
done.Wehadsuggestedtherecouldbetwostagesof
WHAT BS-VI MEANS this—onerelatingtonewmodelandanotherfor
existingones.Thatwasnotaccepted.So,weputall
Doyouthinkcarcompaniesabsorbthecost
becauseofthecurrentmarketcondition?
FOR FUEL theresourcesfromusandSuzukiinJapanintothe Carcompaniesdon’thavemuchleewayinthis.No

Trackingthejourney
task.Wewereabletocompletethetaskofhandling businesscanaffordtosellbelowcosts.Nobusiness
BS-IV BS-VI some16or18modelswellbeforethedeadline. cansurvivewithoutmakingprofit.Withoutprofits,
PETROL youdon’thavethemoneyformaintenance,
Willitbepossibleforyoutoincreasetheprices modernisation,engineering,orimprovisation.
Sulphur inthecurrentsituation?
(Perparticulate matter) 50 10
AMRITHA PILLAY
Mumbai, 30 March THE PROCESS RON* 91 (95**) 91
EvenbeforetheCovid-19problem,therewasa
declineinsalesthisyearinsteadofaprojected
Istheecosystemreadyforthetransition?
Theoilmarketingcompaniesarepreparedwiththe
Petrol, ATF, diesel put in doubledigitgrowth.Besidestheincreaseinprice fuelandthatisallthatisneeded.Iwouldhave
A young woman in a Port Blair laboratory has DIESEL duetoBS-VI,somestateshadalsoincreasedtax.So, thoughtthatrecognisingthehighercostofBS-VI,
spent several weeks testing fuel samples. The Hydrotreaters Sulphur and fuel Sulphur acustomerhadtopaymuchhigherpricestobuy stategovernmentscouldhavenotraisedtheroadtax
laboratory belongs to the Indian Oil for catalytic are separated (Perparticulate matter) 50 10 carsthanhewasdoingearlier.Availabilityof orhelpedinloweringGSTtooffsetthecostofBS-VI.
Corporation (IndianOil), which has been chemical
carrying out the bone-drying of fuel tanks in Converted to Cetane 91 51
process

THE CHANGEOVER
remote places in the country so they would be
ready to receive BS VI-compliant fuel.
“We had to be ready much before the April 1
deadline. It was a race against time,” said Sanjiv
Hydrogen
sulphide in
1991 Vehicle emission norms
‘ForBS-VI,lotofcoordination
wasneededwithcarmakerstoo’
gas form
Mazumdar, executive director-quality check, at introduced
IndianOil. The new norms require the sulphur
content in the fuel to be a maximum of 10 parts
per million or ppm. For over three years now,
2003 RA Mashelkar Committee
Petrol report approved
Mazumdar’s team has been the final link in a Vehicles and the fuel they run on have to switch over
long process chain, which has made the delivery Diesel to BS-VI emission norms before April 1. SANJIV SINGH,
of the cleaner fuel possible. 2004-05 BS-III in NCR, 13 cities chairman of India’s largest refiner and fuel retailer
Like IndianOil, other state-owned oil mar- ATF implemented Indian Oil Corporation (IOCL), speaks to Jyoti Mukul &
keting firms Bharat Petroleum Corporation Shine Jacob about the three-year journey of transition.
(BPCL), and Hindustan Petroleum Corporation 2005-2010 BS-II implemented Edited excerpts:
(HPCL) have several testing sites to make sure ILLUSTRATION: AJAY MOHANTY
nationwide
that the fuel in their retail outlets is BS-VI-ready. How was the shift to BS-VI emission norms?
The three firms have spent close to ~35,000 crore tank of a retail outlet. We began the transition to BS-IV in 2010 and com-
to upgrade their refineries for producing BS-VI- Once the product is received through a mul- 2004-2010 BS-IV implemented pleted it in 2017. For BS-VI, we started supplying the
compliant fuel. ti-product pipeline at a terminal, it is separated in NCR, 13 cities fuel in Delhi two years ago and last year covered the
One of the biggest challenges has been to into different tankages. “As refineries started NCR and Agra. We did it, though we were given
execute the change in outlets situated in remote sending BS-VI, we realised that our tanks still 2009-2010 BS-III nationwide three years to roll out BS-VI from April 1. At the time
areas with lower off-take. In pumps where the had some BS-IV fuel in it. Bone-drying the tanks of the BS-IV roll-out, refineries were producing both
off-take is higher, it was easy to flush the BS-IV
fuel out from the system, thanks to regular con-
was not possible, because then the retail outlets
would have gone dry,” said Mazumdar. “So we
2004-2017 BS-IV introduced BS-IV and BS-III fuel. Refineries could produce BS-
IV by with only slight modifications. The bulk of the “WE INSTALLED ADDITIONAL UNITS WHILE
nationwide
sumption and intermixing, said R
Ramachandran, director (refineries) at BPCL.
started the process of dilution.” Dilution
involves filling different tanks with different
quantity continued to be old grade. In this case, the
refinery cannot operate if it is not making BS-VI fuel.
THE REFINERY WAS OPERATING WITH THE
For pumps with lesser off-take, however, levels of BS-IV and then BS-VI. After multiple April 1, 2018 Sale of BS-VI The major difference, apart from other things, is we OLDER POLLUTION EMISSION LIMITS,
oilfirmshadtoadoptthebone-dryingapproach. dilutions, the fuel becomes BS VI-compliant. petrol and diesel in Delhi begins go down to ultra-low sulphur, which is less than 10 WHICH WAS A CHALLENGE”
Most of the refineries started making BS-VI A similar strategy has been deployed for parts per million (ppm), both for petrol and diesel.
SANJIV SINGH, Chairman, Indian Oil Corporation
fuel from January to ensure that it reaches every tanks at petrol pumps. IndianOil, BPCL, and April 1, 2020 BS-VI norms We produce six-seven streams of both diesel
petrol pump before April 1. “We had to add a sep- HPCL have confirmed that all their retail outlets come into force nationwide and petrol, which we mix in different proportions,
arate process unit at the refineries for selective were now BS VI-compliant. That includes one of depending on the property of each stream so the It is not that the engine will cease. It is only the cat-
de-sulphurisation of the fuel,” said the head for India’s highest altitude petrol pumps at Kaza in final product gives the desired property — some alytic converter’s performance that is affected, and
one such refinery who did not wish to be named. Spiti Valley in Himachal Pradesh, which is run *Research Octane may have very high or low quantum of sulphur. In it can be replaced. But supplying different grades of
Number signifies
The upgrade took around three years. This addi- by IndianOil. improved the case of BS-VI, the entire volume has to be treat- fuel is also possible. The idea is to use BS-VI fuel in
tional process unit removes sulphur from the The method of inter-mixing BS-IV and BS-VI performance of ed. We can’t have anything that is over 10 ppm. We BS-VI vehicles because only then will there be bene-
automobile engine.
fuel to an extent that it meets the norms. fuels involved multiple sampling at different The loss in octane had to install more large units within the same fits. The entire country is moving to BS-VI, and
number because of
The residual sulphur does not go to waste. times to check if the older fuel has been com- phasing out of lead refinery and hook up the system inside. slowly all vehicles will be BS-VI compliant.
“The elemental sulphur, which is the residue, pletely exhausted through sale. “In the past made up changes in Emission and discharge limits have not
refinery processing
is sold for use in the production of chemical month, we were swamped with samples from increased for refiners. We installed additional units OMCshaveaskedforapricehiketorecoup
fertiliser and other products,” explained the outlets,” said Mazumdar, a challenge they did **Premium petrol has while the refinery was operating with the older pol- investment.Hasthegovernmentagreedtoitandwill
higher RON of 95
refinery head. The fuel supply chain starts at not anticipate. His teams have managed to do lution emission limits, which was a challenge. itbetherighttimeforahikeasglobalpricesarelow?
the refinery and goes through a complex their job, working over multiple shifts and by Everything had to be done within a short span. We price our products at FOB (free-on-board) price
Source: Oil marketing
maze of multi-product pipelines, terminals, moving infrastructure and manpower to labo- companies Even from the point of view of project manage- of Arab Gulf for petrol and diesel. We had linked
tankers and depots to finally reach the fuel ratories with higher work loads. ment and award of contract, we adopted different our prices to Euro-IV grade. Now, they will be
processes so that we did not lose time. We are linked to Euro-VI with a minor quality discount or
happy we set a tougher internal target that made it premium that may vary from Arab Gulf. There is a

Testing times for auto manufacturers possible to move to BS-VI before the deadline.

Whatchangesdidyouhavetobringinevacuation
small delta in the Euro-IV and Euro-VI prices that
will be captured in our pricing. However, there is
the issue of capital expenditure, which the global
SHALLY SETH MOHILE & TE NARASIMHAN withafewspecificdesignand ofnewgradepetrolanddiesel? prices do not capture. Indian Oil spent around
Chennai/Mumbai, 30 March
Used cars could see an upswing hardwaredifferences.Sooncethe
designgotfrozen,itwassimplya
The primary movement of products is done
through the same pipeline. In the pipeline, we put
~17,000 crore. OMCs together spent ~35,000 crore,
and auto makers say they have spent about ~70,000
AsIndiabattlestheCovid-19 The slump in automobile sales is “Because of this pricing premium, matterofprogrammingthe kerosene, diesel, and ATF. Between each product, crore. We have raised the issue of price hike with
pandemic,thebigshiftfromthe mirrored in the used-car segment as users will buy more used cars. In that machinesandgivingtrainingtothe we put a kerosene plug that had to have no sulphur, the petroleum ministry. Though prices are deregu-
BS-IVtoBS-VIemissionnormswill well since around half of the buyers sense, used cars become a better technicianstohandleonemore though normally kerosene has 2,000 ppm. It is a lated in principle, we follow certain regulations. It is
takeeffectin24hours.Inthethree of new cars sell their old ones. Buyers deal,” he said. variantofengine,”saidGanesh kerosene badge so that petrol does not mix with not that we fix a price that we want. We don’t work
yearsfromBS-IVtoBS-VI,car who had postponed their purchases BS-IV cars can be resold in the Mani,director,productionat diesel. We used to put kerosene with 1,500 ppm on cost-plus model, it is a moving average of the
makershadtooverhaultheentire in anticipation of the BS-VI norms market even after March 31, 2020. HyundaiMotorIndia. sulphur content, while both sides we had 800 ppm previous 15 days. We need this hike, even if the
manufacturingecosystemto being implemented from April 1 may The used car market has traditionally Despitetheprolonged sulphur diesel and petrol. We are now making prices had not reduced. We are producing BS-VI
ensurecalibrationthatfitsinwell now start selling their old cars. been stronger than the new car slowdown,mostwerereadyto special grade kerosene for pipeline transfer for fuel since January, but are not getting that price.
withthetechnologychoices,while This means some of these buyers segment. It saw about 5 per cent launchBS-VI-compliantmodels which we needed to create necessary facilities. Besides, margins have been very poor.
keepingatightleashoncosts. will sell their old cars, says Gajendra growth in the organised segment in in2019buttheproblemofunsold
Togetherwiththeirsuppliers, Jangid, co-founder, CARS24. On an the first 11 months of the current year, BS-IVinventoryatthedealer-end Wasroll-outinasinglephaseachallenge? HowdidOMCrefineriescoordinate?Wereprivate
automakerspumpedin~10,000 average, India sells 4 million used said Shashank Srivastava, executive becameaggravatedbecauseof We implemented the earlier emission norms in refinersalsopartofthis?
croreforthechangeover. cars, against 3 million new ones. director, sales and marketing, at thenationwidelockdownthat phases. We started with tier-I and tier-II cities Every refinery was required to shut down. Existing
Home-grownmanufacturers The used cars space is expected to Maruti Suzuki. Through its True Value hasmadesalesdifficultforthe before expanding. The advantage is you get more units required a revamp, we had to make modifica-
suchasMahindra&Mahindra,Tata reach 6.7 to 7.2 million per year and franchise in the used car segment, sixdaysinMarch. time to implement, but the disadvantage is you tions and raise capacity. Hydro treatment for
Motors,AshokLeyland,BajajAuto, be valued at ~50,000 crore by FY22, Maruti has close to a 60 per cent AccordingtotheFederationof always require two supply chains. So, it is good that removing sulphur required hydrogen, so we had to
TVSMotor,andHeroMotoCorphad according to Indian Blue Book, the share of the pre-owned car market. AutomobileDealersAssociation, we are supplying only one grade now. This is a very put up hydrogen generating units. Plus, existing
nopriorexperience.Itwastougher pricing and valuation arm of When General Motors and Toyota 105,000two-wheelers,2,250 superior grade fuel and is a continuous effort. units had to be hooked up with existing systems.
forfirmsthathadproductsspan- Mahindra First Choice Wheels, the announced the phase-out of high- passengercarsand2,000comm- We can’t do that alone. Two large refineries in the
ningseveralcategories,ranging pre-owned unit of M&M. According selling diesel models like Qualis and ercialvehicleshavebeensoldbut TherewereapprehensionsthatusingBS-IVfuelin same region, even if they belong to different firms,
fromcarsandSUVstotwo-wheelers to Jangid, BS-VI cars are 5-10 per cent Tavera, the demand and prices of notregisteredthroughoutIndia BS-VIvehiclescouldharmthem.Isthattrue? cannot shut down at the same time. So, there was a
andtrucks. Suchaportfoliomeant more expensive and, for buyers, these shot up in the used car market. becauseofthelockdown. Some I am not an expert on that, but what we are doing is lot of industry-level coordination, along with the
thatthefirmshadtoinvestmore nothing has changed because they However, there hasn’t been a strong 700,000twowheelers,15,000 reducing sulphur. Sulphur at high or low levels is ministry. Even today, if a HPCL refinery is shut, we
resourcesandtimetobuildthe are not getting any value additional sales pull for diesel models this time. passengercarsand12,000comm- poison for catalytic converters in BS-VI vehicles. It will make sure that products of other refineries are
requisitecapabilitiesforexecuting even though they are paying more. JYOTI MUKUL & SHALLY SETH MOHILE ercialvehiclesarelyingunsold. can take sulphur content of 20 ppm or less, but it is available. There was coordination with private
this.TataMotorshad34different The Supreme Court, which had only the converter that gets impacted. Anyway, we refiners as well, though they required fewer chan-
enginesand150vehicleprogra- refused any extension of the April 1 are supplying BS-VI fuel all over the country. An ges because they were producing higher quality of
mmesthathadtobefittedwithBS-VI managementasitisastoryofthe Goenka,managingdirector,M&M deadline for registering vehicles, individual customer will not feel the difference. fuel for export. PSUs probably needed to change
engines,saidacompanyofficial. determinationofthe700-strong earlieronhisfirm’spreparedness. last week allowed the sale and more, but private ones required some changes, too.
“M&M’sBS-VIcomplianceisa teamthathasworkedforthepast Formultinationals,itwas registration of 10 per cent of such Hadtheshiftbeendoneinphases,wouldn’tit It was well coordinated with other sectors as well.
storyasmuchoftechnology, threeyearstomakeBS-VIhappen, relativelyeasier.“TheBS-VIis vehicles till 10 days after the lock- havecreatedaproblemofBS-VIvehiclesbeing Carmakers needed BS-VI fuel to test their vehicles.
planning,andprogramme alongwithpartners,”saidPawan anotherdesignofengineslikeBS-IV, down is lifted, barring Delhi-NCR. exposedtolower-gradefuel? We supplied the fuel wherever they wanted it.
6 ISSUES AND INSIGHTS
>
NEW DELHI | TUESDAY, 31 MARCH 2020

Revival, not survival

necessitates a sharper look at the air-
port charges and taxes, including those CHINESE WHISPERS
on turbine fuel, that make India’s cost
of operation higher than that of the
Going ahead, the government’s policy actions for the aviation sector needs to be less myopic region. This is necessary in an increas- Piling up pressure
ingly shrinking world. To my mind,
the combined industry loss in India this plays out, the closure of some of cropper. Air India’s sale chances looked there is simply no rationale for India The outbreak of coronavirus has
(airlines, airports and concessionaires India’s six-odd players cannot be ruled grim in a pre-Covid world, but post the not becoming an MRO hub in the region understandably put a lot of strain on the
and ground handlers) for the first out. The aviation grapevine is con- virus, I’d say the the probability of a sale barring myopic government policy and understaffed government medical and
quarter of financial year April 2020- vinced that the the Tata group may see no longer exists. The airline is likely to mismanagement. India has over 200 health service infrastructure, especially in
March 2021 is likely to range between this as the perfect opportunity to bail need close to $1.5 billion to survive this. million passengers a year now (domes- Uttar Pradesh. The growing number of
$3.3 billion and $3.6 billion. Of this, the out of a misadventure (Air Asia India). Faced with all this, there are, in my tic and international) and air travel can suspected cases, apart from the massive
loss for the airlines is expected to be The industry is also unconvinced of the view, three things I’d like to see the gov- no longer be defined as a luxury. Taxes influx of migrant labourers, has only
$1.75 billion. Wadia family’s commitment to run Go ernment actively consider. One, it should be aligned accordingly. made more difficult the onerous task of
While that could be written off as a Air, especially on account of their con- should look at asking private airlines to Last but not least, grab this oppor- screening and treatment in UP. In this
one-time hit, what is even more alarm- sistent failure to retain top managers. maintain a healthier balance sheet that tunity to bring the shutters down on backdrop, the state health department
ing is that even if things return to nor- Many argue that Jeh is stuck in a pre- allows them to survive small shocks if Air India in a dignified manner. In the has ordered deploying four health
mal, air traffic is likely to be severely dicament similar to that of Rahul not a tsunami like the present one. boat that the government finds itself, workers in two shifts at the residence of
ANJULI BHARGAVA affected for the entire year. CAPA esti- Gandhi, with his heart not where he Airlines in India have been pursuing a I don’t see how it can justify spending the ruling Bharatiya Janata Party’s UP

A
mates that the fall in India’s domestic finds himself. reckless path of growth at all cost, leav- over a billion dollars to keep an airline president, Swatantra Dev Singh, to screen
s we begin the second week and international traffic could be as However, eventual closure of any of ing themselves, their staff and the sec- running when the same amount can the stream of visitors. This directive has
into the lockdown, we are high as 30-35 per cent for the full year the airlines is more likely to be based tor highly vulnerable. Just like the be used to feed hungry mouths. Sell caused resentment among field workers,
still unable to assess the full vis-a-vis the year gone by. IATA esti- on the head than the heart. Any casu- banks are required to maintain a certain Air India’s assets piecemeal and put an who say they are already overworked.
impact on the economy and mates a 9 per cent drop in traffic vol- alties means job losses and further pain cash reserve ratio, it might be worth end to this sorry saga. You may have Meanwhile, the ruling party and the
the aviation sector globally or in India. umes in the year. Leisure travellers will for an industry that has been racked considering asking the airlines to main- meant well by undertaking to sell the office of the chief medical officer have
But a few things are already evident. decline as tourists remain wary and with pain for over a decade now. In tain a certain cushion (linked to fleet carrier, but circumstances are at times chosen to stay mum on the issue.
One, the pain from this unexpected tsu- incomes take a hit due to the wider eco- India alone, IATA has estimated indus- size) to withstand at least minor shocks. beyond even Superman’s control. And
nami is likely to last longer than the tsu- nomic churn. Business traffic will be try-wide job losses to the tune of Two, while it might be prudent for this appears to be one of those
nami itself. IATA has estimated a reve- subdued and perhaps permanently 575,000 as a result of Covid-19. the government to support the indus- moments -- even the Modi-Shah com-
nue loss of $113 billion for airlines altered by the use of technology plat- Another fact that is becoming try’s survival at this point, including bine might not be enough to take this
globally. CAPA has estimated that if the forms like ZOOM. increasingly clear is that the govern- through lines of credit, it should look boat through choppy waters to the
cessation of operations stays till June, Moreover, depending on how long ment’s plan to sell Air India has come a beyond the industry’s revival, which safety of new shores.

Hold the appetite for a higher buffer

The controversial overflowing granaries have come in handy to feed the poor during the Covid-19 Former chairman of the Commission
Matching masks
of Agriculture Cost and Prices and cur-
lockdown. But should that be used as an argument to raise buffer stocking norms? rent Infosys Chair Professor for After taking oath in a simple ceremony
Agriculture at ICRIER Ashok Gulati sug- last week, Madhya Pradesh Chief
SANJEEB MUKHERJEE cereals. After the latest announcement
AGAINST THE GRAIN gests that a cash payout would still have Minister Shivraj Singh Chouhan (pictured)

Y
by Finance Minister Nirmala Sitha- been a better option. As he points out, said repeatedly that fighting Covid-19
esterday’s headache has inad- raman, all of them will get an additional Quarterly buffer stock and strategic the buffer norms were fixed keeping in was his top priority. Chouhan has never
vertently become today’s 10 kg of wheat or rice each for the next reserve norms for FCI (million tonnes) mind the annual offtake of food grains failed to wear a mask while meeting
boon. The overflowing grana- three months. n Existing buffer + strategic reserve requirement* through the PDS under the NFSA. The people in recent weeks. Notably, he
ries that were, before the out- Though unintentional, this could n Proposed by a high-powered NCAP study ** offtake figures for the past three years always wears a mask that matches his
break of the Covid-19 pandemic, a create the much-needed space for the 53.4 under NFSA show that it has been much outfit. Inevitably, that came to the notice
source of controversy for years, have new wheat harvest (which could, 41.1 less than planned. “So where is the need of the twitterati. So a user posted:
enabled the Centre to ensure that a large however, be delayed because of a Covid- 32.3 to revise or increase it?” he asks. “Shivraj Singh Chouhan's spirit in the
chunk of the population, with liveli- 19-related labour shortage). 30.8 30.7 “The buffer norms of 2013 were fight with Covid-19 is commendable, but
hoods hit by the enforced lockdown, Assuming that the food grain offtake 21.0 21.4 21.4 devised taking into account the Centre’s he looks more concerned about the
does not go hungry. through the Public Distribution System annual food grain requirement under colour of his masks.” Another tagged
So much so, if Centre should wish to, (PDS) in April through June remain at NFSA which was around 61.2 million Prime Minister Narendra Modi and
it can distribute more than a year’s the February 2020 levels, a back-of-the- tonnes. But, last three year’s offtake asked: “Shivraj Singh Chouhan is now
ration in advance to the 800 million envelope calculation shows that in nor- number has been 53-55 million tonnes. doing #coronafashionshow by matching
beneficiaries of the National mal course, around 9.3 mil- Apr-01 Jul-01 Oct-01 Jan-01 So, from that perspective there is no masks with his dress. Will you fire him?”
Food Security Act (NFSA). lion tonnes of wheat and rice *Current norms are based on a technical review committee which need to change the norms,” Gulati said. RTI activist and Vyapam whistleblower
So far, it has decided to give would have been drawn out was constituted to revise them He said even in the current situation Anand Rai also took to Twitter to criticise
** Recommended by high-powered panel headed by Ramesh
three months’ ration in from public granaries. After Chand. These recommendations were overruled by the government
if someone had cash instead of dry Chouhan: “People are dying and the CM
advance free, plus one kg of the government’s decision and the technical committee's views were adopted rations, he or she might have bought is busy matching masks. Why always in
pulses per family (the choice to double the allocation, Source: Officials food from somewhere to feed himself. celebration mode?”
of pulses varies according to almost 19 million tonnes is “In any case, what will you do with
regional taste). expected to move out. already made the unprecedented step which has become too politically sensi- wheat when chakkis (flour mills) aren’t
According to the Food TAKE The healthy stock posi- of borrowing from the small savings tive to reverse. operational,” Gulati said.
Crackdown in lockdown
Corporation of India (FCI),
India’s wheat and rice stocks TWO tion and the ease with which
not only the central govern-
pool to keep its operations going.
The Centre revises the buffer stock-
Much of the argument in the past dec-
ade or so has focused on the merits or
Indeed, access to food remains the
key. That is why former food and
in the central pool as on ANALYSIS BEHIND ment but the states, too, ing norms for food grains every five otherwise of the Direct Benefit Transfer agriculture secretary Shiraj Hussain West Bengal district magistrates, police,
March 10 is estimated at THE HEADLINES have been able to announce years, and the last such revision (DBT) route of cash delivery enabled by advocated emphasis on building more hospital administrations and other state
77.72 million tonnes (includ- free dry rations for the poor occurred before the National Food the Aadhaar identification system. community kitchens in cities for officials had a harrowing time on
ing 19.24 million tonnes of has rekindled the long- Security Act was implemented in the “The last time the government labourers and daily wagers and unclog- Monday after Chief Minister Mamata
un-milled paddy). The total annual standing debate as to whether India country in 2013 (see chart). decided against raising the buffer norm ging the distribution channels for Banerjee pulled up officials during a
requirement of grains to run the NFSA needs to raise its quarterly grain stock- Accordingly, the government is required was on grounds that gradually there will smooth movement of processed food meeting to review the steps taken to
smoothly based on the last three years’ ing norms to face crises such as Covid- to have roughly 4.5 months of PDS be a shift towards cash transfers for PDS for urban consumers. tackle the novel coronavirus. During a
average is around 54 million tonnes. 19. The opinion has long been divided requirement on April 1 of each year in place of grain,” NITI Aayog member “Covid-19 is a once-in-a-lifetime cri- videoconference, in which doctors and
This is the position even before the between the cost of maintaining a hefty (based on the average offtake of the last Ramesh Chand told Business Standard. sis. So planning based on this might not nurses were present, Banerjee came
country has started its annual wheat buffer stock, way above prescribed three financial years). The July 1 buffer But, as he pointed out, since the shift be sustainable in the long-run, what we down heavily on administrators over
procurement for the 2020-21 season, norms, and the wastage that occurs amounts to 9.2 months of PDS, October towards DBT has not been substantial, need is smooth supply chains to distrib- preparations, leaving some of them
which begins April 1. because of the excessive amounts that 1 seven months and January 1 around raising the buffer stocking norms may ute the existing stocks not building on blabbering and others in a cold sweat.
As on date, all NFSA beneficiaries get are procured owing to India’s open- five months. The current stock position be the only solution on the table. the inventories,” Hussain says. Previously, Banerjee had conducted
5 kg of wheat or rice per month at highly ended procurement policy. This is a real of grains, however, is much higher than Chand headed a panel in 2013 which In short, raising the buffer stocking surprise visits to marketplaces to enforce
subsidised rates of ~3 per kg for rice, ~2 concern for the government that is the buffer norms, mainly on account of had recommended raising the quarterly norms on the basis of Covid-19 would the lockdown, catching unprepared
per kg for wheat and ~1 per kg for coarse badly strapped for cash — FCI has the open-ended procurement policy, buffer from current levels. not be a good idea in the long run. violators off guard.

ON THE JOB LETTERS

When the unemployment rate fails Help migrant workers left unable to pay their house rents even
as the Delhi government issued a state-
Apropos the editorial “Covid-19 crisis:
Imposing a financial emergency can be
What is the employment status of people who are stuck at home for an ment recently saying that it would pay
the rents in case the tenants were un-
useful” by A K Bhattacharya (March
30), there is no doubt to impose a pay
extended period of time? Are they unemployed? able to do so. On the other hand, there
are a number of senior citizens who rent
cut for the government and PSU
employees, one has to use the provi-
They have had no employment for the During times such as the current lock- their houses to the migrant workers and sions of Article 360 enshrined in the
past one week or so unless they are down, they lose jobs and have no hope their sole earning is the rent paid by Constitution. But the bigger question
allowed to and can work from home. of finding any. So, they just leave the them. The Prime Minister has also ap- is that will such a step be wise at this
Most people do not have the latter option. labour markets. pealed to the industry to pay the wages juncture when quite a few states are
Are these people willing to be The unemployment rate in India of the workers for the period of the lock- ruled by the parties who will oppose
employed? Arguably, Yes. Are they mostly reflects a mismatch between the down. But how will the small-scale in- any such step by the Centre? When the
actively looking for employment? No. demand for jobs among the relatively dustries/contractors, whose businesses poor are suffering, it is imperative that
They cannot. educated people and the availability of have shut down, make the payments to the salaried class should contribute
Therefore, most people who were jobs for them typically in modern insti- the workers? Similarly, there are lakhs financially. Otherwise, this will lead to
employed till about a week ago or so, are tutions. It does not reflect correctly the Due to the sudden nationwide of private schools across the nation, more inequality and social unrest dur-
not employed today because of the lock- state of the daily wage workers and the lockdown, millions of daily wage functioning on no-profit-no-loss basis ing and after the corona crisis. It would
down. And, they cannot be classified as self-employed. workers are trekking back to their vil- and the government has asked them to be apt, reasonable and politically saga-
MAHESH VYAS unemployed as well because they are Consider those waves of human lages from big cities like Delhi, in some defer the fee payment. But they will cious if all the states are taken into con-

M
not looking for jobs. Some of them beings desperately trying to get home cases covering 200 to 300 km, in the have to pay the teaching and non-teach- fidence before declaring a financial
easuring the unemploy- would go back to their old jobs after the after losing jobs in cities when the coun- sweltering heat of the summer. Having ing staff. The lockdown should not emergency, if there is no other way to
ment rate during a coun- lockdown. Their status is unclear. If try was suddenly, overnight, placed lost their jobs, they have no money or mean robbing Peter to pay Paul. force a pay cut. In the true spirit of dem-
trywide lockdown is like there is reasonable certainty of such a under a lockdown. As they trudge back food. Local authorities should persuade Pooja Khosla Chandigarh ocratic federalism and nationalistic
measuring water in the person returning to the old job, there is home, a job is the last thing they are them to break their journey, house them integration, the states should also sus-
ocean. Water, water every where/nor any a case to classify such a person as thinking about. They need food and in vacant local schools or hostels and Together in crisis pend their political animosity with the
drop to drink. That was from The Rime employed with or without pay but, with shelter for the family. The money in provide them with food and other basic Centre for the time being and imple-
of the Ancient Mariner by Samuel Taylor no work. This would be underemploy- their pockets is useless at the moment. amenities. They should also give them ment measures that can pull the coun-
Coleridge in 1798. ment or, disguised unemployment. It cannot buy transportation back home. some living allowances. This will help try out of this crisis.
Today, people are stuck in their Hypothetically, if this situation were It cannot buy food or shelter. them to survive the current crisis. Ganga Narayan Rath Hyderabad
homes surrounded by empty factories, to continue for the entire month of April, If we were to ask them whether they Rajendra Aneja Mumbai
warehouses, offices and shops every- what would the unemployment rate in were looking for jobs, they’d probably
where. There are empty job seats every- April be? Zero, or close to that. Because want to kill us. The question is irrel- Inadequate measures Letters can be mailed, faxed or e-mailed to:
where, not any to gain. no one who did not have a job was evant. And therefore, the unemploy- The Editor, Business Standard
What is the employment status of pe- actively looking for one. Almost every- ment rate is irrelevant. The Union government’s order to the Nehru House, 4 Bahadur Shah Zafar Marg
ople who are stuck at home for an ex- one in this group will have simply The migrants know that they will eke states to seal borders in order to restrict New Delhi 110 002
tended period of time? Are they unem- moved out of the labour force. out something for a living back home in the movement of labourers who have Fax: (011) 23720201 · E-mail: [email protected]
ployed? To answer that question, we need In times of extreme stress, the unem- their villages. They know there are no been rendered jobless and homeless, All letters must have a postal address and
to assemble the official definition of the ployment rate fails to give us meaningful jobs. But there is safety. In many cases amounts to mass discrimination. Many telephone number
unemployed from its components. A per- signals. As it did following demonetisa- there is a standing crop of wheat, maize,
son is classified as unemployed if such a tion and GST. gram and potato. They need to get to
person does not have any employment, The concept of the unemployment those crops before they rot as they would
but is willing to be employed and is rate was developed in response to a sit- mostly likely in the next two weeks. HAMBONE
actively looking for employment. uation where there were people who This is economic distress. But this
There are three elements in being were looking for work but were unable will not show up in the unemployment
classified as unemployed, all of which to find any. It measures the degree to rate. It will show up in a fall in the labour
must be satisfied. You should not have which a mismatch exists between jobs participation rate and in the
any employment, obviously. And, you on offer and jobs on demand. Such a employment rate. And for India, these
should be willing to be employed. And, concept works well in an economy should be the important lead labour
you should be actively looking where institutions such as enterprises market indicators.
for employment. and government provide formal jobs The Consumer Pyramids Household
In the current lockdown, save for non- and households provide the correspon- Survey was suspended during the week
essential services, what is the status of ding labour. ended March 29 because of the lockdown.
the rest who employed till a few days ago In India, institutions are not the big-
but, are now effectively locked at home. gest providers of jobs. Most jobs are The author is MD & CEO, Centre for
Are they without any employment? Yes. informal in the unorganised sectors. Monitoring Indian Economy P Ltd
 >
OPINION 7
STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXVI Number 247

ILLUSTRATION: AJAY MOHANTY
NEW DELHI | TUESDAY, 31 MARCH 2020

Testing times to remain in place for up to a year. The economic

damage of lighter controls is as worrisome as a full
lockdown. Controls, even limited ones, impact con-
Without correct data, policy decisions will be difficult sumer confidence and consumption. Even today in

F
China, despite most of the lockdown measures now
or a major country with one of the world’s highest population densities, being lifted, and very few new cases, manufacturing
India appears to be an outlier in the Covid-19 pandemic with just over activity is just about 80 per cent of the normal level
1,100 cases till March 30. The country appears, as far as it is feasible to and the service sectors far weaker. Theatres, malls,
know, to have evaded community transmission so far. A new Standard travel and restaurants are still running at less than

Now what?
Operating Procedure, issued by the health ministry for transporting a Covid-19 50 per cent of before-crisis activity levels. This
despite more than two months having passed since
case on Sunday, refers to India’s current phase of the pandemic as “local trans-
the lockdown began.
mission and limited community transmission”. When compared with the world’s This is going to be a long haul. There will be sub-
hotspots — the US (over 140,000), Italy (over 97,000), and Spain (over 80,000) — stantial damage to the economy, especially the serv-
or others such as Iran (38,309) or even Pakistan (1,625) — India appears to have ices sector. This will not be over in three weeks.
fared well. The rate of growth of reported cases, too, seems to have tapered. After
spiking more than 40 per cent on March 11, 10 days before the nationwide lock-
Once the lockdown is lifted, we will need the mother of all There will be savage and unprecedented cuts to cor-
porate profits. Consolidation will accelerate across
down, the daily growth rate of new cases has dropped, though the absolute fiscal and monetary policy support to sustain the economy sectors. Strong balance sheets will be a competitive
advantage. Larger companies will gain share. There

G
numbers have risen. An interesting debate follows: If India genuinely has low
iven the total shutdown across the world, of the lockdown is to bring R to below 1. Once this is will be substantial bankruptcies and layoffs, espe-
numbers, the lockdown was unnecessary because it has wrought human and with most major economies imposing some accomplished, the strict lockdown can be relaxed, cially among the small and medium enterprises
economic havoc. On the other hand, it could be claimed that it is the lockdown form of lockdown, the obvious question on as long as we can ensure that R stays below 1, and sector. Banks will have to brace for a surge in non-
that has kept the numbers low. With just under a week into the lockdown, however, the minds of investors is, how long will this lock- more relaxed policies can be put in place. With this performing assets. Given the risk-aversion already
it is impossible to judge its impact. Equally, given the variable nature of statistical down continue, and at what cost? approach, the disease is not eliminated, but the visible among banks, over the last 24 months, the
reporting in India, the numbers themselves may be open to question. The Covid-19 disease has extracted a huge price number of cases remain stable and we avoid any regulatory authorities have to ensure we do not see
The short point is that without more universal and rigorous testing, it is dif- from the global economy. We are at over 600,000 sudden spikes, which could overwhelm health sys- a credit freeze for everyone except AAA borrowers.
cases and 30,000 deaths. The disease continues to tems —the nightmare scenario every country is try- Risk aversion will rise across the economy. It will
ficult to gauge the next step: Whether to extend the lockdown or end it. This deci-
spread quickly, with cases doubling in many juris- ing to avoid. The lighter control measures must be impossible to forecast FY21 profits, and it will be
sion can be taken once the government has definitive test results to work with, dictions every three days. The world is going into a remain in place till we get a vaccine, effective med- a lost year for most companies. Most corporations,
since reports have shown that the states that have tested more people have reported recession, and most indicators show far steeper falls ication becomes available or till we achieve herd across the world, will go into cash conservation
more cases. Currently, however, the Centre’s testing policy is limited to those in economic activity than even during the global immunity so as to ensure any new local outbreak mode, with all capex plans and discretionary spend
showing symptoms or those with a travel history. Updated knowledge of the financial crisis. Many commentators expect a 25 per can be nipped in the bud. For a vaccine, we will need on hold.
nature of the virus suggests that it is not enough, since it is possible for infected cent decline in US gross domestic at the minimum 12-15 months. In such a risk-averse environment, the quality
people to remain asymptomatic and yet become carriers in the absence of testing. product (GDP) quarter-on-quarter, The policy path is thus clear. premium will sustain, no investor will tolerate gov-
with similar declines in most of Impose severe social controls and ernance issues or balance sheet stress.
According to the Indian Council of Medical Research (ICMR), only 34,931 tests Europe. Most countries will have lockdowns, till such time as we can The path ahead remains uncertain, but the cen-
had been conducted as of Sunday, representing about 30 per cent of the capacity negative growth for the year. I have bring R to below 1. Then follow it tral case for India and other economies must be a
utilisation. Last week, the ICMR sought quotations from suppliers for a million never seen economic data fall as up with a set of lighter controls, no very sharp contraction in economic activity for the
antibody kits (for screening via blood tests) and 700,000 RNA extraction kits (or steeply as observed in China, and large functions, some travel restric- coming few weeks as the lockdown bites, followed
the swab test) and expanding the number of government and private labs to con- soon to be seen globally. Everything tions, targeted social distancing (for by a slow recovery as we transition out of the lock-
duct these tests. This is not nearly enough for a population of 1.3 billion, a good is just falling off a cliff, led by the the old), strict testing and contact down to less strict social distancing. The willingness
services sector. To illustrate, the US tracing, all designed to keep infec- of governments to be bold and assertive in economic
chunk of whom — urban migratory workers — have been forced to jettison social
weekly initial unemployment tions under control and give scien- policy will be tested.
distancing to head back to their villages. claims at over 3 million were five tists time for the development of a We will need the mother of all fiscal and mone-
Access to tests is one part of the problem. According to the ICMR, only 113 times the previous peak.
AKASH PRAKASH vaccine or new medication. This tary policy support to sustain the economy. Investors
government labs have been made functional and 47 private labs have been given The economic toll of the lock- way we are effectively buying time, will back those countries and markets where the
approval to test for Covid-19, the bulk of them in urban areas. The social stigma of downs is immense. The question now shifts to how with the least economic cost. authorities step up. While the Reserve Bank of India
being tested is acting as a deterrent too, according to accredited private labs. This long will they need to be in place? Having reacted The good news is that strict social controls and has delivered, the fiscal response seems too timid.
apart, the relatively high cost of testing — the government has capped it at ~4,500 too late to the spread of the virus, most countries lockdowns have proven to be effective in reducing This is not the time to worry incessantly about the
had to put in place lockdowns to ensure they stop the spread of the disease quickly. The impact of fiscal deficit. In an environment where other coun-
per test — is sure to deter most Indians from opting for it anyway. In this situation,
the disease in its tracks. Had countries reacted ear- China’s January 23 lockdown was visible within five tries are delivering fiscal support of 10 per cent of
it is vital for the government to not only exponentially expand testing facilities lier with more extensive testing and contact tracing, days. China was able to flatten the infection curve, GDP, our response at only 0.5 per cent of GDP (gen-
but also foot the bill. This looks like an expensive proposition for a government like Taiwan or Singapore, then such extensive lock- ex-Hubei province, within two weeks and in Hubei uine new spending) seems too modest. Given the
battling a mounting fiscal burden. But when compared with the consequences of downs may not have been necessary. itself in a month. Even in Italy, the lockdown has extent and importance of small and medium busi-
bringing the Indian economy to its knees, it is a small price to pay. The theory here is clear. We need to bring the R now visibly slowed the spread of new infections. ness to growth and employment in India, our
(reproductive rate), or the number of people infected Thus, for any country that is able to strictly dependence on services and the lack of a social
by someone who has the virus, down to below 1. If R enforce social distancing and a lockdown, within a safety net, we are uniquely vulnerable. The govern-

Universalise benefits is above 1, the virus will continue to proliferate;

below 1, the virus will slowly decrease. The estimated
R of Covid-19 is between 2 and 3. The entire objective
month the infection curve should flatten and the R
drop to below 1. The bad news, however, is that con-
trols won’t just disappear. Lighter controls will have
ment has to be bolder.

The writer is with Amansa Capital

Everyone must have access to basic facilities

T
he sight of a large number of people, many of them migrant workers,

TowardacoherentstrategyforCovid-19
crossing state boundaries, lining up for buses and in some cases simply
walking along highways, reveals that the national lockdown will be inef-
fective unless accompanied by quick action on the part of the Union
and state governments. Clearly, before the lockdown was imposed, better signalling

T
he United States needs a clearer economic humanitarian grounds, will neither open up markets One obvious place to start is the 1920 Merchant
was needed to the population of the importance of staying in place. But there are
strategy to deal with the Covid-19 pandemic. nor give firms an incentive to hire. Past experience Marine Act (the Jones Act), which restricts the trans-
those for whom staying in place would not be a feasible option. Some daily-wage While the crisis is unique in many ways, the — namely, the rebate payments issued after the portation of goods between US ports by requiring
earners might worry about the ability to afford necessities such as food. Others economic-policy approach following the terrorist onset of the 2008 financial crisis — shows that such that they be carried on American-made and -oper-
might have no real place to stay, having been in temporary accommodation or attacks of September 11, 2001, seems to be the most “stimulus” measures do not in fact stimulate. ated ships. Rescinding this rule would lower freight
refused further tenancy by a landlord, or are without money to pay the rent that useful historical analogue. Because people assume that the payments will be costs and open up more distribution channels.
is due. Thus, there is a certain involuntary component to their movement, which Like today, that episode involved a sudden, sur- temporary, they tend to save rather than spend the Longstanding proposals to streamline the Food and
must be recognised. Most of those trying to reach their native places may not prise attack that threatened the entire economy, and disbursement. Drug Administration’s approval of new drugs would
thus required a rapid response. The immediate task To be sure, some elements of the US response are also be consistent with both the pandemic response
have a choice.
was to sever al-Qaeda and its collaborators’ sources more favourable to markets, including the Federal and economic growth.
The problem is that large-scale movement clearly undermines the whole of financing without disrupting financial flows, eco- Reserve’s creation of new facilities to keep credit flow- By the same token, repealing occupational licen-
point of the lockdown. The lockdown, while costly and disruptive, may be the nomic activity, and the reciprocal relationships ing, and efforts by the private sector to expand health sing would open up sectors of the labour market to
only way to avoid the large human cost of a swiftly spreading virus. Yet all the needed for economic growth. In the end, this strategy care facilities and produce more personal protective people who have long been shut out. The plague of
effort will be wasted if there is no clear control of movement, as well as careful proved successful. The economy did not tank, and equipment for health care workers and patients. But unnecessary licensing has spread over the years to
quarantining of those coming from high-risk areas. This is both a problem of the 9/11 Commission later awarded the economic- these are exceptions. The broader trend has not been include everyone from tour guides and florists to
communication and a problem of action. But the second must predate the first — policy response its only “A” grade. in favour of the kind of free-market policies that are interior decorators. This is not a partisan issue. Under
Having a strategy is essential. But equally impor- essential to economic growth. former President Barack Obama, the White House
to reassure worried people, it is necessary to ensure first that there are facilities
tant is that the strategy accurately describe the eco- More to the point, the US has no clear strategy, Council of Economic Advisers concluded that run-
that can be effectively communicated to them and prevent them from taking the nomic problem at hand. It then must which is why recent piecemeal away licensing requirements “raise the price of goods
decision to move. The vital measure required in the current situation is to univer- offer specific short- and long-term responses have faltered. and services, restrict employment opportunities, and
salise benefits — access to cooked food for those who have no access to a kitchen, policies to confront that problem, Policies to open markets need make it more difficult for workers to take their skills
places to hunker down if landlords have thrown someone out, telecom facilities and it must explain clearly how those not be inconsistent with sound across state lines.”
to make calls in case people can’t recharge phones, and free medical testing and measures will achieve their intended public-health policies. The federal Finally, Congress should adopt a bipartisan agree-
protective equipment like masks. ends. Finally, the strategy also must government should not shrink ment that there will be no tax increases for the fore-
include a plan to guide implementa- from encouraging more market seeable future. That commitment alone would pro-
It will be an expensive and difficult undertaking for the Indian state. But that tion by the relevant departments of transactions, rather than trying to vide a real economic boost, and it would be especially
is the cost of a (hopefully) once-in-a-lifetime public health crisis. This will require government, the private sector, and smother all economic activity. welcome now that some are already calling for tax
greater co-ordination between various departments and action from both the US allies around the world. Now is a great time for people increases. The tax-hike chorus is sure to grow louder
Union and state governments. At the moment many of these, including the Union Today, the big problem is that to order (online) that $2,000 once the deficit from the economic-policy response
government, have been slow off the mark. This slowness risks rendering the entire otherwise sensible efforts to limit the JOHN B TAYLOR Peloton exercise bike they’ve been starts to grow.
lockdown a pointless waste of time and energy, and opens the possibility that spread of Covid-19 — shelter-in- hearing about, or to upgrade their In sum, the paramount economic problem today
place mandates, social distancing, home-computer equipment. To is that the response to the pandemic is restricting
uncontrolled virus spread will create a humanitarian crisis at levels not seen in
businesses closures, travel restrictions — are hitting facilitate e-commerce during the crisis, the Federal rather than opening markets. While there will be
recent history. The chaos in the various government and departmental responses, the economy hard and will continue to do so for Aviation Administration could ease its restrictions pressure to relax these restrictions in the weeks
as well as the confusion and concern that is widespread in India, is beginning to some time. With both the US federal government on the use of drones for home delivery, especially ahead, a better strategy would be to deploy more
look like a repeat of the chaos of demonetisation — but with even more at stake. and many state governments — including now that fewer commercial airliners are flying. For market-opening measures that are consistent with
The poor can’t be left on their own to die either of Covid-19 or of hunger. Then California, New York, and Washington — having my part, I am offering my spring economics course public-health imperatives. The US must take steps
there is the challenge of planning for a post-Covid world. According to the issued orders restricting commerce to varying online. According to the student ratings that have to limit job-destroying regulations and avert growth-
International Labour Organization, Covid-19 could render 25 million people unem- degrees, people are beginning to worry that the cure come in, the product is just as good as the on-campus sapping tax increases — before it’s too late.
might be worse than the disease. course I have been giving for years.
ployed and many more underemployed by virtue of reduced wages and working
But measures to limit the contagion are not the The crisis also creates an opportunity for regu- The writer, under secretary of the US Treasury from 2001 to
hours. This is especially critical in India, where a large part of the population is only threat to the economy and markets. So, too, are latory reform. The US strategy could seek to repeal – 2005, is professor of economics at Stanford University and a
either self-employed or dependent on daily wages for their subsistence. There is many of the economic-policy responses currently or at least suspend — many of the rules that hamper senior fellow at Stanford’s Hoover Institution. He is the
no time to be lost. under consideration. For example, one-time pay- growth, while also placing a moratorium on new reg- author of Global Financial Warriors and Choose Economic
ments to households, while understandable on ulations that risk undercutting employment. Freedom (with George P. Schultz). © Project Syndicate, 2020

Employment beyond the data properly? Itcan’t. Andsothatcohortis

forcedtoworkinjobsthatotherwise
shouldnothaveexistedbynow. Thelack
ofgood-qualitybasiceducationliesatthe
conglomerationwasreallyinfavourof
openingupbeyondtheinitialreforms.As
theeconomyremainedshackled,
organisedgrowthnevertookoff. Labour
createenoughjobsandhasbeenalways
inadequateforthetaskathand.
Andfinally,considerthenotionthat
manufacturingistheanswertoIndia’s
Inadequateemploymentopportunities contributedtoamassiveincreasein coreofIndia’semploymentproblemand laws,inspectorraj,highlyunresponsive employmentproblem.Itisnot. Wenow
havebeengeneratedthroughoutthis populationpost-independenceand, theonlyoptionleftforthepolicymakerto governmentsintheCentreandstates knowthatIndianmanufacturingwillnot
period. Economistsofvarioustypes, therefore,thoseintheworking-age takecareoftheilliterateandunskilledis thatrampedupthepricesofland,capital, beabletoaddresstheemployment
demographers,socialscientistsarenot groupshaverisendramatically. While toartificiallycreate energyand probleminthenextfewdecadesatleast.
theonlyoneswhohavelamentedonthe opportunitieswerebeingcreated specifically EMPLOYMENT supplementedit Why?Forone,itcan’tgrowthatrapidly.
inadequacyofemploymentgeneration. moderately,thesupplyhasbeen designedjobsor IN INDIA bytroubling Butletusleavethatasideforthemoment.
Perhapspoliticianshavebeenevenmore increasingfarmorerapidly.Thecore opportunitiesfor entrepreneurs Two,whenthemajorityoftheworkforce
BOOK REVIEW concerned. problemlieshere. them.Therefore, Author: Ajit
Kumar Ghose
incessantlyledto isilliterateorbarelyliterate,howcanitbe
Theproposedsolutionshavebeen Tounderstandtheunemployment wehavemicro- onlymoderate trainedtotakeupmanufacturingjobsin
LAVEESH BHANDARI broadlyrelatedtothreeareas. First,we problemletusfirststartwitheducation construction Publisher: growthinthe thenewgloballycompetitiveeconomy?
needtoensurethattheworkforceisbetter andskilling. Basiceducationwasahuge orientedpolicies, Oxford organisedsector. Three,thereistheenvironmentalmess

H
owdoesoneunderstand educatedandskilledandthatwillhelp messuntilrecentlyandeventoday,it theNationalRural University Strangely,there thatwasfirstcreatedintheWestand
employmentinacountryas themaccessjobswithhigher scoresquitepoorlyonthemessindex. Employment Press wasamissing worsenedbyChinaandifIndiagetsinto
diverseandcomplexasIndia? productivity. Second,freetheshackles Studentsnowgotoschool,thoughmany GuaranteeActand Pages: 192 middleproblemin thesamebandwagon,Godonlyknows
Youstudydataandpolicieson oneconomicgrowthandopportunities teachersdonot;classesmaynowbeheld, allkindsofwelfare India:Firmsjust whereweallwillendup.So,thethird
Price: ~345
employment,right? Wrong. To fromhighgrowthwillpercolatedownto thoughlearningislow. Asa schemes. wouldnotgrow optionisnownolongeranoption.
understandemploymentonehasto themasses.Andthird,weneedtoramp consequence,apersonfromthelower Nextconsider fromsmallto Tosumup,thisvolumetalksabout
understandtheeconomyfirst. And upmanufacturingandrapid socio-economicsegmentsisill- thegrowthproblem. Itisneverthecase mediumscale.Afewwereableto labourandjobs,variousproblemsand
employmentisanoutcomethatcanbest employmentgrowthwilloccurjustasit equippedtoaccessnewopportunities thateconomicgrowthcreates “manage”thegovernmentbetterand solutions,elasticitiesandrates,andsoon.
beunderstoodinthecontextofthe occurredinChina. beingthrownup. Ifpeoplecan'taccess employmentuniformly,it’sanon-linear becamelarge,butthatwaslessbecauseof Ithasdata,definitionsandexplanations,
economyandevendemography. And Indiafailedinallthree. Actually,itdid newopportunities,someofthemcan’t process. Forinstance,theITgrowth theirefficiencyinoperations. Andso, anditwouldbeofhelptothosewhowant
thatiswherethisbook, Employmentin notfailcompletely,butfailedmoderately becomeentrepreneursandcreatenew createdfewjobscomparedtotheincome employmentgrowthintheorganised toknowaboutlabour. Butitmissesout
India,doesnotscore. onallthreefronts,thoughsomemaysay opportunitiesforothers. Salariedjobs generated,buttherewasapercolation sectorwashighlycompromised. Forget ontheeconomicissuesthatunderlie
Sinceindependence,theIndian itsucceededmoderatelyaswell. andentrepreneurshipbothsuffer. effect. Demandforpersonalservices, foreigninvestment,evenIndian employment.
economyhasbeengrowingatrates Whetheryoucalltheglasshalf-fullor Buttheproblemisworsethanthat: housing,manufacturingproducts investmentinriskcapitalislimited. So
moderatelyhigh,toslow,tohigh,and empty,itisnotgoodenough.Improved Howcanasocietyretrainorskilla createdsecond-orderopportunitiesfor whilegrowthwentdownandupand The reviewer heads Indicus Foundation and
backtomoderateinrecenttimes. healthcareandaccesstobasicneeds workforcethatisnotabletoread others. Except,nopolitical down,itwasofverypoorquality,didnot workson environment and inclusion
 The Smart
QUICK TAKE: REGULATORY OVERHANG FOR SUN
1 “The worst month for the Sensex in the last

Investor
40 years has been October 2008, down 23.9%.
Sun Pharma stock has shed about 18% If markets close at around current levels, this
from its monthly highs, with the latest would be the worst month at 24.5%. People who
trigger being the USFDA action on its bought on November 1, 2008, made 60 per cent
NEW DELHI | Halol facility. This will impact product over the next one year”
TUESDAY, 31 MARCH 2020 approvals as well as despatches from SANDIP SABHARWAL
the plant Investment advisor
WWW.SMARTINVESTOR.IN.FOR INFORMED DECISION MAKING <

Sebi eases norms for rating agencies

Corporate bonds jumped 15x over the previous month.
COVID-19 FALLOUT This was the highest value of corpo-
worth ~2.6 trillion Downgrades saw a 15-fold jump in February rate debt papers downgraded in nine
downgraded in Feb Downgraded (~ trillion) months. However, it could not be
ascertained whether the Sebi data has
3.01 adjusted for multiple downgrades of
JASH KRIPLANI same security.
Mumbai, 30 March 2.59 2.60 Debt market participants said that
while the RBI’s ~3.74-trillion liquidity

T
he fear of high intensity of rat- 2.16 enhancement would help good-qual-
ing downgrades — with over ity corporates find avenues for refi-
~2.59 trillion worth of debt nancing, lower-quality bond issuers

Regulator puts
papers being downgraded in February 1.64 could see rating pressures amid dis-
— was allayed to some extent on ruptions in daily operations.
Monday, with the Securities and According to rating analysts, the mora-
1.07

major market
Exchange Board of India (Sebi) tem- torium by banks on classifying
0.90 0.87
porarily relaxing norms for rating accounts as NPAs, coupled with lower
agencies, in light of the operational 0.53 financing costs, will help corporates
disruptions caused by Covid-19. with cash flow mismatches. However,
The markets regulator issued a
circular stating that after the
Reserve Bank of India’s (RBI’s) move
to provide moratorium to banks on
May Jun Jul Aug Sep Oct Nov Dec
0.17

Jan Feb
revenue-related challenges will con-
tinue in the near term.
They added that airlines, hotels,
tourism, malls, organised brick-and-
reforms on hold
’19 ’19 ’19 ’19 ’19 ’19 ’19 ’19 ’20 ’20
classification of non-performing Source: Sebi
mortar retail stores, multiplexes, and SAMIE MODAK Sebi has put on hold the
assets (NPAs), rating agencies restaurants have been among the Mumbai, 30 March final phase of implementa-
should also use their discretion to most vulnerable to rating action and tion. “Taking into account
check if a default was solely on moratorium. Further, the market the board of rating agency,” the Sebi ratings remain on the table. Rating weakening of credit profile. Under The Securities and Exchange that introducing any new
account of the lockdown or because watchdog has given relaxation on rat- circular read. agencies may need more clarity the existing regulatory framework, a Board of India (Sebi) has changes under the prevailing
of procedural delays in availing of ing action in case of delay by the com- Market participants have called it from Sebi as it has not directed ‘D’ or ‘default’ grade cannot be deferred the implementation circumstances — where staff
the moratorium given by the cen- pany in providing information due a timely move, but downgrades could them to refrain from bringing down reversed to investment grade for a of key market reforms on at the stakeholders are
tral bank. If so, the rating agencies to the lockdown. “However, rating still continue, with rating agencies an instrument to below-investment period of at least 365 days. Further, account of the disruption sparsely populated — may
may choose not to consider such a agencies should endeavour to finish likely to factor in current disruptions grade, if it evaluates the company the regulations stated that a delay of caused by the pandemic. not be workable, it has been
delay as default. the exercise on a best-effort basis. and grade debt papers. as unsuitable for fresh investment,” one day or even one rupee has to be The areas in which Sebi decided to continue with the
The relaxation is being given for Such cases shall be put up for ratifi- “Raters may refrain from giving said a fund manager. In February, considered as default, and appropri- extended the deadlines are current phase-II of till further
three months, in line with the RBI’s cation by the rating sub-committee of default or ‘D’ grade, but all other the quantum of downgrades had ate rating action should be taken. implementation of the stew- notice,” Sebi has said.
ardship code for mutual Industry players said Sebi
funds (MFs), shortening the could consider implementa-
initial public offering (IPO) tion of the third phase once

Promoterpledgingjumpsto6-monthhigh Credit cost

likely to rise by
timelines, and overhaul of
regulations governing portfo-
lio management services
(PMS) and alternative invest-
the IPO market revives, which
will be possible only after the
pandemic ends.
The regulator has also pro-
JASH KRIPLANI
Mumbai, 30 March THINNING COVER its recent note.
The sharp correction in 200-210 bps, ment funds (AIFs).
Sebi also provided relax-
vided a huge relief to the PMS
industry, deferring the recent
Promoters have been forced to prop up security
The sharp sell-off in the mar- cover amid market selloff Pledge creation (~ crore)
share prices has put the entire
LAS market under risk. The says IndusInd ations in the know-your-
client (KYC) formalities for
overhaul of regulations by
two months. In February, Sebi
kets has led to a spike in pro- market volatility can put in foreign portfolio investors had notified big changes for
21,854.29

12,330.27

moter pledging as declining trouble those lenders which SHREEPAD S AUTE (FPI). The so-called steward- the industry by doubling the
9,988.93

9,935.84
7,956.54

share prices forced promoters have been active in extending Mumbai, 30 March ship code, an institutional minimum investment size to
16,212.6

15,316.37

to put in place additional secu- loans to promoters against investor’s guide to vote on res- ~50 lakh, hiking the net worth
4,652.41

3,467.46

rity cover. their shares. In its first analyst call after olutions floated by listed com- from ~2 crore to ~5 crore and
So far in March, fresh The analysis by Ind-Ra the appointment of Sumant panies, will now come into capping the fees charged to
pledge creation stands at shows that of the 58 firms like- Kathpalia as managing effect from July 1 instead of manage money.
~15,316 crore — the highest in ly to have more than 50 per director and chief executive April 1. Under this, MFs and The new framework had
six months. Pledging is up cent of their promoter holdings officer, IndusInd Bank on AIFs are required to formalise coincided with the crash in
24 per cent over the last month, Jul Aug Sep Oct Nov Dec Jan Feb Mar pledged, 19 are already in Monday discussed the a comprehensive policy on the market, hitting the indus-
showed the data sourced from 2019 2020 default, while another 19 are impact of the Covid-19 discharge of their stewardship try hard. AIF and venture
*Data up to March 18 Source: nseinfobase.com
nseinfobase.com. classified as an elevated risk of pandemic and the steps responsibilities, which have capital funds (VCFs), too,
According to experts, the refinancing. Sectors, such as it is taking to strengthen to be disclosed publicly and have given two more months
market cap (m-cap) erosion of director at PRIME Database. “Conservative investors are Ratings and Research (Ind-Ra) power, construction, and met- its business. reviewed periodically. to make regulatory filings for
these companies has forced The data sourced from nse- quick to exit from companies indicates that 21 BSE500 com- als — which have been most IndusInd Bank expects The regulation was aimed March and April.
them to beef up the collateral infobase.com and exchanges where there are high levels of panies will be required to exposed to cyclical risks — are its credit cost (bad loan at increasing voting As regards FPIs, Sebi has
value with more shares. showed that firms, where pledging. Investors are pledge more than 100 per cent likely to see a high proportion provisioning as a percent- participation and improving said they can register with-
“Promoters are forced to top- pledges were created in even warier of companies of the promoter holding (as on of promoter holding pledged. age of loan book) to be corporate governance stan- out providing original and
up collateral as the m-cap of March, included Adani where along with pledging, March 19) to maintain a mini- Further, market partici- around 200-210 basis dards. Both the MF and AIF certified documents, provid-
their fims has eroded amid the Enterprises, Emami, Sadbhav there is high leverage,” mum 2.5x share cover, pants say stressed promoters points (bps) in the March industry bodies had written ed they send the scanned
market sell-off. We have also Engineering, and Aurobindo said G Chokkalingam, assuming the quantum of loan- may be able to delay margin 2020 quarter, which indi- to Sebi, seeking extension of versions to their custodians.
seen lenders invoking pledged Pharma. The stocks of these founder and managing direc- against-share (LAS) transac- call if lenders are given confi- cates a rise in bad loans. the deadline. The regulator has said this is
shares. In an environment companies have seen a sharp tor of Equinomics Research tions outstanding as on dence that payments will be This is way higher than the Meanwhile, Sebi’s plan to a temporary relaxation and
where promoters are finding it correction, with their stock and Advisory. December 31, 2019. made in full. “Lenders could average 37 bps seen in shorten the time taken FPIs will have to submit their
difficult to repay loans given trading 34 per cent-79 per cent Analysts say fresh pledging “In other words, these enti- delay selling the pledged shares the past three quarters, between closing of an IPO original documents before
the tight liquidity, they are below their recent peaks. of shares is likely to remain ties could be required to pledge as the recovery from such sell- said an analyst with a and listing of a security June 30, or face suspension.
forced to top-up their collater- Market experts say com- on the higher side in the com- additional collateral or deposit ing is likely to be lower, with domestic brokerage. to three days (T+3), from Sebi has directed the
al value with more shares,” said panies with pledging have ing days. cash to maintain the original shares already at beaten-down six at present, is likely to custodians to conduct prop-
Pranav Haldea, managing seen sharp selling pressure. An analysis done by India security cover,” Ind-Ra said in prices,” said a fund manager. More on business-standard.com be delayed. er due diligence.

JPMorgan says market THE COMPASS

Insurance, AMC stocks better alternatives in BFSI space rout is past its worst now
However, premium HAMSINI KARTHIK as insurers and asset man-
agers, as they do not carry bal-
favour because of their expen-
sive valuation. With 30–37 per
and focus on growing the
high-yielding protection seg- JOANNA OSSINGER
growth could be On a day when the Nifty Bank ance sheet risk and offer cent stock price correction in ment (individual protection 30 March
Index fell over 6 per cent, growth opportunities,” say the past three months, con- and credit life insurance), will
impacted in stocks of insurance companies analysts at ICICI Securities. cerns on valuations have also likely deter insurance compa- Strategists at JPMorgan Chase
— mainly life insurers — Even those at Kotak been addressed, making nies from raising protection have concluded that most risk
the near future bucked the trend, with gains Institutional Equities feel that insurance and AMC stocks pricing sharply over the next assets — a universe that typi-
between 3 and 5 per cent. New stocks in the insurance seg- attractive for investors. few quarters,” say analysts at cally includes stocks and cred-
India Assurance was up over ments may be better placed However, even if these Kotak Institutional Equities. it — have seen their low points
13 per cent, the highest among than the lending segment stocks offer potential, there are The brokerage also warns for the recession that’s gripped
these stocks. With heightened within the financial services some downside risks that of a potential fall in persisten- economies around the world.
risk aversion to banking and space. The fact that these investors should be cognizant cy ratios because of a shift in Conditions that JPMorgan
non-bank lenders, analysts companies work towards the of. For one, as the reinsurers consumer preferences had set for market stabilisa- "Risky markets should
say insurance and asset man- financialisation theme — have started increasing their and high unit-linked insur- tion and revival have largely remain volatile as long Monday, it had recouped more
agement companies (AMCs) which is aimed at improving pricing, insurance companies, ance policies surrenders. been met, with recession-like as infection rates create than quarter of that loss.
could turn out to be an inter- the customers’ savings — too, may hike their price to Consequently, there may be pricing, a reversal in investor uncertainty about the Normand said his
esting alternative in the bank- positions them better than customers. However, under some immediate-term pres- positioning and extraordinary depth and duration of approach dovetails with the
ing, financial services and banks, especially at a time of the current conditions, the sure on pricing for insurance fiscal stimulus, strategists led the Covid-19 recession, recommendations in the past
insurance (BFSI) segment. slowing economic growth. degree to which price hikes companies. For AMCs, one by John Normand wrote in a but enough has changed week from bottom-up analysts
“Markets are moving Moreover, ahead of March’s can be implemented is ques- needs to be watchful of note on Friday. Coronavirus fundamentally and at JPMorgan to add exposure
towards non-lender-based market meltdown, these tionable. “Weak retail senti- redemptions and persistency infection rates remain a “wild technically to justify in US and European credit,
financial sector stocks, such stocks didn’t find much ment, on the back of Covid-19, of systemic investment plans. card,” as they remain high adding risk selectively" peripheral European sover-
even if they’re “slowing” in the JOHN NORMAND eigns, and US and European
US and Europe. inflation breakevens.
Head, cross-asset fundamental
“Risky markets should On the stocks side, things

Uncertainty clouds Blue Dart’s near-term prospects

strategy, JPMorgan
remain volatile as long as are somewhat more nuanced.
infection rates create uncer- note on Friday that he expects JPMorgan’s multi-asset port-
tainty about the depth and the market to turn lower in folio has been overweight
Revival in SHREEPAD S AUTE demand are near-term busi-
ness risks for Blue Dart, which
tiative by the management in
the near term,” according to
2020-21 (April-September
2020), some recovery is likely
duration of the Covid-19 reces-
sion, but enough has changed
coming weeks. He cited a
checklist for a sustained rally
equities all year, though par-
tially hedged with short posi-
discretionary In an otherwise bearish mar- provides surface and air- analysts at ICICI Direct. from December 2020 quarter fundamentally and technical- similar to Normand’s — of tions in credit and long ones
ket, the stock of Blue Dart based courier and cargo logis- Though the company is onwards. Yet, the silver lin- ly to justify adding risk selec- slowing viral spread, evidence in the US dollar. “Thus,
demand crucial Express (Blue Dart) surged tics solutions. still delivering essential items, ing is the expectations of tively,” Normand wrote. “Most that fiscal and monetary pol- future adjustments would be
about 16 per cent intra-day in The nationwide lockdown revenue contribution of these market share gains from risky markets have probably icy stimulus is working, and a in terms of magnitude and
Monday’s trading session, amid the coronavirus pan- products for Blue Dart is not small players. As the latter made their lows for this reces- bottoming in investor posi- funding source rather than
before closing 5.6 per cent demic has disturbed the significant, say analysts. would be more affected dur- sion, except perhaps oil and tioning and flows. in overall tilt,” Normand
higher at ~2,103.85 apiece. entire delivery system within Thus, a recovery in overall ing the ongoing crisis, recov- some EM currencies beset by GavekalResearch’sAnatole said. He added that the
News pertaining to the country demand, especially of discre- ery would be comparatively debt-sustainability issues.” Kaletsky said in a note firm’s global equity strate-
the lifting of supply The nationwide (including air and tionary items is crucial. difficult for them. The jury, Most risk assets should Monday that it’s too early to gists “believe that the risk-
ban on all essential lockdown has surface), which has However, according to some however, is out on this. trade higher in the second buy equities, citing reasons reward for equities remains
and non-essential disturbed the impacted the busi- analysts, there is uncertainty For now, investors are rec- quarter of the year, Normand including “surprisingly com- skewed to the downside.”
items across states entire delivery ness of express over the length of the ommended to await for signs said. He recommends that placent” investor sentiment Normand cautions that not
improved investor system, which delivery players lockdown period. Also, even of the current tough situation investorsaverageintooversold and historical data showing all apparently cheap markets
sentiment. However, has affected such as Blue Dart. after the lockdown period, abating. Although the stock markets, particularly those bearmarketsalmostneverend should be bought, as there is
it may be too early to the business Not only the top it is unclear how long it takes (following a broader market where central banks are buy- on a single massive sell-off still a risk-reward spectrum.
expect a full recovery of Blue Dart line, but lower vol- for discretionary demand fall, with the Sensex down ing directly. (Averaging into without retesting the bottom. Developed-market bonds
in growth. umes would also to recover. about 26 per cent) is down by markets entails spreading out should be used to fund alloca-
Factors such as impact its prof- Apart from demand, oper- about 24 per cent in the past the purchases over time rather Off the low tions to cheap credit and equi-
state-wise logistic distur- itability in the next couple of ational issues — including a one month, and 42 per cent than diving in in one go.) The MSCI All Country World ties, but bond sell-offs should
bance, uncertainty over the quarters. “Lower air and sur- likely labour shortage — is from its 52-week high, at 44x Not everyone sees the bot- Index tumbled some 34 per also be used as opportunities
lockdown period (impacting face volumes would negate another worry. While Blue its FY21 estimated earnings, tom as necessarily in. cent from its February record to buy duration as insurance
overall volumes), and delay in the cost optimisation and Dart’s business is expected to it is still not cheap. Goldman Sachs Group’s high to its recent low on March against the next shock.
recovery of discretionary employee rationalisation ini- remain weak till first half of David Kostin reiterated in a 23. As of early London trading BLOOMBERG
.
NEW DELHI | TUESDAY, 31 MARCH 2020 THE SMART INVESTOR 9 <

SBI and DSP MFs

open small-cap
funds to accept
Street pricing in worst for RIL It’s not the time to
lump sum flows Highertelecomearningscanhelpamidfearsofweakrefining&petrochemicalmargins
UJJVAL JAUHARI
take credit risks
JASH KRIPLANI
Mumbai, 30 March
New Delhi, 30 March RBI action has averted duration risk, but
defaults could mar debt fund returns
N
ot long ago, Reliance Industries (RIL)
SBI Mutual Fund (MF) and was the most fancied stock among
DSP MF opened their small- investors. It was the first Indian compa- SANJAY KUMAR SINGH alsonotexpectingacutinthecash
cap funds for accepting lump ny to touch a market value of ~10 trillion on reserveratio(CRR)ortargetedlong-
sum investments amid a November 28, 2019. But a chain of recent events, Retailinvestorsnowadaysregard termrepooperations(TLRO),both
sharp correction in valuations many of which impacted the broader markets as volatilityintheirequityportfolioas ofwhichalsotranspired,”says
of small-cap stocks. well, led to a sharp correction of 40 per cent in aparforthecourse.However, DwijendraSrivastava,chief
Lump sum investments the stock from February highs. turbulenceofasimilarmagnitude investmentofficer(fixedincome),
are tactical investments, Concerns on margins in its refining and petro- inthefixed-incomeportfolio SundaramMutualFund.TLRO,in
which an investor can make chemical businesses, the potential impact of catchesthemoff-guard.Many particular,isexpectedtoease
any time. This is in contrast Covid-19 on retail sales, and a possible delay/call- investorsreceivedajoltlastweek pressureinthedebtmarket.
to systematic investments, off of its deal with Saudi Aramco and hence debt FACTORING IN SIGNIFICANT DISCOUNT whentheaveragereturnsofseveral “Participantsnowknowthatthe
which are routed through sys- reduction are the key reasons for the fall. Analysts In~crore Currentpriceassumes... Basecaseassumes... categoriesofdebtfunds,including markethasabackstopfacility.
tematic investment plans or nowsaythattheworstseemstobefactoredin,and thosewithashorterdurationwhich Liquiditycanbecreatedbybanks
SIPs on a monthly basis. the downside from here on appears limited. FY21E FY22E FY21E FY22E arepurportedlysafe,turned borrowingfromtheRBIwindow,”
Starting Monday, SBI In its core refining and petrochemical busi- GRM ($/barrel) 6.5 8.5 11.0 10.3 negative.However,strongactionby addsSrivastava.
Small Cap Fund allowed nesses, refining margins remain weak and the theReserveBankofIndia(RBI)inits TheRBI’sactionshavealready
Petchem Ebitda/tonne (~) 7,595 10,287 10,245 10,628
lump-sum investments until expected gains from the 2020 International March27monetarypolicyhelped causedyieldstoease.Forbondsup
it received net inflow of up to Maritime Organization (IMO) Fuel Sulphur Jio ARPU (~) 133 157 150 157 debtfundsretrievelostground. toone-yearmaturity,yieldshave
~1,000 crore from the date of Regulations have not materialised because of the Retail revenue (~ crore) 177,800 201,100 201,800 232,000 Bondpriceshadfallenand dropped100-250bps,whilefor
opening the schemeforlump- coronavirus spread, taking a toll on demand. yieldshadshotupacrossthe bondsofthree-yearmaturity,they
E: estimates, GRM: gross refining margin, ARPU: average revenue per user, Ebitda: earnings
sum subscriptions. SIPs were Singapore complex gross refining margin (GRM) before interest, tax, depreciation and amortisation Source: BNP Paribas interestratecurveduringthe havefallenbyabout150bps.
allowed in the scheme with around $1.6 per barrel in Q4FY20 has slipped fur- fortnightpreceding Categoryaverage
certaincaps.FromApril1,DSP ther, from $3.2 per barrel in the year-ago period theRBIaction.The debtfundreturns
MF has decided to revoke the and around $2 in the December 2019 quarter. assets, and predicting a 40 per cent decline in RIL once the scenario changes. impactwasmore YOUR MONEY havealsomovedback
temporary suspension of Further, because of lower demand and higher retail business valuations and also a peak net- On debt reduction, while the Street is now pronouncedinbonds, (largely)intopositive
lump-sum investments in supplies, polymer prices, which had bottomed debt of $43 billion (~3.2 trillion), including part of expecting a delayed or no deal with Saudi Aramco withmaturities territory(seetable).
units of DSP Small Cap Fund. out in December and were showing some recov- liabilities associated with fibre InvIT. In simple amid weak oil prices, reports indicate that rangingfromthree Even though the
“Overthelasttwoyears,the ery, are expected to see delayed gains. words, the Street is pricing in an extreme down- Facebook (FB) is in discussions with RIL to take a monthstothreeyears. crisis in debt funds
S&P BSE Small Cap TRI (total The telecom/digital business, however, is case outcome across its businesses. minority 10 per cent stake in the latter’s digital Theunderlyingcause was short-lived
returnindex)hasfallencumu- among a few triggers that could support the stock. It is in this backdrop, most analysts feel that business under Jio. Analysts at Kotak Institutional wasasharpdropin because of RBI’s
latively 56 per cent. We cur- Analystssaynear-termheadwindstoRIL’searnings valuations offer a long-term opportunity for Equities say that FB’s interest, if at all, may per- liquidity.Experts prompt action, retail
rentlyhavetheabilitytoinvest come from lower downstream (petrochemical) investors, and the downside may be limited from haps be driven to enhance the addressable oppor- attributethistothe investors cannot
in great businesses at attrac- margins amid a worsening macro environment. the current levels. Analysts at BNP Paribas say tunity in its largest market in terms of subscriber massivewithdrawaloffundsby afford to drop their guard. They
tive valuations, thereby mak- However, it may be partly mitigated by a plausible with China somewhat stabilising after the Covid- base. Jio’s engagement levels with its own sub- foreigninstitutionalinvestors need to be especially wary of
ing the risk-reward proposi- hike in telecom tariffs at an opportune time. The 19 pandemic and a widespread prevention meas- scribersthroughthedigitalecosystemmayhavean (FIIs)."FIIshavebeenpullingfunds taking credit risks. With
tion favourable at current factthatconsumerbusinesses(telecom,retail,etc) ures globally, refining and chemical margins may appeal.Thedeal,ifhappens,canhelpreducedebt. outofemergingmarkets,including operations of many companies
valuations,”saidVinitSambre, arenowseeingincreasedcontribution(nowabout recover in the second half CY20. Analysts, such as Abhijeet Bora at India,andmovingthemintosafer coming to a virtual standstill,
head-equities at DSP MF. a third) to RIL’s earnings provides comfort. Analysts, drawing a parallel between the cur- Sharekhan, say the stock factors in the recent assetclasses,"saysArunKumar, there could be a spike in
Further, experts say that Analysts are of the view that the stock price rent and the Global Financial Crisis of 2008-09, market meltdown, lower refining and headofresearch,Fundsindia.com. downgrades and defaults in the
timing becomes important in nevertheless factors in most of the negatives. In say oil & gas stocks are trading below the finan- petrochem margin assumption, and a delay in Theyhavepulledabout~52,910 near future. “So long as you are in
the small-cap segment. fact, analysts at HSBC say that after a sharp fall in cial crisis levels in terms of valuations. To justi- potential re-rating given concerns over the like- crorefromtheIndiandebtmarket funds with high credit quality, you
“We would like to take the share price, the market is discounting a 40 per fy the current valuations, FY21 earnings should ly deferment of RIL-Saudi Aramco deal. inMarchsofar. will be fine," says Kumar. Stay
money when we find inter- cent decline in downstream refining and chemi- see up to 75 per cent cut, and the oil price should However, Bora adds that it also ignores the pos- AccordingtoRSivakumar,head away from credit risk funds.
est in the category to be very cal Ebitda margins — the lowest in 10 years, and average at $25 a barrel. Not surprising, analysts itive of improving growth prospects for the tele- (fixedincome),AxisMutualFund Thesafezonetoinvestinis
low,” said Kalpen Parekh, res- assigning a zero value for its E&P (exploration at HSBC say pessimism leaves room for surpris- com business (potential ARPU hikes) and sus- said:“FIIsellinginthedebtand fundswithaveragedurationofup
ident at DSP MF. and production of oil and gas) and real estate es, while BNP Paribas expects fast recovery for tained high growth for the retail business. equitymarketswasaprimary tothreeyears.RajeshCheruvu,
factorbehindtheweaknessofthe chiefinvestmentofficer,Validus
rupee,andthat,inturn,caused Wealthsuggestsinvestingin
bondyieldstogoup.”Factorslike categoriessuchasshortduration,

‘Set-up favourable for long-term investors’ theyear-endwithdrawaloffunds

bycorporates,dislocationcaused
bytheCovid-19crisis(withbrokers
operatingfromhome),andmutual
corporatebond,andbankingand
PSUfundsinastaggeredmanner,
providedyouhaveathree-year
horizon.Avoidlong-duration
Despite a sharp correction, the markets have not dropped to valuation lows favourableoutcomeoverthelong ReserveBankofIndia(RBI)? economy.Householdsandfirms fundsalsosellingtomeet funds.“Heavygovernment
of the 2008-09 global financial crisis, says VETRI SUBRAMANIAM, group term.Thatismylessonfrom2009 Whatmoreisrequired? arelikelytoexhibitarisk-averse redemptionpressurewereother borrowingcouldcauseproblemsat
president and head of equity, UTI Asset Management Company. In an andthecrisesbeforethat.But TheRBIhastakenaggressive behaviorinthecurrent factorsthatcausedyieldstospike. thelongendofthecurvelateron,”
interview with Samie Modak, he says cheap valuations and easy monetary thereisnomodelthancangiveus stepstoaddressthegrowth environment.Underthe Whilethemarketswere saysSrivastava.Theruletofollowis
policy will set the tone for attractive long-term returns. Edited excerpts: atimelineorspeedforecastfor challengetotheeconomyand circumstances,theKeynesian expectingthecentralbankto thattheaveragedurationofthe
howthemarketswillbehave.Asa ensureadequateliquiditywithin caseforexpansionofgovernment intervene,themagnitudeofthe fundcategoryyouinvestinshould
Willthestimuluspackagesbeing issuesandprovideastimulusto caveat,alsonotethatwhile thesystem.Theframeworkand spendingandpolicyintervention actioncameasapleasantsurprise. notexceedyourinvestment
thrownaroundtocontainthe economicactivity.Theburdenof equiteshaveexperienceda timelinefordebtforbearance issupportive.Thefiscaldeficit...is “Themarketwasexpectinga50- horizon.Ifthathappens,spikein
economicdamagecausedbythe liftingeconomiesoutofthis sharpvaluationcutandare mayrequirefurther lessofaconstraintinthiscontext. basis-point(bps)ratecut,butit yieldsofthesortseenlastmonth
pandemichelp? challengingperiod intheattractivezone,they tweaks,includingsector- cameinat75bps.Themarketwas couldresultinlossesforyou.
Thereverberations willfallonfiscal havenotdroppedtothe specificpolicies.The Asafundmanager,howareyou
fromthepandemic
anditseconomic
policies. valuationlowswitnessed
duringtheglobalfinancial
governmentresponsein
Indiahassofarlargely
navigatingthevolatility?
My lesson from the past is that
RETURNS TURNED POSITIVE AFTER RBI ACTION
falloutarenotfully Willratecutsand crisisin2008-09. addressedhumanitarian one should not be reactive – it is Returns on March 26 (%) Returns on March 27 (%)
calculableasyet. VETRI SUBRAMANIAM bondbuying issues.Moreintervention your actions before the crisis and Fund category 1-week 1-month 3-month 1-week 1-month 3-month
Fiscalpolicywill Group president and programmes lead What’syour mayberequired volatility that are most crucial. Liquid -0.01 0.2 1.05 0.24 0.46 1.3
firstbeusedto head of equity, toaspikein takeonthe bothintermsof Our focus, as always, is on what is
tacklethe equitieslikewesaw measures socialsecurity, in our control – the investment Ultrashort duration -0.11 -0.47 -0.34 0.66 0.34 0.44
UTI Asset Management
humanitarian in2009? announ- directtransfers process and disciplined review Low duration -0.06 -2.7 -1.73 1.06 -1.5 -0.5
crisis,healthcostsandlossof Amarket,wherevaluationsare cedbyour andeventually of ourholdingsandrisk
Money market -0.17 -0.5 0.47 0.74 0.4 1.35
income.Then,further cheapandfiscalpolicyand govern- furtherfiscal management.
interventionsmayberequiredto monetarypolicyare mentand interventionto Short duration 0.08 -2.02 -0.19 1.68 0.01 1.73
addressdemandandsupply-side accommodative,iswellsetfora the stimulatethe More on business-standard.com Source: mutualfundindia.com

COMMODITIES1
>

> PRICE CARD

Milk consumption down 25% NCDEX extends
As on Mar 30

METALS ($/tonne)
International
------------------------------------------------------------------------------

Price %Chg#
Domestic
------------------------------------------------------------------------------

Price %Chg# Risinghomeconsumptioncan’tcompensateforlowerbuyingbyhotelsandteastalls

DILIP KUMAR JHA and private dairies at half the pre-
settlement date
Mumbai, 30 March vailing price of ~30-31 a litre. RAJESH BHAYANI
Aluminium 1,506.0 -15.9 1,851.9 -5.7 According to Sodhi, large co- Mumbai, 30 March
Copper 4,774.0 -22.8 5,463.0 -15.9 In a major setback to millions of operativedairiesareboundtopay
farmers, India's milk consump- farmers more because of their The Securities and Exchange Board
Nickel 11,225.0 -21.1 11,838.6 -20.4 tion has declined 25 per cent over long term links with farmers. ofIndia(Sebi)hasaskedexchangesto
Lead 1,690.0 -12.5 1,825.4 -17.1 the last month because of the clo- GCMMF pays ~31 a litre for cow review expiry dates of contracts of
sure of hotels, restaurants, and milk and ~50 a litre for buffalo agricultural commodities given the
Tin 14,355.0 -15.4 14,682.5 -17.6 roadside tea stalls amid a nation- milk. Private and small co-opera- operationaldisruptioncausedbythe
Zinc 1,848.5 -20.2 1,984.1 -23.1 wide lockdown to prevent the tives, by contrast, pay less in a ongoing21-daynationwidelockdown
spread of coronavirus. supply glut situation. amid the coronavirus pandemic.
Gold($/ounce) 1,619.2* 6.9 1,797.9 6.2 The decline in consumption "This is a temporary phe- Following Sebi’s instruction, the TURNOVER
Silver($/ounce) 14.0* -21.8 16.3 -19.2 has resulted in a ~5-7 per litre (or TAKING A HIT SUPPLY GLUT nomenon--justacoupleofweeks NCDEX — India’s largest exchange Figures in ~ crore
25 per cent) decline in the reali- more. With the onset of summer, for agricultural commodities — has
ENERGY sation of dairy farmers. The milk Milk farmers’ realisation which is nearly a month away, extended expiry dates of all its agri
market is flooded with surplus plunges ~5-7/litre milk supply will reduce and contracts maturing on April 20 to
CrudeOil($/bbl) 22.6* -66.3 24.1 -64.5
supply, with farmers at some Many farmers are selling prices recover," said Shah. April 30. “The exchange is continu-
NaturalGas($/mmBtu) 1.6* -27.3 1.7 -25.2 areas selling in distress at a 50 per in distress, ata 50% Normally, when milk supply ously reviewing and taking deci-
cent discount. Distress sales are discount is higher than consumer sions,”anNCDEXspokespersonsaid.
AGRI COMMODITIES ($/tonne) happening in remote areas where demand, dairies usually produce The exchange’s expiry for this
Working capital
Wheat 198.4 2.6 245.4 -20.2 private and co-operative dairies SMP or milk powder. "But, SMP month got over on March 20, days
could not reach farmers for pro- paucity hits production prices have crashed because of beforethelockdowncameintoeffect
Maize 186.4* -1.2 201.9 -29.7 curementbecauseofdisruptionif of milk powder reduced opportunity for exports. on March 21. Since the lockdown,
Sugar 358.7* -0.7 455.8 -6.6 transport services. by dairies Shipments are halted and no the NCDEX’s trade volumes have
This scenario emerged after Dairies say milk orders are coming in. Despite the dropped50percent.Fallingpricesof
Palmoil 605.0 -22.0 945.8 -21.6 Covid-19 started spreading in inadequatequantityofSMPavail- crude oil, guar gum and seeds con- marketplaces, warehouses, mandis,
procurement prices will
Rubber 1,247.5* -23.4 1,679.9 -8.6 major milk-producing states, recoverwith the onset able in the market, it is not feasi- tributed to this decline. andtransport.Thesearegroundreal-
such as Maharashtra, Gujarat, of summer in a month Source: Livestock Census, DAHD&F, GoI ble to convert excess milk into Experts had been asking Sebi ities. To avoid any uncalled-for sce-
CoffeeRobusta 1,216.0* -9.7 1,765.9 -5.3 Karnataka, and Tamil Nadu. Compiled by BS Research Bureau
SMP and store it for supply in the merge April and May contracts nario in the derivatives market, Sebi
Cotton 1,101.6 -28.2 1,233.3 -22.4 While milk production is peak demand season. Many becauseofdisruptionsinthefarm-to- must ask exchanges to either merge
* As on Mar 30, 20 1800 hrs IST, # Change Over 3 Months
going on, the decline in con- said R S Sodhi, managing direc- Interestingly, dairies have not dairies are facing working capital fork supply chain. Vijay Sardana, a April expiry contracts of agri com-
Conversion rate 1 USD = 75.6& 1 Ounce = 31.1032316 grams. sumption may dissuade farmers tor, Gujarat Cooperative Milk increased prices of these milk problem because of lack of fund- notedagricultureexpert,said:“There moditieswithMaymonthcontracts,
Notes from making fresh investment in Marketing Federation derivativesdespiteaspurtintheir ing from banks," said Sodhi. are wide-scale disruptions in agri or extend expiry dates.”
1) International metals, Indian basket crude, Malaysia Palm oil, Wheat the upcoming season, as prices (GCMMF), India's largest dairy, consumption. SMP prices in the domestic
LIFFE and Coffee Karnataka robusta pertains to previous days price.
2) International metal are LME Spot prices and domestic metal are
of milk derivatives like skimmed which sells milk and its deriva- "We are selling our products markets have declined to ~230 a
milk powder (SMP) have also tives under 'Amul' brand. at the maximum retail price kg, from ~310-320 a kg about a
Jewellery exports may fall in Q1FY21
Mumbai local spot prices except for Steel.
3) International Crude oil is Brent crude and Domestic Crude oil is Indian crashed because of little exports On the other hand, house- (MRP)," said Devendra Shah, month ago. A similar trend is
basket. amid the global pandemic. hold consumption of ghee, but- chairman and managing direc- emergingintheinternationalmar-
4) International Natural gas is Nymex near month future & domestic
natural gas is MCX near month futures.
"Milk consumption has ter, and milk has increased as tor, Parag Milk Foods, the pro- kets, where SMP prices slipped to Gems and jewellery exports are decline in exports in all of the 11
5) International Wheat, White sugar & Coffee Robusta are LIFF E future declined 25 per cent over the most people are home amid the ducer of 'Go' and 'Govardhan' $2,500 a tonne as against $3200 a expectedtowitnessasharpdeclinein monthsofFY20,withFebruary2020
prices of near month contract. past month because of the clo- ongoing countrywide lockdown. brands milk products. tonne about a month ago. March,aswellasinthefirstquarterof beingamajordisappointment,CARE
6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM sure of hotels, restaurants, and The increase in household con- Meanwhile, the decline in Dairies, however, hope the the next financial year amid disrup- Ratings said in a report.
near month future and Palm oil is Malaysia FOB spot price.
7) Domestic Wheat & Maize are NCDEX future prices of near month roadside tea stalls. But, domestic sumption, however, is insuffi- overallconsumptionhasprompt- decline in milk procurement tionscausedbythecoronaviruspan- A 41 per cent annual decline in
contract, Palm oil & Rubber are NCDEX spot prices. consumption has increased. The cient to compensate for the ed farmers to sell milk in distress, prices will nullify squeeze in demic, according to a report. An cut and polished diamond exports
8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local closure of retail ice-cream par- decline in overall milk usage. especially in remote areas of their profit margins, which was industry that is largely trade-orient- led to a cumulative exports fall of 19
spot price. lours and other value-added Household consumption con- Maharashtra, Karnataka, Tamil feared after lower sales of many ed and attracts over 5,000 exhibitors per cent year-on-year for the overall
9) International cotton is Cotton no.2-NYBOT near month future &
domestic cotton is MCX Future prices near month futures. products has contributed to the tributes nearly 25-30 per cent of Nadu, and Gujarat. Some farmers products like curd, buttermilk, and 100,000 buyers at various trade gems and jewellery industry in
Source: Bloomberg Compiled by BS Research Bureau decline in milk consumption," India's overall milk usage. are offering milk to processors lassi, and ice creams. fairs has witnessed a continuous February 2020, it added. PTI
.
NEW DELHI | TUESDAY, 31 MARCH 2020 BRAND WORLD 11 <

Brands learn to mind the ‘Viacom18 has paid salary

in advance, won’t retrench’
gap on the viral trail The ~3,667-crore Viacom18 has had a great 2019. Its broadcast (Colors,
MTV, Nickelodeon, etc), film (Padmavat Andhadhun, et al) and digital
(Voot) businesses were in good shape till the corona crisis hit. As “AFTER COVID-19,
Advertisersaskconsumerstostaycalmandkeeptheirdistance,findwaysto everything comes to a screeching halt, SUDHANSHU VATS, group CEO THERE WILL BE
and managing director, talks to Vanita Kohli-Khandekar on the
keep the engagement going under a lockdown impact. Edited excerpts.
SOME PRESSURE,
ESPECIALLY AT THE
TE NARASIMHAN the most vulnerable How is Viacom18 tackling some scenario planning. HIGHER END OF
CHENNAI,30 March population in India the corona crisis? INDIA. ONCE
and is also partnering We started looking at it in What scenarios? PEOPLE ARE USED

C TO DIGITAL
aught in the grip of with an NGO, Bikers for the week starting March 9. The first, which we were
the global pandemic, Good, for the initiative. We put together a small task originally working on, was
brands are learningto Many brands are also force to look at it. It has the pre-Covid best case
VIEWING, THEY
tone down their pitch while turning to influencers to seven members from scenario. That is now out. WILL QUESTION
finding ways to innovatively amplify the message. strategy, IT, The second is a base-case THE RELEVANCE
convey a message of opti- Actors, chefs, writers and communications, scenario. That is we take a OF THE
mism and safety in the midst stand-up comics have all commercial, production, year when business was CONVENTIONAL
of uncertainty. Stories of been requisitioned for HR and myself. We looked bad and peg it to that. We CORD”
hope, ‘causevertising’ and in the cause. at various scenarios: What took 2008-09 when the
some cases, influencer-led Some brands have would happen if everything economy was hit in the
requests are all being used to aligned with the civic shut down, how we wake of the global crisis
amplify the universal mes- authorities, wrapping would operate, can we do it following the Lehman
sage of stay home, stay safe their promotional nar- by rotating one-third of a Brothers collapse. It would ~20,000 a month outside of per cent. Films will suffer,
and break the viral chain. rative subtly around team in a week? This was mean a 20 per cent ad Mumbai won’t see any cuts. maybe by 30 per cent
While some brands the larger issue of public the first phase. decline, 2-3 per cent decline This covers 1,500 people. overall. Films will also
From Left: Burger King India asks people to order in, Cinthol
began the communication health and safety. Godrej On March 16, 12 members in subscriptions, while For these people, 60 per cent suffer a little longer for
advocates social distancing, Dettol focuses on hand washing,
journey around Coronavirus Consumer Products (GCPL) of the leadership team met digital will continue to of the cost will be borne by psychological reasons. The
Zomato talks of contactless delivery while Dunkin’Donuts
early, tying in humour, song- for its Protekt range of hand in office and we tried to grow. This assumes that we us and 40 by the production multiplex and higher-end
asks people to stay apart and stay safe
and-dance routines into the wash has extended its cam- figure out how to keep will be limping back to houses. audiences are more fearful
regular message of hand wash- inflicted shut down in the released for the first week of the paign (Protekt India critical functions, which are normalcy in June and be and conscious. Therefore, it
ing and social distancing, the country, but silence is a good lockdown “has predictably Movement) into a joint initia- the backbone of fully normal by How do the scenarios differ will take time for them to
narrative has completely shift- starting point. “In the current boosted brands in the same tive with the Brihanmumbai the broadcast July. for your film and TV come back to the theatres.
ed over the past week. The lockdown silence is golden. (hygiene) category.” Dettol Municipal Corporation (BMC) operations, The third worst- businesses? That is not true for the
tone is sombre, the messaging There is no ‘new-news’ that Liquid Soap topped the list and the Thane Municipal going. The big case scenario We get 10-15 per cent of our single-screen and fan films,
direct and brands are univer- any brand has to communi- (number of insertions) for tele- Corporation (TMC) to distrib- challenge was assumes that it will top line from films, like the ones with a big star
sally asking consumers to cate. So not putting out any vision, replacing OLX.in and ute a million packets of its Mr. concurrency. We be 6-9 months depending on the films like Salman Khan. On the
eschew consumption for per- advertising is actually the best was followed by Dettol Toilet Magic powder-to-liquid hand- needed to give SUDHANSHU before things come released that year. There are digital side, subscribers will
sonal safety. option. Where brands do Soaps and Surf Excel Easy wash, in Maharashtra. Nisaba people VATS back to normal. In challenges there since rise, streaming video-on-
Consider the ecommerce advertise, sensitivity to the Wash at second and third spots, Godrej, executive chairperson concurrent and Group CEO & MD, that case, there projects have been stalled. demand will do better at
companies, online food deliv- context of the times is equally its data revealed. GCPL, said that in the com- secure access. We Viacom18 could be a 50-60 per Laal Singh Chaddha, the high single-digits or maybe
ery apps and travel booking important. With the mood so Dettol, from Reckitt ing days, the brand will be tested it on the cent decline in remake of Forrest Gump mid-teens. Digital
websites that have seen their sombre all around, you can’t Benckiser, has also been active working with various govern- March 16 and could have 170 advertising and a decline in starring Aamir Khan, was to advertising would see mid-
businesses dive sharply over be showing celebrations. Also on social media. Its ment bodies and social concurrent users, now it is subscription as well. That is release on December 20. single digit growth.
the course of the week. While your communication needs to #HandWashChallenge on institutions to create up to 400. a very hard scenario. We are Some production has
the disruption has opened up respect social distancing. And TikTok has hit the top of the maximum impact. We also put together still treating it as a base case. happened. If the clouds But hasn’t there been
numerous points of friction your creatives may not be in charts in terms of views and Apart from the hygiene work from home guidelines, clear out and we can shoot pressure on subscriptions
with their customers, every- sync with that. So, if you real- shares. “Our initiatives around labels and ecommerce com- which started on March 17. What about jobs and some more, we could still post the new tariff order
one from Amazon, Flipkart, ly have to advertise, commu- creating awareness campaigns panies that are directly On March 23, the lockdown salary? make it. But both in film and (NTO)?
BigBasket, Zomato and the air- nicate safety, good health and on regular hand hygiene will impacted by the huge change began. Out of a workforce of We are not going to retrench our drama series, Post NTO, the industry has
lines and even sites such as well-being rather than a usual help develop the habit of in lifestyles that the virus has 1,600 we now have a total of anybody. We paid March production work on writing seen 20 per cent growth in
Airbnb have opted to keep the sales pitch,” he said. hand-washing,” said Pankaj enforced upon the world, only 15-20 people in offices salary on the 24th instead of and development subscription revenues,
communication direct and The hygiene brands have, of Duhan, chief marketing offi- other brands too are keeping spread across India. That is the end of the month. And, continues. though absolute numbers
simple, explaining their inabil- course, been the earliest to cer, RB Health South Asia. the communication lines about 3-4 in each office for even for the extended have fallen. Post Covid-19,
ity to continue conducting jump onto the safety and health In times such as these, open. For instance, BMW has some critical functions. The universe, we are ensuring Your assessment of the there will be some pressure
business as usual. bandwagon. They have also brands are also eager to an ad that asks people to stay production of TV shows that jobs won’t be touched. impact on the industry... especially at the higher end
Is this the best way for- emerged as the biggest adver- demonstrate their commit- safe and indoors. The only stopped from March 18-19. At production houses that The broadcast scenarios we of India. Once people are
ward? Sandeep Goyal, founder tisers in the country, over the ment to the cause of fighting curve that needs to be flat- We will have a bank till this work on our shows, we have are planning are roughly used to seeing on digital,
Mogae Media believes that past week. According to BARC the virus and RB has said that tened, its ad says, is the coro- week. Thereafter, we will go agreed that people getting same for the industry – it they will question the
there is no single right way to (Broadcast Audience Research it plans to distribute 10 mil- navirus curve and people can to repeat. And since it is below ~30,000 a month in could be higher for the relevance of the
deal with the coronavirus Council) India, the data lion units of Dettol Soap to do that by staying indoors. budget time, we also did Mumbai and people below industry by maybe 25-30 conventional cord.

> FROM PAGE 1

Govt’s U-turn on BRACING UP Numbers aside, the massive exodus

‘limited community The government said while keeping

of migrant labourers to their native
places last week also left the possibility of
transmission’ the number of cases low was priority,
it was readying for serious case
rapid transition alive.
Meanwhile, India is using this period
The expert clarified that there was “no management. On Monday, it to build treatment infrastructure on war
intermediate stage between local and announced a slew of measures to help footing. Experts have said that after the
community transmission”. mitigate the crisis. Highlights: lockdown, India would need to engage in
Stage one of the pandemic is when massive testing to ensure the spread is
cases are imported from affected coun- Orders for 2.1 mn personal protective under control.
tries and people with travel history test equipment (PPE) coveralls have been
placed with 11 manufacturers. They are
positive for the disease. In stage two,
local transmission begins when the expected to go up to 15,000 per day Market tumbles amid
source can be traced. So, people who
have come in contact with someone
within a week oil rout, virus spread
334,000 PPEs are available in
with travel history or any Covid-19 pos- “Though measures like the RBI’s inter-
itive case also test positive. hospitals across the country est payment deferrals are steps in the
In the third stage, called community Foreign sources of PPE kits are being right direction, it will only ease things
transmission, the source of infection approached through the Ministry of for a few months. But after three
cannot be traced and, hence, it becomes External Affairs months, we will have companies with
difficult to isolate such cases. In the cash flow issue,” Holland added.
fourth stage, there are several clusters N95 masks are being manufactured Market players said investors were
of the disease in a country and the by two domestic producers. Supply of worried about the cascading effect of
spread becomes uncontrollable. 50,000 masks per day for now, delays or defaults in their payments over
The health expert said while stage capacities to double in the next week the coming days. Many companies have
three was inevitable, it can be delayed. started delaying payments as sales have
DRDO collaborating with local
“How we control the spread of the dis- come to a standstill. Hero MotoCorp,
ease in stage two and three, that is if we
manufacturers to make 20,000 N99 the largest two-wheeler manufacturer
can plateau the spread, the fourth stage masks per day; expected to become in the country, on Monday said it had
can be avoided,” the expert said. available in a week halted full payment to vendors.
Last week, a tweet by Delhi Chief Many agencies have warned both
Minister Arvind Kejriwal about receiving Aggarwal said that of the cases that domestic and global economic growth
a report from a panel of doctors who rec- had come up till Monday evening (1,071), will halve in this fiscal. "As the situa-
ommended measures to prepare for a the number of cases where the authori- tion is still evolving, quantifying the
potential stage three outbreak in Delhi ties were doing contact tracing so as to economic impact of Covid-19 is extreme-
had also hinted that the danger was still identify where they got the infection ly challenging. Under our alternative
alive and not very far. from was very limited or miniscule, scenarios, assuming disruptions would
without specifying the exact last until mid-May (optimistic scenario)
numbers. or September (downside), India's FY21
He cautioned against “going real GDP growth could range between 4
> BS SUDOKU # 3012
into the semantics” in context
of the word “community” and,
per cent year-on-year (YoY) and -0.2 per
cent YoY (negative GDP, the first time
on a lighter vein, even said it since FY1980)," said Gautam
would be dropped from future Chhaochharia, head of India research,
communication. His responses UBS Securities. Last week, the
on other indicators of a wider International Monetary Fund had said
spread of infections, i.e. the the global economy had entered a reces-
hotspots, were rather guarded. sion that will be worse than in 2009.
Hotspots are areas with more Investors dumped banking and
number of cases or limited cas- financial stocks with HDFC and Bajaj
es but in a densely populated Finance dropping 11 per cent each. "The
area. impact of Covid-19 has been severe on
“As part of that strategy we banking stocks, even the better run
identify the containment zone ones, due to their cyclical nature and
as well as the buffer zone still high leverage. So far, we have very few
around it and we form special data points to predict any impact on
teams, the district administra- earnings, while the stock price reaction
tion coordinates the efforts,” he assumes a pretty severe impact,"
said. Investec said in a note.
Aggarwal cited some num- Holland said there are fears that
bers trying to show how the there could be problems in the recovery
SOLUTION TO #3011 Easy: spread of the disease has been of retail loans.
arrested through a lockdown — The market breadth was negative on
while it took India12 days to Monday, with total declining stocks at
Solution
reach from the 100th to the 1,351 and those advancing at 930 on the
tomorrow 1,000th case, the same number BSE. All the Sensex components, bar-
HOW TO PLAY of days saw other, more devel- ring six, ended the session with losses.
oped and less populated coun- Over a third of the Sensex components
Fill in the grid so tries, reporting anywhere fell 4 per cent or more. Tech Mahindra
that every row,
between 3,500 and 9,000 cases. and Nestlé India were the best-per-
every column
However, the relatively low forming stocks and rose 5 per cent and
and every 3x3
number of cases can also be 4.5 per cent, respectively.
box contains
attributed to fewer tests in All the BSE sectoral indices barring
the digits 1 to 9
India. two ended the sessions with losses.
12
>
NEW DELHI | TUESDAY, 31 MARCH 2020 1

The politics behind migrants’ journey home various industrial areas of the national the crowd breaching all lockdown norms
The Centre and state governments bonded and capital towards the UP border on Friday, sent out panic waves in the power corridor

thenfellapartduringthelongestlockdownwalk which led to huge crowds. The UP gov-

ernment was left with no option but to
and the Central government intervened
on Sunday.
bring the migrants back, he added. Union Cabinet Secretary Rajiv Gauba
SOMESH JHA were already on the road to Uttar Pradesh, “The Delhi government buses were and Home Secretary Ajay Bhalla held a
New Delhi, 30 March hoping to cross the border on foot, leaving deployed only to disperse huge crowds video conference on Sunday morning with
the remaining home-bound journey to within the city as it was counter-intuitive the top bureaucrats and police officers of

T
ired of walking miles after the lock- luck. in tackling coronavirus. So, we did send Punjab, Haryana, Maharashtra, Gujarat
down was announced on March 24, “By Friday, around midnight, (UP) buses to some locations in UP,” Shah said. and Delhi. “In the meeting, they expressed
hundreds of migrants had gathered Chief Minister Yogi Adityanath decided By Saturday afternoon, around 50,000 their alarm and unhappiness at the large-
at the Delhi-Uttar Pradesh border on to send buses to pick the migrants from people had gathered at the UP border to scale movement of migrant labour on the
Friday in the hope of getting back home by the state. The bus drivers and conductors catch buses to their home destinations. roads by foot followed by the accumula-
bus once the word had spread that the of the state government buses were called This was a direct result of the UP govern- tion of a large number of people especial-
administration was arranging transport in and it was decided to start the service,” ment’s decision, taking the central gov- ly at the Anand Vihar Bus Terminal. In
for them. Officials in the Prime Minister’s UP CM's advisor Mrityunjay Kumar told ernment into confidence, to ply the 1000 order to disperse the crowds from this
Office (PMO) were still undecided on Business Standard recalling the events of buses, Shah pointed out. area, buses had to be provided in large
whether to give a green signal to a pro- the past few days. He added that by then, The Uttar Pradesh State Road numbers on March 27 and 28 evening,” a
posal to screen and transport workers to the state had made arrangements to bring Transport Corporation had sent a com- communication sent by Haryana Director
their domicile states while visuals of the in 150,000 migrants by putting them On the roads of the national Capital, a sense of understanding was visible among muniqué to all the district magistrates General of Police Manoj Yadav to officers
migrants’ long walk made international under quarantine facilities in govern- the authorities, as the Delhi Police helped migrants board buses PHOTO: PTI within the state to allow the entry of bus- within the state on Sunday stated.
news. ments schools or colleges in villages. In the es which have been deployed to pick peo- The central government decided to
The governments in Uttar Pradesh and past three to four days, around 300,000 migrants to not return to their villages as any kind of movement. We observed ple stuck across various points at border immediately seal the borders and stop
Uttarakhand had started making arrange- had reached UP, Kumar said. the state had made arrangements for food, that people had started making a move districts of Delhi. “The government has movement of people. It also ordered the
ments to transport migrants from their By Saturday noon, when Adityanath’s shelter and whatever else they needed. from the state on March 26 and accord- now taken a decision to allow these pas- state governments to offer relief measures
states. In fact, Ila Giri, the assistant resi- office said on Twitter that 1,000 buses had The Central government, which had ing to our estimates 60 per cent were sengers en route to reach their destina- for the migrants, instructing them to pick
dent commissioner of the Uttarakhand been arranged “to help migrant workers imposed a lockdown, remained silent. from Haryana, Punjab and Rajasthan tion…The special task of carrying people up workers travelling on foot on highways.
government, moved fast to issue a notice reach their destination without any has- On the roads of the national capital, a who were passing through Delhi,” from Delhi border to various districts in The Centre was clear that the migrants
even before the lockdown kicked in. The sle’’, buses had started arriving in various sense of understanding was visible Delhi’s Dialogue and Development UP will continue today and on March 29,” must be returned to the localities from
notice said the state government would parts of UP, the word spread like wildfire between the authorities as the Delhi Police Commission vice-chairman Jasmine UPSRTC managing director Raj Shekhar where they had started.
make arrangements to pick up stranded in Delhi. helped migrants board the buses. The Shah said. had said in a letter. By Sunday night, the Central govern-
workers from two bus stations in Delhi. Within half an hour of the UP govern- Delhi Police, which comes under the He added that though these were man- The UP government fell short of buses ment had suspended two senior Delhi
It’s another matter that the ment’s official announcement, Delhi Union Home Affairs Ministry, even pre- ageable numbers, “the chaos” started with as the crowd swelled at the border and it government officials – one in the transport
Uttarakhand government could not ply deputy chief minister Manish Sisodia said vented workers from walking on the high- the UP government’s announcement on had to dial up the Bharatiya Janata Party- department and another in finance, while
the buses as planned— the Centre’s lock- that about 100 buses of the Delhi govern- way while making them reach the Anand Saturday. “No governments had made led Haryana government for help. Some issuing a showcause notice to a state offi-
down order had put a ban on the move- ment were carrying people who were try- Vihar bus station, where the UP govern- special arrangements till then. We had buses came from Faridabad and picked cial in the home and buildings depart-
ment of people within or outside the ing to leave Delhi. At the same time, ment buses were lined up. made all arrangement for workers living in up people even on Sunday to take them to ments and the sub-divisional magistrate
states, except if they were travelling for Sisodia appealed to the migrants to fol- “The Delhi government had been Delhi.” UP. By then, migrant workers from other of Seelampur (in-charge of Anand Vihar
essential services or were under the low the lockdown. Chief minister Arvind making appeals to the migrants not to But Kumar said the Delhi govern- states had also started moving in the hope bus terminal area), indirectly putting all
exempt list. Frustrated migrants however Kejriwal too made an appeal, requesting move out. We didn’t want to promote ment had started moving buses from of returning home. Soon, the exodus and the blame on the Delhi government.

India reports 227 cases ADMINISTRATIVE APATHY: DISINFECTANT SPRAYED ON MIGRANTS

in a day, death toll at 32

BIGGEST SINGLE-DAY JUMP IN CASES; TOTAL AT 1,251
PRESS TRUST OF INDIA
New Delhi, 30 March
Global coronavirus deaths
T cross 35K; most in Europe
he number of Covid-19 cases
climbed to 1,251 in India on Monday,
registering the highest single-day
increase of 227 cases, while the death toll
PHOTO: PTI

rose to 32, the Union Health Ministry said.

It said the number of active cases was
1,117, and 101 people were either cured or
discharged and one had migrated, the
ministry stated. The 1,251 cases include
49 foreigners. In an updated data at 9.30
pm, it said three fresh deaths were report- A group of migrants, heading home after the lockdown over coronavirus, was hosed down with a chlorine solution in Bareilly,
ed on Monday. triggering criticism and then an admission from the local authorities that they went too far. A state government official, however,
While one death each was reported argued that such spraying on people is permitted internationally. But the authorities did not follow the right procedure, he said.
from Gujarat and Madhya Pradesh, the A fire brigade official said the migrants were sprayed with a solution containing sodium hypochlorite. Chief Fire Officer C M
details of the third was not available on the Sharma said spraying sodium hypochlorite on the group was necessary for “disinfecting” them PHOTO: PTI
chart. So far, Maharashtra has reported the
most deaths (8), followed by Gujarat (6),
93 migrants held for defying
PHOTO: PTI

Karnataka (3) Madhya Pradesh (3), Delhi (2)

and Jammu and Kashmir (2).
Kerala, Tamil Nadu, Bihar, West Bengal,
Punjab and Himachal Pradesh have report- orders, cops fire teargas shells
ed a death each. More than 35,000 people have died More than 740,00 cases have been
The highest number of confirmed worldwide from the coronavirus pan- officially detected in 183 countries and At least 93 migrant labourers live in Surat's Pandesara area,
Covid-19 cases was reported from Kerala demic since it emerged late last year in territories, including at least 408,203 in have been arrested in Gujarat's where both the localities are
with 202 infections, followed by China, most of them in Europe, accord- Europe, almost 150,000 in the United Surat city for allegedly defying situated, and work in power-
Maharashtra at 198. The number of cases in ing to an AFP tally at 1615 GMT Monday States and Canada with 2,635 deaths and the nationwide lockdown and looms and textile processing
Delhi has gone up to 97. using official figures. 106,609 cases in Asia with 3,827 deaths. attacking police, an official said units here, another police offi-
The cases in Karnataka have gone up to In total, 35,905 people have died, Detected cases likely reflect only a on Monday. cial said.
83 till now, it has increased to 82 in Uttar including 26,076 in Europe. Italy has the fraction of the real number of infections Situation became tense in “When the police were try-
Pradesh . The number of cases has risen to most deaths with 11,591, following by as many countries are only testing the Ganesh Nagar and Tirupati ing to convince them to remain
71 in Telangana, 69 in Gujarat, 67 in Tamil Spain with 7,340 and China with 3,304. most serious cases. AFP/PTI Nagar localities late Sunday indoors, they started pelting People who showed coronavirus symptoms being sent for
Nadu while the number of cases in night after nearly 500 migrant stones at the security person- quarantine, from Nizamuddin in New Delhi, on Monday
Rajasthan has climbed to 59. It has risen to workers residing there came nel. Several police vehicles
48 in Jammu & Kashmir.
Madhya Pradesh has 47 positive Nine cases have been reported from the Pradesh and Odisha have reported three
on roads, demanding trans-
portation facility to reach their
were damaged in the stone
pelting,” Chaudhari said. 6 Telangana deaths
linked to prayer
patients. Punjab has reported 38 cases, Andaman and Nicobar Islands. cases each. Puducherry, Mizoram and native places, Deputy The police fired 30 teargas
while 36 Covid-19 cases have been detect- Chandigarh has eight cases, while Manipur have reported a case each. Commissioner of Police Vidhi shells to disperse the crowd,
ed in Haryana. There are 23 cases of Covid- Chhattisgarh and Uttarakhand have “Remaining 46 cases are being assigned Chaudhari said. said Chaudhari, whose official
19 in Andhra Pradesh, West Bengal (22),
Bihar (15) and Ladakh (13).
reported seven cases. Goa has reported
five coronavirus cases, while Himachal
to states to initiate contact tracing,” the
ministry stated.
A number of people hailing
from Uttar Pradesh and Bihar
car was also damaged in the
incident. PTI meet in Nizamuddin
SHUBHOMOY SIKDAR & “Coronavirus has spread
G20 ministers New India Assurance to provide ~50-L
PHOTO: REUTERS

B DASARATH REDDY among some of those who

New Delhi/Hyderabad, 30 March attended a religious prayer

agree to keep meeting from March 13 to

markets open insurance to 2 mn health care workers Hours after the government
assured the country has not
entered the community trans-
March 15 at Markaz in
Nizamuddin area in Delhi.
Among those who attended
SUBRATA PANDA ered by a special insurance cover, including accidental loss government and will be in the mission stage of Covid-19 yet, were people from Telangana.
Trade ministers from the Mumbai, 30 March scheme. “Any health care pro- of life on account of contracting rangeof~500-600,saidaperson alarming news came from Of them, six died — two at
Group of
economies agreed on
20 major
The central government has
fessional, who while treating
Covid-19 patients, meets with
Covid-19 pandemic disease,”
New India Assurance said to
aware of the development.
None of the private sector gen-
Tokyo Olympics Telangana on Monday. The
stategovernmentlateintheday
Gandhi Hospital, one each at
Apollo and Global Hospitals,
Monday to keep their mar-
kets open and ensure the
selected New India Assurance,
the country’s largest public sec-
an accident, he/she would be
compensated with an
the Ministry of Health and
Family Welfare. It said the
eral insurers has been commu-
nicated anything about the
in Jul-Aug 2021 admitted that six persons, who
attended a religious prayer
and two at Nizamabad and
Gadwal,” the state government
continued flow of vital med- tor non-life insurer, to provide amount of ~50 premium process had scheme. “There will be no rein- The postponed Olympic meeting from March 13 to stated. The government earlier
ical supplies, equipment and insurance coverage to more lakh under the been initiated. surance support for New India Games will now begin on March 15 at Markaz in Delhi’s in the day had reported one
other essential goods as the than 2 million health care pro- scheme,” The tenure of the Assurance as the need for it may July 23 next year and run WestNizamuddin,havediedat death and six new cases.
world battles the deadly fessionals taking care of the Sitharaman policy will be for a not arise as even in worst of sce- until August 8, the head of different hospitals in the state. Special teams have identi-
coronavirus pandemic. patients diagnosed with the had said. period of 90 days narios. There would not be a the Tokyo 2020 organising Police and paramilitary per- fied people who came in con-
G20 leaders pledged last deadly Covid-19. The special starting from March large number of casualties of committee said on Monday, sonnel have cordoned off the tact with the deceased and are
week to inject over $5 trillion Finance Minister Nirmala insurance 30 and the sum health care professionals,” said as the coronavirus pandemic area near Markaz and evacuat- being shifted to hospitals,
into the global economy to Sitharaman, last week, scheme would assured is ~50 lakh. If a the source. made it impossible to plan ed hundreds of people sus- according to the Telangana
limit job and income losses announced that under the be a group person- health care professional This will be over and above and prepare for them prop- pected to have contracted coro- government statement.
causedbyborderclosuresand Pradhan Mantri Garib Kalyan al accident policy, unfortunately dies after con- any other insurance scheme erly this year. navirus. They are being kept at According to a PTI report,
sweeping shutdowns aimed Yojana, all health care profes- which includes accidental loss tractingthedisease,thenhe/she being availed of by the health The Games were post- the nearby JLN Stadium, over 2,000 delegates, including
at halting the spread of the sionals — safai karmacharis, of life on account of contracting will be paid an amount of ~50 professional.Underthescheme, poned last week — the first which has now been turned many from Indonesia and
disease. wardboys,ASHAworkers,para- the deadly virus. “The tailor- lakh under the scheme. all government health centers, such delay in the 124-year into a quarantine facility. Delhi Malaysia, attended the congre-
In a joint statement issued medics technicians, doctors, made policy will provide com- The premium for the insur- wellness centers, and hospitals history of the modern Chief Minister Arvind Kejriwal gation held between March 1
after a video conference, the and specialists — would be cov- prehensive personal accident ance scheme will be paid by the would be covered. Olympics. The move was a has ordered the registration of and March 15, officials said.
ministers pledged to take huge blow for Japan, which an FIR against a maulana for It is feared that many of
“immediate necessary meas- invested $13 billion in the leading the Tabligh-e-Jamaat those infected during the reli-
ures" to facilitate trade in FinMin asks banks to Banks in West Bengal Procurement norms for Railways plans to set run-up to the event and congregation. The UP Police, gious event caused the trans-
essential goods and incen- ensure adequate cash to function normally select ministries eased aside 20,000 coaches raised $3 billion from domes- too, have ordered identification mission of the virus in different
tivize additional production tic sponsors. and isolation of people from parts of the country. The Union
of equipment and drugs. With salary day drawing near, The State Level Bankers' The government has relaxed The Railway Board has told its Yoshiro Mori, the head of the state who had attended the home and health ministries
They said they agreed that the finance ministry has asked Committee in West Bengal mandatory public procurement zones that they might be the Tokyo 2020 organising prayer meeting. ducked specific questions dur-
all emergency measures public sector banks to ensure decided that banks will norms for 5 departments, required to convert up to 20,000 committee, confirmed the According to media reports, ing a press conference, saying
should be "targeted, propor- enough cash to meet the function from 10 am to 4 pm, ministries, including health coaches into isolation wards as new dates after he made the the death of 65-year-old man that standard protocols were
tionate, transparent, and tem- heightened demand across the withdrawing its earlier advisory and textiles, till April for buying part of their preparedness to decision with the in Srinagar was, too, linked to being followed in the matter.
porary," consistent with the country amid the 21-day of limiting the transaction products that are key to deal fight the Covid-19 outbreak. In International Olympic this event. Also, six persons The Delhi Police said the
rules of the World Trade lockdown. hours till 2 pm, an official said. with Covid-19. The govt also a letter to all the zonal general Committee. Mori said the tested positive in the Andaman organisers were told not to
Organization (WTO) and not It has also asked banks to All the branches will now allowed them to decide on ite- managers on Monday, the Paralympic Games would and Nicobar Islands and one in organise the event in light of
creating "unnecessary barri- ensure opening of as many function in all the working ms which could be classified as board said that initially 5,000 run from August 24- Andhra Pradesh’s Guntur had the pandemic, but they pro-
ers" to trade. REUTERS branches as possible. PTI days. PTI “essential supplies”. PTI coaches will be converted. PTI September 5. REUTERS attended the congregation. ceeded with the event.