Seasonal Magazine - Latest Issue - May 2020 by John Antony

Bahrain BD 1.50 Kuwait KD 1.50 Oman OR 1.50, Saudi Arabia SR 12.00 UAE DH 10.00 UK Â£ 3.00, US $ 3.00

Rs. 50

YEARS

VOLUME 18 ISSUE 5 MAY 2020

MONEY PRINTING OR MONETISATION IS NEITHER A LASTING SOLUTION OR A DANGER DR. RAGHURAM RAJAN

INDIAN HEALTHCARE & ECONOMY CAN'T COPE WITH A MAJOR OUTBREAK: SOMDEEP SEN

GOVERNMENT BORROWING FROM RBI NOT PREFERRED: NK SINGH

WHY INDIA NEEDS MEGA INTERVENTIONS PROF. MD NALAPAT

AN OBJECTIVE AND SANE VOICE PARSA VENKATESHWAR RAO

A FORMER CHIEF ECONOMIC ADVISOR SHARES HIS INNOVATIVE VIEWS DR. ARVIND VIRMANI

LOCKDOWN AFFECTS COUNTRIES LIKE BETA GROUP'S INDIA MORE: UNIQUE INSIGHTS TO CHRISTOPHER WOOD EMERGE STRONGER FROM COVID-19 DR. RAJMOHAN PILLAI

MAGAZINE

Seasonal www.seasonalmagazine.com

Managing Editor Jason D Pavorattikaran Editor John Antony Director (Finance) Ceena Associate Editor Carl Jaison Senior Editorial Coordinator Jacob Deva Senior Correspondent Bina Menon Creative Visualizer Bijohns Varghese Photographer Anish Aloysious Office Assistant Alby CG Correspondents Bombay: Rashmi Prakash Delhi: Anurag Dixit Director (Technical) John Antony Publisher Jason D Pavorattikaran

LASTING LESSONS FROM COVID-19 As much as Covid-19 is a once in a century crisis, it offers lasting lessons for all from individuals to countries, to make a better world.

The world needs to save

Editorial & Business Office Cochin: 36/1924 E, Kaloor-Kadavanthra Road, Near IGNOU, Kaloor, Cochin-17. Ph:0484- 2345876, 2534377, 2340080 Mob. 09947141362 Delhi: H.No: P-108, Uppal Southend, Sector 48, Sohna Road, Gurgaon, Haryana – 122018 Ph: 9891771857|099471 41362 Mumbai: 202, Woodland Heights Building, St. Martins Road, Bandra West, Mumbai -400 050 Mob: 919947141362 Bangalore: House No: 493, Block 3 3rd Main, HBR Layout, Bangalore-4209731984836, Email:skmagazine@gmail.com www.seasonalmagazine.com UK Office: “CRONAN”, Boundaries Road Feltham, Middlesex, UK TW13 5DR Ph: 020 8890 0045, Mob: 00447947181950 Email: petecarlsons@gmail.com Reg No: KERENG/2002/6803 Printed & Published by Jaison D on behalf of PeteCarlson Solutions Pvt. Ltd. at Cochin. Printed at Rathna Offset Printers, Chennai-14. All Rights Reserved by PeteCarlson Solutions Pvt. Ltd. No part of this publication may be reproduced by any means, including electronic, without the prior written permission of the publisher. All health related articles are for first information purposes only. Always consult your doctor before taking any decison affecting your health.

MEMBER

Subscriptions Available on iPhone/iPad & Android SEASONAL MAGAZINE

EDITORIAL

Everyone needs to save. Not just individuals and families, but small businesses, corporates, NGOs, charities, villages, cities, states, and whole governments need to save for a rainy day. Or an extended rainy season like how Covid-19 proved to be. Needless to say, the richest entities and countries with the deepest wealth are the ones who are going to outlive this crisis and thrive again with the least damage. And its converse needn’t be said even this much. The world’s poor – be it individuals or companies or countries – are taking the biggest hit, even if they have not taken a huge direct hit already from the pandemic. And this will continue for years to come, if not decades. Hopefully, world will wake up to the fact that saving is not what is left after spending, but a judicious percentage of one’s income.

The world needs more income Saving is not possible if there isn’t enough income. Savings can’t be done by reducing essential spending, as consumption needs to be grown. There should be surplus income for all entities. Governments should find ways and means to generate more tax revenue from more sources rather than burden certain segments more. Tax rates should be light so that it encourages growth and profits, and thus compensates in itself. When it comes to corporates, secular profits should be aimed at, and not just lofty valuations that disappear overnight. And coming to the workforce, minimum wages should be set so that there is something substantial to save for those who draw even the minimum wages.

The world needs to be in stable and liquid assets During good times, the world tends to save in multi-bagger investments like real estate and stocks. The even more brave-hearted goes a step further and invests or trades in items like crude and currency futures. But in bad times, these are the first assets to come crumbling down and lay shattered there for years. In contrast, a stable asset like gold has put up a blistering performance, despite some initial hiccups, even during this unprecedented lockdown in human history. Similar is the case with bank deposits, whether it is shortterm or long-term deposits. Despite being looked over often for their lacklustre returns, bank deposits increasingly make sense now, due to lower inflation and ready liquidity.

The world needs to fight autocracy It is no coincidence that modern world’s only pandemic arose from China. In fact, in hindsight at least, the world was only waiting for China to deliver this devastating blow. Because, China had covered up the first 2002-04 SARS Corona Virus outbreak brilliantly, taking 15 long years before admitting that its origin was from bats and civets in its Yunnan province. Neither WHO nor any superpower including USA took China to the task for this, as there were only 8000 cases worldwide and less than 800 deaths, and all nations thought it convenient not to ruffle the Chinese feathers. This emboldened the autocratic regime in China to do an encore when Covid-19 broke out in late 2019. It would never have happened if China had a decent Opposition Party or a free press.

The world needs sensible tourism More and more details are emerging that Covid-19 has primarily been a tourism disease. Starting from the mid-1990s and accelerating by the early part of this past decade, China has been leading in worldwide outbound tourism. Since, 2013, China has not yielded its number one spot in global outbound tourism, and in value terms is double that of the second player, USA. And where are the Chinese tourists going to? Predominantly to USA and Europe. No wonder then that these were the regions devastated by Covid-19 pandemic, and not countries like India or the African nations which the Chinese tourists shun. China could have at least prevented its tourists

More and more details are emerging that Covid-19 has primarily been a tourism disease.

from going abroad, but it didn’t because that would have upset its inbound tourism, which is ranked number two in the world behind USA.

The world needs to take care of its poor However hard and sweeping Covid-19 would rage across the world, there is very little chance that it would kill more than another epidemic which has been devastating the world since decades. Yes, hunger kills 25,000 people daily but the world simply doesn’t care because it mainly affects only the poor in nations across Africa and Asia. But Covid-19 comes across as much more severe as the rich and middle-class who calls the shots in this world are not spared by it. Will Covid-19 change this world’s apathy? Not likely, unless the world wakes up to the fact that it makes immense economic sense too to handhold the poor nations and bring them up so that they become viable and thriving markets that contribute to the growth and sustenance of humanity on this planet.

The world needs to look beyond capitalism It was perhaps destined in history that Covid-19 came and destroyed hundreds of millions of jobs worldwide, at a time when capitalists across the world were planning to replace millions of jobs through automation, artificial intelligence and robots. Now, they wouldn’t be able to do it, because for governments across the world, the first priority now becomes protecting jobs. The greatest positive impact from Covid-19 would be the realization that every emerging technology is not useful for humans at large. Automation or artificial intelligence may be good for the tech firms that peddle it and their financiers, but if these technologies stand to drive out millions of humans from their jobs, they need to be avoided, well, like the Corona virus itself. Countries across the world are now all set to incentivize jobs rather than investments for the first time in modern history. SEASONAL MAGAZINE

The world needs to prioritize better Covid-19 came at a time when the defence expenditures of most large nations were rising year after year. In fact, it has been rising steadily for the last five years, from 2015 onward, and now stands at nearly $2 trillion or Rs. 150 lakh crore. But this has not been like this always. After the Global Economic Crisis started in 2009, and when the realities sunk in by 2011, global defence budgets kept reducing for the next three consecutive years. No great war or geopolitical tension arose in those three years, due to these lower defence budgets. But when the world’s economic situation again got better, the global arms lobby again made governments to spend more. Now, Covid-19 is sure to break that trend once again, as governments realize the futility of spending billions in defence, even when they stand without funds to fight a medical issue.

The world needs to choose carefully where it invests India is no China. We need not even tell the global investors this, as they know it already. We can’t compete with the Chinese on the scales of infrastructure or speed of execution, at least for a foreseeable future. But should that matter anymore? We have numerous other strengths including a thriving democracy, a free press, capable engineers & managers, adequate resources and excellent English language skills. Companies who have burnt their hands in China now think that they have seen the worse. Not by a long shot. All large nations can wreck companies if they want, but most democratic nations with a

If India can untangle its legal and other myriad statutory requirements, and provide a consistent policy framework, there is no reason that we can’t attract many global firms looking to diversify beyond China.

reasonably independent judiciary would not ever do that. But the same can’t be said of an autocracy as powerful as China and that would be the real risk for global companies there. If India can untangle its legal and other myriad statutory requirements, and provide a consistent policy framework, there is no reason that we can’t attract many global firms looking to diversify beyond China.

The world needs to have common sense Covid-19 would go down in history as the greatest intelligence failure of all time. America, Russia, Britain, and France, as well as the world’s emerging superpowers all failed bitterly in unearthing any intelligence from China regarding the depth of this crisis. This is despite investing hundreds of billions of dollars into creating and maintaining sophisticated surveillance mechanisms that include dedicated satellites. Instead, only a little bit of common sense would have saved hundreds of thousands of deaths worldwide, not to say trillions of dollars in resources and millions of jobs. This is because, as far back as December 2019, a handful of scientists and doctors in the West kept saying that there is every chance that the disease is spreading from humans-to-humans, unlike the official Chinese lie of no human transmission. A simple travel ban from China, and for those who have visited China recently would have saved the world. But that would not have been tech-driven intelligence, but plain common sense. John Antony

CONTENTS

URGENT CURES FOR THE COVID-19 ECONOMY Each week growth prediction continues to be revised down. The latest is from IMF which says that the whole of Asia including India would witness 0% growth this year. So far, India has fared well in containing the health side of the crisis. It remains to be seen whether the containment measures would be as effective when India opens the floodgates to let its NRI sons and daughters in. On the economic side, experts are already predicting that the 40day lockdown will cost India upward of Rs. 15 lakh crore. The multi-trillion dollar question that India and most nations

WHY INDIA NEEDS MEGA INTERVENTIONS INDIAN HEALTHCARE & ECONOMY CAN'T COPE WITH A MAJOR OUTBREAK: SOMDEEP SEN, ROSKILDE UNIVERSITY The sudden lockdown announcement has meant that millions of migrant workers, who play an indispensable role in the economies of India’s SEASONAL MAGAZINE

In a conversation with Seasonal Magazine, Prof. MD Nalapat, noted academician and senior journalist, says he is a believer of India’s great future, but only if India does mega interventions and undertakes massive reforms.

BETA GROUP'S UNIQUE INSIGHTS TO EMERGE STRONGER FROM COVID-19 A FORMER CHIEF ECONOMIC ADVISOR SHARES HIS INNOVATIVE VIEWS Seasonal Magazine recently caught up with Dr. Arvind Virmani, Chairman of Foundation for Economic Growth & Welfare (EGROW) AND former Chief Economic Advisor to know his views on how to steer the economy back to growth, as part of our cover story, Urgent Cures for the Covid-19 Economy.

LOCKDOWN AFFECTS COUNTRIES LIKE INDIA MORE: CHRISTOPHER WOOD, JEFFERIES

Lockdown in countries like India and Indonesia are more disastrous for human welfare and economies since there is no help for small businesses and neither are there unemployment benefits, said Christopher Wood, Global Head of Equity Strategy at Jefferies.

GOVERNMENT BORROWING FROM RBI NOT PREFERRED: NK SINGH, CHAIRMAN, 15TH FINANCE COMMISSION Though the government faces a tough challenge in funding the economy reeling from the Covid-19 pandemic, NK Singh, Chairman, 15th Fifteenth Finance Commission, said borrowing money from the Reserve Bank of India is not the preferred option. Section 5 of the Fiscal Responsibility and Budget Management Act allows RBI to directly lend money to the government

SEASONAL MAGAZINE

CONTENTS UNLOCKING STORIES FROM THE WORLD OVER Nations across the world are witnessinr further cautious easing of COVID-19 restrictions following signs the pandemic may be slowing, with hard-hit Italy set to follow Spain in allowing people outside after weeks of confinement.

THE STARTUP GIANTS: WILL THE PANDEMIC PROVE THEIR LEADERSHIP PROWESS? With 39,000+ startups and 33+ unicorns, India is today home to the third largest startup ecosystem, behind only the US and China. Out of this veritable list, there are three that stand out for their growth and value proposition. Today, PayTM founder and CEO Vijay Shekhar Sharma, Oyo Hotels and Homes founder and CEO Ritesh Agarwal and BYJU's founder Byju

PASSIONATE ABOUT INFRASTRUCTURE DEVELOPMENT NitinGadkari has always been passionate about infrastructure development, so much so that he requested Prime Minister NarendraModi in 2014 to allot him that portfolio. Today, he handles this crucial domain’s key components like Ministry of Road Transport & Highways, and Ministry of Shipping. And along with these, Gadkari has been entrusted with an even more crucial segment as far as India is concerned – the Ministry of Micro, Small and Medium Industries which accounts for the bulk

AN OBJECTIVE AND SANE VOICE The voice of Parsa Venkateshwar Rao Jr has been that of an objective and centrist political commentator. He can pick holes easily in secular and liberal arguments, as much as he can easily pick holes in right-wing arguments. Even while objectively criticizing the BJP led

S&P CALLS FOR ADDITIONAL FISCAL STIMULUS IN INDIA Global ratings agency S&P has said additional financial stimulus is “necessary” in India to fight the COVID-19 pandemic, despite the country's weak fiscal position. The stimulus is necessary to support the vulnerable segments of the society and also to prevent additional structural damage to the economy amid the lockdown which has suddenly stopped the business activity, S&P said in a report.

SEASONAL MAGAZINE

WHY DOES INDIA’S RENEWED INTEREST IN THE RIC MATTER? India can utilize the RIC grouping to secure a greater role for itself in the Eurasian strategic, political, and economic affairs, which would solidify its status as a continental power. Moreover, the RIC serves as a hedge against strategic dilemmas in India’s relationship with the United States. As the world turns increasingly multi-polar, India’s emphasis on the RIC will compliment its policy of ‘issuebased alignments’.

US REPORT SAYS CHINA HID COVID-19 SEVERITY TO HOARD MEDICAL SUPPLIES Chinese leaders intentionally concealed the severity of the pandemic from the world in early January, according to a four-page Department of Homeland Security report.

WHY IS WARREN BUFFETT SELLING SELECTIVELY AND BUYING NOTHING

Berkshire’s earnings released recently suggested that an otherwise jubilant Buffett, widely followed by investors the world over, did not buy stocks in March quarter. His company, in fact, sold $6.1

DETAILS EMERGE ON HOW DEEPLY LOCKDOWN IS HURTING THE ECONOMY India’s manufacturing activity slumped to a record low in April as business activities came to a near standstill after the Centre imposed a nationwide lockdown on 25 March to contain the spread

ISLAMOPHOBIC POSTS INVITE TROUBLE FOR SOME INDIANS IN UAE Three more Indian expatriates in the United Arab Emirates have been sacked or suspended from their jobs for Islamophobic social media posts days after the Indian ambassador to the Emirate Pavan Kapoor warned Indians there against putting out such posts on social media, a news report said on Saturday. SEASONAL MAGAZINE

WHY IS WARREN BUFFETT SELLING SELECTIVELY AND BUYING NOTHING BERKSHIRE’S EARNINGS RELEASED RECENTLY SUGGESTED THAT AN OTHERWISE JUBILANT BUFFETT, WIDELY FOLLOWED BY INVESTORS THE WORLD OVER, DID NOT BUY STOCKS IN MARCH QUARTER. HIS COMPANY, IN FACT, SOLD $6.1 BILLION STOCKS IN APRIL AND ADDED TO THE ALREADY HUGE $137 BILLION CASH PILE AND ALSO TO GOVERNMENT TREASURY HOLDINGS.

uffett’s speech, delivered online, made two-three prominent points. He does not see deep value in the market even after the recent crash. He is concerned because, he is unable to gauge the pandemic risk. But he feels that one should keep owning shares of companies that one knows better and sell stocks of companies where fundamental impact of the pandemic is difficult to gauge. Buffett was once a staunch opponent of aviation stocks. Later in 2016, he changed his stance and bought shares in four American airlines. But the Sage of Omaha now says his company has dumped all the airlines stocks recently, even at losses. Berkshire had an 11 per cent stake in Delta Air Lines, 10 per cent in Southwest Airlines, 10 per cent in American Airlines and 9 per cent of United Airlines SEASONAL MAGAZINE

as of December 31. “The airline business changed in a very major way. The future is much less clear to me about how the business will turn out. The world changed for airlines, and I wish them well, but it's one of the businesses we own directly that are going to be hurt.” Berkshire saw $68.48 billion erosion in the value of shares the company held as of March 31. But it largely included unrealised losses. The Buffet company did not sell shares substantially. This is even as the portfolio suffered a 27 per cent hit compared with a 20 per cent fall in the S&P500 index during the same period. Buffett does not see deep value BUFFETT WAS ONCE A STAUNCH OPPONENT OF AVIATION STOCKS. LATER IN 2016, HE CHANGED HIS STANCE AND BOUGHT SHARES IN FOUR AMERICAN AIRLINES.

emerging in the US market. He feels the recent fall does not factor in unknown risks associated with the pandemic, and so, he has stayed on the sidelines. “You do not want to get yourself in a position where those interruptions can affect you either because you're leveraged or because you're psychologically unable to handle, looking at a bunch of numbers.” he said. But then why isn't he selling more? Buffett gave the example of a farmer whose neighbour offered him $2,000 for an acre of land he owns. A day later, the same friend offers the farmer $1,200 for the same piece of land. A day after, this friend of farmer cuts the offer price to $800 per acre. “Are you going to let this guy drive you into thinking I better sell because this number keeps coming in lower all the time? It's a very important matter to bring the right psychological approach to owning stocks,” Buffett said.

DETAILS EMERGE ON HOW DEEPLY LOCKDOWN IS HURTING THE ECONOMY

down as per the latest rules announced; several restrictions in 'red zones' will hamper backward and forward supply chains; and the large disruption in labour with many employees returning home to rural India may create manpower issues," she added.

INDIA’S MANUFACTURING ACTIVITY SLUMPED TO A RECORD LOW IN APRIL AS BUSINESS ACTIVITIES CAME TO A NEAR STANDSTILL AFTER THE CENTRE IMPOSED A NATIONWIDE LOCKDOWN ON 25 MARCH TO CONTAIN THE SPREAD OF COVID-19, A PRIVATE SURVEY SHOWED. he Nikkei manufacturing Purchasing Managers’ Index (PMI) for India declined to 27.4 in April from 51.8 in March, recording the sharpest deterioration in business conditions since data analytics firm IHS Markit began recording data 15 years ago. A figure of above 50 indicates expansion, while a sub-50 print signals contraction. The survey by IHS Markit tracks new orders, output, jobs, suppliers’ delivery time, and stocks of purchases for around 400 manufacturers. The decline in operating conditions was partially driven by an unprecedented contraction in output. “Amid widespread business closures, demand conditions were severely hampered in April. New orders fell for the first time in two-and-a-half years and at the sharpest rate in the survey's history, far outpacing that seen during the global financial crisis," IHS Markit said. "In the latest survey period, record contractions in output, new orders and employment pointed to a severe deterioration in demand conditions.

Meanwhile, there was evidence of unprecedented supply-side disruption, with input delivery times lengthening to the greatest extent since data collection began in March 2005," Eliot Kerr, an economist at IHS Markit, said. Total new business received little support from international markets in April, as new export orders tumbled. Deteriorating demand conditions saw manufacturers drastically cut back staff numbers in April. The reduction in employment was the quickest in the survey's history. The only silver lining was that the 12-month ahead future output index recovered from its March lows, and was well above the 50 mark, though markedly lower than the longterm-average. Pranjul Bhandari, chief India economist at HSBC, said with partial easing of the lockdown from Monday, she expects economic activity to pick up, led by postponed consumption and inventory restocking demand. “As such, the April reading is likely to mark the bottom of the PMI series. Yet, the recovery could be shallow and shortlived given we expect 50% of the economy will continue to be locked

India has extended its countrywide lockdown by another two weeks until 17 May, taking the lockdown period to eight weeks. Lockdown restrictions for restarting economic activities have been substantially relaxed especially for the green and orange zones with no or low incidences of coronavirus cases. However, with the substantial disruption in economic activity, many economists now project India’s gross domestic product to contract in FY21. Standard Chartered Bank recently slashed its growth forecast for India to a contraction of 2% from a growth of 0.7% projected earlier, holding that the two-week extension in lockdown will be a significant drag on growth. “The top 10 states in terms of GDP, which together contribute 70% of India’s GDP, have 35% of their districts categorised as ‘red zones’ (areas with high infection rates), on average. Most of the lockdown relaxations are not applicable in these areas," said Anubhuti Sahay Head, South Asia Economic Research at Standard Chartered Bank. Given that industrialised states have a high proportion of red zones, and their infection rates have yet to show signs of deceleration, economic activity is likely to resume at a very gradual pace even after 17 May. Against this backdrop, Standard Chartered Bank believes economic activity will take much longer to return to normal levels, she added. SEASONAL MAGAZINE

Islamophobic Posts Invite Trouble for Some Indians in UAE Around eight Indians have landed in trouble in recent weeks for their reported Islamophobic social media posts.

THREE MORE INDIAN EXPATRIATES IN THE UNITED ARAB EMIRATES HAVE BEEN SACKED OR SUSPENDED FROM THEIR JOBS FOR ISLAMOPHOBIC SOCIAL MEDIA POSTS DAYS AFTER THE INDIAN AMBASSADOR TO THE EMIRATE PAVAN KAPOOR WARNED INDIANS THERE AGAINST PUTTING OUT SUCH POSTS ON SOCIAL MEDIA, A NEWS REPORT SAID ON SATURDAY. he three now join nearly half a dozen others who have similarly landed in trouble in recent weeks for their reported Islamophobic social media posts. A spokesperson for Azadea Group that operates Eataly, a chain of high-end Italian restaurants in Dubai, confirmed that Rawat Rohit who was employed with them as a chef has been suspended and is facing a disciplinary probe. In another incident, the Sharjah-based Pneumics Automation said they had suspended their storekeeper Sachin Kinnigoli until further notice. “We have withheld his salary and told him not to come to work. The matter is under

SEASONAL MAGAZINE

investigation. We have a zero tolerance policy. Anyone found guilty of insulting or showing contempt for someone’s religion will have to bear the consequences," the firm’s unnamed owner was quoted as saying. Similarly, Dubai-based Transguard Group said they have cracked down on an employee who had posted several anti-Islamic messages on his Facebook page under the name of Vishal Thakur. “Following an internal investigation, the actual identify of this employee was verified and he was stripped of his security credentials, terminated from our employment and handed over to the relevant authorities as per company policy and UAE Cybercrime Law. As of this statement, he is in the custody of Dubai Police," a Transguard spokesperson said in a statement. The latest sackings and suspensions come days after both the former and current Indian Ambassadors to the UAE cautioned their countrymen about the UAE’s strict hate speech laws. Similar warnings were issued by missions in other GCC countries. Indian ambassador to the UAE, Pavan Kapoor in a Twitter post had said that “discrimination was against India's moral fabric" and warned citizens that India and the UAE valued non-discrimination. He also retweeted another post by Prime Minister Narendra Modi that said covid-19 doesn’t “see race, religion, colour, caste, creed, language or borders before striking." The UAE outlaws all religious or racial discrimination under a legislation passed in 2015. Former Indian ambassador Navdeep Suri had also cautioned Indians about the UAE’s hate speech laws and similar warnings have been issued by Indian missions in other Gulf Cooperation Council states.

CREATE A 'LICENSE' TO LET ETAILERS LIKE AMAZON SELL ALCOHOL: LIQUOR BODY TO GOVT

IS NOT HAVING AAROGYA SETU APP A PUNISHABLE OFFENCE?

The liquor industry, restaurants and food aggregators have urged the government to permit home delivery of alcohol. All India Brewers' Association suggested creating a "special license" for e-commerce firms like Amazon and food delivery firms like Zomato and Swiggy to sell liquor from licensed retailers. It also mooted creating an online liquor ordering platform, owned by state excise departments.

GOVT'S FINANCIAL STIMULUS NOT ENOUGH, FISCAL DEFICIT MAY RISE TO 14%: EX-RBI GUV

es, not having Aarogya Setu app is a punishable offence, says Noida police. Those living in the district, which includes Noida and Greater Noida, as well as those entering from outside, need to have the app installed on their smartphones, according to an order circulated recently. Those living in the district, which includes Noida and Greater Noida, as well as those entering from outside, need to have the app installed on their smartphones, according to an order circulated on the night of May 3 and in force from the following day. “All those with smartphones who do not have the application can be booked under Section 188 of the IPC (disobedience to an order duly promulgated by a public servant). After that, a judicial magistrate will decide if the person will be tried, fined or let off with a warning,” said Akhilesh Kumar, DCP, Law and Order. “If people download it instantly, we will

let them go. We are doing this so people take the order seriously and download it. But if they do not download it after repeated warnings, we will have to take action,” said Kumar.

Former RBI Governor Duvvuri Subbarao said the financial stimulus of ?1.7 lakh crore announced by the government on March 26 on account of lockdown "isn't sufficient". He said the government needs to spend more and cap its borrowing. Subbarao added the combined fiscal deficit of Centre and states this year as budgeted is 6.5% of GDP, but would reach 13-14%.

In case someone does not have mobile data, he said, “we will give them hotspot so they can download it there and then”. And if there are other issues such as lack of phone storage, the officer said they will take the person’s number and call to check whether they have downloaded the app. Gautam Budh Nagar Police Commissioner Alok Singh said, “Checks will be conducted at borders and checkposts at random.” Police will also check for implementation when they are out on patrol duty. “If a person does not have a smartphone, they will be asked to get one or fetch it from their homes,” said Singh. “Who does not have a smartphone these days? People may say that they do not have their phones or that their phones are switched off, but we cannot make any exceptions.”

FACEBOOK OVERSIGHT BOARD MAY TAKE UP CASES ON ITS OWN, SAYS ONLY INDIA MEMBER Facebook's newly constituted Oversight Board may take up some cases on its own to decide whether certain content should stay on its platforms, said the board's only Indian member Sudhir Krishnaswamy. Cases would revolve around 5-6 categories, including hate speech and nudity. Additionally, content-moderation team may refer a case to the board or users may bring up cases, Krishnaswamy added. SEASONAL MAGAZINE

SEASONAL MAGAZINE

COVER STORY

URGENT CURES FOR THE COVID-19 ECONOMY

Each week growth prediction continues to be revised down. The latest is from IMF which says that the whole of Asia including India would witness 0% growth this year. So far, India has fared well in containing the health side of the crisis. It remains to be seen whether the containment measures would be as effective when India opens the floodgates to let its NRI sons and daughters in. On the economic side, experts are already predicting that the 40-day lockdown will cost India upward of Rs. 15 lakh crore. The multi-trillion dollar question that India and most nations are now pondering is whether when the infection rates come down, whether they can afford to depend on milder social distancing, masks, and handwashing, instead of the painful lockdown model. In any case, on the economic side of the disaster, a slew of innovative measures would be called for. Seasonal Magazine, on our part, proposes more than half a dozen ways to resurrect the Covid-19 economy. We would also like to listen to what our esteemed and knowledgeable leaders and resource persons think of these ideas, in this podcast, and also about your own ideas in battling this enormous crisis. SEASONAL MAGAZINE

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

LET GO OF FISCAL & MONETARY DISCIPLINE: BOOST SPENDING & CASH FLOW hy should this strategy be the very first one to rescue the economy from Covid-19? Simply put, this is because almost all of the remaining points are likely to run into this sacred wall of economics called fiscal and monetary discipline. Hence it makes ample sense to dismantle this wall first. Those who still harp on fiscal discipline have no idea really on what the economy is up against. Just like Covid-19 has been unprecedented in human history, its economic aftermath is also going to be unprecedented, and comparable to the Great Depression of the 1930s. And it is a sobering point to remember that the world came out of the Great Depression through both fiscal expansion and monetary expansion, and not fiscal or monetary discipline. Even the most sacred gold standard was done away with in the 30s to recover from the Great Depression. And it is a fact of history that those nations that were the first to let go of fiscal and monetary discipline were the first to recover, back then. For sure, government debt will go up, inflation will rise, and currency would turn weaker, but then, there is no other way an impending depression can be averted. SEASONAL MAGAZINE

Actionable Points: Allow India’s fiscal deficit to GDP ratio to go beyond targets like 3.3% to China’s and USA’s figures like 5%. Similarly, do not allow inflation target ranges like 4-6.5% affect growth. Allow rupee to devalue moderately in a natural way, removing the artificial curbs which are costly and not fully effective.

HANDHOLD THE POOR: DIRECT BENEFITS TRANSFER e may be the worldâ&#x20AC;&#x2122;s third largest economy by GDP, but the undeniable fact is that we are a poor country, with just 116th position in per capita GDP. Around 94% of our population works in the informal sector including agriculture, MSME and self-employment, with not much social security, job guarantee, unemployment benefits or pensions. Over 65% of households have no own homes, and 13% households have only single room homes with no proper walls or roofs. Over 30% of households are doing manual labour on daily wages. Around 67% of India lives in its villages, where 75% of the households earn less than 5000 rupees per month. All these have resulted in around 50% of India living below the poverty line. No calculations are necessary to realize that Indiaâ&#x20AC;&#x2122;s poor would be affected the most by the Covid-19 crisis as well as the lockdown deployed to counter it. That is why much more needs to be done to handhold the poor with additional Direct Benefits Transfer or Direct Cash Transfer, than the Rs. 1500 being transferred now to Jan Dhan accounts in a staggered manner. This can also by way of augmenting the pay to the MGNREGA recipients and transfer of benefits like essential food kits to all below the poverty line. This also makes ample economic sense as only such grassroots level money supply would kickstart consumption now.

Actionable Points: Central Government should procure essential food items and other basic household consumption items on a large scale at discounted rates, and offer them as food / home kits to the poor, with around 40% funding coming from state governments.

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

BOOST MOST HARDHIT INDUSTRIES: LENDING, HOUSING, TOURISM, TRAVEL nlike most economic crises, Covid-19â&#x20AC;&#x2122;s economic impact is unique in that it made most industries come to a near standstill, except for agriculture, food staples, pharmaceuticals and banking. Even in these segments, demand has nosedived, making operations next to unviable. But as and when Covid-19 passes, most industries are expected to revive significantly, with a few significant exceptions. These are the lending businesses, housing sector, hospitality and travel. Major lenders like banks, NBFCs & MFIs would be hit by a wave of bad loans that will aggravate the Non Performing Assets (NPAs) crisis going on since 2009, which will stress their balance sheets further. The housing and real estate sector is expected to take a major hit as even the sectorâ&#x20AC;&#x2122;s leading stakeholders are predicting that real estate prices are set to fall by 20% as demand vanishes. This can even make highly leveraged realty companies to go bankrupt. But the greatest hit is likely to be taken by the travel and tourism industries as it is quite clear for the world population now that the highest

SEASONAL MAGAZINE

risk and hardships from Covid-19 were to the world travelers. While leisure travel would be the more serious hit, business travel too would suffer as global trade is more likely to be conducted over digital channels like video conferencing and e-commerce. As such, these industries should be supported by way of recapitalization (for lenders) and tax cuts and other incentives, if millions of jobs are to be protected.

Actionable Points: Pursue radical measures in travel and hospitality industries by allowing them to take in advance booking in flights and hotel rooms for even multi-year periods at better discounts, so that cash flow will happen now. Escrow accounts with banks can be provided to safeguard customer interests.

CUT INTEREST RATE SIGNIFICANTLY: LEARN FROM THE GREAT DEPRESSION he principal way in which countries battled the Great Depression of the 1930s was by monetary expansion. The principal bottleneck prevailing then against increasing money supply was the gold standard. For every dollar or pound printed, countries used to set aside an equivalent amount of gold, which was the guarantee that the money had value. But that also meant that to print money, a central bank had to buy gold which proved to be an unviable way in a crisis like the Great Depression. The world needed to print money to come out of the Depression, and there was no way it could be done while adhering to the gold standard. Hence, one by one, the major economies did away with the gold standard, hoping that the products and services that the money bought would itself act as its guarantee. It was a big gamble, but one that the world pulled off successfully, even though it was not done in unison, but across two decades. Quite similar is the situation now. There is no gold standard to do away with though. The primary weapon available now is cutting the interest rate, and that is what most governments have done, with some of them cutting it to near zero, like 0.10%. Indiaâ&#x20AC;&#x2122;s central bank too has cut the rate by 75 bps, but the question is whether there

is room for more. Of course there is, but the RBI is probably waiting to see how much medicine is optimally needed. There are other considerations too like protecting senior citizens who depend upon fixed deposit interest as livelihood. But, even while providing for their needs through a special interest regime, businesses from the biggest to MSMEs, Self Help Groups (SHGs) and the Self Employed should be provided credit much more cheaply, or Indiaâ&#x20AC;&#x2122;s economic recovery as well as competitiveness would be deeply hit.

Actionable Points: Corporates, MSMEs, SHGs and Self-Employed entities should be extended credit for business activities at 4% interest for a stipulated period to tide over this crisis. The last two categories can be offered up to Rs. 25,000 as urgent loans for their working capital requirements, with strict caution that default would automatically disqualify them from such future handholding measures.

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

REDUCE GST RATES, WIDEN TAX NET: COLLECT LOWER RATE FROM MORE SEGMENTS he implementation of the unified Goods and Services Tax (GST) was long awaited in India, and at its core it has been designed to boost tax revenue significantly, to meet the rising government expenditure and budget deficit that funds the economic development of the country. And it was never designed to provide industry with any tax breaks or incentives, except for the unified Input Tax Credit (ITC) mechanism which is more of a transparency measure, given how the tax rates have increased post GST implementation. Tax collection can be increased by either higher tax rates, or by widening the tax net to include more people and products, or by both. While implementing GST, the government obviously went in for the low hanging fruits first, which was increasing the rates to the current tax net, so that revenue targets can be quickly met. But this has had the undesirable side effect of hurting many industries and the industry clamor for more rationalized rates. Several adjustments followed, as well as a

SEASONAL MAGAZINE

corporate tax cut, but even before Covid-19 hit, the writing on the wall was clear â&#x20AC;&#x201C; more needs to be done on the GST front, if industrial growth was to be revived. But the government was in a fix as solutions that matched longterm and short-term goals were hard to come by. But now, Covid-19 changes all that. There is now no going forward possible without significant rationalization in GST. But, of course, this has to be made without making a major dent on the existing revenue collection. The only way possible seems to be unleashing the animal spirits of the economy by deep cuts in the higher slabs and expecting tax collection to still go up in the medium to long term as growth kicks in and revenue and profits rise. At the same time, the tax net has to be widened for all potential people, products and services, by keeping the tax rates super low.

ACTIONABLE POINTS: GST ON ALL ESSENTIAL CONSUMPTION ITEMS USED BY EVERYONE TO BE REDUCED TO 1%, WHEREAS THE HIGHER TWO SLABS BE FIXED AT 7% AND 14%, IN SUCH A WAY THAT OVERALL TAX COLLECTION IS NOT OVERLY AFFECTED.

BOOST PUBLIC CONFIDENCE AND SENTIMENT IN EVERY POLICY DECISION andhiji was once asked about how leaders and bureaucrats should decide on which route to take. This was his answer - “Recall the face of the poorest and weakest man you have seen, and ask yourself if this step you contemplate is going to be of any use to him.” Times have changed, but not his timeless wisdom. Every policy decision that the Central and State Governments take should be guided by this. This should also make immense sense to the political and bureaucratic class too, as not just the political fortune but the economic fortune is also at the bottom of the pyramid. Many things can be added to what the Father of the Nation said. One is that every policy decision should also boost public confidence and sentiment. Be it tweaking the fuel prices, or the various taxes, or the interest regime, everything should be done by taking into consideration a question like what Gandhiji posed – will this add to the public confidence and sentiment or erode whatever confidence and sentiment now exist? Many steps may be technically warranted at various stages, but good leadership is also ensuring that such steps don’t destroy the public confidence and

sentiment. No government can save a nation on its own. It requires concerted efforts from the citizens. And citizens will do collective miracles if their confidence and sentiment are high even in these trying times. There may be shortterm pain for the government and policymakers in embracing generous decisions, but ultimately such decisions would also help the work of the governments.

ACTIONABLE POINTS: EXPLORE ALL PRODUCTS AND SERVICES AND SCHEMESWHERE A LITTLE BURDEN ON CONSUMERS CAN BE EASED, LIKE FUEL, FOOD, INSURANCE ETC.

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

A FORMER CHIEF ECONOMIC ADVISOR SHARES HIS INNOVATIVE VIEWS By Akshita Goyal

SEASONAL MAGAZINE RECENTLY CAUGHT UP WITH DR. ARVIND VIRMANI, CHAIRMAN OF FOUNDATION FOR ECONOMIC GROWTH & WELFARE (EGROW) AND FORMER CHIEF ECONOMIC ADVISOR TO KNOW HIS VIEWS ON HOW TO STEER THE ECONOMY BACK TO GROWTH, AS PART OF OUR COVER STORY, URGENT CURES FOR THE COVID-19 ECONOMY.

hief Economic Advisor (CEA) is a celebrated post in India. Dr. Manmohan Singh, who went on to become the country’s Prime Minister, was India’s Chief Economic Advisor between 1972-76 under then Prime Minister Indira Gandhi. Dr. Raghuram Rajan was International Monetary Fund’s (IMF), Chief Economist and Director for Research before he became Chief Economic Advisor under Dr. Manmohan Singh and later under PM Narendra Modi. Another leading economist, Kaushik Basu who was also CEA under Dr. Singh in UPA-2, later became Chief Economist of World Bank. In other words, only economists of the highest caliber have been entrusted with this crucial duty by most governments. However, despite their exemplary expertise their performances have varied, as it involved various other factors too like the prevailing economic challenges, the ruling government’s overall policies, election agendas, global issues and so on. Dr. Arvind Virmani, who was a top performing Chief Economic Advisor, handled the crucial post between 2007 to 2009, in UPA-1 under Dr. Manmohan Singh and could guide the economy to one of its best performances ever. Later, Dr. Arvind Virmani was appointed as the Executive Director at the International Monetary Fund (IMF), Washington DC, representing India (as its Ambassador to IMF),

SEASONAL MAGAZINE

as well as Bangladesh, Sri Lanka and Bhutan. Other significant roles that Dr. Arvind Virmani has handled include Principal Advisor, Planning Commission; Member, Telecom Regulatory Authority of India (TRAI); Appellate Tribunal for SEBI Act; and Chief Executive of Indian Council for Research on International Economic Relations (ICRIER). On the academic side of his career, he was Affiliate Professor, George Mason University (and Distinguished Senior Fellow, School of Public Policy - CEMP, GMU). A noted author in economics and other related areas, Dr. Arvind Virmani has published 33 journal articles and 20 book chapters in the areas of macroeconomics, growth and finance, international trade & tariffs and international relations. His books include, The Sudoku of India’s Growth, From Uni-polar To Tri polar World: Multi-polar Transition Paradox, Propelling India From Socialist Stagnation To Global Power, and Accelerating Growth and Poverty Reduction – A Policy Framework for India’s Development. Currently, Dr. Arvind Virmani is the Chairman of Foundation for Economic Growth & Welfare (EGROW), a non-profit, multi-disciplinary public policy organisation engaged in independent, high-quality research in the areas of macroeconomic policy, public welfare, national security and diplomacy. Seasonal Magazine recently interviewed Dr. Arvind Virmani for our cover story, Urgent Cures for the Covid19 Economy. Here are the excerpts of this interaction:.

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY SEASONAL MAGAZINE RECENTLY INTERVIEWED DR. ARVIND VIRMANI FOR OUR COVER STORY, URGENT CURES FOR THE COVID-19 ECONOMY. HERE ARE THE EXCERPTS FROM THIS INTERACTION:

n infective virus has thrown off the normal in our lives and caught us off guard. Such emergencies called for urgent responsiveness and attentiveness on the part of the Government. As in many other countries, Indian government took a quick step of imposing a lockdown. During such VUCA (Volatile, Uncertain, Complex and Ambiguous) times, we had a chance to interact

with Dr. Arvind Virmani for our cover story, Urgent Cures for the Covid-19 Economy. Starting with his views on the 'Life versus livelihood' debate, he affirmed that while lockdown was a necessary shock, it will be extremely costly if extended. He cited an EGROW Foundation research paper which estimates the effect of lockdown on the economy to be 5% of annual GDP in a month. Going deeper, he explained that for this calculation, researchers broke the economy into 3 sectors- essential, contract services and the rest of the economy. As the data speaks, Essential services constitute around 40% of the economy size. In the Essential goods and services sub-sector, we asked about his views on whether the government should distribute these to the poor or cut the tax rates for these to increase their affordability. In response, Dr. Virmani emphasised that if the sector has been in operation

SEASONAL MAGAZINE

throughout the period of the lockdown, no such tax concessions are required. In his tenure as the Chief Economic Advisor to the Government of India, he had strongly advocated the case of direct benefit transfers (DBT) rather than provision of goods. He believes that DBT is a flawless procedure that is completely sealed and avoids leakages given that the alternative of goods provision through Fair Price shops is administratively inefficient. When we were discussing the topic of how the Government is mitigating the damaged economy under lockdown, Dr. Virmani suggested that the legal asymmetry is still left to be addressed. The tax payment obligations for the essential goods and services industry and that for the rest of the economy can't be straightjacketed. Clear differentiation and concession ought to be made for the industries which have been completely closed shop under lockdown. This will not only help the hard-hit industries (like Auto, capital goods and construction) spring back into action post-lockdown but also assuage business sentiments. For the question of payment of wages to daily labourers, he asserted that the Government can't expect the businesses to bleed losses when they have got no compensation apart from an extension of the moratorium on loan repayments. As we moved onto discuss a course of action to use this crisis as an

DWELLING ON THIS IDEA OF GIVING MSMES INTEREST-FREE FUNDS, DR. VIRMANI DREW OUR ATTENTION TO A PROVEN FACT THAT MOST INTEREST SUBSIDY SUPPORT HAS BEEN MOST EFFECTIVE WHEN THEY HAVE BEEN ROLLED OUT FOR A LIMITED PERIOD OF TIME.

opportunity for long-term reform, Dr. Virmani astutely pointed out that the time is ripe to encourage diversification of supply chain. He applauded the RBI's move to reduce the repo rate for it increases the extent of monetary transmission and maintains adequate liquidity. In a lighter vein, Dr. Virmani also said that in times of crisis, interest rates must be negative. On the welfare side, he said that the misery of poverty can be eliminated and not just alleviated through the largest three welfare programmes with Aadhar as the vehicle. Another pragmatic suggestion offered by Dr. Virmani was that of a negative income tax to ensure redistribution of wealth from the haves to the haves-not.

THE TAX PAYMENT OBLIGATIONS FOR THE ESSENTIAL GOODS AND SERVICES INDUSTRY AND THAT FOR THE REST OF THE ECONOMY CAN'T BE STRAIGHT-JACKETED.

With this isolation period in the backdrop, we routed our interaction to the suggestions of eminent researchers NYU's Marti Subramanyam and Ashoka's Anisha Sharma. They had mooted a Government SPV providing armâ&#x20AC;&#x2122;s length pseudo-equity up to 25% of profitable MSME's revenues which can later be brought back by the MSMEs. Dwelling on this idea of giving MSMEs interest-free funds, Dr. Virmani drew our attention to a proven fact that most interest subsidy support has been most effective when they have been rolled out for a limited period of time. Moreover, he is of the opinion that after simplification of the tax structure under GST, tax payment history of MSMEs must be used as an indicator of offering credit guarantees. Covid-19 has presented the economy with a brand new challenge-one that would lead the Government to learn and unlearn dynamically as the agents in the economy gradually emerge out of the lockdown. Given the promising status as of today and the buoyancy of Indiaâ&#x20AC;&#x2122;s growth in the past, Dr. Virmani urges us to look forward.

(Akshita Goyal is currently an ISB PGP candidate of 2021 batch) SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

WHY INDIA NEEDS MEGA INTERVENTIONS In a conversation with Seasonal Magazine, Prof. MD Nalapat, noted academician and senior journalist, says he is a believer of Indiaâ&#x20AC;&#x2122;s great future, but only if India does mega interventions and undertakes massive reforms.

SEASONAL MAGAZINE

adhav Das Nalapat has never been an Editor who minces his words. Long back, it cost him his job as the Editor of the leading Malayalam daily, Mathrubhumi, which was in earlier days led by his grandfather VM Nair as Managing Director and Managing Editor. Later, MD Nalapat switched to English journalism and became the Resident Editor of The Times of India. Even a sterling career there had to be cut short due to his passion for honest storytelling. But he had other arrows in his quiver, as he was a gold medallist in Economics from University of Mumbai. He joined Manipal University as a Professor and is now also the university’s Honorary Director in Department of Geopolitics & International Relations. But journalism in his blood beckoned him again and in 2011, he joined iTV Network where he is currently the Editorial Director overseeing channels like India News, NewsX etc and the weekly newspaper, The Sunday Guardian. Prof. MD Nalapat speaks from his heart, much like his renowned mother, Kamala Das (Kamala Surayya) better known by her pen-name Madhavikutty, who was one of Kerala’s and India’s most beloved writers of prose as well as poetry. Prof. MD Nalapat is an expert in several domains, of which economics, foreign policy and China studies rank high. Like in all issues, he has an uncanny knack for unearthing the hidden and Covid-19 is no exception. In this interaction with Seasonal Magazine for our cover story ‘Urgent Cures for the Covid-19 Economy’, he displays this same flair.

Often times, global cooperation and consensus bring good results. However, in some cases, when the whole world thinks alike, it might be a recipe for disaster. Chinese President Xi Jinping imposed severe lockdown in Wuhan, which then led WHO to recommend the same to the entire world. This has witnessed economies of countries fall like a pack of cards. As countries succumbed, one by one, to the might of the coronavirus pandemic, the simple solution was to enforce lockdowns and shut down businesses. While it has certainly contributed to low casualties in countries like India, there are still questions left unaddressed in terms of the economic relief and job security of peoples. In a wide-ranging interview, Prof. M D Nalapat, Editorial Director of iTV Network and ViceChair at MARG, Manipal University provides his thoughts on a variety of themes including the conduct of WHO and China in the context of the pandemic, the lack of imagination to ease lockdowns, the emerging geopolitical realities and how India can emerge unscathed and issues of free speech and press freedom. Exhorting the government to initate longer interest payment deferrals and revise colonial-era business regulations, he believes that the road to recovery is indeed paved with difficulties. In spite of the challenges facing India, Prof. Nalapat is confident that PM Modi can turn the tide and implement gargantuan reforms in the coming years. Seasonal Magazine’s Carl Jaison speaks to him Q. Do you think this crisis has laid bare the weaknesses of those nations that have no significant social security mechanism for their masses like unemployment benefits, universal insurance, universal pensions etc? Where do you see India standing in this regard? Prof. Nalapat: See, if you look at the question of Covid, we are not yet sure about the actual toxicity of the disease for the simple reason that we are not sure about exactly how many people have been infected in any population. SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY Now in India, for example, we have got the red, orange and green zones. Now it could be that the red zones where there had been a lot of testing and the green zones may be zones of less testing. So in a sense you have been penalizing zones which are tested a lot. And you may be leaving out other zones where there may be equal number of cases that are not tested. So there are a lot of increasing reports coming that the fatality for Covid 19 is roughly the same as that of the flu possibly even for the common cold. And I have seen a lot of studies certain epidemiologists have pointed out not to lose your sense of proportion over this particular virus. It is true that it is a very contagious virus and it does affect populations but the reality is that the actual fatalities per actual number of cases is relatively low, according to data. So the reality is that we are looking at fatality in terms of the discovered cases. Now I think everybody will agree that the discovered cases is definitely maximum about 8 or 10% of the actual cases. So there are some studies which say that 50 times or 100 times or 140 times the reported cases. So in that situation we are not yet sure with the toxicity. The second point on which there is a lot of discussion about is regading some of the so-called treatment methods of covid. For example, the focus on it being a pulmonary disease is also causing lot of deaths because of the blood clotting. Such blood clotting leads to thrombosis, coronary thrombosis, neuro thrombosis etc. I am not a doctor but I am just looking at the data which people have send me and which experts who are doctors who have studied are telling me. So they are saying that many of these cases deaths are caused by thrombosis and not so much pneumonia as by thrombosis. So reality is we know so little about this disease. But what exactly happened? Q. What would be your take on the evolving relations between countries, say for example US-China and India-China in the post-COVID19 geopolitical setting? SEASONAL MAGAZINE

As soon as the information reached the top Chinese leadership, President Xi Jinping he immediately locked down the entire city of Wuhan consisting of 11 million people. And that is what created a global panic, if I may say so, that if the Chinese are locking down an entire city and locking down an entire province and this has never happened before in the history of any country as far as I can remember, then there is something terrible about this epidemic. Now the interesting thing is that the WHO, even after the lockdown was saying that it is not a big deal and not to worry about it as there is no human transmission. WHO claimed that even travel is perfectly safe. At that time, Boris Johnson of UK said that WHO is WHO, and it canâ&#x20AC;&#x2122;t go wrong. And the flights from Wuhan were flying into the UK even after the city was locked down. People who had come in from Wuhan to other Chinese cities Hongkong or Thailand could safely go to United States and also to the UK. The first thing after these developments, and that is what caught my attention, was the response of North Korea. Kim Jong-un was the first leader, from

IT IS TRUE THAT IT IS A VERY CONTAGIOUS VIRUS AND IT DOES AFFECT POPULATIONS BUT THE REALITY IS THAT THE ACTUAL FATALITIES PER ACTUAL NUMBER OF CASES IS RELATIVELY LOW, ACCORDING TO DATA.

around 26th of January, to impose a first lock down in the sense of barring the Chinese from entering North Korea. This was done around the same time as the Wuhan lock down. We all know North Korea depends on China. And now he has a lot of information on China. Singapore also did that. We were also among the first dozen countries to do that and I really congratulate Prime Minister Modi for acting in a very bold way and for being among the first few countries to initiate lock down. But the reality of the situation is that, you know, till today we are not sure about the actual number of deaths or thousand covid patients because we are not sure how many people are covid

patients. Now I will give you my hypothesis. My hypothesis is that China imposed lockdown because of Xi Jinping and the rest of the world followed the Chinese lock down example as an instruction from WHO, in a sense, almost without thinking. The US, European Union, and all kinds of countries did an immediate and total lock down. As a consequence, their economies have gone for a toss. Now if you look at the situation in Sweden, for example, there has been no lock down and there has been no drastic number of deaths either. Tens of millions of people dying, corpses littering the road,billions of people falling terribly ill, I mean it was a doomsday scenario. So all these doomsday scenarios led governments to obey the instruction and go into a lock down. So what happened? Because of these lockdowns, the US and Western European economies have crippled and they are battle-weary at a time when China is coming back into normal activities. Including countries like Sweden where I don’t see a lorry load of corpses as we have seen in Italy. In Sweden, the deaths are low while Italy is struggling with casualties despite

harsh lockdowns. It is nothing compared to, for example, American deaths, even after the lock down. They say that incubation period of the coronavirus is about 14 days and therefore in a sense lots of deaths are coming after the lock down. And so deaths are still climbing in the UK despite the lockdown, so my point is very simple. The Chinese, thanks to WHO, got a massive advantage specifically over the US and Western Europe, a massive economic advantage because of WHO’s recommendations of ‘Lockdown Now’. Q. Whether nations had partial or full lockdowns, almost all had 100% lockdown of their educational campuses and certain business centres. Even WHO has expressed that one of its greatest concerns is how the pandemic may spread once again when the schools, colleges and offices are reopened. When and how do you see normalcy returning? My view is you have got lockdown instructions from fundamentalists. The entire WHO is a lock down fundamentalist organisation. Stop all activities. Stay at Home. I am not very sure social distancing can be a controlling measure. With ‘stay at home’ recommendation of WHO, the entire word went into to a lock down and today the Chinese have recovered. Frankly speaking, the Chinese have got a system of digital acivity for the last several years. Xi Jinping has gone into digital currency, block chain, and he has fought for crypto currency. Now the WHO recommendation has happened either as a coincidence or it has happened as an accident. I am sure the professors of WHO, Director Generals and all great doctors there honestly thought that this is going to

NOW THE INTERESTING THING IS THAT THE WHO, EVEN AFTER THE LOCKDOWN WAS SAYING THAT IT IS NOT A BIG DEAL AND NOT TO WORRY ABOUT IT AS THERE IS NO HUMAN TRANSMISSION. WHO CLAIMED THAT EVEN TRAVEL IS PERFECTLY SAFE.

be a worst thing than the plague. As I wrote in the Sunday Guardian, the WHO thought this is a worse tragedy for human kind than Genghis Khan. May be they really believe it. I am not alleging any bad intend on the part of anybody. But many things happen without bad intend. The world went into the First World War without any much bad intend. The second World War was because of the rascal Hitler with a very bad intend. So I am not a conspiracy theorist who says that China created this in a lab and released it to the world and that the WHO, being a puppet of China, went ahead and asked every country to impose a lockdown. That’s absurd. Q. Do you think the world suffered a lot from Covid-19 due to lack of democracy and free press in China? If it had originated in India, would the situation have been very different due to democratic norms and a thriving press? Look, I was the editor of a Malayalam paper for sometime. Whatever circumstances, I left that newspaper and I made it clear to my journalists that I’m totally for 100% freedom for the press but that it wasn’t practical. I told them, realistically, that only 95% freedom is allowed which means nobody connected with our paper should be attacked. This annoyed a lot people I’m sure but you can ask many of those journalists about the freedom I gave them. In a way, my career was cut short there. But I have no regrets about that. The same thing happened in the Times of India. I wrote some very important articles about Sonia Gandhi, her family, her educational qualifications and whatever happened as happened. Then I went to Manipal University which is a real haven and I would really like to give credit to Ramdas Pai. He gave protection to free thought in the university and diversity of thoughts and views. I have happily been in Manipal University and since 2011 I have also joined the iTV network. Let me narrate an incident on press freedom outside India. I had tried sending a piece to a famous US institute with a Middle East desk on the crisis in SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY Syria back then. I wrote to the editor saying that he may not like it but Bashar al Assad is still the best bet in Syria. The editor, in fact, quite liked it. I had even predicted that the Arab Spring would become a Wahhabi winter! The Americans are famously protected by the First Amendment. Guess what happened? The governors of the institute called up the editor and asked him to take remove my article for publication saying that they don’t want any story that is friendly to Bashar alAssad. Try this with any of the other famous papers and publications. You’re going to get a similar response, regardless of the so-called freedom of press enjoyed in these countries. Therefore, freedom of press is permitted within the bandwidth of any publication and that every publication has got its interests. So, I want to basically point out that freedom is a relative thing. Q. A lot has been said about India standing to gain when MNCs shift out their manufacturing operations and supply chains from China. Do you think there is really such an opportunity emerging, and what are your views on whether Indian companies can capitalize on it? I can tell you one thing: even Chinese companies are anxious to move to India. It’s because Artificial Intelligence (AI) is going to be the spear of world primacy. Why do you think the Americans have woken up to this fact about the Chinese? It’s because the Chinese are almost better than they are when it comes to AI. One of the important ingredients of AI is metadata. The Chinese have got a huge strove of data of their 1.3 billion people. Guess which other country has metadata amounting to that size of population? This explains why Huawei would like to come to India. Huawei, today, is 40% cheaper than the competition. They are willing to spend close to 50,000 crore more to setup 5G because what they’re looking for is meta-data. The Americans are also on the lookout for this prized possession. Why do you think Facebook invested in Jio? It’s because Jio is sitting on a pile of Indian meta-data. We are SEASONAL MAGAZINE

possibly the only country that doesn’t worry about where the meta-data goes. We don’t bother about it but this is the platinum of the future. If you’re talking about data being the gold, meta-data is the platina. The other reason why people want to come to India is because they think in some future year, the policy makers in this country will implement good economic and business policies. For example, like reduction in taxes, regulations. One hopes it can be economic reforms like that done by Deng Xiaoping. Indian PM P.V Narasimha Rao made semi-reforms. My hope is that PM Modi is the one to do comprehensive reforms. In 2013, when he visited China, I had written for the Sunday Guardian about this very same point. Can he be India’s Deng Xiaoping? However, Xiaoping brought in investments from anywhere in the world. Also, each Mayor in a provincial town in China had immense power in terms of sanctioning reforms and measures. Even each branch managers had the wherewithal to sanction loans up to a certain amount. In short, a mayor in China has more power than even a cabinet minister in India. We have a very centralized system of governance. PM Modi has done a lot to decentralize. Even former PM Rajiv Gandhi tried to strengthen the Panchayati Raj, bring in reforms in telecom but couldn’t fulfill it whereas someone like Narasimha Rao was able to do semi-reforms. I was listening to the Economic Advisor, Sanjeev Sanyal who was essentially saying that we need to give ‘bullets’ for economic growth like from a ‘revolver’. However, let me tell you, at the very least we need to be giving bullets from an artillery rifle. Forget bullets; we need missile-like

MY VIEW IS YOU HAVE GOT LOCKDOWN INSTRUCTIONS FROM FUNDAMENTALISTS. THE ENTIRE WHO IS A LOCK DOWN FUNDAMENTALIST ORGANISATION. STOP ALL ACTIVITIES. STAY AT HOME. I AM NOT VERY SURE SOCIAL DISTANCING CAN BE A CONTROLLING MEASURE.

intervention! For a mega-move, we need at least 5% of GDP spent additionally to recover from COVID19. If India wants to reach the superpower status in next 5 years, which I believe we can, we need that 5% GDP spending. However, we are still doing last-minute interventions. Case in point: the RBI’s proposal to defer interest payment for 3 months. We needed a minimum of 6 months and 3 years of long-term planning to tide over this. You have your credit card bills, electricity, interest payments; where is the money going to come from in this scenario? Every week people are losing their jobs. Some companies managed to pay salaries this month but with every passing month it is going to get more and more difficult. Very soon, they will have to start firing people. Q. Despite the collateral damage of over 2.2 lakh deaths worldwide, there is a view that economic bounce-back from Corona might be swifter as infrastructural damage is not there, like that exists in weather related calamities like tsunamis, cyclones or floods or manmade ones like wars. Is there a case for hope in this regard for India? In the PM, we have a man who has got a bold vision. The lockdown was incredibly difficult to implement but it has been a success. Now this has to be met by an equally bold fiscal and monetary infusion into the economy. Secondly, there has to be some changes from this kind of a lockdown. For instance, a green zone could be where there are more cases but less testing because in the absence of testing, we really don’t kow the rate of infection among populations. When you then talk about a zone being red, is it really that serious? Frankly, as long as we start testing, we might need to re-look this policy. In another scenario, let’s say my office is in the green zone but my factory is in the red zone. What do I do then? In a recent case from a state whose Chief Minister I would not want to name, there was a proposal introduced by a bureacrat. The restriction was if one COVID case is there, the entire factory will have to shut down for three months! This is a

superpowers were allocating huge resources to mammoth wars that never came, whereas they were totally unprepared for this war that has already taken over 2.2 lakh lives. Do you think the self-defense strategies of nations are set to change post this pandemic?

ridiculous idea. This is what happens when you have bureaucrats making conditions. And none of them havent even gone near a factory or even own a business. We have to have belief that we have the chance to become the techno superpower of the world. For that, we need to have sensible regulations. We need experts from industries who are domain specialists. It is not an accident that the Atomic Energy Commission has done well despite sanctions. ISRO has done wel despite sanctions. The secretaries to these departments are both scientists. They are not civil servants. I think we should follow that example more often. I’m sure PM Modi is on the right track and is the right person to take the country forward. Even back in 2006, I knew he was the right person and I have full confidence in his ability. We need a complete makeover of the regulatory system, including the system of going through the legal process. For instance, the Green Tribunal. Don’t get me wrong – I’m all for a green country but to make India green as the ‘green fundamentalists’ wants it to be, that is only possible in a country with 70-80 million in population. The problem here is our system is still largely inherited from the colonial one. For instance the Epidemics Act is 130years old and that is being used in the

BECAUSE OF THESE LOCKDOWNS, THE US AND WESTERN EUROPEAN ECONOMIES HAVE CRIPPLED AND THEY ARE BATTLE-WEARY AT A TIME WHEN CHINA IS COMING BACK INTO NORMAL ACTIVITIES.

COVID-19 epidemic. The British, now, are changing their laws every year. But we haven’t changed their law for over 200 years. But I am positive because I believe our country and its youth are in a position today like never before. Our youth is one of the most brilliant in the world. If you look at the hightech jobs in the U.S, they are mostly represented Indian-Americans. Even China and Taiwan are accepting Indian students because of their potential. I know a person named Y.S Rajan who told me numerous stories of how young scientists were not encouraged and even sometimes demotivated by litigations against them. Therefore, PM Modi must end the license raj and British colonial raj. I hope a blueprint is prepared that calls for a complete transformation of this country and then we might see some great results. Q. Most of the world, especially its superpowers and aspiring

Well, I frankly don’t think wars and walls are going away. We’ll surely need walls say in a our Western borders visà-vis Pakistan and other sensitive areas. There are about 15 million people who have come in from Bangladesh in the last 15 odd years. But many of them are going back because their economy is doing really well and in some respects, much better than the Indian economy. We have a great relationship with Bangladesh and should ensure that continues. As for defence, we need to have 40 million people in some kind of arms training and make NCC compulsory in universities. We have to teach some discipline to our students and this must seep into the population. Frankly, the way the economy is going, many are going to be unemployed or feel under-skilled. So I don’t want to see people shouting hate slogans and raise communal slogans and fighting amongst religious groups. The idea of the internet came from defence and the technologies used in defence are what we use today like GPS. So, let’s be absolutely blunt about this: defence is not a problem and the reality is that we live in a world where security is very important. I would imagine that this idea of a militarily trained population is not very welcome in social circles. But India needs to be a force for stability. Look at the Middle East and the Gulf. In the next two-three years, we are likely to see mass protests against the ruling dispensations. See what happened after they removed Saddam Hussein from Iraq and all stability was lost. We need to have alliances where the partners jointly have the men and material needed. Democracies of the world must unite against radical elements apart from authoritarian regimes. I’m a peacenik and I am UNESCO Peace Chair but the tragedy is that unfortunately I don’t see peace in the horizon anytime soon. SEASONAL MAGAZINE

Seasonal Magazine interviews Dr. Rajmohan Pillai, Chairman of US$ 3.1 billion Beta Group, headquartered in Europe, and with their food products sold in over 55 countries worldwide. A young yet veteran businessman Dr. Rajmohan answers wide-ranging questions on the Covid-19 challenges, on Beta Group’s unique experiences in surviving global economic crises, on why the lockdown should be lifted now, on the radical fiscal & monetary measures needed, on Beta Group’s operations & strategies to tackle the crisis, on the rise and fall of his illustrious brother Rajan Pillai who was one of India’s greatest entrepreneurs, on the unique life of his father and mentor K Janardhanan Pillai’s rags-to-riches and back-to-rags and back to-riches story, on his family, and on his most profound thought that why life and business can be managed only philosophically.

SEASONAL MAGAZINE

ags to riches stories are rare. Back to rags stories are also rare. But what about an again back to riches story? That should be the rarest kind. This is one such story that begins in Kerala, but spans Mumbai, Bengaluru, Singapore, London, New York, Delhi, Bangkok, Amsterdam, Malta, and touches back in Kerala. India was yet to gain independence. The place was Kollam in Kerala. Young Janardhanan Pillai was so poor that he opted to work in his wealthy uncle’s farmland. He had to look after his parents and marry off his three sisters. His plan was to keep working in his uncle’s farm as long as it was necessary to marry off his sisters at least. But he was too good a worker, too sincere a guy, that his uncle decided to marry his daughter to Janardhanan Pillai without looking at his finances. Technically it was possible too, as the Hindu Nair community to which they belonged, used to encourage such matrilineal marriages. Through this marriage, he was kind of adopted into his rich uncle’s household. But the hard worker he was, Janardhanan Pillai soon set up a small cashew processing unit with his uncle’s support. It was a natural business to start in Kollam, as the district was most famous for its cashewnuts and their processing. Young Janardhanan Pillai was not a well educated man. Neither was he a born businessman. Rather, he was a thoughtful, philosophical kind of guy, who did things as perfect as he could. And no wonder, his cashew processing venture clicked big time. But Janardhanan Pillai never forgot his roots, never forgot why he had come to work in his uncle’s farm. In the coming years, he would marry off all his sisters decently. The year was 1947. An year when good things were born. Like Indian Independence. And a first son for Janardhanan Pillai, who was named Rajan. The boy’s birth and Indian Independence brought further good fortune to Janardhanan Pillai. His business started soaring, and it looked like he would become a major exporter of cashews from India. Young Rajan was an average boy, a reasonable student and reasonable tennis player, but nothing remarkable. That is, as long as he was in a Malayalam Medium school for his Lower Primary and Upper Primary classes. For his High School, he was shifted to an Anglo-Indian School. And his life took a dramatic turn at this English Medium school. Within months, he was fluent in

SEASONAL MAGAZINE

English, and by the time he was in his 10th, he had became a master debater, winning laurels for his school. But even more importantly, he had acquired a rare smartness to take on the world and to convince anyone of anything. Meanwhile, Janardhanan Pillai’s business was flourishing beyond even his wildest dreams. There was a ready market across the world for his cashew products, especially from Russia, which used to import tens of crores worth of cashews from him every year, Those were huge orders at that point of time. But he remained the same person, living his own frugal lifestyle. 1964 had arrived. Country’s first Prime Minister and Architect of Modern India, Jawaharlal Nehru passed away and Lal Bahadur Shastri became India’s Prime Minister. And at Kollam, Rajan had completed his predegree, and his parents were blessed with a surprise second boy, whom they named Rajmohan. A youthful Rajan went on to study Engineering at Thangal Kunju Musaliar Engineering College at his native Kollam itself. When he was around 18 years of age, his dad’s business started scaling exceptional heights. Janardhanan Pillai came to be regarded as one of the wealthiest persons in the whole of South India. But he didn’t ever let success go to his head. Rajan was eagerly waiting for his engineering course to end. But unlike his friends, he was not eyeing any conventional job. He had big dreams, but just how big even nobody in his family new. The year was 1968. Indira Gandhi was the Prime Minister after Shastri had passed away two years back. Rajiv Gandhi married Sonia that year. And Rajan Pillai had turned 21 and left his home in Kollam, fully knowing that his skills and ambition would be better served in the larger cities. The next that was heard of Rajan Pillai was that he had taken over a five-star hotel in Goa, which proved to be a good deal for him. And thus began an unbelievable saga of achievements from this Keralite youth who had no formal training in business. In the mid 70s, Rajan moved his base to Singapore, something which even Indian businessmen twice his age and ten times his wealth couldn’t imagine, let alone execute. He set up his company, 20th Century Foods, in that mega city to manufacture and market potato chips and peanuts. Meanwhile, Janardhanan Pillai’s business back home too was booming. He had emerged as one among the top three cashew exporters of India. During this time, he often took his teenage son Rajmohan with him when he went for business tours. At Chennai airport, they

would be received by Chairmen of banks, because Janardhanan Pillai was that important a business personality. But he himself took it as just a phase of life, which he knew could change any day. At Singapore, Rajan Pillai too was shifting gears. He befriended one of the rising stars of the global branded foods industry, F Ross Johnson, a Canadian born US business executive who was then the President of US based food major, Standard Brands. Ross Johnson was impressed by Rajan Pillai’s business acumen and took over his firm 20th Century Foods. And Rajan Pillai became one of Ross Johnson’s most trusted lieutenants in Standard Foods. Ross Johnson was a lethally ambitious corporate raider, who was always eyeing takeovers to scale up his business to unimaginable levels. In 1981, Ross Johnson pulled off a coup of sorts when he merged Standard Brands with its formidable American rival, Nabisco (the creators of Oreo cookies), to create Nabisco Brands. Very soon after the merger, he become its President & CEO. And Rajan Pillai started playing bigger roles in Ross Johnson’s global plans. But back in India, in the same year (1981-82), his father, Janardhanan Pillai’s business had suddenly run into its first major crisis. The Indo-Russian trade war began and Russia stopped buying all things from India. Cashew exports from India took a major hit, and Janardhanan Pillai’s venture took a hit of Rs. 40 crore, then a princely sum of money. And that same year, his younger son Rajmohan Pillai turned 18 and joined the family business, which was still headquartered in Kerala. It was the most unfortunate time to join business, as from being one of South India’s richest men, his dad had fallen to be one of the poorest men, being saddled with a huge debt. The father-son duo again visited Chennai, but this time there were no bank Chairmen waiting at the airport. Instead, when they walked into the bank, they were made to wait for 45 minutes. Anybody would have been upset, but not Janardhanan Pillai who faced it with equanimity.

AS FAR AS OUR HEALTHCARE SECTOR IS CONCERNED, WE ARE ON THE KNIFE-EDGE. WE SIMPLY CAN’T AFFORD TO HAVE LAX CONTROLS LIKE IN EUROPE AND AMERICA. ONLY KERALA FARES SOMEWHAT BETTER IN HEALTHCARE.”

In 1984, as one of Ross Johnson’s most trusted executives, Rajan Pillai was sent to London to head Nabisco Commodities, a group company that now came under Ross Johnson’s empire. Like all roles entrusted to him, Rajan Pillai carried this too with flair. His career graph was rising. Though he didn’t come to visit his parents frequently , Rajan Pillai used to call his dad every single day without fail. And when he came for a visit later, he understood the gravity of his father’s business losses, and offered to make arrangements for the whole family including SEASONAL MAGAZINE

himself to immigrate to USA. But his mother would never agree to it. Rajan Pillai returned to his global bases of London and Singapore, and while his career graph continued to rise, his family’s business back home continued to be in deepening trouble. But Janardhanan Pillai was determined to fight back slowly and steadily, and with his younger son Rajmohan Pillai at the helm now, they started addressing and solving one problem after the other. Meanwhile, Ross Johnson was getting even more ambitious. He merged Nabisco Brands with the US tobacco major RJ Reynolds to form RJR Nabisco and became its CEO. Soon after, he took over the Asian subsidiaries of British biscuit maker, Huntley & Palmer, whose parent company Associated Biscuits International Ltd (ABIL) he had taken over in 1982 itself. Interestingly, Huntley & Palmer owned the controlling stake in India’s largest biscuit maker, Britannia Industries. Knowing Rajan Pillai’s roots and exposure in India, Ross Johnson entrusted him with the entire control of Britannia in India and Asia. Rajan did better than anyone’s expectations, growing Britannia swiftly and thus earning the nickname Biscuit Baron of Asia. But disaster hit Ross Johnson the same year. Growing even more ambitious, Johnson who was then the CEO of RJR Nabisco, tried to execute a leveraged management buyout of the whole firm, backed by a PE fund. This set off a bidding war with rival PE fund KKK, which finally won the backing of the RJR Nabisco Board, which was becoming wary of Ross Johnson’s management buyout tactics. The leveraged buyout by KKK was for a record $25 billion, the largest takeover till then. Even though Ross Johnson failed dramatically in US, Rajan Pillai moved swiftly to reclaim several of Nabisco’s subsidiaries in Asia for Ross Johnson, including ABIL which owned 38% of Britannia. Rajan bought it from KKR for $44 million dollars, with the backing of Ross Johnson and French giant Groupe Danone (then known as BSN). By the end of 1989, Rajan Pillai was controlling six Asian companies valued at $400 million. However, this success was short-lived. By 1993, he ran into problems with creditors, and fell out with both Ross Johnson and Danone. That same year, the Wadia Group which always had an eye on Britannia, teamed up with Danone to wrest control of Britannia from Rajan, in one of the most dramatic boardroom battles India had ever seen. SEASONAL MAGAZINE

Rajan Pillai’s problems mounted when Ross Johnson sued him in Singapore, which finally led to his extradition case in India, his brief imprisonment at Delhi’s Tihar jail, denial of medical assistance for liver cirrhosis despite court’s orders for the same, and his shocking and most unfortunate death in 1995 due to medical negligence while in police custody. The case rattled India’s legal system so much that it led to the appointment of a commission for jail reforms, many of which were implemented subsequently. It was left for his father Janardhanan Pillai and his younger brother Rajmohan Pillai to pick up the pieces left unfinished, and to consolidate all the family’s and his remaining companies under one

umbrella. Thus was born Beta Group under the leadership of Rajmohan Pillai. The timing couldn’t be worse for Rajmohan. The family business still had not come out fully from the aftermath of the Indo-Russian trade war of the early 80s. And not only had he lost his brother, but a major take-over made in Thailand in 1995 for Thai Agri Foods, was melting down due to the Asian Financial Crisis of 1997. Dr. Rajmohan soon realized that he cannot emulate the dashing aura of his brother nor the supremely patient aura of his father. He will have to do things his way and excel. And that is what he has done, especially during the 25 years after his brother’s untimely death. A humble person, he gives a lot of credit to his visionary father who was the epitome of equanimity, and to his

incomparable entrepreneur brother. But a careful analysis would reveal that the Beta Group has been strongest under Dr. Rajmohan’s tenure. Dr. Rajmohan Pillai has led Beta Group out of three major economic crises, and with each crisis, the Group has emerged stronger. Today, it is a world leader in nuts and dry fruits, with its products sold in over 55 countries. Based out of Malta in Southern Europe, in 2019 it had recorded a turnover of $3.1 billion and a profit of $376 million, with its major brands being Nut King and Ole. For sure, both Janardhanan Pillai and Rajan Pillai would be proud of Dr. Rajmohan’s achievements. Seasonal Magazine in a wide-ranging conversation with Dr. Rajmohan Pillai.

“OUR FAMILY, LED BY MY ELDER BROTHER RAJAN PILLAI WHO HEADED BRITANNIA, CREATED INDIA’S FIRST PROFESSIONAL TENNIS ACADEMY, BRITANNIA AMRITRAJ TENNIS ACADEMY (BATA) IN CHENNAI, BY DONATING 12 MILLION DOLLARS FROM OUR FAMILY FOUNDATION. IT WAS DONE IN ASSOCIATION WITH INDIA’S ACE TENNIS PLAYER VIJAY AMRITRAJ AND IT PRODUCED SOME OF INDIA’S MOST ACCOMPLISHED PLAYERS LIKE LEANDER PAES AND SOMDEV DEVVARAMAN.”

SEASONAL MAGAZINE

ON THE CHALLENGES THAT COVID-19 THROWS UP You have recently remarked that if a person’s or a family’s wants are really their needs or requirements, and if their purchases are in tune with their budget, then there is no economic crisis for that individual or family. Can you explain this more, and does this apply to nations too in your opinion? Absolutely yes, it is equally applicable from a nation’s point of view too. But before that, I want to thank you for giving me this opportunity to share my unique experiences. As the Father of our nation said most famously, “The world has enough for everyone’s need, but not enough for everyone’s greed.” As a nation, we have to be self-sufficient to meet all needs, and initiatives like Make in India is aligned with that. Coming to our Covid-19 response, our PM and his team has been doing an extremely good job so far. We were one of the first nations to lock down, and our infection ratio and mortality ratio is much better compared with even many developed countries, especially given our huge population. But as far as our healthcare sector is concerned, we are on the knife-edge. We simply can’t afford to have lax controls like in Europe and America. Only Kerala fares somewhat better in healthcare. A simple metric would demonstrate that. In case the Covid-19 situation scales up in India too, we do have 6.5 lakh hospital beds ready, but 1.5 lakh of those beds are in this tiny state of Kerala. Population wise, much more beds should have been there in Uttar Pradesh, Maharashtra, Bihar etc. As of now, the principal objective before us as a nation should be to protect our health-workers by making sure that they have enough protective gear. Because, if they go down fighting this, then it is a war like situation. Otherwise, India is faring much better, above the water now. What all contributes to your optimism? We are self-sufficient in food, we are self-sufficient in cement and we used to have a great textile industry which unfortunately faded out during the last twenty years. This should change. We need to be self-sufficient in critical goods. Like Gandhi said, “Everyone wants to be strong and self sufficient, but few are willing to put in the work necessary to achieve worthy goals.” We have enough food grains and pulses and milk in production, but now the challenge is to reach them to the masses without wastage. Central and state governments are doing the rationing of such basic food items, which should be further fortified. Our next serious issue is that millions of our most poor workers are now without salary. Of the 500 million working class population, barely 60 million are in the organized sector, and the rest have been left in the lurch due to the lockdown. Government should take proper care of them by direct cash transfer to the Jan Dhan accounts, and the government needs to be extremely generous to the over 90% of such Indians for around three months until this situation passes. SEASONAL MAGAZINE

ON BETA GROUP’S UNIQUE EXPERIENCE IN BATTLING CRISES One major challenge affecting most nations including India is that such a thing has never happened before. Do you think post this crisis, nations would fare much better in tackling similar or even newer challenges? Very true. Even I am able to discuss solutions to this crisis because of what we have gone through as a business group during the past several decades. Beta Group had survived three major crises during our history. I will briefly tell you about them so that you will know how much we have learned from those crises and how it is making us withstand the current one. The first crisis was in 1981-82 period, soon after I joined the business as a youngster. There developed a trade war between India and Russia, which nobody must be remembering now. At that time, Russia was India’s largest trading partner, but suddenly they stopped purchasing all things from India. Russia was Indian cashew industry’s largest market. We were badly hit, losing Rs. 40 crore in the process, while the cashew industry lost around Rs. 200 crore. At that time we were the third largest nut processing company in India. It took us 27 years to come out of that trouble fully. The business environment was very difficult back then. Interest rates were between 22 to 24%. Penal interest rate was at 36%. It was a very big mess. Many companies went bankrupt. We were among the few companies left standing by the time the crisis blew over. Which were the other crises that Beta Group survived? In 1995, as part of our international expansion, we took over Thailand’s second largest food company, Thai Agri Foods, which was a stock market listed firm with its products exported worldwide. But within two years, that is, in 1997, came the Asian Financial Crisis that had its epicenter in Thailand. We had taken over the company at 103 bahts per share and within days of the crisis, Thai Agri Foods’ share price had reached 30 baht. It was exactly something like how the Indian stock market is melting down now. Naturally, the whole financing structure behind the takeover deal like the leveraging and all came tumbling down. It was a very painful period. Again, it took us much time, 16 years, to settle everything slowly and come out of that mess. The next crisis happened in 2008-09 period when we were expanding in Europe, while being based out of

Holland and Malta. The subprime housing crisis began in USA, Lehman Brothers went bankrupt, and it rapidly spread across the globe, making it a global financial crisis. Unlike in earlier crises, this time it was the bankers who went bankrupt or short of money, and there was no way out for processing and distribution companies like us who operate in dozens of companies across the world on credit lines. However, we came out much faster from this crisis than in the other two, owing to our hard learned lessons from the earlier two episodes. What were the main lessons from all these three crises? The solutions were all about following better models. In our industry, the chief risk was on-time or just-intime procurement. Everyone was betting on that, as it was very convenient and carried less overheads like transportation, storage and interest charges. Even if your raw materials were coming, halfway across the globe, like from Japan, it was scheduled to arrive just on the processing date or a day before. When things were booming, no one thought about the possible risks. Nobody realized how flimsy was this whole logistics, when not even a week’s disruption in supply chain was anticipated or prepared for. We did away with all that, and in our European operations we now keep two weeks worth of stock. Since the uncertainties are much higher in India, over here we keep three months’ stock always. Many things can happen suddenly in India, either nationwide, statewide or districtwide. There can be sudden strikes or even a leader’s death. It is due to taking sufficient precautions from such lessons that we have been able to continue our operations during this crisis, even though on a subdued scale. These same issues apply to nations too. Most countries including India had become too dependent on China for essential bulk drugs. Even for the medicines we claim to be manufacturing here, some of the raw materials come from China. That is why we really did that export ban on the antimalarial drug, when it became clear that we didn’t have enough stock if China didn’t resume its supply. This should change. We should be self-sufficient in such essential items and also have enough stock at any point of time. And the positive side is that we are a huge resourceful country that can achieve practically anything that we set our eyes upon, and not a city state like Singapore which has the wealth but has to procure most things from overseas. SEASONAL MAGAZINE

ON WHY THE LOCKDOWN SHOULD BE LIFTED NOW As a keen observer and participant of the food supply chain activities in India and the world, you had recently sounded alarm bells about how the lockdown will paralyze the supply chain if something is not done fast. What do you think is a greater concern - billions of people not getting enough food or millions of labourers going without wages? Both are serious concerns, and both are connected issues, but even if the lockdown has to be continued for medical reasons, then the first issue of hunger has to be addressed. For any government anywhere in the world, this would be the primary concern, because whatever said and done, if the people can’t get at least one square meal a day, we would be inviting a mass uprising or revolution. Food is such a basic need. We should never allow such a thing to happen in India as we already have enough food-grains and pulses to tide over such a crisis. The only challenge is reaching them to every nook and corner of the country. In this regard, we must salute some unsung heroes, our truck drivers. It is a harrowing experience to drive trucks at this point of time. It is not only lonely on the highways, but many fuel stations are closed, the public toilets are not cleaned, and there are not much eateries open to get a tea or a meal. They are doing as hard a work as our health workers, policemen and soldiers. The hassles are also too much as there are inter-state disputes and frequent checking but still they are willing to work and help in reaching these essential food materials to all parts of the country. In any case, this crisis is a wake-up call for India and its various states to be as self-sufficient in food materials as possible. Even Kerala is now planning to start milk powder units as it has become unviable to transport the excess milk to Tamil Nadu and get it back as powder. At the same time, the government has a more critical role to play, of ensuring that Covid-19 doesn’t spread like in China, Europe or USA. Food supply is especially vulnerable as it would be a catastrophe if the pandemic spreads to the food packaging workers and the food itself get affected as the virus is notorious of surviving for a week on many surfaces. How do you think these competing objectives of ensuring safety and ensuring food supply can be achieved? Fortunately for the food industry, the World Health Organization has come out with detailed guidelines on processing and packaging so as to eliminate contamination, and these standards are frequently getting updated too as more information becomes available on this virus. Because SEASONAL MAGAZINE

of this, as and when the lockdown is lifted in stages, I don’t see any problem for the food processing and packaging industries to resume operations swiftly without no risk or fear about Covid-19. The only thing is that the industries should implement these guidelines and the government should ensure that they are strictly followed. But coming to your question about the government’s role in ensuring that Covid-19 is not spreading, I think the biggest shortfall has been communications to people, especially to our young people. They are critical to how India has performed this well in this crisis, as their immunity is much higher than our seniors. We also have other advantages like mandatory BCG vaccination and a hot climate. Other nations like in Europe and North America have been hit hard as the percentage of young people are much lower there. Demographically, we are a much younger nation at this point of time. But it is more difficult for younger people to remain locked up in their homes, and that is why I say more exciting communications need to be addressed to them to keep their morale up. Older people have seen many ups and downs and hence will better adhere to the lockdown. The government should be communicating to the younger generations that this is a national cause in which they should participate wholeheartedly.

ON THE FISCAL AND MONETARY MEASURES TO BE TAKEN Coming to fiscal and monetary measures to survive this crisis, what are your views on boosting government spending and lowering of interest rates? Both are critical measures to be undertaken urgently without fail. All viable sectors should be encouraged to resume operations without delay. India cannot afford to continue this lockdown. If there are social distancing conditions to be followed, comply with it, but lift the lockdown. This is because India cannot keep on handholding all the people or all the companies. The healthy and viable among them should be encouraged to resume work at the earliest. Very soon, many sectors and companies are going to approach the government for relief measures. Government can’t help all of them, and that is why it should not put curbs on good sectors and companies and thus indirectly allow them to be stressed further or even fail. Coming to interest rates, it is already fairly low for a developing economy, but this is a rare situation which calls for innovative or even radical measures. One such stopgap measure is even extending credit to critical segments of the economy at zero interest. This can be accounted separately for compensating the lenders later. And together with all these measures, the government should build confidence in citizens and companies by frequently reassuring that the government will do everything to make India emerge from this crisis stronger, and that existing jobs will be protected and everything done to create more jobs. As this has been an unprecedented economic crisis, do you think the way GST and other taxes are charged needs to be changed significantly? How will the government be able to hold on to its revenue, if the GST rates are cut significantly? Regarding GST, the only question is whether to cut the rates now or to keep the tax collections pending. Government should realize that companies have taken a loss beyond the their endurance capacity. This should be treated as the rare emergency it is. It happens only once in a century or so. I propose that the government create a one-time Covid-19 fund, by taking loans or even by printing money, to combat any fall in revenue. Using this fund, government can help citizens and companies generously. This should be a time-limited fund that can be phased out over the next few years so that it is not inflationary on the economy over the long run. Already, inflation is low as consumption has come down whereas production of food materials is still robust. Such radical

“GOD ALLOWS US INTO DIFFERENT SITUATIONS AND WE HAVE TO PLAY OUR PART AS MUCH AS WE CAN. WHEN MY BROTHER WAS 18, MY FATHER WAS THE RICHEST MAN IN SOUTH INDIA, AND HENCE MY BROTHER COULD USE IT AS A LAUNCHPAD, BUT BY THE TIME I WAS 18, MY FATHER WAS THE POOREST MAN DUE TO HIS LIABILITIES. STILL, I HAD TO PLAY MY PART AND THAT IS WHAT I DID.” economic assistance is most important as India has ready consumers, ready-to-work workers and ready-to-operate companies, provided the disease is contained. That is a huge strength which should not be allowed to go waste. Do you think most hard-hit industries like banking, housing, travel & hospitality need to be helped more by the government to come out of this crisis without much damage and loss of jobs? Yes, some sectors need to be helped more, but there are some caveats. The damage on travel and tourism industry is going to be much more than what most people imagine today. Travel charges are going to be at least thrice the earlier rates. Coming to hotels and resorts, there is going to be a huge oversupply of rooms, as leisure travel will dry up. Don’t expect tourism to make a fast recovery. Many hospitality properties are simply going to wind up, however hard they try or however deep the government helps them, because the demand for rooms is simply not going to be there for a long time. This is not only because of the pandemic fears, but because the nearly 20-year boom in most assets like stocks, commodities and real estate, which powered the travel boom, has now come to a grinding halt. So, the government helping all hotels and resorts doesn’t make any sense. Instead, what the government should do is help the unviable properties to pay a one-time loss and help them fold up operations, so that the supply of rooms is brought down in sync with the demand. Whatever demand is likely to be there in the tourism sector in the near future would be targeted towards the expensive properties, and that is where the government assistance should be given, provided these projects were viable before the crisis had hit. SEASONAL MAGAZINE

ON BETA GROUP’S STRATEGIES TO TACKLE THE CRISIS

You are a very optimistic person and as an active tennis player, you have stressed on the importance of playing on the front foot now. What all points make you optimistic in these trying times?

From experience comes optimism. Our individual experiences are very important. Not many groups in India have faced the kind of problems we faced and survived. In fact, we are at a stage now where we are offering our crisis management expertise to other companies in the sector as well as outside our sector. Our products are sold the world over and we have significant operations in five countries. There are different challenges in these five countries with regard to the Covid-19 situation, but we are overcoming all that and facing no issues in core operational aspects like supply chain, payments, salaries to our staff etc. In some of the countries where our products are sold, like in USA especially, we are in a strong position now as dry fruits and nuts are classified as essential food items for nutrition. I am not saying that we are not facing any problems. Our turnover this year will go down, and our profit too will go down, but other than that, I don’t expect any serious disruption to happen. Owing to our unique experience in battling serious crises before, and due to the proper systems we developed to overcome them, I am sure we will come out of this challenge, stronger. But unfortunately, I don’t think many companies in our sector are going to survive this crisis, because they were not prepared for this. So, basically it is our experience that makes us play in the front foot even now. At the Beta Group, what all are your strategies in staying connected with your team members and associates? At what percentage of productivity is the firm operating now globally during this pandemic? Currently, we are operating at about 25% of capacity. This is mainly because the logistics are disconnected in many markets, ports are closed, government offices are closed to renew licenses etc. But in the next 45 to 60 days, we expect to ramp up operations to 60% of capacity. It will depend mainly on how effectively the disease is contained in our major markets like USA, Europe, Thailand and India. Without experience, you cannot battle any crisis. But even with deep experience, each crisis will throw up newer challenges. Who would have imagined that even interstate movement would be affected in a country like India? Even the courier services are not delivering. Still, what we have learned and what we are practicing is that if we are lean and proactive, we can take advantage of the emerging situations. SEASONAL MAGAZINE

ON BETA GROUP’S GL Beta Group’s leadership has been in the nuts business. From where all are the nuts procured and where all are it processed? What is the geographical reach of your products? Our products including our core brands Nut King and Ole are sold in over 55 countries now. Our core nuts procurement, including cashew, is from around 20 countries including India, Indonesia and several African countries. But coming to dry fruits, we procure from a lot more countries, as they come from the world over with different countries leading in different dry fruits. We procure almonds from USA & Spain, apricots from Turkey, and so on. Altogether, we must be procuring from around 80 countries. We directly buy from the farms and we process it in our own facilities in two countries, mainly India and Thailand.

“MY GREATEST INSPIRATION HAS BEEN MY FATHER, K JANARDHANAN PILLAI. HE WAS A STUDENT OF PHILOSOPHY WHO ACCIDENTALLY CAME INTO BUSINESS AND MINTED MONEY ON HIS UNIQUE LIFE PHILOSOPHY, BECAME THE RICHEST MAN IN SOUTH INDIA, THEN LOST EVERYTHING AND BECAME THE POOREST MAN BY WAY OF LIABILITIES, AND THEN AGAIN CAME BACK UP SLOWLY. BUT DURING ALL THESE UPS AND DOWNS HE MAINTAINED HIS EQUANIMITY AND FRUGAL LIFESTYLE.”

OBAL OPERATIONS Apart from your foods division, which all are the areas that Beta Group is focusing on? We have always been exploring opportunities in various fields like infrastructure, energy, logistics, entertainment, consultancy, IT etc. As of now, we are focusing on IT and entertainment. We have an IT company, Pace Hitech, which has ramped up its operations since the last 7 years. We have overseas clients, and is now planning to set up overseas operations. At Pace, we are more into automated platforms, robotics etc that can substitute for physical IT work. I am amazed at the way how the younger generation is connecting and communicating through digital means. Such platforms today ensure that they can communicate seamlessly whether the person they are communicating with is halfway across the globe or in the same room. I

have seen children in the same home messaging each other through their tablets, rather than come and chat in the sofa. The younger generation prefer to interact digitally rather than interact directly. Now with this Covid-19 situation, this trend will only increase, as we have seen with the popularity of platforms like Zoom. We have many such exciting, platform-based communication and collaboration solutions that include solutions for even activities like coaching, mentoring etc. I think platform-based IT solutions and entertainment are going to be the next generation businesses and therefore the Beta Group is focusing on these two, apart from our core foods business. Where is the Beta Group headquartered and do you have plans to list it in the stock market? In my view, stock market listing is mainly required if you need to raise cash for your business. We have enough cash for our core businesses as of now, so at least for the next 5 to 7 years, we are not planning a stock market listing. But in business, we cannot keep saying no to any options, as the situations are changing dynamically. We should be nimble enough to change. Our global headquarters is registered in the Southern European country of Malta. Before Malta became a member of the European Union, we obtained a 30-year tax exemption, that we are enjoying now. Our operations in Southern European countries are also directed from Malta, whereas our operations in Northern Europe is managed by our distribution business in Netherlands. Our backoffice operations are in India, at Kollam and Trivandrum. SEASONAL MAGAZINE

ON HIS PERSONAL PASSIONS, PLAYING TENNIS & WRITING Can you tell us something about your love for tennis and how it evolved? Well, I was born into a tennis playing family. My dad, mom and all my six sisters all used to play tennis. We had a private tennis club in Kollam called the Cashew Club. So, I grew up playing tennis, and while studying at Fatima College, from where I obtained my BCom, I represented Kerala University in tennis five times, and I also got into the Indian tennis team once. I was very passionate about tennis, but I had to forsake it for taking over the family business. Fortunately, I developed an equal passion for business too and I firmly believe that nature has plans behind every development in our lives. For instance, our family, led by my elder brother Rajan Pillai who headed Britannia Industries, created what was India’s first professional tennis academy, Britannia Amritraj Tennis Academy (BATA) in Chennai, by donating 12 million dollars from our family foundation. It was done in association with India’s ace tennis player Vijay Amritraj and his family. This academy produced some of India’s most accomplished players like Leander Paes and Somdev Devvaraman. Unfortunately, we could not continue the Academy when we ran into financial crisis in 1997 and had to sell Britannia to the Wadia Group in 1998 and they were not keen to pursue it. After my university years too, I continued to play tennis and became the national champion in the age group of 35 years. I still play the game daily. You also seem to be a prolific author, having published four books till now. Can we know more about the author in you? Yes, writing is something I enjoy, even though I don’t write regularly. I basically write when I am too emotional. My first book was on the unique life and death of my elder brother Rajan Pillai, titled, ‘A Wasted Death’. It was published by Penguin and translated to six languages. I also wrote a book on the life and times of my illustrious father, K Janardhanan Pillai, which was in Malayalam. My book on our industry, detailing all aspects of the production, processing and trading of cashews, was titled, ‘The World Cashew Industry’, which also incorporated some chapters from my PhD thesis on the history of the global cashew industry. My most recent book has been ‘Sidharthan’, which was really a story told to me by my late brother Rajan, during his last years. He left it incomplete and I just completed this story many years after his death. SEASONAL MAGAZINE

ON HIS INSPIRATIONS & PERSONAL PRODUCTIVITY As a person who is keenly focused on personal productivity, can you tell us how you go about planning and managing your day? I get up from sleep everyday between 3:15 to 4:15 AM. My most productive time is from 3:30 to 7:00. I find that these hours are four-times more productive than the regular office hours of 9 to 5. In other words, I can complete 4 hours worth of my official work using one hour in the early morning. I check and reply to all emails and SMS, meditate, play tennis and take my morning bath then. By 11 AM, I would have completed all my current and pressing work. From 11 onward, it is all about making my future plans and attending to PR activities. When I say future plans, it is really for the long-term. I have often seen that things I started planning 7 years back have come into fruition only now. Still, it is very important to keep doing this exercise, as over a period of 30 years, this future planning has paid me back richly. In the evenings I again play tennis and also read books, then I usually have an early dinner, and by 8 PM my battery would be getting down and I sleep by 8 30 to 9 PM. This is the night routine unless I have to attend a dinner, or some such late night event. Which are your favorite books and who all are your inspirational leaders? I take inspiration from a lot of people. My first and foremost inspiration has been my father, K Janardhanan Pillai. He was a student of philosophy who accidentally came into business and minted money on his unique life philosophy. At one point of time, he was described as the richest man in South India, but his life didn’t change a bit. He lived simply and dressed simply. Success didn’t go to his head. Later, when economic crises mounted, his business got hit, debt ballooned, and due to our huge debt, he became

one of the poorest persons in South India. Again, his life didn’t change, because nothing needed change from his already frugal lifestyle. He went on wearing the same dhotis, same shirts, same chains. He patiently took upon one challenge after the other without any anger or remorse. He always believed that we will receive what we deserve and that everything is just a phase of life that we should play. Only because of my father, I could meet great inspirational figures like JRD Tata and Vittal Mallya, who was Vijay Mallya’s father. Vittal Mallya was a great friend of my father and a great inspiration to me. Coming to books, my favorite author has been Mahatma Gandhi. The philosophy that he arrived at, especially in the latter part of his life is so profound that this world needs it if it has to survive. Rather than fiction, I like biographies and autobiographies. Nelson Mandela’s life story and philosophy are very inspirational to me. Fictional stories that tell of an alternate life I enjoy more as movies, and James Bond, MGR and Prem Nazir movies are some of my all-time favorites.

ON HIS ILLUSTRIOUS BROTHER RAJAN PILLAI Your brother has been one of the greatest entrepreneurs that India has ever seen. How inspiring was he to you? Without doubt, he has been one of the greatest inspirations, not only to me and our whole family, but to many people who knew him. He was one of the most forward-looking persons in his generation. He achieved things that even his wealthier peers could not even imagine. He led Britannia Industries in India and other food companies in Asia, making him the largest manufacturer of biscuits in Asia Pacific, earning him the name ‘Biscuit King’. He brought Coca Cola to India. These were things unimaginable for a young Keralite guy in those days. However, there was a big age gap between us. He was 16 years elder to me, making him more like a father figure. And even more importantly, he had left home in pursuit of a global career when he was 21, and I was just 5, and hence I didn’t have any memories about him. And all through his heydays we didn’t have much contact, except for his visits once in a while to our home. We knew about his achievements, but personal contact between us was very low. I came to know him personally only during his last 7 years, and unfortunately that was the time he was past his peak and slowly starting to decline in business. He took me to different countries and acquainted me with his businesses there and entrusted me with their accounting works, as he was engulfed in many legal issues. During his last one and a half years was the period when we became really close, as he came back to our home and stayed with us. He was very worried about how all the issues could be settled. He confided in me that he had done no wrong and that it was simply a case for taking over his companies and that he had offers to be spared if he would let go of all he controlled. But my brother was never willing for that. That was the period when he told me that story, Sidharthan, which was autobiographical. How do you think he was capable of achieving this much? I have always thought about this, especially as since childhood I have always been compared with him. Relatives would often ask, why can’t you be like him? So, from early on, I made it a point to do things even better than him. My marks were better than his in school. He was a good tennis player, but I became a university champion and national level player in tennis. I acquired knowledge too in many areas of business. I always thought if I do better than him in all these vital things, I will naturally end up better than him. I was quite wrong. The truth dawned on me one fine day when I was in US for signing a deal with Conagra, for our Beta Group. It was a good SEASONAL MAGAZINE

the US President with flair and flamboyance. He came into contact with many high flying business leaders and global politicians and was popular among them. Such a contact was young Vijay Mallya, who too was exploring setting up in Singapore, and they became quick friends, but bad things too developed from that. “I HAVE WRITTEN FOUR BOOKS - ‘A WASTED DEATH’ ON RAJAN PILLAI’S Was Rajan Pillai like your father or totally RISE AND FALL WHICH WAS different? PUBLISHED BY PENGUIN AND TRANSLATED TO SIX LANGUAGES; A BIOGRAPHY ON MY FATHER, A COMPREHENSIVE BOOK ON THE WORLD CASHEW INDUSTRY, AND A BIOGRAPHICAL NOVEL ‘SIDHARTHAN’, WHICH WAS A STORY TOLD TO ME BY MY LATE BROTHER RAJAN, DURING HIS LAST YEARS.”

deal for us, but not big enough to make a mention in US newspapers. And I was in my hotel room, reading the New York Times paper, and to my utter surprise my brother was in business headlines – for taking Coca Cola to India! That is the day I stopped imitating him. He was inimitable. I finally understood that it was not the marks or sports achievements or even business knowledge that mattered. It was all about what you did with what little you had. He was a master of that. He had an aura of leadership about him, which I would never have. Was he always like that or do you or the family recall any incidents that made him like that?

Do you think Central and State Governments failed in providing adequate medical assistance to Rajan Pillai in his time of need?

No, he was not always like that. He has not studied in any fancy institutes either. For a boy who studied engineering at a regular college like TKM Engineering College of Kollam, he went a long way. One turning point in his life was in his 8th grade in school. Till then, he had studied in a Malayalam medium school and he was a normal boy. Then he was enrolled in Infant Jesus School under the guidance of Fr. Rozario, where he quickly learned to speak fluent English. He started winning in debates, and started representing the school too in debates. Within the three years he was there, he developed the confidence to take on the world. At 21 years of age, he took over a hotel in Goa, and before anyone could blink, he was in leadership roles in big companies like Britannia and had moved his headquarter to Singapore, from where he began taking over global companies. During his heydays in Singapore and London, he was the kind of confident business leader who could have dinner with Prince Charles or

Absolutely. Not only both governments, but our MPs, and the whole law & order machinery failed in providing him justice. Not only was medical assistance denied, but even justice was denied to our family after his death. All the 20 MPs from Kerala tried to get a resolution passed for CBI enquiry in parliament, but it was not successful. Legal cases were vigorously tried, but nothing much of justice was obtained, except for a token 10 lakh compensation awarded by Supreme Court. In reality, nothing could compensate for his death, as far as our family, his friends, his businesses and his employees were concerned. That is why I titled my book on him as ‘Wasted Death’ as it was a colossal loss for a lot of people and even the nation. We were shattered at that point of time. We realized we had been wronged by the system. But years later, I have realized that nature has different ways to do things. When bad things happen, we will not understand the reasons. But now I realize that much good have also come up from this most tragic episode in our lives.

SEASONAL MAGAZINE

My father too had an aura about him, but that was totally different. I tried copying that and I failed. I then tried copying my brother’s aura and again I failed. Finally I understood that God gives different gifts and different situations to different people and we have to develop whatever gifts and situations we have been given. I will give you a striking example. When my brother was born, my father’s business was starting, and by the time he was 18, my father’s business was at its peak of success. K Janardhanan Pillai was considered as one of the richest men in South India. And my brother could use that as a launchpad. But by the time I was 18, my father’s situation had changed dramatically. Due to a major economic crisis, his business had nosedived, and he had accumulated debt like anything. Going by his debt, he was perhaps one of the poorest men in South India. So, even if I wanted to start off and behave like my brother, it simply was not possible. Instead, I took over the family business and grew it slow and steady, and with careful planning could steer the ship back to prosperous shores within the next 20 to 30 years.

ON HIS FATHER ANDHIS LIFE PHILOSOPHY You had recently remarked that life can be lived and managed only philosophically, which sounds very profound. Can you explain? That is something I learned from my father, and this is the reason why he remains my greatest inspiration. He started his working life as a poor farmer working for his rich uncle. But he was so good a person that his uncle married off his daughter to him. And thus began his good fortune. He started a cashew processing unit and didn’t have to look back, growing from strength to strength. He could marry off his sisters decently and make sure that all in his extended family were financially comfortable. He was not at all a born businessman or a learned businessman. As I said, I always regard him as a philosophy student who came to business accidentally. But that was his strength. He maintained his equanimity, even when people were saying he was the richest person in South India. When I used to accompany him to Chennai as a teenager, either the Chairman of Indian Bank or Indian Overseas Bank would come to the airport to receive us personally. But just years later, when my father’s business had gone downhill, and I accompanied him to Chennai again, nobody was there in the airport to receive us, and even worse, the Chairman of IOB made us wait for over 45 minutes before allowing us a meeting.

I was terribly upset. How could they behave so unfairly, just because we were not doing well at that point of time? But my father corrected me. He said, “Earlier when we came, we had Rs. 10 crore fixed deposit here, but now we are struggling to repay a debt that has grown to Rs. 16 crore. Earlier I was a king and I was treated as a king, but now I am their prisoner and why should I expect any treatment other than that of a prisoner?” He also chided me for my impatience, saying, “For my first loan of Rs. 1 lakh from this bank, the manager had made me wait three days, and you are upset at a 45 minutes wait?” That was an important lesson for me. When you wrote his biography, you had given a peculiar title - ‘The life of K Janardhanan Pillai – God’s Drama’. Was it adhering to this philosophy? Absolutely yes. In fact that was one of my father’s favourite philosophies. That God is always allowing us to be in different scenarios and that our duty was to enact our given roles at the given times to the best of our abilities. There will be times when nothing we do will yield any result. Still, his philosophy was that, we should be doing our part without fail, and without bothering about the results.. That is what he personally did all his life, and that is why he could live up to see the Beta Group rebounding from all crises – the Indo-Russian crisis, the Asian crisis and my brother’s most unfortunate death when he was just 47 years of age. For many years my father was very poor, and then for many years he was very rich, and again for many years he became very poor when you think about his liabilities, and again before his death, he could see the business and his finances improving. But the beauty was that all through these phases, he remained the same person. And these dramatic changes happen in most people’s lives, and sometimes these phases repeat 3 or 4 times within 30 to 40 years. Just look at the lives of Anil Ambani and Vijay Mallya. Where were they just 10 years back? They were simply on top of the world. And see where they are now. And if they maintain their equanimity now they may even rebound too. That is what I was fortunate enough to do in Beta Group. I remember a time when we were in crisis in Thailand, and my total liabilities were greater than my total assets by 500 million dollars. My driver who earned 10,000 bucks was richer than me then. It took not just a few years but a few decades for us to patiently work out things. Without philosophy it was just impossible. Why all these happen? We don’t know when it happens. But later we realize that it was to make us emerge stronger, to weather deeper crises in the future. SEASONAL MAGAZINE

UNLOCKING STORIES FROM THE WORLD OVER NATIONS ACROSS THE WORLD ARE WITNESSINR FURTHER CAUTIOUS EASING OF COVID-19 RESTRICTIONS FOLLOWING SIGNS THE PANDEMIC MAY BE SLOWING, WITH HARD-HIT ITALY SET TO FOLLOW SPAIN IN ALLOWING PEOPLE OUTSIDE AFTER WEEKS OF CONFINEMENT. ore than 2,43,000 people have been killed and 3.4 million infected worldwide by the virus, which has left half of humanity under some form of lockdown and pushed the global economy towards its worst downturn since the Great Depression. With signs that the spread of the disease is coming under control, parts of Europe, Asia and the U.S. have begun to lift restrictions to try to inject life into economies crippled by weeks of closures and ease the pressure on populations weary of confinement. After a two-month lockdown, Italians on Monday will be allowed to stroll in parks and visit relatives. Restaurants can open for takeaways and wholesale stores can

SEASONAL MAGAZINE

resume business, but there was some confusion about the extent of the easing. Romans were doing aerobics on their rooftop terraces and exercising indoors on Sunday and the squares in the city centre were mostly empty on the last day Italians were obliged to remain within 200 m of their homes. “On the one hand, we’re super excited for the reopening, we’re already organising various activities the kids will be able to do with their grandparents outdoors, workshops in the garden, that sort of thing. The kids can’t wait to see them,” said Rome resident Marghe Lodoli, who has three children. “On the other hand, it’s disorientating. The rules are not clear, and we’re not sure if just using common sense will do.” Italian authorities have said some

preventative measures are still needed in a country that has the second-highest number of virus deaths in the world after the United States. Several industries, including automobile sector and construction, have already restarted work. But Italy’s 20 regions have imposed their own regulations, leading to some confusion over what people can and cannot do. Veneto and Calabria lifted their lockdowns early and allowed bars and restaurants to open with outdoor tables. Elsewhere in Europe, Germany will continue its easing on Monday, while Slovenia, Poland and Hungary will allow public spaces and businesses to partially reopen. In another sign of life returning, Germany’s Minister for the Interior and Sport said Sunday he supports a resumption of the country’s football season this month as long as teams respect hygiene conditions. The British government will unveil its own “roadmap” to ease the country out of lockdown this week, after Prime Minister Boris Johnson said the country was “past the peak” of the outbreak. With health experts warning the disease could hit hard once again, governments are trying to balance easing up restrictions to help battered economies

against the risk of fresh outbreaks. Despite moves to ease curbs across the globe, more than 4.6 billion people are still on some form of lockdown or obligation to stay confined at home. Most governments are sticking to measures to control the spread of the virus – social distancing and masks in public — and more testing to try to track infections even as they relax curbs on movement. Face masks will be mandatory on public transport starting Monday in Spain, where people were allowed to go outdoors to exercise and walk freely on Saturday after a 48-day lockdown. Even as some European countries gradually lift restrictions, officials in Moscow — the epicentre of the contagion in Russia — urged residents to stay home. With cases increasing by several thousand each day, Russia is now the European country registering the most new infections. European leaders are backing an initiative from Brussels to raise •7.5 billion euros ($8.3 billion) to tackle the pandemic and raise funds for efforts to find a vaccine for COVID-19, the disease caused by coronavirus. Italy’s Prime Minister Giuseppe Conte, French President Emmanuel Macron, and Germany’s Chancellor Angela Merkel gave their support in an open letter in weekend newspapers. With pressure growing on governments

worldwide to balance public health requirements with the need to ease intense economic pain, some nations in Asia announced similar easing measures. South Korea - once the second worsthit nation on the planet - said it would ease a ban on some gatherings and events as long as they “follow disinfection measures”. Thailand allowed businesses such as restaurants, hair salons and outdoor markets to reopen so long as social distancing was maintained and temperature checks carried out. But experts have cautioned that many countries are still not through the worst. The Philippines suspended all flights into and out of the country for a week starting Sunday in a bid to ease pressure on its congested quarantine facilities. Iranian President Hassan Rouhani announced mosques would reopen across large parts of the Islamic Republic, after they were closed in early March to try to contain the Middle East’s deadliest COVID-19 outbreak. Mr. Rouhani warned, however, that while Iran would reopen “calmly and gradually”, it should also prepare for “bad scenarios”. U.S. leaders face immense pressure to ease virus measures as the economy has been hammered with tens of millions left jobless.

The United States has the most coronavirus deaths in the world and President Donald Trump is keen for a turnaround to help reduce the economic pain. Florida is set to ease its lockdown on Monday, as authorities in other states wrestle with pressure from demonstrators — some armed — who have rallied against the lockdowns. There are also signs that the pandemic is slowing down in some parts of the United States. In New York City, the epicentre of the U.S. outbreak, an emergency field hospital erected in Central Park is set to close, the Christian charity running it said on Saturday, as virus cases decline in the city. But authorities are wary of letting their guard down too fast, with fears the virus could wreak havoc in the most vulnerable communities in the United States. A massive wave of infections is sweeping through America’s prison population — the world’s largest at 2.3 million — with coronavirus deaths on the rise in jails and penitentiaries across the country. Riots over inadequate protection and slow responses by authorities have already broken out in prisons in Washington state and Kansas. “Things are beyond breaking point at this facility,” said Brian Miller, an officer at Marion prison in Ohio. “Right now it’s hell.” SEASONAL MAGAZINE

FRENCH HACKER FINDS SECURITY ISSUE IN AAROGYA SETU, INDIAN AGENCIES RESPOND PROMPTLY FRENCH HACKER ROBERT BAPTISTE, WHO GOES BY ELLIOT ALDERSON ON TWITTER, HAS CLAIMED THAT THERE ARE SECURITY ISSUES WITH THE GOVERNMENT’S CONTACT TRACING APP, AAROGYA SETU. “A SECURITY ISSUE HAS BEEN FOUND IN YOUR APP. THE PRIVACY OF 90 MILLION INDIANS IS AT STAKE. CAN YOU CONTACT ME IN PRIVATE?" THE HACKER WROTE ON TWITTER TAGGING THE OFFICIAL ACCOUNT OF THE APP.

he hacker also said that Emergency Response Team (CERT-In) and the National Informatics Centre (NIC) got in touch with him 49 minutes after his initial tweet. Sources at Niti Aayog said that they will be putting up an official statement about Baptiste’s concerns soon In a postscript on his tweet, the hacker added that Rahul Gandhi was right. The Congress MP had called the app a “sophisticated surveillance system" and said it raised “serious data security and privacy concerns", via Twitter. On the

SEASONAL MAGAZINE

same day, Baptiste sent out a tweet saying, “Rahul Gandhi tweeted about the Arogya app. I guess I’m forced to look at it now." Baptiste also confirmed that both the Indian Computer Emergency Response Team (CERT-In) and the National Informatics Centre (NIC) got in touch with him 49 minutes after his initial tweet. Sources at Niti Aayog said that they will be putting up an official statement about Baptiste’s concerns soon. The hacker has been in the news earlier for exposing flaws in the Indian government’s mAdhaar app earlier. He

The hacker has been in the news earlier for exposing flaws in the Indian government’s mAdhaar app earlier. found that developers of the app were saving users’ biometric information in a database that could be easily breached. He was also amongst many hackers who breached Telecom Regulatory Authority of India (TRAI) chief R.S. Sharma’s personal information after Sharma put his Aadhaar number on Twitter asking people to show “one concrete example" where harm could be done to him. Aarogya Setu was launched by the Indian government on April 2 as the official app to help with contact tracing efforts. The app has been promoted by Prime Minister Narendra Modi himself and has been downloaded over 9 crore times already. It also holds the record for the fastest any app has reached a 50 million download base, which it reached only 13 days after the launch. The government has recently made the app mandatory for individuals in containment zones for covid-19, and for all government officials. Many companies have also made the app mandatory for their employees, including delivery services Zomato and Swiggy, who ask their rides to download the app.

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

MONEY PRINTING OR MONETISATION IS NEITHER A LASTING SOLUTION OR A DANGER

r. Raghuram Rajan, Former RBI Governor, on why the money printing route to finance the deficit is neither a gamechanger nor a catastrophe, but something that the government can undertake judiciously for the shortterm. Why is the central bank hesitant to finance the government directly? Why does it insist on the fig leaf of the bonds being issued to the market and then the central bank buying through Open Market Operations (as the RBI has been doing in the last few years)? Direct central bank financing in normal times can be inflationary (as can be excess OMOs). Moreover, direct financing of the government obscures market signals for a while when the government spends beyond its means. It is important the government gets market feedback. The SEASONAL MAGAZINE

RBI/government accord allows the RBI to say no to the government, even if it rarely does so. It is best to retain the fig leaf. Is there no limit to RBI financing? Not so long as the banks are willing to passively reinvest excess reserves. However, the more the government issues to the RBI, the more debt the government will have to service, and the less creditworthy the debt. If the government’s debt falls in value, RBI’s balance sheet will get eroded. Once again, what is manageable in small quantities becomes problematic in excess. Why can’t the RBI pay the government a large dividend instead? If the RBI’s accountants agreed (they don’t), the RBI could increase the government’s deposit account at the RBI by 1 LC and say it was a dividend. While this would reduce the

government’s notional fiscal deficit (it would now not issue bonds to the RBI) everything else would be the same. Ultimately, banks would have excess reserves, which would have to be taken in by the RBI at the reverse repo window. Should “monetisation” be a constraint on government spending today? No, the government should be concerned about protecting the health of the economy and should spend what is needed. Obviously, it should try and cut back unneeded spending, and prioritise. It should also worry about getting the fiscal deficit and its debt back in shape over the medium term, and the more it spends now, the harder that will be. However, its inability to finance itself or fears of monetization should not be a constraint. Monetization will neither be a game-changer nor a catastrophe, if done in a measured way. In fact, India is already doing it! However, the caveat – it should be measured -- is key.

URGENT CURES FOR THE COVID-19 ECONOMY

SEASONAL MAGAZINE

AN OBJECTIVE AND SANE VOICE Seasonal Magazine in conversation with veteran political commentator Parsa Venkateshwar Rao Jr.

The voice of Parsa Venkateshwar Rao Jr has been that of an objective and centrist political commentator. He can pick holes easily in secular and liberal arguments, as much as he can easily pick holes in right-wing arguments. Even while objectively criticizing the BJP led government for some of its policies, he can with the same objectivity show that why the usual ‘crying-wolf’ style of BJP’s detractors is being counterproductive to the hilt. Parsa Venketeshwar Rao Jr supports only democratic and constitutional remedies to controversial laws, as he believes that their legal or constitutional validity should be respected by all. Such a uniquely centrist and objective standpoint is rare to find among today’s commentators who either tend to gravitate to the left or to the right. The greatest value that he proposes for the society is to have respect for individual freedom. And his greatest hope is in the electoral process. In an impressive career that spanned several leading newspapers in India as well as abroad, he spent the most time with Indian Express (for over 13 years) which was early on in his career, and then with DNA (for nearly 10 years), later on. Born in Hyderabad and currently based in New Delhi, his earlier overseas assignments included Singapore’s The Straits Times and UAE’s Gulf Today. Other leading media houses for which he has worked include India Today and Tehelka. As a noted political commentator, his columns have been published in Dubai’s Gulf News, Beirut’s The Daily Star, Singapore’s Today, and other leading Indian newspapers including The Times of India, New Indian Express, The Asian Age, Deccan Herald and Deccan Chronicle. Apart from his sharp objectivity in politics, his writing reflects his love and prowess in history and English, incidentally two subjects he studied for graduation and post-graduation. Also, a prolific author of books, his major works include, ‘Rajiv Gandhi to Narendra Modi’, ‘Mullah Omar and Robespierre: Essays in the Politics of Ideas’, ‘Lokpal: Facts & Arguments’, ‘Indian Politics Since 1991: Reforms and Revivalism’ and the ‘Emergency: An Unpopular History’.

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY Seasonal Magazine in conversation with veteran columnist and political commentator Parsa Venkateshwar Rao Jr. Despite initial differences, most governments across the world have followed the same strategy of imposing a lockdown. However, due to how well the lockdowns were adhered to, and numerous other factors, the death tolls in countries have been varied. How do you think the lockdowns will affect the prospects of the ruling regimes generally, and especially in India? I think they will remain ambiguous because the governments would claim that the lockdown was necessary to restrict the toll or casualties. They would argue that, without the lockdown, loss of lives would have been greater. They would fall back on the defence that they took a very hard step which was only to save the lives. That is likely to be their rationalization. Quite a related phenomenon is how the Opposition parties in various countries have performed during the crisis. Generally what could be seen was that political opposition became subdued or even irrelevant in most nations and countries, as rulers started wielding greater powers and hogging the limelight even more. How do you assess the performance of Indian opposition parties at both the Central and regional levels? Even before the wake of COVID-19, the Opposition parties have not been very prominent or vocal enough. Their numbers were restricted in Parliament and they are not in power in many of the states. So, they were already marginalized. Therefore, when the crisis erupted, the ruling party could take over the reins and not pay attention to what others have to say. But, this doesn’t mean that the Congress has not taken any steps to air its views. In terms of its impact on the government, I think there has been very little of that. Stranded migrant workers across India and their plight have emerged as a grave issue in India. As anywhere in India could be reached within half a week by train or bus, do you think more time could have been given to the migrant workers so that they are safely at home, before imposing the lockdown? Is this a case of the poor and downtrodden and their unique situations failing to garner the required SEASONAL MAGAZINE

attention of the political and bureaucratic machinery? I think, firstly, when the government had announced its plans for a lockdown they had not fully grasped the magnitude of the issue. They had to take a decision fast and therefore it was a panic response. This was the case in many other countries as governments realized that healthcare systems are fragile and medicines were in short supply. About the issue of migrant workers, they were never on the radar as it were. However, they had not given a thought even to government’s own functioning or on whether public transport should be going or not. There was no planning and thinking. Whether it was good or bad – we can just debate about and argue about it. Where do you stand on the issue of lives vs. livelihood after these many days into the lockdown? Do you think it’s time to change the strategy? I feel it can’t be an ‘either/or’ question. It may be a convenient formulation but I doubt if it will serve any purpose, taking a side. When the lockdown was announced, the main problem facing the government was how to reduce impact of the pandemic and what are the ways to do that. We have a fair idea on what to do when there is a flood or a delayed monsoon – but I don’t think we have ever taken stock of a problem of this nature and magnitude. It is a medical emergency. To cope with this, you need to have certain infrastructural facilities. The government had to consider the idea of keeping transport options open to carry people around. They had to ensure supplies were not disrupted between state borders. But given that this is a medical emergency, there was not much that could be done as there was no template.

I THINK THEY WILL REMAIN AMBIGUOUS BECAUSE THE GOVERNMENTS WOULD CLAIM THAT THE LOCKDOWN WAS NECESSARY TO RESTRICT THE TOLL OR CASUALTIES. THEY WOULD ARGUE THAT, WITHOUT THE LOCKDOWN, LOSS OF LIVES WOULD HAVE BEEN GREATER.

Do you think India should be moving towards being a welfare state with unemployment benefits, universal health and life insurance etc, in the wake of this crisis? You see, India has always toyed with the idea of creating a welfare state. It first came into force after World War II. There was a Great Depression before it when the markets were unstable and unreliable. We had Franklin Roosevelt’s New Deal, and Soviet Union’s planning system among others. However, in the case of Europe, you had a vibrant economic system which produced goods and was able to distribute them effectively. This is a basic paradox in economics: once you create a welfare state, are you ready to sustain it? Take the Soviet example. In such a system, if there was agricultural failure or monsoon delay, the state would not be able to keep the welfare model afloat. Let us remember one thing: even if the BJP Government is right-wing, their economic policies indulge in leftist, statecentered models. The Ujjwala Yojana, the Jan Dhan Yojana are all examples of this. But, the question is do they have the economic means to sustain it. Do you think India should ensure a Universal Basic Income for all its citizens, starting with the 40-50% of its citizens falling below the poverty line? It is a good idea but works only in countries with smaller populations. Because of the numbers involved in India, it is an open question as to whether Universal Basic Income will work out. The assumption with which people argue for UBI is based on the tax collections available to state exchequer at its disposal. They think that the money used from this can be used to pay income instead of other schemes. So, for instance, if you provide UBI, you won’t need to pay for education or free healthcare. These people think that UBI is the most efficient way of redistributing money instead of providing other welfare schemes. Normally, a crisis of this enormous scale, should have united different communities in India. But unfortunately, due to the Tablighi conference and its aftermath,

communalism has not remained on the backburner even now. Now with hundreds of recovered conference members coming forward to offer their plasma for treatment, do you think extreme right wing populations will be more accommodating in their position? Or is India hopelessly divided along communal lines? The BJP’s majoritarian brand of politics doesn’t allow for reconciliation, doesn’t allow for harmonious functioning of different sections of society. Unless the party in power changes its ideological orientation, it will be very difficult. There is a constant tendency to blame the minority sections for any problem because they can easily be made out the villains. But it seems to have dawned upon the party that to vilify one community during a pandemic is not a desirable strategy because you need everyone to cooperate. Right now, the conviction is lacking. In a world that was already deglobalizing, Covid-19 has proved to be a booster rocket, with national boundaries and national identities going to be fiercely guarded. Does this bode well for the world and humanity's progress? Keeping aside the idea of a global community or village, what is likely to happen is people will want to fall back on their national identities. But the question is how is this going to be sustained? If you want to avoid exchange of goods or reduce export or imports, where is your foreign exchange reserve coming from? So, to think that to use the nationalistic line or fervor to develop the economy is a tempting idea but not practical. They will be forced to do business with outside trade partners, make compromises and do a give and take. There is a naïve idea in India that we can get all those companies leaving China into our country like MNCs. This means you are open to the idea of a global economy. And the goods produced by these MNCs are going to be sold beyond national boundaries. If you want to take advantage, you need to embrace globalization to its fullest. What do you think of India’s moves to further cooperative measures in the South Asian region to fight the

pandemic? Should India start to have global positions on some of these issues? India has a got a very large economy and trades with all major countries. But still, India hasn’t taken its leadership role very seriously. It is not enough to send hydroxychloroquine to countries. We need to back that up with investment in science and technology and transfer to countries that need them. The Americans did this and the Russians also did. The Chinese are currently trying to do this in many parts of the world. India, however, is unable to do it because we lack capacity. It is not enough to speak in idealistic or rhetorical terms. Income inequality has been a bane of India as well as several developing economies. Do you think that if it were properly addressed earlier on, we would have been in a much better state to face this crisis? Income inequality is a worldwide phenomenon. The crisis has only served to highlight this. India is still among the lower and middle-income countries. We still need huge economic growth to have notions of income redistribution being effectively implemented. The acuteness of the inequality is not as great as in developed countries because of the scale of the economy. We haven’t yet reached that scale. We need to provide people with basic living standards and education and health. Inequality is a problem for our economic growth and if we don’t have the basic minimum for our large population to sustain themselves, then it might take us years to reach where we want to. There is a solid economic reason why we need to increase the purchasing power of the people. You have recently written about the leviathan state and why it is not ideal for the future of democracy. Do you think governments and administrative machinery would go back to their normal powers post this lockdown, or that there would be lasting changes in the way we are governed? My suspicion is that the right-wing governments, especially the one in India, wants to maximize the powers of the state. Because the ruling party wants to remain in power and would like to wield powers to its advantage like not done before. The

pandemic crisis and the economic downturn provide it with ample opportunities. This is a dangerous thing. The maximalist state is bad for economic growth and democratic culture. People should be free to make their own choices and not be regimented, which is what any state would like to do. That’s why I’m against the maximization of state power on the issue of principles. You can turn to China and say such a model has worked for them but we don’t want that example. We want to balance the freedoms democracy affords us with the affluence of a growing economy. I don’t think we should fall for the idea of being a great nation but being in subservience to the state. As a keen commentator on giants who strode this earth like Gandhi and Marx, where and in whom do you find the philosophical resources to encourage humanity to try again? What would be your philosophical response to the challenges humanity is faced with today? My own preference is for individual freedom, his moral right to make choices in all fields whether it is economic or political or any other. He should also have every right to choose what he wants to do with his life and not be regimented into a state-run economy. I think big is very bad. We need more competition and free market is essential to keep the economy going because that’s what allows for individual freedom. People in the past have emphasized this but they don’t have all the answers. I would perhaps pick the liberal thinkers like John Locke. To an extent, I would also go back to Edmund Burke although he is considered a conservative thinker. He argued for the freedom of American colonies when the British were refusing to leave by the end of the 18th century. He turned completely against the French Revolution but that is mostly because of the violence. Burke understood the importance of traditions but also individual aspirations. Any thinker who valued individual freedom and believed in the moral choice felt this and went hand in hand. You take away freedom and you don’t have morality left. Among 20th century thinkers, I would suggest people read John Rawls’ works. SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

CAN HARARI’S PRESCRIPTIONS PREPARE US FOR THE FUTURE? When Yuval Noah Harari speaks, the whole world listens. Trained as a historian, Harari is a popular voice amongst the current generation of homo sapiens (and likely to inspire upcoming generations of our species). His impeccable knowledge and insights on pressing issues facing humanity today such as climate change, nuclear weapons, the impact of Artificial Intelligence (AI) are second to none. He explores subjects as varied as philosophy to science to military history and is a best-selling author of the books Sapiens: A Brief History of Humankind (2014), Homo Deus: A Brief History of Tomorrow (2016), and 21 Lessons for the 21st Century (2018). In the prevailing scenario of the COVID-19 pandemic, Harari discusses themes such as how the human race dealt with past pandemic incidences, how governments are coming to speed with surveillance technologies, on the lack of global leadership and why more globalization, not less, is the solution. COVID-19 VS PAST PANDEMICS We are in a better situation compared to the pandemics in history. More importantly, we have all the scientific knowledge to stop this pandemic. We understand perfectly what is happening today. We are no longer blind and powerless. The big question is whether we know how to use our power responsibly. ON UNITED STATES When Ebola struck in 2014, the US led the efforts to stop the crisis. Similarly, in the 2008 economic downturn led the world. Now the US has resigned from its position in leading the country. Now, America is SEASONAL MAGAZINE

first. First in sick people, first in dead people. To develop a vaccine, we need countries to pool their resources together. To deal with the economic impact (of the novel coronavirus pandemic)... unless we have a global economic plan, we could have a global depression. The world is losing confidence in American competence. People are looking at the United States and thinking, ‘Hey, if this is how they deal with... in their own country... maybe it’s good the US is not leading the world anymore.’ THE REAL BIG PROBLEM There is a lot to criticise about China’s

initial response to the coronavirus crisis... We could have prevented the entire pandemic if China had been more open initially. But, generally speaking, I am happy to see China is helping other countries in dealing with this crisis. The ideal situation would be if countries realise you cannot rely on one country, one leader... we need to encourage global solidarity. The real big problem is not the virus, it’s the inner demon within human. We now see hatred... hatred for each other, other countries. If we allow this kind of hatred to spread, it will prevent us from dealing with the current crisis and poison internal relations for years to come.

SEASONAL MAGAZINE

ON RELIGION

ON SURVEILLANCE The most likely and immediate danger is surveillance. Previously surveillance was above the skin... now it’s under the skin. Previously governments wanted to know where we went, we met. Now governments want to know what’s happening inside your body. Previously, governments could know you are watching video online, but didn’t know what you felt like. But imagine this kind of biometric surveillance that tracks your heartbeat, your body temperature... the person monitoring you can know how you feel like, your emotions. It could lead to a totalitarian regime that even George Orwell could not imagine. It is possible to have both health and privacy... it should be possible with system. Yes, we need a system to monitor such pandemics... we should have a separate healthcare authority to be in-charge of this surveillance. The surveillance should also go both ways... it should not just be the government monitoring the people but also people monitoring the government. DICTATORSHIPS NOT MORE EFFECTIVE At a time like this people when people are afraid for their lives, for their jobs, many of them dream about a strong powerful leader that knows everything and will protect us and they are willing to let go of all democratic checks and balances and just trust in one big leader. That’s extremely dangerous. First of all, because such a big leader will not leave once the crisis is over... there is always a new emergency coming. Secondly, dictatorships are just not more effective than democracies at a time like this. People imagine that dictatorships are better because they can make decisions faster. But the problem is if this one man [the leader] took a wrong decision, usually he will never admit it. He will blame others SEASONAL MAGAZINE

AT A TIME LIKE THIS PEOPLE WHEN PEOPLE ARE AFRAID FOR THEIR LIVES, FOR THEIR JOBS, MANY OF THEM DREAM ABOUT A STRONG POWERFUL LEADER THAT KNOWS EVERYTHING AND WILL PROTECT US AND THEY ARE WILLING TO LET GO OF ALL DEMOCRATIC CHECKS AND BALANCES AND JUST TRUST IN ONE BIG LEADER. and ask for even more power to deal with the others. In a democracy there are more involved in making decisions... so we see even in emergencies democracies work better than dictatorships. For example, China — an authoritarian regime — dealt with the crisis relatively effectively, but so did South Korea, Taiwan, New Zealand, which are democracies. And according to some measures, these countries actually dealt with the crisis better than China without becoming dictatorships. END OF GLOBALISATION? We might see a certain going back (in terms of economic globalisation and integration)... Many countries are now completely dependent in exports... and you can’t just produce everything on your own. I think we will see some restructuring of the global economic system, but I don’t see a complete collapse.

There will be some revision [with people’s relationship with religion]. The thing about religious leaders... they are not very good at stopping epidemics, that’s not their expertise. The real expertise of religious leaders is making excuses. They are very good [at that], it is what they do... they promise something, it doesn’t happen and they have best excuses on why it didn’t happen. So it may be the same with this crisis. They can’t really protect people from this disease but they are now working... inventing all kinds of stories and excuses... about why this disease is spreading. I think some people will be convinced with these excuses and will go on believing in these religious leaders... but I hope that at least some people will realise that if you have choose between a scientist who can actually cure you and a religious leader who is best at making excuses, it’s better to go with the scientist. ON INDIA’S RESPONSE I am not an expert on India [so can’t comment on the response]... but I think India faces an enormous challenge... In previous epidemics India was very hard hit... During the Spanish Flu epidemic, India was the hardest hit. I can’t comment on how the Indian government is responding because I don’t understand enough... but I would urge people to react not with hatred but with solidarity... both with other countries and especially with different communities within India. I was very worried about some stories I heard that some people are blaming the epidemic on minorities... on Muslim minorities... even saying that it’s a deliberate act of terrorism... this is complete nonsense, is extremely dangerous... we don’t need more hatred, we need solidarity, we need love between people.

Excerpts from India Today Group’s EConclave Corona Series

WORLD NEVER HAD A MORE URGENT TASK THAN COVID-19 VACCINE, SAYS BILL GATES One of the questions I get asked the most these days is when the world will be able to go back to the way things were in December before the coronavirus pandemic. My answer is always the same: when we have an almost perfect drug to treat COVID-19, or when almost every person on the planet has been vaccinated against coronavirus. he former is unlikely to happen anytime soon. We’d need a miracle treatment that was at least 95 percent effective to stop the outbreak. Most of the drug candidates right now are nowhere near that powerful. They could save a lot of lives, but they aren’t enough to get us back to normal. Which leaves us with a vaccine. Humankind has never had a more urgent task than creating broad immunity for coronavirus. Realistically, if we’re going to return to normal, we need to develop a safe, effective vaccine. We need to make billions of doses, we need to get them out to every part of the world, and we need all of this happen as quickly as possible. That sounds daunting, because it is. Our foundation is the biggest funder of vaccines in the world, and this effort dwarfs anything we’ve ever worked on before. It’s going to require a global cooperative effort like the world has never seen. But I know it’ll get done. There’s simply no alternative.

Although eighteen months might sound like a long time, this would be the fastest scientists have created a new vaccine. Development usually takes around five years. Once you pick a disease to target, you have to create the vaccine and test it on animals. Then you begin testing for safety and efficacy in humans. Safety and efficacy are the two most important goals for every vaccine. Safety is exactly what it sounds like: is the vaccine safe to give to people? Some minor side effects (like a mild fever or injection site pain) can be acceptable, but you don’t want to inoculate people with something that makes them sick. Efficacy measures how well the vaccine protects you from getting sick. Although you’d ideally want a vaccine to have 100 percent efficacy, many don’t. For example, this year’s flu vaccine is around 45 percent effective. To test for safety and efficacy, every vaccine goes through three phases of trials:

The world is creating this vaccine on a historically fast timeline.

Phase one is the safety trial. A small group of healthy volunteers gets the vaccine candidate. You try out different dosages to create the strongest immune response at the lowest effective dose without serious side effects.

Dr. Anthony Fauci has said he thinks it’ll take around eighteen months to develop a coronavirus vaccine. I agree with him,

Once you’ve settled on a formula, you move onto phase two, which tells you how well the vaccine works in the

Here’s what you need to know about the race to create a COVID-19 vaccine.

SEASONAL MAGAZINE

though it could be as little as 9 months or as long as two years.

people who are intended to get it. This time, hundreds of people get the vaccine. This cohort should include people of different ages and health statuses. Then, in phase three, you give it to thousands of people. This is usually the longest phase, because it occurs in what’s called “natural disease conditions.” You introduce it to a large group of people who are likely already at the risk of infection by the target pathogen, and then wait and see if the vaccine reduces how many people get sick.

After the vaccine passes all three trial phases, you start building the factories to manufacture it, and it gets submitted to the WHO and various government agencies for approval. This process works well for most vaccines, but the normal development timeline isnâ&#x20AC;&#x2122;t good enough right now. Every day we can cut from this process will make a huge difference to the world in terms of saving lives and reducing trillions of dollars in economic damage. So, to speed up the process, vaccine developers are compressing the timeline.

SAFETY AND EFFICACY ARE THE TWO MOST IMPORTANT GOALS FOR EVERY VACCINE.

In the traditional process, the steps are sequential to address key questions and unknowns. This can help mitigate financial risk, since creating a new vaccine is expensive. Many candidates fail, which is why companies wait to invest in the next step until they know the previous step was successful. For COVID-19, financing development is not an issue. Governments and other organizations (including our foundation and an amazing alliance called the Coalition for Epidemic Preparedness Innovations) have made it clear they will

SEASONAL MAGAZINE

support whatever it takes to find a vaccine. So, scientists are able to save time by doing several of the development steps at once. For example, the private sector, governments, and our foundation are going to start identifying facilities to manufacture different potential vaccines. If some of those facilities end up going unused, that’s okay. It’s a small price to pay for getting ahead on production. Fortunately, compressing the trial timeline isn’t the only way to take a process that usually takes five years and get it done in 18 months. Another way we’re going to do that is by testing lots of different approaches at the same time. There are dozens of candidates in the pipeline. There are over 115 different COVID-19 vaccine candidates in the development pipeline. I think that eight to ten of those

SEASONAL MAGAZINE

look particularly promising. (Our foundation is going to keep an eye on all the others to see if we missed any that have some positive characteristics, though.) The most promising candidates take a variety of approaches to protecting the body against COVID-19. To understand what exactly that means, it’s helpful to remember how the human immune system works. When a disease pathogen gets into your system, your immune system responds by producing antibodies. These antibodies attach themselves to substances called antigens on the surface of the microbe, which sends a signal to your body to attack. Your immune system keeps a record of every microbe it has ever defeated, so that it can quickly recognize and destroy invaders before they make you ill. Vaccines circumvent this whole process

by teaching your body how to defeat a pathogen without ever getting sick. The two most common types - and the ones you’re probably most familiar with - are inactivated and live vaccines. Inactivated vaccines contain pathogens that have been killed. Live vaccines, on the other hand, are made of living pathogens that have been weakened (or “attenuated”). They’re highly effective but more prone to side effects than their inactivated counterparts. Inactivated and live vaccines are what we consider “traditional” approaches. There are a number of COVID-19 vaccine candidates of both types, and for good reason: they’re wellestablished. We know how to test and manufacture them. The downside is that they’re timeconsuming to make. There’s a ton of material in each dose of a vaccine. Most of that material is biological, which means you have to grow it. That takes

time, unfortunately. That’s why I’m particularly excited by two new approaches that some of the candidates are taking: RNA and DNA vaccines. If one of these new approaches pans out, we’ll likely be able to get vaccines out to the whole world much faster. (For the sake of simplicity, I’m only going to explain RNA vaccines. DNA vaccines are similar, just with a different type of genetic material and method of administration.) Our foundation - both through our own funding and through CEPI - has been supporting the development of an RNA vaccine platform for nearly a decade. We were planning to use it to make vaccines for diseases that affect the poor like malaria, but now it’s looking like one of the most promising options for COVID. The first candidate to start human trials was an RNA vaccine created by a company called Moderna. Here’s how an RNA vaccine works: rather than injecting a pathogen’s

antigen into your body, you instead give the body the genetic code needed to produce that antigen itself. When the antigens appear on the outside of your cells, your immune system attacks them—and learns how to defeat future intruders in the process. You essentially turn your body into its own vaccine manufacturing unit. Because RNA vaccines let your body do most of the work, they don’t require much material. That makes them much faster to manufacture. There’s a catch, though: we don’t know for sure yet if RNA is a viable platform for vaccines. Since COVID would be the first RNA vaccine out of the gate, we have to prove both that the platform itself works and that it creates immunity. It’s a bit like building your computer system and your first piece of software at the same time. Even if an RNA vaccine continues to show promise, we still must continue pursuing the other options. We don’t know yet what the COVID-19 vaccine

will look like. Until we do, we have to go full steam ahead on as many approaches as possible. It might not be a perfect vaccine yet and that’s okay. The smallpox vaccine is the only vaccine that’s wiped an entire disease off the face of the earth, but it’s also pretty brutal to receive. It left a scar on the arm of anyone who got it. One out of every three people had side effects bad enough to keep them home from school or work. A small—but not insignificant— number developed more serious reactions. The smallpox vaccine was far from perfect, but it got the job done. The COVID-19 vaccine might be similar. If we were designing the perfect vaccine, we’d want it to be completely safe and 100 percent effective. It should be a single dose that gives you lifelong protection, and it should be easy to store and transport. I hope the COVID-19 SEASONAL MAGAZINE

vaccine has all of those qualities, but given the timeline we’re on, it may not. The two priorities, as I mentioned earlier, are safety and efficacy. Since we might not have time to do multi-year studies, we will have to conduct robust phase 1 safety trials and make sure we have good real-world evidence that the vaccine is completely safe to use. We have a bit more wiggle room with efficacy. I suspect a vaccine that is at least 70 percent effective will be enough to stop the outbreak. A 60 percent effective vaccine is useable, but we might still see some localized outbreaks. Anything under 60 percent is unlikely to create enough herd immunity to stop the virus. The big challenge will be making sure the vaccine works well in older people. The older you are, the less effective vaccines are. Your immune system—like the rest of your body—ages and is slower to recognize and attack invaders. That’s a big issue for a COVID-19 vaccine, since older people are the most vulnerable. We need to make sure they’re protected. The shingles vaccine which is also targeted to older people - combats this by amping up the strength of the vaccine. It’s possible we do something similar for COVID, although it might come with more side effects. Health authorities could also ask people over a certain age to get an additional dose. Beyond safety and efficacy, there are a couple other factors to consider: How many doses will it be? A vaccine you only get once is easier and quicker to deliver. But we may need a multidose vaccine to get enough efficacy. How long does it last? Ideally, the vaccine will give you long-lasting protection. But we might end up with one that only stops you from getting sick for a couple months (like the seasonal flu vaccine, which protects you for about six months). If that happens, the shortterm vaccine might be used while we work on a more durable one. How do you store it? Many common vaccines are kept at 4 degrees C. That’s around the temperature of your average refrigerator, so storage and transportation is easy. But RNA vaccines need to be stored at much colder SEASONAL MAGAZINE

temperature - as low as -80 degrees C which will make reaching certain parts of the world more difficult. My hope is that the vaccine we have 18 months from now is as close to “perfect” as possible. Even if it isn’t, we will continue working to improve it. After that happens, I suspect the COVID-19 vaccine will become part of the routine newborn immunization schedule. Once we have a vaccine, though, we still have huge problems to solve. That’s because… We need to manufacture and distribute at least 7 billion doses of the vaccine. In order to stop the pandemic, we need to make the vaccine available to almost every person on the planet. We’ve never delivered something to every corner of the world before. And, as I mentioned earlier, vaccines are particularly difficult to make and store.

MY HOPE IS THAT THE VACCINE WE HAVE 18 MONTHS FROM NOW IS AS CLOSE TO “PERFECT” AS POSSIBLE. EVEN IF IT ISN’T, WE WILL CONTINUE WORKING TO IMPROVE IT. AFTER THAT HAPPENS, I SUSPECT THE COVID-19 VACCINE WILL BECOME PART OF THE ROUTINE NEWBORN IMMUNIZATION SCHEDULE. There’s a lot we can’t figure out about manufacturing and distributing the vaccine until we know what exactly we’re working with. For example, will we be able to use existing vaccine factories to make the COVID-19 vaccine? What we can do now is build different kinds of vaccine factories to prepare. Each vaccine type requires a different kind of factory. We need to be ready with facilities that can make each type, so that we can start manufacturing the final vaccine (or vaccines) as soon as we can. This will cost billions of dollars. Governments need to quickly find a mechanism for making the funding for this available. Our foundation is

currently working with CEPI, the WHO, and governments to figure out the financing. Part of those discussions center on who will get the vaccine when. The reality is that not everyone will be able to get the vaccine at the same time. It’ll take months—or even years—to create 7 billion doses (or possibly 14 billion, if it’s a multi-dose vaccine), and we should start distributing them as soon as the first batch is ready to go. Most people agree that health workers should get the vaccine first. But who gets it next? Older people? Teachers? Workers in essential jobs? I think that low-income countries should be some of the first to receive it, because people will be at a much higher risk of dying in those places. COVID-19 will spread much quicker in poor countries because measures like physical distancing are harder to enact. More people have poor underlying health that makes them more vulnerable to complications, and weak health systems will make it harder for them to receive the care they need. Getting the vaccine out in low-income countries could save millions of lives. The good news is we already have an organization with expertise about how to do this in Gavi, the Vaccine Alliance. With most vaccines, manufacturers sign a deal with the country where their factories are located, so that country gets first crack at the vaccines. It’s unclear if that’s what will happen here. I hope we find a way to get it out on an equitable basis to the whole world. The WHO and national health authorities will need to develop a distribution plan once we have a better understanding of what we’re working with. Eventually, though, we’re going to scale this thing up so that the vaccine is available to everyone. And then, we’ll be able to get back to normal—and to hopefully make decisions that prevent us from being in this situation ever again. It might be a bit hard to see right now, but there is a light at the end of the tunnel. We’re doing the right things to get a vaccine as quickly as possible. In the meantime, I urge you to continue following the guidelines set by your local authorities. Our ability to get through this outbreak will depend on everyone doing their part to keep each other safe.

SEASONAL MAGAZINE

is not sufficiently mitigated, the fallout could weigh on the recovery and result in downward pressures on the sovereign and Indian banks, it warned. The agency said systemic pressures for Indian banks could rise owing to the recently announced extension of the nationwide lockdown to check the COVID-19 spread. It said the Rs 1.7 lakh crore relief package along with liquidity easing moves from the Reserve Bank through the targeted long term repo operations will help temper economic risks. Amid speculation of an extension in the three-month moratorium, it said such a move can help borrowers suffering from temporary liquidity issues.

n March, the government announced a Rs 1.7 lakh crore relief package focusing on providing food security to the poor and providing money in their hands to fight COVID-19. Many industry watchers have said the package was too less, while some have backed the Centre for not front-loading the package, saying the longevity of the pandemic is not known. The quantum of a new stimulus package is a highly speculated aspect, with some industry watchers advocating caution and others pushing for more spending given the unprecedented nature of the pandemic. “In our view, the Indian government is likely to introduce additional fiscal stimulus measures, which could be broader in scale relative to efforts so SEASONAL MAGAZINE

far,” the agency, which has a 'BBB-/ Stable/A-3' rating on the sovereign, said. It added that apart from the direct fiscal transfers to the affected individuals, government officials have indicated a willingness to use a range of options available in their policy toolbox which may include additional support for the corporate and the financial sector as well. The agency said India's fiscal position has been weak for a long time now and is a major factor constraining sovereign credit rating along with the government debt. S&P added that India will show a “powerful recovery” in the economy in 2021-22, if it is assumed that the pandemic is contained and there is a significant improvement in the global economic conditions. However, if the damage to India's domestic economy

Drawing from the commentary and data from Axis Bank, which announced its results last month, the agency said a fourth of the lender's borrowers by loan quantum opting for loan moratorium suggests that some of the stronger borrowers are also opting to conserve liquidity in these tough times. The agency said it will compare the same numbers with the commentary from other banks to assess Axis Bank, but maintained that its Rs 1,400 crore loss for the March quarter reflects a “rise in systemic risk”. As of now, its negative outlook on the lender is reflective of the economic risks for the bank, and the Indian economy at large, remaining high, S&P said. The bank will maintain its strong market position and adequate capitalisation over the next 18 months, it said, warning that a large unanticipated asset quality shock can result in a downgrade of the bank's rating.

US officials believe China covered up the extent of the coronavirus outbreak and how contagious the disease is to stock up on medical supplies needed to respond to it, intelligence documents show.

Chinese leaders intentionally concealed the severity of the pandemic from the world in early January, according to a four-page Department of Homeland Security report dated May 1 and obtained by The Associated Press. The revelation comes as the Trump administration has intensified its criticism of China, with Secretary of State Mike Pompeo saying Sunday that China was responsible for the spread of disease and must be held accountable. The sharper rhetoric against China coincides with administration critics saying the government’s response to the virus was inadequate and slow. President Donald Trump’s political

opponents have accused the president and his administration of lashing out at China, a geopolitical foe but critical US trade partner, in an attempt to deflect criticism at home. The analysis states that, while downplaying the severity of the coronavirus, China increased imports and decreased exports of medical supplies. It attempted to cover up doing so by denying there were export restrictions and obfuscating and delaying provision of its trade data, the analysis states. The report also says China held off informing the World Health Organization that the coronavirus was a contagion for much of January so it could order medical supplies from

TRUMP HAS SPECULATED THAT CHINA COULD HAVE UNLEASHED THE CORONAVIRUS DUE TO SOME KIND OF HORRIBLE MISTAKE.

abroad and that its imports of face masks and surgical gowns and gloves increased sharply. Those conclusions are based on the 95 per cent probability that China’s changes in imports and export behaviour were not within normal range, according to the report. Trump has speculated that China could have unleashed the coronavirus due to some kind of horrible mistake. His intelligence agencies say they are still examining a notion put forward by the president and aides that the pandemic may have resulted from an accident at a Chinese lab. Speaking Sunday on ABC’s “This Week,” Pompeo said he had no reason to believe that the virus was deliberately spread. But he added, “Remember, China has a history of infecting the world, and they have a history of running substandard laboratories.” SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

GOVERNMENT BORROWING FROM RBI NOT PREFERRED: NK SINGH, CHAIRMAN, 15TH FINANCE COMMISSION

hough the government faces a tough challenge in funding the economy reeling from the Covid19 pandemic, NK Singh, Chairman, 15th Fifteenth Finance Commission, said borrowing money from the Reserve Bank of India is not the preferred option. Section 5 of the Fiscal Responsibility and Budget Management Act allows RBI to directly lend money to the government under exceptional circumstances. This would mean the RBI directly buying government bonds in the primary market. Singh, however said that “Whether it should be acted or not acted upon, or would be the most preferred SEASONAL MAGAZINE

option? In my view, it’s not.” Some states have demanded that the central government should increase their market borrowing limit to 5% of the state GDP from 3%. Singh said this would require a complete revamp of state FRBM Act. The cost of borrowing for states is high, and increasing the limit to 5% will still pose a similar challenge, he said. The Economic Advisory Council to the 15th Finance Commission, in a meeting recently, highlighted the importance of a carefully designed fiscal response, and not just its size, given that the shortfall in the government’s revenue will be high due to subdued economic activity, according to a statement by the commission.

INDIAN HEALTHCARE & ECONOMY CAN'T COPE WITH A MAJOR OUTBREAK: SOMDEEP SEN, ROSKILDE UNIVERSITY he sudden lockdown announcement has meant that millions of migrant workers, who play an indispensable role in the economies of India’s major cities, were left in a double bind, without any source of income, yet unable to return home. Thousands of people thronged city bus depots and train stations, while others walked for hours to reach their villages. Neither is India’s public health care system, nor its wider economy, is ready to cope with a major outbreak. A 2019 study exposed the dire state of the health care sector: with only 1.4 percent of India’s GDP allocated for health spending, public infrastructure was already severely under-resourced when

the pandemic began. India only has one doctor in the public health system for every 10,189 people. In total, there is a shortfall of 600,000 doctors and 2 million nurses. Add a pandemic to the mix and the results could be catastrophic. In midMarch, the Ministry of Health and Family Welfare estimated that there was one isolation bed available for every 84,000 people, and one quarantine bed for every 36,000. There were also just 40,000 respiratory systems in the entire country.

SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

FURTHER LOCKDOWN WILL DEVASTATE THE ECONOMY: OMKAR GOSWAMI, Omkar Goswami is Chairperson, Corporate and Economic Research Group (CERG) and Member, Economic Advisory Council to the 15th Finance Commission. mposing a nationwide lockdown involving 1.3 billion people for 40 consecutive days is hard enough. Getting out of it could be harder still, unless we are crystal clear and totally unambiguous about our basic intent. Let me start by stating something upfront. In today’s scenario, and for the foreseeable future, there will be enormous conflicts between epidemiological concerns of health and the basic rationale of earning a livelihood. Moreover, given the nationwide fear of the pandemic and anxieties about how it may overwhelm the country’s sparse medical facilities, I suspect that when there is a hard choice to be made between health and livelihood, politicians may veer in favour of health. The economic consequences have been devastating. How can one mitigate this disaster? The key to it lies in getting people back to work as soon as possible, with such safety as can be feasibly maintained. I had interacted with three outstanding empirical economists who shared their estimates in considerable detail. Though subject to corrections, what they suggested is that real GDP growth will contract from around 5.5% in 2019-20 to – 0.4% in 2020-21. If these estimates turn out to be true, this will be the deepest contraction that India has seen since the downturn that occurred in 1979-80, when real GDP growth plummeted from 5.5% in the previous year to –5.2%. To lock down any further will further devastate the economy — almost to a point of no return. It is time to totally lift the

SEASONAL MAGAZINE

lockdown from May 4. Let state governments continue making their call between health and livelihood. Some will opt for full lifting. Others won’t. But after 40 consecutive days, it is time for earning a livelihood. The lockdown was like the chakravyuh that you can enter, but never exit. So, cut the Gordian knot.

LOCKDOWN AFFECTS COUNTRIES LIKE INDIA MORE: CHRISTOPHER WOOD, JEFFERIES

ockdown in countries like India and Indonesia are more disastrous for human welfare and economies since there is no help for small businesses and neither are there unemployment benefits, said Christopher Wood, Global Head of Equity Strategy at Jefferies. Wood said the situation in countries like India and Indonesia is in contrast with the US where the Small Business Administration's Paycheck Protection Programme will provide up to $349 billion in forgivable loans to small businesses to pay

their employees for eight weeks during the health crisis. In countries such as India, with young demographics, such a lockdown causes more human suffering than Covid-19 itself, said Wood. This continuing lockdown is, unfortunately, making it ever more inevitable that India will suffer a consumer lending cycle," the Hong Kong-based ace analyst said. There is also a growing risk of forbearance on local lenders. He is also concerned about the continuing weakness in the rupee amid negative consequence of lower remittances from the Middle East as a negative consequence of fall in crude oil prices. SEASONAL MAGAZINE

PAS INFR DEV

SEASONAL MAGAZINE

SSIONATE ABOUT RASTRUCTURE VELOPMENT

NITINGADKARI HAS ALWAYS BEEN PASSIONATE ABOUT INFRASTRUCTURE DEVELOPMENT, SO MUCH SO THAT HE REQUESTED PRIME MINISTER NARENDRAMODI IN 2014 TO ALLOT HIM THAT PORTFOLIO. TODAY, HE HANDLES THIS CRUCIAL DOMAIN’S KEY COMPONENTS LIKE MINISTRY OF ROAD TRANSPORT & HIGHWAYS, AND MINISTRY OF SHIPPING. AND ALONG WITH THESE, GADKARI HAS BEEN ENTRUSTED WITH AN EVEN MORE CRUCIAL SEGMENT AS FAR AS INDIA IS CONCERNED – THE MINISTRY OF MICRO, SMALL AND MEDIUM INDUSTRIES WHICH ACCOUNTS FOR THE BULK OF INDIA’S INFORMAL SECTOR. VETERAN JOURNALIST SHEKHAR GUPTA RECENTLY INTERVIEWED MINISTER NITINGADKARI FOR NDTV’S OFF THE CUFF. HERE ARE SOME EXCERPTS. SG SG: In an eventful juncture in our lives where we are all learning to use technology, we bring to you a fresh edition of “Off the Cuff” a digital version. And we speak today with one of the most outspoken and one of the most accessible ministers in this government, that is, NitinGadkari. My old friend and also the former President of the BJP at a very young age. So, NitinJi, Welcome to Off the Cuff. (You took some time for us and that too from Nagpur. People are stuck where they are in these times and, it is no different for ministers. You could’ve called for a plane to pick you up.) NG NG: The lockdown in also enforced in Delhi and the offices are shut down. So I’m also working from home and in contact with the Officers. Related to MSMEs, I have talked to associations like Plastic Association, Chamber of Commerce, FICCI, CII, etc. Interestingly, I interacted with more than 6000 scholars across 50 universities around the world via video

conferencing for more than 90 minutes. For the first time, I understood the importance of outreach and connectivity through online medium that I had somewhat underestimated in the past. I’ve reach approximate 35 million people in last fifteen days. It’s really a surprise for me and I was lacking on this front previously. I have realized the impact made by technology and media on our lives and currently, I’m experiencing the same. SG SG: Although you have multiple portfolios (the highway construction most prominent of them), the MSME sector is in turmoil. MSME is integral to the economy for it offers employment to many people in the country. Neither it has loans nor does it have demand. MSMEs lack capital to pay off their employees due to which they are losing their jobs and taking their route back to home. Everyone is eagerly waiting for many days that a relief package will be announced. Will the government come up with a relief package for SEASONAL MAGAZINE

MSMEs or not? If yes, what kind of package could it probably be? NG NG: Shekharji, I agree with you on the importance of MSMEs for it contributes 29% to the growth of our country’s economy. It also contributes 48% share of total exports by our country. MSMEs have created 110 million jobs so far in India. Recently, I was talking to stakeholders in spa industry and was surprised to know that they have generated employment for 6 million people. So it is natural for MSMEs and small industry to provide an economic base to the country. As you rightly said, these sectors are facing numerous problems. The biggest problem faced by the sector, even before the coronavirus struck, that they don’t get paid swiftly for the procurements they supply to the Public Sector Undertakings (PSUs) in various central and state governments. The nonpayment of this amount, which is already very high, results in the erosion of working capital for these MSMEs. Working capital is extremely important for the functioning of MSMEs. We have already taken three decisions in this regard. Firstly, RBI has increased the working capital in MSMEs by 20%. Secondly, I am under talks with the state government (especially in Maharashtra) to make sure that state banks also release another 20%. It is currently in the review process. Thirdly, we have deferred monthly EMI by three months in the industry. In addition to that, we have restricted 600,000 MSMEs by March 31st through the banking system. We hope to re-structure 2.5 million MSMEs by December 31 st. Another problem that impedes the MSME sector is importing new technologies. The production cost can only be reduced by reducing the logistics, capital and labor costs. SG SG: All these measures will bore fruit in the long term. However, in short term, the patient is on deathbed and requires immediate life support. Every government in the world is doing something to preserve jobs. I know in India it is very difficult to give money something like that. But suppose you say something imaginative that for MSMEs below a certain level (for ex, SEASONAL MAGAZINE

spa, salons etc. that contribute to 6 million jobs), the employees whose share in the Provident Fund is bore by the company. Suppose the government gives that share to the company for six months on the condition that no workers will be fired by the company. Are you thinking on such lines or is it not going to happen? NG NG: Yes, we are thinking on these issues. We are offering the maximum possible relief that can be offered by the government on various levels – be it on departmental level, from Ministry of Finance, on PMO level. We are exploring all possible options. Shekharji, let me tell you one thing. The Government of Japan has allotted 12% of their GDP to combat the coronavirus pandemic. However, there is a stark difference between the economies of India and let’s say countries like Japan and USA. For instance, some of the state government are in crisis to the extent they don’t have enough funds to pay salaries to their employees. The revenue collection for centre has also plummeted. Banking systems are also facing big challenges despite our planning and inputs. In a nutshell, most stakeholders are in a state of difficulty. At the end of the day, I understand that saving the MSME sector will be vital to ensure the economic security of the country. As you mentioned out-of-thebox solution, I got a suggestion that around Rs. 80,000 crore is deposited in the ESI funds. Recently SantoshGangwarji came up with an order that Rs. 15,000 relief will be provided to all the companies employing less than 100 labourers. I requested him to waive off the 15k limit as well as the 100-labourer limit so that all can benefit from the scheme. We have definitely took some concrete steps and are also taking some of them. The relief package for the MSME sector will also be soon. We have done our homework and sent the plan to Ministry of Finance for their approval. We are also expecting that a decision will be taken soon and the Govt. of India backs the MSME sector in times of crisis. We hope to fight back the crisis taking all stakeholders together in an inclusive and integrated manner.

SG: When do you think the relief package will be approved? NG NG: See, I’m in Nagpur these days and finished the things at my end. I feel that it will be out soon enough. SG SG: One week or five days or …? NG NG: I cannot comment decisively from here. The decision will be taken by the Finance Minister and PM.However, I expect that a decision will be taken soon. SG SG: Many people approach you with their problem. What do they think is the biggest problem they’re facing? I’m not limiting myself to the MSME sector but talking in general. You’re a political leader and have been a young former President of the party. So what’s your take on the situation in the country? NG NG: The country is facing a crisis these days.Not only our country, but the whole world. From USA, Japan and Germany to UK, Spain and Italy, the situation in these countries are manifold worse than ours. Most significant of all, that people are disappointed all across the world. Pessimism prevails. Irrespective of the economic strata, people are frustrated about the uncertain future. I also advised my

friends in media sector to show some positive attitude in such times. We shall overcome, we shall win and we shall survive the crisis. This attitude needs to be cultivated among all. I see masses scared and disappointed whenever I meet them. This is not a good sign. The government alone cannot change the mind-set. Different stakeholders like the government, media, religious preachers, intelligentsia etc. should work together and spread positivity across the society. Inspire confidence and get away with negativity. I often try to motivate people through song ‘Hum HongeKamyaab’ (‘we shall overcome’) and poetry ‘KoshishKarneWalo Ki HaarNahiHoti’ (‘the ones who try never lose’). In my student-life in Nagpur University around 1977-78, we all used to lose elections. We did not win any seats and were often disappointed. At that time, I got the opportunity to read the memoirs of President Richard Nixon. He was widely ostracized in the States due to Watergate scandal. People even objected him to purchase a property in Washington DC. There was a motivating line in his biography, which goes like this – “A man is not finished when he is defeated, a man is finished when he quits.” I believe that the government, journalists, politicians

and social workers should imbibe this fighting spirit in the masses. SG SG: We cannot run away from the reality that millions of people are running away from the pandemic out of fear. We are seeing a Biblical mass migration – like the one when Moses rallied his people – where masses are running towards their hometowns. The lockdown was enforced on a very short notice of 4 hours. We didn’t make any preparations. Now they are walking long distances on foot. As a down-toearth person, you can understand how heart wrenching it is. Due to this, the psyche of masses is already broken. It is continuously becoming hard to address the migration issue. Do we not have any plans? NG NG: It is true that fear dwells in people’s minds, especially Bihar and UP, from where most of the labour migrates to different parts of the country. Moreover, they have started walking afoot. As they are walking down the highways, I advised the toll operators to arrange for food and water supplies for them. Many civil society organizations have also come forward to join the initiative. For example, many people from Hyderabad are coming to Nagpur. Recently, the government has talked about re-

opening railways. I got a list stating the fact that 80,000 people, only from Vidarbha region, are stuck in Mumbai and Pune and wish to come home. People should follow the guidelines issued by state and central governments. It includes washing hands frequently, wearing protective masks, maintain one metre distance from people, arranging food and shelter in the industry premises, limited travel in one bus and ultimately gradually reopening the economy. We have opened 60-70% of highway construction contracts in NHAI. Generating employment for migrant labourers is a key measure to address their fears.I’ll tell you an intriguing fact. From the concerned represntatives from Chandrapur and Garchiroli (also a Naxal-prone area), I came to know that over 10,000 people, who are from Telangana, are separated from their family in these two districts. I wrote to letter to Chief Minister of both states requesting them to let the stay in these districts. As both districts are free from the virus, it is advisable that the economic projects here are re-instated. It will cease the migration of these labourers. We have to resolve the problem from case-to-case basis. SG SG: As you said that the spread of virus is not uniform across all the areas, the centre painted the map of India into red, green and orange zone like a brush on the canvas. A district is a big unit to determine the zones. It might be possible that one of the taluka/tehsil in a district have 50 cases while the others are virus-free. Don’t you think, we closed the country more stringently than actually needed? NG NG: Let me talk about Nagpur as a case study. There are 12 assembly constituency within the district. Out of these, six are predominantly rural and do not have any cases. Four out of the other six urban constituencies are also doing well. The remaining two constituencies of Central Nagpur and East Nagpur has the cases. Even there, the cases are concentrated to two-three wards each. That’s why I invited District Collect and Commissioner at home and instructed them not to shut down the whole district. We can seal off the problematic areas completely and offer SEASONAL MAGAZINE

some relaxation to the remaining places. Similar advisories are issues from Centre, down to the states and then district collectors. It is the authority of district collector to enforce these advisories. The situation will be monitored from district-to-district and as you said, it is important to re-start the life that has been on a standstill in these areas.

Participant Questions Questions: PQ1 PQ1: Do you think that India’s MSME sector can benefit from the conditions prevailing in China? If yes, what measures are you taking in this regard? NG NG: I agree and will explain you with an example. Recently, India imported 15 million PPE kits through special delivery from China. When there was a shortage, I search for a donor and took a capital amount of Rs. 1 crore. Along with MP VikasMahatme and MSME Joint Director (Nagpur), we offered the capital to a local ready-made garments company by the name ‘Orange Cluster’. They employ 1500 women and also manufacture branded clothes for Peter England.They manufactured the kits on a rate of Rs. 550-650 and deployed it in the nearby hospitals. With a production capacity of 10,000 kits per day, per kit cost has come down from Rs. 1200 to Rs. 550 now. I’ve circulated the video among all the District Collectors. So, there is no need for dependency on China. For instance, the plastic pump for sanitizer and shampoo bottles was also imported from China till recently. In a video conference with the President of Plastic Association, I suggested him to manufacture those pumps. They’ve begun work on that. Similarly, many products like plastic utensils, incense sticks etc. were mostly imported from China. The tiles industry at Morvi has also been revived after technology and production inputs and has total substituted the imports from China. We are also working on a book project on exports and imports done by India in recent years. India will make a relevant policy to benefit the MSME sectors. SG SG: I believe that import substitution is a concept from 1970s and probably won’t be applicable in the future. What SEASONAL MAGAZINE

are the sectors where we can compete on a global level and China is currently leading the race? NG NG: I have identified some sectors. For example, I was particularly interested in the biofuel sector. We used Jatropha oil for powering the helicopters in the Republic Day parade this year. Biofuel sector can be developed considered the varieties of plants that grow in our forests.Secondly, ethanol. Since last 12 years, I’ve been making a case for the ethanol sector in our country and now effects are visible. We produce ethanol using molasses and sugarcane juice. India has a surplus stock of rice and wheat for three years and of sugar for two years. The warehouse storages in Haryana and Punjab are full. Recently, we have secured the permission of making ethanol from the surplus rice and corn that might be spoilt in the warehouses. For instance, India imports $9 billion worth of edible oil and it meets only 10% of the domestic demand indigenously. The productivity should be enhanced by adopting best research practices in the countryside. Similarly, we have identified many sectors. We are offering solar charkha worth Rs. 45000 each to 1 million women. The women will produced cotton fibre using the devices and government will then buy that cloth. There are many such schemes.Many printing paper mills in our country has shut down due to the virus.I’ve suggested the people from Ballarpur paper mill that we can grow bamboo in our fields and supply it to maintain the production of paper. There is a lot of wasteland in the country. India imported paper worth Rs. 40,000 crore, paper pulp worth Rs. 45,000 crore and wood worth Rs. 60,000 crores. We have to change our forests and environmental laws. For instance, we made a case on the Cabinet level for Bamboo being classified as a grass legally so that it can be harvested for industrial purposes. Bamboo is a raw material for making textiles, bioethanol, pickles, furniture etc. SG SG: Just for the record, newsprint paper is not made of bamboo but from the woods of virgin forest. However, let it be. PQ2 PQ2: How will you complete the annual target for making 4500 km roads

in this fiscal year considering the circumstances? How will your projects work if there are many labourers who are migrated back to their homes? NG NG: In my tenure as a minister, the road construction rate in the country increased from 2 km/day to 30 km/day. We cleaned Ganga to the extent of 8090%. Despite the popular skepticism on the proposal of waterways, we see a multi-modal hub at Varanasi and Sahibganj today. The hubs at Haldia and Ghazipur are in progress.As of today, 28 million tonnes of cargo in being transported in the river Ganga. I proposed the Sagarmala project worth Rs. 16 lakh crores at a time the budget allocated for the department was Rs. 800 crore. We raised adequate capital to kick start infrastructure projects worth Rs. 6.5 lakh crores. We have different models like PPP, BOT and Hybrid Annuity Model to conduct these projects. SG SG: But who will arrange for the labour…? NG NG: We have progressed towards bringing the labour back from the labour camps. Around 70% of our projects have begun functioning now. The ports have reopened, 60-70% traffic is back on the national highways and procurement issues in steel and cement have been addressed. I expect that labour will revert back in sometime

once employment opportunities are created. SG SG: I think that normalization of traffic will take time as we do not see traffic on the highways these days. NG NG: I agree that the situation in Mumbai and Pune is problematic. Delhi highways were also restricted and we have come up with makeshift solutions. Trade at ports have also begun. We have to learn to live beside the virus by adapting our lifestyles. We must begin all economic activities after taking sufficient preventive health measures alongside the pandemic. There is no other option. PQ3 PQ3: Hydrogen cells, electric vehicles and many other technologies have revolutionized the transport worldwide. What is India’s stand on such projects and what is the government doing to support these initiatives? NG NG: I recall taking a test drive of a hydrogen cell-driven car developed by Toyota near the Dhyanchand Stadium, Delhi. This is the future. However, producing hydrogen from water is costly and it has to be produced from biomass. The research is in progress in India and all over the world. As the Transport Minister, I totally support such future-oriented technologies. For instance, we are also trying to utilize LNG for long-distance transport services. We have produced bio-CNG from garbarge and even 80 buses are

operating on it in Nagpur. Thus, these are some alternate fuel suggestions. Similarly, electric vehicles industry is also approaching to the helm gradually. Note that the automobile industry in India is worth Rs. 4.5 lakh crores. India will be the leading hub for automobile production in next five years. With the scrapping policy on cards, we will ensure that automobile brands will find manufacturing in India attractive to meet this target. SG SG: Please explain us about the scrapping policy. NG NG: Usually, cars are reduced to scrap after operating for 15-20 years. So, scrapping involves equitable methods to extract raw materials like copper, aluminium, iron, steel etc. from these used cars. In foreign countries, these cars are reduced to a rubble in garbage plants. In 7 major ports, we have deepened the depth of ports from 12 metres to 18 metres. This will facilitate heavier ships (upto 200,000 tonnes weight) in the port that will bring scrap from these countries on a very cheap rate.Kandla will be projected as the manufacturing hub of this scrap. The relevant raw materials will be isolated and recycled to produce new parts for the automobiles. This will drastically reduce the material costs and costs of spare parts which will make our automobile industry competitive. It will be economically beneficial for the nation. PQ4 PQ4: On one hand, the NRIs were evacuated to the country in chartered flights. On the other hand, the migrant labour is walking towards their homes. Moreover, there has been a controversy regarding railway fare of these labourers. Is it really a government of rich? NG NG: To begin with, it is challenging to evacuate the people from outside the country. Most of the international airlines are called off. Also international travel was the most prominent reason that the coronavirus struck in the country. Flying off people from outside is tantamount to increase the risks of the virus. Two things are pretty important in this regard. Firstly, if a vaccine could be developed then there is no harm in opening the borders…

*SG repeats the question* NG NG: Most of the migrant labourers hail from UP and Bihar which are densely populated states. If they have been sent from the hotspots earlier, it risked the spread of infection in their home states. Without a mechanism, it would’ve led to disastrous consequences. The formalities, coordination among the authorities is not that easy as it seems. SG SG: Won’t the person on foot curse the government? NG NG: We have come up with camps in various places and asked people to stay in those camps. The governments and corporations have arranged for their essential supplies. Migrating to home states amidst the risks of coronavirus is also very risky. Thus, the problem is two-faceted. So there is important to come up with a vaccine as soon as possible and also to identify the cases. Developing a robust infrastructure for coming up with testing mechanism is also crucial to tackle with this peculiar situation. We had to take hard measures for preventive purposes. SG SG: Don’t you think that the migrant issue had to be deliberated before enforcing the lockdown? It seems that the government was caught unprepared for this crisis. NG NG: Various stakeholders of society like welfare organizations, political parties etc. came up with community kitchens. The government deposited an allowance in 340 million Jan Dhan accounts to provide relief to the poor. It also announced a relief package worth Rs. 180,000 crores for the poor and downtrodden of the society. Although the government has tried its best, the problem is too complex to come up with simple solutions. PQ5 PQ5: Will you incentivize scrappage policy now? NG: NG:To incentivize the scrappage policy, with measures like tax exemptions etc., deliberations with Finance Ministry is going on. They have also different perspectives regarding the issue. I can make concrete claims only when the official policy comes out. We’ve tried our best from the end. PQ6 PQ6: Have you identified the industries which we might be able to incentivize SEASONAL MAGAZINE

the manufacturing shifts from China to India? Because people may not dislike China but nobody wants their supply chains to one country now as they want to diversify. NG NG: Firstly, we have empowered the Joint Secretaries to coordinate with the state government to work out the clearance logistics so that we can offer transparent, time bound, corruption free and result oriented services. Secondly, we are coordinating with the ambassadors from various countries to understand their country-specific needs in the matter at hand. Thirdly, we have also extended our support to manufacturers who want to shift their production from China to India by offering them land and logistical support. The land acquisition costs on the Delhi-Mumbai Expressway is relatively cheaper. These industrial clusters will be well-connected by waterways, seaports, airports, rail-based and road-based transport. We have also appealed private investors to settle smart cities and smart villages around those clusters. For instance, I’ve requested the leather industry in Dharavi to draft a proposal for land acquisition in Thane near the highway. They can grow their residential areas around the cluster there which in turn will also improve the living standard of the workers. SG SG: Is the Delhi-Mumbai Expressway still on or is it setback? NG NG: [exclaims that SG doesn’t know about the project]the route of the project will be as follows:Delhi – Sohna – SawaiMadhopur – Alwar – Ratlam – Jhabua – Vadodara – Mumbai. This is a 12-lane concrete cement road project. It will reduce the distance between Delhi and Mumbai by 220 km. The land acquisition has been 100% successful. 32 packages out of 62 are operating day and night. In three years, we’ll be able to drive the total distance in 12-13 hours. The time taken by cargo trucks will be reduced to 28-32 hours from 3 days. PQ7 PQ7: The project cost is around Rs. 1.11 lakh crore (figure not sure). About 45% of the investment cost will be bore by the centre and states. How will the project be funded when the economy SEASONAL MAGAZINE

is on the verge of collapse? NG NG: I disagree on the claim as there is no shortage of capital in my sector. We constructed Mumbai-Pune Expressway, Worli-Bandra Sea Link Project along with 55 other flyovers in my last tenure. The expected annual toll income is Rs. 40,000 crore at the end of this year and will hopefully rise to Rs. 100,000 crore in next five years. I will leverage this capital and monetize my project. I’m pitching the project ideas to stakeholders in insurance funds, pension funds, banking sector, foreign investments and institutions like World Bank and ADB. There are 480 projects which are economically viable even after accounting the costs of land acquisition. RBI has also agreed to offer us a 30-year loan for infrastructure development. State Bank Governor has agreed to fun Rs. 50,000 crore for the project. The growth in roadways sector is unprecedented and I’m target to initiate projects worth Rs. 15 lakh crore in next two years. I had a personal dream of making a highway till

KailashMansarovar from Pithoragarh (Uttarakhand). It is exciting to share that the task of cutting across the Himalayas have been completed. The road will be completed in six months after which we can directly go to Mansarovar pilgrimage from India to China via roadways. The four-dham road project connecting Badrinath, Kedarnath, Gangotri and Yamunotri is also on fullfledge. We have also made a 16-lane road from Delhi to Meerut. SG SG: Due to economic slowdown amidst corona, will it be possible to raise adequate funds considering the government advisory to reduce capital expenditure? NG NG:The market conditions of today will promote capital liquidity in the future. There is hardly any viable alternative to infrastructure sector to increase capital flow in the market. Waterways, power, transport, communication, ports, railways are the key investment sectors. Innovative investment models should be developed to raise capital for

the project. NHAI has demonstrated it really well.We also expect foreign investments as 100% FDI is allowed in the infra-sector. In this light, we are confident that enough investment will be made. My experience as a minister in last five years points that infra-sector will play a key role in reviving the economy. PQ8 PQ8: Is the government planning to tinker with direct or indirect taxes this year? Are you planning to increase or decrease them or will they stay unchanged? NG NG: It is a right question asked to the wrong person. Only Finance Minister is able to answer that question appropriately. The issue is not related to my department. PQ9 PQ9: Why don’t you make such rule for easing the liquidity, so that the buyers pay the pending amount immediately to the suppliers? NG NG: As I mentioned earlier, this is the biggest problem that plagues the MSME

sector. Most stakeholders do not play small industries their share at time. We are seriously pondering over the issue and have secured Rs. 40000 crore payment successfully. It is a life-or-death question for survival of the MSME sector. We can’t make stringent laws amidst the lockdown on this issue.However, we are planning to come up with a sort of rolling fund that is guaranteed by the government. We should come up a solution in cooperation with the banking sector. PQ10 PQ10: Is Uddhav Thackeray doing a good job during the pandemic? NG NG:I don’t feel that it is the right time to indulge in politics. We should tackle the crisis above our differencesbased on caste, creed, religion and language. I am in close coordination with Uddhavji, AjitPawar and many leaders in the government of Maharashtra to work together. I havetaken the responsibility of Maharashtra in these tough times. I often offer suggestions and pitch new ideas to the government wherever possible. Therefore, I suggest we rise above the politics and wipe out the coronavirus first. SG SG: Do you have an advice for Bombay (Mumbai) on how to handle the crisis? NG NG: Mumbai must be decongested. Mumbai does not belong to people from any particular region or language. It is surrounded by ocean from three sides. The population density and economic activities should be transported to the outskirts of the city – towards Thane and nearby underdeveloped talukas. The resources and infrastructure are being saturated in metropolitan cities like Mumbai, Delhi, Bangalore, Kolkata, Chennai etc. They need to be decongested. We should know the infrastructure limits in these cities. The industries there should be decentralized. SG SG: Many governments have drawn detailed plan for revamping the conditions in Dharavi. For some reason or other, these plans have not been able to materialize. Don’t you think this is the chance to redeem the people of Dharavi? NG NG: Dharavi houses many people from

Charmakar community – the people who are involved in making products from leather. I wrote to their association and invited them to form a cluster near the planned DelhiMumbai Expressway. We propose to create smart villages around the cluster. Offer the people nicely-built houses to live. Economy, Ecology, Environment. These are the three Es to live in a sustainable way for the future. From this single step, we can successfully migrateupto 150,000 people from Dharavi. There are people from plastic and scrap industry too. We have to segregate people from different sectors and organize them industrially for this to happen.Similar steps has to be taken in Delhi-NCR region. We should provide incentives for industry to shift away from the metropoles. We should think out-ofthe-box solution to take the industry to the countryside in a profitable and sustainable manner. There is no permanent solution to these problems if status quo is maintained. SG SG: Don’t you think sometime that you are the right man in the wrong place? You are competent enough to be the Finance Minister. NG NG: When we formed a government in 2014, I wilfully requested the Prime Minister for the infrastructure portfolio. Infrastructure development is my passion. In any case, it is our PM’s mandate to allot different portfolios and responsibilities to the ministers. I’ll do whatever task is given to me with utmost passion. Politics is an instrument of socio-economic reform. I’m thankful to the Almighty for offering me whatever I have today. I’ve more than 60 years of old today and will happily devote my remaining years in the socio-economic development of the country. I’ll serve the nation inn whatever responsibilities are given to me. Apart from the government work, I have come up with a facility that employs over 15,000 people in the agricultural and development sector. It works on the motto of ‘Waste to Wealth’ and all knowledge skills like technology, entrepreneurship, innovation are imparted in that facility. SEASONAL MAGAZINE

By Carl Jaison

WHY DOES INDIA’S RENEWED INTEREST IN THE RIC MATTER? ndia can utilize the RIC grouping to secure a greater role for itself in the Eurasian strategic, political, and economic affairs, which would solidify its status as a continental power. Moreover, the RIC serves as a hedge against strategic dilemmas in India’s relationship with the United States. As the world turns increasingly multi-polar, India’s emphasis on the RIC will compliment its policy of ‘issuebased alignments’. In the immediate post-Cold War period, efforts emerged among the former non-aligned states and Russia to balance against the influence of the sole superpower, the United States, and its Western allies. Former Russian Foreign Minister Yevgeny Primakov first mooted the idea of a Russia-India-China (RIC) triangle in the late 1990s to create multipolarity in the face of U.S hegemony. Since its founding, however, and largely as a result of the three countries’ differing priorities as well as varying ties to the United States, the grouping has largely proven insignificant. Yet, in the context of recent incongruence between New Delhi and Washington on certain issues and India’s desire to play a larger role in the Eurasian region, the RIC might prove to be a useful forum. New Delhi’s renewed engagement with the RIC triangle can serve to further its policy of multialignment, which External Affairs Minister S. Jaishankar has called as India’s pursuit of “issuebased” partnerships. SEASONAL MAGAZINE

India and the RIC: A Primer It is important to understand the history of the RIC to appreciate its newfound relevance for New Delhi. At its inception, the RIC grouping was imagined as a political and economic bloc pushing for the democratization of the global order and as a counterweight to the United States, whose perspectives the three countries believed did not align with theirs. The trio saw mutlipolarity as the best bet to secure their respective national interests, and sought to build cooperation to ensure regional stability. However, even though the foreign ministers of the three countries met on various occasions through the years, the troika lacked a substantive common agenda to further trilateral relations. Cooperation was also undercut by the overarching desire on the part of Russia, India, and China to deepen their relations with the United States. Moreover, in recent years, analysts have noted that growing Chinese power has severely impeded prospects for success of the RIC triangle given India and Russia’s wariness about evolving power differentials in their relations with China.

sGiven the shifting grand strategic objectives of the United States under the Trump administration and the growing importance of Eurasia as a geopolitical region for India, the logic behind the RIC triangle remains intact and deserves more attention in New Delhi.

Hedging against American Uncertainties One of the primary factors that should inform India’s continued participation in the RIC triangle is a strategic dilemma in its relationship with the United States. The current trajectory of U.S. grand strategy indicates that retrenchment and off-shore balancing are likely to continue into the foreseeable future and this could pose challenges for India. In

fact, some recent U.S. policy decisions have already complicated India’s issuebased alignment strategy. For instance, President Trump’s visit to India in February did little to assuage New Delhi’s concerns about the recent exit deal between the United States and the Taliban in Afghanistan. By giving greater leverage to Pakistan, the U.S. decision has undercut India’s defense on its western front. With the U.S withdrawal imminent, and Russia and China emerging as significant stakeholders in the future of Afghanistan, India would do well to take note of the changing geopolitical environment in the country, and work with Beijing and Moscow to ensure stability, especially in areas like counterterrorism. Moreover, despite broad convergence over the years, India and the United States have been unable to expand the scope of their engagement in some key areas. The failure to ink a trade deal and the slow progress of the Defense

Technology and Trade Initiative for codevelopment of weapon systems are two examples of this. Consider this in the context of the United States increasingly considering a rising China and assertive Russia as strategic competitors, and it seems clear that this could impact India’s relations with Beijing and Moscow, who are its important trade and defense partners respectively. Thus, the RIC triangle offers a pathway for India to hedge against any potentially adverse outcomes resulting from its partnership with the United States. For instance, at the RIC trilateral on the sidelines of the G20 Summit last year, China proposed a 5G partnership with Russia and India in a direct challenge to U.S interests. Particularly in the context of the escalating trade war between the United States and China, India’s best bet is to seek concessions from both sides rather than settle for sub-optimal solutions.

The RIC and India’s Strategic Objectives India can utilize the RIC grouping to secure a greater role for itself in Eurasian strategic, political, and economic affairs, which would solidify its status as a continental power. For one, India’s adjustment to a new strategic reality in Afghanistan would benefit from an alignment with Russia and China on the future stability of the country and the wider region. In addition, strong relationships with its Eurasian neighbors could further Indian goals of reforming multilateral institutions of global governance and finance such as the UN and the WTO. Further, in the coming years, the Arctic route for maritime trade would considerably reduce delivery time between Asia and Europe. Given China and Russia’s geographical contiguity to this region and influence in Arctic institutions, it would behoove India to engage with Beijing and Moscow in a trilateral setting, such as through the RIC, in order to secure its

trade interests while keeping out of the unfolding great power competition. Finally, India would benefit from viewing the RIC as a mechanism for overcoming disagreements with Russia and China over its collaborations with the United States. For instance, both Russia and China disagree on the U.S.-led Indo-Pacific order—in which India has emerged as a key player. But New Delhi has a unique opportunity to be a bridge between these emerging alignments. In fact, India’s position on the IndoPacific exemplifies this—New Delhi’s vision for the region is inclusive but is undergirded by the principles of freedom of navigation and openness. The RIC grouping can be an effective forum to advance these conversations. India’s recent accession to the Shanghai Cooperation Organization and Prime Minister’s Modi’s participation at the Eastern Economic Forum in Vladivostok represent steps in the right direction.

Conclusion The RIC triangle has the potential to blossom into an effective strategic grouping for India but may require some creative diplomacy from New Delhi. Given the current dissonance between Washington and New Delhi on trade and security issues, greater participation in the RIC triangle could maximize India’s options in a multipolar world, in line with its preferred multialignment strategy. This could take the form of India seeking support from its Eurasian partners in Afghanistan or in the Arctic to influence regional outcomes. As strategic analyst Manoj Joshi notes, India’s strength lies in being a “swing power.” Engagement with both Russia and China would enhance India’s bargaining power with the United States, and enable broad support for Indian initiatives on global issues. (This article originally appeared in South Asian Voices , Stimson Center, https://southasianvoices.org/ the-ric-triangle-and-indiasmultialignment-strategy/ )

SEASONAL MAGAZINE

THE STARTUP GIANTS:

WILL THE PANDEMIC PROVE THEIR LEADERSHIP PROWE With 39,000+ startups and 33+ unicorns, India is today home to the third largest startup ecosystem, behind only the US and China. Out of this veritable list, there are three that stand out for their growth and value proposition. Today, PayTM founder and CEO Vijay Shekhar Sharma, Oyo Hotels and Homes founder and CEO Ritesh Agarwal and BYJU's founder Byju Raveendran manage ventures that contribute close to half of the total revenue to the GDP from the startup ecosystem. Given the challenges thrown open to the startup sector and the larger corporate industry due to COVID-19, the three young entrepreneurs suggest ways how the sector can bounce back and provide specific industry diagnosis especially for the hospitality, digital payments and online education spaces. Touching upon whether Covid-19 pandemic will burst the start-up bubble or if the companies will sail through the hard times, they address the prospects of Chinese investments into cash-strapped Indian startups and their individual plans to redraw their blueprints for the post-pandemic economy.

SEASONAL MAGAZINE

SS?

Q. How bad has the pandemic and lockdown been for the hospitality industry? Ritesh Agarwal: Travel and hospitality industries are most affected. Within travel the other industry most impacted is aviation. Nobody is going to be excited to hop on a plane or go on holiday. I do believe it was wise to impose lockdown sooner rather than later as it allowed to control cases. Initially, in the second week of March, we saw the impact was roughly 10-15 per cent of our global revenue but over time it has increased to over 50 to 60 per cent and we believe it may get worse. Q. How has Oyo dealt with lockdown losses? Ritesh Agarwal: As we saw the size of revenue drop our immediate response was to cut all controllable costs like marketing, capital expenditure. When that was not enough we decided we will not announce any lay-offs but we did

have to announce some furloughs for a couple of weeks. We are sticking by our customers and communities. Globally we have offered free stays for healthcare workers. And lastly, our focus is how do we ensure we provide safe experiences for customers who will travel in coming times. Q. How has a growing demand for online education impacted BYJU's? Byju Raveendran: Few sectors have been positively impacted by this and hence our focus has to be on acceleration. Almost 1.5 million students are forced to stay home and online learning is the only option for the time being. We have made our learning material available for free and we have also scheduled free online classes to replicate regularity of school sessions. We saw an immediate 3x increase in the number of users and it continues to rise. Six million new students joined the platform and overall we crossed 50 million students on our platform. Also, time students are spending on the

SEASONAL MAGAZINE

platform has massively increased. Q. Has the lockdown changed attitudes towards online education? Byju Raveendran: We are seeing a behavioural shift. Students obviously love the medium but parents are also accepting this format due to forced homeschooling. Students are realising how much better this can be rather than just reading a book and teachers are getting prepared. The technology has always been there but people are now taking it up due to the pandemic. What has not happened in years will now happen in months. Online education is becoming an integral part of education. It is not a replacement of mainstream education, it is a good complement. Q. Digital payments are down. Has that impacted PayTM? Vijay Shekhar Sharma: I am happy because two things have happened. Even though offline shops did not open up, our online stores blew through the roof. In a decline month, we had only a 3 per cent decline in users. Other categories worked very well for us. And another feature that took off is contactless delivery. There is a huge

acknowledgement of digital payment and contactless ordering. Q. With the Facebook-Jio deal and the development of WhatsApp digital payment platform, how much will PayTM be impacted? Vijay Shekhar Sharma: It is an honour to be recognised among such big names. And the market requires a huge amount of investment. The more people enter the market, the better. This is not a zerosum game. When more players come into the field, customers become savvier. We have moved from payment services to financial services such as banks, lending etc. At our current pace of growth, we can announce our breakeven much earlier than accepted. Q. Oyo planned to be the biggest hospitality firm in the world. Will it now scale down operations? Ritesh Agarwal: The coronavirus has impacted 1-2 quarters of our growth trajectory. We are now focusing on new kinds of travel, weekend travel which requires driving rather than flying. Coorg will be the new Switzerland, Goa will be the new Thailand. If we predict these trends correctly, while market size may shrink, we will have a good opportunity to use our model. We will have a more measured business aspiration going forward. It is very hard to predict a growth plan till the world comes back to normal. we are reviewing and evolving our plans. In times like these, people look back home. We will focus on our core markets like India, Saudi Arabia, Europe and even the US. Q. Will BYJU's be able to retain new users once classrooms reopen?

We are seeing a behavioural shift. Students obviously love the medium but parents are also accepting this format due to forced homeschooling. Students are realising how much better this can be rather than just reading a book and teachers are getting prepared. SEASONAL MAGAZINE

Byju Raveendran: We had to change two aspects of our business model. First, offline to online sales. Which is much more efficient. We are back to pre-crisis numbers in terms of revenue which we expect to double soon. Parents are realising that kids are spending screen time learning something useful. Even stakeholders who were hesitant to try the online model will realise how technology can be used effectively. Nothing will go back to how it was before. Education won't be 100 per cent offline or online and we will reap the

The coronavirus has impacted 1-2 quarters of our growth trajectory. We are now focusing on new kinds of travel, weekend travel which requires driving rather than flying. Coorg will be the new Switzerland, Goa will be the new Thailand. benefit of that. At a time when no investment is happening, we have seen investor interest like never before. Q. What is the tech kings advice for Oyo which has been hit by the pandemic? Vijay Shekhar Sharma: Cash is king. Money in the bank is the biggest asset you can carry, don't it be spent. Stop expenditure wherever possible. Not the time to spend big. Byju Raveendran: There were sunny days till some months ago and now the weather is forecast so just keep your wickets till the easy overs come. Q. Could this be the end of the road for young start-ups? Vijay Shekhar Sharma: Tough times are when you do things differently. Now you cant throw quick money on a problem. For about a year, access to investment will be tough. If you want to solve a problem, do it creatively with lesser resources and it may end up benefitting you in the long run. Right now, everyone is on the same boat. So endless opportunity is there. Just hang on. Q. Tech deals falling out across the world? What is your advice?

Ritesh Agarwal: Crisis is a time of building great companies. Oyo was built after the 2009 crisis. My belief is 3 things, firstly be closer to your customers and employees ask them for ideas, you will be surprised by their solutions. Secondly, try to reserve as much cash as possible and lastly use technology in every manner possible. Not every startup is a tech start-up but use it to reach your customers. Byju Raveendran: Not just young startups, all are facing rough patches due to circumstances out of our control. pandemic or no pandemic startups are doing things in an insurgent mode. In such a time, paramount to take stock of the situation regularly. no point in having yearly or even monthly plans. weekly or daily plans are the order of the day. for most start-ups, it is about survival and not long term strategy. during a crisis, good startups will adapt faster because of the young and aspirational workforce. Every crisis brings about new challenges which means enough opportunities exist to address new problems. Find a problem you truly care about. Q. How can start-ups turn this crisis into an opportunity? Vijay Shekhar Sharma: World is going virtual. The arrival of the virtual

World is going virtual. The arrival of the virtual economy in the mainstream. This crisis will make technology-led companies mainstay. Right now these companies are clubbed separately into Big Tech. Now, soon the division will be over.

economy in the mainstream. This crisis will make technology-led companies mainstay. Right now these companies are clubbed separately into Big Tech. Now, soon the division will be over. Q. What will it be like to run hospitality firms in a post-pandemic era? Vitesh Agarwal: I think in this new world, 2-3 things will happen. Tech will be the order of the day. Hospitality has avoided using technology. In this new world, zero-touch will rule the roost. Since people don't travel, if people take vacations they will seek out more places near cities or pilgrimages. When those happen, making sure tech increases social distancing and high-level hygiene and sanitation is maintained are going to be important. The third is specific examples like using tech to reduce information asymmetry. Companies will have to use tech to change their operations. Q. How will online learning cater to social aspects (peers) of classroom learning? Byju Raveendran: I don't think things will go completely one way after the crisis. Some blend of best of both practices will be the new normal. When you learn from a personal screen, every student can have a front-row seat. If you get the format right, you can engage their attention. You can have the best of teachers giving lessons while mentors give personalised feedback. You can learn hard skills like maths or science online but not important skills like empathy. So having people next to you will always be an advantage. Hopefully, a mixed-format will evolve which will be far more impactful.

XIAOMI'S LAUNCHES ITS FLAGSHIP 108MP SMARTPHONE, MI 10 5G Xiaomi is launching its premium flagship smartphone Mi 10 5G in an online live stream event today. Along with the 108MP smartphone, the company is launching a set of IoT products like a smart streaming device and wireless earphones. Xiaomi said that the pre-orders of the smartphones will get exciting discounts and a 10000mAh Mi Power Bank, worth Rs 2,499, free.

WE WELCOME GOVT'S DECISION OF CAUTIOUSLY STARTING PASSENGER TRAINS: CHIDAMBARAM Congress leader P Chidambaram on Monday appreciated the Centre's decision of "cautiously" starting passenger train services. "We welcome the decision of the government...The same modest opening should be started with road transport and air transport," Chidambaram tweeted. The Congress leader added that this is "the only way economic and commercial activity can effectively begin".

Q. Will reduced economic interaction with China impact Chinese firms that invest in start-ups?

DELHI GOVT TO PROVIDE RS 5,000 AID TO CONSTRUCTION WORKERS FOR 2ND MONTH

Ritesh Agarwal: Capital providers across the world will need to think about where to invest. Good companies will continue to raise money.

The Delhi government on Monday decided to provide another financial aid of Rs 5,000 to the registered construction workers amid the lockdown. The decision was taken at a meeting of the Construction Workers' Welfare Board, chaired by Labour Minister Gopal Rai. We deposited Rs 5,000 into their bank accounts last month and we will do it this month as well, Rai said.

Byju Raveendran: Since we have good fundamentals we will continue to attract investors not just from China but from all over the world. Last year, close to $11 billion flowed into Indian start-ups. Maybe 6-12 months down the line you will see investors come in. The Indian ecosystem is maturing fast.

SEASONAL MAGAZINE