Seasonal Magazine September 2016 by John Antony

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VOLUME 15 ISSUE 9 SEPTEMBER 2016

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IS CLEANING UP INDIA'S BIGGEST MESS - THE NPA DIRT - MORE CHALLENGING THAN UNEARTHING SCAMS? INTERVIEW WITH VINOD RAI

MANAPPURAM IS GOING DIGITAL SOON INDIA’S

RURAL HEALTHCARE STRUGGLES MUMBAI

DEVELOPMENT PLAN – 2034

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EDITORIAL MAGAZINE

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Managing Editor Jason D Pavorattikaran Editor John Antony Director (Finance) Ceena Senior Editorial Coordinator Jacob Deva Senior Correspondent Bina Menon Creative Visualizer Bijohns Varghese Photographer Anish Aloysious Correspondents Bombay: Rashmi Prakash Hyderabad: Iqbal Siddiqui Delhi: Anurag Dixit Director (Technical) John Antony Publisher Jason D Pavorattikaran

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On the last day of August, Indian Government servants took home nearly Rs. 40,000 crores, thanks to pay hikes and arrears from the 7th Pay Commission.

30K, which was scaled, though briefly around 18 months back.

Consumer facing businesses across India are hoping that within weeks, if not days, the bulk of this will flow to products ranging from smartphones to cars, and to services from tourism to cosmetic surgeries.

Detractors, of course, can say many things.

Business facing businesses like lenders and equipment manufacturers are hoping that consumer facing businesses will seek new loans or place new equipment orders to capitalize on the higher demand from consumers. And within less than two months from now, Indian farmers are expected to start harvesting a bumper crop of rice, millet, maize, mung, urad, pea, peanut, guar and all the Kharif crops, thanks to an optimum monsoon for agriculture – not too sparse, not too heavy. If tractor, farm equipment, fertilizer, and pesticide sales are already booming due to necessity, soon to follow will be twowheeler and LCV sales as farmers across rural India start enjoying the best harvest in the past 3 years with better conveniences and facilities, for a rosy future. If anyone needed additional excuses to splurge, India’s great festival season will always be there, this year too, starting with Navratri in October beginning, and progressing through Muharram, Diwali, Guru Nanak Jayanti, Christmas, and New Year.

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All health related articles are for first information purposes only. Always consult your doctor before taking any decison affecting your health.

High time for a reality check and reinvention

Even the Goods & Services Tax (GST) has been passed by the Parliament, after not months but years of squabbling, and that alone is going to add 2% to our already ‘enhanced’ GDP. We have even replaced a stingy Dr. Rajan with a brand new RBI Governor, and more importantly, with a Monetary Policy Committee with 50% government representatives, which will be less miserly with cuts, by design. Obviously, bulls have smelt blood, and are getting ready for a final assault on Sensex

All in all, can any rosy situation have a deeper pink hue than this? Like, they will point to the fact that job creation is suspected to be at 7 or 8 years low. Value addition might have added value to GDP figures, but to jobs? The way major recruiters have shed campus recruits this year, even by risking the ire of IITs and IIMs, is enough signal for the wise. Or detractors might point to the fact that GST is a long way from implementation, with businesses arguing for super cheap rates and government arguing for hefty 20+ rates. To add to the confusion, states are already on their feet arguing for higher shares from the GST pie. Will GST be implemented in the beginning of next fiscal? Jaitley should be called a wizard if he pulls it off. Chances are more for it to be postponed at the eleventh hour for lack of a difficult consensus. To put it in another way, all the actors in the GST drama have so far only agreed to keep quarrelling. Yet another concern of detractors is that despite all the hype and hoopla of economic revival, the earnings of almost all the major companies have been extremely ordinary or quite flat. Revenue growth has been even flatter, and no one will blame you for suspecting that at least some of them have cooked it up a bit. Whatever uptick in earnings is there has

come by way of margin expansion, and complex concepts like EBITDA leave enough room and convenience for ‘expanding’ margins at will. Of course, there have been pockets of outperformance by 50 to 100 companies – most of them in the midcap or smallcap space – but detractors are persisting that 50 midcap companies don’t define India. Another irony of this economic revival and hope run by bulls is that the economy’s main drivers – PSU banks that account for 70% of corporate credit – have been battered out of shape. Now, don’t quote the rise of Bank Nifty to argue against this, as it only means that they are just trying to get back on their feet. What if another AQR punch arrives before they are standing straight? Even without another round of Asset Quality Review, most PSU banks have been registering further slippages and further provisioning. Where will this stop? Even they can’t say, at least the honest ones. Those who swear by the Sensex shouldn't also push two facts under the carpet - one is that Sensex has still not made a new high since 2008 in dollar terms, and secondly the 'outperformance' in Sensex and Nifty has been effected by ousting many stars of the last bull run and bringing in new performers. Many past large-cap stars are now just mid-cap or small-cap laggards. If you look outside India for comfort, you will be compelled to withdraw your eyes swiftly. Only quick-fixes abound. Dislike immigrants? Vote for Brexit. Hate all nonWhites? Choose Trump. Even the regulatory responses have been quick-fixes. Need to contain Brexit? Print more Pounds, Euros, Dollars, and Yens. Not working? Take interest rate to zero. Still struggling? Take it negative, by

charging depositors for deposits.

markets including India.

Fortunately or unfortunately – that only time will tell – quick-fix liquidity against Brexit has caused the Indian markets too to rally. Liquidity is in search for yields, and in a world that is threatening liquidity with negative yields, Indian market will surely come across as an outperformer.

So, is everything really gung-ho with India’s economic recovery? Not by a long shot. Now, this doesn’t mean that the economy is going to the dogs either. But given the too much positivity and too high valuations, there is every reason to be cautious.

But what if this liquidity is withdrawn one fine day, goes the next argument of detractors. The key to liquidity is in the hands of one senior citizen in USA, a lady of 70 years, complete with stylish white hair to prove her wisdom.

Like a sneeze, which is rare to be not followed by another sneeze, Brexit will be followed by many exits. It is a sign of things to come, a backlash against too much globalization with too little benefits for the masses. NASSCOM might deny, but Brexit is already causing Infosys some 3000 jobs.

Janet Yellen might be cursing her own bad fortune these days. On one hand, no monetary policy tool is working. Why, she can’t even speak in public freely for the fear of boosting or upsetting the markets worldwide. Still, she made up her mind and spoke recently that America is nearing the next round of interest rate hikes. At least one nation in the developed sphere is trying to do what is right, but the first time US did it – in December last – it sent the world stock markets reeling for around three months, before data began showing that there won’t be any hikes in 2016. Now, that is set to change, and any market watcher is aware what that means to world

Nations will be forced to look inward, after a long time, to see whether they are sustainable. China has been forced to do it. India too should proactively do the same without being forced. In an emerging global shakedown, that seems inevitable now, whether we can sustain largely on our own? This is not to say that we should ignore export markets. Even China is not doing it. They have learnt the bitter lesson that they can’t flood the global markets with their cheap wares. Instead, they are promoting their better quality companies, and see how a dozen high-quality Chinese brands have literally conquered the Indian smartphone space recently. And they are getting into more, like smart televisions and intelligent appliances like robotic vacuum cleaners, in the Indian market. They are exploiting Make-in-India by doing just Assemble-in-India. Mind you, this is not a developed nation like US, Japan, or Korea, but a developing nation which shares many issues like too high population as India, doing this to us. If they can reinvent, we can hardly afford not to reinvent ourselves. John Antony SEASONAL MAGAZINE

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CONTENTS

SWACHH BANK ABHIYAN Is cleaning up India's biggest mess - the NPA dirt - more challenging than unearthing scams? The latest to be shocked by one of Vinod Rai’s audit reports is erstwhile Travancore Royal Family, based at Thiruvananthapuram, Kerala. Adithya Varma, speaking for the former rulers of Travancore, has termed as “unbelievable” Rai’s audit report on Sree Padmanabha Swamy..

RAJAN'S PARTING SHOT BENEFITS BOTH BANKS AND DEBTORS

“A revolution is a struggle to the death between the future and the past,” wrote Fidel Castro. If the Cuban legend meant the then emerging struggle between socialism and capitalism, the beauty of the quote is that it is eternal, timeless. Revolution is not finite, but continuous. Capitalists have had to adjust, and even the socialists.

EVEN TRUMP IS KNOWN BY THE COMPANY HE KEEPS

There are obvious choices like Mercedes being a top choice and a BMW being the least choice when it comes to driverless mode, but how do fans of other brands perceive..

On one side Donald Trump is desperately trying to save his Presidential bid by moderating his extreme opinions on most matters, but at the same time he continues to choose and keep an inner circle of managers and advisors whose..

JOB SATISFACTION IN EARLY YEARS TIED TO MENTAL HEALTH LATER

SURVEY FINDS INDIA 3RD LARGEST STARTUP HUB

IMMINENT DEFEAT OF IS IN IRAQ FUELING RISK OF TERRORIST ATTACKS WORLDWIDE

A recent study has confirmed that workers who experience low levels of job satisfaction in their 20s and 30s are more likely to have an increased risk of mental health problems in their 40s.

India is home to the third largest number of technology driven startups in the world, with the US and the UK occupying the top two positions, according to a report.

The Pentagon and U.S. intelligence agencies now view Islamic State as a shrinking and increasingly demoralized military force, a sharp shift from the..

The bold overhaul of country's debt market that Dr. Rajan announced recently is a masterful one in that it targets world's hunger for yield, even while it dramatically eases..

SEASONAL MAGAZINE

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WHICH CARS WILL BE ACCEPTABLE AND UNACCEPTABLE FOR DRIVERLESS MODE?

BETTERING THE KERALA MODEL

GOING DIGITAL FOR BETTER GROWTH Manappuram Finance has already well progressed into its second growth phase, which started around 12 months back. Driven by diversifications into Microfinance, SME, Home Finance & Auto Loans, as well as by resurgence in its core asset class of gold, the company’s recent quarters have seen remarkable growth on both its topline as well as bottomline.

HOW FEASIBLE IS THE NEW MUMBAI DEVELOPMENT PLAN 2034?

ARE SHORT-TERM INCENTIVES BETTER, FOR BETTER PERFORMANCE?

The Brihanmumbai Municipal Corporation's blueprint for the city's growth leaves many questions unanswered...

Executive compensation is shaped by regulations and broad, decadeslong trends. Missing from the equation is any assessment of how millions in cash and stock motivate..

JUNK FOODS UPS ALZHEIMER'S RISK, TRADITIONAL INDIAN FOOD CUTS THE RISK

IS THIS THE BEST CAMERAPHONE UNDER RS. 40,000?

A new review of international data adds to the growing evidence that diet plays a significant role in the risk for Alzheimer’s disease and that populations consuming a Western..

Huawei has launched its much awaited camera centric phone Huawei P9. While there is much speculation on how iPhone 7 will sport a dual camera, Huawei India today launched its dual..

INDIA IS GOING CASHLESS SOON Intent on turning the economy cashless, the Centre is hoping to popularise the Unique Identification Number or other such identity proof for digital transactions.

TYPING TO GIVE WAY TO SPEAKING Turns out that voice recognition software has improved to the point where it is significantly faster and more accurate at producing text on a mobile device than we are at typing on its keyboard.

COPING WITH OSTEOPOROSIS Everything to know about the crippling condition affecting over 200 million people across the globe – its symptoms, risk factors, tests, treatments, supplements, exercises, prevention, and coping strategies.

"CHINA A BIGGER THREAT TO INDIA THAN PAKISTAN OR ISIS:" FRANCIS FUKUYAMA Yoshihiro Francis Fukuyama, celebrity political scientist, known for his book 'The End of History and

SEASONAL MAGAZINE

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STRATEGY

WHY OWNING UP TO MISTAKES WILL MAKE INDIAN BUSINESSES STRONGER Owing up to a mistake doesn't come naturally to Indian business founders and CEOs. But Sachin Bansal, the 35 year old ex-chief executive officer at e-commerce giant Flipkart made a candid revelation during his company’s monthly meeting that his stepping down as the CEO was "performance linked." Bansal was aiming to address concerns of the employees regarding recent layoffs. He said that even he wasn’t spared the axe.

lipkart’s co-founder Sachin Bansal deserves a big pat on his back for having the courage to say something few of his peers in other companies would ever do. Speaking at a town hall meeting last week, Bansal said he was replaced as chief executive because of performance. “Look at the top level around you. Everyone has changed. In fact, even I am gone. Some of our targets have been missed and everyone, including the top management, has paid the price,” Bansal is reported to have said. Bansal’s comments have been interpreted in many ways - some say it was a super smart move to diffuse tension in the company, which had to go through staff reductions following a series of valuation markdowns. Others say he was just trying to make a virtue out of necessity by sending out a message that “perform or perish” is a way of life in corporate India and no one is spared not even the co-founder and high-profile executives. No one knows his real motive, but it might not have been easy for a cofounder to be candid enough on the real reason for his exit as CEO. In January, Bansal was replaced as CEO and made executive chairman after eight years at the helm. And this was not the first time that the Bansals (Sachin and Binny, who is now the CEO) have apologised for their mistake — the last time was in 2014, a day after the Big Billion Day sale because of the glitches that the Flipkart site encountered as it struggled to keep up with the heavy traffic. There are many global leaders who think admitting mistakes is no big deal. Take Adidas’ long-serving CEO Herbert Hainer. Following criticism after the SEASONAL MAGAZINE

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Sachin Bansal

Herbert Hainer

German sportswear company lost ground to US rival Nike, Hainer admitted he had made mistakes, such as rolling out too many new golf products just as the market was contracting. He said he would make sure the company goes forward soon. That blunted the criticism from investors, allowing Hainer to walk his talk. Microsoft’s CEO Satya Nadella also didn’t mind admitting the “one big mistake” the company made - to think the personal computer will reign supreme forever and failing to anticipate the technological transformation of the mobile phone. General Motors CEO Mary Barra did the same. After GM recalled over 800,000 of its small cars due to faulty ignition switches in 2014, Barra admitted a series of mistakes were made which led to the cause of the faulty ignition switch. In contrast, there are very few examples of CEOs in India having the humility and the ability to admit error. They will do everything - blame the team, the ecosystem, other stakeholders everything except owning up to their own mistakes. This is unfortunate as being a leader doesn’t mean that you are always right or that you won’t err. You simply have to have the confidence to own the mistakes and admit when you are wrong. That is when you earn the

Mary Barra

Satya Nadella

respect of their colleagues. One possible reason for this behaviour could be the perception that humble leaders are seen to be meek or timid and that admitting error is a sign of weakness. Many management consultants also keep harping that leaders, especially the aspiring ones, should perfect the art of hiding weaknesses and mistakes. That view is flawed. But the more dangerous part is that some leaders try to fake it in order to get some brownie points, without realising that their team members would soon see through it and take them as signs that you don’t mean what you’re saying. Many say leaders should embrace mistakes, not only for themselves but for their team as well. The journey, of course, doesn’t end with admitting mistakes; team members would respect them if the leader takes them through a process of what he learned and what he should have done differently. That’s a great learning experience. Companies need courageous leaders in order to feel there is someone to make the tough calls and to take responsibility for them - they need to know that the buck truly does stop with the leader. And in any case it’s much better than to keep kicking the can down the road.

Credit: Business Standard

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US ELECTION

EVEN TRUMP WILL BE JUDGED BY THE COMPANY HE KEEPS onald Trump is undergoing his own “extreme vetting.” And we are learning a great deal about the quality of his public pledges.

key functions (like actually having a campaign apparatus in key states). And Trump’s personnel selections have been both instructive and disastrous.

In no particular order, Trump has shifted his position on raising the federal minimum wage (against it, for it, get rid of it, leave it to the states, put it at $10 an hour); on fighting the Islamic State (bomb the “hell out of them” and take the oil fields, let our regional allies take the lead, declare war and send in troops, let Russia take care of it); on taxes for the wealthy (increase them, cut them dramatically, make the wealthy pay more, make everyone pay less); on his Muslim ban (exclude all Muslims, keep Muslims out except for members of the military and current residents, it was “just a suggestion,” ban Muslims from countries with a history of terrorism, impose “extreme vetting”); on the national debt (eliminate it in eight years, prioritize massive infrastructure spending, renegotiate debt with creditors, just “print the money”).

Consider this list of Trump’s chosen: Former campaign manager Corey Lewandowski had a brutal and demeaning style that resulted in a staff revolt, and his manhandling of a female reporter overshadowed the Trump campaign for weeks. Former campaign chairman Paul Manafort was paid lucrative consulting fees by foreign interests and resigned after reports that Ukraine anti-corruption investigators were scrutinizing millions in alleged payments there.

Now, concerning his defining promise to round up and deport 11 million undocumented men, women and children, Trump is undergoing a rapid, convulsive transition from Mr. Hyde into Dr. Jekyll. In the movies, this role would require hours in the chair of a highly skilled makeup artist. Trump has Sean Hannity. For much of Trump’s fan base, these details couldn’t matter less. The Trump revolution is mainly a matter of personnel, not policy. Put the right man in charge who will hire the “best people” and fire all the corrupt, stupid failures. Trump’s primary appeal — and his main source of self-regard — is his skill as a negotiator, manager and talent scout. Here we are also getting a good feel for the candidate. Trump’s campaign has been a roiling, noxious, dysfunctional mess from the start, characterized by public feuds, subject to sudden leadership changes and unable to fulfill SEASONAL MAGAZINE

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ON ONE SIDE DONALD TRUMP IS DESPERATELY TRYING TO SAVE HIS PRESIDENTIAL BID BY MODERATING HIS EXTREME OPINIONS ON MOST MATTERS, BUT AT THE SAME TIME HE CONTINUES TO CHOOSE AND KEEP AN INNER CIRCLE OF MANAGERS AND ADVISORS WHOSE BACKGROUNDS ARE REPELLING TO SAY THE LEAST.

Longtime adviser Roger Stone is a crackpot conspiracy theorist who asserts that Bill and Hillary Clinton are “plausibly responsible” for the deaths of roughly 40 people and that Hillary Clinton should be “executed for murder.” Confidant Roger Ailes recently stepped down from his job at Fox News under a cloud of sexual harassment claims. And Steve Bannon, Trump’s new campaign chief executive, is known for his bullying tactics and for running a website (Breitbart News) that flirts with white

nationalism. There are a few exceptions to this pattern - Kellyanne Conway and Mike Pence come to mind - but Trump has hired and elevated some of the very worst people in American politics, known for their cruelty, radicalism, prejudice and corruption. What does all this say about Trump as a prospective president? First, it means that the ideal of leadership Trump displayed as a reality television star is his actual view of leadership. It is not an act. In Trump’s view, leaders elevate themselves by belittling others. They yell and abuse and bully. And their most important quality is absolute loyalty to the great leader, the star of the show. This is a view of leadership that would make H.R. Haldeman cringe. Second, Trump has managed to pick a team that directly undermines many of his campaign objectives. Need to appeal to women? Include a man in your inner circle accused by many of misogyny. Need to appeal to minorities? Elevate a figure associated with the racially divisive alt-right. Need to challenge the corrupt status quo in Washington? Hire a consultant for oppressive governments. Trump’s rhetoric is belied by his choice of friends and associates. Finally, ideology doesn’t seem to be the main criteria in Trump’s selections. The hiring of Bannon does make Trump’s appeal to the alt-right explicit. But Breitbart News is mainly known in this election for slavish devotion to the cult of Trump. This attribute may well guide most of Trump’s top-level personnel choices, including for the Supreme Court. Trump, more than most, needs to surround himself with people who compensate for his alarming weaknesses. Instead, his choices demonstrate and amplify those weaknesses, becoming one more reason to utterly reject his leadership. SM

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N E W S Goa govt signs MoU with Google India The Goa government on Tuesday signed a memorandum of understanding with Google India to promote digital literacy and drive digital transformation in the state. In the first phase, Goa government will launch internet safety education for students from classes 9th to 12th in government schools. The curriculum has been created by Google in consultation with experts, CM Laxmikant Parsekar said.

Govt announces issue of 5th tranche of Gold Bonds The Centre, with the RBI's consultation, on Tuesday announced the issue of the fifth tranche of Sovereign Gold Bonds, applications for which will be accepted from September 1-9. The bonds will be denominated in multiples of 1 gram gold, and the maximum permissible amount that can be subscribed can not be more than 500 grams per person per fiscal year.

6,500 migrants rescued off Libyan coast: Italy

MHA advised to book Naik under antiterror lawsâ&#x20AC;&#x2122;

Around 6,500 migrants were rescued off the Libyan coast in 40 separate missions in one day, the Italian coast guard said on Monday. Reportedly, this is one of the largest influxes of refugees in a single day so far this year. Notably, around 1,05,000 migrants have reached Italy by boat this year, according to the International Organization for Migration.

The legal opinion sought by the Home Ministry pertaining to Islamic orator Zakir Naik has reportedly recommended that a case could be registered against him and his NGO, Islamic Research Foundation under anti-terror laws. Naikâ&#x20AC;&#x2122;s statements allegedly promoted enmity and hatred between religious groups and inspired terrorists, MHA was conveyed. Notably, Naik is banned in UK, Canada and Malaysia.

Two of three French people support burkini ban'

Depends on Salman if my song is in Tubelight'

Almost two out of three French citizens support the burkini ban implemented across several French cities, while only 6% were against the ban, according to a recent poll. Young people were more likely to support the swimwear as compared to the older generation, the poll found. This comes after the top French administrative court suspended the ban in one city.

Haryana's GDP grew 8.2% to 3.96L cr in 2015-16 Haryana's Gross State Domestic Product grew 8.2% to stand at ?3.96 lakh crore during 2015-16 at constant prices of 201112, as against 8% during 2014-15, state Finance Minister Captain Abhimanyu said on Tuesday, citing advance estimates. Further, CM Manohar Lal Khattar said the outstanding amount of electricity bills for the 2015-16 was ?6,431 crore, up from ?5,692 crore for 2014-15. SEASONAL MAGAZINE

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Singer Arijit Singh has said that he will sing for the Salman Khan starrer 'Tubelight' but whether the song will be retained in the film depends on Salman. "But I will definitely sing because nobody can stop me from singing a song," said Arijit. Earlier, Salman reportedly removed Arijit's version of the song 'Jag Ghoomeya' from his film 'Sultan'.

US develops largest solid 3D printed item A trim-and-drill aircraft tool developed by the US Department of Energy has been awarded the world record for the largest solid 3D-printed item by the Guinness World Records. The tool, printed in 30 hours, is 7.5 feet long, 5.5 feet wide and 1.5 feet tall, and weighs 748 kg. It will be tested in building the Boeing 777X passenger jet.

Dirty' designer sneakers being sold at $600 Italian brand 'Golden Goose' is selling a pair of pink 'distressed' designer sneakers, which appear to be dirty, held together with duct tape and come with "worn" out laces, at around $600. The sneakers have been described as "deliberately damaged". Notably, the brand is known for making predistressed sneakers as their most expensive footwear also usually includes small pre-worn details.

N E W S Category-I typhoon Lionrock hits Japan A Category-I typhoon 'Lionrock' hit Japan on Tuesday, bringing heavy rains, high waves and strong winds to areas devastated by the 2011 earthquake and tsunami. Over 100 flights have been cancelled and evacuation warnings issued for people residing along the typhoon's path. Japanese PM Shinzo Abe cut short his visit to Kenya to oversee preparations for the storm.

Trade unions to go ahead with Sept 2 strike

ISRO planning 68 satellites’ launch in one mission

Rejecting government's 42% hike in minimum wage as "completely inadequate", trade unions on Tuesday decided to go ahead with the nationwide strike on September 2. "We demand they should enact a law to fix minimum wage," AITUC General Secretary Gurudas Dasgupta said. Earlier, the government announced the wage hike to ?350 a day for unskilled nonagricultural workers in central sphere.

‘India had agreed to share INA funds with Pak in 1953’ A set of declassified files has revealed that India had agreed to share with Pakistan the assets of Netaji Subhas Chandra Bose's Indian National Army (INA) and Indian Independence League (IIL) in 1953. The then PM Nehru in a note to ex-West Bengal CM BC Roy had stated that India and Pakistan would share the assets in 2:1 ratio.

48 years since 1st ever 'six 6s' in an over Former West Indian cricketer Garfield Sobers became the first ever batsman in the history of the game to hit six sixes in an over on August 31, 1968. Captaining Nottinghamshire, Sobers hit Glamorgan's Malcolm Nash for six sixes, the first and last of which ended outside the ground.? Notably, Sobers declared the innings right after the end of the over.

The Indian Space Research Organisation is planning to launch a record 68 satellites in one mission by early next year, ISRO's commercial arm Antrix' CMD Rakesh Sasibhushan has said. Officials said that the satellites will be "nano in nature". Earlier in June, ISRO had set a record in its space programme by successfully launching 20 satellites in a single mission.

I'm planning to stay, says Yahoo CEO in an email After the $4.83 billion acquisition of Yahoo's core business by Verizon on Monday, CEO Marissa Mayer wrote, "I'm planning to stay." In an email to employees, she added, "I love Yahoo, and I believe in all of you. It's important to me to see Yahoo into its next chapter." Mayer will reportedly assist with the transition and then depart the company. SEASONAL MAGAZINE

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N E W S Bengaluru road gets 'The Frog Prince' artwork To protest against the poor road conditions in Bengaluru, an artist turned a pothole into an artificial pond and recreated a scene from 'The Frog Prince', on Monday. The artwork by Baadal Nanjundaswamy was installed at Bengaluru's Nayandahalli junction to draw attention to the pothole situation and to force the civic bodies to take action.

UKâ&#x20AC;&#x2122;s largest mechanical puppet begins tour UKâ&#x20AC;&#x2122;s largest mechanical puppet 'The Man Engine' today began a 209-km journey across the Cornish Mining World Heritage Site. The puppet, which was unveiled during a 50-minute ceremony, is 39-feet high and weighs 40 tonnes. Its walk will mark the 10th anniversary of the Cornwall and West Devon mining landscape being added to the UNESCO list of World Heritage Sites.

Parsi population declined to 57,264 in 2001-11 As per the census data released on Monday, the population of Parsi community in the country has dipped to 57,264 in 2001-2011. In 2011, the total Parsi/Zoroastrian population was recorded 57,264, with 28,115 males and 29,149 females, as against 69,601 in 2001. The density of Parsis is highest in Maharashtra (44,854), followed by Gujarat (9,727).

IMF flags slowing pace of reforms in India The International Monetary Fund warned that slowing pace of reforms and sluggish exports in India have an impact on its economic growth and recommended six core areas, including labour and infrastructure, that need further reforms. This comes after the IMF lowered India's GDP prediction by 0.1% to 7.4% for the 2017-18 fiscal, saying India's "economy is on a recovery path".

Man broadcasts his own burial live on Facebook John Edwards from England live broadcasted his burial on Facebook to raise awareness for people's struggles with suicidal thoughts and drug abuse. "The idea of live streaming was so people could hear about my experiences and those of other addicts", he said. The coffin is big enough for him to move and he receives food and water through a pipe.s

SEASONAL MAGAZINE

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Aus couple offer island resort via lottery An Australian couple who own a tropical island resort in Micronesia has decided to give it away in lottery rather than sell it to the highest bidder. The lottery kicked off in April, and so far 55,500 people from 150 countries have bought tickets which start from $49. The lottery for the 16-bed resort will be drawn on Tuesday.

475 coups have been attempted since 1950 According to SocialCops' analysis, there have been 475 coups attempted across 95 countries over the last 66 years. However, only 49.7% of these coups were successful. While each country had an average of five coups since 1950, Bolivia had the most (23) in the same time period. Interestingly, there has been a coup every year since 1950, except in 2007.

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N E W S HDFC standalone net profit rises 37% to 1.8k cr short by Mansha Mahajan / 12:19 pm on 28 Jul 2016,Thursday Housing Development Finance Corporation (HDFC), on Wednesday reported a 37% year-on-year growth in standalone net profit at 1,871 crore. The company's total assets stood at 3,00,302 crore, an increase of 17% from the previous year period. However, gross non-performing loans stood at 2,006 crore, 0.75% of the loan portfolio. Further, HDFC’s consolidated net profit grew 27% to 2,797 crore.

MIT creates chip to simulate nerve-muscle connection MIT engineers have developed a chip to simulate nerve-muscle connections, in an attempt to better understand neuromuscular conditions like ALS. Created using mice cells, the coin-sized chip houses a muscle strip and some motor neurons. The setup is designed to recreate the neuromuscular junction, the bit of chemical synapse where neurons and muscle fibres meet.

Datsun GO Special Edition launched at 4.07 lakh Nissan-owned brand Datsun on Thursday launched special editions of its GO hatchback and GO+ multi-purpose vehicle in India, priced at 4.07 lakh and 4.78 lakh (ex-showroom, Delhi) respectively. The cars, in addition to featuring a limited-edition 'Style' moniker, will come in a new colour option called ‘New Blue’, and will be on sale from August through October 2016.

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Giant rats help clear landmines in Cambodia African giant pouched rats are sniffing out landmines left behind as the result of decades of war in Cambodia. The rats are trained to detect explosives and can cover 2,000 square feet in about 20 minutes. They lead deminers to the explosives, but as they weigh around 1 kg, they are not big enough to set them off.

Mukesh Ambani caps salary at 15cr for 8th year Reliance Industries’ Chairman Mukesh Ambani kept his annual salary capped at 15 crore for the eighth consecutive year, even as other executive directors took pay hikes. Notably, the Reliance board has approved a salary of 38.75 crore for Mukesh Ambani. Mukesh, the richest Indian, seeks to set a personal example for "moderation in managerial compensation levels", the company said.

Don't want to be known as woman CEO: IBM CEO IBM's first female CEO Ginni Rometty said in a Bloomberg interview that she wants her tenure to be defined as IBM's CEO and not "woman CEO". Rometty also said, "IBM’s commitment to diversity goes back a long time", adding that IBM has a policy to ship breast milk for travelling women employees who have just had children.

Will persuade Messi to return: New Argentina coach Edgardo Bauza, the newly appointed Argentina football? coach has claimed that he will try and persuade former Argentina captain Lionel Messi to reconsider his retirement. "Hopefully the talk I have with him [Messi] will help him to continue in the national team”, Bauza said. Earlier, Messi had announced retirement from international football following Argentina's loss in the Copa America final.

N E W S Lok Sabha passes amendment to Lokpal Act

1st known identical twin puppies born in Africa The first ever known pair of identical twin puppies has been born in South Africa. The two Irish wolfhound puppies, who were part of a litter of seven, were discovered to be genetically identical after the doctor that delivered them found that they shared the same placenta. Until now, only humans and armadillos were known to produce identical twins.

The Lok Sabha has cleared an amendment to the Lokpal Act giving an indefinite extension to the deadline for assets and liabilities' disclosure by central government employees and management personnel of NGOs. A Parliamentary Standing Committee will examine the Act's clause which requires disclosure by such public servants receiving foreign donations over 10 lakh or government aid over 1 crore.

Rape videos sold for 50 to 150 in UP: Report

IBM announces projects to fight Zika

Rape videos are reportedly being sold in shops across UP everyday for 50 to 150 depending on their 'exclusivity'. “Porn is passé. These real life crimes are the rage,” a shopkeeper at Agra’s Kasganj market allegedly said. "We are taking necessary action. But it is difficult, as sales are happening below the counter," a senior cop reportedly said.

IBM recently announced it would provide its technology and resources to help track the spread of Zika. It is collaborating with the New York-based Cary Institute of Ecosystem Studies to devise algorithms that can determine which primates are the virus carriers. It also runs the 'OpenZika project' for screening millions of chemical compounds to identify candidates to combat the virus.

Regret issues I had with Wasim Akram: Waqar Former Pakistan captain Waqar Younis said that he regrets the strained relationship he shared with teammate Wasim Akram during their playing days. "Yeah, we had issues. He didn't only have issues with me but we had issues in the team those days, which... I do regret at times because it did not really help Pakistan cricket", said former Pakistan coach.

Assam exempted from Aadhaar norms for UGC scholarships The Centre has exempted Assam from the purview of compulsorily providing Aadhaar numbers for availing University Grants Commission (UGC) scholarships and fellowships. This comes after Assam Chief Minister Sarbananda Sonowal informed Human Resource Development Minister Prakash Javadekar about the problems faced by the students of the state in getting UGC scholarships because of the Aadhaar norms.

Super Mario Maker' game coming to Nintendo 3DS Japanese game-maker Nintendo will introduce its 'Super Mario Maker' game to its portable game console, Nintendo 3DS, which will be available from December 2. 'Super Mario Maker' is a game creation system that allows players to create and play their own custom levels based on previous Mario versions. The game also lets players share their custom levels with their peers.

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N E W S

6 richest nations host 9% of world's refugees'

US asks India to remove ICT customs duties The US on Monday sought the removal of customs duties by India on information and communications technology (ICT) products in a bid to introduce these products into supply chain operations. The US is working with India for implementation of the Trade Facilitation Agreement, a US trade representative said, adding that India should tap its ICT segment potential.

Bajaj Auto Q1 net profit rises 2.1% to 978 cr Bajaj Auto reported a 2.1% year-on-year growth in net profit after tax to 978.37 crore for the June quarter. Further, income from operations rose by 3.5% from a year ago to 6,088 crore. Total sales during the quarter fell 2% to 9.94 lakh units. Motorcycle exports fell by 17%, and that of commercial vehicles fell by 48%.

The six richest countries in the world– Germany, USA, UK, France, China, Japan– host less than 9% (2.1 million) of the world’s 65 million refugees, analysis by development organisation Oxfam has revealed. Germany hosts most (736,740) of the 2.1 million refugees, while 1.4 million are split between the rest. Notably, the six countries account for 56.6% of the global economy.

Bharti Airtel Q1 net income dips 31% to 1.4k cr Telecom major Bharti Airtel on Wednesday posted a 31% year-on-year decline in its consolidated net income at 1,462 crore for the quarter ended June. However, the firm's total revenue rose by 7.9% to 25,546 crore and the overall customer base (excluding divested units) grew by 9.3% to 35.78 crore. Further, India revenues were up by 10.3% to 19,155 crore.

Govt to distribute 8L seed of pulses for free To increase pulses' production, the Centre will distribute eight lakh newer varieties of pulses seed to the farmers free of cost by the end of the financial year, Union Minister SS Ahluwalia said. The seeds, worth 20 crore, have been approved by ICAR and State Agricultural Universities. An incentive of 25 per kg is being provided for pulses seed production.

300 bicycle stations to be set up in Hyderabad The Hyderabad Bicycling Club, the Hyderabad Metro Rail and the UN Habitat on Thursday entered into a tripartite agreement to set up about 300 bike stations across the city. About 10,000 bicycles, including e-bikes, will be made available at these stations. Further, 63 of the bike stations will be situated at metro stations to provide passengers with last-mile connectivity.

LG Display to invest $1.75 bn for flexible OLED South Korea-based LG Display recently announced it will invest $1.75 billion in an attempt to meet the growing demand for flexible OLED displays, which are touted to replace LCDs in smartphones and other devices. The company said it was building a new production line for smallto-medium sized flexible OLED screens that will produce 15,000 input sheets per month from 2018. SEASONAL MAGAZINE

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NE WS NEW AAP MLA alleges Sisodia of hiding govt's misdeeds A breach of privilege notice was moved against Delhi Deputy CM Manish Sisodia by fellow AAP MLA Pankaj Pushkar in the city-state's assembly on Wednesday. Pushkar accused Sisodia of furnishing factually incorrect information on questions raised by the former to “hide” the government’s “misdeeds”. Notably, Pushkar was once marshalled out of the assembly for allegedly criticising the AAP government.

B'luru food truck 1st in Asia to be run by women A Bengaluru-based food truck, called '7th Sin', is the first in Asia to be run by an all-women group. Started last week by Archana Singh, the truck is operational six days a week with the workers giving free food to people in religious places on the seventh day. All operations including driving and accounting are taken care of by women.

Airtel upgrades over 9k sites under Open Network India's largest telecom operator Bharti Airtel on Thursday said its 'Open Network' initiative, which offers customers network information and seeks their feedback, has led to upgradation of over 9,000 sites and optimisation of over 30,000 existing ones. Putting up new towers is under way, it added. Airtel last year announced investment worth ?60,000 crore under its network transformation drive.

'African kids to account for 40% poorest by 2030' African children will account for over 40% (nearly 148 million) of the world’s poorest people in 2030, the deadline set by world leaders to eliminate extreme poverty, according to a UK-based thinktank. Adding that education was "central" to reduce poverty, the thinktank said Africa's most populous country Nigeria had the maximum room for progress.

Cricket SA in profits for 1st time in 25 yrs Cricket South Africa's (CSA) affiliates earned profits for the first time since 1991, the year South Africa was reinstated into international cricket, CSA President Chris Nenzani announced. He attributed the achievement to "heightened corporate governance and diligent operational processes" at the domestic level. The board will announce the audit results at its Annual General Meeting on Saturday. SEASONAL MAGAZINE

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Man in UP village coaches 18 girls in wrestling Awadhesh Yadav, from the Nibi village in Uttar Pradesh, is coaching 18 girls in wrestling. Aged between 15 and 22, the girls aim to win at the Olympics, with some already having won national-level competitions. “When I started training the girls, some...locals made fun of me. But I ignored their taunts and resolved to stick to the task,” Yadav said.

Kerala to be declared open defecation-free on Nov 1 The Kerala Cabinet has decided to declare the state as open defecation-free on its formation day on November 1. The Cabinet plans to invite PM Narendra Modi to attend the state-level function to be held in Thiruvananthapuram. This comes as the state government is constructing over 1.90 lakh toilets across the 941 grama panchayats under its sanitation programme.

NE WS NEW Messi may have 'staged' retirement: Maradona Former footballer Diego Maradona has said Lionel Messi might have "staged" his retirement, following Argentina's loss in the Copa America final in June. "[Messi] escaped the criticism but Argentines suffered. Maybe his retirement was staged to make us forget about the three final losses," said Maradona. Messi came out of retirement last week, saying he "loved this country too much."

Nissan gifts ambassador John Abraham new Terrano Nissan has gifted the recently launched Terrano SUV to actor and its brand ambassador John Abraham. Available at a starting price of ?9.99 lakh (exshowroom, Delhi), the Nissan Terrano comes in both petrol and diesel variants. Last month, Nissan had given an opportunity to its customers to testdrive the Terrano for a chance to meet the actor.

Virtual reality experience features Barack Obama Oculus and National Geographic have released a film called 'Through the Ages' featuring US President Barack Obama to celebrate the 100th anniversary of the US National Park Service. The film, which is available as a 360-degree video on Facebook, is set in Yosemite National Park in California's Sierra Nevada mountains, shows President Obama exploring the scene with his family.

OYO now open to couple & local ID guests in 100 cities Hotel brand OYO has recently launched 'Relationship Mode', a new feature on its app that helps couples identify and book couple-friendly hotels. Many hotels do not allow unmarried couples or guests with Local IDs (address in the same city as the hotel). Now 4,000+ OYO hotels across 100+ cities address this.

Apple may launch Snapchat-like app: Reports According to several reports, Apple is developing a video sharing and editing application that will be similar in functionality to Snapchat. The app will enable its users to create and edit videos in less than a minute, reports added. However, it is not clear whether the software will launch as part of iOS or as a standalone app.

Consumer IoT company Witworks raises seed funding Bengaluru-based consumer IoT company Witworks has raised an undisclosed seed round of funding led by Fireside Ventures, Investopad, P39 Capital and a group of angel investors. This comes ahead of Witworks' launch of a smart wearable platform, BLINK. Founded in 2014 by IIT Kharagpur alumni, the startup makes smart connected devices in the home and lifestyle space.

IBM creates 1st-ever AImade movie trailer IBM's Artificial Intelligence (AI) Watson has created the first-ever AImade movie trailer, for an upcoming 20th Century Fox movie 'Morgan'. Scientists fed Watson with 100 horror movie trailers, on which the supercomputer performed visual, audio and composition analysis to find what people find scary. The AI then selected ten scenes from the full movie for a human editor to arrange. SEASONAL MAGAZINE

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NE WS NEW 8% below normal rainfall recorded in August: IMD The country got 8% below normal rainfall in August, as per the India Meteorological Department's (IMD) website. While the north-west and central regions received rainfall in abundance, the southern region remained almost dry, it said. However, this wouldn’t affect the water availability for agriculture and the storage in reservoirs, it added. Earlier, IMD had forecast a 104% rainfall in August.

Chicago cops shoot someone every 5 days: Reports Police in Chicago, Illinois have been involved in 435 shootings over the past six years, averaging five days per shooting, according to reports. The shootings, from 2010-2015, have caused 92 deaths and 170 injuries and the officers involved in the shootings had an average of 10 years experience. Notably, around 80 percent of victims involved were African-American males.

Over 15 crore workers go on strike against govt A day-long nationwide strike is being held by 10 Central Trade Unions today against the Centre’s alleged ‘antilabour’ policies. This time,? the strike will be bigger than last year as over 15 crore workers will join it, the trade unions claimed. Sectors like coal, oil and gas, transport, shipping, banking and insurance are likely to get affected, an official said.

Govt asks to stop airing 5 TV channels in Kashmir Cable TV operators in Jammu and Kashmir on Thursday were directed by the authorities to stop airing five news channels, as they were found promoting “hatred, ill-will, disharmony and a feeling of enmity against [the] sovereignty of the state". A cable TV operator said that the five channels were satellite channels and were being aired from "outside the state".

6 HCs functioning without regular Chief Justices According to the latest Law Ministry data, six High Courts of the 24 in the country were functioning without regular Chief Justices as on August 1. These states were Andhra Pradesh/ Telangana, Kerala, Madhya Pradesh, Manipur, Sikkim, and Tripura. Further, the data reported that the High Courts are facing a total shortage of as many as 478 judges.

Turkey denies ceasefire with Kurds in Syria A Turkish minister on Wednesday denied US claims that said Turkey's military has reached a ceasefire with Kurdish fighters in Syria. US officials had earlier claimed that the Turkish and Kurdish forces agreed to a temporary truce to concentrate on fighting the Islamic State. This comes as Turkish forces launched operations against the IS and Kurdish forces in Syria's Jarablus. SEASONAL MAGAZINE

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DEVELOPMENT

HOW FEASIBLE IS THE NEW MUMBAI DEVELOPMENT PLAN - 2034? The Brihanmumbai Municipal Corporation's blueprint for the city's growth leaves many questions unanswered.

itizens of Mumbai have just a few more days to raise objections to the revised draft of Mumbai’s 20-year Development Plan for 2014-2034. The 1,000-page document was released in full at the end of May, but citizens have been given only two months – till the end of July – to respond to it. The Development Plan, prepared by the Brihanmumbai Municipal Corporation, the city’s civic body, will serve as a blueprint for the city’s growth over two decades. Unlike when the Development Plan was first released in February last year, there has been remarkably little discussion in the public domain on the revised draft. So far, only 2,200 objections have been filed, against 50,000 previously. The first version of the Development Plan was met with much criticism and found

to be riddled with errors. The Maharashtra government then scrapped the document and asked the civic body to revise and republish it as well as seek public opinion afresh. Apart from containing numerous factual errors, the first draft had advocated transitoriented development, arguing for higher floor-space index (or FSI, which is the ratio of buildable space to the area of the plot) near busy local railway stations like Dadar. Even a layperson can imagine the congestion such increased development would cause in such transit nodes that already see a lot of commercial activity, heavy crowds and lots of activity. The BMC, as the civic body is known, had proposed increasing the FSI to a maximum of 8, as against the existing base figure of 1.33 in the island city and 1 in Mumbai’s suburbs. Transit-oriented development is a concept that promotes

the construction of high-density and mixed-use (commercial as well as residential) properties near mass-transit nodes to ensure that more people live and work within walking distance of railway stations and the like. The civic body, while scrapping the increased FSI, said in the revised draft that it would try to incorporate the principles of increasing public transport and “walkability” in the city’s development. Conceivably, a similar concept was introduced by Vidyadhar Phatak, former chief planner of the Mumbai Metropolitan Region Development Authority, in a World Bank document titled Working with the market: Approach to Urban Slums in India which he co-authored with Ahmedabad architect Bimal Patel with two others in 2010. Phatak was one of the main consultants for the Development Plan. The BMC has to be commended for a

Apart from containing numerous factual errors, the first draft had advocated transit-oriented development, arguing for higher floor-space index (or FSI, which is the ratio of buildable space to the area of the plot) near busy local railway stations like Dadar. SEASONAL MAGAZINE

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much more sensible draft the second time around. A seasoned retired bureaucrat, Ramanath Jha, was appointed as officer on special duty to supervise the revision. However, instead of releasing the entire report at one go, the BMC did so in installments, which somewhat took the wind out of the sails of city activists. A cursory glance might well convince a reader that there is nothing objectionable in the plan. For instance, on the face of it, a welcome innovation in the revised draft is the reference to creating affordable housing. It is widely known that Mumbai’s real estate industry caters to at most 20% of the 13-million strong population. Formal housing remains unaffordable for most residents of the country’s commercial capital. Around 50%, or 6.5 million people, in Mumbai live in slums, while another 2.5 million live in cessed and dilapidated buildings. Another 5% forms the floating population of public and private-sector employees living in rented premises. Another about 3-5% live in housing provided by their employers. That this is precisely why the city’s real estate industry is in the doldrums today, with thousands of flats unsold, even as millions live without a permanent roof over their heads. Additionally, a mega city like Mumbai should have ample rental accommodation for the entire spectrum of social classes. However, due to an archaic rent control Act and other factors, this too has not happened. Instead, there’s a peculiar imbalance in the city – there are people who have been living for decades in 2,500 sq ft flats in art deco buildings in prime areas like Marine Drive and other parts of the island city paying a few hundred rupees as rent, while others have to pay through their noses even for cramped spaces in far-flung suburbs on rent. This is because landlords cannot charge market rates for flats that come under the rent-control Act. And since landlords receive a paltry sum as rent for these buildings, they don’t repair their flats. Buying a house in Mumbai, on the other hand, is a distant dream for all except those working in the highest echelons of multinationals, financial services or IT industries or in dual-income households. The revised plan estimates that the city requires a whopping 1 million affordable SEASONAL MAGAZINE

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In a peninsula like Greater Mumbai, such land ought to be kept open to absorb torrential downpours of the likes that were seen in the July 2005 deluge, when the city received 944 mm of rain in around 14 hours. As Mumbaiites learned during the massive flood, intertidal areas, such as mangroves and salt pans, serve as sponges to absorb excess rain. homes for around 4.4 million people. But the BMC has resorted to a sleight of hand in stating that 3,300 hectares of land will be used for this noble purpose. Where from this land is going to be obtained remains a mystery. The Development Plan states that nodevelopment zones – lands that have been kept vacant for future use – are going to contribute the bulk of this. It will amount to 2,100 hectares. The newly designated tourism development areas, such as the Manori-Gorai-Uttan coastal belt in the far northern suburbs, are expected to provide 1,100 hectare. This, however, is a contradiction as the zone is meant to promote tourism, not provide low-cost housing. The small remainder is

to come from salt pans – 130 hectare. However, the catch is that both nodevelopment zones and salt pan lands mostly constitute what the earlier Development Plan had identified as “natural areas” that should not be built upon. The civic body has said that it has exempted ecologically sensitive areas from no-development zones and revised the definition for the latest Development Plan. However, according to NGO Nivara Hakk and architect-activist PK Das, the no-development zones may be located in the midst of eco-sensitive land and constructing on them will require building roads through natural areas, resulting in their destruction. In a peninsula like Greater Mumbai, such land ought to be kept open to absorb torrential downpours of the likes that were seen in the July 2005 deluge, when the city received 944 mm of rain in around 14 hours. As Mumbaiites learned during the massive flood, intertidal areas, such as mangroves and salt pans, serve as sponges to absorb excess rain. What also needs to be kept in mind is that Mumbai, like other coastal cities, is likely to see sea-levels rise with climate change. Without clearly demarcating the areas to be used for affordable homes, Das said, the promise of 1 million homes remains a pie in the sky. He further pointed out that by proposing new

greenfield sites – like no-development zones – the plan is underestimating the potential of redeveloping existing sites occupied by slums. The controversial Slum Rehabilitation Authority – which is tasked with rehabilitating certain categories of slum dwellers in permanent structures – the brainchild of the Shiv Sena-BJP coalition when it was in power in Maharashtra during the mid-1990s, has proved a failure and even the Development Plan estimates that it can provide only one lakh affordable homes. At this rate, it will take a century to rehabilitate all slum dwellers. The Slum Rehabilitation Authority turns lands occupied by shanties over to builders who, in return, re-house them at no cost. However, the quality of their new homes leaves much to be desired. Many of them are hardly better than slums, albeit in the form of seven-or eight-floor high-rises. One of India’s tallest residential buildings – the two 60-storey Imperial Towers in Tardeo – shows how slum redevelopment can go wrong. While most of the complex is, what Shapoorji Pallonji describes as “a new level of residential luxury in South Mumbai” with flats going up to fivebedroom duplexes sprawling over 10,355 sq ft, some of the buildings are for rehabilitated slum dwellers. In comparison to the sprawling luxury homes, these are cramped and poorly ventilated spaces. Slum Rehabilitation Authority projects have a density of about 1,250 tenements per hectare, as against an existing 300 per hectare in slums. The

authority has become a byword for corruption. The maintenance charges are prohibitive for slum dwellers and it is hardly surprising that many sell the homes and move back into slum clusters or a small apartment in the furthest suburbs. The Development Plan also lists 1.74 lakh affordable homes under the Pradhan Mantri Awas Yojana, which envisions housing for all – a thinly disguised remake of the scheme which bore Rajiv Gandhi’s name during the United Progressive Alliance rule. However, nowhere does the plan identify where the land for such a scheme will materialise. The scheme is meant to financially assist slum dwellers so they can build or renovate their homes. In an extensive exhibition at the National Gallery of Modern Art a couple of years ago titled Open Mumbai, where he mapped the entire city with all its geographical and topographical features, Das showed that contrary to popular perception, slums actually comprise only around 8% of the 480 sq km that make up Greater Mumbai. This comes to about 37 sq km. By removing land that will be used for supporting infrastructure, amenities and

other purposes, the city is left 28 sq km that can be used to rehabilitate slum dwellers. If this land is reserved exclusively for such rehabilitation and using an FSI of 3, the BMC would be able to provide 1.3 million units. As many as 9,00,000 could be used for rehabilitation and 4,00,000 for sale – either ownership or rent. As Das pointed out, “It will be possible to utilise an FSI of 3, limit density to a maximum of 550 tenements per hectare, provide open spaces, amenities and infrastructure as per town-planning norms and clear up encroachments on reservations for roads, amenities, open spaces etc.” A clear precedent is the homes that the Maharashtra Housing and Area Development Agency is building for former cotton mill workers. Homes are given out to beneficiaries at affordable rates – which can be as low as Rs 7.5 lakhs – through a lottery. Given that the land is available to the agency for free, it covers all its costs – there is no subsidy. Similarly, the Delhi Urban Shelter Improvement Board, under the Aam Aadmi Party government, is making available 270 sq ft tenements for Rs 1,20,000 at a subsidy. In addition, occupants contribute Rs 30,000 as a onetime fee which forms a corpus for maintenance of the buildings, which the board manages. After five years, this corpus will be transferred to the registered building society. Such examples show that where there is a will, affordable housing schemes can be effectively planned and implem ented. SM SEASONAL MAGAZINE

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India is Going Cashless Soon

Intent on turning the economy cashless, the Centre is hoping to popularise the Unique Identification Number or other such identity proof for digital transactions. he Finance Ministry has now entrusted a high-level committee to examine this proposal and suggest ways to encourage digital payments. “This is the next step on how to provide a full ecosystem for cashless transactions,” said an official. The committee, led by former Finance Secretary Ratan Watal, has also been asked to examine the feasibility of creating a payment history of all card and digital payments to enable merchants and consumers to leverage their credit history and get instant, low-cost micro-credit. “It would also study and recommend measures to incentivise transactions through cards and digital means through tax rebates and incentives, introduction of cashback and lottery,” the Finance Ministry said in an order. The panel has been asked to submit its report within a year. This is the latest in a series of efforts by the Centre and the Reserve Bank to migrate from a cash-based economy to electronic payments, a move that will not only reduce the cost of transactions but also tackle the problem of black money. In February, the Union Cabinet had decided to promote cashless payments through measures such as removing surcharges on card-based payments. The country is also gearing up for the Unified Payments Interface (UPI), which will allow bank account holders to collect and send money through their smartphones. The Finance Ministry has also asked the committee to study the introduction of a single-window payment gateway that would accept all types of card and digital payments of government receipts, and also the feasibility of a setting up a centralised KYC Registry. It has also been asked to recommend any amendments to the regulatory mechanism under various legislations, including the Payments and Settlement System, the RBI Act, Banking Regulation Act, Information Technology Act, Telecom Regulatory Authority Act and the Prevention of Money Laundering Act. SM

HOW MUKESH AMBANI IS DISRUPTING THE MOBILE MARKET AFTER A LONG GAP t has been a busy few weeks for employees at the Reliance Digital, Digital Xpress and mini stores, as people are lining up in large numbers to get the Jio 4G SIM. From what we have learnt, it is going to get busier in the days to come as word on the street is that all 4G-compatible smartphones are going to be eligible for Reliance Jio Preview Offer (JPO). The demand for Jio 4G SIM is on the rise due to its offer of 90-day free unlimited high-speed internet, calls and SMS. On the other hand, users of rival networks shell out about Rs. 250 for 1GB of 3G/4G data per month, plus the call charges and SMS costs that one endures throughout the month.

he pricing of internet and call charges after three months are still a mystery, but until then customers can enjoy the services with no strings attached.

Jio users have the privilege of unlimited usage for three whole months, saving them a lot on their mobile bills.

Jio SIM is available for free, but requires the handset to be eligible for the offer. Reliance has already expanded its JPO to several smartphone brands, such as Samsung, LG, Asus, Gionee, YU, Micromax and more. As long as the device is supported for the offer and the user presents all the KYC documents, the SIM card with 3month unlimited data and other services will be issued. The pricing of internet and call charges after three months are still a mystery, but until then customers can enjoy the services with no strings attached. When we visited some Reliance Digital stores in Bengaluru, they had no SIM cards in stock. But there are many stores around the city with sufficient stock, and people have been lining up before the store counters open, which is the case in all the stores across India. People have also been tweeting about the long queues as SM they wait to get their free Jio 4G SIM.

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INTERVIEW

Interview by: Jaison D & John Antony

Dr. Thomas Issac, Finance Minister, Kerala SEASONAL MAGAZINE

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BETTERING THE KERALA MODEL “

passionate capitalist can’t hoodwink him into admitting A revolution is a struggle to the death between that it was all gung-ho in India after liberalization and the future and the past,” wrote Fidel Castro. If the globalization. Dr. Thomas Isaac will immediately point Cuban legend meant the then emerging struggle to irrefutable facts about the growing inequalities and between socialism and capitalism, the beauty of the the widening income gap between various sections of quote is that it is eternal, timeless. Revolution is not our society. Kerala’s FM is also ready to give credit finite, but continuous. Capitalists have had to adjust, where it is due, as when he credits Kejriwal with and even the socialists. Dr. TM Thomas Isaac is experimenting with a real-time software system to definitely dreaming of a future where the capitalists will prevent tax evasion by traders. The Minister is planning be forced to adjust more. But he is not oblivious to the a similar system in Kerala, which will be even more fact that even socialists will have to adjust for meeting foolproof due to a clever modification he is introducing. future head on. He feels that there is no better model Wherever and whenever Kerala is to be emulated than the Kerala Model unprepared to meet its emerging of development. Few can compete with THE FIRST BUDGET HE his argument, as this model has PRESENTED IN THIS TERM AS challenges, Dr. Thomas Isaac is frank enough to admit it. Examples include catapulted the tiny southern state to be FINANCE MINISTER HAS state’s unpreparedness to handle the a leader in Human Development Index. ALREADY ATTRACTED exodus from Middle East and the falling At the same time, without prompting, NATIONAL ATTENTION FOR ITS rubber prices. He often has only bitter Dr. Thomas Isaac is candid enough to INNOVATIVE MEASURES FOR medicines to prescribe – like moving admit that the Kerala Model is long RAISING FUNDS BY WAY OF away from rubber – but he is willing to pending for an overhaul. This pragmatism sums up this proud SPECIAL PURPOSE VEHICLES handhold those affected by offering (SPVS) THAT WILL TAP THE them alternatives. The first budget he communist intellectual. Kerala’s INDIAN BOND MARKET. presented in this term as Finance Finance Minister has his rationale for Minister has already attracted national backing GST which basically comes attention for its innovative measures for raising funds from the Congress & BJP camps, but he won’t mince by way of Special Purpose Vehicles (SPVs) that will words when he takes on the Modi-Jaitley combine for tap the Indian bond market. A champion crusader their silent killing of decentralization in India by finishing against corruption and tax evasion, he is all set to off Planning Commission and by usurping Plan Funds repeat record tax-collection growth rate in the state, that belonged to the states. An economist himself, just like in his earlier term. But in some things he Dr. Thomas Isaac feels that RBI should have cut rates remains a cautious communist at heart, like in his faster and deeper, but adds in the same breath that total disapproval for private universities being without supporting fiscal policy that contained inflation empowered to give degrees in the state. But for that it was impossible to do so. Once a vocal critic of unmet need too, Dr. Thomas Isaac has alternatives economic liberalization, he finds no charm left in to offer in the public sector. Once a passionate debating whether the 90’s liberalization move was right agriculturist too, he is little swayed by marginal or wrong. But he will gently remind that all our current innovations like grow-bags, aquaponics, or precision achievements haven’t happened post liberalization, farming, and would any day prefer to leverage Kerala’s pointing to India’s impressive gains in the prenatural strengths like excellent soil and good rainfall liberalization era in areas like public industries, green for agriculture productivity. revolution, and basic infrastructure. Even the most SEASONAL MAGAZINE

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Seasonal Magazine interviews Dr. Thomas Isaac, Minister for Finance, Kerala Government: GST Bill has finally been cleared by Parliament. As an early adopter of GST among all state finance ministers, how do you view this development and the importance of GST? The states lost out in autonomy with regard to tax collection way back, when VAT was introduced by the Centre. So, in my opinion, there was no point in holding out against GST, which is better conceived, as it is a progressive step with ease-of-doing-business in mind. We don’t stand to lose out more than we have already lost. Secondly, Kerala is a consumer state, and thirdly, our economy is mainly based on services, and my hope is that these two factors will make GST more favourable to our state. How was the opposition to this move, in your party? None of these points are contested by our party. But as a matter of policy, CPM is against the Centre encroaching on the rights of the states. So, topmost party functionaries have to articulate along those lines. There were discussions in the party on this, and as the Finance Minister of Kerala I had to take a practical stand on the basis I mentioned just now, that with GST we don’t lose more than what we have already lost. India and especially Kerala is staring at a massive return of expatriates from Middle East. How prepared is our economy to handle this situation. What are your short-term and longterm plans? Kerala is not at all prepared to handle this situation, if this does materializes. We also can’t expect much help from the Centre, as their trend is to look at it as a regional issue. Just like the price crash in rubber or cardamom hasn’t emerged as a national issue, this exodus from Middle East, if it happens, will be ignored. It will be up to Kerala to find solutions for this. That is why in my first budget, I took some unusual steps to address this. Firstly, this can cause a regional recession, and that is why there has been an anti-recession package amounting to Rs. 20,000 crores in the budget. Obviously, the Kerala budget can’t accommodate such an amount for this purpose, but we will raise these funds through Special Purpose Vehicles for various large projects, which will tap the Indian bond market for the first time. SEASONAL MAGAZINE

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This will pump in money into our regional economy and drive creation of public infrastructure, which in turn will attract private investments into the state and cause creation of significant new jobs. Surpluses from these projects will be utilized for rehabilitation of the Gulf returnees as they need to be reintegrated into our socio-economic fabric. Will you be tapping overseas bond markets for the same? No, for the time being I would like to avoid that, as overseas bond market participation will make us dependent on forex rates which can fluctuate wildly, and cause unnecessary risk. There is no need either, as apart from the Indian bond market, there are other underutilized reserves in the state itself. Can you elaborate on a couple of such sources? Well, our cooperative banks for instance. Together they have around Rs. 40,000 crores in surplus. Another one is Kerala State Financial Enterprises. KSFE, as you know, is basically a chit firm, and every Malayalee is very knowledgeable about how chit products work. Now RBI has given permission to float NRI Chits, which KSFE will utilize, and we are hopeful of raising around Rs. 25,000 crore through this route. Some of this can be invested in the project SPVs. Then there are SEBI settled special instruments like Investment Funds that attract short-term funds for long-term projects like infrastructure, which may sound contradictory, but there is a structure for it which has proven successful. It is aimed at the corporate sector, but even a state or a state-owned entity can very well tap into it. You have been fortunate to return as the state's FM. You must be remembering what all you planned back then vs. what all worked. How are you broadly modifying your strategies based on this, in the current term? During my last term, the biggest achievement was raising the annual rate of growth in tax collection to over 18%. During the last UDF government it has again slipped to 12%, and now one of my prime objectives is to get back to 20-25% growth. I am planning various steps for achieving this, which should

come to fruition soon. Firstly, we are going to implement a software based system that will scrutinize all returns on over 90 variables, to detect anomalies. This is possible because, now we have several years of tax data in the servers. This new system will generate intelligent reports shortlisting cases where officers need to further scrutinize, and if necessary, intervene. This first step should be ready within two months. What would be the next steps? The next one would be even more ambitious, something that Arvind Kejriwal too is experimenting in Delhi. Under this, every trader on a real-time basis will have to upload a copy of his bills to our servers. But I know there would be computer programs using which only 50% of the bills would reach us. To prevent this, what I am planning is to offer consumers a competition – they can take a photo of the bill in their mobiles and send it to us through phone itself, and the system would be crosschecking whether that bill has been officially submitted to us. If the consumer sends in a bill that is not in our records, he will get 5 times the tax

he paid as a gift. Consumers are highly likely to do this with larger bills where their tax expense is high. It will be a competition called ‘Lucky VAT’ or something like that. The risk of being caught red-handed thus by the tax authorities will greatly minimize evasion. It will be a foolproof system. Don’t you think rooting out corruption is also as important? Of course, rooting out corruption from the tax department has always been important, and in fact, one of the biggest achievements during our last term, was at the State Check Posts including the main Walayar Check Post. I had offered cash reward of Rs. 25,000 for anyone providing proof for corruption at Kerala Check Posts, which went unchallenged for four years or so. We also did an independent social audit on the performance of check posts. Another area in which we did social audit, where more than 70,000 people participated, was about the operation of our treasuries, and it led to widespread improvement in how treasuries operated, back then. Are you planning any new initiatives with regard to treasuries now? Yes, we are going to modernize treasuries in a big way. Within months, you will see core banking being deployed across the Kerala treasuries. We will also make it mandatory for all employees and pensioners of state government and its corporations to get their salaries through treasuries. This will vastly improve the cash balance situation of the treasuries. Of course, employees and pensioners can give standing instructions to automatically transfer their funds or part of funds to a bank account of their choice. As an incentive to keep it in treasury, we will provide 1% more interest to account holders. This will improve the condition of the treasuries, and make more funds available for development activities. This will enable the Finance Department, which is blocking most such proposals, to become a Finance Department that say ‘yes’ to all productive proposals. Do you have any model of development either from any Indian state or abroad that you wish to see implemented in Kerala? No. We are very proud of our Kerala model of development that has ensured

EVERY TRADER ON A REAL-TIME BASIS WILL HAVE TO UPLOAD A COPY OF HIS BILLS TO OUR SERVERS. better standards across education, health, welfare etc. Having said that, I am also aware that Kerala model of development needs to be renewed, it needs to be modified on several fronts. It has fallen short on a few fronts, the most significant being less than required performance in high-quality job creation. So, we need to continue providing welfare measures, but at the same time, we must be growing much faster. Kerala is already growing above the national average, but that may not be enough. We need to invest in, as well as attract private investments, in some of our core sectors like information technology, tourism, value-added products etc. What would be the major initiatives on the education front, that the finance ministry is keen on supporting? There would be a major overhaul with all high school and higher secondary schools being digitalized. Every classroom will have laptop, LCD

projector, screen etc. There will be centralized resource centres. 1000 schools will be made into Centres of Excellence with world-class infrastructure. If eminent academicians of Kerala origin come back to the state to start Centres of Excellence, how will they be encouraged? They will be encouraged wholeh eartedly, and we will also provide them short-term positions in our universities and research centres. But Kerala is yet to allow private and deemed universities. Are you considering that move during this ministry? No, we are not considering private universities at all. Instead, we are going to modernize all our university centres in a big way, to make them world-class. Big money is going to be spent on these centres. We will make them top-notch and offer short-term positions there to eminent NRI/NRK academicians to raise our higher education standards. What if they want to start autonomous centres? We are open to that idea, but not as degree-granting institutions. They will operate as affiliated centres of our universities. I studied and taught in one such autonomous centre – Centre for Development Studies (CDS). Fully autonomous with no meddling by any government secretary. That is the model to follow. But will these eminent academicians find our university centres or

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institutes appealing? At present no, and as an academician and researcher myself, I can vouch for that. Precisely this is why our prime focus will be to upgrade our university centres to world-class standards first. Two of Kerala economy's big strengths - rubber as well as Gulf money - are facing irreparable damages. Do you foresee Kerala economy taking a hit due to this? Yes, we are going to face serious implications. No structural reforms are possible in rubber anymore. We have to move away from rubber. On the Gulf crisis too, we need to find alternatives, there is no other way. There is an ongoing debate whether RBI could have cut rates deeper and faster. What is your stand as an economist FM, and what is your rationale? My view is that the rates should have been cut deeper and faster. The simple rationale is that India has potential to grow much faster. The current high interest regime is preventing that. But whether RBI could have done this is debatable because they have to limit inflation. So, we have to first look at where the inflation is coming from. Reality is that inflation can be controlled better by cutting the taxes on petroleum products. When crude went down, taxes were hiked by the Centre, and when crude went up from the lows, why are the taxes not being cut? That is a big source of inflation. This Central Government burdens people with faulty fiscal policy that charges high taxes on petroleum products which increases inflation across all products and services, and then the Centre expects the monetary policy to contain that inflation. That is meaningless. Fiscal policy needs

to be corrected first, before RBI can act further on interest rates. Do you foresee any challenges for Kerala from the proposal to merge SBT with SBI? Yes, that is one bank with strong historical and emotional roots to Kerala. State Bank of Travancore itself was formed by the amalgamation of 12 regional banks in the state. SBT’s investment decisions therefore have a Kerala focus, whereas SBI’s investment decisions are being determined by its global positioning. Kerala is no priority for SBI. That regional roots of capital determine investment decisions is wellknown and is one of the conclusions in Amiya Kumar Bagchi’s monumental study titled ‘Private Investment in India’. So our disapproval for SBT-SBI merger is not just emotional; it is going to affect regional growth adversely. Kerala Government is planning to promote its own bank. What are the broad objectives that you are planning for this institution? There are several options before the Kerala Government. First option is to convert one of our NBFCs into a bank, which is the strategy RBI is favouring. But there are too many issues involved like upgradation of manpower etc. Second option is to start a new bank, which too we are not favouring at this stage. Instead, we will be strengthening and integrating our cooperative banking system. Now there is a threetier system of cooperative banks, and we will convert it into a two-tier system. The state-level and district-level cooperative banks would be merged. The resultant bank would be one of the largest in Kerala with over 800 branches, and the distinct advantage is that it can attract NRI investments in a

big way. We may need to recapitalize it, but this apex bank can be a major player in the state working under RBI guidelines. Depositors will get added protection, with no hanky-panky. We plan to start this integration work soon so that this apex bank can be formed during this term itself. You have been a pioneer in decentralization policies. How much room is there for improvement in this regard between Centre and states, and within states? Between Centre and the states, instead of things getting decentralized, the reverse is happening. The present Central Government doesn’t believe in decentralization at all. They are already on the verge of closing down the Panchayati Raj Ministry after cutting down its budget from Rs. 7000 crore to just Rs. 96 crore. Modi doesn’t want to select and encourage model panchayats anymore, but ‘model villages’ whatever that means. But the biggest blow to decentralization has been the removal of the Planning Commission. This has centralized a huge amount of money into the hands of the Centre, from the hands of the states. Regarding non-plan expenditure, the states anyway didn’t have much judgment to wield – items like salaries, pensions, interests etc that anyway have to be paid. The states had discretion only with plan funds, which could be used judiciously for developmental activities. Now, this whole corpus of funds has been moved to the control of Arun Jaitley and Narendra Modi. They are erecting the most centralized financial structure ever attempted anywhere in the world, so that they can release funds to whoever finds favour with them. No formula and no guidelines. Many people do not understand the implications of this

The biggest blow to decentralization has been the removal of the Planning Commission. This has centralized a huge amount of money into the hands of the Centre, from the hands of the states. SEASONAL MAGAZINE

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sudden change that has been forced upon the country. What about NITI Aayog then? NITI Aayog is just fictional. Absolutely no powers in resource allocation, and purely in an advisory role. The removal of Planning Commission and centralization of plan funds into the hands of PM and FM is more troubling not due to the unhealthy centralization alone, but due to the arbitrariness built into the sharing of these funds. Just on their whims and fancies at that time, which will be dictated by their political needs at that time. What about the BJP-NDA claims that Kerala has got a better deal from the Centre than when UPA was in power? That is absolute rubbish. Whatever Kerala received has not been by the grace of Modi. It is by the recommen dations of the 14th Finance Commission of India headed by Dr. YV Reddy which was appointed in 2013, and whose recommendation is valid from 2015 to 2020. This Finance Commission sharply increased the share of states from the shareable pool of taxes from 32% to 42%. Every state was benefitted and so was Kerala. There is no point in Modi Government claiming any credit for this. What about decentralization within states? Within the states, it is good that the Finance Commission has given a fair deal to the local self-governments. In Kerala, the state government too is giving generous funds to these local

governments. This has resulted in a peculiar situation in that the local selfgovernments are better off than the state government, when it comes to availability of untied funds or free funds for doing developmental works. Having said that, there is enormous scope for improvement in the expenditure of these funds by local governments. Lack of innovation, lack of people’s particip ation, and increasing corruption are all serious issues with how they operate. So what we are going to do is a second edition of People’s Plan Campaign by which development will move from this level of equilibrium to a higher level of equilibrium. Startups are in big momentum across India's various metros. Though our youngsters too are doing their bit, are you satisfied with the progress we have made? Are there any plans to back promising startups? Yes. Enough is happening to prove that the startup movement is the right path to follow. Kerala’s future is in knowledge industries, services, high-skill industries etc where startups are only natural. Money is not the prime mover here. Innovative ideas and entrepreneurship skills will decide the course. They will raise their money. Kerala also has a huge pool of highly educated workforce. Government’s focus would be to create an ecosystem that encourages startups. Soon we will implement a plan by which 1000 best ideas would be given Rs. 2 lakhs each, and after assessing the progress in their implementation, 50 among them would be given Rs. 2 crores

each as startup support with no security. The objective is to create a new generation of entrepreneurs in the state. Standing in 2016, what is your take on the economic liberalization jump that India took in the early 90s? Was it necessary, or unnecessary, or was its implementation just skewed? It is debatable whether it is possible to have an alternative and be cut off from contemporary globalization. Now it has become fait accompli and there is no point in debating the right and wrong of liberalization. One thing to be remembered is that India is performing better now, not only due to liberalization, but due to the investments in public institutions, industry, and infrastructure that happened before liberalization. One major problem with the post-liberalization period has been that inequalities are building up, and income gap is widening between various sections of the society. Since land is at a premium in the state, are there any plans to boost agriculture through novel methods like aquaponics or precision farming? I don’t think they are going to be widely adopted in the near future. Kerala is a tropical region with heavy rains. These technologies were developed in semiarid regions. We mechanically aping them is not so great. Same with growbags that many are using nowadays to grow vegetables. I find them detestable, increasing pollution when so much good soil is available. The same with polyhouses; maybe rain-guards have a utility in the state. I am not against any of these innovations, but I don’t think these are suitable for large scale adoption in our state. Your budget was hailed by many as groundbreaking and idealistic. Which budget proposal are you most keen on seeing implemented in this term? I want all the proposals to be implemented but I am most keen on the Kerala Infrastructure Investment Fund Board (KIIFB) to start performing. Different bonds will be issued for different projects. Also, government revenues will be used. 15% of motor vehicles tax and 1% cess on fuel are also being considered for KIIFB. This model of development is uncharted territory for the state and there will be challenges that should be overcome. Secondly, I want to achieve 25% tax growth; which will be a record. SM SEASONAL MAGAZINE

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COMPENSATION

ARE SHORT-TERM INCENTIVES BETTER, FOR BETTER PERFORMANCE? EXECUTIVE COMPENSATION IS SHAPED BY REGULATIONS AND BROAD, DECADES-LONG TRENDS. MISSING FROM THE EQUATION IS ANY ASSESSMENT OF HOW MILLIONS IN CASH AND STOCK MOTIVATE THE EXECUTIVE BRAIN OR DON’T. CALEB MELBY ARGUES THAT THE BEHAVIOURAL ECONOMICS APPROACH THROUGH SHORT-TERM INCENTIVES CAN IMPROVE LONG-TERM PERFORMANCE, IF DESIGNED CAREFULLY. red Whittlesey, a compen sation consultant for more than three decades, would like his colleagues to take more seriously the weird ways our brains work. In a 2009 paper, he argued that when corporate boards decide how to pay chief executive officers (CEO), it’s best to heed behavioural economics, which shows that people are irrational when interpreting and acting on financial data. Whittlesey, now 58, was blunt. Existing compensation plans had “no empirically demonstrated validity”. Rather, they were a hodgepodge of reactions to “accounting rules, tax law, shareholder requirements, and legal considerations”. Missing from the equation: any assessment of how millions in cash and stock motivate the executive brain - or don’t. Seven years later, Whittlesey’s theories have yet to win adherents. “It’s gotten worse,” he says, from his office in Seattle. “There’s less attention paid to behaviour than ever before.” CEO compensation is shaped by regulations and broad, decades-long trends. In the 1990s pay experts favoured the use of stock options, until a soaring market made some pay cheques obscenely large. Then awards of stock that vest over time became popular. Now, according to consulting firm Hay Group, a full third of pay is triggered only if CEOs hit performance targets. Increasingly, that target is simply a higher stock price.

“YOU WANT EXECUTIVES TO FOCUS ON A COMPANY’S LONGER-TERM NEEDS, BUT HOW YOU CHOOSE TO FOCUS THEM IS CRITICAL,”

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Investors like this arrangement because it suggests that executives have the same goals they do. Yet it flies in the face of what little we know about behaviour and pay. Consider a CEO whose board promises her a $5-million pot if company shares rise a certain amount over three years. Behavioural economists argue that the executive won’t weigh the true value of the award because of a psychological quirk called “hyperbolic discounting”, or our tendency - demonstrated in dozens of academic studies - to prefer a dollar today to two dollars some time from now. In theory, this means the board could extract the same effort from the CEO with, say, $3 million doled out at closer intervals. Huge grants of stock are likely inefficient, says Michelle Edkins, global head of BlackRock’s investment stewardship

team. “We still haven’t addressed this fundamental issue of how do we measure whether these plans, which cost shareholders a fair bit, are actually driving and rewarding the behaviours that we think they do?” she says. Steven Slutsky, a principal at PwC, agrees. “You’re not getting the bang for the buck you think you are, because the executive will mentally discount that future value,” he says. “Our research shows long-term plans are nowhere near as effective as people think.” That’s counterintuitive. Many critiques of CEO pay focus on the pitfalls of short-term thinking, with examples of leaders hitting their quarterly numbers to the detriment of their company’s overall health. But the behavioural economics approach argues that short-term incentives can improve long-term performance, if designed

carefully. “You want executives to focus on a company’s longer-term needs, but how you choose to focus them is critical,” Slutsky says. Executives are more likely to put priority on their annual bonuses, which arrive sooner and are more often tied to measures over which they have some control, such as profit and efficient use of capital, he says. Over time, improvement in those metrics should mean a higher stock price. Even if this makes sense academically, don’t expect US companies to start creating innovative pay structures. The 2010 Dodd-Frank financial reform law, which gives investors a non-binding vote on pay practices, has had a homogenising effect. The compensation disclosures that public companies must file with the Securities and Exchange Commission now average more than 9,000 words, the length of a novellette. “An unintended consequence of transparency is that you don’t want to stick out at all,” says Dan Laddin, a founding partner at New Yorkbased Compensation Advisory Partners. Few investors have the time or inclination to read those reports, especially those who own shares in hundreds of companies. That’s swelled the power of proxy advisers such as Institutional Shareholder Services and Glass Lewis. They provide recommendations on corporate governance votes, with sets of best practices that take little account of any business’ specific circumstances. To avoid the black eye of a failing vote on CEO pay, companies have changed plans to reflect the advisors’ preferences, and they’re all starting to look the same. More than half the CEOs in the S&P 500 index received compensation last year that was at least in part linked to stock returns, a metric preferred by ISS. “When you’re looking at companies at different stages of the corporate life cycle, when you’re looking at the different personalities, at different stages of their careers, who run these businesses, there’s no way that makes sense,” Laddin says. Still, he’s hopeful things will change and says businesses owned by private equity firms, outside of the public eye, are more willing to experiment. “I think the pendulum is going to swing back toward driving behaviours,” he says. “But it’s going to be the brave companies that do it first.”

(Credit: Business Standard)

MINI BANGS BETTER THAN BIG BANG, SAYS RAJAN ON POLICY REFORMS RBI GOVERNOR RAGHURAM RAJAN BELIEVES THAT STEADY AND IRREVERSIBLE REFORM AND “MINI BANGS”, SUCH AS THE ONE ANNOUNCED ON CORPORATE BONDS, RATHER THAN “BIG BANG” POLICY CHANGES, IS THE NEED OF THE HOUR.

“O

bservers may be impatient, but my belief is that steady and irreversible reform and “mini bangs” like yesterday’s rather than “big bang” is the need of the hour,” said Rajan, addressing members of the Foreign Exchange Dealers Association of India In Mumbai on Friday. “As global conditions become less uncertain, the pace of reform can pick up. The lessons we have learnt during this period on what works will be invaluable then,” he added. Rajan reiterated his concerns about banks’ reluctance to fully pass through past policy rate cuts. “No wonder highly rated firms are bypassing banks to borrow from the commercial paper (CP) markets, with outstanding commercial paper having more than doubled in the last two years to over ?3-lakh crore,” he said. On liquidity, Rajan said: “One way to bring liquidity to corporate debt is to enable them to be used as

collateral in repo transactions with the central bank, with appropriate haircuts, of course. “As banks become able to borrow against their highquality corporate bonds, yields will fall, and more issuers will come to the market. “With this in mind, we have initiated the process with the government to amend the RBI Act to allow the RBI to conduct repos of corporate bonds with banks and other financial institutions.” “Over the last few years, we have had to proceed somewhat cautiously on market development because we worried about creating vulnerabilities when global financial markets were fragile. But as macroeconomic stability has strengthened, the movement has always been forward,” Rajan said. Rajan, whose term comes to an end this month, also said that he was confident that the next Governor, Urjit Patel, “will ably guide the Monetary Policy Committee going forward in achieving our inflation objectives.”

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HEALTH

JUNK FOODS

UPS ALZHEIMER'S RISK, TRADITIONAL INDIAN FOOD CUTS THE RISK A NEW REVIEW OF INTERNATIONAL DATA ADDS TO THE GROWING EVIDENCE THAT DIET PLAYS A SIGNIFICANT ROLE IN THE RISK FOR ALZHEIMER’S DISEASE AND THAT POPULATIONS CONSUMING A WESTERN DIET — MORE MEAT, SWEETS, AND HIGH-FAT DAIRY PRODUCTS — TEND TO HAVE THE HIGHEST RATES OF THE DISEASE.

United States - to dietary data that had been gathered five, 10, and 15 years before the prevalence data. They found that when many people in Japan left behind the traditional diet to start consuming a more Westernized diet, Alzheimer’s disease rates rose from one percent in 1985 to seven percent in 2008. Overall, the findings show that consumption of meat or animal products (excluding milk) had the highest correlations with Alzheimer’s disease prevalence. Residents of the United States seem to be at particular risk, with each

meat eating

Alzheimer’s disease is increasing worldwide. Currently, about 42 million people have dementia, with Alzheimer’s disease being the most common type. The greatest risk factors appear to be associated with diet, particularly the excessive consumption of meat, commonly found in Westernized diets. “Mounting evidence from ecological and observational studies, as well as studies of mechanisms, indicates that the Western dietary pattern - especially the large amount of meat in that diet - is strongly associated with risk of developing Alzheimer’s disease and several other chronic diseases,” said Dr. William SEASONAL MAGAZINE

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B.Grant, author of the review published in the Journal of the American College of Nutrition. His findings, which come from ecological and observational studies, also show that fruits, vegetables, grains, lowfat dairy products, legumes, and fish are associated with reduced risk of Alzheimer’s disease. In addition, the researchers investigated the specific risk each country and region faces for developing Alzheimer’s disease based on their associated dietary habits. They compared the Alzheimer’s disease prevalence of 10 countries - Brazil, Chile, Cuba, Egypt, India, Mongolia, Nigeria, Republic of Korea, Sri Lanka, and the

person in the U.S. having about a four percent chance of developing Alzheimer’s disease. Grant says that “reducing meat consumption could significantly reduce the risk of Alzheimer’s disease as well as of several cancers, diabetes mellitus type II, stroke, and, likely, chronic kidney disease.” “Although the traditional Mediterranean diet is associated with about half the risk for Alzheimer’s disease of the Western diet, the traditional diets of countries such as India, Japan, and Nigeria, with very low meat consumption, are associated with an additional 50 percent reduction in risk of Alzheimer’s disease,” said Grant. SM

INNOVATION

Wind Power is Now Blowing Towards Homes NEW 'WIND TREES' WILL FINALLY MAKE IT POSSIBLE TO POWER HOMES USING HUNDREDS OF SMALL HANGING TURBINES THAT HARNESSES EVEN TINY BREEZES IN ANY DIRECTION. long-term or scalable solution, because they are not designed for household use— they weigh several tons and take up a good bit of room.

icture a steady breeze blowing through the leaves of a tree. Now imagine these leaves could do more than simply churn in the current of air-what if they could capture the wind and transform it into renewable energy? Energy from wind is the fastest-growing source of electricity in the world, according to the Union of Concerned Scientists, an environmental and social research institution. This development of wind power has mostly taken place on a large scale, usually by utility companies providing power to a grid of millions of customers. That’s because wind energy is most efficient when it’s capturing very strong winds, more common in remote areas and at heights greater than 50 feet off the ground. Those turbines need to be as tall as a five-story building, and they take up a lot of horizontal room, too—several hundred feet per turbine, in many cases. They also require more maintenance than solar panels. All of these factors make it challenging to capture wind energy in small amounts. But that hasn’t stopped companies from experimenting in the hopes of one day allowing individual homeowners to capture energy from their own backyards or balconies, and reduce their reliance on fossil fuels. Last December, two “wind trees”- or arbres à vent- quietly churned in a plaza in Paris, as world leaders met for the historic climate talks at the Le Bourget conference center nearby. Developed by a French company called New Wind, the “trees” had plastic “leaves” painted green, with curves that held dozens of tiny blades soundlessly harnessing the wind no matter which way it blew. Unlike larger industrial turbines, which need winds of over 22 miles per hour to function, the leaves captured energy from wind speeds of less than five mph. New Wind was founded by former film and television writer Jérôme MichaudLarivière in 2011, and created its first prototype in 2013. After working through several possible iterations, the company settled on a “seemingly chaotic” arrangement of leaf-turbines on each

Then there’s the price: a single wind tree costs about •49,500 (about $56,000) to deliver and install. That’s not even close to cost-competitive with solar power.

branch. The latest design is just under 30 feet tall and 23 feet wide, sporting a total of 54 leaf-turbines that can capture up to 5.4 kilowatts of energy at a time and produce around 2,400 kWh annually, said New Wind spokesperson Marine Bieliaeff. The startup estimates this would meet half of the average French household’s annual energy needs; run a small, low-consumption office for 12 months; or charge an electric car for 10,000 miles each year. That’s the equivalent of about 160 gallons of fuel. In January, New Wind installed its first tree for a private company, the Swiss bank Piguet Galland. They also have contracts to provide more trees to companies in France, Germany, Switzerland and Luxembourg in the year ahead, with plans to expand beyond Europe next year. “A lot of companies are looking for renewable energy,” Bieliaeff said. CEO Olivier Calloud called the Piguet Galland tree “as much a piece of art as an innovation in the domain of sustainable development.” And indeed, the trees in their current iteration are not a

One advantage of the unusual wind turbines, however, is their adaptability to different locations. A 5.4 kW solar array would take up about 430 square feet of roof space—not an option for those living in apartments or houses without direct sunlight.

Photovoltaic solar panels producing the same amount of energy (5.4 kW) cost between •15,000-20,000 ($17,00022,600) in France, according to the country’s environment and energy agency ADEME. One advantage of the unusual wind turbines, however, is their adaptability to different locations. A 5.4 kW solar array would take up about 430 square feet of roof space - not an option for those living in apartments or houses without direct sunlight. But a wind tree’s curved branches could be attached to any balcony or rooftop, even in areas that don’t get much wind. Small turbines for individuals are catching on; the Danish company Aeolos Wind Energy focuses on wind energy for homes, farms, and schools, and Urban Green Energy recently installed turbines on apartment rooftops in New York. And New Wind is not the first company to design more attractive wind turbines inspired by nature. The Dutch firm NL Architects debuted the Power Flower design in 2010, and Leviathan Energy began developing its Flower Turbines three years later. So far, New Wind has positioned aeropower at the intersection of art and sustainability, which appeals to businesses eager to take a green stance. But they plan to launch smaller, more customizable products for homes next year. “We will bet on modularity,” Bieliaeff said. Rather than selling entire trees, the company would like to provide as many individual curved branches as a customer wants or needs. Such flexibility would allow those with small amounts of space or lower budgets to access at least some wind energy—and potentially prove that wind companies’ commitments to affordable, customizable turbines aren’t just hot air. SM SEASONAL MAGAZINE

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TECHNOLOGY

TYPING TO GIVE WAY TO SPEAKING TURNS OUT THAT VOICE RECOGNITION SOFTWARE HAS IMPROVED TO THE POINT WHERE IT IS SIGNIFICANTLY FASTER AND MORE ACCURATE AT PRODUCING TEXT ON A MOBILE DEVICE THAN WE ARE AT TYPING ON ITS KEYBOARD. THAT'S ACCORDING TO A NEW STUDY BY STANFORD UNIVERSITY, THE UNIVERSITY OF WASHINGTON AND BAIDU, THE CHINESE INTERNET GIANT. THE STUDY RAN TESTS IN ENGLISH AND MANDARIN CHINESE. omputers have already beaten us at chess, Jeopardy and Go, the ancient board game from Asia. And now, in the raging war with machines, human beings have lost yet another battle - over typing. Sometimes the most prodigious research institutions in the world need to study something obvious: Talking is faster than typing on your phone. In tests by Stanford University and Chinese search giant Baidu, speech recognition on phones was three times faster than typing the same message on the stock iPhone keyboard. Of course speaking is faster than typing, but the real finding was that speech recognition can finally keep up with the rate of speech. Baidu chief scientist Andrew Ng says this should not feel like defeat. "Humanity was never designed to communicate by using our fingers to poke at a tiny little keyboard on a mobile phone. Speech has always been a much more natural way for humans to communicate with each other," he says. Researchers set up a competition, pitting a Baidu program called Deep Speech 2 against 32 humans, ages 19 to 32. The humans took turns saying and then typing short phrases into an iPhone - like "buckle up for safety" and "wear a crown with many jewels" and "this person is a disaster." They found the voice recognition software was three times faster. Stanford computer scientist James Landay did not expect that. "The surprise for me was that it was that much better: three times faster! You would think everyone would be flocking to use it if they knew how much better it actually was." Voice recognition still gets a bad rap. That could be because of how people use it. Apple's Siri, the beloved and befuddled personal assistant, has a hard SEASONAL MAGAZINE

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speech for those things is now working really well." Back in the 1990s, researchers found voice recognition tools were far less accurate than keyboard typing. Slang and ambient noise in a room tripped up the software.

time answering basic questions. The Stanford University-University of Washington-Baidu team didn't test query skills. They zoomed in on voice recognition software's ability to type the spoken words. In English, they found the software's error rate was 20.4 percent lower than humans typing on a keyboard; and in Mandarin Chinese, it was 63.4 percent lower. Landay hopes these findings encourage people to revisit the idea of talking to their phone. "People probably play with Siri and find oh, it didn't give them the right answer. So they don't think to use speech as a way to do their text messaging or their email or what not," he says. "Using

THE STANFORD UNIVERSITY-UNIVERSITY OF WASHINGTON-BAIDU TEAM DIDN'T TEST QUERY SKILLS. THEY ZOOMED IN ON VOICE RECOGNITION SOFTWARE'S ABILITY TO TYPE THE SPOKEN WORDS.

In the last few years, that's changed for a few reasons: Just like smartphone cameras with more megapixels can see us better, the built-in microphones can hear us better. Supercomputers are churning through data more effectively in a process called "deep learning." And there's more training data to vacuum in and learn from. For example, Ng says, Baidu has five years' worth of audio - unique recordings of people speaking that can play nonstop from now until 2021. Last year, 65 percent of smartphone owners in the U.S. used voice assistants, according to the 2016 Internet Trends Report, a popular annual overview by tech investor Mary Meeker. Many tech companies are betting that now is the inflection point and are hiring experts in the field of "natural language processing." Google and Amazon are inviting developers to work on voicedriven products. It's easy to see how talking at your device would be far better than typing, say when you're driving. Baidu's Ng imagines another scenario. He does not have children yet. But, he says, he looks forward to the day when his future grandchild comes home and asks, "Is it really true that when you were young, if you came home and you said something to your microwave oven - did it really just sit there and ignore you? That's just so rude of the microwave." His co-author Landay reins him back and notes there are many moments - in a meeting, in bed with your partner sleeping - when typing still makes more sense SM than talking to one's devices.

AUTO

WHICH CARS WILL BE ACCEPTABLE AND UNACCEPTABLE FOR DRIVERLESS MODE? THERE ARE OBVIOUS CHOICES LIKE MERCEDES BEING A TOP CHOICE AND A BMW BEING THE LEAST CHOICE WHEN IT COMES TO DRIVERLESS MODE, BUT HOW DO FANS OF OTHER BRANDS PERCEIVE THEIR CARS IN AUTOPILOT? you drive a Mercedes-Benz or an Infiniti luxury vehicle, you’re probably more willing than most drivers to give up the wheel to a robot, according to a MaritzCX survey. About 27 percent of owners of Daimler AG’s Mercedes and Nissan Motor Co.’s Infiniti say they are “very interested” in buying a fully self-driving auto when those become available, according to the software and research firm’s survey completed this month. Owners of Fiat Chrysler Automobiles NV’s Jeep sport utility vehicles and Ram pickups were the least interested, MaritzCX said. “The luxury-vehicle owners are more willing to accept this technology because they believe safety would be much better in these types of vehicles,” said Shawn St. Clair, the survey author and global syndication director at MaritzCX. “If you’re interested in doing some offroading in a Jeep or a Ram, you’re not interested in an autonomous vehicle.” Convincing consumers to accept driverless vehicles is a challenge for automakers and Silicon Valley giants, who are pouring billions of dollars into the technology in a race to get it on the road. While 94 percent of those surveyed are aware autonomous autos are coming,

Convincing consumers to accept driverless vehicles is a challenge for automakers and Silicon Valley giants, who are pouring billions of dollars into the technology in a race to get it on the road. almost 48 percent aren’t interested in buying one, MaritzCX found. Even among Mercedes and Infiniti owners, more reject than accept the technology. The findings support other recent surveys that show most motorists still aren’t ready to embrace cars that drive themselves. Equipment failure and autonomous cars becoming disoriented in traffic are among the top concerns among those surveyed, who also cited worries about keeping their vehicle secure from hackers, legal liability, and navigating around pedestrians and bicyclists. “We have a road map to take to the automakers to say, ‘Here’s what you need to work on if you ever hope to convert your customers to a fully autonomous car,’” St. Clair said. The Lehi, Utah-based firm said it surveyed 12,353 vehicle owners from May through August. Mercedes and Infiniti may have won over more of their owners because

they have marketed more heavily about autonomous autos they have coming and semi-autonomous features they already offer, such as automatic braking, St. Clair said. Mercedes introduced a driverless concept car in 2015 that has been featured at auto shows and in ads. The brand recently pulled a television commercial that consumer advocates criticized as going too far in promoting its semi-autonomous Drive Pilot feature as providing fully self-driving capabilities. Not all luxury-brand owners are ready to relinquish control of their vehicles. Of brand owners who said they were not interested in the technology, Porsche ranked third with 57 percent and BMW was fourth with 56 percent. “There is a set of luxury owners who want a performance vehicle that goes from zero to 60 miles per hour in three seconds,” St. Clair said. “Those people are not in a big rush to give over control, if ever.” Porsche owners seem polarized on the subject: 22 percent of them were very interested in the technology, ranking the brand in a tie for seventh on that list with Mazda, Toyota and Nissan. SEASONAL MAGAZINE

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WAR

IMMINENT DEFEAT OF ISIS IN IRAQ FUELING RISK OF TERRORIST ATTACKS WORLDWIDE THE PENTAGON AND U.S. INTELLIGENCE AGENCIES NOW VIEW ISLAMIC STATE AS A SHRINKING AND INCREASINGLY DEMORALIZED MILITARY FORCE, A SHARP SHIFT FROM THE SEEMINGLY INVINCIBLE EXTREMIST ARMY THAT DECLARED AN ISLAMIST CALIPHATE TWO YEARS AGO.

he revised assessment comes after surprisingly swift and relatively bloodless victories this summer near Syria’s border with Turkey and in the Sunni heartland of Iraq, two areas where Islamic State had appeared entrenched. The rapid recapture this week of Jarabulus, the militants’ last garrison by the Turkish border, helped close off a boundary region that was crucial for movement of recruits, supplies and money in and out of the group’s quasistate. It also was the latest fight to suggest the Sunni militants no longer are willing to fight to hold territory against a sustained assault. Only one fighter was reported killed in the assault led by Turkish tanks. Several hundred others apparently fled. Partly as a result, U.S. officials have hinted SEASONAL MAGAZINE

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MICHAEL KNIGHTS, IRAQ FELLOW AT THE NONPARTISAN WASHINGTON INSTITUTE FOR NEAR EAST POLICY, SAID TAKING BACK MOSUL. ALONG WITH THE SYRIAN TOWNS OF DEIR EZ ZOUR AND RAQQAH, WILL MARK THE END OF THE CALIPHATE.

that the long-delayed assault on Mosul, Islamic State’s self-declared capital in Iraq, may be launched this fall. The city of 1 million has been increasingly cut off by advancing Iraqi and Kurdish ground forces. Michael Knights, Iraq fellow at the nonpartisan Washington Institute for Near East Policy, said taking back Mosul. along with the Syrian towns of Deir ez Zour and Raqqah, will mark the end of the caliphate.

BUT U.S. OFFICIALS POINT TO UNDENIABLE PROGRESS TWO YEARS AND MORE THAN 14,000 AIRSTRIKES AFTER PRESIDENT OBAMA FIRST ORDERED A BOMBING CAMPAIGN AGAINST ISLAMIC STATE TARGETS.

“After the fall of those cities, [Islamic State] will be just another terror group,” he said. “They might be able to throw a couple car bombs in city centers and mount small arms attacks, but they will no longer engage in heavy fighting on a daily basis. In other words, we’ll be back to where we were in 2013.” But most experts, including U.S. intelligence officials, warn

that Islamic State’s ability to inspire or organize terrorist attacks abroad is unimpaired — and may be even pose a greater threat as foreign sympathizers are unable to reach the cut-off caliphate. “Despite the progress, it is our judgment that [the group’s] ability to carry out terrorist attacks… has not to date been significantly diminished,” Nicholas Rasmussen, head of the National Counterterrorism Center, told the House Homeland Security Committee recently. Militants still detonate car bombs or launch suicide attacks each night in Baghdad. They could devolve into the kind of sectarian insurgency that turned Iraq into a slaughterhouse after the U.S.led invasion in 2003, or morph into a stateless global terrorist network like Al Qaeda became after 2001. “I don’t think we’ll ever be able to get rid of their ability to inspire attacks abroad just because they lose territory,” cautioned a U.S. defense official, who was not authorized to speak publicly on the matter. “They will continue to operate in the shadows and cause problems.” As in other insurgencies, militants may be running away from battles now to survive and fight again - at a time and place of their choosing, experts warn. They could be sent to other battles or used as suicide bombers.

EACH DEFEAT HAS ADDED PRESSURE ON THE MILITANTS BY CUTTING OFF ROUTES USED TO MOVE ARMS, SUPPLIES AND REINFORCEMENTS. THAT AFFECTS COMMAND, UNIT COHESION AND EFFICIENCY.

Moreover, Islamic State still has vast sway. It controls half the area it seized in Iraq in 2014 and 70% of its territory in Syria, according to U.S. estimates, and continues to haul in millions of dollars from taxes, fees and extortion. Current U.S. intelligence estimates say the group now fields as few as 16,000 fighters — half its army of a year or so ago, but still a potent force.

SLAMIC STATE’S OVERSEAS OPERATIONS ALSO ARE UNDER SIEGE. FIGHTING RAGED FROM MIDMAY UNTIL LAST WEEK IN SIRTE, THE GROUP’S STRONGHOLD ON THE COAST OF LIBYA.

But U.S. officials point to undeniable progress two years and more than 14,000 airstrikes after President Obama first ordered a bombing campaign against Islamic State targets.

U.S.-backed Iraqi forces recaptured Fallouja, key to the Sunni heartland west of Baghdad, in late June, militants fled their former stronghold in a large convoy that coalition aircraft quickly spotted and destroyed.

“The number of fighters on the front line has diminished,” Lt. Gen. Sean MacFarland, commander of U.S. forces against Islamic State until this week, said in a teleconference from Baghdad. “They've diminished not only in quantity, but also in quality.” He added, “All I know is when we go someplace, it's easier to go there now than it was a year ago. And the enemy doesn't put up as much of a fight.” As an example, he said that after

“They kind of made themselves easy targets for us,” MacFarland said. “I don't think they would have made that mistake a year or two ago.” Each defeat has added pressure on the militants by cutting off routes used to move arms, supplies and reinforcements. That affects command, unit cohesion and efficiency. “Now they have to go get somebody and bring them all the way across the desert

to reconstitute somebody who gets killed fighting near Ramadi or Haditha or someplace like that,” he said. ”And there's a good chance we'll spot them long before they get there.” In addition to losing the border towns of Jarabulus and Manbij in northern Syria, the militants have been routed this month in Khalidiyah and Qayyarah in western Iraq. They previously were ousted from Hit, Al Hawl and Rutbah in Iraq. Islamic State’s overseas operations also are under siege. Fighting raged from midMay until last week in Sirte, the group’s stronghold on the coast of Libya. U.S. airstrikes and British commando raids helped Libyan government forces finally retake the battered city. Elsewhere, Boko Haram, the group’s affiliate in Nigeria, has lost territory to government troops. Islamic State branches in Egypt’s Sinai Peninsula, and in eastern Afghanistan, also have suffered sharp defeats. “The evidence across the board is the decline of territorial control,” said Seth Jones, a former U.S. counter-terrorism official now with Rand Corp., a nonpartisan think tank based in Santa Monica. The group “appears to be losing steam on a number of fronts,” he added. “It has impacted recruits, finance and the broader narrative that it is winning.” But he warned that Islamic State could make a vicious resurgence, much as Al Qaeda did in Iraq, especially if the U.S.-led coalition eases pressure. SM SEASONAL MAGAZINE

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ECONOMY

Rajan's Parting Shot Benefits Both Banks and Debtors THE BOLD OVERHAUL OF COUNTRY'S DEBT MARKET THAT DR. RAJAN ANNOUNCED RECENTLY IS A MASTERFUL ONE IN THAT IT TARGETS WORLD'S HUNGER FOR YIELD, EVEN WHILE IT DRAMATICALLY EASES THE SITUATION FOR BOTH LENDERS AS WELL AS CREDITORS IN INDIA.

aghuram Rajan got a lot of flak for squeezing both India's borrowers and lenders. But with just a few days to go until the end of his term, the governor of the country's central bank has prepared the ground for a reappraisal of his legacy. No, he isn't cutting interest rates. Nor is he rescuing bad-loan-ridden banks. Instead, he just announced an overhaul of the country's debt market. Not only will the bold move benefit both debtors and creditors, but it should also give global investors a chance to earn the one thing that's fast disappearing from this world: yield. Better still, that higher compensation wouldn't necessarily involve extra risk. To see how, consider the $22 billion of rupee-denominated bonds sold in India's domestic market by single A-rated companies since 2000. With Rajan deciding to allow banks to offer credit enhancements of up to 50 percent of an issue, from 20 percent at present, there's every reason to expect many debentures may become AA. That creates an opportunity for global pension funds and other large investors who wouldn't otherwise have touched such securities. This could lead to substantial savings for Indian companies currently paying coupon rates of more than 10 percent to borrow for three years. Banks would earn a fee for the credit enhancement, though a far bigger boost would come from the chance Rajan is giving them to raise rupee funds overseas to bolster their own balance sheets. The domestic market has very little appetite for state-run lenders; this year, only a few have managed to sell bonds that count toward their Tier 1 capital by agreeing to coupons of as much as 11.85 SEASONAL MAGAZINE

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WITH RAJAN DECIDING TO ALLOW BANKS TO OFFER CREDIT ENHANCEMENTS OF UP TO 50 PERCENT OF AN ISSUE, FROM 20 PERCENT AT PRESENT, THERE'S EVERY REASON TO EXPECT MANY DEBENTURES MAY BECOME â&#x20AC;&#x2DC;AAâ&#x20AC;&#x2122;.

percent. Five-year AA corporate bonds in India yield 8.25%. That's exorbitant. But now India's monetary authority has decided to let banks sell these rupee bonds offshore, investors who aren't registered to invest directly in the South Asian nation could also participate, helping to reduce the cost for at least those lenders with sufficient profit reserves to service coupons. If enough banks start issuing rupee debt overseas, the nascent market in so-called masala bonds could expand beyond the two offerings so far by the country's largest mortgage financier and its biggest power producer. But the carrots come with a stick. Even as Rajan gives banks an opportunity to earn bigger fees and a new avenue to raise capital, he wants them to reduce their exposure to large corporate borrowers. From April 2019, loans to any one group of companies can't exceed 25 percent of Tier 1 capital.

THIS COULD LEAD TO SUBSTANTIAL SAVINGS FOR INDIAN COMPANIES CURRENTLY PAYING COUPON RATES OF MORE THAN 10 PERCENT TO BORROW FOR THREE YEARS.

With crony capitalism reined in, and stiffer competition among banks for new clients, it's reasonable to expect that India's lenders will be healthier in a few years even when they're making loans that are a lot cheaper than now. By spicing things up, Rajan is helping both borrowers and lenders. And answering critics who said he made life difficult for both. However, there are caveats. International ratings of Indian borrowers are capped by the sovereign's creditworthiness, perceived at the lowest level of investment grade by S&P, Moody's and Fitch. Banks will offer an irrevocable contingent line of credit to the issuer that will be drawn in case of a shortfall in cash for servicing the bonds. This in turn improves the notes' credit rating. The reserves from which perpetuals can be paid were negative or very low at five out of Indian state-run banks on March according to ICRA, an Indian rating company. Not being able to service the coupon on an additional Tier bond doesn't count as a default, hence there's no reason for the government to bail out bondholders. SM

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HEALTH

COPING WITH OSTEOPOROSIS

VERYTHING TO KNOW ABOUT THE CRIPPLING CONDITION AFFECTING OVER 200 MILLION PEOPLE ACROSS THE GLOBE – ITS SYMPTOMS, RISK FACTORS, TESTS, TREATMENTS, SUPPLEMENTS, EXERCISES, PREVENTION, AND COPING STRATEGIES. What Is Osteoporosis? Osteoporosis means “porous bones.” Our bones are strongest at about age 30, then begin to lose density. More than 10 million Americans have osteoporosis, which is significant bone loss that increases the risk of fracture. About half of women 50 and older will have an osteoporosis-related fracture in their lifetime. Symptoms of Osteoporosis You might not even realize you have osteoporosis until you have a fracture or an obvious change in posture. In fact, you could have significant bone loss without even knowing it. Back pain, caused by changes in the vertebrae, may be the first sign that something is wrong. Osteoporosis and Fractures Osteoporosis is the underlying cause of 1.5 million fractures every year. Spinal compression fractures are the most common — tiny fractures that can cause the vertebrae to collapse and alter the shape of the spine. Hip fractures can cause lasting mobility problems and even increase the risk of death. Wrist, pelvic, and other fractures are also common in people with osteoporosis. What Causes Osteoporosis? Our bones are constantly being rebuilt throughout our lifetime. Bones are made up of collagen, a protein that provides the basic framework, and calcium phosphate, a mineral that hardens the bone. As we age, we lose more bone than we replace. The greatest change in a woman’s bone density comes in the five to seven years after menopause. Does Everyone Get Osteoporosis? Bone loss is a natural part of aging, but not everyone will lose enough bone

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density to develop osteoporosis. However, the older you are, the greater your chance of having osteoporosis. Women’s bones are generally thinner than men’s and bone density has a rapid decline for a time after menopause, so it’s not surprising that about 80% of Americans with osteoporosis are women.

density (BMD) with that of a healthy 30year-old, since that’s when bone mass is at its peak. The results come as a T-score in these ranges:

frozen yogurt. Fish, such as sardines and salmon, are good sources. Fortified foods, such as cereals and orange juice, can also provide a lot of calcium.

1.0 and higher is normal bone density

Supplements for Healthy Bones

Between -1.0 and -2.5 shows low bone density (osteopenia) but not osteoporosis

Risk Factors You Can’t Control

2.5 or below indicates osteoporosis

Boys aged 9 to 13 years, girls aged 9 to 18 years, women older than 50 years and men older than 70 years may require more calcium than they get in their regular diet. Two types of calcium supplements are commonly available: calcium carbonate and calcium citrate, which are equally beneficial. Splitting your dose - taking half in the morning and half later in the day - improves absorption. Check with a doctor about the upper limit for calcium. Too much can lead to kidney stones. Getting adequate vitamin D aids the absorption of calcium.

Women who are thin and have a small frame are more likely to develop osteoporosis. Heredity plays a role, and so does ethnicity. It is more common among whites and Asians, though AfricanAmericans and Hispanics may still be at risk. Some conditions, such as type 1 diabetes, rheumatoid arthritis, inflammatory bowel disease, and hormonal disorders are also linked to bone loss. Risk Factors You Can Control Smoking, an inactive lifestyle, and a diet low in calcium and vitamin D place you at greater risk for osteoporosis. Excess drinking is linked to bone loss and a risk of fractures. Corticosteroids, antiinflammatory drugs used to treat asthma and other conditions, increase your risk of bone loss. Eating disorders (anorexia nervosa or bulimia) can also take a toll on bone health. Do Men Get Osteoporosis? Osteoporosis is much more common in women, but men are at risk, too. In fact, about 25% of men over 50 will have an osteoporosis-related fracture. Osteoporosis may be under-diagnosed in men because it is often considered a “woman’s disease” and men may not be tested. Testing: DXA Bone Density Scan Your doctor may recommend a bone mineral density test if: • You’re over 50 and have broken a bone • You are a woman over 65, or a man over 70 • You are in menopause or past menopause and have risk factors • You are a man age 50-69 with risk factors DXA (dual X-ray absorptiometry) uses low-dose X-rays to measure bone density in the hip and spine. The test takes less than 15 minutes. Testing: What Your T-Score Means Testing compares your bone mineral

As your bone density decreases, your Tscore gets lower Bone-Building Foods Eating calcium-rich foods can help protect your bones no matter what your age. You need the equivalent of about three and a half 8-ounce glasses of milk a day. Fish such as salmon, tuna, and herring also contain vitamin D, which helps us absorb calcium, and leafy green vegetables also provide magnesium, which helps maintain good bone quality. Some foods and drinks are also fortified with calcium and vitamin D. Foods That Are Bad to the Bone Some foods can sap your body’s calcium. Minimize salty foods such as canned soups and processed meats. Most Americans get much more sodium than they need. Caffeine can decrease your body’s absorption of calcium, but the effect is minimal unless you drink more than three cups of coffee a day. Heavy alcohol use can also lead to bone loss. Which Foods Have the Most Calcium? Drinking a glass of vitamin D-fortified milk is one of the best ways to get your calcium. Other dairy products vary in their calcium content. Yogurt and cheese are better choices than ice cream or

Build Strong Bones With Weights Weight-bearing exercise can help you build bone and maintain it. That includes walking, jogging, tennis, and other activities where you move the full weight of your body. Using small weights in many different activities helps bones. Women who walk just a mile a day have four to seven more years of bone reserve, researchers have found. Exercise Caution While yoga and Pilates can help with balance, too much twisting or forwardbending can increase the risk of spinal compression fractures in people who have osteoporosis. High-impact activities also can be risky for people with low bone density. Swimming and bicycling can be great exercise, but they are not weightbearing and therefore not as effective in providing bone-health benefits. Osteopenia: Borderline Bone Loss

SOME FOODS CAN SAP YOUR BODY’S CALCIUM. MINIMIZE SALTY FOODS SUCH AS CANNED SOUPS AND PROCESSED MEATS. MOST AMERICANS GET MUCH MORE SODIUM THAN THEY NEED. CAFFEINE CAN DECREASE YOUR BODY’S ABSORPTION OF CALCIUM, BUT THE EFFECT IS MINIMAL UNLESS YOU DRINK MORE THAN THREE CUPS OF COFFEE A DAY.

If you have bone loss but not enough to be osteoporosis, you may have a condition called osteopenia. As with osteoporosis, there are no physical symptoms. Osteopenia can progress to osteoporosis, but with changes in diet and exercise, you can slow the bone loss. Your doctor will evaluate you to see if you need medication. Can Osteoporosis Be Reversed? Most medications for osteoporosis reduce bone loss or slightly increase bone density. Forteo helps build new bone, but requires daily injections and can only be used for two years because of potential side effects. But there’s a glimmer of hope SEASONAL MAGAZINE

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MYTHS AND FACTS ABOUT YOUR BONES

1. Babies have more bones than adults.

6. The bubbles in soft drinks harm your bones.

True. When you’re born, you have about 300 bones. By the time you’re a grownup, you’ve only got 206. The reason is as babies grow, some of their bones fuse together.

No. It does not..Let’s put this old wives’ tale to rest. The carbonation in sodas won’t hurt your bones, but that doesn’t mean drinking them is a good idea. Some studies show that the caffeine and phosphorus in colas can weaken them.

Some infant bones are made entirely of soft, flexible tissue called cartilage that’s slowly replaced by hard bone as the baby develops. 2. Your funny bone is in your elbow Don’t let the name fool you. It’s no laughing matter! If you’ve ever hit your elbow in that certain spot, you know it can cause a weird tingling or a dull pain. Your funny bone isn’t a bone at all. It’s a nerve that runs down your upper arm to the inside part of your elbow. 3. When do bones stop growing? It is in late 20’s. They usually stop growing by the time you’re a young adult, but they keep changing. As you age, bones lose density and get thinner and easier to break. You can help keep them healthy by getting plenty of calcium and vitamin D, and by doing exercises that keep you on your feet. 4. Bones make red and white blood cells. Bones have a few different jobs. They give our bodies structure and allow us to move. They protect our organs from damage — your skull protects your brain and your ribs protect your heart, lungs, and liver. Your bones also make red blood cells, which carry proteins and oxygen to tissues, and white blood cells, which help fight infections. 5. Which bone gets broken the most often? It’s the Collar bone!! It’s also called the clavicle, and it leads the list of fractures. You can break it if you fall on your hand or arm or get hit in the shoulder. Breaks in the hands and arms are common as well, because you often use them when you try to stop a fall. SEASONAL MAGAZINE

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If you want a drink that’s good for your bones, go for milk or something with extra calcium, like fortified orange juice. 7. How many bones in your body are not connected to others? The answer is One. Remember a song called “Dem Bones?” That old tune might have helped you remember that the leg bone is connected to the knee bone. But it sure didn’t mention the hyoid, a U-shaped bone at the base of your tongue. It’s the only bone that isn’t connected to another one. 8. Is smoking bad for your bones? Yes. It’s well known that cigarettes hurt your lungs, heart, and overall health. But they’re also bad for your bones. Nicotine and other chemicals in them make it harder for your body to take in the calcium your bones need to stay strong. Cigarettes lower your vitamin D levels, too. 9. Your big toe has fewer bones than your other toes. True. Most toes have three tiny bones, but your big toe only has two. You also have three bones in each of your fingers, but only two in each of your thumbs. 10. Where’s the smallest bone in your body? It’s in the Ear!! A tiny bone behind your eardrum is the smallest one in your body. It’s called the stirrup, and it’s only 2.5 to 3.3 mm long. That’s not much bigger than a fruit fly. The longest and strongest bone is your femur, which goes from your pelvis to your knee. Source: Web MD

for a cure for osteoporosis. New research in animals indicates that an experimental drug that blocks serotonin from being synthesized in the gut could actually build new bone and reverse bone loss. Build Bones in Your Youth Healthy habits as a child or teenager can pay off years later with stronger bones. Young people can build their bones by eating calcium-rich foods, getting enough vitamin D (through sunshine or diet), and exercising regularly. Here are the recommended daily intakes for calcium by age: Under 1 year: 200-260 mg 1-3 years: 700 mg 4-8 years: 1,000 mg 9-18 years: 1,300 mg 19-50 years : 1,000 mg 51-70 men: 1,000 mg 51+ women: 1,200 mg 71+ years: 1,200 mg By age 30, the average woman has built 98% of her peak bone mass. Preventing Falls: The Basics Avoiding fractures is also key to keeping your bones healthy, whether you have bone loss or not. To prevent a fall that could cause a fracture, minimize clutter and be sure that your area rugs are anchored to the floor. Eliminate throw rugs and loose cords. Wearing sturdy, rubber-soled shoes also can reduce the risk of falling. It’s Never Too Late for Bone Health Many people don’t find out about their bone loss until they are in their 60s or older. But you can still benefit from boosting a low calcium intake to recommended levels and exercising regularly. Exercises such as tai chi improve balance, which can help prevent falls. Living With Osteoporosis Osteoporosis doesn’t have to interfere with your life. In fact, being inactive or immobile will worsen bone health. So get out and walk, and enjoy leisure activities. Ask for help carrying heavy grocery bags or other items, and use railings or a cane or walker if you need stability. SM

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NBFC

MANAPPURAM FINANCE

IMPLEMENTING FINTECH& GOING DIGITAL FOR BETTER CREDIT GROWTH SEASONAL MAGAZINE CAUGHT UP WITH VP NANDAKUMAR, MD & CEO OF MANAPPURAM FINANCE TO KNOW HIS LATEST INITIATIVES, FOR THIS COVER STORY:

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"The non-gold book comprises of microfinance, home finance, SME, commercial vehicle loans etc, and together these add up to around 15% of our consolidated loan book."

"Delegation to young promoter group leaders as well as to professionals is enabling me to focus less on the day-to-day operations, and work more on the strategic initiatives and networking outside the company that will shape our future." SEASONAL MAGAZINE

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anappuram Finance has already well progressed into its second growth phase, which started around 12 months back. Driven by diversifications into Microfinance, SME, Home Finance & Auto Loans, as well as by resurgence in its core asset class of gold, the company’s recent quarters have seen remarkable growth on both its topline as well as bottomline. Manappuram is also truly becoming a pan-India financial services provider with many of its operations headquartered out of metro cities like Mumbai and Chennai. Some of its non-goldlending arms have sizeable reach across states like Maharashtra, Gujarat, Tamilnadu, Andhra, and Telengana. Each of its verticals is today headed by a professional CEO, with some verticals being the standalone company’s divisions while some others like Asirvad Microfinance and home finance division are subsidiaries. The promoter group led by ex-banker and founder VP Nandakumar has also infused new energy into the management, with three scions of the family getting into active and crucial roles in the management. After the successful implementation of his diversification strategy during the past few years, Nandakumar’s prime objective these days is to take Manappuram Finance to the digital age by deploying a world-class fintech solution across its lending activities, including the crucial loan origination module. This will enable Manappuram Finance to be a new generation NBFC that can originate, process, approve, and disburse all loans across various asset classes in a paperless and fully electronic mode. According to his vision this will enable the firm to bring down its opex, thereby allowing them to lend to customers at rates comparable to banks. Manappuram has again become a darling of the bourses after its stock appreciated by four times within the last 12 months, helped also by one of the best dividend yields in the NBFC sector. The company’s vision is to grow its consolidated topline by 25% CAGR during the next five years, and its bottomline by a similar or higher figure. Managing Director Nandakumar is planning to implement its digital fintech solution by this December, for which it may also take over a smaller NBFC having such a portal based solution that is most competitive. This founder has also upped his stake in the firm by around 3% within the last couple of years to reach 34% now, thereby placing his money where his words are. SEASONAL MAGAZINE

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Manappuramâ&#x20AC;&#x2122;s market cap has recently surpassed $1billion mark aided by good growth numbers in the last fiscal and recent quarter. How do you see the growth panning out for the current and next fiscal? We generally make plans for the next 5 years, and would prefer to share the same. My aim is to grow at 25% CAGR for the next 5 years â&#x20AC;&#x201C; both the topline as well as the bottomline. Of course, bottomline growth might prove to be better than this, due to the higher efficiencies. Manappuram Finance is no longer a gold-loan only player, but is having a diversified book. What percentage of your loan book is non-gold, and what will be the growth numbers for the gold and non-gold businesses? The non-gold book comprises of microfinance, home finance, SME loans, commercial vehicle loans etc, and together these add up to around 15% of our consolidated loan book. My aim is to grow the gold loan business at a CAGR of 20% over the next five years. In some years growth might be higher, but 20% CAGR would be the possible sustainable rate. Regarding the non-gold businesses, they are currently growing at a much higher pace, some of them at a CAGR of 40% or even more, aided by the low base effect. Can you mention the kind of growth some of these segments are witnessing? Our microfinance subsidiary, Asirvad Microfinance is on track to grow its loanbook to Rs. 2000 crore this year. Our home finance subsidiary is expected to reach a size of Rs. 400-500 crore this

year. Even our SME business is growing along similar lines. This faster pace of growth will continue in our non-gold segments in the initial years. Like some of your peers, Manappuram too has been raising funds through the NCD route. Will this continue? That is because now we can raise funds through the NCD route even without a public offer. A couple of weeks back we raised 500 crores. Our rating too has been upgraded recently and we are hopeful of a further upgrade, which will bring down our cost of funds further. Are you also planning for a Tier 1 capital raise through QIP etc? May not be required, as we are adequately capitalized for the near future. Today we are placed at around 2.5 times our book value. Less than 12 months back we were placed at less than 1 times our book. My view is that there is even more room left for improvement on this front. So we may look at a capital raise only then, to minimize dilution. We will do it ahead of actual requirement as I believe that we should be ahead of the curve. We have done it before and will do it again at a conducive valuation, but not now. What is your outlook on gold price post the Brexit vote? Well, after Brexit vote so many pundits are saying extreme scenarios, one is saying 1500 dollars, still another is saying 2000 dollars and so on. I prefer to stay neutral, neither on this side or that side, and I think gold is at a fair price now 1300 to 1350 range. The only thing I can predict is that due to the uncertainties

post the Brexit vote, chances of gold price correcting has become lesser. Manappuram had introduced an online gold loan product. How has this been faring? Online gold loan has caught up, and now everyday we are doing between 5000 to 6000 transactions. Some hassles are still there, which will be ironed out using technology. Now our prime focus is to go fully digital across all our asset classes. Some companies have already announced it. Everything in an e-mode with little or no paper work involved. Loan processing would be over in a matter of minutes. We will soon be implementing such a fintech system. Recently Nandan Nilekani had spoken about the JAM concept, the confluence of Jan Dhan, Aadhar, and Mobile, and how it is going to revolutionize the financial services industry. Is this something connected? Yes, that is precisely the same concept I mentioned. Fintech is useless without data, butAadhar and credit bureaus are proving to be immensely valuable sources of data. Added to this is Indiaâ&#x20AC;&#x2122;s digital revolution which is based on our rising mobile penetration. Now, we all know how dramatically digital is transforming India. Every sphere is getting digitalized, bettering the transparency, and it is going to add 1.5% to our GDP. As a diversified financial services provider we will benefit from this move due to the resultant lower operating expenses, which will be transmitted to our customers, and they would be the ultimate beneficiaries. Will it translate to better lending rates for your customers? Yes, of course. We will be able to lend at the same rate as banks. Even now, with better rating, our cost of funds is going down, and is now similar to smaller banks, say, South Indian Bank, maybe only a 100 bps higher. Some NBFCs who have already gone for the digital mode, are offering rates exactly as banks, as their opex gets cut. So with fintech and going digital we will also be able to offer rates comparable to banks in some of the asset classes, like home loans or auto loans. Additional advantages are that customers will get to enjoy higher transparency and service levels.

Sooraj Nandan, Senior VP

Sumitha Nandan, Senior VP

A new generation of NBFCs has SEASONAL MAGAZINE

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emerged during the past few years like Bajaj Finance, Capital First etc that offer smaller loans that are not fully assetbacked like consumer durable loans etc. As a fully asset-backed lender till now, is Manappuram Finance planning to get into this unsecured credit space which is growing fast? We are aware of that space, and we want to get into that too, but for that to happen we need to put into place a loan origination system that is fully digital. It has to be most modern and competitive, and right now my focus is to deploy such a system by this December. After that, we will get into these emerging areas. Some of them are also into two-wheeler financing in a big way, and are you planning a push into that area? We are already into two-wheeler financing, and now we want to tie up with manufacturers to take that to the next level of growth. NandanNilekani while explaining the potential of JAM was of the opinion that microfinance may be one area that wonâ&#x20AC;&#x2122;t be positively impacted much by the advent of JAM, due to lack of any systematic underwriting need. Do you agree with this view? No, I think microfinance too will be impacted positively, as MFIs do generate their own type of useful data with the help of MFIN/SRO on individuals and self-help groups that is massive in volume, and which fintech can utilize to speed up the lending activity, and thus growth. Microfinance has become your fastest

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Microfinance?

"After fintech is deployed We will be able to lend at the same rate as banks. Even now, with better rating, our cost of funds is going down, and is now similar to smaller banks, maybe only 100 bps higher." growing segment, and the next one that will attain some sort of critical mass. To what do you attribute this growth? One reason for the better performance of Asirvad is that larger MFIs are in the process of getting converted into small banks. Such a transformation is bringing regulatory constraints on them. Asirvad didnâ&#x20AC;&#x2122;t apply for a banking licence even though it was one among the top-ten MFIs. This development in the industry gave it space for growth. Secondly, when we took it over, Asirvadâ&#x20AC;&#x2122;s rating was BB+, and now it has moved up by five notches to A+. So their cost of funds has proportionately come down. By the end of this year, Asirvad will be able to lend at 20-21%. Lastly, we have good rapport with banks and other lending institutions. Trust in a financial institution is tested during difficult times, and even during the most difficult phase a few years back, Manappuram metall commitments, and due to this, all lending institutions are fully supporting us now in this growth phase. Are you foreseeing a hive-off or even IPO for your subsidiary, Asirvad

Maybe in the future, that is a possibility. For now, Asirvad is getting into micro housing, where it will be lending up to Rs. 5 lakhs to individuals for building small houses at an affordable rate of interest. Have you changed the top leadership of Asirvad after taking it over? No, we have retained the top leadership, it will remain the same, but we have strengthened it. Are all your SME loans LAP based, including the working capital assistance? For the time being all our SME loans are LAP based. But once the loan origination module based on fintech is deployed and working properly, we will look at relaxing requirements like property collateral and consider lending against cash flows etc. That is why our current thrust remains the successful implementation of fintech as soon as possible. Is there an emerging problem of NPAs in the LAP segment? No, we are not seeing an NPA problem in any of our asset classes, including LAP. We will be able to maintain consolidated NPAs at less than 0.50%. What do you think of the interest rates in the country? Do you think Dr. Rajan could have cut rates deeper and faster? Interest rates are set to come down in our country, but over a longer period of time. I think Dr. Rajan was cautious in his approach, and I think it is a good

thing.Caution is very much needed in managing monetary policy. Maybe due to Dr. Rajan’s stance, the near-term positive impact on the economy was lower, but the risk of negative impact was contained. That is very important in the financial world. He didn’t play to the tunes of the politicians or the markets, and I think there will be long-term benefits for Indian economy due to his policies. What about the faster way in which the rates were brought down by former Governor YV Reddy while working with Vajpayee Government as well as UPA 1, in the 2003-2008 period? Isn’t it necessary for India to have such a pace? No, I don’t think such a move is necessary. Do you think Dr. Rajan continuing as Governor could have been a good move for Indian economy? RBI is a pivotal institution and its Governor is an extremely important and responsible post, much more than even some ministries in my opinion. Dr. Rajan brought fresh and original thinking into this role, and functioned in a nonbureaucratic way. It would have been good if he had continued, but he has already moved on, so no point in debating it further. What would be the impact of Brexit on Indian economy, according to you? Initially, there was a huge fear, which didn’t play out- impact on the world economy, including Indian economy, in the long run, as Brexit gets into execution. It will take time, more than two years from now, but the negative impact is likely to be there. NBFCs are said to be currently tapping a void left by banks due to the NPA crisis. Is it true in the case of Manappuram? The void has always been there, due to the slower decision making process as well as higher operating costs in banks, especially when it comes to sectors like SME, agri, gold etc. But yes, the NPA crisis has made the void bigger and more visible. From an investor’s viewpoint, one advantage of Manappuram has been its consistently high dividend yield, which undoubtedly helped the stock turn around in the market during the past 12 months. Will you change this policy now?

No, Manappuram Finance will continue to have the same or slightly better dividend rates. We don’t intend to cut it at all. Sustainability is the key, and we want to pursue sustainable growth in topline as well as bottomline, and that will enable us to have sustainable dividend rates too. The banking license has recently gone on-tap, and is Manappuram planning to apply? We will consider it, but not immediately. Already the large NBFCs are regulated nearly like the banks, and I think the intention or idea behind the on-tap license is to nudge the larger NBFCs, say the top-10 non-banks with Rs. 25,000 croreloan-book or more, to convert into being banks. The procedure has become much simpler now. The only major step would be building a deposit base, the CASA and all that. Equitas has recently done it, and I was a co-promoter of that company in its earlier years. 5 or 10 years down the line, I think most NBFCs would be converting into banks, and the procedure would be much simpler, as by that time they will be operating on

"Our prime focus now is to go fully digital across all our lending across asset classes everything in an e-mode with little or no paper work involved. Loan processing would be over in a matter of minutes. We will soon be implementing such a fintech system."

nearly same systems and regulations as banks. We too are in the process of streamlining our systems to meet such an eventuality. The next generation of leaders from the promoter family has assumed responsible posts in Manappuram recently. Can you detail their roles and responsibilities? Well, my daughter and two sons have come into the company. My daughter is learning the ropes of this business by working as my Executive Assistant. She is a gynecologist by training, but has decided to come into this business. My elder son is heading our operations, while my younger son is heading our social media initiatives. Both of them did their higher education in UK. Their roles are in addition to a very professional setup we have including an Independent Chairman, as well as professional top executives like CFO, Company Secretary, HR Head etc. Such delegation to young promoter group leaders as well as to professionals is enabling me to focus less on the day-today operations, and work more on the strategic initiatives and external networking that will shape our future. Looking at the economy, where do you think credit growth is headed, especially if there is political will and not much of constraints or speed bumps on the way? Even if there is lack of political will, and even if constraints are there, I think credit growth is going to be robust in the economy for the only reason that it will be a bare necessity for sustained SM economic activity. SEASONAL MAGAZINE

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FUTURE

"CHINA A BIGGER THREAT TO INDIA THAN PAKISTAN OR ISIS:" Francis Fukuyama

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Yoshihiro Francis Fukuyama, celebrity political scientist, known for his book 'The End of History and the Last Man' has been a Senior Fellow at Stanford University's Center on Democracy, Development and the Rule of Law, since 2010. "World has changed a lot in the last couple of years" says this renowned scholar of Japanese origin, and adds "there is a crisis of 'Stateness', especially in the Middle East." In this candid interview with Shekhar Gupta for NDTV, Fukuyama extensively talks about the region and speaks about the Middle East, Islam and pan-nationalism. He makes the case for why he supports Hillary Clinton and the deplorable situation that the Republican Party sees itself in. He also says that in the future, China will be the most powerful country and every other country needs to be beware of it, including India. hekhar Gupta (SG): You are one of the most prolific thinker, writer of our times and generation. And you’ve seen some major changes in the last 15 years in the world that you have been studying and making predictions about. Francis Fukuyama (FF): That’s true. I think the world has changed a lot especially in the past couple of years and there is a crisis of ‘stateness’ in many parts of the world particularly in the Arab Middle East where we have seen close to 4 Arab countries fall apart in less than 5 years. These have produced effects like terrorism but then in another part of the world you see strong states like Russia and China (Eurasia) which I think has transformed. SG: A lot of people in India and around the world remember you for the one definitive statement – The End of History and the Last Man – and frankly many of us believed in it after having covered the Cold War and many of the ramifications that came with it… FF: You have to understand the concept of the End of History - what’s the process of modernization and where does it lead. The Marxists said for a 150 years that it would lead to Communism and socialist utopia but my conclusion was that the end point won’t look like Communism. It would look like a market economy with some form of democracy SG: Did the setback come in the form of the excesses of capitalism, this black swan event – the pan-nationalist Islam in the Middle East..? FF: I think one of the big challenges is

China because it is modernizing with a high level of technology and not to forget a highly authoritarian political system. And I think a lot of the modernization theories said you’ll get a middle class with a pressure for democracy, but that doesn’t look like it is happening. In think in the Middle East it is a different phenomenon, where it is a bad adjustment to modernization where the people see the modern world but their economies don’t really produce jobs or opportunities and as a result people feel very disconnected with their traditions and they are looking for an identity there, which may explain the rise of radical Islamism in recent years. SG: Is it to do with jobs, opportunities, social equality with the West because although some Middle Eastern countries have high income but don’t necessarily have the quality of life like in the West or is it to do with just the absence of nationalism or the only available option which is Islamic nationalism? FF: Yes, I do think it is an identity problem. In Europe, the answer given was you were German or Italian or British etc. In the Middle East, religion is more important and I think Islam has played the role of answering the question of “who am I?” ie; I am a Muslim, I am part of the ummah which stretches all the way round the world. I think it has helped people bind to a community in a world with globalization, where communities are fast disappearing all the time. SG: So did the Western World leave the business of “End of History” unfinished? Did they declare victory SEASONAL MAGAZINE

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too soon? I also use your expression in the book: did they get “blind-sided”? FF: I think the United States went overboard with certain things like market liberalization. At the end of the day, a market economy is really the most efficient way towards achieving lasting prosperity. But I think in the 1990s, we overdid it, we pushed privatization too rapidly, especially in the financial sector where we wanted to open up financial markets. This was tremendously destabilizing, including in the US. The largest financial crisis since the Great Depression happened in 2008, which I think was a direct consequence of dismantling our regulatory system, the control of banks and as a result, we paid the price. SG: So, did this come from a breathless celebration of victory or did it come from an intellectual deficit among the class that was described as neoconservatives? FF: Well, the neo-cons were a different group because they weren’t too concerned with economic liberalization, they were just interested in using American power to spread democracy. It was a kind of ‘AmericanLeninism’, this belief in power, which I had a lot of trouble with because I think democracy is something that grows spontaneously as a result of social change. But there was an alliance in the 1990s and early 2000s, the export of democracies, the so-called ‘Washington consensus’, the liberalization of economies, which in many respects was a good agenda because that is how India and China got rich in the last generation. But I think when it comes to financial markets and global capital, it was a big mistake. Also, the Reagan-Thatcher revolution of the 1980s got carried too far and there was certain amount of arrogance in it, the disbelief that the prosperity of the United States is simply dependent on the absence of government. America is one of the few countries where the distrust of the government is almost like a religion and I think it is a confluence of all those things which caused this outcome. SG: With the end of the Cold War, the USA was exporting democracies to all these countries.. SEASONAL MAGAZINE

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FF: I don’t know about the export of democracies because I think it was a problem created by the Bush administration invading Iraq. They gave the impression to people that the way to spread democracy was to invade countries. I think the fall of Communism was a natural thing, the United States had nothing to do with it. Poland, Hungary, Czech Republic had been living under an imposed, foreign dictatorship that really wanted to join the rest of Europe as liberal democracies. So, I don’t think it was a matter of American foreign policy, I think the choice was of those countries. SG: But there was an institutional deficit, that is why we had begun to see some of them unravel; not fully, but to some extent.. FF: Yes, I think the biggest deficit is less about democracy itself, meaning free and fair elections. I think the deficit is in ‘stateness’; a lot of countries don’t have the tradition of having competent states, that is free of corruption, delivery of services etc that citizens want. I think Americans take the state for granted, we

I THINK THE DEFICIT IS IN ‘STATENESS’; A LOT OF COUNTRIES DON’T HAVE THE TRADITION OF HAVING COMPETENT STATES, THAT IS FREE OF CORRUPTION, DELIVERY OF SERVICES ETC THAT CITIZENS WANT.

want to distrust and limit it and we take it for granted that its going to deliver education, pave the roads but in most countries of the world, you cant take such things for granted. SG: You used an expression just now, that we are not yet familiar with in India and which I am sure you must be invoking in the Lal Bahadur Shastri Institute where the top echelons of Indian administrative service is trained – the question of ‘stateness’. Could you explain that a little more? FF: The state is a powerful institution that gathers and uses power, but it also needs to have a certain coherence. People have to believe it is legitimate and it should be able to actually do things. It has to protect the community from internal and external enemies, it has to be able to built roads, schools and deliver healthcare services. This can happen in an authoritarian country like China and in any democracy. I think the real task is for states to deliver governance and a democracy should be able to protect from tyranny but if you don’t have a sense of stateness and a notion of cohesive national community, I think you are not going to be governed well. You also get anarchy and something which is more common in many countries, which is simply weak governance, a degree of corruption in public services, roads not getting paved, children not getting educated.. SG: Is that what happened in the Middle East after the dismantling of the state structure as it was? FF: Well, the problem in the Middle East was deeper than that. State structures were based on a kind of rigid authoritarian government. Of course, those countries had been colonial creations without a sense of national identity. So, I think all of this contributed to the collapse of legitimate authority. We still don’t have a way of putting that back together because communities are divided by religion, sects, ethnicity, tribe, history. Especially in the Arab Middle East, tribalism has particularly been an obstacle in creating state structures because people’s loyalties are much narrower. SG: So, the movements for democracy

or the Arab Spring – was it a curse for the region and the world? FF: Yes, but I think in the long run it is a positive development because it was largely driven by the newer and younger middle-class who are bettereducated in places like Cairo, Tunis and places like that. This class had been very passive up till 2011 and they got globalized. But unfortunately, that mobilization has resulted in authoritarian resurgence in most places but I do think it is part of a larger process of democracy. And until the local people participate, there is nothing much the West can do. SG: Why do they hate the West so much? Their people, lifestyle.. FF: You know, I’m not sure if they actually hate the West because evidence of this is the number of people who want to emigrate to Germany, France, Britain or other places. So, I think politics in a sense doesn’t reflect the social reality where people would actually want to live in an open, free and prosperous democratic society. The problem is that the politics hasn’t delivered on that in that region and I don’t want to minimize the fact the American foreign policy has not been helpful in many respects because it has pursued what has often been perceived as a hypocritical set of objectives like securing its access to oil. SG: But, lets say the United States didn’t have those objectives and wasn’t hypocritical, then it wouldn’t be a superpower to begin with. You can’t be a Gandhian state and be a superpower at the same time (laughs)….. FF: That’s true. But I think we’ve had some illusions especially in the Iraq invasion that we somehow knew enough and had the leverage to actually shape the politics of the region. SG: You were opposed to the invasion, right? FF: Yes, I was. SG: Did that surprise many of your followers and fans? FF: You know, I don’t have any problem in getting rid of Saddam Hussein, but I think the real problem was that we

FF: Well, I think the reason that PM Modi was elected was because people wanted a stronger and more decisive government that cut through some of the blockages that had existed in previous governments. And I think Modi has now understood that it is quite tough to stop these blockages. (laughs)

WELL, IT COULD BE ALL OF THEM SIMULTANEOUSLY. HINDU NATIONALISM ACTUALLY WORRIES ME. INDIA IS SUCH A DIVERSE COUNTRY AND IF THAT BECOMES THE DOMINANT IDEOLOGY, IT IS NOT GOING TO INCLUDE A LOT OF CITIZENS. didn’t have a plan for what came after, which was chaos because the USA just wasn’t prepared to actually recreate a state in Iraq SG: A lot of your recent work has been on governance, state and I also know that India isn’t there in much of your scope of work, but these books have brought your attention to India. Where do you see India featuring in this new world?

FF: I’ve always thought India and China were the opposites in the last 3000 years of history. China has had a strong centralized state and a very weak society and India had a very strong society, but a relatively weak state that can’t exercise tyrannical control and I think that is a pattern that has continued up to the present times. When the Chinese want to build something, they achieve the targets in few years. But in democracies like India and the United States, there is always resistance, legal suits, protests so its way harder to come to a consensus. SG: Have you analyzed the new government in India? This is in a way the first conservative government of the social Right..

SG: Give us an intelligent, outsider’s perspective on this government. Is it strong enough in terms of what people want it to be or too strong or not strong enough? FF: Well, it could be all of them simultaneously. Hindu nationalism actually worries me. India is such a diverse country and if that becomes the dominant ideology, it is not going to include a lot of citizens. So you don’t want excessive strength in that respect. Now, I think that the GST Bill is a tremendous achievement and it is going to help the economy very strongly. SG: What is your take on the security problems confronting India with China just over the mountains and Kashmir on the northern side? FF: I think the biggest challenge in the next couple of decades isn’t going to be ISIS or Daesh, it is going to be China. It is a big powerful country and in another 15 years it could have an economy substantially larger than the United States. As you can see in the South China Seas, as they get powerful their ambitions expand and they are claiming all parts of the Pacific Ocean and putting military in some islands. So I think an organized, powerful opponent is more dangerous than a bunch of 20-year olds with AK-47s. Also, these terrorist organizations don’t have a model which is very attractive whereas China is getting rich. SG: Does India need to worry about China? FF: Everybody needs to worry about China (laughs). Not as a short-term threat but adjusting to a world in which China is a dominant superpower will not be a cakewalk. But, as we speak, that is precisely what is happening in the South China Sea with China bullying smaller countries like the Phillipines. So, yes I think down the road, India will have that kind of problems. SEASONAL MAGAZINE

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SG: Donald Trump now says Japan needs to worry about its own security.. FF: Trump is the biggest threat to global order that we’ve seen in a long time because he wants to undo the entire structures that the US created in the last 70 years. He doesn’t like free trade, he wants to withdraw from America’s existing relationships, he seems to have a soft corner for authoritarian leaders like Putin. SG: Maybe even Erdogan.. FF: Yes, probably, if he knew who Erdogan was (laughs) SG: Its ironical that you say this because you identified yourself as a Republican than a Democrat.. FF: Well, the Republicans, in my view made 2 huge mistakes – the Iraq war and the policies that led to the housing and financial crisis in 2008. When policies don’t work, one tends to reflect and that’s what I did.

FF: Very impressive. I wish the United States had something similar to the Lal Bahadur Shastri Academy here because I think the government would very much require the stability and expertise that is inculcated in the IAS. SG: In our country, many of the problems are in the bureaucracy. As politicians come and go, the bureaucracy is perceived as having a certain job security but many of these problems still fester. What is currently on my mind right now is the situation in Kashmir and the constant reference to Pakistan.. FF: I’m not really sure if that’s the problem of the civil servants and bureaucrats. But I think that’s the outcome of a political stalemate due to changing leadership, not the bureaucracy. The bureaucracy provides a kind of continuity and expertise and if you look at the surface of most problems they originate from politicians

SG: So now you are supporting Hillary.. FF: Yes, I am. Also, the Republican Party is going towards an insane direction – it is going further to the right. They’ve managed to nominate this buffoon candidate by the name Donald Trump. So, I really don’t have anything to do with them at this point. SG: What do you think will happen? The odds are against him winning but he has close to 30-40% of Americans supporting despite knowing how nutty he is. What do you think it is going to this segment of the electorate? Will they allow Hillary to function after that? FF: Yes, I do think Trump has no chance of winning the election this time. Also, the country is going to remain polarized. The problem is that those people have been the old working class, hurt by globalization and I think somebody has to truly respond to their needs and interests. Donald Trump can’t do that with the kind of protectionism policies he is advocating. So, I think the polarization is going to continue even after Hillary is going to get elected. SG: What has been your experience with teaching civil servants in India? SEASONAL MAGAZINE

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TRUMP IS THE BIGGEST THREAT TO GLOBAL ORDER THAT WE’VE SEEN IN A LONG TIME BECAUSE HE WANTS TO UNDO THE ENTIRE STRUCTURES THAT THE US CREATED IN THE LAST 70 YEARS.

and not bureaucrats. SG: I remember Bob Blackwell once said “Politicians are like specialists in a hospital, civil servants are like doctors in an emergency room.” FF: Yes, you said it right. Because most of the orders come from the politicians. SG: Does the world need to worry about Pakistan? And how much do we need to worry about Pakistan? FF: Pakistan has been at the centre of the world’s problems for quite some time. It has a very weak and ineffective state, continually radicalized over the last 20 years. Its been the source of a great deal of terrorism, it’s destabilizing Afghanistan as we speak and is preventing the consolidation of a stable state, which is detrimental to everyone. I think the problem is that the US recognizes this but still needs Pakistan. If Pakistan goes it on way, it’s hard to figure out which way it is going to go. SG: Also, the world will need to ensure that ISIS doesn’t get its hands on Weapons of Mass Destruction.. FF: Absolutely, a nuclear state is always the most scariest thing. We won’t know what their commanding control arrangements are, it would seriously destabilize the country and nobody would know who has access to those weapons. That would be a very frightening country. SG: How do you address the problem of a frightening country such as what you described? FF: Well, I think for the most part what we should do from the outside is to prop up the voices who want tolerant and liberal order in these countries and there are people in Pakistan who want lasting peace. We can only hope that this constituency can hold it together long enough to help us through this period. SG: No matter what happens, you can be rest assured that whenever you visit this part of the world, you won’t fall short of ideas. I really look forward to seeing you a lot more in India and many more conversations in the future. FF: Surely. Thanks for having me here. The experience has been quite wonderful. SM

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GADGETS

VALUE-FOR-MONEY RULES INDIAN SMARTPHONE MARKET Handsets for less than $100 dollars sell like hotcakes in India, and no smartphone maker, including mighty Samsung, can afford to ignore this if they are serious about India. Because, according to the latest research from Counterpoint’s Market Monitor service, the smartphone shipments in India grew a healthy 23% annually in Q1 2016 compared to the global growth, which stalled for the first time ever since smartphones first begun to sell. he study also pointed out that Samsung led the “Make in India” traction followed by Intex, Micromax, Lenovo, Lava/Xolo, and others. There is a race to sell inexpensive handsets in the world’s fastest-growing smartphone market. The Indian market already has around 70 smartphone brands priced lower than $100, according to market research firm Counterpoint. In August, South Koreabased Samsung launched one of its cheapest smartphones in India. The Z2 will cost just Rs4,590 ($68), $90 lower than the average price of a smartphone sold in the country. Samsung’s new model has already started its sales. Earlier, in January 2015, Samsung had launched the Z1 at an even lower price of Rs4,299. Other global players such as Lenovo and Xiaomi, too, have flooded India with sub-$100 models. Meanwhile, domestic companies like Micromax, Intex, and Lava are already top contenders in the space. Besides, several new startups have announced dirt cheap devices in India over the past few months. For instance, in February, Delhi-based Ringing Bells launched the “world’s cheapest smartphone.” Its product, Freedom 251, is priced at a jaw-dropping Rs251 ($4). The company said it received 7.5 crore registrations and is already shipping phones to customers. In April, Jaipur-based Docoss launched an Android-powered smartphone priced at just Rs888. Bengaluru-based Namotel announced a smartphone called Acche Din in May, which the company said would sell at an unbelievable Rs 99. “Since there is so much competition in the affordable smartphone segment, companies are now trying to offer even lower prices to set themselves apart. Samsung’s move is also in the same direction,” Tarun Pathak, senior telecom SEASONAL MAGAZINE

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analyst at Counterpoint, said. However, makers of these ultra-low priced phones have also faced criticism over false claims and hidden costs. In March, a police complaint was filed against Ringing Bells alleging that Freedom 251 was a ponzi scam and that

Other global players such as Lenovo and Xiaomi, too, have flooded India with sub-$100 models. Meanwhile, domestic companies like Micromax, Intex, and Lava are already top contenders in the space.

the company had raised funds by issuing misleading advertisements. Meanwhile, Namotel’s Rs99-smartphone reportedly had hidden charges. It could be booked only after registering on a website called Bemybanker.com, which charged a one-time membership fee of Rs199. The sub-$100 category dominates the price-sensitive Indian market, and the trend is unlikely to reverse in the near future. India has some 700 million mobile phone users, according to Counterpoint Research, while the country’s smartphone user base is only over 220 million. This means around 550 million Indians are still using feature phones and may graduate to smartphones in the coming years. Most of these first-timers are likely to buy inexpensive models, Pathak said. “So companies are likely to continue launching phones in the affordable segment at least for the next six to eight quarters,” he said. SM

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INTERVIEW Interview by: Jaison D & Carl

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SWACHH BANK ABHIYAN

IS CLEANING UP INDIA'S BIGGEST MESS - THE NPA DIRT MORE CHALLENGING THAN UNEARTHING SCAMS? Seasonal Magazine recently met Vinod Rai, Chairman of Bank Board Bureau and ex-CAG of India, for this exclusive interview:

he latest to be shocked by one of Vinod Rai’s audit reports is erstwhile Travancore Royal Family, based at Thiruvananthapuram, Kerala. Adithya Varma, speaking for the former rulers of Travancore, has termed as “unbelievable” Rai’s audit report on Sree Padmanabha Swamy Shrine which found not only abnormal increase in expenditure but Rs. 186 crore worth of gold missing from the temple’s famed collection. This is not the first time Vinod Rai’s reports have been found as “unbelievable” by those at the receiving end. Remember Andimuthu Raja, and those who flocked to support him initially in Congress, DMK, and UPA, when the 2G Scam was unraveled by the then CAG? You can debate on the extent or quantum of each scam unearthed by Vinod Rai, which even the courts have done, but it is difficult to argue that there was no scam, when Rai says he smelt a scam. Neither can you debate with the effectiveness of Vinod Rai’s reports. If in doubt, one can ask anyone ranging from Sonia Gandhi to Narendra Modi, and anyone in between. It is an open secret that, if not were for Rai’s reports and its aftermath, neither would Congress been reduced to doubledigits in Lok Sabha and neither would Modi’s rise to power been this much impressive. However, in his latest role as Chairman of the newly constituted Bank

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Board Bureau (BBB), Vinod Rai is not in a combative mood. Still, he has his hands full with unenviable tasks like cleaning up the NPA mess in PSU banks, creating a professional succession plan for Chairmen & MDs of these banks, and thirdly, to execute the daunting task of merging various PSU banks to create fewer and bigger banks that can withstand shocks better. The ex-CAGâ&#x20AC;&#x2122;s focus on the big picture rather than small issues when it comes to corruption, was out in the open when he frankly disclosed that many bureaucrats including himself have been trying to match official schedules with personal schedules so that unaffordable personal travel costs are managed. While this has raised a storm in the media, and the jury is still out on whether Raiâ&#x20AC;&#x2122;s stand is ethical, the BBB Chairman has stood his ground, saying that such things happen because government servants have little perks, and that over-scrutinizing such personal travel bills of officers are pointless, especially when so much large-scale corruption is there in the system. In his new role, the Chief of BBB is working continually with the Finance Ministry, Reserve Bank of India, PSU Bank Managements, Central Vigilance Commission, and Central Bureau of Investigation to ensure that the future of our PSU banks is secure. Seasonal Magazine recently caught up with Vinod Rai to have his views about various factors affecting the economy, as well as about his initiatives at Bank Board Bureau:

here are some core tasks before the Bank Board Bureau including the PSU bank mergers, the institutionalizing of the top appointments, and the NPA crisis. Which among these would be your top priority now, and why? Our top priority today is to ensure that the lending activities of banks, which means to give credit, starts as quickly as possible. The balance sheets of banks are very stressed, there are a lot of NPAs, and there is also a shortage of capital with the banks. Therefore, it is very essential for us to clean-up the balance sheets of the banks, which means that with the stressed assets that they have, they either do recovery, settle or resolve them, or restructure them so that they are no longer NPAs but they start earning some revenue for these companies because of which they can also plough it back into their business and some they will give to the banks. So, the first priority is to ensure that the lending activity starts and the bank assets and balance sheets get cleaned up. Creating a structure for the top appointments in banks, come next? Yes, that is the second major task. What we are trying to do is to ensure that all the appointments, whether it is the Chairman, MD, ED, or other top officials, are done in a timely fashion. Few months before the vacancy arises, we start the interaction process so that by the time vacancy happens, we have already got approval of government and can ensure that every vacancy is filled up timely. What are the specific steps that the Bureau is taking to speeding up the top appointments at various PSU banks?

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What we are doing is that we are trying to ensure that we create a good reservoir, that a good list of professionals is ready with us, which means we are looking for professionals capable of credit appraisal, risk management, HR capabilities, and IT. These are the 4 things on which we are putting a lot of stress and we also have a list of experts who are available and willing to join Boards of public sector banks. Secondly, there are some experts at the managerial level also whom we are encouraging the banks to hire through a lateral mode. These experts are available in the market

Receiving ‘Padma Bhushan’ award from the President.

on a contractual basis and at market salaries. Banks may be able to hire them for 3 years or 6 years, whatever it may be. In fact, now we have increased it up to 10 years. The order for this has already been issued by the RBI. Consolidation or merger of PSU banks is only the third priority? Yes, but I am saying it is the third not because it is not important, but because today the most important objective has to be cleaning up the bank balance sheets. Today, if we task the banks with consolidation too, it will be very difficult for them to manage both. So, what we are trying to do is, the consolidation work we will do separately by focusing on which are the best complementing banks for consolidation, but we won’t do the actual consolidation in this financial year because we will be concentrating on the balance sheets of the banks. Maybe in April next year, we will come forward with consolidation plans because by then our work would be done in terms of knowing which are the merging banks, and which would be the bank which would merge the other bank into it, and we will find out the best fit, 4-5 mergers, whatever we have to do, we will do. Meanwhile, the easiest of course was for the SBI and its

associates for which we have already initiated the process and by 31st March that will be complete. So basically it means that by next year, it would become just one bank. Is the government, the RBI, and the Bureau already on the same page about how to tackle the NPA crisis, or is there more ironing out to be done for a consensus? The good thing about setting up of the BBB was that the government was very cooperative with us and I remember on the first day when the BBB took charge it was the 8th of April - the MoS Finance and the Governor of RBI both had come to the BBB office in Mumbai to kick off the activities and have discussions with BBB members to ensure that everybody is on the same page, same wavelength, so that then the work would start in full swing. With the guidance of the Governor and the Minister, we started the work and now we are working in full coordination. What are the broad steps that you recommend to tide over the current NPA crisis? The first thing we are doing with regard to NPA crisis is that we are telling the bank managements to look into the

accounts that are stressed. Now, accounts under stress would depend on those under difficulty because of downturns in the economy, because of statutory approvals getting delayed, crisis in the commodity market etc, which are factors beyond their control. Also, exports had died down and there was no demand. So, we are trying to ask them to restructure these accounts so that at least the production activities can start and if those genuine accounts still require some more working capital, we are willing to stretch and provide the same. The other type is where we suspect some mala fide and collusive action has taken place, those are the ones for which we will be getting a detailed investigation done to ensure that in the future, such actions, either on the lender’s or the borrower’s part, or both, doesn’t happen. You mean to say that strict message has gone to the concerned bank authorities to ensure compliance? Yes, strict message has gone, RBI has issued guidelines, we have had meetings of all the CEOs of the banks, the CVC and Director, CBI. So, everybody is on the same page and the idea is to not to do any witch-hunting, but only to ensure that mala fide activity doesn’t take place in the future. SEASONAL MAGAZINE

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Since you have a deeper look into the NPA problem now, is it something of greater impact than you had imagined before taking up this assignment? Not really. Before, I took up this assignment, I think the RBI had done a good job in trying to recognize the quantum of NPA issues and the steps that they had done under the Asset Quality Review, and the SMA-I and SMA-II kind of schemes they had, so I think the worst of the recognition of bad assets had already taken place. So, now I think the worst is over and only some small accounts which may be pending somewhere - who have been hit by later developments – remain to be recognized, but the majority has been unearthed. Recently the SBI results came out, they have done very good, they have shown profits, and it is a clear indication that the worst is over. But their provisions are up… They have provisioned, but they have shown profits, the market appreciated that, SBI stock has gone up, which are all indications of the fact that the market also accepts that the bulk of the recognition has taken place and that the worst is over. Why are PSU bank mergers essential, or is consolidation just an attractive proposal, but not an inevitable one? What time frame are you seeing for this task? No, for banks today, it has become very essential. Conventional banking is now giving way to banking through IT, technology etc. Banking is also going digital or mobile too. Now for small banks to be able to spend a lot on such development activities, to spend a lot on setting up an IT framework, it becomes very difficult and expensive. So, it is best to ensure banks consolidate so that consolidated development funds are used to build world-class infrastructure in these areas. Also, conventional banking used to be branch banking. Now, there are more Points of Sales, hand-held devices, ATMs are giving way to hand-held devices which representatives can carry on their twowheelers. So, for the villager from rural areas, for whom it is very difficult to go all the way to a branch, will soon have the facility of ‘home-level banking’, in a SEASONAL MAGAZINE

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way, the branch itself is reaching out to them. So, for these kinds of activities, if there are 30 small banks and everybody starts spending on that, their cost-toincome ratio will become very high and they will not be very competitive also. Hence it is very important to consolidate and maybe create 6 or 10 large banks which have a reserve of funds, which can be utilized for these kinds of activities to ensure that banking gets digitized and the bank can reach the doorstep of the client. That’s why consolidation becomes important. The Government and the RBI are apparently not agreeing on whether RBI reserves should be used to recapitalize PSU banks. What is your take on this regard? I believe that RBI reserves are always kept for a rainy day or a crisis situation. So, once we take out the reserves and capitalize the bank with it, that money is lost. Today the situation is that the government has provided enough in the budget, at least for the time being, and if the Government has to go into a rights issue of the banks, its capitalization money plus the money which minority shareholders will be able to put for the 25,000 crores that the Government puts in, another 15,000 to 20,000 crores can be raised from the market. And I think that for the time being it will be enough because we require only that much of capital with the banks as the lending process needs. Today, the demand for credit is also low. And I sincerely feel that for demand to pick up it will take about 3-4 months’ time and by that time, banks would have sufficient capital to be able to meet the emerging demand. Next year maybe more capitalization will happen. Statutory norms, like Basel norms can be met? No, the Basel norms are being met, that is not a problem. Regulatory problems these PSU banks don’t have. Only thing is whether they have got enough capital to start the lending process. Do you think the RBI Governor has cut the interest rate up to a level where it would have been possible for him? It is very difficult for us to sit in judgement about what the ideal rate

should be. There is always a healthy tension between the Government that always wants to push for growth and the monetary authority which is looking after controlling inflation. So, it is a tightrope walking. Hence for us to sit in judgement, on what were the facts before the RBI when they took a decision on what the rates should be, is very difficult. Maybe, 50 basis points difference here and there was possible. But the RBI was more worried about whether inflation was under check and there was also the downturn. If the inflation would have gone unchecked, then it would have gone to make bigger problems. So it is really difficult for us to sit in judgement about what the rate should have been. You are right there. But how do you think the sentiments have been affected? Why has the credit intake gone down? Don’t you think it is the duty of the

people at the regulatory and government level to ensure better sentiments? Of course, but you see, sentiment is affected not only by the rate. It is affected by the downturns in the economy also. So, yes, maybe at a point of time, if the RBI would have given us a bit of impetus or push with favorable rates, the sentiment would have become better. But it would be difficult to rule on that today. But in the previous NDA regime, the interest rates had come down to a very attractive level and there was a lot of activity and positivity, so everybody was expecting the same now… But that was boom time in the world too. The global economy was doing very well. But at the same time, it can also be argued that because of those activities and high lending, these problems have occurred. But one can never tell, you

see. It may also have been because of the world recession post 2008. What happened was there was a huge amount of lending, which was justified, and it was mainly for infrastructure. Unfortunately, infrastructure projects have a very long gestation period. But more importantly, what happened was statutory approvals for infrastructure projects, like the land acquisition, power, environment clearances in tribal areas, those kind of things got very delayed. If you remember, hundreds of approvals were pending in the Environment Ministry and all those kinds of clogs were there. So once a project gets delayed, there are cost overruns, and they don’t generate revenue, due to which they can’t meet interest liabilities. So, that had a cascading effect. Do you think that there is room for faster and deeper interest rate cuts by RBI as of now?

That would be very difficult for me to say, but of course interest rate has to support the revival of the economy. It is essential for interest rates of the RBI to be ahead of the curve than be behind the curve. However, it is a question of timing. That can be best assessed by economists who are studying the markets every day. As Dr. Raghuram Rajan is all set to leave within weeks, how do you like to think of his legacy at RBI and on the monetary management of the economy? Dr. Rajan will be leaving behind a very god legacy, there is no doubt about that. His expertise and knowledge have come in very handy at a time when the Indian financial institutions were very stressed. He put in place systems, which helped in recognizing the problems that we were in and his knowledge was useful to ensure that we could revive the economy in time. Of course, anybody can argue about the steps that he had taken; people have views about everything these days and I can’t say whose view is correct, but I believe he has done a stellar job and will leave behind a good legacy. Is there a mandate for the Bureau over the private sector banks and NBFCs. How is it different from your core mandate over PSU banks? Technically, in a strict sense, we don’t have mandate over private sector banks or the NBFCs. The NBFCs are certainly not within our fold. We have to look into the appointments and strategic lending of only public sector banks. But what happens invariably is when we look into resolution of assets, lot of these are joint lending, where both private and public sector banks are involved. So, when you strategize over a particular resolution obviously it affects all the lenders and some of them may be private sector banks. You enjoy expertise in both the IAS or administrative sector, especially on the financial admin side, and later you also handled the audit side as CAG very powerfully. How are those insights helping you in formulating better policies for the banking sector?

Vinod Rai With Wife

I have been lucky that the government has given me the opportunity to work in SEASONAL MAGAZINE

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these sectors where I have gained some expertise and having a background in economics, I was able to apply myself. The audit exposure has given me an idea of how there should be an oversight on the lending process of banks. Every bank has an audit committee that is compulsorily mandated. The audit committee must comprise of chartered accountants who are well trained in commercial lending process. So, we are trying to strengthen that aspect of the audit process, that is the external audit which is post the event, and the other is we are trying to ensure that the banks have a good concurrent internal audit process, which leads to good financial control. Then, of course, the important part is the HR Management. In the public sector, the complaint is usually that the salaries are not like in the private sector. So what we are trying to do is trying to structure or create innovative methods by which we can introduce performance-based incentives to public sector managers. So we are looking at ESOPs, bonus programs, other performance-linked incentives where if they perform well, we are able to compensate them better. After taking up this assignment, what are your main concerns regarding our PSU banks? Is it about their poor competitiveness or is it about the corrupt practices or about poor vision? The public sector banks lend about 7072% of the lending or credit of the country. In the worst of times even the public sector banks have done a stellar job, absolutely remarkable job. Public sector banks are the ones who have been able to ensure long tenor lending to infrastructure sector like syndication, take out financing etc. In India, infrastructure is still very poor. Unless, we shore up our infrastructure and ensure physical infrastructure is good, maybe roads, power, airports, whatever it may be, the rest of the economy won’t be supported. That is where public sector banks have played a tremendous role. But unfortunately in these times because of the downturns in the economy, they have come under stress. I think what we need to do is to ensure the intake of professional expertise and that I think is one of our priorities – to professionalize the management and the SEASONAL MAGAZINE

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boards of the PSBs. And I am sure the will be able to bounce back in about a year or two to the higher levels that they had performed earlier. Are you denying that lack of professionalism, lack of vision, as well as corruption are existing in PSU banks? No, those issues are there. And some of these problems aren’t negligible either, they are major issues. But these PSU banks have inherent strengths as the foundations are very strong. All we need to do is professionalize the management and the Board, then they will be able to pull themselves back. Your most prestigious stint was as the CAG, and how do you assess the performance of this institution since then? I think the CAG is doing a very good job because we have been able to professionalize that institution by ensuring that the auditors get the best training available anywhere in the world. The modern-day governments are becoming experts so we have to ensure that our auditors also have that expertise. We started a process about 10 years back, wherein our auditors were trained in the best institutions. At least 60-70 people go to the US, Singapore etc for specialized training. We also send them to the Middle East where they do audit of oil exploration firms so as to gain technical knowledge. They go to Germany to learn about space and atomic research, thermo-nuclear plants etc. Also, one feather in the cap for CAG India is that we were selected in 2011 to audit the International Atomic Energy Agency, which is highly technical but since we had professional capability we were selected over lots of other developed countries and we are going to be auditing it for 6 years. The IAEA is a very prestigious agency and the compensation we receive for the work is also very rewarding. Now that the much awaited GST Bill is cleared, what are the major hidden challenges that you are foreseeing in its execution? Is it about reaching a consensus on the optimal GST rate, is it about containing the inflation, or is it about execution risks like missed deadlines?

The big challenge is of course to reach the optimal GST rate because it can’t be too high to discourage production and at the same time the rate can’t be too low to lose revenue. That is why the council of finance ministers of states and the central finance ministry has been setup because we have to drive an optimal rate which is well balanced between the consuming states and the producing state. So whether it is a Gujarat or Tamilnadu - which are producing states - and UP or Bihar which are consuming states, it helps both sides. So, I sincerely feel that it will not be inflationary, but the first big challenge will be to ensure that the IT network is in position and secondly, about 50,000 tax officials are trained before the GST system is rolled out. Because once the implementation starts, we can’t afford to have glitches. At every stage, there is a set-off of the taxes that

you have already paid. If that link breaks, then the set-off will not take place and that can keep adding to the tax which will become very high. Starting off with district administration to getting to handle some of the topmost administrative posts in states and Centre and to handling the top audit function and now the Bank Board Bureau, you have been blessed with unparalleled exposure about India's challenges. What philosophy and what strategies would you like seeing implemented by the country's political, administrative, and business leaders for India to be a developed nation? As I said in the beginning, I have been very lucky. In my early years of my service, which was mostly with the Kerala Government, I found them to be very supportive which gave me opportunities to do those jobs where I

could do my best. What I would like to see in the administration going forward is a very positive approach, meaning whatever happens, we must be able to resolve the problem. Every challenge has to have a response and every response must be a positive one. Do you also mean to say that we shouldnâ&#x20AC;&#x2122;t be risk averse? Exactly, I agree with you 100% on this point. We have to calibrate risk, make an assessment of the risk and take a calculated action. Unless you take those risks, you canâ&#x20AC;&#x2122;t be at par with competition. The world is becoming very competitive and to be able to be competitive ourselves, we have to ensure that we are ahead of everybody else. Secondly, the states and Centre need to work in a cohesive fashion. Both the governments are spending lots of

money, but the work is actually done at the state level and district level and here the state administrations have to be totally charged and energized to ensure that the delivery process is smooth and there is no leakage from it. Unfortunately, we have suffered from leakages, but the good thing that the government has done is, whether it was AADHAR, direct benefits transfer or now going forward, they are implementing KYC and other schemes, the systems have been put in place. So, the scope for leakage is less. Only thing is that we have to put our shoulders together and ensure that cohesiveness comes about because a lot is at stake in inaccessible rural areas whether it is public health, rural employment, primary education etc â&#x20AC;&#x201C; these are the areas where the district and states have to bring about good development. SM

On a trek with probationers in Himachal.

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SURVEY FINDS INDIA 3rd LARGEST STARTUP HUB INDIA IS HOME TO THE THIRD LARGEST NUMBER OF TECHNOLOGY DRIVEN STARTUPS IN THE WORLD, WITH THE US AND THE UK OCCUPYING THE TOP TWO POSITIONS, ACCORDING TO A REPORT. he study, done by Assocham in association with Thought Arbitrage Research Institute, also revealed that Bengaluru is host to the largest share of technology startups in the country, followed by Delhi NCR and Mumbai, while Hyderabad and Chennai are also quite popular among budding tech entrepreneurs.

LOVE AT FIRST SIGHT? YOU MUST BE KIDDING!

"The disruptive innovation in technology and process is creating newer Indian startups and foreign investors, including some of the well-known venture capital funds, are showing immense interest in these startups," Assocham President Sunil Kanoria said. The awareness that a startup is a vehicle of rapid growth through technological disruption and innovation, has to spread across the economy, the report said. Otherwise, if any small traditional business is treated as a startup, then the ecosystem will never develop properly, it added. The study recommended that synergising 'Startup India' with 'Make in India' and 'Digital India' initiatives has the potential to expand the domestic ecosystem for new entrepreneurs.

"In the technology driven startups, India has moved up to third position with the US occupying the top position with more than 47,000 and the UK with over 4,500. "India's tech startups numbered around 4,200 up to 2015," the report pointed out. In terms of total number of startups, comprising both tech and non-tech areas, India again figured among the five largest hosts in the world, along with China (10,000 each). THE AWARENESS The US occupies the top slot with THAT A STARTUP IS 83,000 startups. IT hub A VEHICLE OF RAPID GROWTH THROUGH Bengaluru is host to 26 per cent TECHNOLOGICAL of domestic tech startups, DISRUPTION AND followed by Delhi NCR (23 per INNOVATION, HAS cent) and Mumbai (17 per cent). In the 'catching up' category were TO SPREAD ACROSS THE ECONOMY, THE Hyderabad (8 per cent), Chennai REPORT SAID. and Pune (6 per cent each).

It also suggested tax exemption for research and experimentation to encourage fresh ideas without fear of failure. Recommending a Stanford University model in various Indian universities, the Assocham-Thought Arbitrage paper said courses on creation of small businesses should be encouraged in campuses.

overs need to meet at least four times before Cupid's arrow strikes their hearts, said a study. The findings showed that people often find themselves drawn to individuals after multiple encounters, even when there was no initial attraction. "Cupid's arrow is often slow to strike. It may be attributable to the gradual change in attractiveness from repetition," said Ravi Thiruchselvam, Psychologist at Hamilton College in New York. For the study, the team gave snaps of people's faces to a group of young men and women. The researchers then wired the participants brains to monitors as the group ranked the attractiveness of people in the pictures. The subjects were then shown the snaps for a second time, and rated those they found attractive much more highly. The attraction was even stronger on the third occasion and strongest of all on the fourth. The fourth attempt showed extra activity around the excitement and pleasure centres of the brain of the participants.

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CAREER

JOB SATISFACTION IN EARLY YEARS TIED TO MENTAL HEALTH LATER

recent study has confirmed that workers who experience low levels of job satisfaction in their 20s and 30s are more likely to have an increased risk of mental health problems in their 40s.

Of the 6500 participants, those who reported job dissatisfaction in the first iteration of the study (which began in 1979) also reported worse general mental health, higher levels of depression and more difficulty sleeping.

A lot of jobs come with stresses and pressures that are simply too much to bear if you want to live a happy life. However, a recent report confirms that hating your job in your 20s could be related to health problems down the line. The report also adds that sometimes quitting your job can be the best decision for your health.

An obvious caveat for a study like this is that people who do suffer from mental health problems might be less likely to experience job satisfaction in the first place - perhaps because they are already living with depression, or struggling to sleep.

The research, carried out by Ohio State University, found no increase or decrease in the risk of mental health problems for those who reported high or very high job satisfaction over the same period.

The correlation between low job satisfaction and mental health issues may not be a causal one, but the evidence shows that the two are certainly in some way connected - with those who dislike their job 46% more likely to be diagnosed with "emotional problems", according to Live Science. SEASONAL MAGAZINE

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TECHNOLOGY

FACEBOOK IS FINALLY FORCING WHATSAPP TO SHARE YOUR NUMBER You might choose not to share your account information under WhatsApp’s latest policy change for relevant ads on Facebook, but that does not mean the messaging platform will not share your phone number with the social media website that purchased it a few years back. This policy marks a significant change in the stand by WhatsApp, a messaging service that has more than a billion users. When it was acquired by Facebook for $19 billion two years ago, WhatsApp cofounder Jan Koum promised to protect user data, saying the deal will not affect their privacy policy. Nikhil Pahwa, co-founder of the Internet Freedom Foundation, told: “I think the expectation and the promise of WhatsApp, when it was acquired, was that your information, even if it is your number, would not be linked with Facebook.”

hatsApp will give your contact details to Facebook for purposes other than ads even if you opt out, a WhatsApp spokesperson said, contrary to reports that users can choose not to share details such as their phone number. The choice is limited to whether or not Facebook can use your information for relevant ads and suggesting people you can friend. “If you choose to opt out, this means Facebook won’t be able to suggest friends or improve the ads you see based on your WhatsApp number,” the spokesperson told. When asked, however, if phone numbers will still be shared, the spokesperson said: “…the phone number is being shared with Facebook, but it will not be in the public domain. Also some basic device information is being shared: SEASONAL MAGAZINE

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mobile carrier code, identifier, mobile country code.” “Specifically, we will provide Facebook the phone numbers people use to sign up for WhatsApp, along with information about how often people are using our service. This will allow us to improve our app’s performance and ultimately be more transparent about our metrics with the public,” the spokesperson said.

“SPECIFICALLY, WE WILL PROVIDE FACEBOOK THE PHONE NUMBERS PEOPLE USE TO SIGN UP FOR WHATSAPP, ALONG WITH INFORMATION ABOUT HOW OFTEN PEOPLE ARE USING OUR SERVICE.

The FAQ section on whatsapp.com provides a step-by-step guide on what to do “if you do not want your account information shared with Facebook to improve your Facebook ads and products experiences”. It said the “Facebook family of companies” will still receive user information “for improving infrastructure and delivery systems, understanding how our services or theirs are used, securing systems, and fighting spam, abuse, or infringement activities”. Users on social media platforms have been posting about how opting out of WhatsApp’s changes will prevent the messaging service from sending their phone numbers to Facebook. However, WhatsApp’s clarification shows the contact details will go to Facebook. The choice users have is that they can stop Facebook from using the details for more relevant ads and friend recommendations. WhatsApp said the details of users who don’t have Facebook accounts will also be given to the social network. “The short answer is yes, all numbers. But if we have an opportunity to give background here, the point is that WhatsApp is owned by Facebook. Facebook owns the computers WhatsApp uses.

“So while (it) is true that Facebook Inc has ‘access’ to these numbers, they’re not useful for anything on Facebook because no one has accounts there. We’re not creating accounts for people,” the spokesperson said. WhatsApp said earlier this year that it was experimenting making businesses pay to reach their customers through the service. “With its most recent announcement, WhatsApp has shown that it is no longer as independent from Facebook as it initially intended to be… It remains to be seen whether the 1 billion-plus users of WhatsApp regard the company’s latest announcement as a betrayal of trust…,” Pamela Clark-Dickson, principal analyst

IS THIS THE BEST CAMERAPHONE UNDER RS. 40,000? H

uawei has launched its much awaited camera centric phone Huawei P9. While there is much speculation on how iPhone 7 will sport a dual camera, Huawei India today launched its dual lens rear camera smartphone, Huawei P9 priced at Rs 39,999. The phone is all about the camera and it

THIS POLICY MARKS A SIGNIFICANT CHANGE IN THE STAND BY WHATSAPP, A MESSAGING SERVICE THAT HAS MORE THAN A BILLION USERS. WHEN IT WAS ACQUIRED BY FACEBOOK FOR $19 BILLION TWO YEARS AGO, WHATSAPP CO-FOUNDER JAN KOUM PROMISED TO PROTECT USER DATA, SAYING THE DEAL WILL NOT AFFECT THEIR PRIVACY POLICY. at Ovum, wrote in an opinion piece. It is to be seen whether WhatsApp’s policy shift has the potential to affect its user-base. “We can choose to use other services. People shifted from Orkut to Facebook because Facebook was better at privacy. In the same way, people can choose to switch from WhatsApp to a potentially more secure messaging service like Signal. Terms and conditions are subject to change (like in the case of WhatsApp) and we have to accept that as a reality.” The messaging service, however, sought to reassure its users: “WhatsApp has become even more private and secure since joining Facebook, as we launched end-to-end encryption, which ensures messages can only be read by people in the conversation. WhatsApp can’t read them and neither can Facebook.” It also said it will not allow banner advertisements from third parties.

(Credit: Hindustan Times)

has been co-engineered with German lens and camera specialist, Leica. Similar to iPhone's campaign we see scores of impressive pictures clicked from the phone. The two 12MP cameras on the back is built to capture colour and depth in a frame giving the picture a professional touch, "one camera sensor captures the colour

THE CHINESE MANUFACTURER IS ALSO OFFERING 2-YEARS WARRANTY AND ONE FREE SCREEN REPLACEMENT FOR ANY ACCIDENTAL DAMAGE TO THE DISPLAY OF THE DEVICE WITHIN FIRST THREE MONTHS OF THE PURCHASE.

information and the other sensor captures only the black and white and varying levels of gray information." Basically the USP of the phone is camera, camera and camera. The smartphone is powered by Huawei's own HiSilicon Kirin 955 that is refined variant of the 950. It features an octa-core processor with one quad-core Cortex A72 cluster clocked at 2.5GHz and another Cortex A53 quad-core cluster clocked at 1.8GHz. The chipset is paired with 3GB of RAM and 32GB of internal storage that can be expanded using a microSD card slot. Recently we saw big move on the battery front from OnePlus 3 with 3000mAh with dash charge. Huawei's new phone comes packed with 3,000mAh battery on the back along with a fingerprint reader and a USB Type C port that sits at the bottom. The smartphone will be available in Titanium Grey, Mystic Silver and Prestige Gold finishes. Huawei also announced the stainless steel version of the Android Wear powered Huawei Watch priced at Rs 22,999. Both the watch and Huawei P9 will go on sale exclusively on Flipkart at 3:00PM on 17 August. The company has also extended the warranty period to two years with a pick and drop service. The Chinese manufacturer is also offering 2-years warranty and one free screen replacement for any accidental damage to the display of the device within first three months of the purchase. Along with this, the buyers will also get one free device replacement instead of repair during the first three months of the purchase. SM

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RURAL

INDIA'S UNBELIEVABLE STRUGGLES WITH RURAL HEALTHCARE EVERY YEAR, THOUSANDS FROM INDIA'S VILLAGES TRAVEL TO ITS BIG CITIES IN SEARCH OF PROPER MEDICAL FACILITIES. SOME EVEN DO 1000 KM JOURNEYS AND TAKE APPOINTMENTS 1.5 YEARS AWAY. ith a wound that refuses to heal on her shoulder, ninemonth-old Ruksana lives with her parents – and hundreds of others patients from across India – on the footpath outside the metro station of Delhi’s All India Institute of Medical Sciences. After waiting six months amid the noise, dust and traffic, they finally have an appointment with an AIIMS doctor – a year from now. Ruksana, a quiet, unsmiling child with kohl-lined eyes, and her parents journeyed about 1,023 km from East Champaran, Bihar, for medical help. They embody recently released data from the National Sample Survey Office that 48% of overnight trips made by millions of Indians from rural areas (25% in urban

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areas) are for medical purposes, their journey reflecting the growing failures of the public-health system in the world’s fastest-growing economy. More than half of India’s rural population uses private healthcare, which is four times as costly as public healthcare, and can cost the poorest 20% of Indians more than 15 times their average monthly expenditure, another National Sample Survey Office survey found last year. Ruksana’s father, Mohammed Kalimuddin, 38, is a farmer. He has spent Rs 60,000 during the family’s six-month sojourn in Delhi. That includes Rs 24,000 on failed medical treatment. Since Kalimuddin’s average annual earnings are no more than Rs 40,000, the gap has been bridged by his savings.

“The basic diagnosis and examination has been done but full treatment is yet to commence,” said Kalimuddin. “These doctors are giving appointments almost one year from now – how will her wound get treated?” People like Kalimuddin make the journey to Delhi because they are rarely assured of quality healthcare near home. More than 90% of treatments for childhood diarrhoea and pneumonia in Bihar – the leading causes of death among Indian children – were found to be incorrect, IndiaSpend reported in February 2015. Kalimuddin’s story is shared by several other families who live outside the AIIMS metro station as they try to reach a doctor. They do not have money to stay in a hotel or rent a room. The money spent by Kalimuddin is

to toilets at home. The medical migrants outside AIIMS and the journeys they make reflect the low priority India accords to healthcare. Here are some indicators:

almost four times the average expenditure of Rs 15,336 per health trip according to the National Sample Survey Office data. Up to 86% of the rural population and 82% of the urban population are without health-expenditure support, and about 12% of the urban and 13% of the rural population got health insurance through the Rashtriya Swasthya Bima Yojana (National Health Insurance Scheme) or similar plans, IndiaSpend reported in July 2015. Inadequate public healthcare and healthcare expenses push an additional 39 million people back into poverty in India every year, this Lancet paper said. “Thankfully, many come every week and provide us with food, which helps us survive here,” said Kalimuddin, who mostly gets food from a group of Sikhs. When they don’t come by, the family spends Rs 30 for a plate of rice and vegetables from a nearby stall. More than half of overnight trips in Kalimuddin’s state – 581 of every 1,000 – Bihar, were for medical reasons, sixth-highest among all Indian states and union territories, according to the survey data. West Bengal (633 of every 1,000) and Assam (599 of every 1,000) were the states that reported the highest number of trips made for medical reasons from their rural areas. In contrast, 211 every 1,000 trips from rural areas of Delhi and and 250 from Meghalaya were for medical purposes, the lowest in India. With 104 million people, Bihar is India’s third most populous state, and has the third-highest percentage of people (33.7%) living below the poverty line – defined as the ability to live on Rs 26 per person per day in rural areas and Rs 31 per person per day in urban areas. After Bihar, the greatest percentage of people below the poverty line are in Chhattisgarh (39.9%) and Jharkhand (36.9%).

In general, poverty is correlated with the lack of healthcare. For instance, among states with the highest proportion of undernourished children, Jharkhand and Chhattisgarh have the worst infrastructure for institutional deliveries. Although 18 states with poor health indicators – called “high-focus states” – increased health spending in anticipation of cutbacks on centrally sponsored health schemes, smaller states have cut health spending because they did not have the money, IndiaSpend reported in February 2016. The North-East region requires over eight lakh additional hospital beds to tackle the inaccessibility of healthcare services for the rural population, according to Federation of Indian Chambers of Commerce and Industry and the Public Health Foundation of India. India’s poorer states have health indicators that are worse than many nations poorer than them, and India’s healthcare spending is the lowest among BRICS (Brasil, Russia, India, China, South Africa) nations, as are its health indicators. While Chief Minister Nitish Kumar is credited with turning around the economy of Bihar, the state is still at the bottom rungs of India’s poverty ladder, unemployment and public and personal infrastructure – from highways

THE MEDICAL MIGRANTS OUTSIDE AIIMS AND THE JOURNEYS THEY MAKE REFLECT THE LOW PRIORITY INDIA ACCORDS TO HEALTHCARE.

Of 4,000-odd multi-crore infrastructure projects in the country, only nine (0.21%) – with a total investment of Rs 938 crore – are in the health sector, IndiaSpend reported in December 2015. Publichealth centres across India’s rural areas – 25,308 in 29 states and seven union territories – are short of more than 3,000 doctors, the scarcity rising 200% (or tripling) over 10 years, IndiaSpend reported in February 2016. There is an 83% shortage of specialist medical professionals in community health centres, as IndiaSpend reported in September 2015. India has seven doctors for every 10,000 people, according to this 2012 WHO report. The ratio should be 1:600. The Centre’s spending on health has declined over two years, part of the 14th Finance Commission devolution reforms aimed at giving states more money without spending conditions imposed from Delhi. The money allocated for key centrally sponsored social schemes – Integrated Child Development Services and National Health Mission – declined 10% and 3.6%, respectively, over two years. Currently, the National Institution for Transforming India (known as NITI) Aayog is working on a vision document on public health. Some salient features: All rural MBBS doctors should be trained as family physicians with the government paying for each patient so treated. Incentives to low-cost private altern atives, such as NGO-run institutions and missionary-run hospitals, to bolster government-run institutions. Promote competition between private and government hospitals at the secondary level, which involves services of medical specialists, while primary centres are usually single-physician clinics, usually with facilities for minor surgeries. In a meeting in April 2016, the NITI Aayog called for the outsourcing primary healthcare to private doctors. It does not appear that journeys like Ruksana’s will end any time soon. (This article first appeared on IndiaSpend, a data-driven and public-interest SM journalism non-profit.) SEASONAL MAGAZINE

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INNOVATION

INSIDE INDIA'S REVOLUTIONARY MONEY TRANSFER APP National Payments Corporation of India (NPCI) on Thursday said the Unified Payments Interface (UPI) is live and currently available for customers of 21 banks. Here are the key facts you need to know about the new payments system: What is UPI? UPI is an app - a payment solution which empowers a recipient to initiate the payment request from a smartphone. It facilitates virtual payment address as a payment identifier for sending and collecting money and works on single click 2-factor authentication. A government press release explains the system as follows: The product will enable money transfers – both ‘Push’ and ‘Pull’ through smart phones. According to it, the two important features of UPI are, (i) it facilitates customer convenience by eliminating the need for providing detailed account/beneficiary details, through the use of virtual address and (ii) it facilitates interoperability of person-tomerchant payments (both push and pull).The soft launch of UPI was announced by the outgoing Reserve Bank Governor Raghuram Rajan in April this year and was under pilot run, mainly with employee-customers, for some time. After assessing the success of pilot run, RBI had accorded its final approval for public launch of the product. How exactly does this work? How is it different from the online payment system presently in use? Currently to to make an online payment, first you need to add the beneficiary details, including the individual's name, bank account number, IFS code, etc. While using UPI app, these processes are not required as the identifier is the virtual payment address or the unique ID of the beneficiary. This unique ID can be your phone number tagged along with the name of your bank. Once you have the unique ID of the beneficiary, enter the app, put amount to be paid, the unique ID and click 'send' button. The banks will have to make their apps UPI-enabled. Also, unlike RTGS and NEFT, UPI app can

be used to transfer funds 24 hours. According to NPCI, which developed the system, the UPI app will be made available on Google Play Store by banks. Which all banks have gone live with the app now? Customers of as many as 21 banks can avail of the app's services. Some of the banks which have gone live Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Oriental Bank of Commerce, Union Bank of India and Vijaya Bank, among others. NPCI's decision was to allow only those banks with 1,000 customers, 5,000 transactions and success rate of around 80 percent during the pilot runs to go live. The threshold criteria helped banks to refine their systems and procedure, NPCI said. How is it beneficial for the customers?

It makes payments easier and quicker. As e-commerce marketplace Flipkart, which recently bought out a UPI startup PhonePe, says, "In contrast to the present payments process, which involves entering numerous account/card details and multi-level interventions, UPI will provide a highly secure hassle-free digital payments experience." The app also provides an option for scheduling push and pull transactions for various purposes like sharing bills among peers. One can use UPI app instead of paying cash on delivery on receipt of product from online shopping websites and can pay for miscellaneous expenses like paying utility bills, over the counter payments, barcode (scan and pay) based payments, donations, school fees and other such unique and innovative use cases. Why is it important? This is a step towards transforming India into cashless economy. Only six percent of the merchants and retailers in the country have the infrastructure for accepting card payments. So the transactions are mostly made in cash, which makes it difficult to arrest tax evasion. UPI's significance has to be seen in this context. Cashless transactions will arrest generation of black money and increase the tax compliance, boosting the revenue for the government. For ecommerce companies in particular this is likely to give a big leg-up. Announcing the buyout of PhonePe, Flipkart CEO Binny Bansal said, "Payment has been one of the biggest hurdles for mass adoption of online shopping in India. UPI has the potential of transforming the entire payments ecosystem in the country." Moreover, as NPCI Managing Director and CEO AP Hota says, "Real-time sending and receiving money through a mobile application at such a scale on inter-operable basis had not been attempted anywhere else in the world." SM

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IN-FOCUS

MOTHER TERESA'S WORK IN THE WORDS OF THE FIRST WESTERN JOURNALIST WHO INTRODUCED HER The American reporter who first brought news of Mother Teresa’s work to an international audience still remembers the day in 1966 when he met the nun serving the poor in the slums of Calcutta. “Certainly she totally deserves to be a saint. In my eyes, she was a saint her entire life,” says retired Associated Press reporter Joe McGowan, Jr. “She was so humble and yet so pleasant.”

1960s. “Calcutta is a place all unto itself,” McGowan recollected. “I saw a couple of completely naked women walking the streets, their hair all disheveled. They would see a cigarette butt and they would reach over and pick it up and chew it and eat it. This was the kind of thing you saw in Calcutta in those days. How they are today, I don’t know.”

McGowan, 85, was an AP reporter for 42 years who covered wars, revolutions, and earthquakes. In 1966, he was an AP bureau chief with a huge territory – India, Pakistan, Afghanistan, Nepal, Ceylon, and the Maldives Islands.

Another time he saw a group of students waiting and waiting for a streetcar, growing increasingly angry at the delay. “They were so mad, when the street car arrived they set it on fire. That meant fewer streetcars for the next day.”

Trying to dig up more stories, he was speaking with a newspaper editor in Calcutta about anything unusual or ignored. “He finally said ‘Well, there’s that funny little nun who goes around collecting dying people.’ And I knew I had a story,” said McGowan. The reporter took a bike taxi over to her home for the dying and spent two days with Mother Teresa. She was dressed in the local sari, the homespun material common to average or poor Indian women. “There was nothing pretentious about her at all,” McGowan said. The nun would walk around Calcutta with a twowheel cart with the help of two hired men. “They went around picking up dying people,” the reporter recounted. “In those days there were not enough hospital beds in places like Calcutta. So if you were declared terminally ill, your family had to come and take you home so that there was a bed for somebody else,” he said. “If nobody picked you up, they put you on the sidewalk to die.” Since 1952, Mother Teresa and her Missionaries of Charity sisters had cared for the abandoned and the dying at their Home for the Dying Destitutes. The building was divided into two parts, one for men and one for women. Conditions were cramped. “They slept on the floor on crude little mats. It was so crowded they couldn’t even get up

In a world like that, McGowan recalled, Mother Teresa was “very, very calm” and “very unpretentious.” “She was doing all this work, but it was just her life. She wasn’t bragging about it.” and go to the bathroom,” McGowan recounted. “I tried to stay out of the way, these people were crammed in there so tight.” “Under her outstanding care, some of those people recovered and got up and walked out,” he said. McGowan said he was “extremely impressed” with her work. “I think that showed in my writing about her.” His Associated Press account from March 1966 was the first international news story about her. McGowan said he didn’t know if he could even explain what motivated her. “She always wanted to do the Lord’s work, I guess she would say.” “I’m not Catholic, but obviously she is an amazing woman,” he continued. “She will be sainted in just a few more days. I just have the highest of respect for her, the work that she did, to work there in the slums of Calcutta.” The Indian city was a rough place in the

The people she helped reacted with great appreciation. “Elsewhere they had not received any aid of any kind,” he said. “It was so unusual in an extremely overpopulated place like India for them to get this kind of attention.” McGowan continued his reporting career and retired to Broomfield, Colo., a suburb of Denver. He told of his experiences and the people he met in his 2012 book From Fidel Castro to Mother Teresa. “On the one hand, you had Fidel Castro. On the other hand, you had Mother Teresa: this small nun who was doing – I guess you would have to say – miraculous things for people at the bottom of the societal rung,” he said. The journalist and the nun reunited when she visited Denver in May 1989. She passed him a written message. “She gave me a card. In her handwriting, it says ‘Love others as Jesus loves you. God bless you. M. Teresa, M.C.’” McGowan says it’s among his most treasured possessions. SM SEASONAL MAGAZINE

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HOUSING FINANCE

SBI HOME LOANS

The Leader in Rates

SBI continues to be the rate leader in the country, with home loans offered at the most competitive rates of 9.30%. SBI has come out with cheaper home loans to attract government employees who are beneficiaries of the wage revision bonanza. The Seventh Pay Commission covering both serving and retired government staff has resulted in surplus cash with more than one crore beneficiaries. SBI has launched new loan products by at liberalised terms including reduced interest, targeted mainly at the government and defence personnel. The new products announced are ‘SBI Privilege Home Loan’ and ‘SBI Shaurya Home Loan’. Salient features include eligiility for central, state, PSU bank employees, repayment period extended to 75 years of age, no processing fee, cheaper by 0.05 per cent interest, check-off facility with the employer, as well as switch-over options of existing loan balances with other banks / lending institutions. State Bank of India (SBI) is providing a formidable challenge to dedicated Housing Finance Companies (HFCs) as well as peer banks by offering very innovative products and better rates, and the real winner from SBI’s aggressive posturing is the homebuyer. SBI Home Loans comes with the trust factor of State Bank of India, India’s staterun and largest lender. It continues to be the rate leader

in the country, with home loans offered at the most competitive rates of 9.30%. Additionally, SBI Home Loans offers low processing fees of 0.25% for loans up to Rs. 25 lakhs. The loans offer interest rates on attractive Daily Reducing Balance basis. SBI has many innovative products like MaxGain Overdraft, PreApproved Home Loan (PAL), and Yuva Home Loan with 20% higher loan amount. SBI being the largest bank in both the public and private sector, can grow its home loan portfolio to any size as per the market growth. Its home loan product is backed by SBI’s stateof-the-art net banking facility that ensures transparency and efficiency, for both the lender and the homebuyer. It has a wider portfolio unlike many others with ticket sizes ranging from as low as less than Rs. 25 lakh to as high as more than Rs. 75 lakhs. SBI Home Loans is attracting more and more customers these days due to its longer maximum tenure as well as a generous construction period moratorium (repayment holiday) of up to 36 months. SBI Home Loans applications can be submitted online, and evaluated for approval in an online manner, which is attracting young and tech-savvy homebuyers. SEASONAL MAGAZINE

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HOUSING FINANCE

REPCO HOME FINANCE

Defying Conventional Mortgage Wisdom REPCO HAS GROWN AT 31% EVEN IN THE LATEST Q1 NUMBERS, AND HAS MAINTAINED ITS ASSET QUALITY, EVEN WHILE SERVING THE UNDERSERVED IN HOME LOANS.

R. Varadarajan o what kind of homebuyers does the country’s largest housing finance companies like HDFC or largest banks like SBI or ICICI lend? To the safest of the safe customers like well-employed professionals, with either job security or the security of being in an in-demand profession. Will these institutions lend to the non-salaried class? Generally not, as commonsense suggests that only such well-employed pros can take on the impact of a heavy and long-tenure debt like a home loan. Will HDFC, SBI, or ICICI provide home loan to a rural shopkeeper or agriculturist? Even if his finances and assets are healthy, they generally wouldn’t as he won’t be having a proper balance sheet or CIBIL score to accompany his application. Will these institutions provide loans to the so-called affordable segment of homebuyers? Again, most probably no, as commonsense suggests that those looking for sub-15 lakh kind of home loans would not be as financially stable as those looking for 30 or 50 lakh plus kind of loans. Giving those kinds of loans would cause NPAs to surge, goes the wisdom. These are the unshakeable first principles of housing loan business on which companies like HDFC built up huge home loan portfolios of over Rs. 2 lakh crore. Now, what if a Housing SEASONAL MAGAZINE

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Finance Company (HFC) proves that each and every one of these first principles of home finance can not only be violated, but turned upside down, to become one of the fastest growing housing finance operations in the country? Welcome to Repco Home Finance. The Chennai based Joint Sector firm promoted by state-owned Repco Bank lends primarily to non-salaried class like shopkeepers, small traders etc. Its home loan portfolio is dominated by rural customers at about 75%. And Repco’s focus is on the affordable segment with average ticket-size being Rs. 12 to Rs. 15 lakhs. Despite all these factors, Repco is not only growing at a furious pace of around 30% annually, but doing so in a safe and high quality way, with Net NPA less than 1% and Net Interest Margin at an industry leading 4.4%. No wonder then that discerning investors including some of the world’s most reputed FIIs have made a beeline for Repco Home Finance’s stock since its IPO in early 2013. The stock is up by nearly 6 times since April 1st 2013, outpacing biggies like HDFC in stock price growth. How Repco has done this next-to-impossible achievement is by a slew of innovations like personal business visits, creating balance sheets out of customers’ simple ledgers, and relying on its own in-house developed credit appraisal system.

HOUSING FINANCE

DHFL VYSYA HOUSING FINANCE

FOCUSED ON THE MIDDLE INCOME SEGMENT DHFL Vysya Housing Finance is all set to emerge stronger with the upcoming merger of group company Aadhar Housing Finace into it. hile DHFL Vysya is a leader in the middle income segment in South India, Aadhar Housing Finance has been more focused in North India. DHFL Vysya would be the surviving entity, post merger. DHFL Vysya has the intrinsic advantage of having a strong promoter group in DHFL and Wadhawan Global Investments, as well as a thoroughly professional management. Its footprint spans 7 states including the 5 South Indian states as well as Maharashtra and Uttar Pradesh. DHFL Vysya Housing Finance offers housing loans to both urban and rural middle income group customers. It offers attractive interest rates across typical ticket sizes like less than Rs. 10 lakhs, less than Rs. 15 lakhs, less than Rs. 25 lakhs, and more than Rs. 25 lakhs. DHFL Vysya offers an insurance policy for its home loan customers that insures against loss of life or loss of employability through accidents. It has attractive interest rates for small ticket sizes in both urban and rural areas that can go as low as 8.87%. DHFL Vysya has a significant presence in the states of Andhra Pradesh, Telengana, Karnataka, Tamilnadu, Kerala, Maharashtra, and Uttar

Pradesh. DHFL Vysya is jointly promoted by Indiaâ&#x20AC;&#x2122;s third largest HFC, Dewan Housing Finance Ltd (DHFL), and its promoter group company Wadhawan Global Investments.It is also backed by ICICI Bank which is a minority shareholder in the firm. This HFC offers loans to all possible segments of the society including salaried employees, professionals, self-employed people, and established businessmen. The flexible repayment options include fixed rate for first 10 years, and variable rates thereafter. DHFL Vysya combines the best of capable promoters (DHFL Group) and professional management, with its Managing Director R Nambirajan being an acknowledged expert in affordable housing and affordable home loans.

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HOUSING FINANCE

SHRIRAM HOUSING FINANCE

OFFERING HOME LOANS TO ALL UNDERSERVED - BIG TO SMALL Underserved can mean even the middle to higher income groups, which doesnâ&#x20AC;&#x2122;t have proper income documents due to their work being in the informal sectors of the economy.

hriram Housing Finance Ltd (SHFL) is a subsidiary of Shriram City Union Finance Ltd, a flagship company of Shriram Group, one of the largest diversified financial services groups in the country. Shriram Housing Finance's niche area of focus is underserved segments. When you hear the term underserved, first to come to your mind would be the low and middle income groups. But it is not the full picture as underserved can mean even the middle to higher income groups, which doesnâ&#x20AC;&#x2122;t have proper income documents due to their work being in the informal sectors of the economy. That is why Shriram Housing Finance extends home loans ranging from Rs. 50,000 to Rs. 75 lakhs, and even beyond to Rs. 1 crore plus. The underserved category of home loans is booming, as the informal segment of the economy accounts for 90% of the working population. Though the interest rates in the segment are higher than that offered by banks and mainstream HFCs, the riskadjusted returns are similar. Founded by legendary entrepreneur R Thyagarajan, Shriram Group is one of the most well-capitalized financial service providers in India, which makes scaling up of relatively newer operations like SHFL, a breeze. Sujan Sinha

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R Thyagarajan

Shriram Housing has been growing at a blistering pace since late 2011, when it commenced operation, due to the Shriram pedigree and expertise, the management bandwidth, as well as the huge and growing market of the underserved in which it operates. Sujan Sinha, a former veteran of Axis Bank, is the MD & CEO of Shriram Housing Finance Ltd. Headquartered at Mumbai, Shriram Housing Finance is present in 17 states and union territories across India. Its largest operations are in the states of Andhra Pradesh, Tamilnadu, Gujarat, & Rajasthan. It has utilized the branch facilities of group companies including Shriram City Union and Shriram Transport on a co-location basis, but in a clearly demarcated way.

HOUSING FINANCE

MAHINDRA RURAL HOUSING FINANCE

HOME LOANS AT THE GRASSROOT LEVEL This unique HFC uses proprietary credit appraisal models as there is no proper sale or purchase agreement for most lands, in rural communities. ahindra Rural Housing Finance Ltd (MRHFL) is arguably one of the largest HFCs serving the rural underserved population in India. Growing at a CAGR of over 50%, MRHFL is proving that corporates can do what is socially neglected and still thrive. Mahindra Rural Housing is the kind of company that only a Group like the Mahindras can spawn, and only something a parent like Mahindra & Mahindra Financial Services (MMFSL) can nurture. Because, the success of Mahindra Rural Housing stems from the in-depth knowledge of Mahindra Group in the rural sector by way of their leadership in farm equipment business, and the expertise MMFSL has in financing such farm equipment. No wonder then that Mahindra Rural Housing’s success has been globally acknowledged, with it being a prestigious member of UNDP’s Business Call-to-Action. Since its inception, MRHFL has been led by its CEO Anuj Mehra, who has also been its MD since the last few years. An economics graduate from Delhi University and a postgraduate in business administration from IIM Ahmedabad, Mehra has worked in various industrial spheres, and has been a Mahindra Group veteran for long. MRHFL is unique in that it’s 12.5% equity stake is held by National Housing Bank (NHB), which is the sector regulator and a subsidiary of Reserve Bank of India (RBI). The rest 87.5% equity is held by MMFSL. MRHFL's reach is over 40,000 villages. It uses proprietary credit appraisal models as there is no proper sale or purchase agreement for most lands, in rural communities. This unique HFC is present in 9 major states, and operate from 250 branches, with its most productive states being Maharashtra, Tamilnadu, Karnataka, and Andhra

Pradesh. The average ticket size is Rs. 1 lakh, while the usual limit to which they lend is around Rs. 7 lakh. Some of its loans are home-completion loans, which customers use for their roofing or flooring. MRHFL is currently in the process of growing its semiurban segment more as many large-scale affordable housing projects are happening in these geographies. Anuj Mehra

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HOUSING FINANCE

MAGMA HOUSING FINANCE

Bringing Alive the Smallest Dreams Magma Housing Finance’s Mission is to provide better and efficient access to all, through innovative solutions for the housing needs of the under-served RURBAN India.

he innovative products & services provided by Magma Fincorp had already created a niche for itself in providing services to informal customers in tier 3 and even smaller towns, reaching out to most of the Talukas in the 20 states that the company is present in. Over 60% of the Indian population resides in the rural areas. Magma Housing Finance’s goal is to reach the household of such under banked consumers at the grassroot level and help them realize their dream home. The entire Magma group network is being leveraged to cater to this customer segment, with use of technology and all group branches being online for superior customer experience. MHF offers complete range of home loan products namely home loan, home extension loan, home improvement loan, plot loans, plot plus construction loan with focus on informal income customer segment in upcountry locations. MHF also offers Loan against Residential and Commercial properties and residential project loans for small developers in emerging markets and micro markets. The housing finance company offers door step services to all their customers in remotest locations and having properties within or outside municipal limits. MHF’s exhaustive range of products is designed for salaried as well, though with a much larger focus on the informal salaried income. However, largely MHF caters to the self-employed customers, through extensive yet simple front-ended evaluation of their earning capacities. MHF’s unique proposition of doing credit assessment based total income of customer including alternate

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Sachin Khandelwal

income through simple templates by their in-house credit team is what helps MHF to cater to this segment. Magma group is almost as old as retail lending in India. Since the commencement of its financial services operations in 1989, Magma has been driven by one single goal, that of “Investing in the smallest dream”. Magma understands their “Rurban” customer’s dream and aim to be a stepping stone in them realizing it, by providing a wide suite of retail loans to help them create their very own dream home.

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WHAT TRAFFIC JAMS HAVE GOT TO DO WITH CANCER? A lot it seems. Apart from wasting your time, long traffic jams may cause exposure to toxic fumes, and potentially increase various health risks, including cancer, say researchers, one of them of Indian origin. xposure to outdoor air pollution is among the top ten health risks faced by humans and is especially pronounced in urban concentrations, according to the World Health Organization (WHO). In October 2013, WHO classified outdoor air pollution as being carcinogenic to humans. The findings showed that when vehicles stop at red lights, they go through different driving cycles such as idling, acceleration and deceleration and emission of toxic fumes. These emissions take more time to disperse, especially in built-up areas and end up accumulating in the air at traffic signals. Thus, the people sitting inside cars, with closed windows but with fans switched on, can be at an increased risk of exposure to the outdoor pollutants, the researchers said. Switching on the fan sucks the dirty air from outside to inside the vehicle, resulting in an accumulation of pollutants in the car. However, it may be relatively safe to put fans onto the setting where they re-circulate air within

the car without drawing polluted air in from outside, the study stated. "Where possible and with weather conditions allowing, it is one of the best ways to limit your exposure by keeping windows shut, fans turned off and to try and increase the distance between you and the car in front while in traffic jams or stationary at traffic lights," said Prashant Kumar from the University of Surrey. "If the fan or heater needs to be on, the best setting would be to have the air re-circulating within the car without drawing in air from outdoors," Kumar added. Previous studies have shown that drivers stuck at traffic lights were exposed up to 29 times more harmful pollution particles than those driving in free flowing traffic. The new research, published in the journal Environmental Science: Processes and Impacts, has found that pedestrians are also exposed to increased air pollution around traffic signals.

ONLY 50 INDIANS EARN BETWEEN RS. 50-100 CRORE! JUST HOW BELIEVABLE IS THIS TAX DATA? Recently, the Indian government decided to resume publishing income tax data, after more than a decade in order to encourage the use and analysis of Income Tax data and to increase transparency. The Central Board of Direct Taxes published data based on incometax returns filed by taxpayers for the assessment year 2012-13. While the data reveals several statistics and trends about India’s taxpayers and the nature of filings, the gross total income of India’s super rich is noteworthy. According to the CBDT data, only three Indians have a gross total income of more than Rs 500 crore. 26 individuals earn between Rs 100-500 crore and 50 Indians have a gross total income ranging between Rs 50-100 crore. The gross total income of individuals includes one’s salary along with the income from other sources, and is the income before deductions. The data from financial year 201112 reveals that in terms of just salary income, only 6 individuals earn between Rs 50-100 crore. Another interesting revelation is that no individuals showed a salary income of more than Rs 100 crore.

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LUXURY VACHERON CONSTANTIN UNVEILS MAITRE CABINOTIER RETROGRADE ARMILLARY TOURBILLON WATCH Swiss watch manufacturer Vacheron Constantin has unveiled the Maître Cabinotier retrograde armillary tourbillon model. The Maître Cabinotier retrograde armillary tourbillon is a remake of the double retrograde indications and the armillary tourbillon. The retrograde function governs the hours and minutes while the tourbillon revolves on two axes and has a spherical balance-spring.

MONTEGRAPPA ANNOUNCES THE PIRATES PEN AS NEWEST ADDITION TO THEIR LUXURY LINE MONTEGRAPPA PIRATES PEN Within the limited edition series produced by luxury brand Montegrappa, the craftsmen and women at Montegrappa present writing instruments commemorating swashbuckling adventurers – the much feared and followed Pirates. Offered as piston-fed fountain and rollerball pens, the Pirates writing instrument is made in Charcoal Black celluloid and a die-case metal barrel and cap.

ROLLS-ROYCE OPENS A NEW DEALERSHIP IN POLAND British luxury car manufacturer, RollsRoyce, celebrates the opening of its new showroom in the Polish capital of Warsaw. Building on its long-standing partnership with Auto Fus car dealership, the novel facility will offer the entire Rolls-Royce portfolio, including its latest edition, Dawn. It will also carry the brand’s bespoke service, which spans some 44,000 exterior colors as well as a bevy of fiber optic elements in the starlight headliner to choose from.

FENDI CELEBRATES 90 YEAR ANNIVERSARY WITH FASHION SHOW AT ROME’S TREVI FOUNTAIN FENDI has chosen its hometown of Rome, Italy to celebrate its 90 year anniversary, staging a unique event on July 7, 2016 that will include a Fashion Show at the Trevi Fountain, followed by a dinner at Pincio Terrace, Villa Borghese. Founded in Rome 90 years ago, FENDI opened its first boutique in 1926 in Via del Plebiscito, featuring a small fur atelier and leather goods workshop. The Trevi Fountain, Roman icon, is a one-of-a-kind scenery for FENDI’s fashion show.

ITALIAN FASHION HOUSE FENDI PRESENTS BLACK EDITION FENDI is pleased to introduce the Black Edition, a new capsule collection with a rock twist. In this new version, the flowers bloom on dark black leather and adorning some FENDI bags is a Dotcom embellished with flowers and black metallic Selleria stitching on the front with a mirrored dot coming out from the detachable internal pouch. The collection also includes a Mini By The Way bag in floral decorated leather as well as a backpack with two silver zips and a studded handle.

VACHERON CONSTANTIN SIMPLIFIES GLOBAL TIME KEEPING WITH NEW OVERSEAS WORLD TIME

Dedicated to travelers who seek to keep track of time with ease no matter where their destination happens to be, the new Overseas world time from Watchmaker Vacheron Constantin is the ideal companion. It displays at least 37 time zones and is made of three parts. Its center includes a "Lambert" projection map which dsiplays the world's continents and its cities, along with the oceans. A third sapphire disk uses smoky graded tint to indicate day and night to the wearer and lastly, the translucent outer ring displays the hours and minutes.

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LUXURY THE HOUSE OF ROSE CELEBRATES 35 YEARS WITH REDUCED PRICES AND NEW ITEMS

ALSORG LAUNCHES THEIR NEW BEDROOM COLLECTION Alsorg has launched its latest Bedroom Collection in which every detail has been carefully designed to provide comfort and total body support. Alsorg’s new collection is made in India from American walnut wood and solid wood. Product Descriptions: The first set includes a bed that is made of American walnut wood with suede upholstery.

WIN A TRIP OF A LIFETIME TO NEW YORK CITY WITH TUMI This August, international travel, business and lifestyle accessory brand TUMI has partnered with Etihad Airways and NYC & Company, New York City’s official destination marketing organization to offer its customers in India a getaway to New York City. From August 1 through 31, 2016, TUMI customers who make a purchase and fill in a contest form at any TUMI store in India can enter the competition.

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FENDI PRESENTS “DOTCOM CLICK” The new FENDI Dotcom Click bag is a mini of the Dotcom bag. With its unique removable pouch, visible from the color contrast dot in front of the bag, it can also be used as an evening bag. The Dotcom Click is available in quilted nappa. An additional contemporary touch is given by the long chain strap that gives the opportunity to wear it in a double way together with the short handle. Plain leather versions are available in light blue, poppy and black, but also in leather and suede contrast waves.

To celebrate the momentous occasion of their 35th anniversary, The House of Rose is offering a 35% special markdown on jewelry pieces beginning August 3, 2016 at noon and ending at 7 pm on August 6, 2016. Rose, which started as a jeweler to jewelers in 1981, is helmed by Biren Vaidya, MD, who is the creative soul and driving force behind the brand.

LOUIS VUITTON REVEALS A NEW RANGE OF PACKAGING This new range of packaging, developed by Italian brand Luis Vuitton, is worked in a bright saffron shade specially selected to create a new visual signature. Named Imperial Saffron, this color has been a part of Louis Vuitton’s history for a century and a half. It can been seen on heritage pieces such as the Citroën trunk, created for an expedition in Africa launched by the French automobile firm in 1924. The Imperial Saffron has also naturally been showcased as the prominent color on the official poster of “Volez, Voguez, Voyagez”, Louis Vuitton’s exhibition at the Grand Palais in Paris in 2015. -

GUCCI EMBRACES BRITISH CULTURE UNDER NEW PARTNERSHIP WITH CHATSWORTH HISTORIC HOUSE Gucci and the historic house of Chatsworth have begun a three-year contract that will highlight fashion, culture, art, architecture and history in Britain. Chatsworth, known to host cultural events, is far from new in the fashion world. One of their more current exhibits includes “Never a Bore”, which showcases photos of Duchess Deborah Devonshire taken by English photographer Cecil Beaton. Gucci will support the various events hosted Chatsworth for the next three years. The upcoming exhibit featuring fashion and style of Chatsworth will be one of their longest running exhibitions to date beginning in March of 2017 and ending in October of 2017.

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LUXURY BMW AND MONTBLANC LAUNCH THE “MONTBLANC FOR BMW” SPECIAL EDITION IN THE U.S. AT PEBBLE BEACH Coinciding with last year’s launch of the all-new 2016 BMW 7 Series, BMW and Montblanc proudly present the “Montblanc for BMW” Special Edition, a collection of lifestyle accessories designed specifically for the 2016 BMW 7 Series.

CHRISTIE’S HOSTS ‘OUT OF THE ORDINARY’ SALE THIS SEPTEMBER Christie’s has announced the highlights of its ‘Out of the Ordinary’ Sale beginning September 14, 2016. Items featured include: A slice of Queen Victoria’s wedding cakeQueen Victoria (1819-1901). A slice of wedding cake, 1840. In presentation box, inscribed ‘The Queen's Bridal Cake/ BUCKINGHAM PALACE, FEBY. 10/ 1840’, beneath a Royal crown; together with Queen Victoria’s signature on paper with Royal cypher. Estimate: £800-1,200. This lot is sold with a letter from the Royal Archives at Windsor Castle relating to the cake.

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LOUIS VUITTON LAUNCHES MADE TO ORDER SERVICE Louis Vuitton has launched its exclusive Made to Order service for the Monte Carlo in Caiman leather. The service will be available permanently at their store in DLF Emporio, New Delhi. Louis Vuitton celebrates the 10 year anniversary of the iconic initials loafer – the Monte Carlo—by launching a special made-to-order Monte Carlo shoe in Caiman leather.

PIAGET POLO S INTRODUCED FOR GENERATION OF GAME CHANGERS Featuring a shape-within-shape that is Piaget’s distinctive hallmark, the new Piaget Polo S displays the unique association of a cushion-shaped dial within a round 42mm case. The collection is composed of the automatic Piaget Polo S, equipped with the 1110P movement, and the Piaget Polo S Chronograph, equipped with the 1160P movement. Both of these movements have been developed specially for the Piaget Polo S. The automatic Piaget Polo S is available with a blue, silvered or slategray dial, while the Piaget Polo S Chronograph is available with a silvered or blue dial.

TIMOTHY OULTON BRINGS DESIGNS TO INDIA FOR THE FIRST TIME

British furniture and interiors company Timothy Oulton introduces its designs to New Delhi this August with the opening of its new gallery in Defence Colony. Partnering with Tarun Vadehra Interiors, the two story 334m2 gallery will offer customers an immersive multi-sensory experience, displaying distinctive furniture designs in which only the finest materials are used, from South American leather to century-old wood reclaimed from English distilleries, alongside dramatic lighting collections and vintage curios.

RR DECOR LAUNCHES ITS NEW COLLECTION OF FURNISHING FABRICS RR DECOR NEWEST COLLECTION RR Décor has unveiled its latest furnishing fabrics collection called “Enya Collection”. The collection of textures is achieved through a mix of yarns and weaves in many color combinations such as shades of white and creams, as well as pastel tones of mint, dusk and lilac. It will be available in all leading premium furnishing stores across India.

LUXURY HERMÈS NEW HAUTE-BIJOUTERIE IV-CONTINUUM TO BE PRESENTED FROM SEPTEMBER 5 TO OCTOBER 8, 2016

Hermès presents its new hautebijouterie, gold and silver collections designed by Pierre Hardy, from September 5th until October 8th during the biennale des antiquaires, at the bijouterie space of the Hermès store located at 24 Faubourg SaintHonoré, Paris. In a setting conceived by the French artist and architect, Didier Faustino, Hermès presents an installation of twelve modules, twelve time capsules that blend haute bijouterie and jewelry in gold or silver- the insolent Chaîned’Ancre Punk, Niloticus Ombre, openwork crocodile scales in gold, and the Attelage d’Or, inspired by Hermès’ equestrian roots.

3.1 PHILLIP LIM ADDS ‘ALIX’ SADDLE CROSSBODY TO ITS FALL 2016 COLLECTION The ‘Alix’ Saddle Crossbody bag is the newest addition to the 3.1 Phillip Lim handbag line. This halfmoon shaped bag is available in camel, brick, navy and black as well as in Anaconda-embossed leather. It features a paper clip closure and long leather handle. Stylish and minimalistic! The ‘Alix’ Saddle Crossbdy is available at 3.1 Phillip Lim boutiques, their website and in department stores worldwide.

FENDI TIMEPIECES UNVEILS THE FENDI MY WAY KARLITO With his fur crest, Karlito lands for the first time on FENDI timepieces, after making his debut on the FENDI Fall/ Winter 2014-2015 fashion show. Now he is back with an exclusive Collection of watches, the Fendi My Way Karlito, fusing fur with precious stones and leather. The Fendi My Way Karlito pays homage to Karl Lagerfeld. A caricature of Karl’s face with his distinctive sunglasses pervade the silver, white and black lacquered dial, which is set with 3 diamonds as indexes. A circle of steel studs decorates the sleek black steel bezel, while the FENDI signature stands at 12 o’clock.

RYAN REYNOLDS BECOMES NEW INTERNATIONAL AMBASSADOR FOR LUXURY WATCHMAKER AND JEWELER PIAGET As a luxury watchmaker and jeweler since 1874, Piaget has announced award winning Ryan Reynolds as their new international male brand ambassador. Reynolds began his acting career in 2012 with the film ‘The Proposal’ and recently starred in a number of superhero roles including Marvel’s 2016 ‘Deadpool’. Philippe Léopold- Metzger, Piaget CEO, describes the actor’s on-screen roles as “remarkable” and “daring”. “Like Piaget, he fearlessly brings creativity to his art, and we are thrilled to welcome him to the Piaget family”, said Metzger. Reynolds is happy to join the Piaget family and even remembers the brand from his childhood. “I work in a field in which things can be cast away quite quickly. So when you find something iconic, something timeless, it’s important.” said Reynolds.

INTERCONTINENTAL CHICAGO CATERS TO CHINESE TRAVELERS WITH “CHINA-READY” OFFERINGS Inter Continental Chicago Magnificent Mile is pleased to offer those visiting from China a selection of "China-Ready” amenities designed to make their stay feel like home. Offerings include authentic cuisine and Mandarin speaking staff trained to communicate with nonEnglish visitors. Chinese guests are welcome to use UnionPay as form of payment and can enjoy other ChinaReady offerings such as a welcome pack upon check in which includes a customized welcome letter and hotel guide in Mandarin, a Chicago map along with magazines available in Mandarin, tea amenity with two different types of Chinese teas, complimentary bottled water and slippers, Mandarin TV channels, A la carte Chinese menu items upon request and a Chinese breakfast buffet section offered in the Center Court room as part of the full breakfast buffet. SEASONAL MAGAZINE

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