Sept 30 oct 31,2017 by Passline Business Magazine

September 30 - October 31, 2017

P a s s l i n e

Yoga for all ages

M C Paul

â&#x20AC;&#x2DC;Land Acquisition is still a hurdle for extensionâ&#x20AC;&#x2122;

Elias George

Rajeev Chandrasekhar

Arundhati Bhattacharya

Precepts and practices clash in ecology protection

September 30 - October 31, 2017

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September 30 - October 31, 2017

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E d i t o r i a l

GST solutions are far from perfection

E Editor & Publisher Varghese Paul Kozhikode Vineetha Mukundan Ph: 8714986177 Chennai Augustine Joseph Ph: 09381000534 Bangalore Gireesh Gopal Ph: +91 7204560000 Adithya Ph: +91 9538060591 54, 2nd Main, Vyalikaval Banglore – 560003 Manager-Marketing Sajan K Ph: 09895344485 Keethara Publications Pvt Ltd Door No: 1994/66 2nd Floor, ‘Priyadarshini’ Veekshanam Road Kochi – 682018, Kerala, India Mob: 9207734485 www.passlinebusinessmagazine.in E-mail: passline.com@gmail.com

ven after the measurers like easing of tax compliance rules for small and medium business and the reduction of tax rates of 27 products have not found a solution for already vexed GST imbroglio. The only positive aspect of the changes that GST council has made is the impression among the business community and the general public is that the authorities are willing to listen to the problem encountered by them at the rollout of the new tax. The solutions that have emerged must serve to the ease of pain of compliance, but are far from perfection. Our small scale industries are facing the threat of closure due to the unscientific regulations and high tax rates in GST regime. As regards Kerala, the implication of GST has made a death knell for the rubber-based manufacturing units. Tax rates for rubber products were 5% before GST; now it is 18% to 28%. The essential products like door frame and window frame made in cement being used by the common people for constructing home will fall under higher tax bracket of 28%. Cement primer and hollow bricks are also now in 28% from 4% range. The business institutions having turnover up to Rs 1 crore can avail the compounding rate of 5 %. But if the product is selling out of the state traders should remit 18 to 28% as tax. The finished products of small rubber manufacturers are bought by the traders from other states. They have stopped the purchase after the hike of the tax. Plywood manufacturers are also in the same situation. Before the implementation of GST small scale sectors need not remit the tax up to Rs 1.5 crore. The limit was reduced in the GST tax rule to Rs 75 lakh and now it is Rs 1 crore by the recently amended norms. But the industrialists say that Government should reverse it to Rs 1.5 crore as previously as it was before the roll-out of GST. Furniture and plywood are still in 28% slab, and wax which had no tax is now having 12% in GST. These types of abnormalities should be rectified. If the Rs 1 crore exception is bound for the interstate purchase also the small scale sector will have a relief because most of the raw materials are coming from other states. However, the government is opting for tax cut for few more items immediately, according to the market source. In that case, if the GST Council takes care of these grievances that will be good. The reality is that no country has undertaken switchover to a new tax regime without teething troubles. That is said, it was entirely predictable that rushing to GST without adequate ground work and providing adequate time for parties concerned to learn to comply with would cause huge pain.

Varghese Paul

PERSONALITY

September 30 - October 31, 2017

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‘Paulettan’ leaves of Irinjalakudites By Varghese Paul

M C Paul

rinjalakuda, the town where art and literature hold hand in hand, also has certain stories of business development in its history. A few doyens, those who have contributed immensely and became the catalyst for the betterment of the place and its people, will always be remembered even after centuries. The memories of those people will be evergreen to the coming generations because, they leave back indelible imprints for the younger generations to cherish. No doubt, M C Paul , who is respectfully and affectionately called `Paulettan’, the personal pride of Irinjalakudites, is of that genre. After completing over 5 decades of successful navigation of the company -- Kerala Solvent Extractions Ltd—he co- founded along with a few friends, is stepping down from the helm of affairs in October 2017, as a 95- year-old nonagenarian, as its Managing Director. Paul, born in Mampilly family, one of the renowned business families in Irinjalakuda to Thomas Chacko and Alappatt Annam Chacko as their second son. His father was the agent for Burma Shell petroleum products those days and he also ventured into several other businesses along with it. Paul completed his schooling from Irinjalakuda Government Boys High School. Further, let us sharpen our ears to listen to ` Pau-

lettan’ for his success story which is based on a lot of hard work and determination. “ I was good at studies though I was active in sports and literature. I liked football very much and was the member of school football team as the custodian of our team. I also served as the Sahithya Samjam Secretary of the school. Despite all these extra curricular activities , I scored good marks in all classes. After completing SSLC, my idea was to join college for higher studies but God’s wish was not that. Our family business run by my father ran into serious crisis and father incurred great loss. Literally my father was not in a position to send me to college due to his financial constraint and I was forced to enter the family business at the age of seventeen. I do not know for certain if my destiny would have been different if I had gone to college. But, I realized my responsibility and worked with hundred per cent dedication. Time has proved that hardwork and dedication will lead to success”. “ I started my career as the ration retail dealer of the government. Then became the whole sale dealer and later the President of the State whole Sale Ration Dealers Federation for fourteen years. Slowly I expanded my business and also found new areas for the development. Gradually I became the Man-

I started my career as the ration retail dealer of the government. Then became the whole sale dealer and later the President of the State whole Sale Ration Dealers Federation for fourteen years. Slowly I expanded my business and also found new areas for the development. Gradually I became the Managing Director of Union Tile Factory Karuvannur, Senior Partner of St Joseph Oil Mills, Irinjalakuda

September 30 - October 31, 2017

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KSE; not from hearts aging Director of Union Tile Factory Karuvannur, Senior Partner of St Joseph Oil Mills, Irinjalakuda. Along with this I started family businesses like MCP Traders, MCP Enterprises, MCP Agencies and M C Paul & Sons etc. I served as the President of Irinjalakuda People’s Cooperative Bank for fourteen years”. In the history of Irinjalakuda Municipality, Paul was the only person who elected unopposed as its Chairman. For almost 30 years he had served the people as Municipal Councilor and played a pivotal role in the development of Irinjalakuda town. During his tenure as Chairman, he stopped the scavenging system of the Municipality. Irinjalakuda town hall, drinking water project and Irinjalakuda Ayurveda Hospital etc took birth during his period of service. He was the first person to be elected as Kerala Municipal Chairmen’s Chamber as its member from the Irinjalakuda Municipality. He was a charter member of Lions Club of Irinjalakuda. In 1989 – 90, the Lions Club adorned him with the ‘ Lion Of the Year’ award. He was deeply involved in the religious activities and served various religious organizations in different capacities. His intrinsic taste for arts and culture paved way for the birth of many organizations in Irinjalakuda. The ‘ Arts Kerala’, an organization for conducting the University Youth Festival, was his brain child. ‘ Unnai Warrior Memorial Kalanilayam for which he was the secretary for several years was an institution dear to his heart. Paul’s contribution to the education sector in Irinjalakuda is also memorable. The people from Irinjalakuda had usually to go to Trichur for their higher studies. There was no good colleges or higher studies institutions in and around Irinjalakuda those days. Paul while he was Municipal Chairman presented a proposal for giving 28 acres of land free of cost to those who want to start an Arts College and that was the turning point for the sudden spurt of educational institutions in Irinjalakuda. He was in the committee for the inception of one of the best institutes in the state, Christ College, and right from

the beginning he is the member in its Managing Committee. He was also in the committee for the beginning of St Joseph college and Don Bosco school.

M C Paul as a politician

Paul was an active member in Indian National Congress and served the party in different capacity in its organizations. He served as Congress Block President for long twenty years. He contested to the legislative assembly from Irinjalakuda in 1987.

The birth of KSE

The KSE was started in the year 1963 and Paul was one of the Promoter Directors till 1976. In 1976 he became the whole time Director and in 1978 Executive Director. In 1994 November he was elevated to the post of Chairman and Managing Director of the company. According to Paul, the reason for commencing a solvent extraction factory in Irinjalakuda is that “the coconut plantations were in abundant in and around here. Naturally the possibility for getting dry coconut having good percentage of oil content in competitive price is very high. Soon oil mills and rotary chucks came up in the area. Gradually a shortage for the copra gripped the market and we could not understand the reason initially. After researching on it we came to know that even after extracting oil from the copra, using the technology we were using those days (Rotary Expeller), there will be 8 – 9 % oil remaining in the oilcake (pinnakku). The Bombay oil companies who had technology for extracting hundred per cent oil from the nut were buying the copra for higher price. That was the reason for the shortage. It was then that our solvent extraction plant was installed in Irinjalakuda. P e o p l e were under a

false impression that certain percentage of oil content in `pinnakku’ is good for the cattle, which is not correct. Like human beings, the excessive oil content in cattle feed is not good for them. “We made people aware about this which paved the way for the birth and success of KSE. Today KSE provides employment to more than 1400 people directly and over 5000 people indirectly. KSE is in the forefront among other Indian companies both in solvent extraction of copra cake and ready mixed cattle feed manufacturing”. “ I spent almost fifty-two years in KSE and I am proud and happy to see the company at this level. But, the happiest moment in life was construction of K S Park. When I mooted the idea of constructing a park adjacent to KSE, in Board meeting, few members of the Board were skeptical about the idea. But our Chairman at that time Sri K L Francis whole heartedly supported me and gave me free hand. He counted my sincere service to the company and everybody agreed for going ahead with the project. My intention was to do something extra to the public and our employees who are living in surroundings of our company for spending

She wont interfere in any of my official matters. That must be the main reason for my success. Her nature is to look after the family and welfare of the children. Naturally we have a peaceful family.

September 30 - October 31, 2017

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My reminiscences with ‘Paulettan’ : Anand Menon, GM “I have been working with ‘Paulettan’ for the last thirty nine years. I can’t pick or choose the best anecdote because there are many. Each day with ‘Paulettan’ is a new learning experience. Before joining KSE I was in Philippines with a vegetable oil company. Irinjalakuda was not developed like today 39 or 40 years ago. It was a big village having poor infrastructure with few good educational institutes and a couple of churches, temples and Ayyankavu `Maidanam’ as its land mark . Though I was not conversant with the language and had no friends, K L Francisettan and ‘Paulettan’ were mentors who guided me in my journey of life and I became a part of Irinjalakuda society. I too was given the opportunity to grow with the company and given feeling of ownership in all its activities. ‘Paulettan’ is a multifaceted personality and shrewd business man. He has an ability to garner the love and affection of every class of people. When problems and crisis arise even if, we struggle for a solution, he would be able to tackle it with great acumen. For Managers like us he gave full freedom of decision-making and gave all support at all levels in backing our decision. As

their leisure time effectively. The Company spent almost Rs 80 lakh for the project. It is an amazing piece of work with a lot of greenery, computer lab with free internet connection, advanced library, play zone for children etc. People even from far places are coming to relax and refresh in the K S Park. Nearly 400 to 500 locals throng the Park on holidays and vacations. I am grateful to the Board of Directors who wholeheartedly complied with my request to spend a huge sum on the Park. Then I thought of contributing to the park something of my own in the form of statues of Mahatma Gandhi, Jawaharlal Nehru, Mother Teresa, Swami Vivekanandan and recently of Dr APJ Abdul Kalam which cost me Rs 1.5 lakh each”.

“It was a memorable evening on 15th Sept’17 at J.W.Marriot Hotel, Mumbai, when I was among the few past chairmen of the National Assn.Clfma of India, honoured at its Golden Jubilee function by Devender Fadnavis Hon. CM of Maharashtra,for our proactive role in making the association such a powerful national body;at a glittering function in the presence of Union Minister of Animal Husbandry, Radha MohanSingh ( Not in the picture)” most of the workers are personally known to ‘ Paulettan’ he has always been cordial and warm to all levels of employees right from the gardener of the company to the highest manager. We had very few strikes in our history. The last one was immediately after the launch of Vedagiri unit in

Kottayam district. It was a case of insubordination and unions were not budging for a compromise. We took the decision to lock out the factory with the backing of ‘ Paulettan’. Though this resulted in loss to the company as we lost four months of production, ‘ Paulettan’ stood with us despite some doubts

The bracelet, he is wearing always on his wrist, has lot of sentimental values. “After few years of inception of KSE, in a public meeting, my employees gave me this as their token of love and gratitude. I was really moved by their gesture. My attachment with this particular golden bracelet reminds me some fond memories. While I was with Bishop of Irinjalakuda he amusingly enquired about the bracelet presented by my employees. Instantly Bishop commented that this a unique memento should not be removed as it is very rare that employees are gifting the higher ups. It is always vice versa. After that I always wear this bracelet.” He said, “There are lot of pleasant memories along with few bitter experiences in my long stint in KSE.

But, since I am a positive man, always remembering the pleasant and positive things.” the nonagenarian reminisces”.

Family Paul’s wife is Annie and she is the daughter of E K John of Edakkulathoor family. The couple is blessed with four sons and one daughter. Eldest son M P Jackson is social worker. He was the Chairman of the Irinjalakuda Municipality and the member of the Thrissur District Council. Currently he is serving as the President of Irinjalakuda Town Co operative Bank, President of Cooperative Hospital and President of Irinjalakuda Chamber of Commerce etc. Other sons Tomy, Jiji, Bright are engaged in family businesses. Daughter Usha is married to Dr Francis Alappatt.

raised about the decision. This bold step changed working dynamics of our Vedagiri unit. Another one is the role played by ‘Paulettan’ and ‘Francisettan’ for electing me as President of Compound Livestock Manufacturers Association (CLFMA). At our AGM of the Association, Paulettan suggested my name as nominee of the company. This was a covetable post with all India stature. It was an uphill task with known National players in the fray. I do not know what magic has been played by these two. The result came as a bolt from the blue and I was elected unopposed. `Paulettan’ and ‘Franciseettan’ had convinced the power brokers that they would stand to lose and that we deserved the position. Sri M C Paul has played a long and fruitful innings at KSE Ltd. He has played a key role in its development; starting of units at Swaminathapuram, Ettumanoor, Konikkara and purchased a unit at Palghat etc.. He has been a friend of every member of KS family and is stepping down from active involvement in the day to day function of the company at an advanced age. We all wish him a happy and healthy life in the coming years. He has truly been a legend in his life time,” the GM concludes.

About his wife, Paul says, “ She wont interfere in any of my official matters. That must be the main reason for my success. Her nature is to look after the family and welfare of the children. Naturally we have a peaceful family”. There are people who got fame and fortune by birth itself. Another section of people will get power and pelf by luck. But, ‘Paulettan’ grabbed it by hard work, experience and diplomacy. Today, KSE is a thousand-crore company and Paul played a pivotal role along with his companions to bring the company at this level. In foot ball field he was the custodian of the team. In his real life also he is custodian for his company and for his employees also for his well wishers.

7 ISSUES

September 30 - October 31, 2017

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GST: Still a perennial issue

STANLY JAMES FCA, CHARTERED ACCOUNTANT, KOCHI

wo months have passed since the GST became in practice in India. Almost all sectors of the economy, whether it is small scale industries or the small business or the corporate houses and mega industries, everyone is reeling under utter confusion and stress. The end users viz the common man is struggling to make both ends meet due to the indiscriminate price hike of the commodities in GST regime with its irrational tax rates. The prices of daily using commodities are not coming down. The price of chicken which is largely used by the general public is Rs 120 per kg now, despite the direct intervention by our Finance Minister to keep the price at Rs 78 a kg in the open market. The reason attributed to this is that manufacturing companies, before the implementation of GST, had increased the prices of their products and when the GST launched they have reduced the prices nominally in order to convince the government and the public but in reality the prices are scaling high, contrary to the assumption that the price of all commodities will come down. Because in the GST regime the cascading effect of the tax will end, naturally the manufactures will reduce the MRP and it will eventually end up in price fall. But, this theory has been neglected here by the manufacturers. The main reason for this phenomenon is that the Central Government has not done any form of assuaging steps even among the large scale manufacturers. Because, for states like Kerala, it is not possible to bring out legislative measurers or timely notifications as per GST

regulations specifically for a state. Similarly, the scrutiny at our check posts are not carried out efficiently and also only delivering a way bill will be sufficient to transport the goods across the check post. Common man or the end users are the main victims of the GST lacuna. Expense graph is always shooting up for them. There is no option to avail input tax for certain things like restaurant bills, travel expenses etc. Similarly in the form of Reverse Charge Mechanism if a business man accepts the services from those who do not have GST will have to bear the additional burden. There is no eligibility for the Input Tax Credit for these types of taxes. The reason attributed to this is the dearth of awareness about the GST among the business people and the manufacturers. There is confusion among the business people about their assessing authorities itself. They do not know who are their concerned authority for the assessment whether it is State government or the Central government officials. The practical issues regarding the return filing has also forced the business class to approach the middle men to sort it out. The notifications publishing in daily basis is also creating havoc in the business community. Though crores of rupees have earmarked for the awareness programmes by the government it is doubtful that whether the money utilized properly for this purpose only. Almost 150 countries are so far under GST regime, but nowhere prevailing the high rate of 28 percentage of GST. Everybody is under the presumption that the Central government is observing the situation as watch dog and after a time-lag they may intervene harshly with punitive measures to regulate the system. The Central officials must take the State government officials into confidence before going for the raids or similar actions on the business premises. The joint operations only can bring the desirable result. Then only we can bring the hoarding and tax evasion under control. Now petroleum products and liquor is not in the GST regime. If we bring those things in the ambit, the prices will certainly come down. If the prices of petrol and diesel come down the transport cost will also be less and the prices of the commodities will reduce, says the

economic experts. It is true that in the GST regime that the tax collection of the Central government has become more transparent and easy. Like collecting TDS under IT act, every month GST is also reaching the Government exchequer hassle- free along with taxes like VAT, Service Tax, Central Exercise etc. With this, the SGST (the State’s tax ) is also shared by the State government. Even then the date for submitting the return and related compliances are repeatedly extended by the Central government. As far as Kerala is concerned our Finance

Minister, Dr Thomas Isaac was very much optimistic about GST rollout saying the tax income of the State will increase compared to any other states, the reason cited is that ours is a consumer state . But as per data available in July the Central government has collected a total sum of Rs 92,000 crore and the State’s share is Rs 1,300 crore as tax which has a short fall as far as Thomas Isaac’s expectation of 20% hike in the income concerned. The deficit in the income will hamper the hope of Kerala’s developmental activities in future and end up in burgeoning fiscal deficit.

8 HEALTH

September 30 - October 31, 2017

Yoga for all ages By Suresh Kumar

he great sage Swami Vivekananda once said, ``we want today muscles of iron and nerves of steel’’. While muscles of iron for humans can be achieved by regular practice in a fitness centre, whether nerves of steel can be achieved is a doubtful proposition. After visiting a few Yoga centres in and around Kochi some refreshing thoughts have struck the mind. “I have been practising Yoga for the last two years. As I practise at a yogasana kendra there is no distraction of any sort, unlike doing it at our homes. The one hour daily exercise peps up mind and body”, says Rani Das in her fifties, who practises yoga at Sree Ramakrishna (SRK) Ashramam, Kaloor. She had been suffering from varicose vein for some time. “Standing for long duration caused leg pain. But after doing yoga regularly, standing posture never pained me”, she adds. Pranavy(15), a class X student at St Antony’s School, Kacherippady, was recently enrolled in a Yoga centre. After doing Yoga for some months she feels flexible. Sheeja Sukumaran, a dance teacher, has been doing Yoga for the last two years. “Now my body feels flexible and helps me a lot in my dance profession”, Sheeja says. Advocate Sreekala Asokan also has been practising Yoga for the last two years. As she had been afflicted with fluid ear imbalance called ‘Vertigo’, ENT specialist advised her to undergo Yoga therapy. “Now I am completely recovered from the disease and continue Yoga,”smiles the advocate. “We conduct residential Yoga training classes for two days (Saturday, Sunday) a week for six months and charge Rs 2000”, says Kaithapram Vasudevan Namboothiri, Director of Pathanjali Yoga Training & Research Centre, Elamakkara. People, cutting across age and sex, arrive here for Yoga. People aged 15-65 attend Yoga classes here. Many are afflicted with muscle, body pain, arthritis, intestinal problems etc. School children want concentration in their studies. “It is ironic that westerners know and practise Yoga than Indians”, says Swami Bhadresananda, Sreeramakrishna Ashramam, Vytilla. Ashram conducts Yoga classes once in a week on Sundays. The fee for the two-month course is Rs 1200. The classes are held between 6 and 7 am.

Many lament the miserable physical condition of the present day generation. Lack of proper exercises, physical training, improper food habits are the main reasons. Various methods of physical training may help external muscles, leaving internal organs functionally weak. Yogasana is the ideal method which improves both your external and internal organs. Nowadays people, especially students, complain that they do not get proper concentration while studying. Yoga needs disciplined and meticulous practice. “Most unfortunately the publicity Yoga has received is also being misused by some vested interests. They charge heavy fees making Yoga unreachable to common man”, opines C S Muraleedharan, Trustee, SRK Ashramam, Kaloor. They charge Rs 1000 only for a three-month course with daily one hour practice. Before commencing yogasana, one should perform ‘Suryanamaskara’. It should be performed over an empty stomach, in order to make body joints flexible. A neat and clean room allowing plenty of sunlight and fresh air is the ideal place for yogasana. The early morning and early evening are the best hours to do yoga as the body has a tendency to become calm. It can be performed on a coir mat, blanket, and cotton sheet, spread on the floor. Practising in the open air is also good, but avoid rain, hot sun and dust. The dress worn should let the body get as much sunlight and fresh air as possible.

Avoid as far as possible hot food, too much of salt, chillies, tamarind and other condiments. Normally one hour yogasana daily covers 20-30 ‘asanas’ (postures). These include ‘Padmasana, janusirasana, sarvangasana, matsyasa-

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na, bhujangasana, salabhasana, dhanurasana, ardhachakrasana, makarasana,...........finally savasana. Each Yoga posture has its specific purpose and should not be treated as an exercise only but a technique for the body by the mind, says Vijayaraghavan, the 75-yearold Yoga guru at SRK Ashramam, Kaloor. Among various systems of physical exercises designed for health, none of them is as effective as ‘Yogaabhyasa’. It is the particular posture of the body attained by controlling and coordinating the several limbs of the body like hands, legs, stomach, head, neck etc. Yoga helps the mental, physical, intellectual development of human beings. Regular practice will tone up the nervous, lymphatic, muscular systems and keep them in perfect condition. The respiratory muscles become strong and respiratory passage will be cleared of all impurities. Blood circulation will improve. As Yoga has an astounding curative effect on many diseases it is a demonstrable factor; the practice of it should not be put off until one is sick or feeling sick. Rather it should be practised as it was originally intended as a way of life so as to maintain the body in an excellent high state of health and to act as a preventive against diseases.

9 5

INTERVIEW

September 30 - October 31, 2017

‘Land Acquisition is still a hurdle for extension’

Passline News Service

MRL has flagged off a globally renowned public transport system with the launch of the Metro train in Kochi in the first reach of the first phase from Aluva to Palarivattom covering 11 stations. Recently launched second reach of first phase from Palarivattom to Maharajas ground (city centre) has made the adrenaline rush in the public and the team Metro. Now the jubilant Metro team is under the task of completing the third lap of first phase upto Petta.The enthusiastic Metro MD Elias George IAS in an interview to Passline points out the major hurdle for the extension of the next phase. Excerpts of the interview:

How do you evaluate the performance of Metro rail so far? Is there any increase in the commuters’ numbers? If so, what percentage of increase have you noticed? • It is too early to do any evaluation now as we are here for just 3 months and metro is a mode shift, which requires a

mindset change. We have seen the pattern in other cities of India where the metros start running as it takes a year or so for the metro to be part of the routine. After the inauguration of the first reach of its first phase, the metro had an average ridership of around 30,000 per day, but after commencement of operations on the second reach till Maharajas, the ridership has almost doubled, bringing in a daily revenue of almost Rs 10, 00, 000. Do you think that when the metro becomes fully operational the traffic clog in our roads will disappear? • Definitely, the passengers would prefer the convenience of the metro, which offers pollution free, noise free and accident free travel experience. More over, it saves a lot of commuting time (it would take only 32 minutes from Aluva to Maharajas (the city center 18 km). Even today, people travel in metro, only because of curiosity and for experiencing the ambience. The real needy are yet to come . How do you comment on it? • Before the inauguration of the second reach, most of the passengers were only one-time travel-

lers who wished to take joy rides, but now people are using metro as their regular travel mode. The pattern of ridership has completely changed. Your targeted class of people? • One of the prime objectives of this project is to reduce the traffic congestion and pollution on the roads. On scrutiny of the data related to Kochi, it can be seen that 4% of the moving traffic (buses) carry 50% of the commuters, while private vehicles (PTVs) (79% of the daily vehicle movement) carry 43% passengers. Hence no `road democracy’, and the need for shifting people from personal vehicles to public transport is inevitable. So, metro should eventually shift people from private carriers to public transport. About the fate of extension to Info Park and CIAL? • While the decision on the Info Park extension is pending with the Government, the extension to CIAL is yet to be decided. We are ready with the DPR for Angamaly. CIAL ridership profiling is not justifying the extension through that route. It is widely accepted fact that public transport systems are not for reaping profit, even then we have to find some alternative arrangements to bridge the

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financial loss incurred by these types of projects. What are your plans and strategies for that? • World over, most of the metros are not profit making and those who make profit, they make it from alternate incomes. KMRL has been working out plans for alternate revenue and in line with the same, we have implemented

strategies whereby spaces are being let out for KIOSKs in metro stations, semi naming rights for some metro stations are being auctioned and metro pillars as well as spaces within the metro are being given for advertisements. Another vital revenue is from the PPP model. Axis Bank will invest the total amount for installing AFC systems in every station. Axis Bank will pay a premium of Rs 400 crore to KMRL. What is the latest situation of metro village you have envisaged sometime before? • We are not taken up that idea further According to you what are the hindrances you foresee to take up the metro to next level? Dearth of political will, finance or the non- cooperation of labour unions and general public? • Land Acquisition(LA) is the major issue we are foreseeing. Do you think that DMRC will be with you if you take up the next phase? • No. Like other metros, KMRL has also established itself as a complete organisation and is equipped with the latest technology and experts to carry out works in the next phases.

10 COMMENT

September 30 - October 31, 2017

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By A Special Correspondent

any people may ask the bullet train project which is recently inaugurated by Indian Prime Minister and his Japan counterpart Shinzo Abe is the need of the hour for the country when we have rail accidents at regular intervals. Donâ&#x20AC;&#x2122;t you think that maintenance of the existing railway lines are more important than of high speed trains? It is true that Indian railways has a huge problem with safety and maintenance. But this challenge is also an opportunity. Japan launched its first bullet train in 1964 from Tokyo to Osaka just before Tokyo Olympics. At that time Japan was not developed the way which is seen nowadays. But Japan took the risk and introduced the bullet train assuming it will pave the way for the swift economic development. Now bullet trains are crisscrossing the country touching almost all the cities in Japan. It takes long fifty three years for India to join the league of countries having bullet trains for their speedy movement. The politician in Narendra Modi may consider it that the foundation stone laying in Ahmedabad in the run-up to the Assembly election in Gujarat is an advantage for his mandate but the clever statesman in him also wants it to be his legacy. Whatever it may be, for an ordinary citizen the only concern is by spending tons of his tax money, what betterment he may achieve ? What extend his living standards will escalate? The 508- km Mumbai- Ahmedabad Rail Project will be built at an estimated cost of Rs 1,10,000 crore (Rs 1.1 trillion). Out

of that Japan will spend Rs 88,000 crore (880 billion) at an interest rate of 0.1%, which has to repay in 50 years, with 15- year grace period. No doubt , this is a testimony for the power of Modiâ&#x20AC;&#x2122;s negotiating skills. It also shows the true potential of the Indian economy in attracting such investments. Till now, we are saying borrowing at 7% interest rate is a great success. After this, the bench mark will be 0.1% inter-

est rate. Tomorrow, if we were to do business with Americans or the French or the Germans, we have the 0.1% for the deal, which is significant. If we are surprised at this deal, it shows that we do not have confidence in our economic market. If people are rushing to invest in this country, it is because we are giving them a huge market and we are simultaneously ensuring technol-

ogy transfer. Remember what happened to the automobile industry when we brought in Suzuki from Japan? At that time we only had Ambassadors and Fiat cars. If you had booked an Amabassador in Pune, they would drive it all the way from Uttarpara in West Bengal to Pune and would hand over a car that had already been driven for over 2,500 km. There was no concept of dedicated service sta-

tions then. All these things changed within the last 20, 30 years. In the process, lakhs of people have gained jobs. Maruti revolutionised the car sector in India. Who would have thought, 30 years ago, that India would be a global manufacturing hub for cars and India would export cars? Likewise, when computers came in the 1990s, people pooh-poohed it and said computers would take over human jobs. Today, even a semi-literate person cannot do without his smart phone.

September 30 - October 31, 2017

What we miss out in these silly debates is Indiaâ&#x20AC;&#x2122;s amazing ability to absorb technology. The railways was never run on scientific, technological and economical parameters. Today the operating cost of the railways is approximately 93% of its revenue, which means it is not a viable proportion. That has to change , the bullet train project might make the railways think of efficiency and economics . With this, the old order will make way for the new. We need to shake up

the technology Indian Railway uses and this will happen with the entry of bullet trains. In one stroke , we are dealing with geopolitics, technology and economy. This will probably bring in a new culture of punctuality, cleanliness, safety, passenger friendliness... so many things the railways, as a public sector undertaking, never thought about. The railways was the fiefdom of successive railway ministers. With this, let us hope that economics and technology dominate over politics

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in the Indian Railways. In the initial years, the ticket prices may be high. But, remember, when the mobile telephone was introduced, the call rates were Rs 16.80 per call only to fall to less than 50 paise in the next few years. And who benefitted by this? The common man. Likewise, let us have faith in economics and technology. Opposition can use this against Modi, saying he caters only to rich and not the common man. When private airlines began in India, they said the same thing; that it was for the Ambanis and the Adanis. But you must understand that technology and economics have to go hand in hand. Remember, the loan of Rs 88,000 crore from the Japanese has virtually no interest, while, if the government had taken it from Indian banks, the interest rate would have been 12% to 14%. Tomorrow, you may perhaps see the French building bullet trains from Chennai to Bengaluru! Who knows? Yes, the train is for the common man to travel, but that doesnâ&#x20AC;&#x2122;t mean that he has to travel at 35km/hr.

12 PSU

September 30 - October 31, 2017

P a s s l i n e

KSRTC needs a paradigm shift

K Vijayachandran

risis in KSRTC continues unabated: Rehabilitation plan finalized by the UDF Government in January 2014 failed to take off: This statutory corporation was incorporated in 1965 as a joint venture with the Government of India, as stipulated by the Road Transport Corporations Act of 1950. Section 3 of the act had authorized the establishment of Road Transport Corporations in the states, ‘‘considering, (a) the advantages it offered to the public, trade and industry by the development of road transport, (b) the desirability of coordinating any form of road transport with any other form of transport and, (c) the desirability of extending and improving the facilities for road transport in any area and of providing an efficient and economical system of road transport service therein’’. According to Section 18 of the act, ‘’general duty of an RTC was to exercise its powers, as progressively to provide or secure or promote the provision of an efficient, adequate, economical and properly coordinated system of road transport services in the State or part of the State for which it is estab¬lished and in any extended area.’’ According to Section 7, ‘’the State Government may, after ascertaining the views of the Corporation, by notification in the Official Gazette, to constitute one or more Advisory

This sort of casual approach toward the KSRTC crisis should end immediately considering the seriousness of the crisis facing this statutory body as well as its 30,000 employees and 37,000 pensioners. There has to be paradigm shift in the Government approach as well as in the perceptions of general public. Councils consisting of such number of persons, on such terms, and for the purpose of advising the Corporation on such matters, as may be specified in that notification.’’ According to Section 7A, ‘‘where a Corpo¬ration is satisfied that it is expedient for the more efficient discharge of its functions, it may, with the concurrence of the State Government and the Central Government, frame by notification in the Official Gazette a scheme or schemes providing for the estab-

lishment of one or more subsidiary corporation.’’ All these indicate that the RTC Act 1950 was intended to establish institutional capabilities at the state level for the development and regulation of road transport infrastructure. SRTCs were not conceived as socialist enterprises: they were conceived as public utilities to help economic development based on the historical experience of industrial countries. However, this did not happen as

envisioned by the law makers of 1950: State-reorganization and subsequent delays in the formation of effective governments, role conflicts with RTA and motor vehicles departments, as well as vested interests of private road transport operators had contributed to delays and policy confusion that continues to exist even today. When I took up my first study on KSRTC in 1985, the general belief was that KSRTC should prove its mettle by competing with private operators. Detailed analysis had shown that the inefficient and comparatively high-cost private operators were making profits because they avoid or skip unprofitable routes and schedules, where as KSRTC was duty-bound to operate them. This is a common experience: When public and private enterprises share a common market, private sector appropriates the surpluses and losses are forced on public sector.

However, the situation was seen slowly changing by the time I did the second study, eight years later, in 1993: Many RTCs in southern states, had strengthened their regulatory role as envisioned in the statute, not only by increasing their relative fleet strength and expanding into rural areas and also by decentralization of management. District-level subsidiary corporations headed by an young IAS officer, supported by competent senior technical staff and well- equipped workshops, as I could witness in Kanyakumari district, were in sharp contrast with the KSRTC divisions or depots, remotecontrolled by the Chief Office in Thiruvananthapuram, under the shabby management culture, inherited from the colonial days of Maharaja. Even small towns like Thakkala were wellconnected with their rural hinterlands by locally managed town services, organized by Nesamony Transport Corporation headquartered at Nagercoil. Galloping vehicle population in Kerala was breaking down its roads and, State PWD was failing to catch with the repairs and maintenance, despite the massive Rs 2,000 crore World Bank project. There were 39,137 road accidents in 2016 according to State Crime Records Bureau, and this is an all time record. Two wheelers, which account for nearly two-thirds of the vehicle population, were involved in more than half of these accidents. Failure of public transport system has created a boom in the twowheeler market in Kerala. Death rates due to road accidents had crossed the ten per day mark, three years ago. Damaged and abandoned vehicles on the roadsides are a common sight; another sort of pollution caused by motor vehicles. Kerala Planning Board recently made a detailed review of the 1,61,000 km length of Kerala: Road

September 30 - October 31, 2017

PRESENT STATUS

ears later in 2007, as I wrote a review on Transport Infrastructure in Kerala, situation had further improved in Tamilnadu and Andhra compared to Kerala. Quoted below are passages from this article, later published as my wordpress blog: https://kvijaya40.wordpress. com/2017/07/27/kerala-infrastructure/ “State Road Transport Corporations play a leading role in organising comparatively efficient public transport systems in most other states. In this respect, Kerala lags far behind other southern states: It has only one RTC and most parts of the state are dominated by private buses which simply outnumber KSRTC buses by eight to one. There are only 135 RTC buses per million population in Kerala, compared to 284 in Tamilnadu and 253 in Andhra Pradesh…. …Dependency on private bus operators has resulted in extremely poor vehicle utilisation: There are more than 1100 passenger buses per million population in Kerala, compared to 393 in Tamilnadu and 253 in Andhra. And, these numbers do not include the large number of mini buses and vans that operate illegal passenger services on Kerala roads. Public transport is hardly any better in Kerala, despite the much larger deployment of passenger buses and other vehicles which are over-crowding the road network …...

….Number of three wheelers per million population in Kerala is nearly three to four times that of TN and AP. In the use of two wheelers, Kerala is far ahead of the other two states, if mopeds are excluded from the count. Kerala has relatively large number of personal vehicles including taxis and private motor cars… .. It has 112 thousand motor vehicles on the road, compared to 72 in AP and 132 in TN: On area basis, AP has only less than one-fourth and TN about two-third number of vehicles on the road compared to Kerala. Karanataka is, possibly, no different: …. accident rate per vehicle in Kerala is nearly double that of the other two states. The fact that more than sixty persons die on Kerala roads every week, is an indicator for the poor quality of road transport infrastructure in the State. ….Intra-district and city-town services are the weakest links in the public transport network of Kerala and these public transport segments are mostly under the tyranny of small-time private bus operators and the Regional Transport Authorities headed by the district collectors. Routes and licences given to private operators become their private property, subject to judicial reviews even by the High Court. ….It is high time that public road transport network get liberated from these archaic statutes and brought on par with more civilised countries, where it is organised inevitably under a public monopoly.”

NATPC as well as the Association of State Road Transport Undertakings (ASRTU) could guide the proposed district level RTCs in re-designing and re-scheduling of operations, taking into account the local needs as well as the interests of local bus operators as well as their employees. Faculties and students of local professional colleges could be associated in this programme.

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density in Kerala was 414 km/100 sq km, the highest in any state and more than five times the national average. Road length per lakh population was 506 km in Kerala, against the national average of 259. Kerala with a population density of more than double the national average was cautioned against the liberal use of land for roads. All these factors, rapid rise of vehicle population, increasing rate of fatal and non-fatal road accidents, and rapidly deteriorating road conditions call for an urgent paradigm shift in the organisation and management of KSRTC: The State could be guided by the reform experience of other RTCs. Unfortunately, the specialist consultant appointed by Kerala Government has not cared to look at the problems of this statutory body from an all-India perspective. Neither has he cared to study why the rehabilitation package of 2014 simply failed to take off. He had two-day long discussions with the union leaders and senior executives of KSRTC in December last year at the Centre for Development Studies (CDS). He has reportedly left the country after making a fifty-slide presentation and was not available for any discussion. Proposals like replacing diesel buses with LNG buses, starting of super-fast services, wet-leasing of high-tech buses from foreign automobile giants etc, as publicised by the CEO of KSRTC through newspapers are not mentioned in the revival package suggested by the specialist consultant. He has not proposed even a preliminary plan for financial restructuring of the corporation. This sort of casual approach toward the KSRTC crisis should end immediately considering the seriousness of the crisis facing this statutory body as well as its 30,000 employees and 37,000 pensioners. There has to be paradigm shift in the Government approach as well as in the perceptions of general public. Director board of KSRTC presently has 15 members; eight of them official and seven non-official. Selection of the seven non-official directors has not attracted any public criticism so far, but that does not mean that, it was done in the best interests of KSRTC and the people of Kerala. A paradigm shift means a critical review of the board composition and corrective action as necessary.

(Turn to page 34)

8 14 IND ECONOMY

September 30 - October 31, 2017

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India turns 70: Future economic be justifiably proud of even while recognizing the many failures and deficiencies.

The lost decades

Dr V K Vijayakumar

ndia turned 70 this August. Seventy years is a long period of time in the life of an individual; but it is a very short period in the life of a nation. Perhaps, this is the right moment to take stock of our achievements and failures as a nation. When we look back at the journey of the Indian economy during the last 70 years since independence, there is a lot we can

The idealistic Nehruvian socialism of the initial years following independence was a product of the post-colonial era, in which Soviet Union influenced the economic policy of many countries of the Third World. Leaders of the Third World like Jawaharlal Nehru, Abdul Nasser of Egypt and Marshall Tito of Yugoslavia – the founding fathers of the Non-aligned Movement – were highly impressed and influenced by the egalitarian and the social justice element inherent in the socialist model. Therefore, the economic model that independent India adopted after independence was based on economic planning, dominance of the public sector,

import-substitution and leadership role for the government. Private enterprise and markets were looked at with suspicion. After Nehru, Indira Gandhi took India’s economic policy too far to the left with an all-pervasive government calling all shots. Populism replaced economic pragmatism and politics trumped economics. By 1973 we had usurious rates of taxation: the peak rate of income tax touched 97.75 per cent and wealth tax touched 3.75 per cent forcing even the honest to evade tax. By late seventies, the government owned 98 per cent of all coal produced in the country, 85 percent of banking, 100 percent of insurance, 100 per cent of telecom and even 65 per cent of the bread produced in the country. Policies like the MRTP Act, FERA and industrial licensing created the “license- permit-quota raj”, which, apart from stifling private initiative and enterprise, also gave rise to the corrupt “politician-bureaucrat- businessman nexus”. This inward-looking economic policy, succeeded in generating a GDP growth rate of only 3.5 per centannually,during the three decades spanning 1950 to 1980. This “Hindu growth rate” paled in comparison to the high growth rate of the Asian Tigers like Singapore, Taiwan, South Korea and Hong Kong who followed an export- oriented market economy model.

Liberalization The Rajiv era (1984-89) saw a slight change of course for the Indian economy. Reduction of tariffs and taxes, allowing FDI in many sectors and amendments to restrictive legislations like the MRTP Act, propelled the economy to a higher growth rate of 5.6 per cent during the 1980s. However, this high growth rate could not be sustained due to the rising foreign debt, which culminated in the Balance of Payments crisis of 1991. This crisis led to a paradigm shift in India’s economic policy. Under the leadership of the then Prime Minister Narasimha Rao and Finance Minister Manmohan

Singh India embraced sweeping economic reforms. Liberalization, privatization and globalization heralded a new economy. Twenty-five years of reforms transformed the Indian economy. During the 25-year period 1991 to 2016, India became the second fasted growing large economy in the world with a GDP growth rate of 6.5 per cent. ‘Sellers markets’ with poor quality products and perennial shortages for commodities like cars, scooters and telephones were replaced with competitive ‘buyers market’ with superior quality products and services. Reduction in import tariffs and promotion of foreign investment integrated the semi-closed Indian economy to the global economy. The sustained high growth in GDP during the 25 years following the liberalization of 1991 also led to an impressive growth of the Indian corporate sector. Corporate profitability increased many fold. The net profit of the corporate sector rose from Rs 6400 crore in 1991 to above Rs 4 lakh crores by 2017. The stock market indices reflected this profitability gains: the Sensex moved up from around 1000 in 1991 to around 32000 presently. Since the initiation of liberalization, India’s GDP multiplied 10 times in real terms and the stock market multiplied 32 times.

Capital market undergoes revolutionary changes The capital market has been transformed substantially by the sweeping reforms initiated since 1991. The abolition of the controller of capital issues, free pricing of IPOs, establishment and empowerment of SEBI, emergence of NSE as India’s premium stock exchange, opening of mutual funds to the private sector, allowing foreign portfolio investment, introduction of online trading and dematerialization of securities led to the growth and emergence of a vibrant capital market. As already mentioned, Sensex exploded from around 1000 in 1991to around 32000 presently, thereby creating phenomenal wealth for investors. India’s top companies (excluding banks) by sales turnover and mar-

9 15

September 30 - October 31, 2017

prospects look bright ket cap underwent significant churn since 1991. See the following table: 1991- 2016 Rank Company Revenue Rank Company Revenue (Rs crores) (Rs crores) 1 Indian Oil 18663 1 Indian Oil 359536 2 SAIL 8071 2 RIL 285945 3 HPCL 7217 3 Tata Motors 276542 4 BPCL 6909 4 BPCL 190392 5 BHEL 3249 5 HPCL 188736 6 NTPC 2510 6 ONGC 139364 7 TELCO 2247 7 Tata Steel 128388 8 TISCO 2210 8 TCS 111730 9 Madras Refinery 1645 9 L&T 104172 10 RIL 1509 10 Hindalco 101257 11 Cochin Refinery 1502 11 Bharti Airtel 98069 12 L&T 1451 12 Coal India 83780 13 IBP 1435 13 NTPC 79950 14 MTNL 1318 14 M&M 78561 15 HIND LEVER 1243 15 Vedanta 68887

Total

61184

Total

2295316

Top 5 Sensex companies by market cap Company Market cap (Rs crores) Company Market cap (Rs crores) 1st Jan1991 15th August 2017 TISCO 3193 RIL 511572 TELCO 1685 TCS 472669 RIL 1483 HDFC Bank 452672 Hind Lever 1347 ITC 330152 Century Textiles 998 HDFC 273086 The churn in top companies is self-explanatory. The dominance of public sector companies in top 15 in turnover has become history. Now, private sector companies, some of them of relatively recent origin, increasingly dominate the list. This trend is likely to gather momentum, going forward. The churn has been much more in the ranking based on market cap, with 3 new entrants from services sector in the top 5.

Resets in the economy Presently, the Indian economy is undergoing some major resets. The economy is on a transformative path propelled by a leadership, which has an over-arching new vision for India. Initiatives like GST, RERA, the bankruptcy code, crackdown on black money, effective use of Aadhar and digitalization are transformative reforms that have the potential to shift the paradigm, not only of the economy, but the nation at large. These resets, aided by India’s demographic advantage and political stability, can turn out to be truly transformative. Participate in the imminent unprecedented wealth creation India is, presently, the fastest growing large economy in the world. With the right kind of reforms, India’s growth

rate can move up to 8 per cent and eventually, in a favorable global setting, to 9 or even 10 per cent. India’s 2.2 trillion economy is likely to grow to a $10 trillion economy by 2030. This growth has the potential to push India’s market capitalization from $1.6 trillion presently to $10 trillion by 2030. This

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is a historical opportunity for investors. Systematic investment through the equity mutual fund route is the simple strategy to benefit from this imminent wealth creation. (Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services)

nature

September 30 - October 31, 2017

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Environmental Regulations & the National Green Tribunal

Precepts and practices clash in ecology protection

apid deterioration, encroachment and damage to Ecologically sensitive zones like lakes, water bodies and forest lands are rampant, across many states in the country . Parliament and state legislatures have passed laws to protect these environmentally sensitive parts of our country. Indeed, environment protection is a key part of not just our laws but also our culture and history. However there is ample evidence that the Institutions that have been created at various levels to regulate and oversee Environmentally sensitive zones and projects like State Environmental Impact Assessment Authority (SEIAA) are being increasingly negligent in their functions as originally envisaged. The issue of challenges posed to environment by the legitimate requirements of development is known. This makes it even more important to have these institutions discharging their duty and also to have relevant capacity and capabilities to deal with the influence, reach and power of Government bodies and financial power of corporates and business. It is unfortunate that Regulatory Authorities responsible for granting environmental clearances (ECs) in states have become tools for corruption as they serve as rub-

ber stamps for state governments The Government of Karnataka’s proposal to reand vested interests. During the controversial Steel Flyover Fiasco duce the area of Ecological Sensitive Zone around and Peripheral Ring Road (PRR) Bannerghatta National Park (BNP) from 268.96 sq projects in Bengaluru last year, the State Environment Impact Askm as per the draft notification from the MoEF in sessment Authority of -– Karnataka June 2016 to 181.57 sq km etc. These are visible (SEIAA-K) approved these area development projects by merely failures of an effective environmental regulation. going by the requisition of the executing agency, the Bangalore De- table, the Karnataka Lake Conser- are susceptible to exploitation, like velopment Authority (BDA) as road vation and Development Authority quarrying by vested interests. There expansion projects, in clear viola- (KLCDA) has mooted the idea of are visible examples of this – like tion of EIA notification. Therefore notifying 176 lakes in Bengaluru as the rampant encroachment of Eco the Central Government must en- Wetlands. However, this is yet to be sensitive Munnar district in Western sure that Regulatory Authorities do notified due to the red tape involved Ghats of Kerala and a Government not approve projects on the basis in the notification process. that is not responding to it despite of only information provided by the Another reason to review the status Supreme Court and NGT direcexecuting agencies but must scru- of Environmental Regulation is the tions. The Government of Karnatinise all project related details be- drastic loss of Forest Cover, media taka’s proposal to reduce the area fore issuing clearances. reports state that India has lost 40 of Ecological Sensitive Zone around The implementation of the Wetland % of its forest cover between 1880 Bannerghatta National Park (BNP) (Conversation and Development) to 2013. This calls for a far more from 268.96 sq km as per the draft Rules, 2010 is in limbo since its stringent mechanism to bolster notification from the MoEF in June inception. Central Wetland Regu- protection of forest land and more 2016 to 181.57 sq km etc. These latory Authority (CWRA), consti- importantly Eco-Sensitive Zones are visible failures of an effective tuted under the Wetland Rules, (ESZ) around National Parks that environmental regulation. 2010 have failed to notify any lakes as w e tl a n d s except the ones mentioned in the Ramsar Convention for the Conservation and Sustainable use of Wetlands. kZybnse ÌmÀ Given the importance of sImXnbqdpó aWhpw ckn¸n¡pó cpNnbpamWv km¼mdnsâ sslebnäv. anI¨ C\w tNcphIfpsS k¦e\amWv the netkm¼mdnsâ Cu hiyamb kzmZnsâ ]nónse clkyw. AXn\pthWw CutÌWnsâ \ñ \mS³ cpNn¡q«v. ImcWw km¼mÀ tIaambmte kZy tIaamIq.... work of lakes for maintaining the environment and water

km¼mdmWv

September 30 - October 31, 2017

An MP with active social conscience Rajeev Chandrasekhar is an Independent MP in the Rajya Sabha, elected for a second term from Bangalore, Karnataka. A Malayalee by Origin, he is the son of a senior Air Force officer, born in Ahmedabad, Rajeev secured his Bachelors in Electrical Engineering from Manipal Institute of Technology before moving to Illinois Institute of Technology in the US where he did his Master’s in Computer Science, and then to Harvard University for an Advanced Management Programme Degree. Chandrasekhar’s technology credentials are among the nation’s most significant. He pioneered the build-out of India’s telecommunications sector by setting up the country’s first green field cellular business. Before that, he was a design engineer and CPU architect on Intel’s 486 and Pentium teams in Silicon Valley. An independent MP aligned with the National Democratic Alliance and the Vice Chairman of the NDA in Kerala, Rajeev Chandrasekhar writes often and has a strong track record in Parliament. He focuses on issues related to the economy, embedding technology in government, urban governance, national security, environmental protection , security of women and children etc. Chandrasekhar has served on the parliamentary committees on finance , technology defence etc. He has also served on select committees that created key legislation involving the goods and services tax, insurance, mines and minerals, telecom spectrum and real estate regulation. Rajeev is fairly unusual among Indian businessmen in that he is unafraid to speak his mind and even take on the government on many policy issues. For instance, he was critical of the UPA government’s handling of the telecom sector, leading to the 2G spectrum scandal. He

has opinions – and solutions – to offer on an array of issues, ranging from freedom of the Internet to economic deregulation, from governance reform to institutionalising anti-corruption and anti-graft measures. Rajeev is into all things Tech and all things Good Governance – and has the reputation of being an MP with and active social conscience. He has taken up a gamut of issues with the Government ranging from child sexual abuse to fighting for good governance. In carving out a profile that goes beyond just the boardroom, Rajeev has made the jump from being an entrepreneur to becoming a public intellectual. Rajeev’s entrepreneurial zeal and major initiatives have won him all round recognition and awards. Not only that multifaceted life and achievements been featured in books like Riding the Wave by Mini Menon, Men of Steel by VirSanghvi and Rouge Elephant by Simon Denyer, all of which deal with the topics of Movers and Shapers of India. To quote a popular magazine which aptly described his achievements as “Rajeev Chandrasekhar has done more things in one lifetime than many others do in several”. A quiet achiever, Rajeev Chandrasekhar’s success lies in his relentless pursuit of nationbuilding ideas and his ability to bring together best of the brains – experts , committed individuals in government and private – and inspiring them to success. Recognition of his entrepreneurial zeal has come from all around, in the form of the Global Service Alumni Association Honour from Illinois Institute of Technology, Honorary Doctorate from Visveswaraya Technical University, Karnataka, Most Distinguished Alumnus award from MIT, Manipal and a rare honour from the Indian Army, for his service to veterans and their families.

Lack of proper implementation of environmental laws and regulations has made the intervention of courts a necessity in the country today. The NGT has played an important role as the adjudicator in many such cases which involved large scale destruction of Forest and Tree cover like Steel Flyover in Bengaluru and Munnar in Western Ghats, Water bodies and Lakes in Bengaluru etc. The NGT has brought to light numerous cases of discrepancies in ECs granted by The Ministry of Environment, Forests and Climate Change (MoEF& CC). Additionally, citizens have utilised the NGT to bring to attention apathy within Regulatory authorities- Eg. Application no. 245/2016 before the NGT questioned the SEIAA for its lethargy in not monitoring the Government’s move to build the controversial Steel Flyover in Bengaluru. Moreover, the NGT Order dated May 04, 2016, played a crucial role in establishing a buffer

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zone around lakes in Bengaluru, it also subsequently issued directives to stop pollution in Bellandur and Varthur Lakes. So there is a legitimate need to strengthen and support NGT which has served as a means for grievance redressal for the citizens. However, there is a perception that there is a move to curtail powers of NGT with the passing of the Finance Act, 2017. It is important that NGT is not diluted and there should be no attempt to bring bureaucrats etc. into this, unless these are men of impeccable track record – because as I have said biggest violator in environmental laws are either Government or Government backed Business. The Government should reiterate its commitment to principles of sound, consistent Environmental regulation to protect our precious ecology and environment by strengthening further Institutions and their capacity to regulate and enforce environmental laws and not dilute them.

18 CEOs

September 30 - October 31, 2017

P a s s l i n e

rundhati Bhattacharya’s four year stint as Chairman of SBI will be over by October 6, 2017. One who looks closely at her tenure will agree that it has been eventful throughout. It was coinciding with rising bad loans of the banking sector and the subsequent remedial measures going on the resolution front. She played a pivotal role for preparing the ground for the merger of associate banks with itself which was completed earlier this year. The employee’s unions took the ante against the merger, went on strikes and the banking sector in the country was crippled several times. Demonetisation was another waterloo for the Indian banks and as Nation’s bank SBI tackled it under the stewardship of Bhattacharya meticulously. Her operational skills were also tested during the period, as all banks, including SBI, had to manage the exchange and deposits of scrapped notes. However, the bank’s margins and asset quality came under pressure as the demand for loans reduced significantly along with rising provisions for bad loans. Besides that, she focused on making the banking behemoth more relevant to the changing business environment, customer needs or employee expectations – making the bank digitally savvy , cordial relation with regulator and making the organisation employee-friendly particularly for women. In short, we can summarise her major achievements while she steps down from the Chairmanship of world’s 45th largest bank.

The merger Though already the largest bank in the country, the merger of five associate banks and Bharatiya Mahila Bank with consolidated asset base of over Rs 33 lakh crore, has given the SBI more firepower and scale to compete on global arena. The bank’s merger with six other entities has taken it into the league

of top 50 banks globally in terms of assets. For Bhattacharya, who got a one-year extension last October, the merger was the key task during the past year, which she delivered promptly. The bank had done a lot of groundwork prior to the merger, especially in 2016-17 in terms of cleaning up the corporate loan book of associates, integration of infor-

mation technology systems, and bringing senior management on the same page to ensure smooth transition. The merger has resulted in strain on the bank’s financials with a rise in slippages in the retail loan book and slow growth in home loans.

Relations with regulator & govt A former top SBI executive said the relationship of the head of the largest bank with the regulator Reserve Bank of India (RBI) is crucial. Unlike her two predecessors, who had run-ins especially with the regulator, Bhattacharya developed good working relationship both with the RBI and the finance ministry. The central bank takes her opinion and insights seriously, said an executive at the Indian Banks’ Association.

September 30 - October 31, 2017

Capital position In June, the SBI raised equity capital of Rs 15,000 crore through a qualified institutional placement route, the first such fund-raising after the merger, at Rs 287.25 per share. As a result, its capital adequacy ratio stood at 13.3 per cent at end of June 2017 for combined entity, compared with 13.1 per cent for the standalone bank in the March 2017 quarter.

Rajnish Kumar will head SBI

While working to stabilise the asset quality of the bank, Bhattacharya was vocal about taking action against recalcitrant managements and promoters of defaulting companies. But, banks were hamstrung without legal recourse to kick existing managements out. The SBI was no exception to it. With the Insolvency and Bankruptcy Code giving creditors more rights, Bhattacharya has been instrumental in driving hard bargains in many NPA cases. In an otherwise steady journey of improvement in asset quality, a merger induced bump up in gross bad loans has queered the pitch.

RBI’s asset quality review from the December 2015 quarter, the SBI’s financials began deteriorating. The SBI’s net interest margins, which were in the range of 3-3.2 per cent fell to 2.8 per cent between June 2016 and March 2017, and fell further to 2.4 per cent in the June 2017 quarter after the merger with associate banks.

Digital banking

Asset quality Bhattacharya in her first two years brought down gross non-performing assets (NPAs) as a percentage of total advances from 5.6 per cent in September 2013 quarter to 4.2 per cent in the September 2015 quarter. However, after the central bank’s asset quality review, applicable from December 2015 quarter, gross NPAs have gone up. The June 2017 quarter showed the impact of poor asset quality in associate banks as gross NPAs touched 10 per cent.

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he government has named Rajnish Kumar as the new chairman of the State Bank of India (SBI), the country’s biggest lender, for three years. Rajnish Kumar is currently a managing director at SBI. He has been with the bank for the last 37 years and was previously the managing director and CEO of SBI Capital Markets, the merchant banking arm of the bank. Kumar has been with the SBI for over three decades, having joined the bank as a Probationary Officer in 1980.

She was equally vocal about pointing to adverse effect of farm debt waivers on credit discipline. She did find strong support on her view on farm loan waivers from former RBI governor Raghuram Rajan when he was the central bank governor.

Four managing directors were interviewed for the post earlier this year by the Banks Board Bureau, which had made a recommendation to the government after that exercise. Last year, the government had extended Ms Bhattacharya’s tenure for a year. Kumar has held several key assignments across various business verticals in SBI, including two overseas assignments in Canada and the UK. He has vast experience in handing large credit, project finance, foreign exchange and retail banking.

Financials The bank’s financials improved in Bhattacharya’s two years with the net profit rising from Rs 2,375 crore in the September 2013 quarter to Rs 3,879 crore in the September 2015 quarter. However, after the

The leader in physical banking was lagging behind private sector banks in the digital space when Bhattacharya took over as chairman. The bank’s digital offerings both increased and improved as it quickly launched products from ewallet SBI Buddy to digital branches, and mobile website and apps for all types of customers. As a step to support the fintech ecosystem, the bank created a Rs 200-crore fund to invest in fintech start-ups. Many solutions and services are expected to emerge from this fund to give an edge to the bank for the future.

People focus Bhattacharya’s people skills are something even her competitors admire. For the merger, she had to bring employees on board, and convinced them patiently to accept it. She let senior colleagues -- managing directors -- work independently, which is seen a major plus. She has also been sensitive to employees’ concerns and has addressed them effectively. She allowed women employees to work from home if they were caregivers to an ailing parent or if a child had an important exam to take.

September 30 - October 31, 2017

P a s s l i n e

Is quitting Infy a Hobson’s choice for Vishal Sikka ?

or Vishal Sikka there is no alternative other than quitting the company and perhaps he was looking for an escape route because, he may have realised that he was in no position to deliver good on the promise Infosys made to its shareholders. No one takes a decision like this in haste if he is the MD/CEO of $8 billion enterprises and also operates from California, thousands of air miles away from Bengaluru where his company’s board of directors sit. Freedom to pick any person, sack any one, no questions are asked. The board will support when you pay a million mindboggling severance package to an outgoing CFO. Your board backs you to the maximum when an ageing activist-like co-founder questions you about your salary and on the bonuses that you may earn. When you acquire a company for $200 million and if the co-founder questions the propriety of the deal, the board merely appoints legal firms to conduct a probe, but the full probe report is not made available to the co-founder. With so much freedom of operation and so much backing from the board, what do you do? You quit because you were distracted by the co-founder who commands less than 4% share of the company that you head. The above description sums up the chickening out of Vishal Sikka, PhD from Stanford University and ex-CTO, SAP SE. Vishal Sikka was the CTO of SAP’s crown jewel, a

the FY ending March 2017, Infosys growth was just a little over 7%. If Infosys has to achieve its $20 billion revenue target by March 2021, it has to grow by at least 18.9% growth year-on-year over the 10.2 billion USD revenue it achieved in FY ending March 2016. This appears to be a near impossible task. Dr Sikka may have realised that he was in no position to deliver on the promise Infosys made to its shareholders. Perhaps he was looking for an escape route and he quit under the cover of ‘continuous drumbeats of distractions’. Dr Sikka doesn’t elaborate the source of these distractions. N R Narayana Murthy, Infosys’ co-founder, has been making a noise about Infosys not being run in line with the core values of the founders. He protested against the bizarre compensation packages and fantastic severance pays of Infosys’ CXO level executives. Narayana Murthy also wants the full report of the independent investigation carried out by the two legal

not have frightened Vishal Sikka out of his wits. As long as Murthy is not itching to get back on the Infosys board and as long as he is not making a grand plan for the entry of his children on the Infosys board, he is well within his rights to keep criticising the company on matters of ethics, morality and corporate governance. It is likely Dr Sikka quit Infosys as the realisation grew on him that he would not be able to achieve the targets that he set for himself for FY ending March 2021: • a. $20 billion revenue; • b. Operating margin of 30%; • c. Per employee revenue of $80,000 per employee. The table proves that in terms of revenue per employee, Dr Sikka and his management team were able to make virtually no change. The company had a per employee revenue of $51,426 in FY 201314 and in the last financial year it dropped down to under $50,876 per employee.

product called SAP HANA, before he was picked by Infosys to become its MD and CEO in June 2014. Infosys had closed financial The table captures the essence of what it is. year 2013-2014 Infosys’ key Infosys’ key results for 2 Infosys’ key results for 2 with a turnover results for FY FYs AFTER Vishal Sikka Financial Years BEFORE Vishal of Rs 50,000 when Vishal took over Sikka took over Sikka took over crore (around $8.2 billion). The FY 2012-2013 FY 2013-2014 FY 2014-2015 FY 2015-2016 FY 2016-2017 newly appointed Dr Sikka and a Revenue committee set (in $ million) 7,398 8,249 8,711 9,501 10,208 up by the InfoNet income sys board set 1,725 1,751 2,013 2,052 2,140 an ambitious (in $ million) Number of target of making Infosys a $20 Employees 156,688 160,405 176,187 194,044 200,644 billion company Number of by March 2021. Clients 798 890 950 1,092 1,162 A little over two Revenue per years since 47,215 51,426 49,442 48,963 50,876 Dr Sikka took Employee over as MD and CEO, the company appears far away firms on the Panaya acquistion for Dr Sikka’s supporters may say that from that projected target of $20 bil- $200 million. Murthy is not somelion. (See the table) one to whom Vishal Sikka reported under his leadership, Infosys outFrom the table, it is evident that In- to. Murthy is not a member of the performed TCS and Wipro. But then fosys under Dr Vishal Sikka, the pro- Infosys board and hence his pro- the targets set by Dr Sikka for himfessional CEO who was hired by In- tests should not have led to Sikka self were not to outperform these fosys at an annual package that may getting distracted to the extent of competitors. His targets were what now look impossible to achieve unbe more than the lifetime salary of a throwing in the towel. mid-level Infosys employee, has been Murthy, who had been exceedingly less Infosys makes some big ticket trotting when it was supposed to be critical of the Infosys board and acquisitions. The $20 billion dream cantering. For Infosys to become a has raised questions on its corpo- appears too gigantic to be achieved $20 billion company by March 2021, rate governance, has every right by organic growth alone. And if Dr Infosys had to show a growth of to criticise the company that he co- Sikka did indeed quit because he 13.5% year-on-year (YoY) from April founded. He was doing so as an was distracted by the ‘drumbeats 2014 onwards. Under Dr Sikka, Info- activist shareholder who is no lon- of distractions’, then the reality is sys showed a growth of about 5% for ger bound by the shackles of being that: Vishal Sikka is just CTO mathe FY ended March 2015. a member of the board. He is a free terial, and not CEO material. Dr In the next year, Infosys achieved bird and even if he appears to be a Sikka may be a man of high IQ, but a revenue growth rate of 9% and in free radical, his drumbeats should his EQ needs to be tested.

21 Banking

September 30 - October 31, 2017

P a s s l i n e

ITU Bank: A standalone entity in its Centenary Year Passline News Service

rinjalakuda Town Cooperative Bank , rebranded as ITU Bank, is sprucing up its activities to celebrate its Centenary Year with ambitious business schemes and technological advancement. The first high-tech bank in cooperative sector is marching towards its glorious 100- year mark of service in 2018. The wide range of initiatives taken by the ITU Bank enabled the bank to fetch a standalone entity with its peers and at a level playing field with other scheduled commercial banks in the state. ITU Bank has many firsts in its credit like the first fully computerized bank with air- conditioned branches in cooperative sector, the first bank in the sector which showcased with colour scheme and logo etc.

all advanced technology – based services. This year we have added mobile banking and net banking to our technology- based service kitty,” says Dileep Kumar.

“Unlike other cooperative banks, we are following a totally professional Talking to Passline, its General management system and as a part Manager T K Dileep Kumar , an of it, we are delegating the works experienced banker and the catato the employees to the nature lyst for the overwhelming growth of it. The members of the Board of ITU Bank, said, “ we have many of Directors or any other exterplans and ideas to commemorate nal forces will not interfere in the our Centenary Year, but it is in fluid day- to- day affairs of the bank,” stage and yet to crystallise. In the says M P Jackson, a prominent ongoing financial year , 2017 – 18 figure in society, political circles we have a total business target of and a great business personalRs 2,500 crore , Rs 1,450 crore ity who has an impeccable track as deposits record in his and Rs 1,050 personal life, crore as adis the Chairvances. Last man of the year we have ITU Bank. crossed Rs T K Dileep Kumar is a seasoned He is also 2,000 crore banker with vast knowledge about the Chairmark with Rs banking industry. Finance and ac- man of the 1,200 crore as counting is his strength coupled with Cooperative deposits and the thorough administrative and man- Hospital at Rs 840 crore agement capacity. A post- graduate Irinjalakuda. as loans. in Business Administration from CU- He himself is This fiscal we SAT, Dileep joined ITU Bank in the taking initiahave opened year 2000. It is no doubt that his pro- tives for the 14 branches, fessional acumen and commitment transparent and 5 more enabled the bank to reach new scales and smooth branches will of strength and professionalism which functioning be opened bewe are seeing today. He is always in of the bank. fore the end of search of new vistas and areas for Dileep is atthis fiscal year growth of the ITU Bank. Dileep has tributing the in places like been the President of Kerala Urban success of VadakkanchBank Chief Executive Forum for the the bank to ery north this single last three years. , Athani, reason. “ Chilakkara, Like any Erumapetti, other bank, we too keep our core Cheruthuruthy in Thalapilly thaluk”. area as retail lender. We lend “ Our net NPA is merely a negligible gold loans, house loans and also level of below 2% and the bank provide personal loans up to Rs is providing its customers almost 50 lakh,”adds the GM. ITU Bank

A seasoned banker

has commenced services to NRIs now. As its first step, the bank has launched a NRE deposit scheme with abovethe - industry -level interest rates. When the commercial banks provide 6.5 – 7% as interest on deposits, ITU Bank is giving a maximum of 8.25 % . When quipped about the entry of a Small Finance Bank (SFB) in Thrissur district Dileep said, “ Both are totally different. SFBs will not become a

dampener for our business t a r gets. They are taking money from other funding agencies comparatively with a higher interest rate; so naturally their lending rates will be higher than us. And also there is a cap of Rs 25 lakh for the loans SFBs can provide. Whereas, we can give a maximum limit of Rs 10 crore loan to a single borrower. Though there will be some competition in certain areas , we can accommodate them also because the concept is excellent and the opportunity is vast in the banking sector”, remarks the General Manager.

22 PROJECT OPPORTUNITIES

September 30 - October 31, 2017

P a s s l i n e

Stainless steel products Prof Job K T r Basheer is a Non-Resident Keralite (NRK) from Kozhikode returned from Middle East after having good savings. He wants to construct a modern residential building in his town. In this process, he is involved in a series of discussions with Architects, Engineers, Builders & building material suppliers. Mr Basheer also decides to visit some of the residential buildings and building sites for personal verification. He notices that stainless steel hand railings/stainless steel glass railings add beauty, elegance and life to the residential buildings. He inquired the building owners the availability of such steel hand railings/stainless steel glass railings. To his surprise, he learned that in the absence of local suppliers, much of the steel hand railings/stainless steel glass railings are coming from places like Coimbatore, Bangalore etc. The cost of transportation adds to its cost. Timely availability of the materials is another problem. Thus, he takes a very important decision to set up a manufacturing unit in Kozhikode for stainless steel products like hand rails, glass with hand rails, dust bins, kitchen storage, planter boxes, trolleys, towel folders etc. Typical stainless steel railings available in the market are shown below:

With a stainless steel demand exceeding 3 million tonnes since 2014 and an increasing focus on quality products, India is set on the growth pathway for the next years ahead. The Indian stainless steel production has been rising very fast, especially since 1990. Producers of household utensils were searching

for a low cost alternative to make stainless steel affordable for the mass market. Production in 2015 was almost 190 times higher than in 1978, 15 times higher than in 1990 and more than 3 times higher than in 2000, reaching 3.5 million tonnes in 2015. On an average, India had an annual growth rate of 16% since 1978. The long term perspectives for India remain positive. India has been increasingly shifting focus from volume- to value-based production in the past few years. Stainless steel demand has also been growing to over 3 million tonnes in 2015, making India the second largest market in the world behind China. India might not experience the Chinese exorbitant growth of the recent years, but it is set out to continue its rapid development supported by industrialization, urbanization and a “Make in India” economic policy. The major areas in construction industry needing stainless steel products are: 1. Shopping Malls, a new craze 2. Organized Retail, growing fast 3. A big housing boom 4. Corporate make-over 5. Urban Renewal especially street furniture 6. Airports expansion and development 7. Railway Station Modernisation According to a general survey, it was estimated that the projected demand for housing in Kerala is around 10.84 lakh over a fiveyear period. Based on this survey, the current stock is estimated at 75 lakh residential units. The projected demand for the new population up-to the end of the 12th plan period (2012-17) is 6.5 lakh. Apart from this, there is a need for reconstruction of 5.5 lakh units of dilapidated houses. Thus, the State has to undertake the task of constructing 12 lakh Housing units. Considering an average amount of Rs 20 lakh for the construction of a residential unit, it is estimated that a total amount of Rs 2,40,000 crore is needed as investment in the Housing Sector. Even if assuming a

modest of 20% of residential buildings opts for stainless steel hand railings etc the number of houses is 2.40 lakh. The invest in railing on an average is taken at 0.5% of the total cost of building, the requirement for stainless steel will be Rs 240 crore, which a huge investment opportunity for any business man. Stainless steel hand railings are manufactured by turning, drilling, welding etc of the stainless steel rods/squares/flats. The fabrication and fittings of hand rails normally is carried out by the suppliers itself. A typical unit having a capacity to produce around 100 tonnes of stainless steel hand railings and other products per year is shown below. Sl. No. Description Requirement 1 Land 30 cents 2 Equipment like CNC Lathe, Pipe Bending Machine, Portable Argon Welding Set, Arc Welding Set, TIG Welding Machine, Drilling machine, hand tools etc. Rs 100.00 lakh 3 Annual requirement of Stainless Steel rods, squares, flats etc. Rs 200.00 lakh 4 Direct employment potential 15 persons The approximate investment requirement for starting stainless steel hand railing unit will cost Rs 250.00 lakh as indicated below: Sl. No. Particulars Cost (Rs in lakhs) 1 Land of 30 cents Own 2 Factory Building – 3000 Sq ft 45.00 3 Machinery & Equipment 100.00 4 Miscellaneous fixed assets 25.00 5 Preliminary and pre-operative expenses 30.00 6 Working Capital (1st Year) 50.00 Total 250.00 It is expected that financial institu-

tions will provide assistance to the extent of 75% of the fixed assets amounting to Rs 120.00 lakh. It is also eligible for an investment subsidy of Rs 30.00 lakh from the State Government. Thus, the promoters are expected to bring in Rs 100.00 lakh as equity capital. The financial viability of the stainless steel hand railing unit is provided below: Sl. No. Particulars Amount ( Rs in lakhs) 1 Annual Income 300.00 2 Cost of salary, electricity, gas, interest on loan, administrative expenses etc. 50.00 3 Operating Profit 50.00 4 Breakeven point 50% 5 Pay Back Period 5 years 6 Internal Rate of Return 30% As discussed, the present demand for stainless steel hand railings for the housing industry in Kerala is around Rs 240 crore, which is bound to increase in the coming years due the large flow of investment in housing sector. Currently, much of the requirement of the products is met by suppliers from places like Coimbatore, Bangalore etc. The high cost of transportation coupled with delivery issues, points the need for local manufacturers of the products. (Prof Job K T is a retired Senior Faculty of Centre for Management Development, Thiruvananthapuram. Presently he is the Director, Enterprise Development Service, Thiruvananthapuram, offering training, consultancy, Asset Valuation and Quality Management System services to small and medium enterprises. He can be contacted at Mob: 9847135571 or e-mail: jobkt012@gmail.com)

23 INCOME TAX

September 30 - October 31, 2017

P a s s l i n e

Filing IT returns is not hassle-free By A Special Correspondent

need to report it when filing the return. You need to provide details of the money deposited and details of bank account such as name, IFSC code and account number. This is a common requirement across all ITR forms. The authorities already have data from the banks. They would cross-check the details with the data from banks. In case of discrepancies, they can initiate action. Ensure you report this correctly.

New ITR form may be simpler, but some changes could stump you, caution...

Change in ITR forms To make it easier for individuals to file returns, the government has rationalised ITR forms. The number of forms has been brought down to seven, from the earlier nine this assessment year. Few ITR forms are merged for simplicity. The ITR-2

Change in timelines

form this year replaces three ITR-2, ITR-2A and ITR-3 issued last year. The ITR-1 (Sahaj) this year is just a one-page form that can be used by individuals earning up to Rs 50 lakh a year and has only salary income, interest income and income from house property. Those who earn over Rs 50 lakh or own more than one house property, they need to opt for ITR-2 Form.

Additional disclosure for high-income earners Last assessment year, the government introduced a Schedule AL in the ITR for those who earn Rs 50 lakh or more. These high-income earners had to disclose specified assets and liabilities held at the end of the financial year. Until last year, taxpayers were only required to disclose assets such as immovable properties, cash in hand, jewellery, vehicles, and so on. This year, the tax authorities have widened the requirements in the schedule. These taxpayers now need to also disclose financial assets such as stocks, MF, insurance, etc. They also need to disclose the address of immovable properties and the description of movable assets. If an assessee has an interest in a partnership firm, then s/he needs to provide the PAN of the partnership firm and details of investment in it.

ed to tax deduction at source (TDS), you still need to pay tax on the interest depending on your income tax slab. Banks deduct only 10 per cent as TDS. If you fall in 20 per cent or 30 per cent tax bracket, you will need to pay the additional tax on the returns accrued on FDs.

Cash deposits demonetisation

during

During demonetisation, if you had cash deposits of over Rs 2 lakh, you

You can now revise your return even if you don’t file it by the July 31 deadline. Earlier, a taxpayer could revise return only if he had filed it by the deadline. Say, an individual files tax return in August, past the deadline. He is free to revise returns in case of errors until March 31, 2019. At the same time, the government has also reduced the time granted to file belated returns from the next assessment year. As of today, the taxpayer can file returns for the financial year 2016-17 until March 31, 2019. Going forward, an individual has to file the return within one assessment year. The returns for 2017-2018 has to be filed by March 31, 2019.

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Disclose all incomes Majority of the individuals are not aware that the interest earned on the money kept in savings bank account attracts tax if it crosses Rs 10,000. But, even if it is below that threshold, it needs to be reported when filing the return. There’s also a misconception that the interest earned on five-year tax-saving fixed deposit (FD) does not attract tax. While the FD helps to save tax at the investment stage under Section 80C, the interest earned is fully taxable. Also, while your bank FD is subject-

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Coconut Development Board [MINISTRY OF AGRICULTURE & FARMERS WELFARE, GOVERNMENT OF INDIA]

Phone: 0484-2376265, 2377267, 2377266, 2376553, Fax:91 484-2377902 E-mail:cdbkochi@gmail.com, kochi.cdb@gov.in, web:www.coconutboard.gov.in

*As per the study report of Amrita School of Pharmacy, Amrita University & Bio Chemistry Dept. of St. Thomas college, Palai, Kerala.

ntil recently, a person didn’t need to file a return if her/ his taxable income is below Rs 2.5 lakh. But this year onwards, it doesn’t solely depend on the taxable income. Now, if the taxpayer has exempted income like long-term capital gains that crosses the basic exemption limit of Rs 2.5 lakh, s/he needs to file returns mandatorily. For example, if an individual redeems equity mutual funds (MFs) worth Rs 3 lakh held for over a year and has no other income, the gains from the investment are tax-free. The entire income, therefore, is exempted from tax. But even in such cases, the taxpayer needs to file return mandatorily. “Taxpayers may not be aware of such minor changes in the regulation, but these can lead the authorities to issue a notice,” says a well known tax practitioner. The government’s latest norms to capture details of your income and assets have made things more tedious. And, a small error or omission of information can prove costly in the future. Linking Aadhaar and PAN is compulsory On July 4, the Central Board of Direct Taxation issued a notification stating all those who file income tax returns need to quote their Aadhaar details or enrolment number compulsorily. Tax experts say that in June, when the Supreme Court had granted partial relief to those who don’t have an Aadhaar, many thought it’s possible to file returns even if they don’t have an Aadhaar. The apex court had only asked the government not to cancel PAN of those who don’t have an Aadhaar. It was meant only for those who don’t have to file the return. Such individuals can quote their PAN for financial transactions. Taxpayers without the Aadhaar number or the enrolment ID will not be able to file their tax returns from July onwards. Many also feared their PAN would become invalid if not linked to Aadhaar by the end of June. But, that’s not the case. You can still link them by going to the income tax e-filing portal.

24 POVERTY

September 30 - October 31, 2017

P a s s l i n e

WORLD HUNGER INCREASING FOR FIRST TIME SINCE TURN OF THE CENTURY A United Nations study found that war and climate change were the driving forces of an increase in malnutrition worldwide in 2016. By Shelley Connor

he number of people suffering from malnutrition worldwide rose to 815 million in 2016, rising by 38 million from the year before. According to a new report co-signed by five United Nations agencies and charities, and made public by the Food and Agriculture Organisation of the UN (FAOUN) recently, this was the first such year-to-year increase since the beginning of the 21st century. The development of science and technology, and their spread around the world in the form of gigantic increases in food production, have made possible a century-long reduction in the number suffering from hunger and malnutrition. In 2016, the world produced more than enough food to provide an adequate and nutritious diet to every human being on the planet. But these gains are now increasingly offset by war and the impact of climate change, according to the UN report. Another factor — on which the UN report is largely silent — is the impact of mounting economic inequality, which means that in both comparatively wealthy and poor countries, many people are too poor to purchase the food that exists in abundance. The five agencies involved in the study are the Food and Agriculture Organization, the World Health Organization, the International Fund for Agricultural Development, the World Food Programme, and UNICEF. As is typically the case in such re-

ports, the language is deliberately restrained and the approach cautious and incremental, even when addressing what can only be described as a social catastrophe. In 2016, for example, an estimated 155 million children younger than five were classified

as “stunted,” too short for their age, because their physical development lagged significantly because of lack of food. Some 52 million children were considered “wasting,” so acutely undernourished that they were not heavy enough for their height. One-third of the population

In South Sudan, severe food insecurity afflicts around 4.9 million people — over 42% of the population. In Yemen, 60% of the population — an estimated 17 million people — suffer from severe food insecurity. This number represents a 47% increase from June of 2015. Pediatric malnutrition has been “a serious problem for a long time” in Yemen, according to the report. However, acute undernutrition, or wasting, has risen sharply in the past three years.

of eastern Africa, and one-fifth of the population of the entire continent, were undernourished. In Asia, 12 per cent of the population were undernourished, mainly in South and Southeast Asia. The report warns that significant progress in reducing malnutrition worldwide, from the level of 900 million people in the year 2000, is now in danger of being reversed. In just the last year, chronic undernourishment surged to an “extreme level” worldwide. Famine was declared in South Sudan in February. Yemen, northeast Nigeria, and Somalia teeter on the edge of famine. The number of chronically undernourished people rose

to 815 million in 2016 — a number greater than the population of the entire European continent. Of that number, 489 million, 60%, live in countries affected by war or civil conflict. The foreword to the report states that not only have conflicts “risen dramatically in number” over the past decade, but they have “become more complex and intractable in nature.” The residents of countries in conflict zones are almost two-and-a-half times more likely to be undernourished than those in other countries. In South Sudan, severe food insecurity afflicts around 4.9 million people — over 42% of the population. In Yemen, 60% of the population — an estimated 17 million people — suffer from severe food insecurity. This number represents a 47% increase from June of 2015. Pediatric malnutrition has been “a serious problem for a long time” in Yemen, according to the report. However, acute undernutrition, or wasting, has risen sharply in the past three years. The report cites “the conflict-induced, economy-wide crisis that is affecting the entire population.” War and internal conflict create food insecurity in myriad ways. One is through population displacement. According to the FAOUN report, the number of refugees and internally displaced persons (IDPs) has “increased significantly along with the greater number of conflicts,” doubling from 2007 to 2016 to a total of 64 million people. One out of every 113 human beings is currently a refugee, an IDP, or seeking asylum. An estimated 70 million people worldwide are likely to suffer undernourishment as a result of displacement. War also exacts heavy tolls on agriculture and food distribution systems, “from production, harvesting, processing and transport to input supply, financing and marketing,” states the report. In Iraq, for example, prior to the 2003 US invasion, the Nineveh and Salahal Din districts produced a third of the country’s wheat and 40% of its barley. Yet by February 2016, 7080% of Salah al-Din’s grain cultivations were damaged or destroyed; in Nineveh, which includes the city of Mosul, 32-68% of the land used for wheat cultivation had been ei-

September 30 - October 31, 2017

tries, it is not uncommon to find occurrences of morbid obesity alongside undernourishment in a single family. As wages stagnate and food prices continue to increase, many people can only afford heavily processed, starchy foods. Such products are more profitable for companies to supply, because they are less prone to spoilage and are therefore cheaper to transport and store. This is a burgeoning health crisis, as the report points out: “food insecurity and poor nutrition during pregnancy and childhood are associated with metabolic adaptations that increase the risk of obesity and associated noncommunicable chronic diseases in adulthood.” As the report’s authors say, the results of the UN’s assessments have “set off alarm bells we cannot afford to ignore.” However, while the UN rightly points out that conflict engenders undernourishment, it blatantly omits the role that imperialism plays in these conflicts. It classifies the conflicts in South Sudan and Syria as internal conflicts, when, in fact, the chaos in both countries has been directly caused by the United States, its allies, and its proxies. It even fails to mention the United States at all in its assessment of Iraq, invaded, laid waste to and occupied by US military forces from 2003 to 2011, and still a battleground. The report’s authors suppress any mention of the Saudi-led coalition’s attacks upon Yemen, as

P a s s l i n e

well as US complicity in those attacks; in many instances, the coalition has blocked humanitarian aid organizations from entering the country, and it has bombed numerous hospitals and mobile clinics. But the report details the same crimes at some length when perpetrated by “warring factions” in South Sudan. Largely ignored are the long-range, ever more obvious effects of manmade climate change. No critique is levelled against the corrosive social effects of the profit motive, which is responsible for both climate change and the dearth of affordable nutrition in developed countries. The worldwide capitalist crisis threatens new, more lethal wars. The imperialist nations cannot address food insecurity, not only because they have caused it with their militarism and unchecked industrial pollution, but because they are fundamentally incapable of solving their own contradictions. Even as this report was released, unprecedentedly violent hurricanes submerged entire cities, displaced thousands, and claimed lives throughout the American Gulf Coast and the Caribbean. Global hunger can only be eradicated by putting an end to the contradictions of capitalism and replacing it with an economic system based upon social need. The UN may sound the alarm bell about widespread undernourishment, but only the struggle of a united international working class can put an end to it.

ther compromised or destroyed, as well as 43-57% of the land used to cultivate barley. In Syria, where agriculture once thrived — and where many scientists believe it originated historically — six years of attempted regime change by the United States have devastated the country’s cultivation. Eighty-five percent of Syrians now live in poverty. An estimated 6.7 million faced acute food insecurity in 2016. Acute malnutrition — wasting — is currently seen at increased levels in most areas. One of the most insidious ways that conflict drives undernourishment lies in “food … being used as a weapon of war.” The report mentions the use of trade blockades in South Sudan. It notably fails to mention the Saudi-led blockade against Yemen, where imported grains supply the bulk of the population’s nutrition. Conflict is not the only source of undernourishment, as the FAOUN report makes clear. Climate extremes have led to – Third World Network Features. sharp increases in food insecurity in Sub-Saharan Africa as well as Southwest and Southeast Asia. In addition, as the World Socialist Website has reported in the past, diseases of malnutrition are once again on the rise in developed Shenoy’s Jn, Near Arrow, Narakathara Road countries such Ernakulam - 682 035 as the United E-mail:cochinarmoury@gmail.com States and Great Britain. Stockist: COCHIN AIRGUN, Ph: 0484-3228069 In these coun-

DEALERS & REPAIRS of ARMS/ AMMUNITION

COCHIN ARMOURY Phone: 0484-2371598, 2353589

26 INVESTMENT

September 30 - October 31, 2017

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The points to plan your systematic withdrawal correction or bear market, this has the reverse effect of a systematic investing plan where your money buys more units.

ike systematic investment plan (SIP) there is systematic withdrawal plan ( SWP) also. It can work for you, only if you know how to use it to your benefit. 1. A systematic withdrawal plan, or SWP, is an option offered by a mutual fund when you want a cash flow from your investments. The money is automatically deducted or systematically withdrawn on a regular basis (fortnightly, monthly, quarterly). At the set, predetermined date, units from your fund are sold and the money is sent to your bank account. 2. Do not opt for a SWP when you have a regular cash flow. Instead, opt for a systematic investment plan, or SIP. This is the time you should be putting your money to work to attain your goal of wealth creation. 3. A SWP is an excellent strategy to have when you are looking for some sort of regularity in cash flows. It could either be that you have moved from a full-time job to a freelance role or have retired from the workforce. 4. A SWP can be set up to withdraw only a portion of the capital appreciation. The good part is that the entire capital stays invested but one can enjoy the gains in the event of an appreciation. This works extremely well in a rising market. The problem takes place in a downturn. If there is no appreciation at all, there will be no payout. Or, the payout would be very highly diminished. 5. If you are very dependent on these cash flow, opt for a fixed amount to be withdrawn. This will ensure that you do get a cash flow into your account in an up or down market. But, in a down market, naturally your fund units will have fallen in value. Consequently, more units have to be liquidated to meet your withdrawal needs. So in a market

6. Don’t confuse the SWP with a MIP. The Monthly Income Plan, or MIP, is a structured product. It is a debt-oriented hybrid fund with marginal exposure to equity. Each fund has its own mandate which sets the equity limit anywhere from 10 per cent to 25 per cent, maybe even 30 per cent in a few select cases. Dividends are given to the investor depending on the fund’s ability to generate returns. No guarantees or assurances here. The SWP is NOT a product. It is merely a facility that allows for disciplined withdrawals from a mutual fund -- it could be any fund; equity, debt or hybrid. 7. Don’t confuse the SWP with a STP. The Systematic Transfer Plan, or STP, allows you to transfer money from one fund to another in a periodic and disciplined fashion. For example, if you wish to invest in the stock market via an equity fund, but want to do it systematically and not at one go, then the STP comes in handy. You can park the bulk amount in a debt fund and decide on the fixed amount that can be systematically transferred to the equity fund every month. The money will earn you more in a debt fund than a savings account. However, this works best if the amount parked is a substantial amount. 8. In case you think the SWP is a magical option which will hold you in good stead always, note these five points. First, if the amount in the fund to start with is huge, that would help. Second, higher the withdrawal rate, the faster will be the depletion. Third, as long as the fund is thriving in a bull market, the SWP will keep delivering on that momentum. Let’s illustrate with an example. Assume you start the SWP in a fund where your investment is Rs 2 lakh. You own 10,000 units whose current NAV is Rs 20. Your SWP

pattern is to withdraw Rs 5,000 on the first of every month. So 250 units get sold and the money is transferred to your bank account. You now have 9,750 units and your investment has now dipped to Rs 1.95 lakh. Over the month, the NAV rises to Rs 21. So your investment is now worth Rs 2,04,750 (9,750 units x Rs 21). To give you the monthly

Rs 5,000, around 238 units will get sold. Leaving you with 9,512 units which translates into your investment being worth Rs 1,99,752 (9,512 units x Rs 21). Fourth, a downturn will take its toll. Fifth, if you start off with a huge amount and there is significant positive momentum in the first few years of the investment, it should put you on a stronger note.

27 TOURISM

September 30 - October 31, 2017

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Poovar Island Resort

Unique in floating cottages, villas

oovar Island Resort is the latest in its concept and convenience. Reliable sources say it is the first such resort in India blessed by the nature’s bounty and manmade paraphernalia. Poovar Island Resort is truly a corridor into a heaven of virgin and unspoilt, surrounded by the enchanting serene backwaters and opening out to the Arabian Sea and a pleasant golden sand beach. Built on 25 acres of verdant coconut topes patting the beach, the resort currently comprises elegant land based superior rooms, built around the swimming pool on a natural lily pond and is unique in India for the floating cottages and villas which are afloat on the backwaters and face the sea. Located 30 km from Trivandrum International Airport, away from the hustle and bustle of the city, nestled amidst swaying coconut palms, undulating golden dunes and green vegetation, a ten minute boat cruise along the palmfringed shores of bewitching backwaters will take you to the Poovar Island Resort. A guest who visited the resort recently narrates, “ Poovar Island Resort is a place where nature is at her mesmerising best; picture-perfect, beckoning coconut palms, undulating golden dunes, deep blue sea, emerald green backwaters, red-orange sunsets and luxuriant vegetation. Nature has dabbed all

the colours of her palette to create this dream landscape around the Resort. Blue sea meets the green backwaters here and time stands still. Peace and tranquillity reigns. Stress, tension, deadliness, and pressure become mere sounds; words without meanings. Rush hour traffic is just a rumour. Poovar Island Resort, a place to lose yourself and to relish the finest moments of life, an experience that is truly out of this world.” “ You won’t get a place like this resort anywhere in India for spending your holidays” said M R Narayanan, Managing Director of the resort. “ Our resort has 52 land-based cottages, 12 floating cottages and 4 deluxe floating cottage suite that embodies a separate living area, 8 premium land cottages etc. The spacious rooms have all the luxuries like air-conditioning, mini bar, cable TV (only in land cottages), attached bath with 24- hour hot/cold water and telephones with STD / ISD facility. The Resort launched

the state-of-the-art Eco Floatel specifically meant for long staying Ayurveda guests. It has a pool side candle light barbeque where guests can enjoy Indian and Continental cuisines under the stars. Opportunity for beach volleyball, traditional and contemporary cooking classes, fishing/net pulling with the local community, crab hunting in backwaters, swimming pool(including kiddies pool), library, jogging track, indoor games, yoga classes, motor boat cruise and cultural musical nights are entertainments in the guest package. Sightseeing tours, Boat excursions are other chargeable activities. Poovar currently has 4 restaurant venues The air-conditioned fine dining ones. The restaurants serve seafood, vegetarian and non-vegetarian food in Indian (North, South and Jain), continental and some Italian and Chinese cuisines.” Narayanan points out.

Ayurveda village

The ‘Ayurveda Village’ at Poovar Island Resort is one of the few places where the 6000- year old ancient healthcare system is still prevailing at its pristine form. A team of experienced doctors and masseurs

practice this traditional art in the salubrious environment in order to maximize the healing potential. The doctors with immense experience in traditional ayurvedic rejuvenation therapy strive their best to establish optimal health in every person, may it be physical, mental or spiritual. The present Ayurveda village has been expanded and the property has added 14 spacious Ayurveda land cottages including two suites. Ayurveda restaurant has also been renovated and caters to the discerning guests with a superior selection of authentic Ayurveda Cuisine to choose from. This comprehensive a la carte menu gives variety and choice to the guests. A free flowing swimming pool has also been added to enhance the guest facilities at the Ayurveda Village.

Therapy Centre The Ayurveda Therapy Centre consists of a total 20,000 sq ft with 13 treatment rooms (10 Open rooms & three A/C rooms), six rooms of each 250 sq ft fully equipped to handle all traditional Kerala Ayurveda treatments, three rooms with steamer facilities and also seven rooms of 125 sq ft each. Medium sized rooms are also available. Two Specialized full time doctors and 12 female and eight male therapists are always ready at the disposal of the guests.

28 UN REPORT

September 30 - October 31, 2017

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Developing Asia-Pacific economies to grow at 5% this year However, it faces some near-term risks especially given the global policy uncertainty of recent months. By Kanaga Raja

he developing economies in Asia-Pacific region are projected to see average economic growth rising to 5% in 2017 and 5.1% in 2018, compared to 4.9% in 2016, a UN report has said. In its Economic and Social Survey of Asia and the Pacific 2017, released recently, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) said this growth is underpinned by stable economic conditions in

China, where higher value-added sectors are gradually replacing excess capacity sectors as the driver of output, employment and export growth. The developing economies of Asia-Pacific encompass all the countries in the region except Australia, Japan and New Zealand. In its first chapter providing a macroeconomic assessment of the region, the Survey makes a case for a proactive role for fiscal

policy and supporting structural reforms not only to enhance economic potential but also to strengthen social protection and improve resource efficiency. “As we enter the second year of the 2030 Agenda, economic growth in Asia-Pacific economies is steady but modest amid prolonged weak external demand and rising trade protectionism. Future economic growth will need to rely more

For the Asia-Pacific region to realize its full potential, however, it cannot rely simply on past strategies and patterns of economic growth. For future growth, the region will need to rely more on broad-based productivity gains, which in turn will require effective institutions and governance in both the public and the private spheres.

on productivity gains, compared to factor accumulation,” said ESCAP Executive Secretary Dr Shamshad Akhtar, in a press release. “Sustained productivity gains, in turn, will require effective institutions and better governance, in both public and private spheres,” she added. “In addition to ensuring sustained and robust economic growth, policymakers will need to address social and environmental challenges in order to improve the quality of this growth.” According to the ESCAP report, the region’s developing economies now account for a third of the world’s output, only slightly less than the combined share of the developed economies in North

America and Europe. “If the region continues to outpace global economic growth at the current pace, it would account for more than half of global output by 2050.” For the Asia-Pacific region to realize its full potential, however, it cannot rely simply on past strategies and patterns of economic growth. For future growth, the region will need to rely more on broad-based productivity gains, which in turn will require effective institutions and governance in both the public and the private spheres. Following a strong post-crisis rebound in 2010, economic growth in the Asia-Pacific region has been moderate in recent years compared with its historical trend. The region’s export-oriented economic growth strategy is under pressure amid prolonged weakness in external demand and global trade. China is both a transmitter and a source of the current economic slowdown, given its role as a hub in global value chains and its rebalancing towards consumption and services. ESCAP said the recent slowdown is also due to large terms of trade losses among net commodity exporters, such as the Russian Federation. Fortunately, both China and net commodity exporters had sufficient fiscal space to respond to such shocks. In particular, China’s fiscal stance has been very expansionary, with large budgetary and non-budgetary support provided for the economy. India also regained its economic growth momentum on the back of reform initiatives and the beneficial impacts of low global oil prices. “Taken together, the AsiaPacific region’s economic performance, although modest compared

Across the region, economic growth is expected to be slightly more broad-based in 2017 in terms of demand-side components. Leading indicators, such as manufacturing PMIs (Purchasing Managers’ Indexes) and the latest export and import data, point to a mild economic recovery, particularly on the investment side.

September 30 - October 31, 2017

with its recent past, is commendable when viewed against the backdrop of a struggling global economy.”The Survey noted that in 2016, economic conditions in the region began to stabilize, with better-than-expected performance exhibited by China and a recovery under way in net commodity-exporting countries.

However, growth slowed considerably in Turkey due to the political situation and to a lesser extent in India due to the impacts of de-monetization. Taken together, average economic growth in developing Asia-Pacific economies is estimated to have been 4.9% in 2016, largely stable compared with that of

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the previous year, without a further deceleration. Across the region, economic growth is expected to be slightly more broad-based in 2017 in terms of demand-side components. Leading indicators, such as manufacturing PMIs (Purchasing Managers’ Indexes) and the latest

export and import data, point to a mild economic recovery, particularly on the investment side. However, such a recovery is unlikely to be a firm rebound given that the factors which held back domestic demand remain largely unresolved even as rising trade protectionism effectively offsets potential recovery in external demand. Average economic growth in the developing Asia-Pacific region is projected to rise to 5% in 2017 and 5.1% in 2018, underpinned by stable economic conditions in China, where higher value-added sectors are gradually replacing excess capacity sectors as the driver of output, employment and export growth. According to the Survey, projected moderation in China reflects mostly ongoing efforts to deleverage and restructure the economy, which could boost growth in the medium term. In India, a gradual recovery from an estimated 7.1% growth rate in 2016 is projected, as re-monetization will restore consumption, but a revival in investment will take longer given unresolved problems in the banking sector. A slightly improved growth outlook for the rest of the region is due to a recovery in net commodity-exporting economies and public investment in some of the net commodity-importing economies. Among developed Asia-Pacific economies, growth in Japan is projected to strengthen in line with improved labour market conditions. Despite the broadly positive economic outlook for 2017 and 2018, the likely impact of some risks for the near-term economic outlook should not be underestimated, the report cautioned. With a significant increase in global policy uncertainty in recent months, the risks to the outlook are tilted to the downside. The most significant risk is trade protectionism. Recent shifts in United States policy over trade, currency, immigration and other areas could have large potential impacts on the region, including for China’s goods exports and India’s services exports. Possible further shifts in United States policy, together with Brexit and upcoming elections in various European countries, have also resulted in heightened global uncertainty, which in itself undermines investment in the region. “Any foregone trade and investment in turn could hurt employment prospects and act as a drag on productivity growth in the years to come.” Based on simulations, average economic growth in devel-

September 30 - October 31, 2017

China’s role as originator and transmitter of shocks has increased in recent years. Real or perceived economic instability in China could lead to bouts of financial volatility in the region, as witnessed in early 2016. oping Asia-Pacific economies in 2017 could be up to 1.2 percentage points slower than the baseline projections if an increase in trade protectionism and global economic uncertainty is steeper than anticipated. All this comes at a time of

potential tightening of global financial conditions, which could effectively bring to an end the region’s cycle of monetary easing, said the Survey. Capital outflow pressures, which increased in the wake of

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the United States election before subsiding recently, are likely to reemerge with the announcement by the United States of fiscal stimulus and lead to further depreciation of regional currencies against the United States dollar. This outcome is expected to be accompanied by bouts of financial volatility, arising from any deviations of actual policy from market expectations. The United States raised its federal funds rate in March 2017 for the second time since the United States election in November 2016 and only the third time in a decade. The median expectation

is that there will be two more rate increases in 2017. There is also a chance that sovereign yields in Europe could rise on the back of more expansionary fiscal stances and that the European Central Bank (ECB) may not extend its quantitative easing beyond 2017. “Countries in the region with large current account deficits and high shortterm external debt are particularly vulnerable.” On the upside, said the Survey, regional exports could benefit from stronger external demand and currency- induced competitiveness, but any boost is likely to be limited by trade protectionist measures. Currency depreciation could also further limit monetary policy space, not least due to its inflationary impact. Within the region, China’s role as originator and transmitter of shocks has increased in recent years. Real or perceived economic instability in China could lead to bouts of financial volatility in the region, as witnessed in early 2016. In view of the fact that several regional economies are competing with China in global value chains, depreciation of the renminbi puts pressure on other regional currencies to also depreciate. On the upside, if China’s economic performance is stronger than expected, as in 2016, there could be positive trade spillovers. In the medium term, strengthening domestic and regional demand will be critical in the face of a tough external environment. In this regard, China’s rebalancing and opening augurs well for the region, said the Survey. The Belt and Road Initiative could provide renewed momentum for regional connectivity and intra-regional trade, while China’s capital account liberalization could dramatically increase the pool of long-term financing available for investment in the region. “The future of regional demand also depends largely on whether South Asia realizes its full potential, for which regional economic cooperation and integration could critically complement domestic efforts.” According to the Survey, monetary policy stances in the region have recently shifted from “accommodative” to “neutral” as upside risks to inflation increased. In the first three months of 2017, policy interest rates were on hold in India, Indonesia and the Philippines, while short-term interest rates increased in China, in contrast to the previous two years when policy rates were lowered consecutively or kept at record low levels in these economies

September 30 - October 31, 2017

plus others such as Pakistan, the Republic of Korea and Thailand. Average inflation in developing Asia-Pacific economies is projected to rise from 3.6% in 2016 to 3.8% in 2017 and 2018. While global commodity prices have largely stabilized since 2016, they remain a source of upside or downside risk depending on whether a country is a net commodity exporter or importer. If global oil prices overshoot baseline projections of $55 per barrel, net importers of oil in the region would face higher inflation but net exporters would see faster economic recovery. Despite the OPEC production limitation agreement, large inventories and the availability of shale oil in the United States have so far limited further price rises. In any case, the boost from low inflation and supportive monetary stances has been smaller than expected. For instance, countries which underwent disinflation or reduced their interest rate did not necessarily see output growth accelerate in the following year. Possible reasons include relatively weak growth in real wages and farm incomes on the consumption side and uncertainty and excess capacity on the investment side. In some countries, private sector debt overhang was also a major factor. In particular, private investment has not been forthcoming in many countries. The Survey said that the recent up-tick in inflation, though mostly due to nondomestic demand factors, such as oil prices and exchange rate depreciation, calls for caution. Likely currency depreciation could further limit monetary policy space, not least due to its inflationary impact. Nevertheless, raising policy rates would be difficult as well. For instance, leveraged households and firms could find that

debt service costs will rise and refinancing become more difficult, thus increasing financial stability risks. Economies are therefore advised to maintain the status quo in terms of policy interest rates. At the same time, they should consider strengthening the management of capital flows and macro prudential measures to mitigate the adverse effects of exchange rate depreciation and to ensure financial stability. According to ESCAP, a potential source of financial instability in the near future may be worries about excessive indebtedness. In 2016, global total debt stood at record levels of $152 trillion or 225% of global GDP. Furthermore, a specific vulnerability of debt accumulation is that, although issuance of local currency bonds has increased, considerable volumes of debt have been issued in hard currency, mostly the United States dollar. The interest rate hikes in the United States, together with the strong dollar, could spark a trend reversal. ROLE OF FISCAL POLICY The Survey underscored that fiscal policy could further play an active role in stabilizing the economy and supporting development priorities, but its effectiveness depends critically on good governance. Fiscal policy stances in the region have been broadly counter-cyclical and expansionary in recent years. China implemented large infrastructure projects and tax breaks; India adjusted its mediumterm fiscal consolidation path to accommodate higher current expenditures; and the Republic of Korea and Thailand engaged in various stimulus measures. However, net commodity exporters have taken a more cautious approach in view of the terms-of-trade losses that have affected public finances. “Ensuring fiscal sustainability requires tax reforms and effective debt management, keeping in mind the potential positive spillovers of social and infrastructure investments on the economy,” said the Survey. In assessing fiscal sustainability, countries could consider the potential positive spillovers of social and infrastructure investments on the economy. If the spillovers are sufficiently large, for instance due to the “crowding in” of private investment, the public debt

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to GDP ratio could be stable over the long term. To achieve economic health, countries often need to make changes in the basic structure of their economies. Structural reforms are measures that are aimed at raising productivity by improving the technical efficiency of markets and institutional structures, or by reducing impediments to the efficient allocation of resources. These range from measures as diverse as reforms on banking supervision and laws on property rights to changes in tariff rates or rules on hiring and firing. “Keeping in mind the broad objectives of productivity growth, equity and environmental sustainability, countries need to decide which reforms are most critical in the specific country context and whether several reforms could be bundled or sequenced.” In the past, structural adjustment programmes in crisis-affected developing countries often took “one-size-fits- all” and “big bang” approach. An alternative approach is less ambitious, consisting of sequential targeting of binding constraint. A potential advantage of this approach is that early wins could create political support for reforms over time, and that the sense of ownership will increase, which could also allow time for countries to “learn to reform”. This situation is in contrast to the Washington Consensus and its augmented version, which tends to be prescribed from the outside and suffer from redundancy or the lack of a well-defined list of priorities. The region’s own experience, including that of China, seems to support the sequential targeting approach, said ESCAP. Moreover, the region’s own experience also highlights the important role of the State in structural reforms. The Government provides an enabling environment of policies, institutions and public services that helps factor and product markets to work efficiently, which in turn enables private sector-led growth to take place. ESCAP also said that in view of the fact that social protection coverage in Asia and the Pacific is still relatively low and that there are important gaps in both the depth and breadth of social assistance for the working-age population, a series of policies needs to be considered. – Third World Network Features. ( Kanaga Raja is the Editor of the South-North Development Monitor (SUNS).

32 NEWS

September 30 - October 31, 2017

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Fund will not be a constraint for startups: CM

Kerala State Industrial Development Corporation(KSIDC)- organised Young Entrepreneurship Summit ( YES 3-D2017) being inaugurated by Chief Minister Pinarayi Vijayan in Kochi. Industry Minister A C Moideen, Thripuithura MLA M Swaraj, KSIDC Chairman Dr Christy Fernandez IAS(Retd), Managing Director Dr M Beena IAS, Central Telecom Secretary Aruna Sundararajan IAS, Kerala Industry Secretary Sanjay Kaul, Maradu Municipal Chairperson Sunila Sibi are also seen.

Passline News Service

ntrepreneurship changes many of the youth in the State from job seekers to job creators. The government wants them to use their skills in the State itself and will provide them with all support, said Chief Minister of Kerala Pinarayai Vijayan while inaugurating 3rd edition of the Young Entrepreneur Summit (YES 3D 2017) at Le Meridien Convention Centre, Kochi, Kerala. YES 3D 2017 has the theme ‘Disrupt, Discover and Develop’, encouraging young entrepreneurs to disrupt an existing process, discover an alternate technology, and develop a better product. The Chief Minister assured the young entrepreneurs that funding will not be an issue for startups. The government targets 1,500 startups in the State and has made adequate provisions in the State budget and through organisations such as KSIDC and KFC. The potential of startups from the State was on display on stage at the Summit with “SAYABOT” a robot developed by a robotic startup - ASIMOV - handing over a Tab to the Chief Minister to launch the signature film of the Summit. Pinarayi said that the biggest strength of any society was its youth. He asked the youth of the State to dream and work to achieve those dreams. The core of any

startup is an idea and so the youth should not prolong the ideas that spring in them. They should be think tanks and developed with the help of technology and software. “No one with a new idea will have to leave the State disappointed,” the Chief Minister ensured. The CM said that many of the business practices being followed in the State were outdated. They had to be changed to make them in tune with the times. Hence it is commendable that the Summit has the theme “Disrupt, Discover and Develop”. Pinarayi observed that some of the startups tend to stop operations midway due to issues such as lack of fund and mentorship. He hoped that YES 2017 would provide answers to their problems . Minister for Industries, Sports & Youth Affairs A C Moideen presided over the function. In his presidential address, the Industry Minister said that the government has received a good response to its startup initiatives. The minister said that the government is taking steps to build infrastructure for a new Kerala. Steps to make Kerala investorfriendly are also being taken. An Investor Promotions and Facilitation Act is being planned to make it easier to do business in the State. To address the question of land availability, a land bank of

5,000 acres is being planned. Aruna Sundararajan IAS, Secretary, Department of Telecommunications, Government of India, in her special address said that “Kerala can be India’s Silicon Valley, given the talent, natural resources and the government support that is available in the State”. She added that young entrepreneurs from the State had made their presence felt in the global arena. A large market, technology and supportive government policies provide a huge opportunity for entrepreneurs in the country. Chairman of KSIDC Dr Christy Fernandez IAS (Retd) in his address stressed the need to build up a startup ecosystem in the State. He asked the entrepreneurs to rise up to the challenges that come their way during their entrepreneurial journey. In her welcome address, KSIDC MD Dr M Beena IAS emphasised the need to have startups in sectors other than IT such as Agro & Food Processing, Waste Management, Biotechnology and the like. She added that KSIDC that has been spearheading the growth of large and medium scale enterprises, will be a “single shop” for young entrepreneurs too. Thripunithura MLA M Swaraj, Secretary for Industries, Government of Kerala, Sanjay Kaul IAS, and

Maradu Municipal Chairperson Suneela Sibi, also spoke. President, TiE Kerala Rajesh Nair, proposed the vote of thanks. KSIDC launched the YES initiative in 2014 which spearheaded creating an enabling ecosystem for youth and student innovators across the State. While the first edition of YES was to creating an enabling ecosystem for the young / student innovators across the State to realize their entrepreneurial dreams and to create a paradigm shift in their mind set to become job providers rather than job seekers, the second edition with the theme of ‘Collaborating and Networking’ was aimed at creating a strong interlink amongst startups, networking amongst incubators and connecting startups with angels and the opportunity to meet and exchange ideas with founders of successful startups, businessmen, venture capitalists etc from across the country. Since then, KSIDC has been the prime driver in boosting entrepreneurship among the youngsters by creation of adequate infrastructure facilities through setting up of Business Incubation Centres, Mentoring & Handholding and offering financial assistance to startup entrepreneurs through a seed capital assistance scheme.

September 30 - October 31, 2017

Eastern Global Short Film Awards

he popular Eastern Global Short Film Awards will have ‘Women’s Journey’ as the focus theme for special award in its 2017 edition. The competition is open and entries can be submitted until November 20, 2017. Announcing the second edition of the short film competition, the organisers said the event features a wider award category this year, besides a reputed jury comprising some of the best-known names in their professional areas of work. The Eastern Global Short Film Awards is promoted by the Global Initiative for Excellence in association with Eastern Group, with the objective of promoting and acknowledging exemplary work in the short film sector. “In continuation of the Eastern Bhoomika initiative, our aim is to bring together different perspectives and narratives on Women’s Journey to the limelight, and contestants are required to visually narrate their vision”, said Eastern Group MD Firoz Meeran. This year, the award categories are: Best film, Focus Award (Bhoomika Award for the best film on the women theme), Best Popular Film, Best Director, Best Screenplay, Best Actor/Actress, Best Cinematography, Best Editing, Best Background Music, and Best Location Sync sound/Sound Mixing. Internationally-reputed film maker, Dr Biju will head the jury. Popular film star Rima Kallingal, film maker and director Sreebala K Menon, and wellknown journalist & film critic Saraswathy Nagarajan will be part of the core team as jurors for the focus theme of this year. Other members of the jury comprise cinematographer M J Radhakrishnan, film director and writer Pramod Payyannoor, short film maker Ajan R S, actor-producer Prakash Bare, music director Santosh Chandran, sync sound recordist and sound designer Smijith Kumar P B, and environmental documentary maker C Rahim. A key attraction this year is a production funding by the Eastern Group for the winning script on the ‘Women’s Journey’ theme. Well-known film personality, Rima Kallingal will head the sub jury that will select the winning script. The Eastern group will offer production funding for the winning script. The Eastern Global Short Film Awards is supported by the Chalachitra Academy, KSFDC, Shenoy’s Group of Theatres, Shortflix, Bharat Bhavan, Public Relations Council of India, IAM (Indian Ad Film Makers), Ergo Events, Bytes Interactive, Folk Tales, and Nava Kerala Mission. Visual media personality Siraj Shah is the creative director of the event. Eastern Group managing director Firoz Meeran, Global Initiative for Excellence managing partner Joe A Scaria & Eastern Global Short Film Awards Chief Coordinator T Vinay Kumar addressed the media.

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WMFGlobal Convention on Nov 2 & 3 in Austria & Vienna

orld Malayalee Federation(WMF) is one of the world’s largest independent Malayalee non-profit organizations in Vienna, Austria, Europe; founded on October 29, 2016 by a small group of friends with a strong passion to ensure more social discipline among Keralites around the world.WMF volunteers educate and mentor Malayalees, residing inside and outside Kerala, when and where required. To give them a better, prosperous and disciplined attitude. The crux of the Federation is its global patrons who are stalwarts in different fields. They comprise Rev Fr Davis Chiramel, Chairman, Kidney Foundation, India; Sayed Munavar Ali Thangal Chairman for Communal Harmony, India; T P Sreenivasan, former Ambassador, Head of the Council for Higher Education, Kerala; M P Vireendra Kumar, Managing Director of Mathrubumi ,Member of Parliament, India; N K Premachandran, MP, India; Lal Jose, Actor and film Director, India; plus a core committee consisting of popular personalities from Austria, Saudi Arabia, Germany, Finland and India. WMF is the largest Malayalee organization spreading its wings across France, Germany, Sweden, Finland, Kuwait, UAE, Saudi Arabia and Kerala. WMF is now bracing up for its mega event the Global Convention on November 2 and 3, 2017 at two venues at Jufa Hotel Wien City, MautnerMarkhof-Grasse, Austria and Convention Hall, Langenfeldgasse13-15, A-1120 Vienna, Austria respectively with slews of programmes like Family Orientation Seminar, Women’s Forum, Cultural Extravaganza besides business symposium, Youth Summit and Award Ceremony in the presence of Malayalee celebrities and business dignitaries giving audience to nearly ,1000 Vienna Malayalee families and the guests from other WMF units. The Onam celebrations of the WMF will follow suit in different dates in different regions. The growth story of the Indian economy coupled with the recent investment-friendly gestures from the government and respective bodies make Kerala a cherished destination for Malayalees who intended to return to their home State. Some of our members will retire and others seek opportunities for joint ventures or safe investments. It is the endeavour of the Federation to bring together all these varied interested people and the event will be a meeting place of them. Here you will tie up with the right people who can further your business or personal aspiration or your future business associate or partner The WMF invites you to be a privileged sponsor of this mega event. Please contact our Kerala associate Passline Business Magazine (Official medium) for further details: Mr Sajan ( Manager Projects), Passline Business Magazine, Mob: 09895344485.

Kerala Startup invitee for S-Korean acceleration initiative Buyfie, a Kerala-based hyperlocal e-commerce startup, has been selected for the prestigious ‘in2Korea’ acceleration programme. Conducted by South Korea’s Ministry of Science and ICT (MSIT) and National IT Industry Promotion Agency (NIPA), the programme offers startups the opportunity to fast-track their growth in one of the world’s major IT hubs.

The Buyfie team: (from left) Praveen S S (co-founder, CEO), Deepu V A (VP, Finance), Prabin S S (co-founder, CTO), Pranav S S (co-founder, COO), Anoop Krishnan (VP, Sales), Arunnath V (Technical Lead), Rajeesh M (VP, Operations) and Arun S S (VP,Technical)

34 (From page 13) RTC Act demands timely preparation and submission of annual reports and audited accounts of this statutory body, and get them reviewed by CAG and state legislature. These were meticulously followed in the past and audited reports were readily available during my second study of KSRTC in 1985. The practice has been virtually discontinued: A paradigm shift means zero tolerance towards such administrative lapses. RTC Act provides for one or more advisory boards for helping the statutory bodies on policy issues. However, neither the government nor the CMD of KSRTC finds such advisory bodies to be of any relevance. Possibilities with such advisory boards should be explored at the cabinet level. And again, the RTC Act suggests incorporation of subsidiary corporations for serving the regions or districts in the state more efficiently. Consultative forums with the participation of district administration could serve as advisory committees for these district level bodies: Success stories of such reforms, from Tamilnadu and other states, should encourage KSRTC to embark on such reforms. NATPC as well as the Association of State Road Transport Undertakings (ASRTU) could guide the proposed district level RTCs in re-designing and re-scheduling of operations, taking into account the local needs as well as the interests of local bus operators as well as their employees. Faculties and students of local professional colleges could be associated in this programme. Schedules and tariffs could be decided to suite local and regional requirements and for ensuring traffic operations on a no-loss no-profit basis, with the support of a calibrated subsidy system to be administered by the State government. KSRTC has a net-work of offices, depots and workshops across the State covering all the 14 districts (see map) for implementing a truly state-wide plan in which even the retired employees could participate in case they so desire. Kerala Government could learn from the experience of other states and take measures to restructure and reorganise KSRTC in line with the provisions of the RTC Act: A Detailed Project Report may be prepared with the objective of KSRTC jointly with

September 30 - October 31, 2017

the proposed 14 district level subsidiaries organising urban transport services in the 86 municipalities and 6 municipal corporations, that would effectively network with their 941 neighbouring village panchayats. And of course, the inter-district and inter-state services need to be integrated into this state-wide network. The programme will need an additional fixed capital of around Rs 650 crore in the next four years: Rs 500 crore for 2,000 new buses and

Rs 150 crore for plant and machinery and office equipment for the 14 subsidiaries. We may add another Rs 350 crore to this, and conceive a Rs 1,000 crore five-year plan for building this state-wide road transport infrastructure, under the banner of KSRTC. These investments could be easily financed by the savings in the regional economy for an year or two. And, we may not need any global consultants for preparing a detailed project report (DPR) for this: Cen-

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tre for Management Development (CMD) and/or Institute for Management in Government (IMG) could be asked to provide the advisory services for the reorganisation and restructuring of KSRTC and preparing a DPR as necessary. The paradigm shift essentially means, looking at KSRTC as the statutory body for the development and regulation of road transport in Kerala, as envisaged in the RTC Act and not as a mere bus operator competing with private operators.

E V E N T S

September 30 - October 31, 2017

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Chief Minister Pinarayi Vijayan with Mobile 10x team after handing over the agreement with the company to support state’s app economy during IEDC Summit 2017 organised by KSUM at Adlux Exhibition and Convention Centre, Angamaly . Union Telecom Secretary Aruna Sundararajan (far left) and Roji M John MLA (second to the left of CM) are also seen.

an K N, re(Treasury) Reghunath2017’ in the nt ide es Pr e Vic ve uti s ec nks & Banking Award culture), from South Indian Bank’s Ex gri adstreet, India’s Top Ba ceiving the ‘Dun & Br Sector Bank - Priority Sector Lending (A the presence of category Best Private r, RBI, Harun Rashid Khan(Centre), in world’s leading Former Deputy GovernoMD Manish Sinha. Dun & Bradstreet is the er 150 years. Dun & Bradstreet Indiainformation and insight on businesses for ov source of commercial

T K Dileep General Managere consecutive nk Ba e iv at er d for th n Co-op Irinjalakuda Tow right)receiving FCBA 2017 awar a function organised m at la fro ra nd Ke (2 in ink Kumar nk has got recogn d the best urban ba ar second year for rs in Jaipur. With this award the ba aw e Th . la ra Ke in by Bank Frontie l level as a notable urban bank sector. tion at the nationast customer service in banking is given for the be

Kochi Police Commissioner M P Dinesh IPS inaugurating the seminar on `Emerging trends in Cyber Frauds’ conducted by Federal Bank in the presence of Jose K M, Vice-President, Transaction Monitoring & Fraud prevention department, Federal Bank; and Tomy John, Vice- President & Chief Vigilance Officer, Federal Bank.

36 RN65561/94 Reg No KL/EKM/116/2009/2011

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