The IBS Times : 202nd Edition; September 2017

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Team IBS Times Shilpam Dubey (Editor in Chief) Sneha Tibrewal (Managing Editor) Antra Bharti Debanjan Paul Dixita Reddy Gagan Kapoor Radhika Gupta Shreya Rani Smriti Patodia Srujana Naik Utsav Changoiwala Aarushi Jandrotia Aishwarya Siram Amit Shovan Mandal Ayush Thalia Ishaan Sengupta Kartik Grover Naman Shah Nishika Tatiya Noel Mathew Sambhav Jain Srivatsasa Sripujitha Tanay Sood Designed By : Gagan Kapoor & Sneha Tibrewal 2

Too Many Shocks....

Everyone knows that tax evasion through shell companies has been carried out so successfully since ages. It was not too shocking a news when we heard that SEBI is going to struck off the records of 2,00,000 shell companies from the Registrar of Companies. But, yes, it’s shocking to see how stern actions are being taken now. Though, this is in line with the plethora of other structural reforms that we are witnessing.

Equally shocking was turnaround of events at Infosys, which consumed more than half spaces in the newspapers last month. We are covering that too, along with the impact of its buyback of shares. We are covering India’s growth slump in the last quarter, it’s still “unease of doing business” and a lot more. In our last edition, we covered in our content, that closures are indeed not possible any time soon. In this edition too we are taking the discussions ahead.

Please write to us and become of part of these discussions.

Email id : editor.ibstimes@gmail.com

Shilpam Dubey Team IBS Times 3

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COVER STORY - Shell’ tag - SEBI’ clog.

INFOSYS - Is Family Feud Going Public?

Demon-etized Disinvestment: Government Selling Stakes To Increase Receipts.

An Unfriendly Fragile State - North Korea might just be India's next enemy.

Portrait Of The West SBI’s Decision to Cut Savings Rate and its Repercussions Crypto currency - Foundation & its Fortune INFOSYS- Will Buyback Help in Wealth Maximization The Great Business Wall of India INDUSTRIAL ANALYSIS - The Booming Sector of India: Hospitality and Tourism MARKET WATCH - A Way To Cut Losses QUARTERLY ANALYSIS – Slump In India’s Growth

Shell’ tag – SEBI’ clog - Srivatsasa Sripujitha On 6th Sep tember, 2017 Govern ment of India have decided to bar 3 , 00 ,000 directors o f the shell companies who ha ve failed to co mply the statu tory p rovisions to improve the corpora te governance and check the financial irregularities through the use o f shell companies. Ministry of corporate a ffairs initiated its step to tra ce the beneficial owners who are trying to divert the funds with the help of shell companies. Even chartered accountan ts, cost accoun tants, company secreta ries who have been colluded with these shell companies are also being monitored by the regulatory authorities. Government have stuck the bank accounts o f mo re than 2 ,00,000 companies and struck o ff their records fro m Registrar of Companies(R OC) to stop directors from accessing the bank accoun t. Shell Companies are non-­trading en tities;; it means they are no t traded in any o f the stock exchanges for purchasing and selling the shares. Most of the companies exist for the name sake in online with an email address, and on paper as a registered financial entity. To be registered as a shell company, an interested party must first file an application with the U. S Securi ties and Exchange Commission (SEC). Exa mples are a startup firm is te chnically a shell

corporation until it co mmences its business and If LLP’s (limi ted liability Partnership);; Non trading corporations are Shell Companies if they don’t comprise any physical property.

Shell Companies are not defined in India as per Companies Act or any other law.

But Se curities Act o f United States defines it under Securities Act Rule 405 and Exchange Act Rule 12b-­2 as a company, other than an asset backed issuer, with no or nominal operations;; and no nominal assets ( Nominal Asse ts are asse ts consisting of ca sh and cash equivalents).

Hypo thetically, Shell companies do not engage in any active business operations or significant assets.They can be set up by business people for both legitimate and illegitimate purposes. They function as transaction vehicles for a variety of firms and for myriad of purposes legitima tely.

Generally, they are u sed to ob tain financing, maintain con trol over a conglomerate co mpany.

Illegitimate purpose of registering a shell company is for eva sion of taxes, laundering of unaccounted money and concealing the particulars of parent co mpanies ownership.

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What are the as pects company?

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Bogus Transactions-­ It is be fore the demonetization tha t IT department probed into the operations o f Kolkata based company na med Anjali Jewellers Pvt. Ltd, a leading jewellery maker in West Bengal.

After investigation i t was astonishing that the company was growing much faster than what it’s declared cash flows would permit. There are cash flows going into the asse t creation that the re turns didn’t reflect. After reconciling the books wi th the physical inventory i t wa s found that-­ there was more gold and jewellery lying in its stock than recorded in its books. The bogus transactions were created to suppress tax.

Operators-­ Investigation shows that operators are in control for these shell companies but they are not in board.

They don’t own the shares of the se companies, but manage the operations.

The directors and shareholders o f the shell companies are mere “name-­ lenders”. They sign on documents for a fixed fee. The operators seek out people in distress to be appointed as directors.

The tax departmen t came across a lady who was supporting her husband’s cancer treatment by signing on documents as a director o f a shell company.

Accommodation-­ The diverse needs o f several clients are met my opera tors by managing and consulting them a t a time .

They budgeting and planning is done for a period of around 5-­6 years for creating and processing o f these companies. The main intention of this planned operation is described as “parallel banking” is accommodation. For a substan tial chunk o f economy it is the key efficient working capital management and tax rationalization.

For instance a vast majority of real estate developers buy bogus invoices to suppress profits. One way which may not lead laundering is after receiving the cash they make an exchange with unsecured loan into the books as legitimate amount.

Participatory No tes: Becau se o f their nature of short term nature of investing foreign institutional investors provide quick money entering the Indian Capital Markets through participatory no tes. To invest in Indian sto ck markets withou t the hassle o f involve ment with the regulatory approval pro cess, FIIs trade P-­notes. These shell companies route their investment using this financial instrument. Though FIIs must register with SEBI, the Participatory no tes trading among FIIs are not registered. For this rea son, India’s Gove rnment is concerned that participatory no tes are used for money laundering.

SEBIs Action on Brokers The Inco me Tax department and Se curities Exchange Board of India are enquiring the role of around 100 brokers who have helped shell companies launder as much as Rs.16000 crore by compro mising so called Know-­your-­customer (KYC) norms. After drawing inputs from Serious Fraud Investigation Officer, Cen tral Bureau o f 7

Investigation and En force ment Directorate Ministry of Corporate affairs have identified 16,000 potential bogus companies. The brokers played an important role in allowing these shell co mpanies to trade in listed penny stocks and show illegitimate wealth as trading profits. So metime s, brokers ma y not know they are dealing with a shell co mpany. There may be cases where certain fron t companies are also created to hide black money. It may not be admitted in all the cases that brokers are in hand in glove with the operators to incorporate such shell co mpanies to launder money. By the time a structure is created, a co mpany would have all its records in place and from know-­your-­ customer (KYC) view it would be difficult for a broker to distinguish genuine companies from bogus ones.

SEBIs diktat Companies

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The Securities Exchange Board o f India directed sto ck exchanges to take action against 331 listed entities suspected of being shell companies. Ou t of them, 162 were actively traded on BSE L td;; 169 had already been suspended due to legal reasons and 48 were traded on NSE. The total public float of these companies is Rs.12000 crore . There was a market capitalization of mo re than R s. 300 crore each.

• Shares to be traded only once a month on Monday-­ According to SEBI notification, the shares of these companies will be traded only once a month until the sto ck exchanges ascertain whether these are genuine companies or structures meant for fund diversion and tax evasion.

• The e xchanges ha ve been asked to independently audit these firms, and if necessary, appoint a forensic auditor. SEBIs communique said the regulator had based its decision on a letter from the ministry of corpora te affairs (MC A) identifying these 331 firms. In come Tax department played a major role in the fraud investigation.

• Buyers of shares to deposit 200% of traded value as a surveillance deposit that will be retained by exchanges for 5 mon ths. A series of action are being taken against shell companies by our Finance Minister Arun Jaitley. Around 1 , 62 ,000 companies that have not been carrying out business activities ha ve been deregistered.

• Firms to be compulsorily delisted if their credentials are not verified. This is mainly to protect shareholders’ interest keeping in mind tha t in many such places, promoters’ shareholding may be disguised as public shareholding and fall in trap.

Conclusion: Weeding out the shell companies would help in checking out the menace of black money and also promote an ecosystem where the business is done in an easy manner and protects the interest of stakeholders at large. By doing this the regulatory authorities would gain the trust o f the public. Let u s hope that this move drives the economy in right path.

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INFOSYS Is Family Feud Going Public?

- Kartik Grover Infosys Technologies is one o f the few Indian companies that has changed the structure of Indian IT industry. It has changed the world’s perceived notion of India as less intellectual as well as country of snake charmers and beggars to economic giant with brilliant minds and software engineers and ambi tious entrepreneurs. Info sys like many other big MNCs is like a big fa mily which was started by six visionary people who wanted to develop a so ftware which would bring a boom in Indian IT industry.

Initially, Mr. N R Narayana Murthy had a passion about creating a good quality software with a borrowed capi tal of Rs. 10,000 from his wife Mrs. Sudha Murthy, then realising that the borrowed amount would not be sufficient, so they got a deal from a custo mer who will provide them working capital for few months.

CEO and founder. With the changing times, there wa s also need for greater accountability o f companies to their shareholders and customers. SEBI has set up a commi ttee under the Chairmanship of Shri Uday Ko tak, Executive Vice Chairman and Managing Director of Kotak Mahindra Bank to advise on issues relating to corpora te governance. The primary objective of the committee was to view corpora te governance fro m the perspective of the investors and shareholders and to prepare a ‘Code’ to suit the Indian corporate environmen t. The committee divided the recommendations given by by Kumar Mangalam Birla into two categories, mandatory and non-­ mandatory.

This was the start o f Infosys Technologies and since its foundation there was looking back as it grew in leaps and bounds. It was the first Indian company to be listed in NASD AQ in 1999 and it was due to the efforts o f the founders, their sacrifices, sacrifices by their family a s they had one common dream. Today, i f we talk about Infosys our mind is filled with Cor porate Gover nance and verbal spa t be tween

• The manda tory recommenda tions apply to the listed companies wi th paid up share capital of 3 crore and above.

• Composition of board of directors should be optimu m co mbination of executive & non-­executive directors.

• Audit co mmittee should contain 3 independent directors with one having financial and accounting knowledge.

Mandatory

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• Remuneration committee should be setup • The Board should hold at least 4 meetings in a year with maximu m gap of 4 months between 2 mee tings to review operational plans, capital budgets, quarterly resul ts, minutes of committee’s meeting.

• Management discussion and analysis report covering industry structure, opportunities, threats, risks, outlook, internal control system should be ready for external review • Any Information should be shared with shareholders in regard to their investments.

Non-­Mandatory The committee made several recommendations with reference to: • Role of chairman • Remuneration committee of board • Sale of whole or substan tial part o f the undertaking • Corporate restructuring On Corporate Governance , a committee was formed before SEBI and that was Cadbury Committee in 1991, which discussed role of chairman and the Genesis during Corpora te Governance.

There were some recommendations by Sir Adrian Cadbury which are sta ted below: • The boards o f all listed co mpanies should comply with the code o f best practice set out by the committee.

• As many companies, as possible should aim at meeting its requirements.

• The listed co mpanies reporting in respect of years ending on or after 31 December, 1992, should make a

state ment about their co mpliance with the code in the report and accoun ts and give reasons for any areas of non-­compliance.

• Companies should publish their state ment of compliance only after they have been the subject of re view by the auditors.

• The Auditing Practices Board should consider the exten t and form that an endorsement by the auditors could take.

In June 2014, when Dr. Vishal Sikka was appointed the CEO and MD o f Infosys, India’s second largest IT services company, his task was to transfo rm the company’s bu siness model. The first non-­ founder CEO o f Infosys took the helm from S.D. Shibulal, one of the se ven founders of the company. Vishal Sikka seeks to boost sales of high-­margin services like cloud co mputing and stem a staff exodus. Vishal Sikka , a former member of executive board at German software co mpany SAP AG has the technical savvy to herald what analysts expect will be a stra tegy overhaul at Infosys, which, like its competitors Ta ta Consultancy Services L td and Te ch Mahindra has relied on labour-­intensive, low-­margin contracts from Weste rn clients. A computer scientist by training, he was key in developing and marke ting SAP’s flagship product, H ANA, which helps firms analyse large a mounts of da ta quickly. Sikka, the first CEO in the company’s history who is not a founder, gave hint tha t Infosys was unlikely to see any profound change in the near-­future.

On August 18, 2017 Vishal Sikka put in his papers to the board as In fosys founder N R Narayana Murthy expresses 10

his concern over Gove rnance issues in the board. In February this year, squealer’s complaints claimed that the acquisition was overpriced. It was alleged that the unusually high severance package to former chief financial officer Rajiv Bansal, who was not in favour of the acquisition, was no t disclosed at that time. David Kennedy who wro te an email to the CEO that he could no longer hide Bansal's severance package raised many questions on him. This wa s a kind of blow to the company and to its founders and to retain the co mpany’s dignity founders had to step in. Infosys acquired Panaya on February 16 , 2015 for $200 million and valued the company a t a 25 per cent premium over the $162 million arrived at

by Series E investors one month prior to the deal. Panaya was struggling to raise money and employees were leaving the company, the co mplainant wrote in the letter.

After Vishal Sikka exit from In fosys, Co-­ founder of In fosys Nandan Nilekani was invited to become the non-­execu tive chairman and this was unanimous decision taken b y the board. As Mr. Nilekani quoted “Life does turn full circle” as he Co-­founded Info sys at the age of 26 and re-­joined at 62. He described his return a s a public service as his streng th lies in consensus building. He had been Co-­chairman of In fy for barely 5 years in 2007 and tha t time In fosys was on a track to catch up with TCS in terms of revenue.

The next phase (after 2007) of Nilekani’s life is well-­documented:1) Unique Identification Authority of India chairman;; creator of Aadhar (a Supreme Court ruling establishing privacy as a fundamental right is likely to impact the

programme);; 2) the political ba ttle he had to fight in the UPA against Ananth Kumar for Bangalore South Seat;; 3) desire to see his idea through that saw him reach ou t to Prime Minister Narendra Modi and convince him. Since 2014, Nilekani has been working on EkStep , a technology solution to address India’s huge education issue.

Set up by the Nilekanis with an initial commitment of $10 million, EkStep looks a t solving the 'learning problem' by creating a technology-­led platform to help children in improving their 'learning outcomes' quite early in their life.

Now the questions unanswered left: Can Mr. Nandan Nilekani help the company reinvent itsel f for its own second innings?

Is there any relationship between former C EO Vishal Sikka and former C FO Rajiv Bansal during Panaya deal which got former CFO a severance package of 17 crore?

Was Mr. Murthy right on his part for disclosing company’s internal matters in public which led to drastic decline in stock prices of Infosys?

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Demon-etized Disinvestment: Government Selling Stakes To Increase Receipts - Ishaan Sengupta pay-­out received from the Rese rve Bank of India. It turned out to be damaging given the fact that the Government received around 35000 cr. as opposed to the 72000-­cr. received last year. A major cause for the same is insinuated at Demonetization which co sted the R BI a lot, for which the profits o f the sa me reduced substantially.

Source -­ moneycontrol.com We are going through a phase when the Governmen t has far less a mount of money with itself for investing in Governmen t Expenditure , either for day-­ to-­day operations or for capital expenditure. The current dispensation has already spent a huge amount, so much so tha t it is inching closer to its fiscal deficit target for the full year already. The nu mber stands close to at least 94.2% o f the fiscal deficit ta rget. Its revenue receipts for the next year might be compensated by GST and the financial inclusion because of demonetization but its curren t receipts are nowhere close to providing for its annual expenditure obligations for the current year. The Governmen t’s only option is to bank on capital receipts or disinvestment to meet the said obligations.

Partially responsible for this dearth in receipts, is the reduction in the dividend

Recently, the Govern ment announced that it would issue an Exchange Traded Fund (ETF) named Bharat 22 launched under the aegis of the Union Finance Ministry. This ETF is likely to add to the 72000-­cr the target of the Govern ment.

An exchange traded fund is a mu tual fund which invests in top stocks specific to indexes of choice.

Their market fluctuations are also dependent on how the stocks in the index fare . The Bharat 22 ETF has been provided an index by Asia Index Pvt. L td. (joint ventu re between Dow Jones and BSE), which has been named -­ S&P BSE Bharat 22 Index – and it has been licensed to IC ICI Prudential AMC for the development of an ETF based on the index. The fund would be comprised of (as the name suggests) 22 stocks, diversified across industries namely, industrials (26%), Finance (20.3), Utilities (20%), Energy (17.5%), FMCG (15.2%) and basic materials (4.4%). The 12

holdings being disinvested are part of Central Public-­Sector Enterprise s, PSU Banks and Specified Undertaking of United Tru st of India. These stocks held are Large cap stocks. The fund is likely to be a reliable and pro fitable one , in the long run. However, i t would be advisable to invest only for a time of 5 years, and not more given the uncertain ties in the Government sector that might turn up.

Earlier the Gove rnment had launched an ETF na med CPSE ETF for which it had earned the Gove rnment close to 11500 cr. and had grossly ou t-­performed the benchmark index by a wide margin. And therefore, the Bharat 22, would bank on nationalistic investors and hence might outperform the benchmark index as well.

But the ETF is no t the only disinvestment strategy tha t the Governmen t is turning to.

Recently the Governmen t announced that it would sell off a 7% stake in the biggest power producer in the country, the N TPC. The Governmen t managed to raise around 9100 cr. Re tail investo rs only invested around 73% of the quota allocated to the m. On the contrary, institutional investors bid for a round 46.35 crore shares against the 32.98 crores.

Initially the dispensation had planned on selling around 5% of the stake but accounting for adjustments, finally, 7% was sold off. Another news doing the rounds is the inten tion of the Go vernment to sell a 15% stake in another power producing company, namely, NLC India Ltd. and it is likely to fe tch around 2500 crore for the Govern ment. This would reduce the Governmen t’s share to below 75% as opposed to the 89% stake it currently has now.

As part of the plan, the government selected seven publicly-­traded co mpanies where it would look at divesting its stake through an offer for sale. These include power secto r firms N TPC , NLC India Ltd, NHPC Ltd , Power Finance Co rp Ltd and Rural Electrifica tion Corp Ltd. Other companies in the list include Steel Authority of India L td and refiner Indian Oil Corp. Ltd . The stake sales in these companies are likely to fetch the government close to 30,000 crores.

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But perhaps the most awaited disinvestment activi ty is the -­ up to 49% stake sale in Air India. It would be interesting to see how much the stake in the national carrier sells for, given that the Airline currently has around 48000 cr. of debt adding to the 31,517-­cr. working capital loan and an aircra ft loan of 17359 cr. Al though the Gove rnment is likely to waive off some amount o f debt, the carrier would re main a tough sale. (Feel free to go through the article pertaining to the Air India sale in the 201st edition of IBS Times for more relevant information).

new-­found fa ctor, and can be a ttribu ted highly to demone tization. The exercise had prompted the addition of new investors in both re tail and the institutional segments. It also led to the reduction in the Governmen t’s resources that would have been used for government expenditure fo r the whole year. The question to be asked here is, whether these disinvestment activities would turn out to be detrimental to public interest.

Would the common populace have to face the brunt of profi t making institu tions or the majority of governmen t stake would balance all odds?

One more co mpany listed for disinvestment is HSCC Ltd , which falls under the aegis of the Health ministry.

Hospital Services Consultancy Corporation Ltd. wa s fo rmed to assist the Governmen t o f Mauri tius in con structing Hospitals. The co mpany is likely to be merged or acquired by a suitor by the end of the year to mee t the Government’s disinvestment ta rget of 72500 cr. The company started out wi th projects o f just 5 cr. and has currently taken up projects worth 18000 cr. and therefore is likely to fetch the curren t dispensation a lot of money.

This huge insti tutional and retail investment in the capital markets is a 14

An Unfriendly Fragile State North Korea Might Just Be India's Next Enemy - Sambhav Jain Does North Korea wan t to show its dominance all over the world by testing various missiles and hydrogen bo mb?

Well, this could be true as North Korea yet again tested a hydrogen bomb on 3rd September, 2017 which i t can mount on a missile. This was the sixth nuclear test conducted by North Korea . Prior to this it fired a missile over Japan on Ma y 29 and August 29 o f 2017. North Korea has put the globe on the edge of World War 3 with their terrifying nuclear missile program. Their latest launch wa s capable of wiping out e ven the entire U S. They have been firing ballistic missiles high in to the air and most o f the m landed into the sea. It has been observed that their most dangerous launch is yet to come which will be fully nuclear missile at a land target.

This act expre ssed a strong rebuke from U S President Donald Trump, who threatened to cu t o ff trade with any country doing business with North Korea.

That list would include China, the US biggest trading partner, which accoun ted for about a sixth of its overseas commerce.

The United State s imports about $40 billion in goods a month from China, North Ko rea's main co mmercial partner.

On global trade flow, North Korea does not have a very significant impact.

North Korea fires intercontinental ballistic missile over Japan. Source : financial express 30.08.2017 According to Massachuse tts In stitu te of Technology's Ob servatory of Economic Complexity, North Korea is the 119 th largest export economy in the world.

North Korea exports just $3 billion worth of goods every year, which include items like coal, fabric, oil and retail products.

The country relies heavily on imports which totals nearly $3.5 billion. The top export destinations of North Korea a re China, India, Pa kistan, Bu rkina Faso and a few o ther na tions in Asia, wi th China leading by a big margin. The biggest import origins for the coun try are China, India, Russia, Thailand and the Philippines. Most of these major economies like India, Russia, and Pakistan also have strong bilateral relations with the United State s. In 2016, 15

China, being North Korea’s largest trading partner, was the biggest exporte r to the United State s and the third largest importer from the nation a fter Canada and Mexico according to the In ternational Trade Administra tion. The trade in goods between China and United Sta tes last year totaled $578.6 billion. Hence, there is little doub t that Ame rica itself can sustain the econo mic hit, after Donald Trump made his sta temen t. Such a mo ve can also lead to global recession.

Following the missile test, the Uni ted Nations Security opened an emergency meeting in response to North Korea’s sixth and mo st powerful nuclear te st. The United Sta tes, Britain, France, Japan and South Ko rea requested an urgent meeting. However, South Korea reported that North Korea had been observed moving a rocket that appeared to be an intercontinental ballistic missile(ICBM) towards its west coast. South Korean defense ministry warned tha t North Korea was ready to launch an ICBM anytime.

Geopolitical ten sions continued to simmer following North Korea’s biggest ever nuclear test. US stocks market san k wi th S&P 500 losing 18.7 points to 2457.85 points, The Dow Jones Industrial Average fell 234.25 points to 21753.31 , the Nasdaq Composite dropped 59.76 points to 6357.57 on 5th Sep tember,2017. The Nikkei share average fell 0.7% to a four-­ month low in Tokyo. In Sydney, the ASX200 benchmark index also fell by the same margin as investors opted for sa fe havens such as gold and government bonds. The South Korean benchmark index – the Kospi – was 0.35% lower.

Shanghai also dropped 0.4%.

As a result, gold prices climbed to a one year high as investors invested in gold.

Gold is still in demand as safe haven.

Gold can be perceived as the less risky asset from geopolitical uncertainty that has been stocked up by even ts in the Korean peninsula.

source: The Hindu 4.09.2017 On the other hand , China’s military is on high alert in light o f the increased tensions between the US and North Korea. Tightening sanctions on North Korea is an option for China, bu t they don't wan t to see their regime collapse and have American troops on their border. The Sou th Korean president, Moon Jae-­in, has warned tha t the crisis on the Korean peninsula is becoming uncontrollable and he tried to sought Russian cooperation in a meeting wi th Vladimir Pu tin. The global political situation has beco me very se rious due to North Korea’s repeated provocation Impact on India: India strongly condemn North Korea’s nuclear test and asked them to re frain from actions which adversely impact place and stability in the Korean peninsula.

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Indian markets declined as global markets fell amidst geopolitical tensions between the US and North Korea. BSE Sensex closed lower by 190 points to 31,702, while the Nifty fell 62 points to 9,913 on 4th Septe mber,2017. This fall is mainly due to the No rth Korea’s nuclear test. Investors will wait and watch for more cues. The rupee ended with 2 paisa high to end a t 64.10 against the US dollar even as geopolitical worries continued to cast down over forex trading. Inve stors wealth got eroded by Rs.1.38 lakh cro re due to heavy sell-­off in the trade market.

North Korea’s claim o f testing a hydrogen bomb have raised concern s over Indian security because o f a possible reverse flow of the ad vanced te chnology to a country tha t North Korea has coopera ted with on nuclear weapons – Pakistan.

Collaboration between Pakistan and North Korea on nuclear and missile technology dates back to the 1980s.

North Korea supplies Pakistan with long-­ range missile technology and it is widely believed Pakistan’s Ghauri missiles a re based on North Korea’s Nodong missiles.

Now it’s a threat to India that Pakistan may acquire the same nuclear weapons from North Korea and attack India.

Now it depends upon India, strengthens its national security as China continues to be the backer o f North Korea despite its of nuclear and missile tests.

how it policies biggest criticism

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Portrait Of The West

- Naman Shah What are the fa ctors leading to the accomplishment of exceptionally brilliant growth o f the sta te? Is it geography or native entrepreneurship mind-­set? Is it the historical edge in co mmerce and trade or good governance? The reasons for the state’s growth has always re mained a debatable topic since 2002.

Gujarat is one o f the leading industrialized states in India. At current prices, Gujarat's GSDP was abou t US$ 158.2 billion over 2015-­16. Ave rage annual GSD P grow th rate fro m 2004-­05 to 2015-­16 was about 12.02%.

The growth story of Gujarat is one o f a state inspiring. Wi th only 6% of India's in terms of land and barely 5% o f its population, Gujarat has managed to account for 7.6% o f the country's GDP and 22% of its exports. Its annual Gross State Domestic Product (GSDP) grow th from 2001 -­ 2013 averaged nearly 10%, which is faste r than that of India's. Given alongside is the GSD P grow th o f the sta te over the years.

Per capita GSD P growth is where Gujarat has excelled. The analysis o f GSDP performance is conducted over two tenures: 1980-­1999 and 2000-­2013. The

intention behind the co mparison be tween the two time periods is to analytically separate the influence o f history from good governance in later years. If per capita GSDP is the criterion , Gujarat was the 7th richest big state in India in 1980-­ 1981, 5th richest in 1999-­2000 and 3rd richest in 2013-­2014. This is a spell-­ binding accomplishment. If Gujarat we re a country with a population o f one crore+, then it would have been ranked as 3rd fastest growing na tion in the world , just behind South Korea and China.

The fact tha t Gujarat has the longest coastline (1,600km) also contributes to its growth. Gujarat has served as an integral native trading hub for centuries, one of the most dominant in the Arabian Sea. Also, the coastal state has a dubious advantages: 18

• Greater global access • Lower transportation costs The sta te also has a nu mber of bro ken coasts, which adds to the advantage.

Following are the key industries which act as backbone of the state: • Agro-­based and food processing • Dairy • Chemicals and petrochemicals • Textiles and apparels • Engineering and auto • Gems and jewellery • Oil and gas • Pharmaceuticals and biotechnology • IT • Minerals • Ports • Power • Tourism

Tourism in Gujara t has immensely shown a steep upward growth since the past 15 years. Before , Kutch used to be a useless barren land where the scope of economic activities was next to nil.

The government there developed the craze of Rann U tsav o f Ku tch. This increased the tourism fo r the destination apart from the wildlife sanctuary. The infrastructural grow th and the grow th in tourism o f Ku tch go hand in hand.

Gujarat is the sole home of the pure Asiatic lions in world. Gujarat has always had major scopes of improvement in the field of tourism but due to non-­stagnant turmoil of communal riots people averted to come here . Also, proper marke ting of these a reas was performed, thus leaving the people unaware. Ami tabh Bach chan is currently the brand a mbassador o f Gujarat Tourism. ‘ Khushboo Gujarat Ki' campaign by him has grown tourism in Gujarat by 14 %, almost twice that of national growth rate.

Unlike the North-­Indian state s like Punjab and Haryana (the states which launched the first Green Revolution wi th government support), Gujarat's agricultural flip-­flop knocked i ts door via the market route . Ca sh crops such as cotton , oilseeds and tobacco act as dominant factors as far as the sta te’s farm grow th story is concerned. Other major crops produced are rice , wheat, jowar, bajra, maize, tur, and gram.

Gujarat has an agricultural despotic economy.

The total crop area am ounts alm ost ½ the total land area.

Gujarat o ffers scenic beauty from Great Rann of Kutch to the hills of Saputara.

Ode to Vibrant Gujarat Summit: Vibrant Gujarat is the name given to a biennial investors' summit held by the govern ment of Gujarat. Over all, the events evoke an excellent response amongst in industrialists in India and foreign countries, particularly in Gujarat.

According to the Department of Industrial Policy & Promo tion (DIPP), Foreign Direct Investments (FD I) inflows in the state of Gujarat gave US$ 13.28 billion during April 2000 -­ March 2016;; Gujarat accounted for 4 .6 % share in the overall FDI inflows in India. The Vibrant Saurashtra Expo and Summit, wa s held in January 2016 where MoUs worth US$ 341.88 million were realised for the

The performance o f o ther coastal states have been pre tty good, but not as good as Gujarat. Almo st 1/4 th of India's sea cargo passes through Gujarat's ports.

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development of various sectors o f the state . Such initiatives go a long way in promoting the business culture in the state.

Ode to the TATA crisis: So when we are talking o f the industrial rise in Gujara t, we should not miss the Tata crisis. The word crisis is no t apt to the mentioned state but to West Bengal which badly missed the chance of industrial growth. The growth in Gujarat actually got enhances after Tata Nano Plant was pu t up in Sanand. This chance was first in the hands of West Bengal but due to the political party in opposition then, this could no t happen. The moment West Bengal missed this opportunity, the then chief minister Narendra Modi didn't leave any stone unturned to miss it. And today Tata ha s not only enhanced the industrial growth there but also marked the beginning of a new era of the sta te’s economy. The sale of the plant is a whooping 3,50,000 cars per year.

Over-­all study of numbers and ranks: A milk revolution and large scale exports of fish accompanied the growth in horticulture and sharp increase in agricultural productivity. The agricultural turnaround-­with growth ra tes as high as 11% between 2000 and 2013 was accomplished in spi te o f wa ter scarci ty.

With a contribution of 65%-­70% to India’s denim production, Gujarat is the largest manufacturer of denim in the country and the third largest in the world(as far as textile is concerned). The state is the world’s largest producer of processed diamonds, a ccounting for 72 % of the world’s processed diamond and 80 % of India’s diamond exports.

As o f June 2017, Gujarat had a total installed power generation capacity o f more than 30,188 .75MW ranking third .

Gujarat is considered the pe troleum capital of India due to presence o f large refining capacity set up by private and public sector companies.

As of December 2015, Gujarat ranked second in the production of crude oil (onshore) in India. The sta te produced 3 .32 million tonnes of crude oil, which accounted fo r about 1/4 th of the total crude oil (on shore) production in the country till Dece mber 2015. Reliance Petroleum operates the oil refinery a t Ja mnagar which is the world's largest gra ss roots re finery. The company has also planned another SEZ (special economic zone), in Jamnagar.

Gujarat also ranks second na tionwide in gas-­based thermal electricity generation with national marke t share of o ver 8% and second na tionwide in nuclear electricity generation with national marke t share of over 1%.

Scope: Gujarat has shown it can achieve rapid growth for an extended period. Fro m 1980 to 2013, average per capita GSD P increased at a rate o f approxima tely 5% p.a. Gujara t could rank as the third fastest growing coun try in the world wi th a population over 10 million. India ranks sixth for this time period. Gujarat's re cord in education and health is no t a s good .

Education imp roved a t 2.2% per annum, about the same as India's (2 .1%). The government must focus on the economic-­ social transforma tion o f the Eastern Corridor and We stern Gujarat. This will lead to inclusive developmen t and reduce inequality-­the best recipe for growth.

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SBI’s Decision to Cut Savings Rate and its Repercussions - Amit Shovan Mandal As we all know that leader of country’s banking industry, Sta te Bank of India ta ke a decision to cu t savings bank account interest ra te by 50 basis point for a deposit up to Rupees 1 crore on 31st July 2017.Let see what is the reason behind this decision.

It is no t like that saving bank account interest rate reduces fo r the first time.

Before deregulation of the sa vings bank deposit interest rate on 25th October 2011, the rate was set by RBI and they reduced the in terest ra te for several times.

But this is for the first time since deregulation when a commercial bank (Public Sector) reduces interest rate and introduce a two-­tier savings bank account interest rate , which is up to one crore and more than one crore , an interest rate of 3.5% and 4 % respectively.

Managing Director’s statement: According the state ment o f Rajnish Kumar, Managing Director of State Bank of India, because of huge cash in flow in savings account during the time of demonetization period, declination of inflation rate, high real interest ra te and anticipation of softening of interest ra te* lead them to re think about the revision of the savings bank account interest rate.

Although the bank has another option to raise their Marginal cost based lending rate(MCLR)** instead of a reduction o f the savings rate.

Impact of Real Interest rate: Let’s see how real rate and inflation ra te come into play to decide interest rate.

According to the prominent economist Mr. Irving Fisher, we can calculate real interest rate by this following equation: Real Interest Rate = Nom ina l Interest Rate – Inflation Rate

From the table, we can see that for the month of August 2017, Nominal interest 21

rate or interest ra te of T-­Bill is 6.65%, Inflation ra te is 2 .36%, So now Real interest ra te, r = 6 .65 – 2.36 = 4.29% and for the month of August 2016, Nominal interest rate or interest rate of T-­Bill is 6.67% , In flation rate is 6.07%, So now Real interest ra te, r = 6 .67 – 6.07 = 0.6%.

It clearly shows us that real interest rate is increased by 3.69% compared to previous year.

According to some economist of HSBC Securities & Capital Market (India) Priva te Limited, 4% inflation rate which is fixed by Reserve Bank o f India become a new normal inflation rate instead of 6% on an avg. during 2008-­2013.

From this graph , i t is very clear that inflation rate decreases over the year and the real rate is an increase over the year.

Impact of Demonetization: A flood of cash flow into bank deposit leads bank to reduce their margin to get that money back to the cu stomer a s a loan, On 31st December 2016 SBI announced to reduce its MCLR by 0 .90 from 8 .65% to 7 .75%. Huge cash flow during demonetization period leads banks to a large liquidity surplus. Credit grow th was 6.1% in July 2017. Due to very low

growth ra te, there is the 60% of deposits during demonetization was left in the bank unutilised, So bank needs to pay intere st on that money withou t u tilising that, for which they fa ce losse s. To reduce losse s, they reduce their interest rate.

Why they c hoose to cut savings rate over raising MCLR: As I men tion tha t SBI has already reduced their MCLR on 31st Dec 2016, but still 60% deposited amount left in the bank unutilised. In this condition, the bank cannot increase their lending rate further.

Moreover, if a bank wants to raise MCLR, then the bank must raise their deposit rate too. Because MCLR directly links with the deposit rate of the bank. As SBI already cut their term deposit interest rate so they have no other option but to cut their savings bank interest rate . Apart from this, it will further raise the lending rate for a various sector like Agriculture , small medium enterprise, a ffordable housing segment, EMI etc which oppose the growth of the country.

So now we can say that decision to cut rate is a good decision from a financial perspective.

Repercussion: As we know that SBI is the leader o f Indian Commercial Banking Industry, so after its decision to reduce rate most o f the leading Public secto r and Priva te se ctor banks reduce their rate too.

State Bank o f India has a custo mer base of more than 42 crores, according to a survey conducted by Economics Time s.

This decision will impact 90% of its customer.

If there is a question that who are those 22

people who deposit their money in a savings accoun t? The answer which will come to mind first is ‘common peoples of India.

According to the ‘Household Survey on India’s Citizen Environment & Consumer Economy’ (ICE 360° surve y),2016 on an average 99% of Indian Household has a bank accoun t. We can also see tha t, the 1st three quintile’s (5 Quin tiles represen t 5 different type inco me segment of India) peoples spend their 77-­90% disposable income*** for their rou tine consump tion expense. We have also found it that average savings for 1s t three quintiles are Rs.8000/-­ approximately.

from this survey, we can say tha t annual savings of 60% household are approximately 8000/-­.

Using our common sense little bit, we can easily say it tha t those 60% household’s people deposit and sa ve their money in savings account. Now they will get a very low return on their hard-­earned money. So, we can conclude tha t though the decision is an ideal decision from an economic perspective . But, from a socioeconomic perspective , this decision has an adverse effe ct on those lower income segment peoples. In addition to tha t, they already introduce Monthly Average Balance from 1st April 2017 which is a bit high for common people too. In past days, they used a tagline like “The banker to every Indian”,” The bank o f the common man”, but their decision put a question mark to their past taglines.

This decision ca me two days before o f third bi-­monthly monetary policy reviewed by Reserve Bank o f India. So , this rate cut set a stage for RBI to reduce ra te. Finally Reserve Bank o f India reduces repo ra te by 25 basis point under liquidity adjustment facility from 6.25% to 6.00% on 02 Aug 2017 with an immediate effect.

Reduction of saving bank accoun t interest rate will also help them to reduce lending rate. Reduction o f savings bank a ccount rate will also fo rce as well as encourage customers to deposit in Term Deposit scheme instead of savings account.

Reduction of the intere st ra te by SBI pu t an immediate e ffect on the share price of the o ther public-­sector bank including SBI. On 31st July 2017 in Bo mbay Stock Exchange, they up 2.07% to Rs.307/-­.

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At 11 :37 am;; on that day Nifty PSU Bank index, the largest gainer among sectoral indices, up by 3.2% co mpared to 0 .33% in Nifty 50 and less than 1% gain in Ni fty Bank and Nifty Private Bank index.

Details of the Share price of PSU banks on 31st July 2017:

Main components of MCLR: • The marginal cost of funds: The incremental cost of borrowing more money for funding additional asset purchases or investments. Simply, the marginal cost of funds is simply the interest rate on the new loan balance.

• Operating cost: Operating Expenses of banks.

• Tenor premium.: It denotes that higher interest rate can be charged on long term loan.

• Negative carry because CRR: The cost which is bear by the bank to maintain CRR in RBI. MARGINAL COST OF FUNDS BASED LENDING RATE (MCLR) OF SBI WITH EFFECT FROM-­01.09.2017-­

*Softening of interest rate: According to Chanda Kochhar, Chief Executive Officer, ICICI Bank when the cost of funds keeps going down, interest rates coming down and Inflation is coming under control, then we are moving towards a softening interest rate environment. **MCLR: Marginal cost based lending rate was introduced by RBI in April 2016 by replacing the base rate system.

According to the new guidelines of RBI, every bank must prepare MCLR which will be their internal benchmark for lending rate, the further actual rate will depend on customer’s riskiness. Borrower interest will be calculated as follows-­ Interest rate = MCLR + spread, where, the spread is a risk factor, that defined customer ability to repay the loan.

***Disposable Income: Disposable income or disposable personal income (DPI), is the amount of money that households have available for spending and saving after paying income taxes.

Disposable personal income is one of the economic indicators used to understand the overall state of the economy Disposable Income = Personal income – Income taxes

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Crypto currency Foundation & its Fortune - Ayush Thalia What is Cryptocurrency?

Cryptocurrency is a digital asset designed in a procedure where encryption techniques are used to regulate the generation of units the currency and a chain of netwo rk verifies the transfer of funds, operating independently o f a central bank or any regulatory au thority. It works as a medium of exchange using a complex procedure of cryp tography to secure the transaction and con trol additional creation o f currency in the circulation.

Cryptography is a ssociated to the disciplines of cryptology and cryptanalysis. Cryptography co mprises of techniques such as microdots, merging words with images to hide information in storage or transit. Cryp tography implica te creating written or generated codes that authorize information to be kept secre t.

Cryptography tran sforms the data in to a format which turns unreadable for an unauthorized user, licensing i t to be transmitted withou t anyone decoding it back into a readable forma t, hence it compromises the data.

Benefits and Drawbacks-­ Cryptocurrencies ca me into the picture as a global currency to make effortless transfer of funds between two participants

in a transaction and the transfers a re facilitated through the use o f cryp tography for securi ty purposes. The funds through cryptocurren cy are transferred wi th minimal processing fees, unlike most banks and financial institu tions charge for wire tran sfers.

Since cryptocurren cies are virtual and lack central control , a digital cryp tocurrency balance can be erased by a system crash. Prices o f general commodities a re based on supply and de mand and the rate a t which a crypto currency can be exchanged for another currency can is volatile. The idea o f cryptocurrency is still young and hence it is yet not trusted by a larger number of the population.

Cryptocurrencies are vulnerable to the threat of hacking and in Bitcoin's history, the co mpany has been subjected to over 40 thefts including a few that exceeded $1 million in value.

Bitcoin and its working Bitcoin is peer-­to-­peer de centralized currency and the largest na me in the market of cryptocurrency.

Bitcoins are sent (or signed over) from one address to another with ea ch participant potentially having numerous addresses. Eve ry paymen t o r transaction is then broadcast to the ne twork and 25

included in the blockchain so that the included bitcoins cannot be spent twice.

After an hour, e very transaction is locked in time by the ma ssive processing power that con tinues to extend the blockchain.

These techniques are used to ensu re Bitcoin provides a fast and trusted payment network that is useable for the general public. To begin with it, one has to choose a virtual wallet and keep it secure just like any o ther wallet. Bi tcoin makes it possible to transfer funds globally in a convenient manner and it allows you to be in control o f your money.

With Great fea ture comes grea t security concerns and Bi tcoin can pro vide high levels of securi ty i f used accurately. The value of a bitcoin is volatile due to its young economy, novel natu re, and illiquid markets. Bitcoin should be considered a high-­risk asset. All Bitcoin transactions are stored publicly and permanently on the ne twork for block-­chain which means anyone can see the balance and transactions of any Bitcoin address. The identity of the use r behind the address remains undisclosed until informa tion is revealed during a transaction.

To begin with Bitcoin , you can install a Bitcoin wallet on compu ter or mobile phone which will generate your Bi tcoin address and one can create mo re addresses whenever needed. Just as your email address or a PayPal account number, you can share your Bi tcoin address with your friends and merchants to begin transactions. A Bitcoin address is much as the sa me how email works, except tha t Bitcoin addresses should only be used once. A block chain is a shared public ledger where all verified transactions are included in the block

chain and maintained by the public. This way, Bitcoin wallets can calculate the spendable balance of any user and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the historical order of the block chain are implemented with cryptography.

Bitcoin wallets maintain a secret piece of informa tion called a private ke y or seed, which is used to sign transa ctions in block chain, providing a ma thematical proof to the coder that they have come from the owner o f the wallet.

The signature also re stricts the transaction fro m being altered by anyone once it has been issued. All transactions are broadcasted between users and hence it gets confirmed by the network in the following 10 minutes, through a process called mining.

Mining is a distributed general agreement be tween the Bitcoin u sers and the system is used to confirm waiting transactions by including them in the block chain. It enforces an ascending o rder in the block chain, p rotects the neu trality of the network and allows various computers to agree on the sta te of the syste m. To receive the confirma tion, transactions mu st be packed in a block chain that fi ts the requirements of cryptographic. The rules then pre vent previous blocks from being modified to avoid any invalidation in any o f the following blocks. Mining also crea tes the equivalent of a lottery system which prevents any individual fro m easily adding new blocks consecutively in the block chain. Hence, no individual can 26

control wha t is included in the block chain or replace parts o f the block chain to roll back their own spends.

architecture is designed to create the process of “mining” more resource-­ intensive progressively. The volatility

Why is the cryptocurrency so volatile?

The market of cryptocurrency is very small and the players in this field are very inexperienced traders who hold on to bitcoins when the price goes up with an optimistic behaviour hoping the value goes up, and sells i t when the p rice drops from negative news.

Just a s the way internet and the social media took a boom in our lives, Bi tcoin or any other cryptocurrency fails to do so as the reputa tion is ha mpered by media which scares the public by publishing geopolitical events and sta tements by governments tha t Bitcoin is likely to be regulated. It has properties which a re similar to gold and hence the awareness of currency makes i t volatile. The design decision is governed by the developers of the core technology and the limit of production is a fixed amount which is 21 million BTC. The a mount is estima ted to reach by the year 2145.

nature of cryp tocurrencies and the anonymity o f the Bitcoin address owners are not few reasons why people don’t have trust on cryp tocurrency yet.

However, the anonymi ty features have attracted transactions fro m illegal activities. Bitcoin faced 35% fluctuations in values after a p roposed exchange-­ trade fund by the Winklevoss Bitcoin Trust was denied by the U .S. Securities and Exchange Commission due to probability of illegal purposes such as black-­market trading.

Several educational institutions have even begun to accept Bitcoin as a means o f payment, a move to promo te the change in the world of transactions. The acceptance of Bitcoin by the general public has already led few companies to consider investment opportunities in the currency.

Building a fascinating infrastructure in mining and block chain makes Bi tcoin and Ethereum a promising leader in the world o f cryptocurrency.

The Future or a Gamble?

Bitcoin and the cryptocurrency has been around since 2008 but gained popularity in the year 2013. Bitcoin’s unique

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INFOSYS-­ Will Buyback Help in Wealth Maximization - Noel Mathew Certain things happen in a sudden and that is what happened in Infosys on August 18, 2017. In fosys Limited is an Indian multinational corporation headquartered in Bangalore, India which provides business consulting, informa tion technology and ou tsourcing services. It was founded in July 1981.It is the second largest IT firm in the coun try. Its market capitalization was 34.38 billion in January 2017.Recently many news had come up regarding Infosys and the exit o f the former CEO Vishal Sikka . The boardroom battles over a spate o f issues led to the exit of its first non-­founder execu tive Vishal Sikka on August 18, 2017 and the return of its co-­founder Nandan Nilekani as nonexecu tive chairman. The exit of Vishal Sikka re sulted in a dra stic fall in stock price ;; it slipped to about 13% . The company lost more than 22000 crore s in the market capitalization. After the exit of Vishal Sikka, Infosys announced a buyback o f Rs.13000 crore s shares at Rs.1150 each on August 19, 2017. He re in this article we will look at the recent buyback of share s done by In fosys and other buybacks in the past.

Now, wha t is buyback of shares? A buyback is also called as repurcha se and it’s the purchase made by the company of its ou tstanding shares which reduces the

number of shares in the open marke t.

Usually company’s buyback share s to increase the value o f shares available by reducing the supply of the m. As the number of outstanding shares in the market ge ts reduced, bu ybacks increases the proportion of shares owned by the investors moreover it will help in achieving optimum capital stru cture and will enhance consolidation of stock in the company. Infosys announced its first buyback in its 36 yrs history on August 19, 2017. Le t’s ha ve a detail look on what led the company to buyback its shares.

First Buyback in 36 years: August 18, 2017 is an historical day for Infosys .It’s the day when the C EO Vishal Sikka resigned fro m the company a fter the war of words between Sikka and the founders. On august 19th the company announced a historical decision to buyback its 11.3 crore shares at a buyback price of Rs.1150 per share. The Bengaluru based firm was undergoing some issues since past few months with, the founders and the board of directors clashing over corporate governance lapse and In fosys U SD200 million Panaya acquisitions. This spat led to the sudden resignation of the CEO Vishal Sikka along 28

with the other four board members, including the Chairman R.Seshasayee .

This exit resulted in drastic fall in market price. Info sys witnessed a fall of 13% and touched a three year low o f Rs.873 .10 on BSE, a level that was seen on 21 august, 2014. Investors lost about Rs.22519.50 crores in the market capitalization.

This forced the company to announce buyback of shares a t Rs.1150 per share which was Rs.226 more than the closing price on August 18,2017. The pro moters of the group including N.R .Narayana Murthy and Nandan Nilekani have offered to sell about 1.77 crore shares worth Rs.2038 crore in its Rs.13000 cro re buyback plan. Bowing to the demand and interest o f co-­founders and investors, Infosys on 24 August, 2017, named its co-­founder Nandan Nilekani as the new Non-­Executive Chairman. Shares of Infosys spiked o ver 4% on Nandan Nilekani’s return to the helm. The buyback plan by In fosys is expected to help the company regain its market value

by October 2017.

Various other companies had also co me up with the buyback in the previous years.

We will have a look a t some of the other past buybacks.

Other Buybacks – To the past Infosys’ first buyback is second co mpare to the Rs.16000 cro re shares repurcha se by its rival Ta ta Consultancy Service (TCS) in April 2017. Reliance had co me with largest buyback of about Rs.10, 440 crores between February 2012 and January 2013 be fore TCS. Wipro had also announced its decision to buyback

its 34.3 equity shares of Rs.2 each for Rs.11000 crores at Rs.320 per share in July 2017. Le t’s have a look at these buybacks.

Tata Consultancy Service (TCS), which is India’s largest company in terms of market capitalisation announced India’s biggest buyback offe r in April 2017. It decided to buyback 5.61 crore equity shares a t Rs.2850 per share. It was equivalent to 2.85% of the company’s equity which is about Rs.16000 crores.

The buyback price offe red by TCS was almost 15% higher than the market price at that point. This buyback o ffer price helped the shareholders to achieve extra dividends.

In case of Reliance, on February 2012, it announced a buyback up to 12 crore equity share worth Rs.10, 440 crores from the open market at a price of Rs.850 per share. It was the highest buyback until that period. It was introduced to increase the share holder’s wealth. RIL was also ai ming to provide a tax e fficient mechanism to return money to the shareholders.

However, R IL brought back only shares worth Rs.3900 crores through open market. The share price of RIL slumped to about 35% during 2011. RIL witnessed a first quarterly drop in their profit during 2012, and the se tend them to buyback the shares.

On July 2017, Wipro, India’s third largest IT firm announced a buyback of Rs.11000 crores, a fter a quarterly d rop of 8.2% in profi t. It wa s the se cond buyback programme initiated b y Wipro in two years. The recent buyback involved buyback of around 34 crore 29

shares which was about 7% o f the to tal equity shares. Wipro announced a buyback of Rs.320 per share , implying a premium o f 18.5 % . This buyback resulted in 6 .5% hike in stock. Wipro witnessed i ts biggest gain in four years, through this buyback.

Conclusion When co mpared to the Info sys buyback, there was not mu ch loss in the market capitalisation for investor’s in TCS befo re the buyback, whereas RIL and Wipro witnessed a loss in quarterly profit. Infosys, TC S and Wipro made the buyback through the tender offer route, whereas RIL made the buyback through the open market. The sudden fall in stock price had affected In fosys more when compared to the o ther firms. Most of the buybacks are announced when the company fails to meet the investors expectations. This is what happened with Infosys as well as with the other firms.

Exit of a CEO does no t stop a company.

It might affect the co mpany for a shorter period but proper replacement and solutions are the best way to get back to the market. Investors will be eyeing upon such solutions and replacements in ca se of Infosys. How is Nandan Nilekani’s return going to help In fosys? Will this buyback help Infosys regain its marke t?

All we need to do is, wait to see the difference.

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The Great Business Wall of India - Tanay Sood Independence or being independent has been lost and found in the Indian business dictionary, bu t has the country really received any independence sta tue on the world map, the answer is de finitely ‘NO’. Should we be happy or sad, that Britishers were actually doing a good job in running the operations of our country because the term ‘labour’ is very well associated wi th India till date . India was known as the queen of interna tional trade with the help of i ts handicra fts, from Kashmir for shawls, Gujrat for te xtile (duptas and dhotis), Nagpur for silk-­ bordered and Banaras for metal wares and the Kerala spice marke t was the prestigious immemorial till the earlier years of the eighteenth cen tury and the establishment o f the Ea st India Company which transferred and implemen ted the syste m of exporting raw materials and importing the finished goods added value to our economic system.

So, is the current picture o f our country still the same? A country bag full of vast economic poten tial and rich in its resources and one o f the fastest growing countries o f the world and wi th it economic liberalization it still stands at 130th position in the Ease of Doing Business as per the World Bank report.

The year 1991, is a very well-­marked year in the Indian history, co mmonly known as the ‘LPG’ regime, thu s re ferring to Liberalisation, Privatisa tion, and Globalisation, therefore, opening its corporate doors for the foreign companies. So where is India actually failing?

• Regulatory Risks: The investor appetite to invest in our economy is always defeated by our administra tion’s rules and regulations. The biggest risk of doing business in India involves changing or unpredictable regulations.

Due to lack of transparency in our syste m, potential investors either withdrew their investmen ts or in continues argu ments with our legal syste m. The biggest exa mple being the Vodafone-­Hutchison tax case.

• Economic Risks: The economic risks in India are more to do with inflation and with lack o f fiscal discipline at the government level. India is a ho me to one of the Asia’s largest stock marke t, but due to our weak currency against other big giants, foreign companies are always cautious and wa tching out for the exchange rate risks and in terest risks.

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• Social Risks: Might be the biggest risk that an entity faces for doing business in India. Foreign enti ties generally forget tha t India consti tutes o f 23 regional languages and unlike other Asian countries the work cultures differ to a grea t exten t. People feel more comfortable in their native ecosystem rather than opting to wo rk on a foreign land.

World Bank Report Analysis The index of the report only takes in to consideration the decongested ci ties New Delhi and Mumbai data which is not practical as a person in these cities can obtain credit to start to venture with ea se as compared to credit hindrances one has to go through at small cities. The government has to improvise on the micro environment functions of our country which is employment and building infrastructure. By infrastructure we mean not only to build cemented roads but to embed the Tier 2 and Tier 3 cities wi th adequate resources and opportunities for the sustainability of small and medium-­ sized companies. If the government is able to resolve the social and economic dilemma we could see a rise in the se enterprises, which could be a boost our growth in terms GDP. Ma cro fa ctors include capacity utilization which is still low in the core industry sectors, it is hovering around 70 -­75%, so unless we see capacity utilization going up and the cash inflows coming in, and a decrease in our imports, the grow th crunch would continue to haunt us.

How India is Improving India is a huge country, attracting global investors but due to the cumbersome

process in our administration system, business deals do not get execu ted. The parameters on which World Bank ranks the economies which are constru ction permits, getting electricity, registering property, enforcing contra cts and resolving insolvency.

The biggest hurdle in the holistic development in the business industry is resolving insolvency. Thanks to “Mallya Saga”, Ministry of Corpora te Affairs in consultation with Rese rve Bank of India (RBI) ca me out of their drea ms and realised the rise in Non-­ Performing Assets (NPS) and de teriorating liquid cash from banks, the forma tion o f Insolvency and Bankruptcy Code (IBC ) and National Company Law Tribunal (NCLT), which abolishes Company Law and Sick Industrial Companies Act (Special Provisions) Act, 1985 thus speeding up the redre ssal system,( within 180 days plus grace of 90 days), therefore keeping the High Court ou t o f this ambit. Secondly, the biggest reform was undertaken by our pri me minister Mr. Narendra Modi, enco mpassing on Make in India Ini tiative which is aimed a t attracting foreign investmen ts and manufacture goods in India for the creation of employmen t and enhancement o f skills, thus re moving the label of labour country. Ou r country has actually surpassed United State s o f America and China, as the top destination globally for foreign direct investments.

Road Ahead India with it completion o f 70 years o f independence still faces bucke t full o f problems. The govern ment is only

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showing the good report card and tries to hide the bad grade sheet. Implementing numerous policies is not a wrong initiative but the go vernment should focus more on implementing these policies in an effective manner, by a mere shaking of hands you don’t strike a deal. A deal is said to reach an agree ment when your goal is achieved. De monetisation was aimed at curbing black money but in turn, the Jan Dhan Yojana accounts were filled with humongous funds, thus not serving the motive of the policy. Gross Do mestic Product for June quarter ha s also slumped to 5 .72 per cent. Reasons a re obvious you cannot expect a daily wage worker to receive his wages in digital format, which internally let to production dip in our industrial sector to great margin.

NITI Aayog the think tank of India has stated the World Bank report is incomplete and vague on various grounds, espe cially in the Indian Sta te wise growth which actually showcases the accurate and concrete picture of doing business in India. So, do we presume the international standards set and other statistical agencies working in this regard are p roducing wrong reports and are actually anti-­ Modi? Well, this would be answered during the tenure of our present governmen t, which is actually betting big on ‘curbing of black money’, ‘transparency in corpora te governance’ and ‘Good and Services Tax’, to achieve Make in India initiative.

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The Booming Sector of India: Hospitality and Tourism - Aarushi Jandrotia The sector which has emerged as one the key drivers of growth a mong the services sector in India is hospitality and tourism sector. These sectors are becoming the catalyst for the economic grow th o f India.

Today, for strategic acquisitions, Indian hospitality marke t has become the fe rtile field and we can say this by looking at the ongoing trend in the hotel transactions market in the line. Big hotels g roup are investing in India. The economic grow th of India is not only because of the hospitality but also fro m the tourism.

India’s rich culture , historical heritage, different places of natural beauty which has been spread over the country and variety in ecology a ttracts lots of tourism.

Apart from being a source of foreign exchange for the country i t is also a potential large employment generator.

Market Size: Today, we can clearly see the grow th of domestic and outbound tourism a s there is middle class is rising and disposable income is increasing.

As per Ministry o f Tourism, with the top 10 States/U Ts con tributing about 84.2 % to the total number o f Domestic Tourist Visits (DTVs), there is an increase in DTVs to the Sta tes/Union Territo ries (UTs) grew by 15 .5 % year over year to

1.65 billion (provisional) during 2016.

In May 2017, the foreign tourist arrivals (FTAs) in India has also increased 19 .5 % year-­on-­year to 630,000 and on e-­tourist visa it increased 55 .3 per cen t year-­on-­ year to 68,000 .As per data from Ministry of Tourism, In Ap ril 2017, India's foreign exchange earnings (FEEs) reach to U S$ 2.278 billion as tourism increased b y 32% year-­ over-­year.

By 2030, India is e xpected to be a mong top five business travel market globally. It is also expected that by 2022, International hotel chains will increase their expansion and investmen t plans in India from 44% to 55% share in Indian hospitality industry.

Growth: As per the tourism ministry, from January to July this year a grow th of ove r 15 per cent has been registered, with many opting for e-­visa facility. The da ta o f the arrival of the number o f tourists from different countries is as follows:

The growth of 15.7 per cen t has been recorded, As the Foreign Tourist Arrivals (FTAs) increased from 49.03 lakh 34

(previous year) to 56.74 lakh (from January to July, 2017). An increase of 7 .4 per cent ha s been seen in July 2017 as compared to July 2016 as to total o f 7 .88 lakh foreign tourists arrived in India in July, 2017.

There is also an increase in nu mber of foreign tourists who arrive on e-­visa.

There is an grow th of 73.3 per cen t of the number of tourist ca me on e-­visa as in there were 0.68 lakh tourist in July 2016, and in this year by July 2017, a to tal of 1.19 lakh tourist has been recorded. The number of tourists arrived on e-­visa was 5.40 lakh by January to July 2016, and by this year we can see the growth o f 54 .7 per cent a s a total o f tourist arrived on e-­ visa is 8 .36 lakh , fro m January to July 2017.

The data o f the countries and the tourist availing e-­visa facility in July 2017 are as follows:

Investment: The hotel and tourism sector has attracted around US $ 10 .14 billion of FDI during the period April 2000-­March 2017.

As foreign countries are realizing India’s potential many co mpanies have invested in the hospitality and tourism secto r. The performance me trics like ADR (average daily rate) and occupancy have resu med strong growth for most hotel markets in India. Coun trywide ho tel markets a re performing a t an al lti me high with ADRs ranging between Rs 4,200 and Rs 7,900 and occupancy at 54-­75%. Hotel markets

are posting nearly 12% higher roo m revenue over 2015, which in itself witnessed nearly 11% higher roo m revenue growth over 2014.

Pune and Hyderabad are witnessing, double-­digit growth in performance, ranging 12-­18%, a fter being almost written o ff b y many hotel industry pundits. Simultaneously, leisure and tier-­ II and III ho tel ma rkets are outperforming the more ma ture and established commercial hotel market of the country.

New hotel supply is expected to slow down to 3-­4% year-­over-­year in the next 3-­5 years, fro m a high o f 6-­8% o ver the past five years. The slow addition of rooms means the industry will see strong performance grow th in the short-­to-­ medium term. Recen t investments in this sector is as follows: • Over the next four years, JW Marrio t plans to have 175-­200 hotels over the next four years • ‘Born in France, made in India’ approach by AccorHotels has reached a to tal of 45 hotels and i t is expected to increase to 55 ho tels by 2017 and 550 hotels in next three years • In January 2017,the se cond largest European hospitality industry, Louvre Hotels Group , bought a majority stake in Sarovar Hotels in India, beating

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Wyndham Hotel Group in the race. In terms of number o f properties this deal is estimated at $50 million (Rs 336 crore), makes the combined enti ty one of the biggest hotel chains • By 2017 , H yatt Ho tels Corporation is planning to bring its H yatt Centric brand to India soon along with th ree new hotels in Kochi, Rameswara m and Hyderabad • MakeMyTrip has agreed to make a deal value of US $ 720 million by buying Ibibo Group’s India travel business which will create India’s largest online travel firm wi th a value of US$ 1.8 billion • Chaudhary Group (CG) Hotels & Resorts is aiming to have 200 hotels operational by 2020 • Mid-­hotel segmen t in India is expected to receive an investments o f Rs 6 ,600 crore (US$ 990 million) excluding land over next five years, with major hotel chains like Mariott, Carlson Rezidor and ITC planning to se t up upscale, budget hotels in state capitals and tier-­ II cities.

Tourism & Hospitality sector and GDP Tourism in India a ccounts for 7.5 per cent of the GD P and is the third largest foreign exchange earner for the country. The tourism and hospitality sector’s direct contribution to GD P in 2016, is e stima ted to be U S$47 billion. The direct contribution of travel and tourism to GDP is expected to grow at 7 .2 per cent per annum, during 2015 – 25, with the contribution expected to reach US$160 .2 billion by 2026.The sector’s to tal contribution to GDP is e xpected to increase to US$ 136 .2 billion by the end of 2016 and is expected to further grow to

US$ 280.5 billion by 2026.The to tal contribution of travel and tourism to Indian GDP is fore casted to increa se b y 4.97 per cen t per annum to U S$ 280 .5 billion by 2025 (7.2 per cent of GDP)

Gover nment’s take on tour ism a nd hospitality The ministry of tourism realize the importance of tourism and thus is considering to set up the government-­ run tourist office s in key ma rkets su ch as the U S, UK and Russia. Tourist facilitation centers will also be set up a t airports in Delhi, Mu mbai, Chennai and Bengaluru where the tourist could address their queries. In Sep tember the Incredible India 2.0 campaign is expected to be launched.

The ministry has also taken up the matter of the 28% GST tax on declared tariff on hotels with rooms of Rs 7500 and above with the ministry o f finance as it believes it will impact MIC E (meetings, incentives, con ferences, and exhibitions) tourism in the country.

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Market Watch – A Way To Cut Losses - Aishwarya Siram - Nishika Tatiya A mantra to have safe investments and to have successful execu tion o f trading is by close observation of market conditions.

Equity Investors are a little cautious ahead of Q1(3-­mon th financial period) GDP data.

On the o ther hand , ease in geopolitical tensions will give some relief to the market. The 50-­share NSE Ni fty ended at 9,917.90, up 33.50 points—0.34%—a fter shuttling between 9 ,925.10 and 9 ,856.95.

Realty, power, oil and gas stocks took the front row in the month o f August. The BSE realty index advanced the most by 1.11%, followed by power, consumer durables and oil and gas. Healthcare, banking and metal came as sudden changes, ending in the negative.

Defence stocks had a field day after the defence ministry, in a major move , has decided to carry out a series o f reform initiatives in the Indian Army. IT rubbed off on de fence stocks, including Reliance Defence and Engineering (up 6 .86%).

Astra Microwave Products, Punj Lloyd, BEML and Taneja Aerospace and Aviation went up. Domestic institutional investors (D IIs) remained steadfast in their backing by lapping up shares worth Rs 15,695.51 crore while foreign portfolio i

investors sold share s of Rs 16,073 .21 crore as on August 30. D IIs bought shares worth R s 290.78 crore while FPIs liquidated shares worth Rs 12.46 crore.

Broader markets kept getting higher, wi th BSE small and mid-­cap indices turning green.

Indian stock marke ts are trading lower as the market participants are expected to largely look up to global trends for direction and digest the Cabinet reshuffle announced recently. The sell-­off in the shares of heavyweights companies su ch as HD FC, HD FC Bank, Info sys, Kotak Mahindra Bank, L &T and Adani Ports con tributed the most to the decline of benchmark Sense x. Collectively the se 6 stocks erased off about 70 points in the index while shares of Reliance Industries, Tata Motors, Maru ti Suzuki and Coal India helped to trim the losses.

Commodities: Gold : The prices of Gold shot up to their highest in nearly a year as the safe haven a ssets are bought by the investors a fter North Korea conducted its most powerful nuclear test, increa sing the geopolitical tensions. Besides this, the increased 37

buying by the local jewellers lifted gold prices to the highest level of this year.

Gold prices increased by R s 200 to trade at Rs 30,600 per ten grams.

Globally, spot gold rose by 0 .7% to $1333.28 per ounce, earlier touching its best on 9th No vember,2016 a t $1336.79.

US gold futures for De cember delivery were up 0.6% at $1,338.60.

Other pre cious metals such as silver ro se by 0.8% to $17 .83 per ounce , Platinum gained 0.4% to$1008.90, earlier touching its best since early ma rch at $104070.

Palladium added 0.8% to $988.50. It had previously marked i ts best since February 2001 at $1001.

forecasts upwards for the first time in six months. The poll was carried out be fore Hurricane Harvey hit U .S. shores, curtailing U.S. refining by a fifth and disrupting offshore production.

The Interna tional Energy Agency said earlier this month global oil demand would grow mo re quickly than expected this year, helping to ea se a glut despite rising crude production fro m North America and weak OPEC compliance with outpu t cuts. However, the withdrawal in U .S. crude stocks is seen accelerating the marke t rebalancing targeted by the OPEC production cuts initiated earlier in the year

Oil: Brent Crude is a form of light crude oil that serves as a major benchmark p rice for purchases of oil worldwide.

Shale oil has high carbon conten t, when subjected to high pressure for millions of years it forms crude oil Brent crude oil spo t prices averaged $48 per barrel (b) in July, $2 /b higher than the June average and almost $4/b higher than in July. EIA forecasts Bren t spot prices to ave rage $51 in 2017 and $52 in 2018.

The U.S. Energy Informa tion Administration (EIA) estimate s that about 4.25 million barrels per day of crude oil were produced directly from tight oil resources in the United Sta tes in 2016.

This was equal to about 48% o f total U .S. crude oil production in 2016. Tight oil is oil embedded in low-­permeable shale, sandstone, and carbonate rock formations.

An accelerating decline in global crude inventories and expectations for an uptick in global demand growth has caused analysts to revise their Bren t oil price

Forex: Overall currency marke t sentimen t turned highly volatile against the backdrop of concern s over the domestic economy which unexpectedly slowed to 5.7% in the June quarter, the slowest pace in three years, underlining the disruption caused by the uncertainty related to the rollout o f the goods and services ta x (GST) even as the Indian economy is struggling to reco ver from a shock demonetisation.

The i mpact on currency marke t because of GST has been stated in our previous edition i.e. 201st edition.

After India’s economic g rowth slowed down to a 3-­year low of 5.7% , the rupee weakened over one-­week low against the US dollar.

The rupee ended a t 64.02 a dollar -­ a level last seen on 24 th August, down 0.19% from its close of 63.91 on 31s t August. The rupee opened a t 63.95 a dollar and touched a high and a low of 63.88 and 64.05 respectively.

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So far, this year, the rupee has gained 6.3%, while foreign insti tutional investors (FIIs) bought $7.16 billion and $19.89 billion in equity and debt markets, respectively.

Conclusion

On 4th Septe mber, again the price of the Rupee shot up by 7 paise to 63 .95 against the U S dollar in early trade because of selling o f the American currency by exporters and banks a t the forex market.

The cu rrent scenario of Indian market is best de fined by the term ‘volatile’. It has witnessed immense highs and lows with the introduction o f GST and then GDP which unexpectedly slowed to 5.7% . On the o ther hand, the geopolitical tensions between North Korea and the USA also led to the fluctuations in the stock market. This has surged a debate on is it really tha t easy to make money in Indian stock market today.

Besides, the dollar’s weakness against other cu rrencies overseas especially Asian currencies such as South Korean won was down 0.61% , Indonesian rupiah 0.14%, Malaysian ringgit 0 .09%, Thai baht 0.08% , Taiwan dollar 0.06% and Philippines peso fell 0.05%. However, Japanese yen was up 0.42% , China offshore 0.19% and China renminbi 0.16% gave rupee strength.

And also, the renewed geopolitical tensions after No rth Korea’s late st nuclear test capped the rupee’s gain.

Meanwhile, the BSE index fell 189 .98 points or 0 .6% to 31,702 .25, while the NSE index closed down by 61 .55 points or 0.62% at 9,912.85.

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Quarterly Analysis Slump in India’s Growth - Ishaan Sengupta & Naman Shah A slump in growth rate creates quite a shock for the economy Predictive analytics is what the world runs on these days, and this ti me around, majority o f the e conomic analysts around the world go t it wrong. Yes, India’s grow th rate has slumped down to a 5-­year low of 5.7%, thwarting down expectations o f a 6.5-­6.9 % range GDP, given that the same for the preceding th ree months had amounted to 6 .1%. The Growth rate has been substantially falling since Q2 of FY17 for three quarters up to now and this is what is turning ou t to be a growing concern not only for the e conomy but for the units or industries tha t had been performing poorly already.

So, what has caused this consistent reduction in the g rowth rate? Which sectors are a ffecting the GD P negatively?

And finally, what can be predicted (it seems to be a taboo now) further?

The general inference fro m this debacle is that bo th fiscal and monetary policies are to be blamed. When it comes to fiscal policies, it is but ob vious that Demonetization and GST have played their parts in pro viding a shock to the economy, by slowing down production in varying industries. Both have led to corporates and factory workers laying-­off employees as a modicum of co st-­cu tting, or adapting to stock requirements – catering to an e xpecta tion of lesser demand for products. In ca se o f monetary policy, the conservative a ttitude o f the RBI, in cutting interest ra tes, controlled the rise in investment demand a s well as led to demand led economic activity. So here is a deeper look into the various factors that might have led to this slump – The Goods and Services Tax – The uncertainty related to the rollout of the GST, led to a heavy disruption across major sectors in the economy. It led to manufacturing units, cutting their production as a measure to cater for uncertain demand. This not only perpetuated the slowdown in economic activity after demone tization, but is likely to add to the woes o f unskilled labourers who worked in labour intensive industries.

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Export Le d Growth – The Government’s ambition of an export led growth has not materialized. In fact, given the shock that has been actuated to small and medium scale businesses, the grow th in export activity has decelerated significantly – so much so that merchandise e xport grow th has reduced to 3.9% , the lowest in eight months. Hence, export led growth is N OT a ‘thing.’

Corporate Ba lance Sheets – The Gross Value added by manufacturing sector has been extre mely poor. It fell to 1 .2% as opposed to 10 .47% in the last fiscal quarter. The companies con tributing the most to the manufacturing sector grow th are technically fro m the corporate sector, and a fall in demand has led to the company balance shee ts no t faring well. If the co rporate sector is suffering, it would not be hard to infer that the whole manufacturing sector is decelerating.

Lay-­offs -­ Rampan t layoffs in corpora te firms, is a resul t of the poor demand , due to shortage o f liquidity in the market. This has led to a loss in business for corporates who have no option but to lay-­ off e mployees to curb their operating costs. This in turn is leading to a further reduction in growth activity.

Conservative Monetary Policy – The conservative decisions taken by the Monetary Policy Co mmittee related to interest rates have affected economic activity immensely. The failure to keep inflation within the e xpected band o f 4-­6% has led the rupee to appreciate against the dollar. This has also caused

Liquidity – Despite ha ving excess liquidity in the economy, there ha s not been much economic activity to support the growth.

Although private consumption is a t a reasonable position, it has been falling for two quarters straight. This is a worrisome.

The Ec onom ic Survey -­ The second volume of the Economic Survey released earlier this month said a ra ft of deflationary impulses is weighing on the economy, which is likely to miss the 7.5% upper band of its fore cast growth range this year. The first volume of the Economic Survey released in January had projected growth in the range of 6.75-­7.5% in 2017-­18 against 7.1% in 2016-­17.

The Numbers Survey of econo mist had seen growth picking up by 6 .6% in the June quarter GDP grew 6 .1% in the p receding 3 months. Finance minister said it is a matter o f concern tha t GDP grow th in the first quarter has slipped its shows a challenge for the economy in the co ming quarters. We require both in terms of policy and investment, to work more to improve upon the figures.

Yes, i t can be thought tha t rising cost of intermediate goods and inventory drawdown in anticipation of GST implementation, the manufacturing growth falling sharply below. It was expected to be a revival in II and III quarters of manu facturers and normalise their positions. The grow th in GVA at constant prices for the June quarte r has been disappointing coming down to 41

5.6% year-­on-­year the sa me rate as in the March quarter but it's worse than it looks because the base e ffect should have boosted growth in the June quarter.

In the quarter, the 5.6% growth wa s on the top o f 8 .65% growth in the year ago quarter whereas 5 .6% growth in the June quarter is on the top of 7.6% growth in the same quarter year ago. Here i t is also to be noted that valuable or expenditure on gold and jewellery con tribute it as mu ch as 42.2% to the growth of June quarter.

Here it is to be also noted tha t growth in the industry ha s fallen shortly fro m 5.5% in March quarter to 1 .47% in the June water the lowest of 5 years services growth on the o ther hand has been 7.8% as compared to 5 .7 in March quarter.

Talking about the manufacturing industries' fall in growth was that the production in the quarter had been slowed down while as the sales was made to the customers fro m the p re holded stock itself.

The Road Ahead But it is definitely to be added tha t this time around the base itself was low, given the fact that the grow th ra te for the previous quarter wa s 6.1% and therefo re the growth should have been higher than usual.

This has to be the most quintessential point to be taken under consideration. Therefo re the situation in the economy is p retty gri m and despi te being a te mporal phenomena, Trends in factory outpu t and capital goods point towards a fundamental loss in momentum.

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NOTES

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FINANCIAL TRIVIA The notion that "too big to fail" institutions can fail too, became evident in the 2008 Global Financial Crisis. But, these mega-­banks have not just survived the crisis but are still the top players globally, accounting to two-­ thirds of the banking industry. They have $9.6 trillion in assets, up 37% from five years ago. As Clinton-­era Secretary of Labor Robert Reich puts it, “They are still too big to fail, too big to jail, and too big to manage well”.

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