Conflict of interest led to Cyrus Mistry removal: Ratan Tata
Poor governance and a tendency to concentrate control were other reasons, he says
•The October ouster of Cyrus Pallonji Mistry from his post as executive chairman of Tata Sons Ltd. was the denouement of a series of issues that included “conflicts of interest,” “poor governance” and a “tendency to concentrate control” of the Tata group companies, according to Ratan N. Tata.
•“Mr. Mistry accused me of wanting to come back,” Mr. Tata, the 79-year-old chairman of the Tata Trusts and Mr. Mistry’s predecessor at the group’s helm, said in an exclusive interaction with The Hindu, his first with a journalist on the issue.
•“Nothing could be further from the truth.”
Unease built up
•Piecing together information gleaned from documents that include e-mails between Mr. Tata and Mr. Mistry and conversations with senior group executives, who did not wish to be identified as the matter is in court, it emerges that the Trusts’ unease with Mr. Mistry’s management of the group had been building up over time.
•While friction within the Tata Sons board, and between the Trusts and Mr. Mistry, started intensifying in 2014-15, as the Tata Sons board believed it was being ignored in decision-making, things came to a head in 2016.
•Tata Power’s June 2016 acquisition of Welspun Energy’s renewable assets is believed to be one of the main bones of contention in the Mistry-Tata standoff, with questions remaining over the extent to which the boards of both Tata Power, and more importantly that of Tata Sons, were in the loop and supportive of the decision.
•The flashpoint was Mr. Mistry’s decision to acquire Welspun Renewables Energy at a price of ₹9,500 crore, which a group veteran said was presented as a fait accompli to the board, after the decision had been taken.
•“That was the point in time we got to believe that he had a tendency to do things on his own against the earlier practice of collective decision making,” said the group veteran.
•While all important decisions, particularly those that involved acquisitions or fund raising, were earlier always discussed and approved by the Trusts’ representatives on the Tata Sons board, the Tata Trusts — the majority shareholders in the steel-to-software conglomerate’s holding company — now found themselves marginalised.
•Always polite to a fault in their written communications with each other (the senior Mr. Tata always addressing Mr. Mistry as “Dear Cyrus” and Mr. Mistry unfailingly starting with “Dear Sir” and closing with “warm regards”), the growing tensions and widening gap in perspectives on a range of issues between the two was clearly apparent.
•The issue of governance was another key flashpoint. Having agreed to dissociate himself from his family’s construction businesses — Mr. Mistry is the younger son of Pallonji Mistry of the Shapoorji Pallonji group — when he assumed office, Mr. Mistry is said to have reneged on that commitment by awarding contracts valued at about ₹2,000 crore to the group’s SP Corporation, till date; a clear conflict of interest.
•Among the group companies that contracted large projects to SP Corp. were Tata Consultancy Services and Tata Motors.
Conflict of interest
•After Mr. Tata repeatedly flagged this concern in several communications, Mr. Mistry wrote in October 2013 to the group’s companies, “to avoid any perception of a potential conflict of interest, I believe that, as long as I am the Executive Chairman of Tata Sons, it would be appropriate that the Tata group of companies no longer engage with the Shapoorji Pallonji group of companies for any engineering and construction contracts.”
•However, the issue lingered on as another point of contention between the two men as they continued to exchange communications on it.
•Mr. Mistry also appears to have not fulfilled the requirement of a five-year strategic plan and a one-year operating plan for Tata Sons. Mr. Mistry’s own Vision 2025 plan, which ‘proclaimed’ Tata Sons would become the 25th most preferred group company in the world by 2025, “contained nothing specific,” according to Mr. Tata. “It was a travesty,” said Mr. Tata.
•The Tata Trusts and Mr. Tata were also disconcerted by Mr. Mistry’s approach to fees and commissions for directors on the boards of the group’s operating companies, as well as a departure from long-running tradition of elevating senior group executives to the Tata Sons’ board.
•For instance, some of the group’s companies paid as much as about ₹1.3 crore to their directors by way of annual fees and commissions, and this at a time when they were posting losses and withholding dividends to shareholders.
•Also, at the time of Mr. Mistry’s exit, Tata Sons had only one other group executive on its board — Ishaat Hussain who was Director, Finance, Tata Sons.
•This was after Mr. Mistry, who assumed office in December 2012, had chosen to let board vacancies created by the retirement of as many as four former Tata group executives remain unfilled.
•Still, the Trusts withheld their counsel, in order to allow the incumbent group chairman the freedom to operate.
•“It’s absolutely untrue that the Trusts were interfering with the functioning of Tata Sons and operating companies”, said Mr. Tata.
•But on October 24, 2016, the Tata Trusts and Mr. Tata appeared to have decided it was time to call time on the long-running feud. The outcome — Mr. Mistry’s much-debated ouster.
On terror funding trail, NIA conducts raids on separatists
Cash, letterheads of banned terrorist organisations seized during searches.
•The National Investigation Agency (NIA) on Saturday conducted searches at 26 locations in Kashmir, Haryana and Delhi in a case relating to funding of terrorist activities by Pakistan-based terror outfits.
•In the raids, which started around 6 a.m, at least four NIA teams, along with police and CRPF personnel, fanned out across Srinagar and raided 14 premises of separatists and businessmen. Seven senior separatist leaders were questioned.
•An NIA spokesperson said the Preliminary Enquiry (PE) was converted to an FIR on Saturday. “Had there been no FIR, the searches would not have been possible,” he said. “During the raids, NIA recovered ₹1.15 crore in cash, property-related documents, letterheads of banned terrorist organisations — Lashkar-e-Toiba and Hizbul Mujahideen — pen drives, laptops and incriminating documents. Fresh locations revealed during the questioning of inmates will also be searched,” the spokesperson said.
•The bank accounts and lockers revealed during the course of investigation have been ordered to be frozen, the spokesperson said. The concerned persons have been summoned for questioning and further investigation will continue, it said
•"The subject matter of investigation is to probe the entire chain of players behind financing of terrorist activities including pelting of stones on security forces, burning of schools, damaging government establishments, etc. Cash amount worth a few crores, gold jewellery, coins worth about ₹40 lakh, large number of property related documents have been seized from the financiers, hawala operators, office bearers of separatist groups," NIA said in a statement.
•The NIA team sealed off the Qamarwari residence of Hurriyat chairman Syed Ali Geelani’s son-in-law Altaf Shah. Sources said he was questioned about his bank and property details. Electronic gadgets were also screened.
•Another Geelani confidante Mehraj Kalwal, district president of Tehreek-e-Hurriyat, was also questioned at his Srinagar residence.
•Hurriyat faction chairman Mirwaiz Umar Farooq’s spokesman Aftab Ahmad alias Shahid-ul-Islam was detained for several hours at his Sanat Nagar residence. According to sources, money was recovered during searches at the residence.
•Another leader of Mirwaiz’ Hurriyat faction, Zafar Akbar Bhat, was also faced questions from an NIA team.
•Residences of three other separatist leaders — Nayeem Ahmad Khan, Javaid Gazi Baba and Farooq Ahmad Dar alias Bitta Karate — were also raided.
•These separatists figured in a sting operation carried by a TV channel recently, in which they admitted to having received funds from Pakistan and Lashkar-e-Taiba (LeT) to continue unrest in the Kashmir valley.
•The NIA also carried out simultaneous raids on residences of four businessmen, including Zahoor Watali, brother of former inspector general of police Ali Muhammad Watali.
India, France to join hands on Paris pact
Leaders of the two countries also vow to unite to boost maritime security and fight against terrorism.
•India and France on Saturday vowed to work together for the implementation of the landmark Paris climate agreement and fight the challenge posed by terrorism, as Prime Minister Narendra Modi met newly elected French President Emmanuel Macron here.
•Mr. Modi said India was committed to “go above and beyond” the Paris deal to protect climate for future generations as he termed the U.N.-brokered agreement a shared legacy of the world, a day after U.S. President Donald Trump walked out of the accord. After holding two hours of wide-ranging talks with Mr. Macron at the presidential Elysee Palace here, Mr. Modi said the Paris climate deal reflects “our duty towards protecting the mother Earth and our natural resources. For us, this (protection of environment) is an article of faith.”
Shared legacy
•“Paris climate agreement is a shared legacy of the world. It will benefit the future generations as well,” Mr. Modi said addressing a joint press event with Mr. Macron.
•Describing the city of Paris as an important part of his political journey, the Prime Minister said India and France had worked shoulder-to-shoulder for this agreement.
•On his part, Mr. Macron said he wants to restate France’s full commitment to the fight against climate warming.
•The two leaders voiced concern over the growing threat of terrorism worldwide. “Terrorism is one of the biggest challenges the world is facing today,” Mr. Modi said.
•“We cannot see the danger of climate change but we can see the horrific effects of terrorism, we can feel it. Innocent people, women, children lose their lives to terror. Every child in France knows the face of terror,” Mr. Modi said, referring to a series of terror attacks that rocked France in recent years.
•Mr. Macron said, “We are committed to work together in defence cooperation, maritime security and fighting terrorism on the Internet. France will stand by India in the fight against terrorism.”
•Mr. Modi invited the French president to visit India. Mr. Macron said he would visit New Delhi by the end of the year for an international summit on solar power.
Pushing the boundaries
As India and Pakistan face off, some questions about the cricket calendar
•Most of us in South Asia, even the occasional cricket watchers, set a calendar alert for the next India-Pakistan match. And today’s match between the two teams in Birmingham is bound to be particularly charged — expectedly so, given how cricketing ties between the two countries are so dismal that an India-Pakistan encounter is a rare thing. This lazy Sunday is bound to be given over to the match, the English weather permitting.
•Yet, such meetings of the two teams only in multilateral tournaments, such as the rather pointless ICC Champions Trophy currently in progress, cannot be good for the sport. To amount to something more than wholly partisan account-keeping of the final result, fixtures between the keenest rivals in team sport need to be embedded in a larger narrative — such that cricket in its normal calendar allows, with bilateral Test tours, the odd tri-series, the rare friendship match setting up individual sub-plots (such as the Sachin Tendulkar-Shoaib Akhtar competitiveness), imbuing nuance (a record of relative strengths in different formats and conditions putting each victory/loss in perspective) and reminding the viewer of context. Else, for the hysterically loyal fan as well as the may-the-best-team-win purist, these sporadic fixtures would amount to just point-scoring between teams (or rather, their fans), nothing more.
On whose side?
•What a cricket match between India and Pakistan means in the time of suspended bilateral tours is a complex question, but it’s useful to be guided along in some aspects, obliquely, by a new book, Knowing the Score: How Sport Teaches Us About Philosophy (And Philosophy About Sport) by David Papineau, a professor of, no prize for guessing, philosophy. He inquires into questions such as “what makes someone a fan, beyond appreciating the objective merits of a team?” Every thoughtful, long-term cricket fan tries to work out an answer to that, and there’s no set progression.
•One way of doing so, suggests the book, is to take notice of the presence of teams in the fray in different sports that inspire a following that is not confined to their geographical/national boundaries. They pull us out of partisan selves, so that we become partisans of the sport, not its teams.
•For long, that team has been the West Indies for cricket. For the longest time — especially from the seventies to the mid-nineties — to beat the team was to announce one’s claim to a place in the sun. But the West Indies, before that dominance and now even after its decline, pulled spectators out of their corners, it forced them to appreciate cricket’s social history, its anti-colonial subtext and its capacity to be enriched by newer influences on and off the field.
•To truly enjoy a game of cricket, you needed to be aware also of how it was watched in the stands in Kingston, Port of Spain, Bridgetown, and other iconic venues in the Caribbean. You needed to know the game, and equally you needed to be awash in the spirit of the game.
•It is, of course, the case, as Papineau points out, that the “sporting country” of the West Indies isn’t “a real country”. And even as the islands (as well as Guyana) increasingly turn to other sports such as football and basketball, and lose aspiring cricketers such as Usain Bolt to track and field, and even as the West Indies struggles to keep up with other teams (it’s not even in the fray in the Champions Trophy this year), Papineau says it matters little: “…the future will not undo cricket’s role in creating a post-colonial identity for Anglophone West Indians.” It’s part of a vivid chapter in the book about “national teams that demand loyalty to countries that don’t appear on the official map of nations”. Hong Kong sends a separate team to the Olympics; in most sports Ireland teams include the north and south of the island (that is, the Republic of Ireland and Northern Ireland); it’s England and Wales Cricket Board, but “the team itself is ‘England’”; and Scotland has its own cricket and football teams. (Interesting fact: “The annual Scotland-England [football] match was one of the great sporting fixtures, until it was discontinued in 1989 because of the fans’ excesses.”)
•In this context, Papineau points to the American exception: “When it comes to international sporting competition, it is almost invisible.” This relative lack of enthusiasm for team sports on the international stage, compared to national leagues, requires its own sociological study, but in a week when the U.S. pulled out of the Paris climate pact, Papineau’s words have particular resonance: “Exceptionalism on the sports field encourages exceptionalism off it. A country that shies away from international sport can be tempted to stop thinking of itself as one nation among other.”
•Food for thought as we wonder, this weekend, why exactly India and Pakistan don’t play each other more often, and as we work out how bilateral cricket has over the decades enriched more than just the game.
Cryptocurrency: An idea whose time has come
China, South Korea and Japan have adopted use of bitcoins with regulations. India can either follow its Asian counterparts or drive the whole enterprise underground
•A spectre is haunting global capitalism: the spectre of cryptocurrencies. Three distinct forces of our modern age have come together to breathe life into this strange and wondrous monetary artifice. One, the rise of computational power that allows algorithms to programmatically issue currencies; two, a distrust towards governments that can idiosyncratically debase currency or even demonetise at will; and three, a scarcity of safe assets to store wealth over the long term. The birth of the first cryptocurrency — bitcoin — was announced to the world in 2008 by still unidentified inventor(s) who goes by the name ‘Satoshi Nakamoto’.
•If you have never heard of bitcoin or cryptocurrencies, one way to think of it is as tokens sold by temples — for special rituals or prasadam — in exchange for cash. These temple tokens, typically, can only be used within the premises. They are often exchangeable between individuals without the permission of any supervening authority. And if you lose the token or forget to use it, it is as good as losing money. This analogy is useful, but it can only go so far. Unlike tokens in a temple which are controlled by authorities, cryptocurrencies are generated by a network of computers that run a software called ‘blockchain’.
•Most networks — be it, businesses or families — rely on trust to build consensus. What happens to consensus formation if there is no trust in families or businesses?
•A network that uses ‘blockchain’ transcends this requirement of trust among members to form consensus. It is does this by relying on two fundamental ideas: the near-impossibility of reverse engineering a mathematical algorithm (‘SHA-256 hash function’) and human self-interest. In a blockchain (think of units of information arranged as separate blocks which are concatenated to form a chain), when a new piece of information arrives, it is appended to a previous block to create a new block. This new block is arranged in a specific architecture (‘the Merkle tree’) and the ‘header’ of this new block is passed through the hash function. This function spits out transformed output. We check if this output has specific preset properties. If not, then the block header is incremented by a random number (‘nonce’) and this new set is passed through the hash function again.
•Finally, after many trials, when we find the appropriate nonce, the ‘miner’ announces this random number to the rest of his peers in the Bitcoin network. They check using this nonce if adding this information produces an output with specific properties, including an untampered old block. If verified, then this new block is deemed valid. The new public ledger with updated information is now deemed as the new consensus. Thus we have a cleverly-engineered consensus via a system that doesn’t rely on trust but rather on a ‘proof of work’.
Known unknowns
•A natural question: why would anyone bother to mine for this random number? This is the part of the system that relies on human self-interest. For every verified number that is ‘mined’, the Bitcoin network allocates 12.5 bitcoins [~ $30,000] to the miner. When more people (as of 2015, nearly 1,00,000 merchants) accept bitcoin or other cryptocurrencies for goods and services, their value increases.
•The real, and perhaps unanswerable, question is what is their true value— i.e. how many rupees is any given cryptocurrency worth? The real answer is: no one knows. Unlike fiat currencies, whose long-term relative values are driven by differentials in purchasing power, we do not have a good understanding of what determines the long-term relative value of these cryptocurrencies. But this has not stopped investors from betting on the increased acceptance of various versions of blockchain technology and its currency units.
•Since 2014, the American tax authorities have treated cryptocurrencies as ‘property’ subject to appropriate capital gains tax rate. On April 1 this year, Japan deemed bitcoin as a legitimate payment method; on July 1, Australia will follow suit. Chinese authorities have aggressively stepped in, when needed, to ensure cryptocurrency exchanges function well.
•However, over the past seven years, successive Indian governments have ignored cryptocurrencies. Finally, on April 12 this year, the Indian government constituted an inter-disciplinary committee to study regulatory frameworks for cryptocurrencies. It has sought public comments. However, prominent voices like the BJP parliamentarian Kirit Somaiyya have called for an outright ban citing some understandable (what happens to the monopoly of rupee in India as medium of exchange?) and many absurd fears (drugs, money laundering, Ponzi schemes).
•What the Indian government ought to do instead is follow, learn, and innovate based on what China, South Korea, and Japan have done: enshrine minimum capital requirements, force segregation of customer accounts, and make potential criminal activity difficult. The Indian state can either help structure the growth of cryptocurrencies or drive the whole enterprise underground beyond its control. As a wise Finance Minister, quoting Victor Hugo, said during his 1991 budget speech: “no power on earth can stop an idea whose time has come”.
When a peasant revolts
The state needs to find holistic solutions to India’s chronic agrarian distress
•It didn’t last long enough to turn public attention away from more weighty matters like cattle trade and peacock tears, but nevertheless, the two-day ‘strike’ by farmers in Maharashtra ought to have politicians and policymakers worried everywhere. That is because when the Indian farmer decides to take collective action, there is really no way to counter it.
•Chaudhary Charan Singh demonstrated this way back in 1978. His ‘kisan rally’ remains the largest gathering witnessed in Delhi’s Boat Club lawns to date. It was an awesome display of political power which propelled him — howsoever briefly — into the Prime Minister’s office.
•Mahendra Singh Tikait demonstrated it again a decade later at the same venue. Half a million farmers squatting on the lawns off Rajpath soon brought the Rajiv Gandhi government to its knees, which accepted Tikait’s long charter of demands, ranging from higher price for sugar cane to waiving of electricity dues.
•More recently, the Jats of Haryana once again demonstrated the might of farmer power, seeking ‘Backward Class’ status — and associated reservations in jobs and education — for themselves by coming out into the streets.
•So, it is hardly surprising that the Devendra Fadnavis government had to cave in, in a span of just two days. With fruit and vegetable prices soaring 50% and faced with an imminent milk shortage, the Fadnavis administration bought peace by agreeing to waive the loans of “small and marginal” farmers — nearly 80% of the State’s 13.7 million-strong farmer population — as well as waiving interest and penalty on pending power bills.
•The government also agreed to hike the procurement price of milk — though perhaps not to the ₹50 per litre farmers demanded — and promised to bring in legislation to make procurement of agricultural produce at prices below the Minimum Support Price (MSP) a criminal offence. It also agreed to set up a State-level commission on agricultural costs and prices.
•Of course, the ruling party has accused middlemen of machinations to jack up prices (quite true) as well as the Shiv Sena and the Nationalist Congress Party of political shenanigans (also quite true), but that shouldn’t distract us from the real takeaways from this episode.
•The first one is this: when the Indian farmer is roused enough to march on the streets, it is almost impossible for any government to counter it. That is what 65% of the population means. Faced with large-scale farmer protests, Rajiv Gandhi’s Congress caved; the Janata Party caved; the UPA caved and, now, the BJP has caved in — in Haryana and Maharashtra.
•The second is this: unless the powers that be stop merely paying lip service to agrarian distress and actually double down efforts to find meaningful solutions, we are looking at potentially much larger, much more impactful uprisings in times to come.
A distorted subsidy regime
•It is paradoxical that agrarian distress has risen even as agricultural output has grown. There are many reasons for this. At the core is a distorted subsidy regime which has pushed cereals in favour of oilseeds and pulses, and water or input-intensive cash crops like sugar cane or cotton in areas which are agro-climatically not suited for them. On the other hand, with rising incomes, education levels and prosperity, the nature of food demand has also changed. India’s per capita cereal demand, as Credit Suisse’s Neelkanth Mishra pointed out in a recent article, has been declining by 1% a year for the last 30 years. This means that domestic demand for cereals isn’t growing any more — while output, even in bad monsoon years, has risen.
•Farmers continue to grow cereals, tempted by rising MSPs. Procurement, faced with growing grain mountains and tightening of subsidies, has reduced, except in traditionally strong agri-markets like Punjab, Haryana and Madhya Pradesh.
•This forces distress sales at below MSPs, as was also seen in the case of toor dal this year. Last year’s record price surge forced the government to announce higher MSPs and incentives. However, an immediate and overwhelming response from the farmers found it unable to actually procure at the promised support price, leading to distress sales, and a continuing cycle of rising agricultural debt and unpaid bills.
•In Maharashtra, for instance, one of the subsidiary demands was to stop ‘harassment’ by microfinance companies, which leads me think that another Andhra Pradesh-type crisis may well be brewing there.
•This in turn triggers demands for loan waivers and other write-offs. Yogi Adityanath set the ball rolling with a loan waiver in Uttar Pradesh — now the demand is spreading. Tamil Nadu farmers, despite a high-profile demonstration in Delhi and a half-hearted strike, have not managed to get one yet, but that is only because they haven’t yet found a forum — or a leader — they can rally behind. If Tamil Nadu finds a Tikait, the tale would unfold quite differently.
•The point is, given the manifest shortcomings in execution capability, and the limits on capacity, state intervention — of the type which Fadnavis and the Yogi have preferred — can never really solve the problem. There isn’t enough capacity and there isn’t enough money.
•What needs to be done instead is to find holistic solutions — actual, rather than theoretical access to credit, lifting of market access controls, better rural infrastructure, affordable and reliable power supply and a crackdown on middlemen. Otherwise, it may not be milk that flows down the streets the next time around.
The modern-day ‘no stroll zones’
‘Normal’ walking in Indian cities is now confined to those who have no choice but to be pedestrians
•Sometimes a change of location throws up some stark realisations. Things that have been staring you in the face that you hadn’t fully articulated suddenly become clear, or, if you’d forgotten them, become clear yet again. For instance, I move between India and the U.K. most years because of work and family reasons and there is a pattern that repeats itself as I make the transition from Calcutta or Delhi to London.
Walking the walk
•One of the first changes involves my creaking bones having to wake up and deal with the fact that this vilayat is a place where they need to propel me from point to point, i.e. make me walk. In India, I live in cities and it is rare for me to walk from one point to another; conversely, in London it is rare for me to find myself in a taxi or what we in India call a ‘private car’. This results in a kind of osteo-schizoid condition that is both painful (to me) and hilarious (to spectators, aka family and friends).
•As a child growing up in Calcutta, I have memories of doing a lot of walking. We lived in an underdeveloped enclave in south Calcutta. In order to get to the city proper, to catch the school bus or the public buses, one had to walk. In south Calcutta generally, between the Avenues of Rashbehari and Southern, between the Parks of Gol and Jodhpur, you could walk. Visiting Bombay, you walked around the Fort area and, of course, on Marine Drive or Chowpatty; sometimes you were driven all the way to the wilds of Juhu, to walk on the beach there. Ahmedabad, another of my childhood cities, involved a lot of walking, some of it on hot sand, some of it on ancient stone in the old ‘pols’.
•The south Delhi of the late ‘60s was a wasteland and needed motorised transport, but I imagined you could walk if you needed to because where’s the problem in walking on a flat expanse of dirt?
•Returning to London, it hits me again that the walking areas in all these desi cities have shrunk radically. In fact, in all these towns you have to take some form of motorised transport to reach an area reserved specifically for perambulation because ‘normal’ walking is now confined to those who have no choice but to be pedestrians. So, while south Calcutta still retains what one might call ‘walkability’, the area around where I live (central-south) is impossible to traverse on foot with any ease or pleasure. The sidewalks are occupied by food stalls, the bits that aren’t are constantly dug up, the bits still remaining have the constant dripping from the overhanging air conditioners.
•The pedestrian has no choice but to walk on the road, which is dangerous because, with typical sadistic perversity, Calcutta’s drivers think the asphalt — all of it — belongs to them.
Anti-pedestrian cities
•If anything, large tracts of Delhi are worse. In no other city have I seen pavements specifically designed to be anti-pedestrian. I don’t know how succeeding governments justify the mini-canyons at every bungalow entrance in the Lutyens area.
•As you walk down these roads, you are constantly stepping down and up about a foot at every gate. Around the really large government haciendas, you get to walk about 30 undisturbed feet between the steep steps; around the smaller bungalows, the distance shortens. Around the Capital’s flyovers and major crossings, the biped is really shown his place — ‘do not dare to cross here or you will die’ seems to be the message, so, even in the blowing loo, you end up walking an extra kilometre or more to be able to cross a road safely.
•No matter which metro or sub-metro in India, besides the traffic and the bad pavements, the other factor is the pollution. To walk briskly or slowly is to fill your lungs with oxygen. This fresh air powers your stride, lightens your bones, puts a spring in your step. Or, in the case or Ahmedabad or Agra, Bombay or Bhubaneshwar, Calcutta or Calicut, Delhi or Dinajpur, not. Coming to London and walking under the glorious canopy of the newly green trees, you can’t help but feel, perhaps not completely fairly, that among the things that Empire stole were also our fresh air and our promenading areas. Then you realise that no, this is one bit of damage we have caused entirely by ourselves. In any case, pushing your bones out of their half-year sedation, you realise what a luxury it is, to be able to complain about needing to walk so much even as you crave the activity while waking up every morning.
FB seeks India payment system patent
Move comes at a time when the U.S. firm is looking to unveil its e-payments service in the country
•Facebook has sought an Indian patent for its electronic payment system enabled through messaging.
•The firm has already filed for the patent at the Chennai Patent Office.
•The move comes at a time when Facebook is looking to unveil its electronic payment service in India. It has already filed for patent for the system in the U.S., which is pending approval.
•“The present disclosure relates to systems methods and devices that provide a transactional payment system. In particular, the transactional payment system allows users of messaging systems to send and receive electronic payments to and from other users of the messaging system,” Facebook said in its application for the patent.
•A messaging application on a client device could receive payment information input (such as a payment amount and payment method) from a sender for making a payment to a recipient, it said.
•“The messaging application can send a payment message, including the payment information, to a messaging system and the messaging system co-ordinates a payment process based on the payment information,” Facebook said in its disclosure.
Status updates
•During the payment process, the messaging system could provide status updates to the sender and receiver of the payment via status messages that were included in a message thread corresponding to the sender and the recipient, it added.
•Facebook was not available for comment.
•Facebook-owned mobile messaging app WhatsApp aparently is preparing to enter India’s booming digital payments industry. A post on its website in April invited applications for role of “Digital Transactions Lead, India.”
•“The patent application envisages peer-to-peer payment between users of a messaging application such as WhatsApp. A patent grant to Facebook will enable WhatsApp to monopolise key aspects of the technology that enables peer-to-peer payments using messaging application,” Kartik Puttaiah, InvnTree IP Services, said.
•The patent application and WhatsApp digital payment initiative might be the first big bet by Facebook to directly generate revenue from the messaging app since its acquisition, he added.
•Prashant Reddy, a research associate at School of Law, Singapore Management University, said that the law on software patents was yet to be settled in India. Mr. Reddy said he would not get too excited over Facebook’s patent filing.
•He pointed out that there were as many as 16 published pending patent applications filed by a slew of firms such as Mastercard, Huwaei, among others. There wasn’t a single Indian company, however, he added. “Hopefully, the Patent Office will deliver well reasoned decisions on these applications,” he said.
•“Indian Patent Office has received multiple patent applications in this domain due to evolution of digital banking. Even if such patents are granted, it is really difficult to enforce them via court of law considering the dynamic nature of mobile applications and digital banking tools,” Rahul Dev, partner, TechCorp Legal, said.
New GST rate of 3% for gold, diamonds
Rates finalised for all products.
•The Goods and Services Tax Council on Saturday finalised the rates on all the remaining products, including gold, footwear, textiles, agricultural implements, biscuits, and beedis. The Council also cleared the rules regarding return filing, and transitional provisions.
•Union Finance, Defence and Corporate Affairs Minister Arun Jaitley, while briefing the media following the conclusion of the one-day meeting, said gold, silver, and diamonds would be placed in a new rate category of 3% while rough diamonds would attract a nominal rate of 0.25%.
•Biscuits, currently taxed at a combined State and central tax rate of 20-23%, have been placed in the 18% GST rate category.
•The Finance Minister said there was consensus among all the ministers on rolling out the indirect tax regime on July 1, and added that the Council would meet again on June 11 to discuss the remaining rules.
•The existing four categories of footwear on which different rates of tax applied have been simplified into two categories, those costing below ₹500 and those costing above this amount. They will be taxed at 5% and 18%, respectively.
•Within textiles, silk and jute yarn have been placed in the exempt category, while cotton and other natural fibre will be taxed at 5%. Man made yarn will attract a rate of 18% while natural yarn will be taxed at 5%. All fabric will be taxed at 5%. Apparels and made-ups priced below ₹1,000 will be taxed at 5% and those above ₹1,000 will be taxed at 12%.
•Beedi leaves, currently taxed at anywhere between 5% and 28%, depending on the State, will be taxed at 18%. Beedis will be taxed at 28%, with no additional cess being levied. Agricultural implements will be taxed at 5%.
•“There was almost a vertical division in the Council regarding the tax treatment of gold, with half wanting 2% and the other half wanting 5%,” Mr Jaitley said. “So, it was decided to tax it at 3%.” The creation of a new tax slab could, however, create problems for the GST Council as it will encourage other sectors to make demands for a similar treatment, according to experts.
India is third in best-value fares
Loses top slot; average price rises 53% from $3.25 in 2016 for travel of 100 km
•India dropped to a third position from its top slot on offers for the best-valued air ticket prices on its domestic and international routes worldwide, as airfares soared in 2017, a recent study by Kiwi.com showed.
•The survey said India’s average flight cost for travel of 100 km rose from $3.25 in 2016 to $4.96 in 2017.
•India ranked third in best-valued air ticket prices in 2017 — a fall by two rungs from number one a year earlier, Kiwi.com’s 2017 Flight Price Index said.
•Malaysia, with airfares at $4.18 for 100 km travel and Bulgaria ($4.65) preceded India. Online portal Kiwi.com conducted a research of short-haul and long-haul flights from 80 of the world’s most frequently visited countries and cities, calculating an average ticket cost per 100 km of travel, using high and low season flight costs for over a million journeys.
•However, India’s full-service carriers offered the cheapest airfares at $4.25 (2.67 per 100 km travel.
•India’s average fares on low-cost domestic flights rose from $2.27 to $3.88.Average international fares on low-cost flights rose from $3.54 to $5.81 and on full-service carriers from $4.51 to $6.51 per 100 km travel.
•“Ticket prices fluctuate constantly for a myriad of reasons,” said Kiwi.com CEO Oliver Dlouhý. “Year on year changes can partly be attributed to fuel prices, sociopolitical shifts such as Brexit, recent elections and fluctuations in foreign exchange rates,” he said.
Oracle steps on cloud Accelerator to woo start-ups
Technology major eyes benefits of riding on start-up wave
•Oracle, one of the world’s biggest technology companies, is betting big to engage with innovative start-ups in India. From sourcing ideas to influencing direction of new product development start-ups are becoming important for Oracle to plug into the ecosystem to fine-tune its future strategies and outstrip rivals.
•“So [as is] typical, Larry Ellison (Oracle co-founder) wants to make sure we are benefiting from being enormous and yet also benefiting from the opportunities of start-ups,” said Oracle chief executive Safra Catz in response to a question from The Hindu during her recent visit to the country.
•Though Oracle had unveiled a $100 million venture capital fund almost two decades ago, it has chosen a different strategy this time to engage with start-ups. Instead of investing capital, the company, with more than $37 billion in annual revenue, is offering a mix of advice and access to technology to young ventures through its Startup Cloud Accelerator Programme.
•We want to nurture start-ups on our platform, just like we did in the old world. Most large software companies in the world are based on Oracle,” said Ms. Catz. The Redwood City, California-based firm introduced the accelerator as a pilot programme last April in Bengaluru. It is now opening new centres across the globe in Bristol, Delhi–NCR, Mumbai, Paris, Sao Paulo, Singapore and Tel Aviv.
•Following the expansion of the accelerator in the country, Oracle said that it has nurtured two batches of companies as part of this programme in India. The accelerator provides young ventures with six months of mentorship, technology, co-working space and access to Oracle customers, and venture capitalists.
•“India was the seed for our start-up incubation centres,” said Ms. Catz.
Digital India
•Unlike traditional accelerator programs, the company said that this initiative is driven by Oracle research and development, and has a focus on re-imagining enterprise innovation through true partnership with startups. “This whole initiative is a learning process for them (start-ups) and us,” said Sanket Atal, group vice-president of development, Oracle India. “We also involve Oracle’s global product development teams to identify opportunities where we can foster co-development.”
•For instance, the company said that the Oracle Cloud Platform had been validated to develop applications using India Stack services. India Stack is a set of application program interface (APIs) that allows Governments, businesses, start-ups and developers to utilise a unique digital infrastructure and deliver secure presence-less, paperless, and cashless service delivery. EzeDox, one of the firms which participated in the Oracle Accelerator programme is eyeing this opportunity. It has built a digital locker that facilitates issuance, categorisation and storage of official and personal documents. “Leveraging India Stack through Oracle cloud is the most open, easy and modern way for our developers to take full advantage of this unique digital infrastructure,” said Veerendra Mishra, co-founder of EzeDox.
•Another company, Farebond, which also participated in the accelerator programme, uses data science and predictive analytics to provide an innovative solution to the travel uncertainty problem faced by air travellers.
•It enables undecided travellers to ‘lock-in’ air fares for a period of time so they can peacefully plan their trip. “The Oracle accelerator has empowered us with cutting-edge cloud technology to analyse massive amounts of data,” said Naveen Setia, co-founder of Farebond.
GST
•Oracle, with 38,000 employees in the country, is also pursuing innovation inside the company to tap the unique opportunities in the country. The company recently announced the availability of Oracle enterprise resource planning cloud in India. It would help local and multinational firms operating in the country to prepare for the country’s transformational tax reforms.
