Cabinet clears Rs 6,062 crore World Bank-assisted programme for MSMEs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Union Cabinet on Wednesday approved a World Bank-assisted Rs 6,062 crore funding programme for the small and medium businesses to help improve their access to market and credit.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the Rs 6,062.45 crore or USD 808 million ‘Raising and Accelerating MSM Performance’ (RAMP) for the micro, small and medium enterprises (MSMEs), an official release said.

RAMP will commence in FY23, it said. Of the total outlay under the programme, Rs 3,750 crore (USD 500 million) will come from World Bank loan, and the remaining Rs 2,312.45 crore will be funded by the central government.

RAMP will work under the Ministry of MSME (MoMSME) towards resilience and recovery interventions after the coronavirus disease. “The programme aims at improving access to market and credit, strengthening institutions and governance at the Centre and state, improving Centre-state linkages and partnerships, addressing issues of delayed payments and greening of MSMEs. In addition to building the MoMSME’s capacity at the national level, the RAMP programme will seek to scale up implementation capacity and MSME coverage in states,” the release said.

The government formulated and proposed RAMP for strengthening MSMEs in line with the recommendations of the UK Sinha committee, KV Kamath committee and the Economic Advisory Council of the Prime Minister (EAC-PM). RAMP programme with impacts across the country will directly or indirectly benefit all 6.3 crore enterprises under the MSME category.

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A total of 5,55,000 MSMEs are specifically targeted for enhanced performance. In addition, expansion of target market to include service sectors and increase of about 70,500 women MSMEs is envisaged, the release said. RAMP has identified two result areas after preliminary missions and studies, first is to strengthen institutions and governance of the MSME programme and second is to support market access, firm capabilities and access to finance.

“Funds would flow through RAMP into the ministry’s budget against Disbursement Linked Indicators (DLIs) to support ongoing MoMSME programmes, focusing on improving market access and competitiveness.” The disbursement of funds from the World Bank towards RAMP would be made on fulfilling DLIs such as implementing the national MSME reform agenda, accelerating MSME sector Centre-state collaboration, enhancing effectiveness of Technology Upgradation Scheme (CLCS-TUS). The government said the programme will prepare Strategic Investment Plans (SIPs) in which all the states and Union Territories will be invited.

The SIPs would include an outreach plan for identification and mobilization of MSMEs under RAMP, identify key constraints and gaps, set milestones and project the required budgets for interventions in priority sectors, including renewable energy, rural and non-farm business, wholesale and retail trade, village and cottage industries, women enterprises, among others. The apex national MSME council headed by the minister for MSME will monitor and look after the policy overview of RAMP.

An RAMP programme committee headed by the Secretary of MoMSME will monitor specific deliverables, the government said. For day-to-day implementation, there would be programme management units at the national level and in states, comprising professionals and experts competitively selected from the industry to support MoMSME and states, to implement, monitor and evaluate RAMP programme, the release said.

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PM-led CCS approves procurement of 15 light combat helicopters

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a significant move, the prime minister-led Cabinet Committee on Security (CCS) on Wednesday approved the procurement of 15 indigenously developed Light Combat Helicopters (LCH) at a cost of Rs 3,887 crore. The defence ministry said 10 helicopters will be for the Indian Air Force and five will be for the Indian Army.

“The CCS has approved procurement of 15 Light Combat Helicopter (LCH) Limited Series Production at the cost of Rs 3,887 crore along with infrastructure sanctions worth Rs 377 crore,” it said.

Light Combat Helicopter Limited Series Production (LSP) is an indigenously developed combat helicopter containing around 45 per cent indigenous content by value which will progressively increase to more than 55 percent.

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The state-run Hindustan Aeronautics Ltd (HAL) produces the helicopter. The decision to procure the helicopters came in the midst of the three services focusing extensively on enhancing their overall combat capabilities in view of India facing myriad security challenges including along the borders with China.

The LCH is equipped with requisite agility, manoeuvrability, extended range, high altitude performance and all-weather combat capability to perform a range of roles including combat search and rescue (CSAR), destruction of enemy air defence (DEAD) and counter-insurgency (CI) operations, according to the ministry.

It said the helicopter can also be deployed in high altitude bunker-busting operations, counter-insurgency operations in the jungle and urban environments and for supporting ground forces.

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The helicopter can also be used against slow-moving aircraft and remotely piloted aircraft (RPAs) of adversaries. The ministry said it would be a potent platform to meet the operational requirements of the Indian Air Force and the Indian Army.

“State of the art technologies and systems compatible with stealth features such as reduced visual, aural, radar and IR signatures and crashworthiness features for better survivability have been integrated into the LCH for deployment in combat roles catering to emerging needs for the next three to four decades,” the ministry said in a statement.

“Several key aviation technologies like a glass cockpit and composite airframe structure have been indigenised. The future series-production version will consist of further modern and indigenous systems,” it said.

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The ministry said India is continuously growing in its capability to indigenously design, develop and manufacture advanced cutting edge technologies and systems in the defence sector under the ‘Atmanirbhar Bharat Abhiyaan’.

“The manufacturing of the LCH by the HAL will give a further push to Atmanirbhar Bharat initiative and boost indigenisation of defence production and the defence industry in the country,” it said.

“The production of LCH will reduce import dependence for combat helicopters in the country. Light Combat Helicopters are already in the import embargo list. With its versatile features built-in for combat missions, LCH has the export capability,” the ministry said.

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Twitter India is hiring, to focus on country-specific products: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Twitter is ramping up its hiring in India as it looks to create specific products for Indian users. The social media giant is looking to scale up its teams by hiring members in senior positions across product management, revenue science, design, research and data science verticals, reported The Economic Times.

India is the third-largest audience for Twitter in the world, with 23.6 million users on the platform as of January 2022. While the US and Japan still have a larger user base on the platform — 76.9 million and 58 million, respectively — India’s rapid increase in the number of smartphone users and cheap internet have catapulted it to become one of the largest potential markets for social media platforms.

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“Today there are close to 6 million developers in India. Twitter too has strong aspirations for India, a priority market for us. We are constantly piloting new features and learning from people’s experience on the service. We are available in 11 Indic languages. Infact, almost 50% of tweets in India are now in languages other than English,” said Apurva Dalal, Engineering Site Lead at Twitter India to ET.

The company is planning to develop global solutions for Android-forward markets like India while focusing on particular services that would interest users from India. The company recently announced that it will be launching a cricket tab with the Indian Premier League (IPL) 2022 season warming up.

“Starting this week, the service will be testing a Cricket Tab on its Explore page, rolling out the experiment to some people in India who use Twitter on Android,” the company said in a statement.

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The company had also recently partnered with payment services provider Paytm to allow users to make payments for the platform’s Tips feature. Indian users are now able to use UPI, credit and debit cards, and netbanking along with other options for availing the feature.

“Earlier in January, we also started testing a revamped, more personalized explore page to make it easier for people to unwind, find new interests and see what’s happening. In February, we integrated Paytm as an additional payment provider for Twitter’s Tips feature. With the addition of Paytm as a payment provider, people will be able to make payments using UPI, credit and debit cards, and netbanking, among other options,” said Shirish Andhare, Director and Head of Product at Twitter India.

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Behind all these new features is a rapidly growing team. The company’s tech team has grown by 150 percent in 2021 from 2020, and the company doesn’t look like it will be hitting the brakes on hiring anytime soon.

“Our decentralized model has been core to this growth allowing anyone to work for Twitter from anywhere opening up more opportunities for people at a pan India level. The hires across verticals are a testimony of our commitment to grow our team in India and build a service that is made in India, for Indians. In India, we have teams across all three global engineering lines of business — revenues/ads, consumer and core technology platform teams,” Dalal added to ET.

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At the same time, Twitter’s user base in India has continued to grow. The company stated that monetisable daily active users (mDAU) grew by 74 per cent (year-on-year) in Q4 2020, and its growth in India is part of the process of achieving 315 million mDAU (monetisable daily active users) by Q4 2023 globally.

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Trade setup for March 31: As Nifty50 flirts with 17,500, more upside ahead? Market cues, technical chart signals, key levels to track

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

5G: Parliamentary panel expresses concern over high spectrum price, delay in service rollout

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Expressing concern over high spectrum price, a Parliamentary panel on Wednesday asked the government to pay due attention to the issues raised by telecom operators and take steps for early rollout of 5G services. The Standing Committee on Communications and Information Technology, chaired by Lok Sabha MP Shashi Tharoor, in its report, expressed concern about the 5G rollout delay that will deprive the country of taking advantage of various benefits of 5G when other countries of the world have made noticeable progress in the deployment of the technology.

“It is high time that 5G should be rolled out in India in some specific use cases, however, the Committee do not see any progress in that direction. The committee, therefore, reiterates that the department need to review all their policies relating to 5G so that the country is not left behind in the race for 5G,” the panel said in the report. The panel added that the Telecom Regulatory Authority of India (Trai) should be urged to expedite its recommendations on the 5G spectrum so that the auction can be held at the earliest.

The panel noted that the pricing of the 5G spectrum in the country is exorbitantly high as compared to other countries in the world and that there is a need to review the pricing by taking into account factors such as per capita and ARPU (average revenue per user) in the country. As per December 2021 quarter financial reports, VIL had reported ARPU of Rs 115, Bharti Airtel Rs 163 and Reliance Jio Rs 151.6.

“The committee had recommended the department to look into the issue of high spectrum price and come out with a convincing spectrum pricing policy that is sustainable, affordable and acceptable to all,” the panel report said.

Also read: TRAI Secy says recommendations on 5G spectrum pricing in 7-10 days; work in final stages

Telecom industry body COAI had informed the panel that TRAI had recommended Rs 492 crore per megahertz (MHz) as a reserved price for spectrum in 3300 MHz to 3600 MHz for 5G, which is far higher than the auctioned spectrum price in other countries. The panel was informed that a comparison of unit pricing of the 5G spectrum with other countries indicates that it is seven times costlier than the UK, 14 times costlier than Australia, 35 times costlier than Spain and 70 times costlier than Austria.

Bharti Airtel has informed the panel that the price recommended by TRAI is exorbitantly high and ranges from 3-70 times of the market-determined price of the spectrum in other countries in absolute terms and is 16 times of the price in relative terms.

“The concern of the committee is that price of the spectrum in the country should not become so unsustainable that it may have a long term negative impact on the telecom sector as a whole. Considering the stress in the telecom sector, high spectrum price will have a detrimental effect on TSPs to fully roll out 5G in the country. The Committee reiterate that the concerns of the TSPs with regard to spectrum pricing in the country are given due attention,” the report said.

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The panel also recommended that the concerns raised by COAI for rationalisation of levies and duties in the telecom sector also be given time-bound consideration by the government. COAI had submitted before the panel there is a need for rationalisation of levies and duties in the telecom sector, such as providing soft loans against GST import line credit due to operator, reducing spectrum usage charge by 5 per cent and license fees from 8 to 3 per cent. “The Committee (is) concerned to note that no action has been taken by the Department and TRAI on the above recommendation of the Committee,” the report said.

The panel has asked the Department of Telecom, in coordination with TRAI, to make sincere efforts to address the concerns raised by the industry players so that the financial burden of telecom operators neither acts as a deterrent in their move towards 5G nor places an unsustainable burden on the Indian customers.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

PM Narendra Modi to visit tribal-dominated Dahod on April 21: Gujarat BJP chief

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Prime Minister Narendra Modi will visit the tribal-dominated Dahod area of Gujarat on April 21, state BJP president C R Paatil said on Wednesday. Though there has been no official announcement of the prime minister’s visit, party sources said he was likely to speak at a rally in the region.

Incidentally, Paatil had said on Tuesday that the Union government has decided not to greenlight the controversial Par-Tapi-Narmada river link project following protests by tribals in Gujarat. Elections are due in the BJP-ruled state by December. Tribal leaders within the state BJP too had appealed to the Centre not to go ahead with the project.

Addressing BJP workers in Gandhinagar on Wednesday, Paatil said, “Prime minister Narendra Modi will visit Gujarat on April 21. His first programme in the morning will be held in Dahod.” Party workers will work to make it a grand event, he added.

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Later, talking to reporters, he said in over two-and-a-half decades that the BJP has been in power in Gujarat, the party has worked for the uplift of tribal communities.

“Due to this, they have been electing BJP candidates. While Congress organises a press conference in Delhi on issues related to Gujarat, BJP workers hold meetings for programme to be organised in tribal areas. There is a difference between the two,” he said.

He was referring to a press conference held on Wednesday by Congress in Delhi over the Par-Tapi-Narmada river link project. Congress Rajya Sabha member from Gujarat Shaktisinh Gohil and MLAs Sukhram Rathwa and Anant Patel attended the press meet.

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On Tuesday, Paatil had said the Centre has decided not to give a go-ahead to the Par-Tapi-Narmada project. The decision came after tribals in Valsad and other parts of south Gujarat organised massive rallies to protest against the announcement about the project made by Union Finance Minister Nirmala Sitharaman in her budget speech last month.

Sitharaman had also said that the Union government will provide support for this and other river linking projects only after consensus is reached among concerned states.

The Par-Tapi-Narmada project envisages transfer of water from surplus regions of the Western Ghats to water deficit regions of Saurashtra and Kutch. It proposes seven new reservoirs in north Maharashtra and south Gujarat.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ind-Ra slashes FY23 GDP forecast to 7-7.2% citing Ukraine war

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India Ratings has lowered its GDP growth forecast for FY23 to 7-7.2 percent, from 7.6 percent earlier citing the rising uncertainty over the Russia-Ukraine war and the resultant dampening of consumer sentiment.

Since the duration of the war continues to be uncertain, in the first scenario crude oil prices could remain elevated for three months, and in the second case for six months, Ind-Ra said.

If crude prices remain high for three months, FY23 GDP could grow by 7.2 percent; in case it lasts longer, then growth will be 7 percent, down from 7.6 percent projected earlier, its chief economist Devendra Pant and principal economist Sunil Kumar Sinha said on Wednesday.

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They said the size of the economy in FY23 will be 10.6 percent and 10.8 percent lower than the FY23 GDP trend value in these two scenarios, respectively.

On Tuesday, Icra had also penciled in a similar rate of growth for the economy. Noting that consumption demand, as measured by private final consumption expenditure, has been subdued in FY22, despite sales of select consumer durables showing signs of revival during the festive season, the report doubts the same to pick up or remain where it is now given the rising inflation worries and so is household sentiments on non-essential/discretionary spending which continue to be subdued.

Consumer sentiment is likely to witness a further dent due to the Ukraine war leading to rising commodity prices/consumer inflation. Ind-Ra expects private consumption spends to grow at 8.1 percent and 8 percent in scenario 1 and 2, respectively, in FY23, as against its earlier projection of 9.4 percent.

Also Read: Inflation not a significant problem for India; banking sector looks interesting: Morgan Stanley

Similarly, investment demand, as measured by the gross fixed capita formation, is the second-largest component (27.1 percent) of GDP from the demand side.

Private capex by large corporates, which has been down and out over the past several years, has shown some promise lately in view of the rollout of the production-linked incentive scheme and increased manufacturing sector capacity utilisation driven by higher exports.

However, they expect the surge in commodity prices and disruptions in the global supply chain caused by the Ukraine war to take a toll on sentiments and it’s likely this capex may get deferred till more clarity emerges with respect to the conflict.

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However, government capex is unlikely to be dented. the capex to GDP ratio for FY22 to 2.6 percent, according to the revised estimate from the budgeted 2.5 percent and budgeting for 2.9 percent for FY23, the government has been showing its resolve to do the heavy lifting, they said, and believe that the overall gross fixed capital formation growth will not be impacted much and will grow at 8.8 percent in both the scenarios in FY23, which is 10 basis points (bps) higher than their January forecast.

On the inflation front, they warn that a 10 percent rise in oil prices without factoring in currency depreciation, is expected to push up retail inflation by 42 bps and wholesale inflation by 104 bps.

Similarly, a 10 percent jump in sunflower oil without factoring in currency depreciation is expected to push retail inflation by 12.6 bps and wholesale inflation by 2.48 bps.

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Both these events can increase the retail and wholesale inflation by 55 bps and 109 bps, respectively. Retail fuel prices, which were on hold since early-November 2021, have been inching up since last week daily and have gone up almost Rs 5 so far.

Based on this slow rise they estimate retail inflation to average 5.8 percent and 6.2 percent in FY23 in these scenarios, respectively, as against the earlier forecast of 4.8 percent.

Due to a higher import bill for items such as mineral fuels & oils, gems & jewellery, edible oils and fertilisers, they expect the current account deficit to come in at 2.8 percent of GDP as against 2.3 percent projected earlier as it figures out that a USD5/barrel increase in crude prices will translate into a $6.6 billion increase in current account deficit.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Delhi High Court to hear WhatsApp, Facebook pleas over CCI probe on July 21

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Delhi High Court Wednesday listed for hearing on July 21 the appeals of WhatsApp and Facebook challenging its single-judge order dismissing their pleas against the probe ordered by the CCI into the instant messaging platform’s new privacy policy and said that the issue of data sharing has to be looked into.

A bench of Justices Rajiv Shakdher and Poonam A Bamba adjourned the hearing on the appeals in view of the submission by the senior lawyer for WhatsApp to defer the case for some time in view of the pendency of the data protection law before the Parliament, and directed the parties to file their written submissions in the matter.

Sharing of data, scrapping of data..someone needs to look into it. Aside this case, they say there are 5,000 data points on every citizen… They can predict what you are going to do in every situation, Justice Shakdher observed. Referring to Cambridge Analytica, a UK-based company which is facing probe for allegedly illegally harvesting data of Facebook users, the judge questioned the aspect of data sharing in closed groups on Facebook.

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Senior advocate Harish Salve, representing WhatsApp, submitted that WhatsApp does not look at messages and only has external information such as phone number and volume of trade. On Facebook, one puts one’s life in public domain, he added.

He told the court that as stated by WhatsApp earlier, until the data protection law comes into existence, it will not coerce its users to opt for the updated privacy policy and when the Parliament is seized of the issue, there was no question of CCI continuing with its own investigation into the policy. If we have the bill (till the next date of hearing), good. Else decide it on the basis of the law as it is, Salve said.

The court also extended the interim order granting time to Facebook and WhatsApp for filing replies to two CCI notices asking them to furnish certain information for the purpose of inquiry conducted by it. In July last year, WhatsApp had told the high court that till the data protection bill comes into force, it would not compel users to opt for its new privacy policy as it has been put on hold.

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Commitment is that I will do nothing till the Parliament’s law comes in. If Parliament allows it, I will have it. If it doesn’t, bad luck.. I’ve taken it off till the Parliament makes a law. Either we fit in or we don’t., Salve had said. The present case relates to the appeals of Facebook and WhatsApp against a single judge order dismissing their pleas against the probe CCI ordered into the instant messaging app’s new privacy policy.

The division bench of the high court had on May 6, 2021, issued notices on the appeals and asked the Centre to respond to it. The single judge on April 22 last year, had said though it would have been “prudent” for the CCI to await the outcome of petitions in the Supreme Court and the Delhi High Court against WhatsApp’s new privacy policy, not doing so would not make the regulator’s order “perverse” or “wanting of jurisdiction”.

The court had said it saw no merit in the petitions of Facebook and WhatsApp to interdict the investigation directed by the CCI. The CCI had contended before the single judge that it was not examining the alleged violation of individuals’ privacy which was being looked into by the Supreme Court.

It had argued before the court that the new privacy policy of WhatsApp would lead to excessive data collection and “stalking” of consumers for targeted advertising to bring in more users and is therefore an alleged abuse of dominant position. WhatsApp and Facebook had challenged the CCI’s March 24, 2021, order directing a probe into the new privacy policy.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Citi deal will take 9-12 months to get all approvals; cards biz to grow 57%, says Axis Bank CEO Amitabh Choudhry

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Axis Bank Chief Executive Officer Amitabh Chaudhry on Wednesday said the company is committed to ensuring that the transition is smooth for existing Citibank customers after it was announced earlier in the day that Axis Bank would acquire Citibank’s consumer businesses–credit cards, retail banking, wealth management and consumer loans–in India for $1.69 billion.

Choudhry said Axis Bank expects the necessary approvals for the deals to come over the course of the next 9-12 months and that the post-tax integration cost would be around Rs 1,500 crore. “Citi portfolios are a great fit for Axis Bank ‘s strategy. Citi has close to 2.5 million cards with highest monthly spends and a book size of Rs 8,900 crore. This acquisition is a natural fit for our wealth management franchise, Burgundy,” Choudhry said, adding that Axis Bank’s cards balance sheet will grow by 57 percent with this acquisition.

Choudhry, addressing a press conference, said Citibank customers will continue to have access to full financial services and added that the customers can continue to avail themselves of all existing rewards during the transition period. “There will be no disruption of services for Citi customers during the transition period,” Choudhry assured.

That said, Choudhry said the bank is braced for customer attrition. “We are confident we will be able to offer Citi customers the same or an even better experience with Axis Bank, but have factored in some customer attrition while finalising the deal. We hope Citi customers will stay with Axis because of the wider suite of products we will be able to offer,” he said.

Choudhry said Axis Bank’s senior leaders and its rich network of Citibank alumni will drive the transition. “We already have a rich network of Citi alumni within Axis Bank and plan to have senior leaders at Axis Bank to play a key role in the assimilation of business.”

Axis Bank will pay a cash consideration of up to Rs 12,325 crore for the acquisition. “We will pay the entire cash consideration after the necessary approvals are in place after nine months,” Choudhry said, adding, “We may need to raise some capital to fund the deal. We will decide on the nature and quantum of capital raise for the deal closer to when we have to raise it.”

Approximately 3,600 Citibank employees will join Axis Bank after the acquisition, which Choudhry said would be “a significant addition to our team” and added, “(We) will ensure Citi employees get the same or a better offer at Axis.”

On further acquisition plans, Choudhry said, “We have enough on our plate; not looking at any other acquisitions at the moment.”

Axis Bank CFO Puneet Sharma said the acquisition will result in a positive net interest margin for the bank. “We will organically grow our NIMs and this acquisition will aid that.”

Sharma added that they estimate that the acquisition will see a growth in earnings per share and return on equity in 2024. “The purchase consideration impacts (our) capital adequacy by 180 basis points.”

Sharma said Axis Bank has 9-12 months time to get Citibank customers’ consent for transition. “Customers will not be asked to change their cards, account numbers overnight. None of the features or benefits Citi customers have will change during the transition period,’ he said.

Axis Bank’s Ravi Narayanan said, “We are getting a substantial chunk of business from the Citi franchise and a granular deposit customer base. The acquisition is a great foundation for us to build on. There won’t be any movement in Axis’ reported GNPAs post-Citi acquisition,” he said.

In a press release, Axis Bank said the acquisition will add aggregate deposits of Rs 502 billion to Axis’ portfolio, of which 81 percent is CASA; 1,600+ Suvidha Corporate relationships with more than 1 million customers and an average salary of Rs 70,000 per month to strengthen Axis Bank’s Salary Business.

Also read: Citigroup to sell India consumer business to Axis Bank for $1.6 billion

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow