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Saturday, September 14, 2019

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


The new balance sheet: India Inc is looking beyond profit

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In May 27, billionaire banker Uday Kotak, one of India's most respected business executives, tweeted the image of a water dispenser at one of his offices. It featured a stylish retro Kilner glass jar (for bonus fun fact, see the end of this article) with "Yorkshire Glassware, established 1898" embossed on it, alongside a stack of paper cups. He wrote: "4.3 lakh plastic bottles saved per annum. Glass water jars and disposable paper cups in meeting rooms at Kotak Mahindra Bank Mumbai offices. Working to make it national. Environment is precious."When architect Manit Rastogi met Infosys founder and then chairman NR Narayana Murthy in 2014 for discussions about the tech giant's new campus in Nagpur, he says he got a one-line brief: "Create the world's most sustainable office building." When it comes up, the building, which will have a working population of 20,000, will be net zero in energy, water and waste-to-landfill (meaning its net consumption from electricity grid or outside water supply will be zero, and it will send no waste to a landfill). 71129924 When Indian Hotels Company (Taj Hotels) decided in 2018 to phase out plastic straws at its hotels and TajSATS aviation catering unit, it resulted in the elimination of 2 million straws in a year. It now uses biodegradable straws, bamboo straws and in its new property in the Andamans, papaya stems. These instances illustrate a heartening and accelerating trend among Indian corporations — a move to be thoughtful about their impact on the planet and the people around them, including employees, customers, partners and communities. What appears to be emerging is a more conscious, compassionate version of the bareknuckled capitalism of the 1980s and 1990s, when chief executives mostly talked business and money — profits, market share, interest rates. Now they are far likelier to share a Greta Thunberg clip on social media or laud a progressive Supreme Court verdict ending discrimination. The change might be too little, and some scepticism around image-building might even be warranted, but we now have to entertain the possibility that the Indian corporation is turning woke. At the very least, parts of corporate India are displaying a wokeness that's far ahead of the wider society it is based in. The phenomenon we discuss in this article is distinct from philanthropy and corporate social responsibility programmes of companies. The conscious corporation is tweaking its business operations, premises, hiring and policies to do good and be better. While many legacy Indian business groups can rightly claim a long history of efforts to be conscious, now the traction and pressure around the idea are such that all manner of companies — startups to multinationals, cement companies to phone makers — are acting, and telling the world about it. 71129933 "All companies are now under pressure to be more thoughtful and conscious of environmental and sustainability issues," says Gita Piramal, business historian and senior fellow at the University of Oxford. "Among traditional family business groups, the fourth generation, in many cases, appears to show a greater awareness than the second and third generations. Among the first generation, I would say there were both types of entrepreneurs."Indian entrepreneurship, she says, came into the fore from around the 1850s as the industrial revolution reached us through colonialism. Calcutta, Madras and Bombay became aggressive entrêports, and as banians (intermediaries) to the colonists, this generation was able to build large capital resources. In business history, she says, the Godrej family comes readily to mind as being at the forefront of environmental issues. "For the second and third generations, however, wealth creation was the priority as India stumbled along with GDP growth of around 3%. The fourth generation, often youngsters returning to India after studying or working overseas, appears to be far more aware of environmental, sustainability and related issues." An example could be found in one of India's top industrial houses. In a 2008 interview, Mukesh Ambani, India's richest man then, as now, told The New York Times that his teenage daughter Isha Ambani didn't like the plastics business in his portfolio. "It pollutes a lot," he quoted her as saying. She is now active in business, having been a board member at Jio, the group's multibillion-dollar telecom bet, since 2014, presumably bringing an environmentally conscious ethos to business. 71129937 Young customers and employees preferring brands and companies that adhere to certain values is another nudge. Unilever, the FMCG major with a long history in India, has embraced progressive values wholeheartedly in its operations as well as messaging."We believe that today'ss consumers, especially millennials, are highly woke and want to contribute in their own way to the environment as well as address societal issues. They are demanding brands that deliver more than just the functional benefit, and have a higher purpose that resonates with them. This is supported by research that indicates that millennials want to work for companies that have a purpose beyond their products and profits," says Anuradha Razdan, executive director-HR, Hindustan Unilever.Concerns around climate change and the uptick in extreme weather events are another factor that are nudging corporations onto a virtuous path.Examples abound. Here is a selection from across industries.Phone maker OnePlus has tied up with WWF India to mark 1,500 days of its mobile operating system OxygenOS. For every tweet with the hashtag OxygenOS, it will plant a tree. Online shopping giant Amazon has committed to eliminating the use of single-use plastic in their packaging by June 2020, a deadline they might have to advance as India is banning all single-use plastic by October. 71129943 Foodtech startup Zomato announced paternity leave of 26 weeks, explaining that lack of universal paid parental leave was one of the reasons why the number of women executives falls in higher organisational ranks. Drug maker Novartis followed suit.Fashion brand H&M has committed to sustainably sourcing all the cotton it uses by 2020. The Lemon Tree hotel chain is famous for hiring people with disabilities (PwD) and integrating them into all aspects of operations. Fast food chain KFC, Aegis BPO and Landmark Group also work on consciously hiring PwDs.Efforts at automaker Mahindra have meant it now uses 63% less energy to produce a vehicle compared with eight years ago (a tractor takes 33% less energy now to produce). The group saved 58 million kWh of energy through 700 energy efficiency projects implemented in the last five years. That's enough to power 67,000 average US homes for a month.Bath fittings maker Jaquar recycles 4,221 tonnes of brass and 8 tonnes of chrome annually, as well as 5 lakh litres of water every day. They have been making their showers and faucets with water-saving technology.HUL has made major strides in energy, water and waste. It managed to reduce water usage (cubic metre per tonne of production) by 55% in 2018, compared with a decade ago. Total waste generated in its factories reduced by 58% in the same period. HUL incorporates social causes in the advertising campaigns of its mass consumer products as well.In December 2018, Godrej Consumer Products introduced a gender affirmation policy for employees who wish to undergo gender transition. Staff can claim reimbursements for non-cosmetic surgeries and hormone replacement therapy. 71129945 These initiatives are apart from the impressive work being done by philanthropic foundations of groups and individuals such as Reliance, Bharti, Azim Premji, Shiv Nadar, the Birlas and others. Then there's also the work funded by corporate social responsibility. Law mandates that companies must spend at least 2% of their average net profits during the preceding three years on CSR activities.Rastogi, founding partner of the award-winning architect firm Morphogenesis, says companies have become very conscious of the environmental impact of their buildings. "Today, the 'going green' agenda is an integral part of most companies' initiatives. "Some of our projects across India, such as the corporate offices of ITC, Zydus, Infosys, Wipro and RP-SG, are all conceptualised as green buildings on the drawing board. The key has been to do away with myths of sustainability and instead adopt the right approach within the Indian context."Good Job What's going on? Why's everyone suddenly so intent on doing good and being seen as doing good? Some of this is inspired by the evolution of capitalism itself globally. In the US, after the financial crash of 2008 imposed hardship on the general public, companies have sought to project a softer side, talking up progressive causes, going against the grain of the popular ideas of economist Milton Friedman, who said the social responsibility of companies was to make profits. Business Roundtable, the influential grouping of CEOs of America's largest companies, recently cast aside its statement of corporate purpose formalised in 1997. It said:"The paramount duty of management and of boards of directors is to the corporation's stockholders." 71129950 Its new statement, formalised in August, is long and dwells purposefully on themes such as "value for customers", "diversity and inclusion", "protecting the environment", "dealing fairly and ethically with suppliers" and "supporting the communities in which we work".The first mention of shareholders comes in the penultimate paragraph and all it says is: "We are committed to transparency and effective engagement with shareholders".At the World Economic Forum in Davos, where the leading figures of corporate India are regulars, these ideas have been debated for a while. The two thinkers at the forefront of this idea - that shared value delivers shareholder value, or that business competitiveness and corporate social responsibility are closely linked -have been academics Michael E Porter and Mark R Kramer of Harvard University. The concept of "shared value" finds explicit mention in the communications of Godrej and Mahindra groups.But it's not as if these ideas are new or alien to Indian business. In fact, in some ways. Indian business groups pioneered many of these ideas."I am a big admirer of Jamshetji Tata who said over a century ago that the community is not just another stakeholder but the very purpose of business," says Amit Chandra, MD of Bain Capital and a former non-executive director at Tata Sons. 71129981 "The Tata group was accordingly designed with wealth creation as a means for the propagation of societal good in a compassionate way. India was, therefore, at the forefront of the philanthropic movement. The Tatas were not an exception and a few other families like the Godrej, Bajaj and the Birlas were deeply engaged in nation-building around the time of Independence. Over a century later, no one has epitomised this principle better than Azim Premji."Jamshetji Tata's American contemporaries were robber baron capitalists. Progressive ideas around business and wealth were expressed and practised here long before estate tax gave momentum and definition to philanthropy in the US.Considering Indian companies operate in some of the most polluted and unequal cities and towns in the world, all that has been done might just be a beginning. And many promoters have still, sadly, not made these matters a priority. "There is a great deal more to be done. The larger (promoter) community is still of those who just nod their heads to this and don't do enough," says Piramal.Bonus fun fact: The founder of Kilner glass jars was the great-great-great-grandfather of the controversial British TV host Jeremy Clarkson, who got to see none of that wealth.

How WhatsApp is helping small businesses

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Buy fish through a chat window — that is the USP of Parthaa Kundu's venture. Delhi-based Kundu, the founder of Fishappy, home-delivers fish from selected vendors. Customers can see videos of live fish, select what they want and type in their orders — all on WhatsApp's platform for business.Kundu, 47, started Fishappy in 2015 and promoted his business through word of mouth, a website and pamphlets in newspapers. He signed up for WhatsApp Business in June 2019. "The business exploded, as users were already familiar with WhatsApp.Now 97% of the business comes via the app," says Kundu, who was in the luxury travel industry before becoming an entrepreneur. He sources fish from select vendors in Delhi and sells to 500-550 customers a month in the Delhi-NCR region now, from around 300 customers 18 months back.Many small businesses like Kundu's around the country are finding that the business platform of the popular chat app might be the most fitting tech platform for their scale and nature. Small businesses struggle to be discovered on larger ecommerce platforms. And their scale does not permit them to invest in digital marketing and drive traffic to their own website or Facebook page. They find Whatsapp Business to be an acceptable substitute for a website or app and love that anyone can manage the backend. There is no need for dedicated customer service staff, as you can answer queries on the go. This helps improve customer satisfaction as users get instant replies. 71130364 Abhijit Bose, head of WhatsApp India, says the app enables end-to-end communication cycle between small businesses and customers. "What started as a P2P (peer-to-peer) service has enabled users to connect the same way in P2B (peer-tobusiness) conversations."About one million small businesses in India have already signed up on the platform. Globally, that number stands at 5 million.The two major drawbacks, however, are the absence of payments and features designed to support businesses of a relatively small scale. This means once a small business scales, the owner would have to find a more appropriate platform for their size. Once the platform throws opens payments, which the company says will happen within a few months, it could see rapid adoption by more small businesses."We can make business owners' life easier and it also help in increasing their sales," says Bose. "I think that will end up digitising them more as they get more comfortable. Another distinguishing factor is our scale and we are able to touch tier-2 and -3 cities because various sectors use WhatsApp. For example, agriculture is a huge sector where a lot of businesses run on WhatsApp for different needs."Businesses can download the app for free and create a profile of their offerings. But they have to register a separate phone number for business use as the number used for WhatsApp cannot be used for the business platform. It also allows a business to register using a landline number, unlike in the mother app. Businesses can easily sort and automate messages. 71130367 The flip side is that businesses would have to use online or offline campaigns to promote their presence on the messaging app. However, despite not supporting payments at the moment, the app has the potential for businesses to convert interest into a sale. Indu Wary, the founder of saree and accessory seller Asomkriti, discovered this in 2018. Bengaluru-based Wary, 32, a former product manager with an IT company, started the venture in 2017 to sell products such as mekhela chadar (traditional sarees from Assam), kurtis, jewellery and stoles sourced directly from 55 weavers in Assam. Though she was selling through Asomkriti's website, she soon realised that people often add items to cart but don't make an actual purchase. Ecommerce sites were overcrowded with large sellers. So Wary signed up on WhatsApp Business in mid-2018. "Things changed almost immediately, as people trusted the app. Our conversion from interest to sales increased to 60%." The startup sells 600 products a month now and does business worth Rs 5.5-6 lakh. The app has a green check mark on verified profiles, making it easier for people to know if the business is genuine or not. Ahmedabad-based Lightspeed Mobility, which makes battery-operated cycles, is another venture that has been able to close more online sales because of WhatsApp Business. 71130372 The company, founded by Rahil Rupawala, 33, in 2017 has 15 dealers in tier-1 cities but relies on online sales in smaller cities. "WhatsApp is crucial to talk to our customers. It helps us do personalised customer service," says Rupawala. Lightspeed handles 250300 queries a day over WhatsApp and sells 100 cycles—costing Rs 31,000-57,000 — a month now. Not just products, startups are also offering services over WhatsApp Business. For Mumbaiheadquartered Hey Deedee, an all-women courier service, the platform is the linchpin for seamless operations in 10 cities. The 900-women team of Hey Deedee, which delivers couriers for e-commerce companies such as Amazon, starts its day by checking updates (number of couriers, pick up points, etc) on the app. The crew then plans the deliveries and a territory head in each city coordinates with the field teams. "We do all product deliveries except food," says Revathi Roy, managing director & CEO. "Conversations with field staff happen over the business app and they update us over it in case of any issue. I have pan-India visibility of the business on the app." The app has reached the financial space, too. ScripBox, a Benguluru-based fintech company, uses WhatsApp Business to educate users on loans, mutual funds and other such products. It is also looking at collecting know-your-customer documents through the app. Manu Prasad, chief marketing officer, ScripBox, says, "Usage of internet is moving to mobiles. WhatsApp is attractive because of its popularity." Chandigarh-based Feetport uses the app to verify customer details for some banks. The startup also uses the app to manage field teams of clients, including Indraprastha Gas Limited and Jaquar bath fittings. A common theme among all these startups is that they have a small team — LightSpeed has 20, Feetport 18, Fishappy has four and Asomkriti has seven. The company has a separate solution for larger businesses as well, but is currently open only to a select few. Such entities pay for the service, get an API (application programming interface) and can customise the app. 71130377 For instance, users booking tickets on the websites of Makemytrip or PVR Cinemas can opt to receive booking notifications on WhatsApp. Users can get tickets or a QR code on the phone and also get access to a seat map to select their plane seats or book in-flight meals. Makemytrip.com's Chief Product Officer Anshuman Bapna says, "Majority of India is on WhatsApp already and it helps us easily contact people who have opted to use this method. The biggest use-case is customer support." Bose says, "An API (application programming interface) version is not something that your typical store owner would be able to support. But it can help companies that operate at a larger scale and responds to millions of request a day." Kotak Bank, OYO and BookMyShow are some of the other companies that have signed up for this service. Parikshit Dar, co-founder & director of BookMyShow, says, "The app helps us create a personal connection with our customers via instant communication updates." The app is like a default communication platform for BookMyShow. However, one complaint most small businesses have is that WhatsApp Business does not have a payment option. Ankur Pahwa, partner, EY, says, "One big challenge is payments. WeChat's success (in China) came with payments. Else it would have just be a platform for discovery, lead generation and there would be gaps between discovery and conversion." A payment service will be added to the app by the year-end, says WhatsApp India's Bose. Until then, people like Fishappy's Kundu will have to rely on other platforms, credit cards or cashon-delivery to collect money. That is not yet a problem for Kundu as he handles 500-550 orders a month. "If it scales to 1,000 orders or more a month, WhatsApp Business will continue to be an important part, but I might need other touchpoints as well." Or he would have to shift to the paid service. For now, the messaging app fills a void for entrepreneurs who find e-commerce marketplaces too big for comfort.

The reason why India's top babus are quitting

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The years around 2000 saw India reaping higher rewards of the economic liberalisation it had set off a decade ago. An expanding India Inc required capable managers.This led to a flurry of resignations of officers of the elite Indian Administrative Service (IAS). Most were middle-level bureaucrats aspiring to fast-track their careers and earn more. So they quit the safety of a government job to join corporate India.The salary structure of government officers have improved a lot since then, leading to a drastic reduction in IAS officials resigning to join companies. But the recent resignations of a few IAS officers, albeit for various reasons, have again turned the spotlight on the much preferred branch of the bureaucracy.Take the example of Subhash Chandra Garg, 58, who sought early retirment after the government in July transferred him from the post of finance secretary to the relatively lowprofile ministry of power.Then came three more resignations of IAS officers in quick successions, all within a month and a half. Kannan Gopinathan, 33 — who was serving as the secretary of power, urban development and town & country planning in the Union territory of Dadra and Nagar Haveli — resigned from government service over the clampdown in Kashmir. S Sasikanth Senthil, 40 — deputy commissioner of Dakshina Kannada district — resigned alleging "fundamental building blocks of diverse democracy are being compromised". Then came the resignation of Kashish Mittal, 30 — who was additional principal secretary to NITI Aayog vice-chairman — because he was unhappy at being transferred to Arunachal Pradesh.The resignations of four of the 5,205 serving IAS officers wouldn't have been news in Delhi's corridors of power but for a growing sense of anxiety among the IAS cadre, considered the elite among the two dozen-odd central services. And the reason for the concern has nothing to do with Kashmir Valley or democracy. 71129250 Half a dozen bureaucrats ET Magazine spoke to said they were unhappy that the role of IAS officers was diminishing at the Centre. There is no guarantee now of an IAS officer becoming a Union joint secretary even after she gets empanelled, they say. Empanellment is a process of shortlisting civil servants so that they can be made joint secretary, additional secretary or secretary. Earlier, IAS officers had a greater chance of being selected for these posts. But now, the Centre is looking for officials from other services as well.The first shift away from reliance on IAS officers was noticed in mid-2016 when the Modi government appointed a large number of non-IAS officers — income tax, railways, forest officers, etc — as joint secretaries in one go. Other services have had a long-standing grudge that the government always gave preferential treatment to the IAS cadre. Then came a blow from states such as West Bengal and Chhattisgarh, which blocked IAS officials from their cadre from joining the central government services on deputation."You can imagine the frustration of an IAS officer if she is to retire without even getting one posting outside the state. What is the point of then calling the IAS an all-India service?" asks one officer.If that wasn't enough, career IAS officials, particularly the younger and midlevel ones, consider the recent government move allowing lateral entry of nine private sector executives as joint secretaries as an early sign of the IAS getting marginalised.Their concern is what will happen if non-IAS and lateral entrants eventually capture a sizeable number of berths in the higher bureaucratic echelons, such as additional secretaries and secretaries, which are now dominated by IAS officials. 71132263 The worry is not entirely unfounded. In the past few years, IAS has lost at least two key traditional posts — as heads of the Enforcement Directorate (ED) and the Central Vigilance Commission. Indian Revenue Service (IRS) officer Sanjay Kumar Mishra was made chief of the ED and Indian Police Service officer Sharad Kumar was made the interim chief vigilance commissioner.The government had also appointed a former IRS official, Sushil Chandra, as Election Commissioner in February. Going by conventions, all three election commissioners are usually IAS officials.The IAS is still a much favoured career path, says former cabinet secretary KM Chandrasekhar. "Resignations from the IAS to join politics or civil society or the corporate sector have happened in the past too." He points to the mushrooming of IAS coaching centres in Kerala, where he currently resides, to argue why the IAS has not lost its sheen.Every year, about a million graduates register for the civil services examination and the top preference of almost everyone is the IAS. After all, the clout of the premier administrative arm in the bureaucracy is widely known."The first change you feel after leaving the IAS is that you lack the authority that had come with the post," says OP Agarwal, who resigned from IAS in 2007 and is now CEO of World Resources Institute India. Agarwal was a joint secretary in the urban development ministry when he quit and later joined the World Bank's headquarters in New York as a specialist in urban transport systems. "No one comes to you anymore once you leave IAS. Instead, you struggle to get into government offices. But there are positives too. You no longer need permission to attend a seminar abroad!" he adds.The grass is not necessarily greener on the other side. 71129291

Indian startup founders reveal important new trends

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Even in the fast-paced disruptive world of startups, a few things are hard to change. Gender bias, for one.Sairee Chahal, founder of Sheroes, a community platform for women, is at times at the receiving end of it. Often it comes in the form of "innocent" remarks and "friendly suggestions". "You started this alone?" she often gets asked, with thinly veiled scepticism.Just the other day, an executive from the venture capital industry suggested to her: "You should have a male cofounder. It is easier." Her sense of dismay over the incident comes through in her voice as she spoke, over the phone, to me. "It felt stupid. I am not a spring chicken. This is my second startup. I have been an entrepreneur half my working life. There is so much resistance to solo female founders," she says. 71129577 So why did she start alone? I repeat the loaded question not because she's a woman but because starting up alone is tough and lonely, for men and women. MakeMyrip founder Deep Kalra recently told me that if there is one thing he would change about his entrepreneurial journey, it would be to have a cofounder. Chahal knows well the hardships of a solo founder. But she says she had little option. "I didn't know where to find them." A small-town Punjabi girl from a middle-class family, she had few networks in Delhi from her growing-up days. Nor did she form deep bonds during her corporate stint — a challenge that women often face — to scan for a cofounder. "Startups are tough. It is even tougher for women entrepreneurs who have to battle many tides," she says. 71129591 Chahal confirms what a survey of Indian entrepreneurs by Excubator, a startup incubator and consultancy firm, for ET Magazine, reveals.India's startups remain a man's world. They might be flush with funds and buzzing with bright ideas and disruptive technologies, but traditional gender biases and challenges remain in play here. The online survey was done in August and received valid responses from 299 entrepreneurs. Women comprised just 14% of total respondents.It is a good time to pause and understand Indian entrepreneurs. 71129609 Once on the fringes, starting up has become mainstream. Entrepreneurs are the new heroes of India's middle class. After two decades of boom-bust cycles, the ecosystem is both deep and rich, with 1,400 new startups created in 2018, (from a high of 3,560 new startups in 2016, it dipped in 2018, due to the onset of a funding squeeze). The funding landscape too has substantially matured with most global VC firms including those from the East (like China, Japan and Korea) setting up shop in India. In 2018, according to Venture Intelligence, VCs in India invested $8.5 billion in Indian startups.Also, amid all-round pessimism in the Indian economy, startups and their founders are a beacon of hope. Amid dreary headlines of bankruptcies, credit defaults and incarcerated promoters, new entrepreneurs, their surging ambitions and funding boom offer a much-needed respite.The survey attempts to understand Indian entrepreneurs, mostly of tech-led startups. Who are they? Where do they come from? What is their gender, demographic and psychographic profile? What drives their pursuits? What are their biggest challenges? "The survey busts a few myths and endorses some visible trends," says Guhesh Ramanathan, founder, Excubator. 71129644 First, the macro view. Bengaluru is unquestionably India's startup capital, with 37% of founders who responded to the survey coming from there. NCR is at the second spot — 16%. About 71% of respondents are from Tier-1 cities (Bengaluru, Mumbai and NCR). Like FreeCharge's Kunal Shah and Myntra's Mukesh Bansal, who have now started new ventures, 34% of survey respondents are serial entrepreneurs.Contrary to popular perception, "they aren't young, fresh college graduates," says Ramanathan. The median age for starting up is high — 35 years for men and 37 for women. They are well educated, too — 39% have a bachelor's degree and 53% have a master's degree/diploma. About 4% have a PhD; the same as school graduates.Their experience is fairly spread out, from 0 to 30-plus years. About 37% are solo founders but the most popular configuration is two cofounders for a company, at 47%. A vast majority has been set up over the last decade, with almost half in the last five years. About 26% of them have managed to raise funding. Raising funding seems to be their biggest challenge (59%), followed by finding and retaining talent (40%), government and regulatory issues (31%) and finding customers (30%).Entrepreneurs are also maturing in their mindset. What are the yardsticks these entrepreneurs use to benchmark their success? For about 58% it is generating profit, while for 42% it is the number of people they employe and for 20% it is fund-raising. 71129675 Signalling Indian startups' rising global ambitions, a high 66% say their focus is both Indian and global markets; 30% are focused only on India while a small but significant 4% are focused only on global markets. 71129806 Mature and more evolvedSeasoned startup watchers echo what the survey reveals. The first thing that Saurabh Srivastava, founder of Indian Angel Network, notices is the maturity of Indian entrepreneurs and their ideas."In 2010, we would get 200 startups annually and struggle to find even one or two to invest in. Last year, we vetted 10,000 and invested in 25-odd.The quality of ideas has improved substantially," he says. Arun Natarajan, founder, Venture Intelligence, says he sees more experienced — and hence older — entrepreneurs. "With age and experience, they have a better feel of the problems and hence go after business models that are sounder," he says. 71129869 The biggest thing that serial entrepreneur and investor K Ganesh notices is the surging aspirations and scale of ambitions of today's entrepreneurs. Sanjay Nath, managing partner, Blume Ventures, too, finds today's entrepreneurs a lot bolder. "They think global from day one. They are attempting to do things at a much grander scale. Flipkart's exit and the kind of money people made give confidence to many," he says. Oyo and its aggressive global expansion plans are now a Harvard case study. They could become bigger than Marriott, he says. 71129887 Successful exits have spawned a growing breed of serial entrepreneurs. "They come with a lot of experience. If you are doing anything for the second or third time, it is obvious you are going to be better and faster," says Rajan Anandan, managing director, Sequoia Capital India. Just look at the way Kunal Shah's Cred and Udaan, founded by former Flipkart employees, are scaling up. The latter, founded in 2016, is already a unicorn (valued at more than $1 billion). 71129899 "While the number of new startups is coming down, the quality of founders is going up. We are getting more nuanced and differentiated ideas," he says. This also has to do with the maturing of the funding ecosystem — in quality, quantity and spread. The biggest manifestation of all this, almost everyone agrees, is that Indian entrepreneurs today are thinking very hard about their ideas and the problems they are solving. They are less likely to chase the flavour of the season and have a more original and evolved approach to building their startups."Today's founders have a very different DNA.Many have studied or worked overseas. They have a global view and have a very healthy global network," says Nath. Consequently, in their mind and ambitions, they compete as equals with peers from Silicon Valley as they often think brand and build the latest tech products for global markets. A growing breed of B-to-B and SaaS (software as a service) entrepreneurs like Girish Mathrubootham of Freshworks, Ankur Kothari of Automation Anywhere and Umesh Sachdev of Uniphore are proof.Diverse flavoursA few things haven't changed. For example, 70% of entrepreneurs come from the top three cities. But things are likely to get better. "So far, horizontal ecommerce like Flipkat and Amazon were focused on the 50 million English-speaking urban consumers. The next wave of startups (think Meesho and Bulbul) will focus on Bharat, the 300 million consumers who may not be English-speaking but are literate and tech-savvy. This will attract a lot of entrepreneurs from smaller towns and cities," says Ganesh.A boost from a better ecosystem should help, too. Razorpay cofounder Shashank Kumar started in 2014 in Jaipur. Within nine months, they moved to Bengaluru where talent, funding and ecosystem were more vibrant. He sees a change, though."The Rajasthan government has taken a lot of initiatives to nurture the startup ecosystem there," he says.With Jio and the growth in digitisation, consumers in tier-2 and tier-3 cities are already becoming tech-savvy. "Over time, you will see these entrepreneurs from small towns starting to leverage technology for business, too," says Ganesh. 71129904 Gender bias in the startup world is disappointing.It may have something to do with having few women in the investor world. Not only are there fewer women founders (14%) but they also face significant odds and must prepare better. According to the survey, female founders are older (median age 37 years as against men's 35 years) and better qualified (74% of female founders have a master's degree as against 56% among male founders). To understand gender bias, two other survey data points are important to note.Funding probability of women-led startups halves (at 14%) as against those led by men (30%).It gets worse if the startup is led by a solo founder— just 5% of startups led by solo female founder like Chahal get funded as against 31% of startups run by solo male founder."Women's mobility is constrained. With the shifting focus to Bharat, I have a very strong feeling the women's numbers will rise," says Ganesh.Perhaps the startup world will then manage to disrupt this age-old imbalance in the corporate world.

IT and HR synergy are key challenges for PNB-OBC-UBI merger

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KOLKATA: Integration of technology platform will remain the key challenge for the merger of Punjab National Bank, Oriental Bank of Commerce and United Bank of India, senior executives of these banks said, even as the government has selected the merger partners on the basis of their IT compatibilities rather than geographical synergy.Harmonising human resource issues will be another key aspect of these mergers, as was seen in the past. "Asymmetrical entities are coming together, so there is bound to be some challenges" Ashok Kumar Pradhan, chief executive of UBI said Saturday, at an interactive meeting between the three banks and their customers held in Kolkata.PNB, OBC and UBI use Infosys' Financle software for their core banking solutions, while Allahabad Bank and Indian Bank are on TCS' BaNCS software, prompting the government to stitch these alliances for a smoother transition. Similarly, Canara Bank and Syndicate Bank are on the same iFlex platform. Union Bank of India, Andhra Bank and Corporation Bank are again on the Finance platform.UBI and OBC use Finance-7 while PNB uses Financle-10. So, UBI and OBC need to upgrade their software solutions to have a seamless integration.On the HR issues, Pradhan said that best available benefits from three banks will be passed on to employees. "There will not be any retrenchment or voluntary retirement scheme," he said.These banks have formed as many as 23 committees covering every aspect of banking merger such as IT, HR, product offerings etc to make the exercise less painful.Chief executives of all the 10 public sector banks, which are selected as merger candidates, had a meeting at Bank of Baroda headquarters in Mumbai on September 4 to get a lowdown on merger experiences. "Bank of Baroda has given us a template on merger and the likely challenges in this exercise. It was a great learning," UBI's Pradhan said.PNB board has already approved the merger while the UBI and OBC will consider it at their respective board meetings -- both scheduled on September 18.The merger is expected to take shape from April 1, 2020. Consequent upon this, the merged entity will become the convenor of state level bankers' committee in the states of Haryana, Punjab, Tripura and West Bengal, and union territories of Delhi and Chandigarh.

Fresh jolt to Hotel Leela-Brookfield deal by SAT

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Mumbai: The Hotel Leela sale to Brookfield has come unstuck again. The new spanner has come in the shape of the Securities Appellate Tribunal (SAT) directing Hotel Leela Venture Ltd against declaring or acting upon the results of postal ballot resolutions seeking shareholders' approval for sale of its assets to Brookfield Asset Management Inc.This comes after ITC Ltd. moved the tribunal against the market regulator's order rejecting its contention that the sale should not be allowed because of related-party transactions.Hotel Leela had issued fresh postal ballot notices to its shareholders on August 13 and planned to declare results on September 18.ITC has argued that voting by JM Financial Asset Reconstruction Company Ltd., which owns 26 per cent in the company, on the postal ballot resolutions to approve the Rs 3,950 crore deal was a related-party transaction.The market regulator didn't agree even as it found conversion of debt to equity by JM Financial ARC a violation of the takeover code.On Friday, SAT heard arguments from ITC, SEBI and Hotel Leela.

Top 1% still earning big & another recession signal for the US

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Ritesh Jain, a Dalal Street veteran, trend watcher and Global Macro Investor, captures global macro investment opportunities and economic, business and financial trends with charts and commentaries in this space.Thomas Piketty is back with a 1,200-page guide to abolishing billionaires 71125696 Capitalism & markets have 3 driving forces, new GK paper argues: Schumpeterian (produce more with less), Ricardian (open new markets) & Malthusian (there won't be enough for everyone). Only one dominates at any one time. Currently Schumpeter in play but new wave may be about to take over. 71125699 Inventory/sales ratio in US is rising which is always followed by a slowdown or recession 71125702 When Consumer is indebted,Consumption cycle coming to an end and industry is going through disruption… you don't get into this business 71125703 Who is Buying US equities which are now trading at all time high…it is neither Household nor Institutions but solely Corporate Buybacks 71125705 The trade war has not dampened foreign direct investment FDI in China. Since the tariff war broke out in mid-2018 FDI has expanded about 3 per cent annually, roughly the same pace as in the previous five years. 71125711

With rate cut likely, market wonders how low Fed will go

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NEW YORK: With US-China trade tensions roiling markets, investors are counting on support for stocks coming from a Federal Reserve willing to keep cutting interest rates to help the US economy avoid a severe downturn.A quarter-point rate reduction is widely expected when the Fed issues its next policy statement on Wednesday, which would be the central bank's second such cut after lowering rates in July for the first time since 2008. That puts the greater focus on clues about how much further the Fed will go."If the Fed gives forward guidance that suggests less than what the market is thinking, then you will probably see markets sell off," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia. "So long as the Fed plays along with what markets are pricing in...I think markets will be very stable."The Fed's 180-degree pivot from tightening monetary policy last year to easing it has helped drive the stock market's overall strong performance in 2019. The benchmark S&P 500 .SPX has climbed 20 per cent this year and is near all-time highs.The central bank in July cited signs of a global slowdown, simmering US-China trade tensions and a desire to boost too-low inflation as it lowered borrowing costs.Markets are pricing in a near 90 per cent probability that the Fed will shave another quarter point from its current overnight lending rate of 2.00 per cent to 2.25 per cent, according to the CME Group's FedWatch tool. There is a roughly 65 per cent probability that the Fed makes at least one more quarter-point cut by the end of the year, according to FedWatch."The market is going to want to see a focus that we have a cut and there is likely more coming," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "They want to know that the Fed is vigilant and will act aggressively if needed."That raises the importance of the newest set of policymakers' rate-path projections - the so-called dot plot - that will be released along with the rate decision. UBS economists said in a note they expect that will shift lower overall for 2019, but project only two cuts total for the year, which could irk both investors and a US president eager for a more aggressive posture.President Donald Trump has frequently criticized the Fed for not cutting rates more swiftly and significantly, with the Fed chair he appointed, Jerome Powell, the primary target of his ire.The European Central Bank's decision on Thursday to cut interest rates and restart a larger stimulus program could further pressure the Fed to cut rates, as the ECB's move stands to weaken the euro against the dollar and thereby drive up the price of US exports - an issue that especially vexes Trump.Powell, who will give a news conference after the central bank issues its statement, has made comments in the past that have shaken the market, including in July, when he said the bank's rate cut might not be the start of a lengthy easing campaign to shore up the economy."Every meeting has the ability for Jay Powell to say something that upsets markets a little bit," said Arthur Hogan, chief market strategist at National Securities Corp.Powell "has had enough practice to know that he does not want to move markets or make news," he added.Of the past eight easing cycles since 1981, four have been "insurance" cycles, when economic problems loom but the economy is not in a recession, while four were pre-recession cycles, according to research from Allianz Global Investors.One year into an easing cycle, the S&P 500 rose an average of 20.4 per cent during insurance cycles, while the index fell an average of 10.2 per cent during pre-recession cycles, according to Allianz."Historically, what they're doing now, which is cutting rates in an economy that is not in a recession and not really in any imminent risk of a recession, has been positive for the stock market," said Mona Mahajan, US investment strategist at Allianz.The stock market overall has typically responded well to a second rate cut, which Wednesday's would be, with the Dow Jones Industrial Average .DJI rising an average of 20.3 per cent one year later, according to Ned Davis Research. The weakest performance has come when the Fed tried and failed to prevent a recession.The probability of a recession in the next 12 months is nearly 38 per cent, its highest in about a decade, according to the New York Fed's recession indicator, which is based on the US Treasury yield curve. Last month, yields on two-year US bonds exceeded those on 10-year notes, an inversion of the yield curve that is seen as an omen of recession.An escalation in the US-China tariff war is contributing to economic uncertainty and is top among concerns for stock investors. Late last month, a key speech from Powell was upstaged when Trump issued tweets that heightened trade tensions."I do think it's important that the Fed helps ease financial conditions and helps reduce the probability of recession," SunTrust's Lerner said. "If the tariff fight ratchets up more, then what the Fed does, the effect will be less."