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Tuesday, March 3, 2020

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


India's taxman is in an overzealous hurry to meet Modi's target

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NEW DELHI: The income tax department is asking companies and individuals engaged in tax disputes to settle cases under the Vivaad Se Vishwas scheme even though the relevant law is yet to be passed by Parliament.Tax experts said that the department is pushing taxpayers, including those based overseas, to settle but the government maintains that it's only "encouraging" them to do so."It is seen from records that (there is) litigation pending between you and the department," reads one such letter, a copy of which ET has seen. It asks the company concerned to contact the relevant officers in case it's interested in availing of the scheme.The Vivaad Se Vishwas (from dispute to trust) scheme was announced by finance minister Nirmala Sitharaman in the budget presented on February 1.I-T Aggressive in Pursuing RevenueAssessing officers are also said to be making phone calls to taxpayers, asking them to opt for the scheme that offers interest and penalty rebates if a settlement is reached before March 31. 74467657 "The tax department has become quite aggressive in pursuing revenues in wake of shortfall," said Amit Maheswari, partner, Ashok Maheshwary & Associates LLP. "Enforcing pending tax demands by attaching bank accounts coupled with the drive to settle cases under the Vivaad Se Vishwas scheme is making life difficult for taxpayers."Maheswari said that appeals commissioners were delaying decisions on cases and instead asking taxpayers to settle under the proposed scheme.The Central Board of Direct Taxes (CBDT) has told field officers that annual appraisals and postings will depend on their success in getting taxpayers to opt for the scheme.Revenue secretary Ajay Bhushan Pandey had earlier told ET there would be no coercion. He said the department had asked field offices to reach out to taxpayers to explain the modalities of the scheme so that they can make an informed choice."We are facilitating... We are not forcing anyone… Person must be given a choice," he had said. "They have been asked to reach out to explain them pros and cons of the scheme."Experts said there should be no pressure on taxpayers."These letters are welcome, so far as taxpayer's information and education is concerned," said Shailesh Kumar, partner, Nangia & Co LLP. "However, on practical implementation side, it would be important that the final decision be left on the respective taxpayers without really exercising any pressure to opt for the scheme."Kumar said taxpayers who were not aware of the scheme have begun reaching out to their tax advisors after getting the letters.Mumbai-based tax consultant Dilip Lakhani said the current cash crunch could be an issue."The frantic attempt by Central Board of Direct Taxes to collect Rs 50,000 crore by March 31 under the Vivaad Se Vishwas scheme may find a hurdle as the corporates are facing heavy cash crunch and those matters which are pending before first appellate authority are already stayed on making the prescribed payment of 15-20% of disputed tax," he said.There are 483,000 direct tax cases worth over Rs 9 lakh crore pending before various appellate for a — the Income Tax Appellate Tribunal (ITAT), high courts and the Supreme Court.Public sector banks and government-owned companies aren't too keen on opting for the scheme, ET reported on March 2, on the grounds that the demands are unjustified or too high.

What Zomato really paid to buy Uber Eats

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BENGALURU: Ride-hailing major Uber sold its India food delivery business to larger rival Zomato for $206 million in return for a 9.99% stake, regulatory filings by the US-based firm show. The all-stock deal was first announced on January 22. Uber said in its filing that the "estimated fair value of the consideration received is $206 million, which includes the investment valued at $171 million and the $35 million of reimbursement of goods and services tax receivable from Zomato."Zomato's valuation, which stood at over $3 billion in January, seems to have, however, been discounted during its buyout of Uber Eats India. According to the restaurant discovery and online food-delivery app, the discrepancy in the valuation was because Uber did not receive the same rights as that of a primary investor. "The Uber deal was done at a lower valuation since it didn't get any rights that a primary investor would have gotten, for instance, liquidation preference, right to information, etc," a Zomato spokesperson told ET.Zomato Media allotted 76,376 Non-Voting Compulsorily Convertible Cumulative Preference Shares to Uber India Systems, with a face value of Rs 9,000 at a premium of Rs 1,71,153, for a total issue price of Rs 1,80,153 per share, regulatory filings by Zomato on February 4 showed. "In consideration for the purchase of shares of Uber Eats, Zomato has paid through the issuance of Compulsorily Convertible Cumulative Preference Shares in itself to Uber, which is allowed under Indian laws," said Dipti Lavya Swain, M&A lawyer and Partner, HSA Advocates. "This way Uber has effectively made an investment in Zomato," he said.On January 10, according to a stock exchange filing by Zomato parent Info Edge, existing investor Ant Financial, an affiliate of Chinese internet giant Alibaba, led a $150 million investment round, valuing it at over $3 billion pre-money, or before the investment. Rival Swiggy's valuation has stayed largely flat over the last 12 months. Uber said in its annual disclosures that its ownership in companies including Zomato comes with significant risks outside its control. "We are not represented on the management team or board of directors of Didi or Zomato, and therefore we do not participate in the day-to-day management or the actions taken by the board of directors of Didi and Zomato," the filing said. Didi Chuxing is a Chinese ride-hailing platform where Uber holds a stake after it sold its China business in 2016.Uber is contractually restricted from competing with Zomato in India with respect to meal delivery through January 2023.

India's richest man has a Covid-19 problem

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Kolkata: The continuation of the deadly Covid-19 outbreak may drive Reliance Jio Infocomm to consider a multi-vendor strategy as its current 4G networks vendor Samsung could be vulnerable to ensuring uninterrupted supplies with the deadly virus spreading to South Korea, analysts and industry executives said.Industry experts said Jio's rivals, Vodafone Idea and Bharti Airtel, who buy a chunk of their networks from China's Huawei and ZTE, though may see at least a 25% spurt in procurement costs in the next few quarters if driven to bridge shortfalls from European vendors like Ericsson and Nokia, which could weigh on their capex plans unless they pass on to consumers in the form of higher tariffs, said industry experts. 74467793 "Spread of the coronavirus epidemic to South Korea may prompt Jio to consider a multivendor network gear procurement strategy instead of solely relying on a single vendor in Korea's Samsung,'' Rohan Dhamija, partner & head of India & Middle East at Analysys Mason, told ET.Such a move, he said, would be a more pragmatic way for Jio to overcome any potential gear procurement constraints in future."If the epidemic is a prolonged one in South Korea, Samsung might be vulnerable to ensuring uninterrupted 4G network equipment supplies to Jio that could throw up challenges, especially at a time when network load in India is on the rise and Jio is adding data customers every month," said Dhamija.Unlike Bharti Airtel and Vodafone Idea, who have multiple vendors, Jio buys network gear only from South Korean supplier Samsung. Till recently, analysts had maintained that Jio won't be impacted at all by the coronavirus epidemic as it does not use Chinese equipment, but the situation has now changed with the virus spreading to South Korea.Telcos though downplayed worries about any immediate jump in gear procurement costs or capex triggered by likely disruption in supplies from Chinese vendors, saying the AGR payments crisis has sharply reduced telco spends on network expansion, and recent tariff hikes by the Big 3 telcos too has cut consumption levels, reducing network load.Rajan Mathews, director general of Cellular Operators Association of India (COAI), said, "Telcos haven't yet seen major disruption in gear supplies following Covid-19 outbreak as there's hardly any fresh network spends happening, amid the AGR crisis."

What if you can't afford to fight coronavirus?

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By David FicklingAs the coronavirus has tiptoed closer to global pandemic status, the world's major economies are ramping up their spending on defenses. Italy plans to spend $4 billion on emergency economic measures to tackle the outbreak, while South Korea will set aside at least $5.12 billion and U.S. lawmakers rejected a White House request of $2.5 billion as too low. Expectations of additional fiscal and monetary measures to combat the disease helped fuel a rebound in risk assets Monday. The science and spending that rich countries are able to marshal in the face of epidemic disease is inadequate to the task at hand, as my colleague Anjani Trivedi has written. It's nonetheless awesome in its size and speed, and reassuring for those of us who expect to be facing spreading infections in the coming weeks and months. That makes the dearth of similar measures in lower-income countries all the more gratuitous.Nearly three-quarters of all deaths from infectious disease in 2016 happened in sub-Saharan Africa, South Asia and Southeast Asia. While just 5% of Europeans die from infections, the rate in Africa is more than 40%. Conditions such as HIV, diarrhea and malaria have seen precipitous declines south of the Sahara in recent years, but diseases of the nose, throat and lungs like influenza remain far more prevalent. After cardiovascular and neonatal conditions, respiratory infections are now the leading cause of death in Africa.74468178 To date, most lower-income and lower-middle-income countries have been mercifully free of reported coronavirus cases. Sub-Saharan Africa has recorded just two infections, in Nigeria and Senegal. India has had five named cases; Indonesia, two.Absence of evidence doesn't mean evidence of absence, though. The community surveillance that picks up infections and chains of transmission is far harder in countries where the public health system is less equipped to handle major outbreaks.Just 168 of the 18,500 deaths reported to the World Health Organization from the 2009 H1N1 influenza pandemic were from Africa, but a 2013 study used disease modeling to estimate that the true burden on the continent was about 21,000 deaths — roughly in line with the continent's 15% share of the global population. With a disease like Covid-19 that appears to spread unnoticed, it's possible that the rate of infection in these countries is already higher than has been recorded.74468185 The background level of disease makes responding to new outbreaks even harder. Coronavirus, like influenza, appears to be particularly fatal among those with existing conditions. That's likely to be a problem in Africa, where about two-thirds of the world's HIV-positive people live and where an 18-month Ebola outbreak in the Democratic Republic of Congo is only just slowing down.Even if you don't catch the coronavirus, you stand a higher chance of dying during a pandemic in a country with a bigger burden of disease and less developed health system. By overwhelming hospitals and clinics, major outbreaks decrease the quality of care and raise the risk of mortality for everyone. Almost all of the countries the World Bank deems to be least-prepared to handle pandemics are in Africa, South Asia and Southeast Asia.74468189 Improving this situation could be remarkably cost-effective. Spending about $3.4 billion a year on improving human and animal emergency medical preparedness would yield $30 billion of annual benefits, according to the WHO.The advantages could be even greater, since major outbreaks can leave long-lasting scars on an economy. Diseases shrink the labor force by sending people to convalesce at home, reducing their ability to work, or, in the worst case, killing them. A 1% increase in life expectancy results in a 5% increase in per-capita GDP, according to one analysis. Four years after the 2014 Ebola epidemic, Sierra Leone and Liberia had still not recovered the levels of income per capita they enjoyed on its eve. That's reason for the world — and in particular rich countries — to take this opportunity to spend the $1.69 or so per person that would be needed to bring all the world's health systems up to scratch. The burden of poor health in the developing world impoverishes us all.

Digitising transit payments key to a cashless economy

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Inconvenience irritates consumers and leads to loss of business. But that's where the next big opportunity for fintech innovators is.Most Indians are hassled by long queues at ticket counters, toll plazas, bus stops, petrol pumps and even at parking stations to purchase tickets; taking the wallet out, counting the currency, and more often than not getting the due back because the person at the counter doesn't have the 'change.' To replace these cash payments — which are typically micro-ticket sized ranging from Rs 5 to Rs 250 — with a digital medium has long been a challenge that India and its payments ecosystem has failed to resolve.But the first shot has been fired — all payments at the national highways have to be done through the so-called Fastag, a mechanism where payments are done electronically.It has been a well-documented fact that cash comes with cost. These costs for the operation of mass transit systems can be the costs of handling the currency across the spectrum. The state is the biggest loser with cash being a convenient tool to evade tax. "If you really look at the development of mass payments across the globe and specifically Asian markets such as Japan and Singapore you can find parallels in the journey with India because the cash usage has been high because of similarities in culture," said Naveen Surya, chairman emeritus, Payments Council of India. "Transit (payments) has been actually the real big product innovation that drives mass adoption of digital payments." Japan and Singapore have made great strides in electronic payments for transit.THE CHALLENGESFor long the lack of technology and a conservative regulatory regime stalled adoption of mass transit payments. For example, several attempts through the previous decade to create a semi-closed-loop card for Delhi Metro by banks failed as there was little scope beyond that to profit from it.The absence of a revenue model for both acquiring and issuing participants and the closed nature of these solutions, have been major deterrents for the creation of a truly interoperable mass transit solution for Indian commuters.OPPORTUNITIES MAY GROWKochi metro is doing a test-run using NPCI's National Common Mobility Card (NCMC) which is a semi-closedloop prepaid instrument for daily commuters similar to the 'Tap N Go' cards used by commuters at London's globally renowned suburban metro network 'tube'. A similar pilot project has also been undertaken by a leading lender for the Bengaluru metro."The NCMC is the most elegant solution for digitising the mass transit payments. The convergence of various transit systems for NCMC acceptance will provide a boost to mass transit payments," said Akhil Handa, head, fintech and new business initiative, Bank of Baroda. "We are also working on these and have in fact already got NCMC certification for issuance and acceptance infra from the regulators."The NCMC is a new specification of card to be used for mobility payments which can be adopted by multiple schemes. As envisioned by the regulators, the card has two instruments on it -- a regular debit card which can be used at an ATM, and a local wallet which can be used for contactless payments. Such low-value prepaid cards are already in use in countries like Japan, Malaysia and the UK.However, scale can only be achieved once a reasonable business model is developed. The merchant discount rates or MDR, even if applicable on these cards would be very low because of the micro nature of the ticket sizes.The key challenge will be to get transit systems to accept these cards as they have existing contracts for collections on the ongoing projects. On the issuance side, existing debit cards will have to be upgraded to support the contactless standards.Industry experts point out that to replace cash, convenience also needs to be emulated.Mass adoption of transit payments can happen "by allowing the creation of a limited wallet with no KYC" on these cards, the Nandan Nilekani committee on digital payments said. The solution could be making these instruments open-looped, it said."To popularise the card, acceptance at locations other than transit may also be considered. The committee recognises that for high-frequency, low-value use cases, users will want many of the same qualities as cash and will not want their transactions to be tracked," the committee recommended.The Reserve Bank of India has already taken steps for the adoption of a common mobility card. In December it has enabled banks to issue 'low KYC PPI' wallets with a monthly usage limit of Rs 10,000."Mass transit payments are typically the largest prepaid category across the globe in terms of mass retail payments," said Surya who points out that in several markets digitisation of transit has led to a digital transformation in other payment categories such as merchants. "In terms of scope it is larger than anything we've tried before. Even customers with inactive bank accounts due to low balances would find use of this as everyone uses low-cost public transport."Technology such as tokenisation and near field communication (NFC) are encryption-based contactless payments solutions that enables consumers to replicate their cards on the smartphones increasing security and enabling the interoperable nature of these transactions."Micro payment is harder to digitise as the convenience of cash hasn't been replaced yet. But even with cash, inconvenience comes when there is change involved," said Mahesh Patel, chief technology officer, AGS Transact. "We feel that NFC is the solution as two-factor authentication (2FA) is not required because the smartphones are password protected unlike contactless cards."While innovations are aplenty, bypassing India's notorious bureaucratic roadblocks is a challenge.Even in the National Highway Authority of India's Fastag project, mass adoption happened after a regulatory diktat. But it is a part failure since it isn't accepted in city toll roads. If inconvenience persists despite the diktat, there's an opportunity as the government pushes digital payments.

Lenders will have to do a better job, and channels that they use need to evolve: Shahid Charania, MD, Equifax

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Atlanta-based Equifax is one of India's four operational credit bureaus, helping the country's lenders underwrite loans using technology and analytics. In an exclusive interview with Ashwin Manikandan, Shahid Charania, managing director, emerging markets, discusses how India is going through a shift in credit behaviour with millennials embracing tech for quick loans. Edited excerpts:The Indian economy has witnessed slowdown in GDP growth over the last few quarters. How do you see it impacting the credit growth?If you look at India's history over the last 25-30 years, economic growth has gone through ups and downs just like any other major economy in the world. But if you look at the credit numbers, the potential is huge whether for people who are new to credit or the existing set of people in the credit system. So, we have to look at a much broader perspective like, say, 10-15 years while gauging these numbers.If you look at some of the other developed countries, the ratio of loans to customers is much higher than in India. While one consumer in US has multiple loan products, here in India, the ratio is still hovering around 1.5 per customer.We believe there's a huge amount of potential to grow our business. There are still over 300 million customers that are not covered by any financial services. This represents a massive opportunity for credit uptake in India.Any signs of stress or delinquency in the retail credit books?We've not seen high delinquencies overall. However, there might be some pockets prone to delinquencies which can be attributed to external factors. Obviously, there has been a slowdown in sourcing but that can be due to a variety of reasons.India has one of the youngest demographics in the world. What are some of the new trends that you're seeing?The younger generation is more open to credit as against older ones. They want both short-term and longterm credit right away and that's where a lot of fintech companies are doing well.A lot many transactions are going digital. Growth of personal loans is also an indication of increased demand for instant credit.We are seeing the shift to nontraditional borrowing e.g., travel expenses. Historically, we have not seen people borrow money for vacations which is now changing. This brings back the whole point of alternate data.These are your non-traditional borrowers. Having alternate data in our ecosystem would help credit decision-making models. Lenders will have to do a better job and the channels that they use need to evolve as per the shift in behaviour.What do you think would be drivers for credit growth in India? How can lenders make the best use of technology to expand services?If you look at the fintech industry in India, they're trying to solve some niche problems that the banks are perhaps not solving. The biggest advantage a fintech has is that they use technology to make their operations faster and nimbler.Even at Equifax we are spending a billion dollars to transform ourselves in ensuring that our data is available instantly. We are enhancing our technology much more and integrating some of the fintech solutions to our platform to solve traditional problems.How will RBI's proposed public credit registry (PCR) change the credit bureau model?PCR envisions aggregating comprehensive raw credit line data and data from alternate sources. While Credit Information Companies (Regulation) Act, 2005 (CICRA) allows credit bureaus to do some analytics on existing data, the level of sophistication allowed needs to evolve. The RBI has been progressive in these matters. We have had dialogues with the RBI on the growth and how bureaus can facilitate the credit in the country using analytics.We have also highlighted other regulators across the globe use different scoring models.How do you feel global warming will impact lenders in their credit decisions? Are they already factoring these risks in their models?There is definitely a conversation that is happening on global warming and how it impacts factors leading to credit requirements. We feel that the use of alternate data can come in handy in predicting risks. For example, the use of agricultural data and land data can help predict impact of, say, a crop. I think there is an expectation from lenders across the globe to bring out these aspects and give them a better picture through robust data scoring models.Equifax had a major data breach in US in 2017 where data of nearly 147 million customers were leaked. What are some of the steps you've taken to shore up your systems?We are spending over a billion dollars. The transformation is happening as we improve our technology and security standards even more than what we are required to comply. From an India perspective there was no impact of the breach on Indian customers but our standards are global and they apply to our India operations as well.

Panic selloff may not last long, Nifty50 to bottom out soon

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The Covid-19 outbreak and its spread have increased anxiety in the global markets. On an average, developed and emerging market equities have fallen 15 per cent in just over a month. This has increased panic, measured in terms of volatility. The volatility indices have seen a sharp spike to multi-year highs in recent times. However, past data shows selling in the Indian equity market has stopped within a month or two. Out of nine panic situations seen in the last 10 years, the Nifty has bottomed out within a month or two in six instances after posting an average decline of 11-13 per cent, shows a study by ICICI Securities. In three out of nine times, the Nifty has seen bottom formation in four to five months after posting average decline of 17 per cent. Post 2015, as the markets have started trading at lower volatility levels of 10 per cent, the sharp panic levels in volatility have seen top formation near 30 per cent. Currently, volatility has seen a surge from 10 per cent to 25 per cent already. It is expected to see a cool-off from 30 per cent, which should ideally form the market bottom, according to ICICI Securities. 74468307 "Currently, the Nifty has already fallen by 10 per cent. Hence, the Nifty has important level of investment at 10,800 and worst case scenario seems to be close to 10,400," said Pankaj Pandey, head of research, ICICI Securities.

F&O Strategy: Bullish Nifty traders can go for an Iron Butterfly

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Bullish traders with moderate risk appetite could initiate the Iron Butterfly strategy with Nifty options expiring on March 26. With fear gauge India VIX at 24.5 levels, market experts like Rajesh Palviya of Axis Securities and Bhavin Mehta of Dolat Capital believe the strategy to be sound as inflows from options sales are high because of the elevated VIX.Using Tuesday closing rates, a trader sells an 11,300 straddle (Nifty call and put) for a combined Rs 523 a share (75 shares make one lot). Simultaneously, she buys a 10,800 put and an 11,800 call for a combined Rs 176 a share to protect against sharper swings. The inflow thus reduces to Rs 347 (523-176), the maximum gain.The trader gains if the Nifty veers in a 10,953-11,647 range with maximum gain accruing at 11,300. The loss begins below 10,953 till 10,800 and from 11,647 -11,800. It's limited to Rs 153 no matter how much the Nifty falls below the upper or lower breakeven points.For example, if the Nifty slumps to 10,600, the sold 11,300 put is in the money by Rs 700, while the purchased 10,800 is 200 ITM. After relinquishing the inflow of Rs 347 and the gain of Rs 200, the trader shells out Rs 153 from her own pocket to the 11,300 put buyer. Similarly, if the Nifty breaks above 11,647, the loss is limited due to purchase of an 11,800 call.

Infosys sees a billion dollar in the cloud

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BENGALURU: Infosys is doubling down on plans to make cloud, data and experience becoming billion-dollar businesses and will continue to make most of its acquisitions in these areas in the next fiscal year, sources told ET.Infosys held its annual management planning session last week to take stock of its initiatives and plan for the next financial year. A key goal is to ensure that the Bengaluru-headquartered IT services exporter ends the ongoing fiscal year at a fast growth clip, which will set the stage for the next."The focus on these aspects of digital will continue. We have a strong strategy and we will continue on this path. The acquisitions will be around those areas," an Infosys executive told ET.For the third-quarter, digital contributed over 40% to Infosys' revenue and is growing at a time when its legacy business is contracting.Last month, Infosys said it would pay about $250 million to acquire a Salesforce platinum partner in the US, a deal that bolsters its cloud play. Past acquisitions have also helped its digital strategy."We are always in discussions but there is competition for these deals and there is concern about over-paying. We have had issues with acquisitions in the past, so everyone is aware of that," the executive said. Infosys declined to comment for this story.Cognizant announced two cloud deals last month — one in the US and the other in France. Analysts have said the acquisitions are a key part of IT services growth."The SAP, Microsoft, Oracle service lines are drying up as customers are moving to Software-as-a-Service offerings, of which Salesforce is the largest platform. Now, instead of the CIO, the chief marketing officer controls more of the spending and they prefer these models, so it makes sense to build those service lines," said Sanchit Vir Gogia, CEO of Greyhound Research.Infosys will also continue to make it easier for employees to take decisions on large deals, without needing to seek permission from senior management at every level."One of the reasons that large deal wins have been strong is because of the empowerment of account managers and heads of verticals. The focus is continuing growth momentum," a source with knowledge of the discussions said.

Pay for this tech course only if you get job with over Rs 6 lakh salary

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Mohammed Hassan had to forego his monthly paycheque for six months when he joined the coding bootcamp at Masai School in Bengaluru. For the 24-year-old engineer from Salem, that was a luxury considering he was very dependent on the Rs 18,000 a month he earned as a mechanic. But one comfort was that he would have to pay Masai only after the course, and what was even more attractive was that he would have to pay only if he got a job with a minimum salary of Rs 6 lakh. After the course, he was picked up by social networking app ShareChat as a full-stack developer with a salary of Rs 18 lakh per annum — eight times his previous salary.The enormous demand for software skills has encouraged a new business model that many students could find very attractive. Learn now, pay later, and that too, only if you get a certain minimum salary. The contract between the student and institution is called the income share agreement (ISA). If the student gets a job with at least that salary, he/she will pay 15-17% of the monthly salary to the institution for the first two-three years. "I could not possibly have pursued the course without the ISA," says Hassan.Pesto Tech is another company that offers an ISA. Their Pesto Remote is a three-month full-stack engineering course — teaching tech like React, Node, Mongo, Redux, Git, functional programming and testdriven development — remotely to students. The students must have had two years of work experience. "We charge 17% of their salary every month for the first three years only if their salary is Rs 15 lakh," says Pesto co-founder Ayush Jaiswal. It also has the Pesto Pro programme for engineers with over five years experience, where the ISA kicks in if they make 1.5 to 2 times their previous salary. "We want to be a part of the students' success and not burden them with a loan," says Jaiswal. Pesto has students from 23 states learning and earning remotely.Masai runs a 24-week gruelling course to train students to become full-stack developers. Once a student gets a job that pays Rs 6 lakh per annum or more, the ISA kicks in, which makes it mandatory to pay 15% of the monthly salary for three years. The total to be paid is capped at Rs 3 lakh."We are starting a part-time course for working professionals, three hours daily in the evening for eight months. They will start paying us if their salary is 1.5 times what they are earning," says Prateek Shukla, co-founder and CEO. Unlike Pesto, Masai works with non-banking financial companies, which underwrite the fees, pay it to Masai if the student gets a job with the minimum salary, and collects the monthly payments from the students.InterviewBit Academy, which recently raised $20 million in a series-A round by Sequoia India and Tiger Global, offers both upfront payments and ISA options. For the first option, students need to pay Rs 3 lakh. In the ISA scheme, it is 15% of the monthly pay for two years, provided the student gets a minimum Rs 7-lakh salary. "70% students from the current batch have got that minimum salary, others are still appearing for job interviews. If you have learnt it right and have got the required skill sets, getting a Rs 7-lakh job is not difficult at all," says InterviewBit cofounder Abhimanyu Saxena.Ankur Pahwa, partner and national leader for e-commerce and consumer internet at consulting firm EY India, says ventures offering ISAs are aligning industry requirements and students' educational needs. "Apart from students, it also helps (recruiting) companies tied up with these startups save training and recruitment costs and meet in-demand job requirements," he says.But there are risks in the model and most are aware of it. InterviewBit co-founder Abhimanyu Saxena wonders if ISAs are legally enforceable, and points out that it might also be difficult to implement. "Let's say a person gets a job and three months later joins another firm at a higher salary. How do you track that? There is no systematic way," he says.Pahwa says the success of ISA ventures will depend on maintaining learning quality and employability of candidates, especially as they start to scale. The big challenge would be the availability of highpaying jobs for a large number of students. The skill gaps may not remain as yawning as it is now. "Regulations in the space are still developing and any changes could have an impact on future business models," says Pahwa.

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