NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*, LUCKNOW* VOL. 18 NO.

310

Thursday, December 26, 2024

India maps industrial park Lenders get serious on AI with

livemint.com route to turn factory giantuP1 in-house talent, outside aid uP1
 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*, LUCKNOW* VOL. 18 NO. 310

Thursday, December 26, 2024

Think Ahead. Think Growth.

mint primer QUICK EDIT

One for the road: A home

All about Honda- for all
By 2030, India’s Millennial and
Nissan merger Gen-Z generations are expected
to comprise about three-fifths
of all new home buyers, accord-
BY N. MADHAVAN ing to a study by real estate ser-
On Monday, Honda and Nissan, Japan’s two large automakers vices firm JLL. Millennials are
announced plans to merge and become the third largest auto group in those born between the early
the world. Mint takes a close look at the proposed deal, the factors 1980s and the mid-1990s, while
driving it, potential benefits and how it will play out in India. Generation-Z folks were born
between the mid-to-late 1990s
Pecking order and early 2010s. The urban
Post merger Honda-Nissan will become the third largest auto group in the world home-ownership rate is also
Top 10 automobile groups in the world, by sales* (million units) expected to hit 72% by 2025, up
from 65% in 2020. This indi-
7.9
cates a growing preference for
6.5 owning houses over renting
5.4 5.4 them, even as rising pay levels
4.1 among these age cohorts
3.4 3.3 explain their expanding share of
2.8 2.8
homebuyers. Since this sector is
among the biggest employers,
robust demand for housing is
Toyota Honda+Nissan Stellantis Ford BYD broadly good for the economy.
Volkswagen Hyundai General Motors Honda Nissan Several linked sectors, such as
*Sales volumes January-September 2024 Source: Reuters steel and cement, stand to gain.
SARVESH KUMAR SHARMA/MINT
That said, affordability is an
What do we know What drove this issue. Private housing projects
1 about the merger?
Honda Motor Company, Japan’s
2 merger plan?
Two major factors—China and
in big cities increasingly seem to
be upscale, while those seeking
second largest car maker and electrification. For major global cheaper options have very little
Nissan Motor Corporation, its auto manufacturers, China is choice. It’s also time for a review
third biggest, have begun talks to proving to be a losing market as of the real-estate regulatory sys-
merge their operations sometime new Chinese car makers grab the tem enacted back in 2016 for its
in mid-2025. The new entity will imagination of local consumers. effectiveness, given reports of
have a combined market cap of Not just that. They are also
unfulfilled deliveries by some
$50 billion. It is expected to have a beginning to export in a big way.
revenue of $191 billion and profit China has overtaken Japan as the home builders. While cheaper
of $19 billion. Mitsubishi Motors world’s largest auto exporter. loans can aid demand, home-
Corp., a smaller player which has Today, four out of the top 17 car buyers also need to be confident
Nissan as a majority shareholder, is makers globally are Chinese. Both of getting what they pay for.
also expected to be part of the Honda and Nissan are losing
merger. The combined sales market share badly in China. The
volumes of the three will exceed 8 second reason is the electrification
million cars, and they will become of the power trains. Japanese
the third largest auto group carmakers, strong in hybrid
QUOTE OF THE DAY
globally after Toyota and technology, are yet to make it big
Volkswagen. in electric cars.
The major challenge of the 21st
REUTERS century is water security. In the
21st century, only those
3 What benefits does the
merger bring?
On paper, many. Economies of scale to
countries which have adequate
start with. The bigger size will give them
water resources with
greater bargaining clout with the supply proper management
chain. It will also enable the automakers to
cut costs by sharing resources such as
will move forward.
labour, production facilities and platforms.
They can work together in electrification
Nissan CEO Makoto Uchida (L) and software development. It’s a lifeline for
with Honda CEO Toshihiro Mibe. Nissan which has been cutting jobs.
NARENDRA MODI
PRIME MINISTER

4 Great in theory but will

this merger work? 5
Former Nissan chairman Carlos
How will this merger
play out in India?
Honda and Nissan are marginal
Ghosn thinks the two players in India. Honda’s market
manufacturers have no real share is 2.1% and its volume in INSIDE
complementary strengths. FY24 declined 5% from FY23. One
Sceptics also point to the failure of of its two manufacturing facilities Mark to Market | Investors stay wedded
past deals. Daimler-Chrysler tie- in India remains closed for want of to hotels >P4
up is a case in point. It collapsed volumes. Nissan’s market share is Global | How a mayor turned her town
after nine years. A Renault-Nissan less than 1% and its cars are into a ‘pig butchering’ scam hub >P10
partnership too failed. The CEO of produced by the plant it has set up
Money | How to choose a crypto trading
Stellantis, formed in 2021 through with Renault at Sriperumbudur
platform to invest in digital assets >P13
the merger of FiatChrysler and near Chennai. It is not clear how
PSA group, quit earlier this month. this facility will be utilized post the Views | Panama isn’t the only US ally
On the other hand, many experts merger. Both car makers are, Trump has rattled >P14
say that a merger among legacy however, expected to share Views | India’s leadership has a valuable
players is the only way to take on platforms and rationalize their role to play in a multipolar world >P15
nimble new players. operations in India.

What do you prefer for long-term

Take our survey and get a capital gains tax?

chance to win iPhone 16!* A. 20% tax with indexation benefits

B. 12.5% without indexation benefits

C. Not sure which one is better

D. I don't know about this

Have your say on

Scan this QR code to
Budget 2025. take the survey

*T&C apply
*The image shown is for illustration purpose only
 PLAIN FACTS

5 yrs since covid: How

it changed the world
BY DEEPA VASUDEVAN

I
n December 2019, a cluster of cases with an unknown flu-like illness emerged in Wuhan, Liked this
China. Within a few weeks, the virus spread across the region, and soon engulfed the story? Share it
world. By March 2020, covid-19 had been declared a pandemic. Half a decade has passed by scanning
since the worst global economic, social and health crisis in a century. But the economic, the QR code.
social and policy effects are still lingering, and have changed the world in significant ways.

Economic output has fallen back

several years from pre-covid trend 1 GDP Gap
How the pandemic has impacted India’s GDP trajectory INDIA’S GROWTH seems to have rebounded, but the data
(at 2011-12 prices, in  trillion) masks the fact that the stumble of 2020-21 set us back several
700 years from the pre-covid output path. Between 2011-12 and 2019-
600
20, the Indian economy averaged an annual growth rate of 6.6%.
At 7.5%, GDP will catch
up with pre-covid In 2020-21, it fell to 5.8% as stringent lockdowns were imposed.
500 trend by 2032-33 At 7%, GDP As the pandemic receded, the economy recovered: the following
will catch
400 up with
three years saw growth rates of 9.7%, 7% and 8.2%, respectively.
If it hadn't: pre-covid However, India’s GDP will catch up with its pre-covid trend
300 6.6%* CAGR trend by path only by 2042-43, assuming a steady 7% growth from 2024-
Covid 2042-43
200
strikes
Two trajectories 25. A higher, 7.5%, growth rate will allow the catch-up to happen
assumed from 2024-25:
100 7.5% CAGR; 7% CAGR
a decade earlier. Such output gaps also exist for other large
economies that appear to have turned around (the US, China).
0
2011-12 2020-21 2032-33 2042-43 Each will need robust growth to return to their pre-pandemic
*Based on CAGR between 2011-12 and 2019-20. paths, but unfortunately, external challenges such as trade
Source: Statistics ministry, author’s calculations tensions will make it harder to achieve this goal.

2 Debt Deluge Covid raised the level of government

debt, worsening future fiscal flexibility
THE UNIVERSAL policy response to the pandemic was for Gross general government debt (% of GDP)
governments to borrow large sums to support households and Advanced economies
businesses. For both advanced and developing nations, 2020 saw Emerging market and developing economies
the greatest pace of debt increase in the past two decades. 140 2020 covid-led
The International Monetary Fund fiscal monitor (October debt spike 114.2
120
2024) estimates that global debt will remain above pre-covid
levels till the end of the decade. The main obstacle to reducing 100

debt is that public spending is set to escalate in the years ahead. 80 2009 global
financial crisis
Commitment towards net-zero targets will increase spending on 60 debt spike
climate change mitigation, defence spending is likely to go up in 40 2020 covid-led
Europe, and rising protectionism will push up domestic capital debt spike
20
expenditure. High public debt reduces future fiscal flexibility,
0
and debt servicing uses up funds that could be spent on health, 2001 2029
education and infrastructure. Thus, in the coming years, the debt Data from 2025 are estimates.
overhang from the pandemic could constrain fiscal policy. Source: International Monetary Fund

3 Industrial Policy Returns Industrial policy actions to promote domestic

production have increased since 2020
AS THE pandemic sealed borders and shut down Number of new government interventions* globally
production units, goods stopped moving along global
supply chains. The resulting shortage of items made it 8,000
clear that Asia supplied a disproportionately large share 7,000
of the world’s manufacturing inputs. This spurred a new 6,000
wave of industrial policies, with governments 5,000
announcing support for specific industries or sectors 4,000
considered strategically important for economic growth 3,000
or national security. Examples include the European
2000
and US CHIPS Acts, Made in China 2025, and India’s
1,000
production-linked incentives for manufacturing.
0
Between 2019 and 2024, the number of new state 2009 2024
interventions via tariffs, subsidies, price controls, licence *include tariffs, subsidies, licensing, quotas, price controls,
quotas or foreign investment curbs nearly tripled, with export-and-trade-related measures.
the biggest jump occurring in 2020, the first covid year. Source: New Industrial Policy Observatory, Global Trade Alert

Trust in the government has dropped

in the aftermath of the pandemic 4 Trust Erosion
Edelman Trust Barometer, government AT THE start of the pandemic, many believed state-mandated
Jan 2020 May 2020 Jan 2021 Jan 2024 lockdowns would avert disaster. Fittingly, the Edelman Trust
Barometer showed high trust in governments in May 2020. But
100
by 2021, this trust fell sharply, and has not reversed in most
80
countries. The hardships faced during the pandemic topped by a
More period of high inflation (from 2021) and rising interest rates (from
60
trust 2022) led to widespread frustration with government policies.
A 2023 Pew survey of 24 countries showed that 74% of those
More surveyed believed elected officials were disconnected from
40 distrust
ordinary people, and 59% were dissatisfied with how democracy
20 was working in their countries. In 2024, 40 of 54 elections (up to
November) resulted in the incumbent losing. One can argue that
0 this strong anti-incumbency had its roots in the pandemic. Even
UK US Mexico Germany India China in India, where trust in the government remains high, voters
Source: Edelman Trust Barometer, various issues were disgruntled enough to deliver a coalition government.

5 Changing Work Models Hybrid work has become an accepted

working model worldwide
LOCKDOWNS SOWED the seeds of hybrid work. The share of Share of remote/hybrid job postings on Indeed.com (in %)
hybrid workers varies across firms, industries and nations, but it is US UK Australia Germany
here to stay. For example, the India Indeed Hiring Tracker for the 20
July-September quarter showed that 42% of jobseekers viewed
flexible working hours as a non-negotiable factor in job searches.
The trend towards hybrid work is seen in developed nations also: 15
the UK and Germany show a strong remote work culture.
Lockdowns also encouraged some workers to explore non- 10
work interests, and the rapid rise in e-commerce offered a
platform to monetize their passions. The result is a rise in gig work,
5
both as a sole or extra source of income. Covid also put work-life
balance into focus. Workers are more conscious of managing
health, family and other interests along with careers, and 0
employers are more willing to provide suitable work conditions. 01 Jan 2019 30 Nov 2024
The author is an independent writer on economics and finance. Source: Indeed Remote Tracker
SATISH KUMAR/MINT

MINT BEST OF 2024

MINT MONEY LONG STORY MANU JOSEPH
Your go-to guide for navigating the Our Long Story series delves deep into From politics and governance to cul-
tricky waters contempo- ture, litera-
of personal rary issues ture, movies
finance. From with original and science—
picking the reporting and M a n u
perfect credit meticulous Joseph’s
card to hunt- fact-check- insightful
ing the right ing. To mark takes know no
insurance the year’s end, bounds. With
plan, we’ve got you covered. This best- we’ve curated the best Long Stories his sharp wit and unparalleled perspec-
of-2024 collection is packed with tips, from 2024—capturing the moments tive, he has dissected the year’s most
deep dives and straightfor- and events that shaped the compelling topics with
ward advice to help you year. Revisit the highlights depth and nuance. Here’s a
make smart, informed and uncover the stories curated collection of his
financial choices. that mattered most. best work from 2024.
 New Delhi, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*, LUCKNOW* VOL. 18 NO. 310 Rs. 10.00 . Price with Hindustan Times Rs. 15.50 20 PAGES

Thursday, December 26, 2024

Still a work in progress: Tech OTT, box office uncertainties

livemint.com letdowns of 2024 uP12 stall big-budget movies uP7

SENSEX 78,472.87 0.00 NIFTY 23,727.65 0.00 DOLLAR ₹85.20 ₹0.00 EURO ₹88.56 ₹0.00 OIL $73.59 $0.96 POUND ₹106.87 ₹0.00

India maps industrial park Lenders raise AI

game with in-house
DON’T MISS
ISTOCKPHOTO

route to turn factory giant talent, outside help

Plan for mega parks providing designated space to firms follows China model Shayan Ghosh & Shouvik Das
MUMBAI/NEW DELHI

Jessica Jani & Mihir Mishra

A
turing value-add output are China rtificial intelligence (AI)
MUMBAI/NEW DELHI park street ($4,975 billion), US ($2,497 billion),
Japan ($818 billion), Germany ($752
that tiptoed into bank-
ing channels with chat- AI-driven attacks prompt firms

I
ndia is finally going the indus- The objective is to make India the third-largest contributor to billion) and India at $456 billion. bots is about to make bigger
trial park way to streamline the global manufacturing from fifth currently. India’s contribution is about 3% of strides, as India’s leading banks
to strengthen cybersecurity
country’s manufacturing eco- 31.6 Top countries, by share in global manufacturing (in %) total exports. and non-bank financiers look With Gen AI transforming business
system, bearing in mind neigh- Queries sent to the ministries of to embrace the technology to operations, it is also contributing to
bour China’s phenomenal suc- 15.9 pharmaceuticals, textiles, petro- improve customer service, escalating cyber threats. Sophisticated
cyberattacks leveraging AI-powered
cess through this approach. leum and natural gas, and com- cybersecurity and asset quality. deepfakes, phishing, data manipulation,
The Centre is working on a plan merce remained unanswered till State Bank of India, Bank of and malware are on the rise. >P7
to build more than 20 dedicated, press time. Baroda, HDFC Bank, Axis Bank
mega industrial parks across the Indian industrialists have indeed and Poonawalla Fincorp are Banks are working to adopt AI
country by 2030, two officials 6.5 been holding China up as an exam- among lenders developing spe- to enhance business. MINT GST on sale of used vehicles
aware of the matter said. The objec- 4.8 ple of having used such parks to cific use cases through a mix of to vary by nature of business
tive is to make India the third-larg- 2.9 2.7 build its manufacturing industry. external experts and internal technical problem.” A bank The GST on used vehicles will depend on
1.8 1.8 1.7 1.7
est contributor to global manufac- At a recent Mint CEO roundtable, teams as they work to adopt AI document on 21 December the selling enterprise’s nature of business,
turing from fifth currently. The Mahesh Chhabria, managing to enhance business. seeking bids said the firm must officials clarified. That would mean the tax
ministries of pharmaceuticals, tex- China Japan India Russia Mexico director of diversified conglomer- India’s largest lender SBI is also check the model's practical will be different for enterprises which use
tiles, petroleum and natural gas, US Germany South Korea Italy France ate Kirloskar Industries, pointed scouting for an intellectual applications and usefulness. cars for business operations from those that
and commerce are involved in out that despite being the second property rights firm to secure Jayanth Kolla, partner at AI use them as stock in trade or as inventory.>P2
Based on 2022 data Source: World Population Review
these discussions. largest manufacturer of footwear patents for innovations in AI research and consultancy firm
The plan is to build five chemical FAST TRACK pairs, India still imports soles and and machine learning by its Convergence Catalyst, said the Redington eyes marketplace
and petrochemical manufacturing the Centre plans to pharma, textiles, These parks will be a uppers from China. analytics department. Peer BoB need for SBI to build its own AI push as cos turn to AI, cloud
hubs, seven textile parks, five build over 20 parks other ministries are mix of greenfield and “The way China created a cluster is also seeking external experts and ML patents is understand-
Redington is looking to transform itself into
leather and footwear parks, four across India by 2030 involved in the talks brownfield projects on footwear is mindblowing,” to generate use cases for AI. able, since it may not want to a marketplace platform from a pure-play
medical devices parks, and three Chhabria said. “In a cluster of 10 sq. SBI wants the selected firm work with a public model from distribution firm, a top executive said. The
SARVESH KUMAR SHARMA/MINT
bulk drugs parks, providing desig- km, I can source anything and to evaluate its AI/ML (artificial one of the Big Tech firms given change stems from the sharp growth in its
nated space to companies in the radic and not planned, unlike contribution to global manufactur- everything, from the smallest guy intelligence/machine learning) the vast amounts of sensitive software and cloud segments, as the firms it
sector, the officials cited above said China, where it has been planned ing to at least 4% by 2030,” said the to the biggest guy, to make my foot- model against the criteria for and proprietary data it handles. works with focus more on cloud and AI. >P6
on the condition of anonymity. through several parks”. second official. This person wear.” getting patents registered. The “It is also important to note that
“The idea is to designate areas These parks will be a mix of both pointed out that going by current Chhabria added that big global firm must check if the model SBI’s work here does not
where it is easier to provide facili- greenfield and brownfield projects, projects and in the absence of these brands succeed in China just introduces new features or pro- involve Generative AI, but
ties for companies,” the first official with most of them designed and parks, India’s would only grow to because the sourcing is right in the cesses not found earlier; and other aspects of classical AI LOOKING BACK AT 2024:
said, adding that there has been implemented afresh and some 3.25% of global manufacturing. backyard, just in time. “All design also determine if the model development that could help in Special coverage on Markets and
criticism that India’s manufactur- existing parks upgraded. According to a World Bank data, provides a “non-obvious Personal Finance on Pages 8 & 9
ing development “has been spo- “The aim is to increase India’s the top five performers in manufac- TURN TO PAGE 6 improvement or solution to a TURN TO PAGE 6

Weaver taps Paragon, Hit movies step

Premji for ₹1,000 cr up mall footfall
Priyamvada C. & Suneera Tandon & Lata Jha
Ranjani Raghavan NEW DELHI

A
BENGALURU/MUMBAI string of blockbuster
movies towards the

W
eaver Services Pvt. end of 2024 has partly
Ltd, an affordable helped rescue shopping malls
housing finance and retailers after a near wash-
company founded by former out earlier in the year, accord-
employees of HDFC Ltd, is in ing to top industry executives.
talks to raise about ₹1,000 Pushpa 2: The Rule starring
crore from Premji Invest and Allu Arjun, one of the all-time
Paragon Partners, three people top grossers, opened in cine-
familiar with the matter said. Weaver will launch home loan mas in December. Kartik Aary- Pushpa 2, starring Allu Arjun,
“Some of the proceeds will products for women. REUTERS an-starrer Bhool Bhulaiyaa 3 opened in cinemas in Dec. PTI
be used to scale up Delhi-based and Mufasa: The Lion King
Capital India Home Loans that Weaver, set up by Satrajit have also drawn crowds. “In this quarter we have
the company acquired in Octo- Bhattacharya, former head of Strong box-office releases, actually come back very
ber,” one of the people cited investments and M&A at along with the festival season strongly,” said Pratik Dantara,
above said on the condition of HDFC, and other former HDFC demand up to Diwali, drove a head, investor relations and
anonymity. executives, said in October that high single-digit growth in strategy, Nexus Select Trust,
While Paragon and Weaver it had signed an agreement to sales for retailers in the three the operator of 17 shopping
did not respond, Premji Invest months ending December,
declined to comment. TURN TO PAGE 6 according to mall owners. TURN TO PAGE 6

The bank behind the fintech revolution

stumbles as customer funds go missing
Alexander Saeedy their accounts at Evolve.
[email protected] Evolve stopped processing
payments and said it needed to

S
cot Lenoir turned a determine how to distribute
sleepy farming bank in funds to customers. A month
Arkansas into one of Sili- later, a court-appointed medi-
con Valley’s top financial part- ator disclosed that as much as
ners. Now it is in crisis mode $96 million in fintech cus-
and some clients have started tomer funds might be missing
pulling funds after a business from accounts at Evolve and
partner failed and thousands other banks. Now, Evolve is
of customers couldn’t access facing lawsuits over the miss-
their money. ing funds, and some clients are
Evolve Bank at its peak starting to back away from the
managed around $10 billion Synapse founder Pathak says Evolve’s inability to pay customers bank.
for financial technology firms, casts doubt on safety, security of financial system. SYNAPSE/LINKEDIN Both Evolve and Synapse
including Stripe and Affirm . It blame each other for the mis-
caters to fintechs that offer bankrupt in April. Synapse 100,000 fintech customers placed funds.
technologically friendly sav- connected fintechs to banks were kept in large, commin- “Synapse failed to do the
ings accounts for everyday like Evolve to store their own gled accounts under Synapse’s one most critical job they were
people with sweeteners like customers’ funds. Synapse’s management at Evolve, its pri- supposed to do—keep accu-
high interest rates. Most fin- job was to mary bank rate ledgers to track individual
techs don’t hold their custom- ensure that partner for end user funds,” Evolve said in
ers’ funds and instead use everyone’s years. a statement. It said it is work-
banks like Evolve in the back- funds were After ing with other banks to find
ground. accounted for, while Evolve Synapse filed for bankruptcy, the funds.
Problems at the bank spilled would open accounts and thousands of customers sud- Synapse founder Sankaet
into the open when a software issue debit cards to the cus- denly couldn’t use their debit
company called Synapse went tomers. The funds of over cards or move money out of TURN TO PAGE 11
02 THURSDAY, 26 DECEMBER 2024
NEW DELHI ECONOMY & POLICY LIVEMINT.COM

m MINT SHORTS
Finmin report: Govt committed to
GST on used vehicles to EPFO adds
750k new
cutting fiscal deficit to 4.5% in FY26
New Delhi: The government will continue its focus on
improving quality spending, strengthening the social security
net and bring down the fiscal deficit to 4.5% of the GDP
vary by nature of business members
in October
(gross domestic product) in FY26, a finance ministry document
said. Budget for FY22 and to attain a level of fiscal deficit Dhirendra Kumar
lower than 4.5% of GDP by FY26, according to finance ministry [email protected]
statements on the half yearly review of the trends in receipts Tax will be different for enterprises using cars for operations from those using them as stock NEW DELHI
and expenditure and deviation in meeting the obligations of

T
the government under the Fiscal Responsibility and Budget he Employees’ Provident
Management Act, 2003. PTI Gireesh Chandra Prasad Fund Organisation
[email protected] (EPFO) reported a net
NEW DELHI addition of 1.34 million mem-
India’s GDP growth seen at 6.5% bers in October. The surge

T
he Goods and Services Tax reflects growing job opportuni-
in FY25, FY26: EY report (GST) on used vehicles will ties and heightened awareness
BLOOMBERG
depend on the selling enter- of social security benefits
prise’s nature of business, among workers. Provisional
officials and experts clarified. payroll data for October reveals
That would mean the tax will be dif- positive trends in both new
ferent for enterprises which use cars for enrolments and returning
their business operations from those members.
that use them as stock in trade or as According to the ministry of
inventory—for example, a used car deal- labour and employment’s press
ership. release on Wednesday,
The GST Council last week recom- 750,000 new members joined
mended harmonizing the tax rate on EPFO in October. It attributed
used cars at 18%, which meant the rate the growth to expanding job
for used small cars, including electric opportunities, increased
New Delhi: India’s economy is likely to grow by 6.5% in the vehicles moved up from 12%. It applies awareness of EPFO benefits,
current and the next fiscal year, an EY report said, attribut- only on the margin of the selling enter- and effective outreach initia-
ing lower-than-anticipated expansion in the prise. tives by the organisation.
September quarter to fall in private consumption expendi- GST is not applicable if one individual A striking trend in the data is
ture and gross fixed capital formation. Real GDP growth sells it to another. For used EV dealers the margin scheme under the CGST Rules, 2017 applies only if input tax credit has not been availed. MINT the strong representation of
eased to a seven-quarter low of 5.4% in July-September— An official explained that in cases young workers. The 18–25 age
the second quarter of the current 2024-25 fiscal year. where businesses with GST registration the vehicle. where margins on sale of small cars were explained Shah. group accounted for 58.49% of
This was compared to 6.7% in the preceding quarter. have claimed depreciation under the However, where margins are in the liable to a 12% GST and margins on sale Shah said that depreciation benefit all new enrolments, with
This was primarily because two domestic demand compo- Income Tax Act, the margin on the sale negative, no GST is payable, said the of larger vehicles based on engine under Section 32 of the Income Tax Act 543,000 members joining in
nents—private final consumption expenditure and gross on which GST is applicable would be the official, who spoke on condition of not capacity and length, were subject to 18%. applies only to vehicles classified as cap- October. This reflects a grow-
fixed capital formation—together accounted for a fall of difference between the selling price and being named. The Council’s decision to Where the used vehicles are classified ital assets used for business purposes by ing number of first-time job
1.5% points. PTI the depreciated value of the car. prescribe a single GST rate on as inventory (stock-in-trade), registered entities. seekers entering the organized
These are instances where sale of all old and used vehi- such as those sold by second- For second-hand EV deal- workforce.
a company sells cars which cles including EVs at 18% hand EV dealers, GST is ers, where vehicles are Additionally, 591,000 indi-
Nathealth urges govt to address were used for business
18% was a measure of simplifi- calculated on the margin, treated as stock-in-trade,
12% viduals re-joined EPFO in
purposes and were part of cation, the official said. that is, the difference the margin scheme under October after previously exit-
systemic gaps in healthcare their capital assets. Harmonized rate Sandeep Sehgal, part- between the sale price The earlier tax rate Rule 32(5) of the CGST ing, marking a 16.23% year-on-
New Delhi: Healthcare industry body Nathealth has asked the Depreciation is allowed recommended last ner-tax at AKM Global, a and purchase price, pro- on margins on sale Rules, 2017 applies only if year increase. The trend sug-
government to address systemic gaps such as acute shortage of only on capital assets week on used cars. tax and consulting firm, vided Input Tax Credit of small cars. input tax credit has not gests a preference among
medical specialists, escalating cancer care costs, and inadequate under section 32 of the explained that only those tax- (ITC) has not been availed been availed. workers to transfer accumula-
hospital infrastructure to meet the demands of a growing popula- Income Tax Act, not on inven- payers who have not claimed on the purchase of the vehicle, In such cases, GST is tions rather than opt for final
tion in the upcoming union budget. In its pre-budget recommen- tory held by businesses. any depreciation under the tax laws explained Priyal Shah, partner, charged on the margin (sale price settlements, emphasizing a
dations, Nathealth sought increasing budgetary allocations of the On the other hand, a used car dealer- will be required to pay tax on the sale con- GST advisory at NPV & Associates LLP. minus purchase price), provided it is focus on long-term financial
healthcare sector to over 2.5% of GDP and asked finance minister ship will have to pay 18% GST on its mar- sideration minus the purchase price. “If input tax credit has been availed, positive. If ITC has been availed, GST is security.
Nirmala Sitharaman to address the growing burden of communi- gins, which is the difference between The 18% tax on used vehicle sales GST is applied on the entire sale price, levied on the full sale price, ensuring For an extended version of
cable and non-communicable diseases, compounded by long the selling price and purchase price of replaces the earlier system of two rates as per general GST provisions," proper tax compliance, said Shah. this story, go to livemint.com
standing challenges. PTI

Govt extends duty-free import

of yellow peas till Feb 2025 TRANSITING FROM 2024 TO 2025 WILL HAVE ITS UNCERTAINTIES
MINT

Sixth, FDI (foreign direct investment) continues to be buoyant at domestic front as lower inflation and interest rates should help
$42 billion in the first half of the year as investors continued to revive investment. Interest rates are likely to be lowered in Febru-
EXPERT repose faith in the fastest growing economy.
Seventh, the RBI (Reserve Bank of India) did send signals for a
ary provided inflation remains within an acceptable range and the
cycle could involve up to 75 basis points (bps) cut in the calendar
VIEW pivot in interest rate in October with a change in stance to neutral. year. This would be good news for the bond market, too.
While the repo rate remained unchanged in the December policy, Assuming a normal monsoon, growth for FY26 should be
M A DA N S A B N AV I S bond yields softened to an extent in anticipation. above 7%. On its part, the government would be well placed to
Eighth, private sector investment has shown some signs of an lower the fiscal deficit further to probably less than 4.5% of GDP for
Respond to this column at increase since July as seen by higher investment intentions. FY26 as revenue collections may be expected to be buoyant. Fur-
[email protected] And last, the stock markets mimicked global trends and stood ther, it may be expected that capex would continue in an uninter-
out even as corporate profits remained under pressure in both the rupted manner next year.

I
n 2024, the external environment turned out to be benign, as quarters of the year. Clearly, the India story spoke better than what The unknown factor will be developments in the West when
New Delhi: The government has extended the import evidenced by stability in crude prices. This was despite the could be called temporary hiccups. Donald Trump takes over as the US president. His economic
of yellow peas without duty and MIP (minimum import spread of the Israel-Hamas war and the continued battle in The rather sanguine story has had only one major shadow, agenda articulated during the election
price) till February next year. However, the imports are Ukraine. Geo-politics, therefore, took a backseat. which was inflation. High inflation has been a concern for the Forecasts for campaign was quite straightforward.
subjected to registration under online Import Monitoring Looking inwards, a good monsoon also meant that worries on larger part of the year. With food inflation being particularly high, FY25 have been It included increasing customs
System, with immediate effect, for all import consignments the farm front were minimal. The general elections, however, it did come in the way of discretionary spending as was revealed by tariffs, curbing migrants and lowering
where Bill of Lading (shipped on board) is issued on or caused some disruption as government spending got deferred, some companies that spoke of urban stress. This contributed to pruned to less corporate tax rates. The potential
before 28 February 2025. PTI which in turn affected private investment decisions. Against this higher input costs, which affected both growth in sales and profits, than 7%, but the impact on higher deficits and borrow-
background, how has the Indian economy performed? and got reflected in the low growth in manufacturing within the foundations ing cannot be missed and this would
On the positive side, growth has been rather stable, and while GDP (gross domestic product) numbers. The good monsoon seem resilient also have an influence over the future
Defence secretary launches forecasts for FY25 have been pruned to less than 7%, the founda- should change this scene in the coming months. direction of interest rates given the
tions appear to be fairly resilient. Data for the second quarter reveal The other unsettling factor that added to volatility in the forex potential inflation.
Rashtraparv website, mobile app steady performance of services and agriculture, which continue market was the whimsical nature of FPIs (foreign portfolio inves- China, on the other hand, would need to take some countervail-
New Delhi: A website that will facilitate access to information to be the bedrock of the growth process. tors). While debt flows did benefit from the inclusion of Indian ing action, which can mean subsidizing production to the extent
related to the organization of events such as Republic Day and Second, agricultural production is expected to be robust, with bonds in global indices, equity outflows dented overall flows, that exports could have a dumping proclivity. Therefore, one has
Independence Day, host their live streaming and provide details both kharif and rabi benefiting from the good monsoon and high which cumulated to just around $7 billion this year. to be extra alert on imports.
related to tickets and seating arrangements was launched on reservoir levels. This added to the constant pressure on the rupee as the market But for sure there would be volatility in the forex market and the
Wednesday. Defence secretary Rajesh Kumar Singh launched Third, rural demand has revived as seen in consumer sales since watched for continued RBI intervention to prevent the currency RBI may have to be active once again to prevent the slide in the cur-
the Rashtraparv website along with its mobile app on the occa- October, which bodes well for demand. Fourth, the banking sys- from sliding. After crossing a high of $700 billion, foreign rency. Alternatively, an approach could be to allow for further slide
sion of ‘Good Governance Day’ that commemorates the birth tem has grown stronger in terms of asset quality and capital availa- exchange reserves have slipped by around $50 billion in the past of the rupee to keep abreast with competition. It will once again be
anniversary of former prime minister Atal Bihari Vajpayee, the bility, and is well placed to meet the challenge of rising credit. few months. This got reflected in the rupee, which slid in the past the year of the RBI on both interest rates and currency.
defence ministry said. The website and mobile app have been a Fifth, exports have turned around, albeit mildly, from negative two months my almost ₹2 per dollar. Madan Sabnavis is chief economist, Bank of Baroda and author
result of a consultative process adopted by the ministry. PTI growth to around 2% for the first eight months, which is a comfort. Looking ahead, in 2025, there is certainly optimism on the of Corporate Quirks: The darker side of the sun. Views are personal.

Mediation council: A key missing link in commercial dispute reforms CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
Manas Pimpalkhare Council of India (MCI) would relief’ in a dispute. regulate mediation institu- The Union government has suggestions or complaints
[email protected] create the rules for mediation Currently, parties that plead tions in India. It is unknown over the past year promoted about errors.
NEW DELHI and give mediators authority. for and secure ‘urgent interim where the MCI was estab- mediation as an effective
Readers can alert the
The government planned to relief’ can skip the mandatory lished and operationalized,” means of dispute resolution,
newsroom to any errors in the

A
mid a growing policy set up the Mediation Council of mediation proceedings. Urgent Rao said in the institution’s especially in commercial suits. paper by emailing us, with your
push for mediation, India—crucial to improving the interim relief refers to when a recommendation to the Speedy resolution of com- full name and address to
legal practitioners have ease of doing business in court stays further action Union law ministry as part of mercial suits is crucial as these [email protected].
pushed for the urgent forma- India—by the end of the year, as against a disputed asset till it the public consultation on the include a wide array of dis-
tion of a council comprising Mint reported on 25 June. But reaches a verdict. amendment to the Commer- putes—transactions of traders It is our policy to promptly
respond to all complaints.
experts and policymakers to while certain aspects of the The proposed amendment is cial Courts Act. and merchants in the country, Readers dissatisfied with the
determine the rules and proce- MCI, such as salaries, have been a clear step towards promoting The MCI’s powers would import-export, carriage of response or concerned about
dures involved in mediation. notified by the government, mediation for resolving com- include overseeing the educa- goods, construction contracts Mint’s journalistic integrity may
The idea of a mediation the council hasn’t been estab- mercial issues, said P. Madhava tion, assessment, and certifica- and tenders, franchising write directly to the editor by
council isn’t new. While the lished yet. The government planned to set up the mediation council by the Rao, registrar of Hyderabad- tion of mediators through and distribution agreements, sending an email to
2015 Commercial Courts Act Calls for the formation of a end of the year, but it hasn’t been established yet. ISTOCKPHOTO based Amika Arbitration and recognized institutes. It would intellectual property, and [email protected]
created designated courts to mediation council have grown Mediation Council. also lay down standards for insurance—making this inte- Mint’s journalistic Code of
resolve commercial disputes, louder following a proposed on 8 November. mercial suits before appearing “The Mediation Council of the conduct of mediators gral to the ease of doing busi- Conduct that governs our
with mediation playing a cru- amendment to the Commercial As per the proposal, disput- before a designated commer- India was proposed by the and recognize mediation ness in India. newsroom is available at
cial role, the 2023 Mediation Courts Act, which was pub- ing parties should engage in cial court, even if they have Mediation Act of 2023 to service providers, as per the For an extended version of www.livemint.com
Act stipulated that a Mediation lished for public consultation mandatory mediation in com- secured an ‘urgent interim institutionalize, license and Mediation Act. this story, go to livemint.com

FOR ANY QUERIES/DELIVERY ISSUES

CALL: 60004242, Monday-Saturday, 10am-6pm (Delhi, Mumbai, Bengaluru, Kolkata, Chennai, Hyderabad, Ahmedabad, Chandigarh, Pune and Lucknow) MAIL: [email protected] TO SUBSCRIBE: Give a missed call on 7039035039 or visit www.mintreaders.com or write to us at [email protected]

First published in February 2007 to serve as an unbiased and clear-minded chronicler of the Indian Dream.
RAVI KRISHNAN (EDITOR) - Responsible for selection of news under PRP Act, @ All rights reserved. Reproduction in whole or in part without written permission of Publisher is prohibited; PUBLISHED/PRINTED BY MANHAR KAPOOR ON BEHALF OF HT MEDIA LTD, 18-20 Kasturba Gandhi Marg, New Delhi 110001
Printed at HT Media Ltd presses at •Plot No. 8, Udyog Vihar, Greater Noida, Distt Gautam Budh Nagar, Uttar Pradesh 201306; •MNSPrinters Pvt. Ltd, 345/4, Bhatrahalli, Near KR Puram RTO, Old Madras Road, Bangalore 560049; •Saraswati Print Factory Pvt. Ltd, 789, Chowbhaga (W), Near China Mandir, Kolkata 700 105; •MNSPrinters Pvt. Ltd, 76/1, Poonamallee High Road, Velappanchavadi, Chennai 600077; •
Bhaskar Print Planet, Survey No. 148P, Changodar Bavla Highway, Sanand (Tal), Distt Ahmedabad, Gujarat. •Jagati Publications Ltd, Plot No. D75 & E52, APIE Industrial Estate, Balanagar, Rangareddy Distt. Hyderabad 500037 *Also available in Chandigarh, Pune and Lucknow.
RNI Registration DELENG/2007/22485; Mint welcomes readers’ responses to all articles and editorials. Please include your full name, address and telephone number. Send in your views to the editor at [email protected]. ©2024 HT Media Ltd All Rights Reserved
LIVEMINT.COM DEALS, TECH & STARTUPS THURSDAY, 26 DECEMBER 2024
NEW DELHI 03

m MINT SHORTS
IndiQube Spaces files draft papers
Don’t look now, but China’s AI
with Sebi for ₹850 crore IPO
New Delhi: Workplace solutions company IndiQube Spaces Ltd
has filed preliminary papers with capital markets regulator Sebi
to raise ₹850 crore through an initial public offering (IPO). The
sector is catching up fast
IPO of the Bengaluru-based company comprises a fresh issue of
equity shares worth ₹750 crore and an offer for sale (OFS) of
equity shares aggregating up to ₹100 crore by the promoters—
Rishi Das and Meghna Agarwal, according to the draft red her- Startups use workarounds to challenge OpenAI in some areas despite lack of leading-edge chips
ring prospectus (DRHP) filed on Tuesday. IndiQube Spaces pro-
poses to utilize the proceeds of the fresh issue to the tune of
₹462.6 crore towards funding capital expenditure towards estab- Raffaele Huang & Tracy released in November, delivered per- Nvidia customers are preparing to
lishment of new centres; ₹100 crore for payment of debt; and a [email protected] formance comparable to a Llama 3.1 deploy its latest AI data-center chip ,
portion will be used for general corporate purposes. PTI SINGAPORE model introduced in July by Face- called Blackwell, at significant scale .
book owner Meta Platforms. Elon Musk ’s xAI has constructed a

C
hinese startups show Researchers who reviewed papers data center with 100,000 Nvidia
GoMechanic eyes over 3-fold signs of catching up with published by the two companies said chips and recently raised $5 billion to
America’s leading artifi- Tencent’s model was likely trained do more. Amazon Web Services plans
growth before launching IPO cial-intelligence models with around a 10th of the computing to build a massive AI supercomputer
more quickly than many power Meta used. with hundreds of thousands of its
in the industry had expected, despite DeepSeek started as the AI research homegrown chips.
the restrictions China faces in buying unit of High-Flyer, a quantitative DeepSeek, which focuses on open-
advanced chips. hedge-fund manager with $8 billion source models, emphasizes math and
DeepSeek, a startup funded by one in assets that is known for leveraging coding. Moonshot has gained popu-
of China’s most successful hedge- AI to trade. In 2021, DeepSeek con- larity among Chinese consumers
fund managers, released a preview nected around 10,000 of Nvidia’s with its ChatGPT-like chatbot Kimi
version of its latest large language A100 chips to form a cluster for AI and is known for its ability to handle
model in November. It said the pro- training, which it called Fire-Flyer 2. long-form text.
gram’s abilities compared favorably In a paper published this August, Chinese AI startups are currently
with OpenAI’s reasoning model DeepSeek said Fire-Flyer 2 achieved valued at a fraction of U.S. companies
called o1, which came out in preview performance close to an such as OpenAI—which
form in September. Nvidia system contain- Chinese AI was recently valued at
New Delhi: Car services and repair platform GoMechanic Other Chinese companies have ing similar chips, but the developers have $157 billion —because
expects over three-fold rise in net revenue to ₹700 crore by made similar claims in recent weeks. Chinese system cost less faced U.S. financiers are unsure
2027 and thereafter go for public listing, a top official of the Moonshot AI, a startup backed by Nonetheless, the lack of cutting-edge chips is painful to the Chinese startups, and consumed less restrictions on about their ability to
company said. GoMechanic co-founder and CEO Himan- Chinese internet giants Alibaba and according to Chinese executives, and the gap is poised to widen. REUTERS energy. DeepSeek’s May monetize their advan-
access to the
shu Arora said the company at present has around 3% mar- Tencent, said it developed a model paper on its MoE model, ces. Fierce competition
ket share and aims to raise it to 10% in the next three years. specializing in math with capabilities math students. administration in December again which incorporated a world’s most has led to a price war
The firm is also looking to diversify offerings, foraying into close too1, while Alibaba said one of DeepSeek said its model bested tightened export control rules. technique to process advanced AI chips among AI model ven-
the two-wheeler and electric vehicle services segment.“We its own experimental research mod- OpenAI’s on the AIME. An experi- But the developers have found data more efficiently, dors.
sit at about 3% of the market share right now and to be ser- els outperformed the preview version ment by The Wall Street Journal workarounds. was widely noted in the Beijing-based Zhipu
vicing every 1 car out of ten would be around 10% by 2027. of the U.S. model on math. using 15 problems from this year’s At Moonshot, the startup backed industry. AI, which was valued at around $3 bil-
By 2027, we expect our brand to generate approximately The companies haven’t published AIME found that OpenAI’s o1 preview by Alibaba and Tencent, founder “One way China will get around lion in its latest fundraising round this
₹700 crore in revenue. We believe that an IPO is a natural papers describing their models, and model got to the answers faster than Yang Zhilin has said the company is export controls—building extremely month, has pushed back its plan to go
next step for GoMechanic’s growth story,” Arora said. PTI evaluating the claims is difficult DeepSeek, Moonshot and the experi- focusing on reinforcement learning, good software and hardware training public as soon as the second half of
because there isn’t a single agreed- mental Alibaba model. In one word which mimics humans’ trial and stacks using the hardware it can 2025 after investment bankers told
upon test of an AI model’s abilities. puzzle involving strategy in a hypo- error. The approach might use com- access,” Jack Clark, co-founder of AI the company it was unlikely to get the
Taiwan blocks Uber-Foodpanda Still, some U.S. specialists said they thetical two- puting power less startup Anthropic, wrote in his blog, valuation it wanted, people familiar
were impressed. player game, the intensively in referring to DeepSeek’s cluster. with the matter said. Zhipu showcased
merger over monopoly concerns China is “catching up faster,” said OpenAI program improving per- “Made in China will be a thing for AI its AI agent in late November and
Taiwan: Taiwan has rejected ride-hailing giant Uber’s plan to Andrew Carr, a former fellow at gave the answer in formance. models, same as electric cars, drones, released a video-generating model
buy Delivery Hero’s Foodpanda on the island, stating on OpenAI and currently an AI entrepre- 10 seconds while DeepSeek took Since late last year, AI developers and other technologies,” he wrote. similar to OpenAI’s Sora in July.
Wednesday that the deal would significantly harm market com- neur. He said DeepSeek researchers more than two minutes. have increasingly been using a tech- Many Chinese AI developers have Howard Huang, a former AI-infra-
petition. The US ride-hailing giant was aiming to acquire Food- trying to replicate OpenAI’s reason- Getting the correct answer on the nique called “mixture of experts,” or found ways to access restricted structure executive at a Beijing-based
panda Taiwan by the first half of 2025 for US$950 million, merg- ing model “figured it out within a few first try is still a feat because word MoE, in which an initial routing Nvidia chips, including through AI-model company, compared the
ing the top two players in Taiwan’s food delivery market. “If Uber months, and frankly many of my col- problems often stump AI programs . mechanism directs the problem to a trades with middlemen and overseas Chinese industry to people trying to
acquires Foodpanda, it will be completely unrestrained by com- leagues are surprised by that.” Chinese AI developers have faced specialized expert model like a head data centers . dance while wearing shackles.
petition,” Taiwan’s Fair Trade Commission vice chairman Chen One test used for comparison is the U.S. restrictions on access to the chef directing a spaghetti order to the Nonetheless, the lack of cutting- “Focusing on what we have been
Chi-ming said.“The disadvantages to market competition from American Invitational Mathematics world’s most advanced AI chips, kitchen’s Italian cook. This process edge chips is painful to the Chinese good at is the only opportunity to sur-
this merger far outweigh its economic benefits,” Chen said, add- Examination, which is designed to including those from chip leader also eases the demands on chips. startups, according to Chinese execu- vive, and probably to win,” he said.
ing that the merged firms’ market share would exceed 90%.AFP challenge the brightest high-school Nvidia , since 2022. The Biden Tencent said its MoE model, tives, and the gap is poised to widen. ©2024 DOW JONES & CO. INC.

KIND ATTENTION

RESIDENT WELFARE ASSOCIATIONS/ BUILDERS/

PROJECT PROPONENTS/ NGOs/ CITIZENS

PROVIDE ELECTRIC HEATERS

AVOID OPEN BURNING
AND WARM CLOTHING TO
AVOID AIR POLLUTION
SECURITY AND OTHER STAFF

 Avoid open
burning of biomass &
LET’S PROTECT OUR AIR
solid waste
TOGETHER !
 Do not use coal and Delhi Pollution Control Committee
wood for heating https://dpcc.delhigovt.nic.in

purpose
Scan QR code to Download
Green Delhi App
04 THURSDAY, 26 DECEMBER 2024
NEW DELHI MARK TO MARKET LIVEMINT.COM

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE

78472.73 -2.74 23727.65 -2.50 22402.70 -3.00 68857.25 -4.61 24572.50 -2.96 46314.02 -3.14 55023.17 -3.35
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

-0.81 -7.59 -0.75 -8.53 0.80 -8.15 1.24 -10.35 -0.34 -9.08 2.85 -6.67 4.58 -4.27
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

1.46 10.36 0.81 11.14 0.51 17.57 -3.89 32.56 -0.20 14.24 13.08 29.07 5.66 31.00

Ola opens 3,200

Investors stay wedded to hotels new stores in bid
Nishant Sasne
[email protected]
Room for more?
Revenue growth of most hotel companies was strong in H1FY25
ing the positive impact of TajSATS.” month, adding, “We remain optimis-
It is the airline catering division.
Enhanced connectivity, growing
tic on the business though.”
To capitalize on robust demand,
to win buyer trust

I
nvestors of hotel stocks are Year-on-year H1FY25 revenue growth (in %)
interest in spiritual and wildlife tour- hotel firms are raising funds, which Bloomberg
enjoying a good view. So far in ism and higher foreign tourist arriv- could be used for expansions. [email protected]
2024, stocks of The Indian Hotels IHCL-standalone 10 als are expected to aid demand from Schloss Bangalore (Leela Hotels),

O
Co. Ltd (IHCL), EIH Ltd, Chalet a medium-to-long term perspective. Ventive Hospitality and Brigade la Electric Mobility
Hotels Ltd and Lemon Tree EIH-consolidated 8 “The near-term outlook appears Hotels are looking at initial public Ltd announced open-
Hotels Ltd have gained 97%, 64%, mixed with a decelera- offerings (IPOs). “Cumu- ing of 3,200 new
41%, and 27%, respectively. A good Chalet Hotels 17 tion in broader markets INVESTORS latively, these companies stores in a single day, as India’s
part of the recent surge can be attrib- while key cities of Delhi, CHECK IN are looking to raise biggest e-scooter maker seeks
uted to the recovery in the Septem- Lemon Tree 23 Hyderabad, Bangalore, around ₹8,000 crore in to expand its local footprint
ber quarter (Q2FY25). After a chal- and Mumbai—which THE sector saw a IPOs including fresh and address customer frustra-
lenging Q1 due to heatwaves and Samhi Hotels 26 form 30% of the branded pickup last quarter
led by strong
raise of nearly ₹6,000 tion related to shortcomings in
elections, the sector saw a pickup inventory—seem to be occupancies and crore. This follows a service.
Apeejay Surrendra
across the board last quarter led by 4 doing well,” said analysts ARR improvement ₹1,000 crore QIP by Cha- The Bengaluru-based Ola
Park Hotels
strong occupancies and improve- from Nuvama Research. let Hotels earlier in year Electric has increased the Ola Electric chairman
ment in ARRs or average room rates. Juniper Hotels 23 “While the short-term AMID strong and three IPOs (Samhi number of showrooms and Bhavish Aggarwal. PTI
demand, shares of
What has also boosted the Q3 out- outlook for the sector is IHCL, Chalet and Hotels, Park Hotels & service centers to 4,000,
look is strong demand aided by a Hospitality business only Source: Company, Motilal Oswal Financial Services
positive, the medium to Lemon Tree have hit Resorts, Juniper Hotels), Ankush Aggarwal, group head slammed by service and per-
higher number of wedding dates and long-term like-for-like new highs this month which cumulatively of financial services and retail formance-linked customer
robust meetings, incentives, confer- PRANAY BHARDWAJ/MINT
growth assumption of raised around ₹4,000 auto business, said at an event complaints. A monthly runrate
ences, and exhibitions activity. Moti- basis point is one-hundredth of a per- Oswal in a 16 December report. 7-8% may limit operating crore,” said a Jefferies on Wednesday. of 80,000 such complaints
lal Oswal Financial Services expects centage point. “We anticipate hotel Optimistic about revenue growth, leverage benefits.” India report on 10 December. ITC The company, led by were overwhelming its service
key hotel companies, especially lux- companies to post healthy growth in IHCL MD & CEO Puneet Chhatwal Shares of IHCL, Chalet and Lemon Ltd is also going to demerge its hotels co-founder Bhavish Aggarwal, centers, according to local
ury and upper upscale players, to 2HFY25/FY26, aided by: an increase said in the Q2 earnings call, “With Tree hit new 52-week highs this business in Q4FY25. is looking to penetrate India’s media reports.
report about 10-12% RevPAR growth in ARR across hotels, due to a favora- 30% higher wedding dates and an month. “Valuations for IHCL are As the listed universe of hotels small towns as well as bolster Videos and photos of mal-
in Q3, driven by about 8-10% ARR ble demand-supply scenario, corpo- increase in foreign tourist arrivals running well ahead of its historical expands with potential IPOs of four its after-sales service. “By lev- functioning Ola Scooters cir-
growth and 100-200 basis points rate rate hikes, and room upgrades expected in H2, we remain confident averages, which compelled us to new companies, industry ARRs and eraging its direct-to-consumer culating on social media while
improvement in occupancy. RevPAR through renovations; and healthy of comfortably delivering double- downgrade the stock to ‘reduce,’” occupancy rates will become key (D2C) model, Ola is ensuring Aggarwal had a social media
is revenue per available room; one operating leverage,” said Motilal digit revenue growth, even exclud- said the Nuvama report earlier this monitorables for investors. that EV ownership becomes a altercation with an Indian
reality for every household,” comedian, who criticized the
the company said in an company’s flagship model.
exchange filing last week. Reputational Turnaround

For SRF, there is no light at the end of the tunnel, yet Ola Electric’s
single-day store
launch blitz
The massive
rollout comes a
“Their service
network is an area
the company is
marks i t s couple of months trying to address”
Harsha Jethmalani dance, adding that recovery in and agrochemical intermedi- That’s kept the stock under attempts to revive after the firm got as it scripts a rep-
Out of element
[email protected] H2 will be gradual. Two of ates each. pressure as further earnings its market utational turn-
SRF’s key chemicals business revenue growth trajectory is slammed by
SRF's crucial products—the on a weak footing Also, to improve its margin, downgrades cannot be ruled share—and repu- around, Jinesh
customer

T
he growth catalyst for active ingredient (AI) supplied Chemicals revenue (in  crore)
SRF is looking to backward out. FY25 capex guidance is tation—after a Gandhi, analyst at
SRF Ltd would be miss- to BASF Ltd and P-17—grap- integrate a few AIs. Domestic ₹1,600-1,800 crore, largely tumultuous year complaints Ambit Capital
2,500
ing in the December ple with weak demand. sales now form 25-30% of toward three new fluoropoly- marked by a Pvt., told Bloom-
quarter (Q3FY25) even after a Recently, SRF’s manage- 2,000
1,722 chemicals business versus 5% mers coming on-stream by blockbuster list- berg News.
dismal H1 earnings show. Rev- ment told Nuvama Research’s 1,500 1,358 three years ago. Q3FY26. But the capex ing in August followed by an India’s heavy industry min-
enue from the chemicals busi- analysts that Q3 may still not Still, weak exports pose a momentum has been falling. onslaught of consumer com- istry ordered an audit of the
ness, which made up 41% of H1 be particularly exhilarating, 1,000 hurdle for SRF. Data compiled Sustaining earnings growth in plaints regulatory scrutiny and firm’s servicing hubs in Octo-
revenue, fell 8% year-on-year. but Q4 looks promising. 500 by PhillipCapital (India) in a the packaging film and tech- a heated spat between its ber, Reuters reported, and the
The slowdown in the global Despite intensifying com- report dated 15 November nical textiles segment would chairman and a stand-up Central Consumer Protection
agrochemical market contin- petition for P-17, SRF is confi- 0 showed that speciality chemi- be crucial. comedian. Authority served a notice in
Q1FY23 Q2FY25
ues due to elevated inventory dent that the industry’s overall Source: Company, Kotak Institutional Equities
cals exports stood at ₹167.6 So far in 2024, SRF’s shares Almost every Indian town, October over alleged violation
at customers’ end. Refrigerant volume growth would be sub- crore quarter-to-date in are down 8%, far below the city and district would have an of customer rights, misleading
gas exports were weak. Plus, stantial, offering significant PRANAY BHARDWAJ/MINT
November, dropping 17.3% Nifty Midcap 50 index's 23% Ola Electric store and a service ads and unfair trade practices.
cheaper supply from China benefits for the company in pause in AI sales (to BASF), the chemicals segment, SRF aims sequentially and almost 24% returns. Its FY26 price-to- center, its chairman Bhavish This has led to market share
maintains pricing pressure. the mid-to-long term, said the situation began to improve in to launch 7-8 AIs and sales are year-on-year. This, along with earnings multiple at 38 times, Aggarwal said in a 19 Decem- loss for the sector leader—it
In the Q2 earnings call, SRF Nuvama report dated 19 December, it added. expected to begin in FY26. In weak refrigerant gas exports, according to Bloomberg, has ber video posted on X. The dropped to 24.5% in Novem-
withdrew FY25 growth gui- December. Following a brief To boost its speciality H1, it launched three pharma dragged SRF's total exports. moderated but is still pricey. milestone was initially ber versus 32.6% in the same
expected on 20 December but month last year. Ola Electric
later pushed to 25 December. shares are now trading about
Mark to Market writers do not hold positions in the companies discussed here unless otherwise informed The massive rollout comes a 40% lower from their peak in
couple of months after it got August after the strong listing.

A credit-score hangover is hitting America’s riskiest borrowers

DAVID UBERTI & the credit scores of this come people have taken a hit. In FICO’s view, the relation- The price declines since the said.
KATHERINE HAMILTON so-called nonprime group have Nonprime borrowers moni- ship between a given score and pandemic pushed some of “A lot of lenders were
fallen sharply since last year, tored by FICO in April spent the likelihood of debt repay- Harlow’s customers underwa- extending credit with no visi-
veering below prepandemic 13% more of their credit lines ment changes alongside eco- ter on their loans. Those in bility,” said Charlie Wise, sen-

A
drianna Boshears’s levels. People fell behind on on average than when Covid-19 nomic shifts, putting the onus dire straits sold back cars, ior vice president of research
dream of homeowner- credit-card bills and car pay- landed, while falling behind on on banks to evaluate how unu- sometimes at a loss, raising the and consulting at TransUnion.
ship seemed within ments more often in 2024 than bank card payments in the past sual swings translate to real- risk of defaults that could crip- Greater uncertainty stems
reach for the first time in 2021. any point since the aftermath year 28% more often. world risk. ple their credit scores. from the U.S. outlook. Should
She and her husband Jeffrey of the Great Recession. “For the last four years, Americans who opened Harlow has maintained a a recent slowdown in hiring
were finally saving money, The boomerang effect is we’ve been waiting for the credit cards in 2021, 2022 and roughly 12% delinquency morph into job losses or
thanks to pandemic stimulus exposing a weak point in a U.S. other shoe to drop,” said Lara 2023 fell behind on bills rate—low enough to do good reduced wages in 2025, more
checks and a larger-than-usual economy that has earned Ceccarelli , a credit counselor quicker than they did on business—in part because her people could fall behind on
tax refund. A real-estate agent widespread discontent in for American Financial Solu- accounts originated in each of team is more aggressively repaying debt—and ding their
suggested they work to boost recent years despite muscling tions. “We’re finally hitting the previous five years, probing customers’ risk. credit scores.
their low credit scores before ahead of its rich peers . that stage.” These borrowers are falling behind on payments after pandemic according to the Consumer “We want to make sure they Stimulus checks and a one-
applying for a mortgage. Credit scores—rankings of One step back aid ran out and inflation skyrocketed. ISTOCKPHOTO Financial Protection Bureau. do have the ability to pay, and year forbearance on Eduardo
The couple’s scores rose consumers’ likelihood to repay After jumping from 708 in Some banks, like Citizens, we’re not setting them up to Narvaez ’s federally backed
after Adrianna opened her first debts—serve as most Ameri- April 2020 to a record 718 in making payments, higher pri- customers. She has kept her avoided a bit of the resulting fail,” Harlow said, adding that mortgage helped him build
credit card, and then vaulted cans’ primary gauge of financial April 2023, Americans’ aver- ces and interest rates are prov- credit score steady by continu- hit to their profits by pulling her own lenders have tight- credit and support his mother
into the 700s after the couple health. Their rise during the age FICO score ticked one ing to be a double whammy. ing to pay monthly mini- back from riskier borrowers or ened standards. “When cus- after she lost work as a house-
added four others. But as their pandemic fostered hope for point lower in October 2023— In the East Bay area of mums—and taking home less expanding the ways they tomers can’t pay, dealers can’t keeper in the pandemic. “She’s
savings dwindled, the 41-year- young families—of homeown- the first decline in a decade. It Northern California, Jennifer pay for herself. weigh risk. pay, either.” helped me my whole life,” said
old mom started pulling out ership or new cars. But for those has held steady since then. Lee’s 14-table Break Your Fast Now the mother of a 2-year- “In hindsight,” Coughlin More trouble ahead? Narvaez, who had a $15-an-
the plastic to pay for groceries whose incomes haven’t kept up Economists say that down- restaurant survived the pan- old girl, Lee has stayed afloat said, “I think the entire indus- Bank stocks climbed over hour light manufacturing job.
and utilities. By October, the with inflation, the normaliza- shift isn’t steep enough to sig- demic in part thanks to two with the help of her husband’s try didn’t actually do this very the past year, while investors “It was my turn to do it.”
kitchen cabinets in her Fresno, tion of the economy has meant nal a slowdown in overall con- federal loans totaling $115,000. salary from a tech company. well.” snapped up bonds tied to auto But as Narvaez started his
Calif., apartment were bare. All backsliding. Some are now liv- sumer spending or trigger The 34-year-old kept serving She recently asked her com- Lenders more recently loans, a sign that Wall Street own family outside of Jackson,
five cards were maxed out. ing with loans they wouldn’t instability in the financial sys- omelettes and eggs Benedict, munity for aid in a social-me- closed the spigot somewhat. believes most Americans will Miss., he racked up thousands
Their balances now exceed have been able to otherwise tem. Total delinquencies are paying down debt from a pre- dia plea that drew thousands Issuance of new subprime auto keep paying their bills. in debt that he struggled to
$10,000. Adrianna’s credit obtain and credit limits lenders still low by historical standards. vious expansion. of dollars. loans spiked 12% in 2021, but But there are threats on the manage. Now, three of his
score has fallen to 569. There wouldn’t have typically offered. Instead, the slip reflects pres- One of Lee’s loans was for- “The only way I can really fell back down by that same horizon. In October, missed credit cards are frozen in a
are no more dreams of buying The swings show the some- sure that is disproportionately given and she deferred pay- see myself getting out of debt rate two years later as lenders payments on federal student repayment plan obtained
a house. times arbitrary-seeming ways hitting people on the lower ments on is to sell,” tightened standards, accord- loans began dinging credit through a debt counselor. Nar-
“I make more money than I that credit scores shape Amer- extreme of the credit spec- the other Lee said. ing to S&P Global. Origination scores after a four-year pause vaez reserves a fourth card for
did back then, and I’m strug- icans’ lives. They are ubiqui- trum, said Ethan Dornhelm , loan, which “Despite edged back up 7.5% in the first and will start showing up as emergencies. The limit: just
gling more now,” she said. tous, assigned to people with- vice president of scores and had a bal- the restau- three quarters of 2024. delinquencies in January. $1,000.
Americans’ credit scores out their say—even without predictive analytics at FICO. ance of $80,000, until 2022. rant being such a big part of Similar ripple effects are Those borrowers’ median “The last few months, I’ve
skyrocketed during the pan- their knowledge. Yet they The U.S. job-creation That is when prices started my life, it’s just not a life I can reaching small lenders like credit scores jumped 31 points been more stressed about it,”
demic in an unexpected bene- aren’t a government program machine hoisted average real jumping for her weekly 1,000 sustain.” A&D Motors, a used-car deal- to 685 from 2019 to 2021, the 36-year-old said. On top of it
fit of the upheaval. Millions are like Social Security. Instead, after-tax incomes above their eggs, 15 pounds of bacon and ‘FICO inflation’ ership south of Huntsville, according to credit-reporting all, he lost his job in November.
now nursing the financial they are based on a system pio- prepandemic level. But the 200 pounds of potatoes. She The whiplash forced len- Ala., that finances most of its agency TransUnion . Armed The father sacrificed lunch
hangover. neered in the 1950s by Boze- gains haven’t been universal. increasingly put those supplies ders to reckon with what 30-plus monthly sales. With with better credit, student-loan breaks at his old gig—trea-
Higher prices and borrow- man, Mont.-based Fair Isaac Roughly 17 million Ameri- on credit cards, piling up debt Brendan Coughlin , vice chair money in their pockets and holders racked up more debt, sured time with his daugh-
ing costs are hurting some of Corp., known as FICO, and cans with FICO scores below of about $45,000, while pay- and head of consumer banking prices surging, customers dur- with average nonmortgage bal- ters—to make extra cash driv-
the same consumers whose monitored by a handful of pri- 700 in April 2020 had scores ing $600 a month on her loan. at Citizens Financial Group , ing the pandemic shelled out ances increasing 31% from 2021 ing for DoorDash. Now, Nar-
credit scores were most vate companies. that were 50 points higher a “The irony, after everything called “FICO inflation.” as much as 40% more for vehi- to 2023, to $22,000 a head, not vaez takes grim consolation in
inflated by an expanded Covid- Debt counselors across the year later. About 38% of that that happened, is that this A traditionally calculated cles than they would have pre- including student loans. knowing the food-delivery app
era safety net. While the share country say their client book- group couldn’t sustain those [loan] is what’s kicking my ass credit score “is not accounting viously. Meanwhile, the slice of that offers flexibility to work the
of Americans seen as risky bor- ings are equal to or exceed the gains as of April 2024. right now,” she said. for this abnormal environ- “They’re paying for that group that is more than 60 grueling hours he may soon
rowers has dropped, according number in 2019. Lenders Even for people who have Lee raised prices to com- ment,” he said. “It’s just look- now,” said Jennifer Harlow, days behind on debt has more need to get by.
to credit-scoring firm FICO, catering to low- or middle-in- kept their score steady by pensate, but fears scaring off ing at you.” owner of A&D Motors. than doubled, TransUnion © 2024 DOW JONES & CO. INC.
LIVEMINT.COM
THURSDAY, 26 DECEMBER 2024
NEW DELHI 05
Advertisement

NO INDIAN LEFT BEHIND

BHASHINI– THE LANGUAGE OF INCLUSION
I
n a country as linguistically challenges. The National Hub of In primarily Hindi speaking handwritten materials into
diverse as India, language Language Technology (NHLT), states, this technology has digital text, facilitating
can serve both as a unifier the backbone of Bhashini, hosts been deployed to address seamless access to
and a barrier. With over a plethora of AI models that pronunciation challenges information.
hundreds of languages and are available as open APIs to amongst students, significantly • Voice Activity Detection:
dialects spoken across its length developers and innovators. enhancing their confidence and Ensures accurate sentence
and breadth, linguistic diversity language skills. By combining segmentation for translation,
is a cornerstone of Indian Transforming Lives offline functionality with preserving context and
identity. However, this diversity Across Sectors cutting-edge AI, Bhashini meaning.
often presents challenges, The impact of Bhashini extends ensures that learning is inclusive • Inverse Text
especially in the digital era, far and wide, touching the and accessible, regardless of Normalisation: Converts
where access to information and lives of millions across various connectivity issues. numerical and symbolic
services predominantly occurs sectors. Its integration into key data into meaningful text for
in English or Hindi. governance, agricultural, judicial Overcoming Challenges specific applications, such as
Recognising this critical and educational systems has Bhashini’s journey has not financial transactions.
need to address this disparity, transformed how citizens interact been without hurdles. One of
the Ministry of Electronics with public services. the primary challenges was the Scaling New Heights
and Information Technology lack of digital data for many Bhashini is not just about
(MeitY) created the Digital Agriculture and Rural Indian languages. To address language translation; it is about
India Bhashini Division. This Governance this, the division employed creating a comprehensive
initiative, under the National One of Bhashini’s most innovative approaches, such as ecosystem for digital inclusion.
Language Translation Mission remarkable implementations crowdsourcing audio samples Its speech-to-speech translation
(NLTM), aims to transcend is in agriculture through its from citizens through mobile apps. system supports 11 Indian and
linguistic barriers and enable integration with the PM Kisan These contributions formed the 14 international languages,
seamless digital inclusivity for Chatbot. Farmers, often hindered foundation for creating datasets positioning India as a pioneer
all Indians. by language barriers, can now and developingAI models. in linguistic technology. By
access critical scheme-related Technical challenges, such as making these technologies
Vision Behind Bhashini information in their mother integrating solutions with legacy available as open APIs, Bhashini
Unveiled during Digital tongues. This has helped over systems and ensuring data invites startups and tech
India Week in July 2022 by 11 crore farmers navigate the privacy, were tackled through companies to innovate further.
Prime Minister Narendra complexities of government robust engineering and user Plans for the future include
Modi, Bhashini embodies the schemes, ensuring timely access feedback. Offline capabilities expanding language support to
government’s vision of an to benefits. Gursharan Dhanjal Sameer Kochhar Amitabh Nag were developed to address the lesser-spoken dialects, integrating
inclusive digital ecosystem. In rural governance, the Vice-Chairman Chairman CEO issue of inconsistent Internet AI solutions into voice-based
Its mission is to empower e-Gram Swaraj platform has SKOCH Group SKOCH Group BHASHINI connectivity, ensuring that UPI payments and developing
citizens by providing access to been enhanced with Bhashini’s Bhashini’s solutions reach even personalised applications for
digital services in their native multilingual capabilities. Local the most remote areas. sectors like healthcare and
languages. The initiative focuses governance processes, often SKOCH Gold Award: Digital India BHASHINI Division, MeitY e-governance. Bhashini’s
on harnessing the power of inaccessible due to language received by Amitabh Nag, Chief Executive Officer, BHASHINI Driving Success infrastructure, built on a resilient
artificial intelligence (AI) to hurdles, are now available in 22 Bhashini’s suite of AI tools and multi-cloud platform, ensures
create language models and Indian languages, benefiting 2.7 The multilingual Nyaya languages. Train schedules, citizens in their native language, features sets it apart as a global scalability and adaptability to
technologies that facilitate lakh village Panchayats. This has Setu chatbot provides legal station names and even bridging the gap between the leader in linguistic technology. meet growing demands.
translation, speech recognition fostered transparency, improved guidance in regional languages, grievances are now accessible government and its people. Some of its most innovative
and other language-based citizen engagement and ensuring that citizens can access to over 200 million citizens in solutions include: Human-Centric Mission
services across 22 scheduled empowered local communities. justice without needing an their preferred language. This Education and Skill • Automatic Speech At its core, Bhashini is about
Indian languages. intermediary. This innovation has simplified travel for millions, Development Recognition (ASR): Enables empowering people. It is about
Bhashini operates under the Access to Justice addresses one of the most particularly in rural and semi- Bhashini’s contributions to real-time transcription and the farmer who can access crop
mantra of fostering collaboration. The judicial system, known critical barriers in the legal urban areas. education are groundbreaking. translation of speech in 22 information in his native tongue,
By partnering with over 70 for its reliance on English, system–accessibility. Citizen grievance redressal Rural schools, often plagued Indian languages. the villager who can lodge a
research institutions across has long posed challenges for platforms, such as CPGRAMS, by a lack of resources, now use • Text-to-Speech (TTS): grievance without language
the country, it has successfully non-English-speaking litigants. Transportation and have also benefited from an ASR-based app to improve Converts digital text into barriers and the student who can
brought cutting-edge AI-driven Bhashini’s solutions, such as Public Services Bhashini. Complaints can now English pronunciation. The app human-like speech, making confidently speak in a second
language solutions to the translating case documents The National Train Enquiry be filed in local languages and identifies pronunciation errors information accessible to language. The initiative’s
forefront. This collaboration and FIRs from vernacular System (NTES) and the translated into English for faster and provides instant feedback, those with low literacy levels. human-centric approach ensures
exemplifies how academia, languages to English and vice RailMadad platform have resolution. This bi-directional enabling students to learn • Optical Character that technology serves as a
government and industry can versa, have significantly reduced integrated Bhashini’s technology translation ensures that effectively, even in remote areas Recognition (OCR): tool for inclusion, equity and
work together to address societal delays in court proceedings. to offer services in nine regional responses are comprehensible to with limited Internet connectivity. Translates printed and empowerment. �

BUILDING BLOCKS FOR INDIA’S FUTURE EVERY BUSINESS

PLANNING FOR A DIGITAL ECONOMY HAS A REASON TO
R RESPECTED
eflecting on the of semiconductor manufacturing
nationalisation of banks and AI-driven platforms, which
and the long road to fill critical gaps in India's BE
achieving significant financial technology ecosystem. These

WHAT IS
inclusion, Charan Singh, initiatives not only contribute
Distinguished Fellow, SKOCH to economic growth but also
Development Foundation and Co- reduce dependence on imports,

YOURS?
Founder, EGROW, highlighted creating a more resilient and
a stark fact - until 2014, nearly self-reliant digital economy.
half of India's population lacked
access to formal banking. Balancing Innovation
However, the Prime Minister's and Inclusion
mission-mode initiative in 2014 It is important to ensure that
led to a revolution–50 crore the benefits of the digital
unbanked individuals joined
the formal financial system,
economy are equally distributed.
Singh cautioned against the
NOMINATE YOUR STORY
pushing India's financial inclusion “creamy segment” of society
to an unprecedented 97% of disproportionately benefiting
households. from digital innovations, leaving
Of course, the transformative Suranjali Tandon Gursharan Dhanjal Amitabh Nag Charan Singh marginalised communities
impact of the JAM Trinity (Jan Associate Professor Vice-Chairman CEO Co-Founder behind. He stressed the need for
Dhan, Aadhaar and Mobile) NIPFP SKOCH Group Bhashini EGROW Foundation robust cybersecurity measures
and the rapid adoption of digital and a regulatory framework
banking cannot be denied.
This digital leap, powered
artificial intelligence (AI) for
text-to-text translation, speech
Taxation and Regulation
in the Digital Economy
crypto-assets offer potential for
innovation, they also pose risks
that balances innovation with
protection.
INDIA INVOLVED ASSESSMENT
by mobile penetration and
UPI adoption, set the stage for
recognition, text-to-speech
synthesis and optical character
Suranjali Tandon from National
Institute of Public Finance and
related to illegal transactions
and regulatory evasion.
With AI and automation
reshaping industries, there is corporate.skoch.in
a broader transformation. As recognition in 22 scheduled Policy (NIPFP) shed light on the “Governments, especially in a growing need for reskilling
Singh pointed out, “The digital languages. complex regulatory landscape the G20, are keen to understand and upskilling to prepare the Corporate Excellence | ESG
revolution is not just about Nag emphasised the of the digital economy. She the source and flow of money workforce for new roles. As
banking; it encompasses every mission's inclusive approach: addressed the global debate in these opaque systems,” she Singh noted, “Job reorientation Digital Transformation
aspect of our economy, from “No language should be left on taxing digital giants like explained. Balancing innovation is a Herculean task in a country
Make in India to Start-up India.” behind.” By creating over 300 Google and Amazon, which with robust regulation will be with diverse languages, Corporate Digital Responsibility
India's telecom sector, with over AI models and training them often pay minimal taxes despite critical as India navigates this topographies and contributors
65 crore smartphone users and
expanding 4G and 5G networks,
with 24 crore parallel sentences,
the mission is not only breaking
generating significant revenues
across multiple jurisdictions.
rapidly evolving space. to GDP.” bfsi.skoch.in
has laid a robust foundation for
the digital economy. However,
down linguistic barriers but also
fostering digital literacy. The
“The effective global tax rate
for these companies was around
Defining and Measuring
the Digital Economy
Path Forward
From addressing regulatory
Banking | Financial Services | Insurance
there is need to address
challenges like digital trade
initiative's voice-first strategy
transcends language and literacy
2% in 2016-17,” she noted,
underscoring the need for a
The challenge of defining and
measuring the digital economy
challenges to fostering innovation
and inclusion, the path forward ratings.skoch.in
barriers and the regulatory divides, enabling users to fair and transparent taxation remains. Gursharan Dhanjal, will require concerted efforts
environment. interact with digital platforms framework. Vice Chairman, SKOCH from policymakers, businesses Central Government
seamlessly. India has taken steps to Group, questioned whether and civil society. The digital
Bridging Divides in the However, the challenges address this imbalance by taxing the digital economy should be economy is not just about State Governments
Digital Economy remain immense. As Nag profits generated within its measured by output, innovation technology; it is about its impact Districts | Cities
Amitabh Nag, CEO, Digital highlighted, many Indian borders, even as this has led to or its impact on society. He on every citizen and every corner
India Bhashini Division,
brought attention to three
languages lack sufficient
digital data, requiring
trade tensions and retaliatory
tariffs from other nations.
emphasised on the need for a
clear framework, pointing out
of the nation.
By bridging digital divides, gaming.skoch.in
significant divides—digital, innovative field-based data The issue remains unresolved that traditional metrics like ensuring transparency and
literacy and language—that collection efforts. Despite globally, but it is felt that the next GDP often fail to capture the embracing innovation, India Responsible Digital Gaming
persist despite the progress these hurdles, the Bhashini few years would see countries nuanced contributions of digital can chart a course toward a
made. He shared how the
National Language Translation
exemplifies how technology
can be a powerful equaliser,
aligning their tax policies to
ensure equitable outcomes.
transformation.
Dhanjal also highlighted the
more inclusive and sustainable
digital future. It should serve as
fintech.skoch.in
Mission (NLTM), launched in ensuring that India's She also touched on the rise role of intelligent modeling and a reminder of the transformative
2021 that aims to bridge these multilingual and multicultural of cryptocurrencies and their indigenous innovation in driving potential of the digital economy Email: [email protected]
gaps using AI-driven solutions.
The Bhashini project leverages
fabric is reflected in its digital
ecosystem.
implications for transparency
and financial inclusion. While
India's digital progress. He cited
examples like the development
and the responsibility that comes
with it. � Contact: 9811156688
[email protected] skochgroup skochgroup skochtv @skochgroup @skochsameer
06 THURSDAY, 26 DECEMBER 2024
NEW DELHI CORPORATE LIVEMINT.COM

India eyes industrial Redington eyes marketplace

park route to turn
factory powerhouse push as cos turn to AI, cloud
FROM PAGE 1

shops that make the uppers in

the footwear are available to be While the cloud, managed services biz is still small, it grew the fastest at 53% in Sep quarter
outsourced there itself. Where
does that concept exist in Toyota’s sales dropped 0.2% in
India?” he said. Gulveen Aulakh the next three to five years, growing at November from a year ago. AP
India’s move to create such [email protected] 30-40% annually. Software business,
dedicated manufacturing parks
is an attempt to replicate
NEW DELHI currently part of the technology solu-
tions unit, currently makes up 10% of the Toyota sales

R
China’s success, where these edington Ltd, India’s largest Redington Group’s overall business. In
parks have played a big role, the
first official cited above said.
distributor of consumer gad-
gets, is looking to transform
the quarter ended September, the com-
pany's revenue was ₹24,952 crore, with
stagnate as
A banker, who deals with a
lot of global companies, said
that India should work on Pharma sector parks’ will help
itself into a marketplace plat-
form from a pure-play distri-
bution company, a top executive at the
a profit of ₹293 crore. India, South Asia
and Singapore contribute two-thirds of
its overall revenue, with the rest coming
factory woes
planned manufacturing cen- firms scale up efficiently. MINT
tres like China.
$10-billion company said. The change
stems from the sharp growth in its soft-
from other markets.
Distribution of smartphones and fea- compound
“India has seen manufactur- and at lower costs. ware and cloud segments, as the compa- turephones is Redington’s largest con-
ing grow, but China’s develop- A pharma facility would
ment has been more focused,” require several common infra-
nies it works with focus more on cloud
and AI.
tributor to global revenues at ₹8,713
crore, followed by consumer and com-
low demand
this person said, also request- structure facilities, including a For the next few years, distribution mercial personal computers, print and
ing anonymity. He added that central effluent treatment and logistics will remain the mainstay of supplies at ₹8481 crore and networking, Bloomberg
the parks would help attract plant, solid waste management, the company that distributes Apple security, software, server and storage [email protected]
several global corporations that and a common warehouse, iPhones, iPads and MacBooks in India; that contributes ₹6,314 crore to overall TOKYO
want to enter India. among other things. however, the marketplace platform will revenue. Its cloud resell and managed

T
Global organizations have “When it is an industrial begin to take shape from 2025 and later services business is the fastest growing oyota Motor Corp.’s
noted the role of China’s indus- park, the costs of these things become a larger play, group chief execu- at 53% on-year, but contributing only global sales plateaued in
trial parks in the country get shared among players tive officer V.S. Hariharan said. ₹972 crore to overall revenue, as per the November as lacklustre
becoming a manufacturing inside the park…no one player “We’re investing a few million dollars company’s earnings presentation for the demand coalesced with a pause
powerhouse. bears the cost,” said Aditya on the platform called Cloud Quarks to September quarter. Redington’s single in production at two plants.
“Over the past four decades, Khemka, fund manager at make it more analytically oriented, and Redington chief executive officer V.S. Hariharan. largest vendor is Apple, with a revenue Vehicle sales—including that
China has successfully built Incred Asset Management. we're also building a marketplace contribution of 29% in the first half of of subsidiaries Daihatsu Motor
and operated a He added that around it with multiple vendors and kets across the world, including Saudi form marketplace will be able to provide FY25, followed by HP at 10%, Lenovo at Co. and Hino Motors Ltd.—
variety of indus- Organizations there is also a software, so the resellers can also work Arabia which contributes $1.5 billion to tailor-made solutions. 8%, and Samsung and Dell each contrib- totalled 984,348 units last
trial parks at noted the role of need to focus on with us to gain knowledge of this for the overall business. The strategy would pan out over the uting 7%. In FY24, Redington Ltd’s rev- month, the Japanese auto-
home and abroad, China’s industrial the functionality their customers. We are working on Hariharan said companies in the seg- next few years; however, Redington will enues stood at ₹89,600 crore, with a maker said Wednesday, down
overcoming parks in making of parks before that, as against pure hardware distribu- ments where it operates are undertak- be able to ascertain the timing of the profit of ₹1200 crore. The group already 0.2% versus November 2023.
issues that hinder scaling them up. tion which will be supply chain logistics ing digital transformation of their busi- marketplace pivot in the next 12-18 works with major hyperscalers such as Production declined 9.4% year-
the development
the country a driven with credit, warehousing,” Hari- nesses, which are likely to include creat- months. The inflection point will come Microsoft, AWS and Google, which will
“Because the on-year to 966,921 units.
of parks, such as manufacturing implementation haran said in an interview. enable it to bring software solutions While Toyota remains the
infrastructure powerhouse of the parks has Under its existing model, the CLOUD COVER from these entities to the platform world’s biggest automaker, its
financing and not been done Chennai-based company operates marketplace. business is feeling the strain of
coordination of properly, the vast warehouses stocking a large REDINGTON’S FIRMS in segments REDINGTON will HARIHARAN To be sure, the hardware distribu- intense competition over
policies and measures, and has infrastructure has not been number of gadgets from smart- current operating
model is heavy on
where it operates are ascertain the timing
undertaking digital of the marketplace
expects Redington’s
software business to
tion and supply chain segment will hybrid gasoline-electric cars in
accumulated a rich repository created, the roads are not there phones to laptops from vendors inventory, credit, transformation of pivot in the next double to $2.5 billion remain strong as key brands and the US and locally made electric
of experience, knowledge and or the railway structure is not such as Apple and Samsung, a busi- warehousing biz, said Hariharan 12-18 months in the next 3 to 5 yrs vendors introduce products with AI vehicles in China. Its hold on
good practices,” United there, these parks are more or ness that’s based heavily on credit. agents or AI features built into the markets across Southeast Asia
Nations Industrial develop- less dysfunctional,” Khemka In contrast, the marketplace plat- hardware beginning 2025, which is also being steadily eroded by
ment organization had said in a said. “So, before you open more form will offer infrastructure and soft- ing capacities in the cloud and investing when companies see the benefits of will be priced higher than existing mod- Chinese competitors.
study in November 2020. paths, the idea always should be ware as a service requiring no inventory, in adopting or integrating AI within using AI on top of cloud, and begin get- els. The market is expected to see faster More broadly, weaker
For the pharmaceutical sec- to first operationalize what you low warehousing and little credit, based their operations. This creates a situation ting the return on investments made in tech refresh cycles in the next three years demand for new cars globally
tor, for instance, analysts say have.” on subscriptions and renewals that its where they may be working with a the infrastructure to create the cloud. on personal computers, mobile phones this year was compounded by
dedicated parks would help jessica.jani@hindustan- network of 39,500 partners will take to handful of independent software pro- Hariharan expects Redington’s soft- and servers, besides cloud solutions and output cuts at Toyota caused by
companies scale up efficiently times.com market. It currently operates in 40 mar- viders, which is where Redington's plat- ware business to double to $2.5 billion in new AI solutions. regulatory probes and recalls in
Japan and abroad.
Output between January
and November fell 7.3% in

Blockbuster movies step up mall footfall Weaver Capital taps Paragon, Japan and 15.2% in China,
underscoring the rising com-
petition in the world’s largest

FROM PAGE 1
Premji to raise ₹1,000 crore year when several titles were
deferred because of the Indian
car market.
In China, production, or
vehicles off the delivery line as
centers across several cities Premier League (IPL) and Lok opposed to end-consumer
with tenants including H&M, Sabha elections. FROM PAGE 1 part of Capital India Corp. Pvt. sales, declined 1.6% year-on-
Zara and Sephora. Footfalls While the Hindi version of Ltd, promoted by Sumit K. Nar- year last month as Toyota and
doubled after falling in the half Pushpa 2 has crossed the ₹700 raise ₹800 crore from Gaja var, who is also chairman of other legacy auto brands,
year ended September, he said crore mark, Bhool Bhulaiyaa 3 Capital and Lok Capital. The Noida-based Trident Realty. including General Motors Co.
“Demand was weak in the has raked in ₹278.42 crore and deal has not yet secured regula- Capital India Finance is a core and Volkswagen AG, find
first nine months of the (calen- Singham Again at ₹268.35 tory approval. investment company (CIC) themselves left behind.
dar) year. But, starting Diwali, crore, besides smaller suc- Part of the funds from that which also includes RemitX, a At home meanwhile, the
releases like Bhool Bhulaiyaa cesses like The Sabarmati capital-raise has been ear- tech-enabled cross-border emergence of a new rival could
3, Singham Again, Mufasa: The Report (₹30.90 crore). marked towards an acquisition remittance player; RapiPay, a be a threat to Toyota’s domi-
Lion King, and now Pushpa 2, “There has been some con- of Capital India Home Loans fintech payment and money- nance, after Honda Motor Co.
we’ve got the footfalls back,” sistency in footfalls over the for ₹267 crore, a deal that is also transfer startup; Credenc, an and Nissan Motor Co. kicked
Dantara said. “This has obvi- Fewer films came to screens after the pandemic with shoots past one-and-a-half to two awaiting regulatory clearance. education loan fintech; and off negotiations this week to
ously helped consumption. remaining restricted. REUTERS months overall, with Bhool Over the last few years, hous- In 2024, housing finance firms Kuants, an investment platform. combine under a holding com-
Cinema has done reasonably Bhulaiyaa 3 and Singham ing finance companies, espe- saw a tenfold rise in primary Broadly, India’s housing pany slated to list by August
well among other categories in back. remaining restricted. Video Again during Diwali, followed cially those operating in the fundraising. ISTOCKPHOTO finance sector has witnessed 2026.
the mall.” “Till November we saw high streaming platforms emerged by Pushpa 2, of course; and affordable segment, have consolidation with major buy- Honda absorbing Nissan
Multiplexes boost footfall at single-digit sales. December as an alternative, prompting now Mufasa that has also attracted increased interest Vastu Housing Finance. outs such as New York-based could, however, give the two
shopping centres, particularly also followed that trend, but consumers to ditch the thea- opened decently,” Rahul Puri, from investors who perceive In 2024, housing finance private equity firm Warburg struggling Japanese brands the
on weekends, spurring con- we will have to wait for the ters. While the post-covid managing director, Mukta Arts them as less risky assets. companies saw a tenfold Pincus’s ₹4,630 crore acquisi- scale they need to take on
sumption of everything from month to end period has seen and Mukta A2 Cinemas said. The affordable segment typ- increase in primary fundraising tion of Shriram Housing China’s BYD Co., sales figures
fast food and apparel to high- since we have Higher inflation hits such as The sentiment is “fairly posi- ically caters to the underserved to $826.8 million compared to Finance Ltd in May for equity released on Wednesday show.
value jewellery. Higher infla- some heavy foot- and slowdown Pathaan, Jawan, tive” as far as mall walk-ins go, category of low-income or mid- $82.6 million, as per data from and convertible instruments Honda, which earlier this
tion and slowdown in govern- fall days ahead in govt spending Gadar 2, Animal especially in bigger cities, he income customers who may be Tracxn. Meanwhile, Weaver and EQT’s 100% acquisition of week sketched out plans for a
ment spending during the (including during the and others, the said. salaried, work in the informal will focus on launching innova- Indostar Home Finance for deal that amounts to an acquisi-
general election, however, Christmas and
general election, first few months
Still, consumers in smaller sector, or are self-employed tive home loan products for ₹1,750 crore in September. tion of Nissan, sold 3.43 million
cooled consumption. That the weekend of 2024 were par- tier II and III cities still face and run a small business. While women borrowers and self- It also saw some of the most cars globally in the first 11
partly reflected in India’s GDP before New however, cooled ticularly dull for “significant financial stress” private equity players have employed individuals in the prominent initial public offer- months of 2024. Nissan said it
growing at its slowest pace in Years),” Dantara consumption theatres, with no and spending on entertain- been active in this space, ven- unorganized sector from the ings this year. Bajaj Housing sold just over 3 million.
seven quarters in the quarter said. “In the first big Hindi lan- ment isn’t a priority, Puri said. ture capital firms have begun to tier II and tier III towns. Finance went public in Sep- China’s biggest automaker
through September at 5.4%. half of the year, guage releases. “The mall footfalls have realize the sector’s potential Capital India Home Loans is tember with an issue size of BYD sold 3.76 million vehicles
The festival season, how- footfalls were down 2%; we are While the December quar- dropped and that in turn, owing to its promising growth a subsidiary of Capital India ₹6,560 crore, while Aadhar over the same period—a clear
ever, was expected to aid a now in the positive zone, up ter was packed with big-ticket impacts cinemas too.” prospects. Earlier this month, Finance Ltd (CIFL), a non-de- Housing Finance had a ₹3,000 illustration of how Nissan and
revival as retailers usually offer 2-3%.” releases, the flow of new mov- [email protected] Prosus, which typically invests posit taking non-banking crore public issue in May. Honda are weak alone but,
discounts and attractive Fewer films came to screens ies has been more consistent For an extended version of in tech startups, made its first financial company focusing on Priyamvada.c@live- together, might have a fighting
schemes to lure shoppers after the pandemic with shoots compared with earlier in the the story, go to livemint.com. $100 million investment in loan against property. CIFL is mint.com chance.

Lenders get serious on AI with in-house talent, outside help

FROM PAGE 1 selected use cases using Genera- large section of our customer ent. human resources functions. ces. “For us, AI is expected to
tive AI technology, it is eager to base and are also using ML “Indian banks are ramping Arvind Kapil, managing enhance productivity, bring in
cyber security initiatives or risk extend these capabilities to models in our transaction risk up. IDFC First Bank and Axis director and chief executive of consistency, reduce human
mitigation,” said Kolla. other areas across its opera- monitoring platforms to miti- Bank are building their own AI Poonawalla Fincorp, told Mint error and give richness to the
A senior executive at a Ben- tions,” BoB said. gate frauds and prevent money IPs already, instead the lender is testing insights based on analyzing
galuru-based AI startup said it Private sector banks are not mules,” said Ramesh of buying and DIGITAL multiple targeted large volumes of structured or
is in the process of applying for behind. Top lender HDFC Lakshminarayanan, chief working on estab- SHIFT use cases, including unstructured data.”
the position. “It is not surpris- Bank has been working with AI information officer and group lished models. This cases for AI in risk Many believe lenders prefer
ing that India’s largest banker is for many years, enhancing head of IT, HDFC Bank. On is a clear trend, and BANKS once relied management, com- in-house AI models using their
taking this step, especially see- decision-making and monitor- GenAI, HDFC Bank is explor- will only increase in on tech service firms pliance, business
for deployment but
own databases due to concerns
ing how Jamie Dimon has led ing across key areas like credit ing private LLMs (large lan- the near future,” now hire engineering development and around intellectual property
JPMorgan Chase to become risk, marketing and customer guage models) and copilot tools said Jaspreet talent directly customer service. and copyright issues.
one of the leading innovators in service. to support customer service Bindra, founder of “The plan is to Kashyap Kompella, AI expert
AI too,” the executive said on “Our AI-driven customer processes, relationship man- tech consultancy AI LENDERS prefer have around 20-25 and founder of RPA2AI
in-house AI models
the condition of anonymity. service bots drive our IVR ager efficiency, and software Top lender HDFC Bank has been working with AI for many years, & Beyond. using their own such areas in the Research, said that building
In July, Bank of Baroda (Interactive Voice Response), testing use cases, Lakshminar- enhancing decision-making and monitoring across key areas. MINT The push for AI databases due to next six to 12 patents would undoubtedly be
began looking to empanel part- social media and email com- ayanan added. is not limited to top copyright issues months,” said difficult, but there are lots of
ners to implement AI and Gen munication and help us In August, Axis Bank tied up ments fraud in cross-border ally, banks were going to tech banks either. Adar Kapil, adding that use cases, including taking cues
AI, and released additional improve efficiency by provid- with the Society for Worldwide transactions. services firms to deploy such Poonawalla- his plan is for Poon- from AI centres of excellence to
information on it in November. ing self-service options to our Interbank Financial Telecom- Experts said the rise of AI in tools, but today they have backed non-bank lender Poon- awalla Fincorp to use AI as a improve operational efficien-
“While the bank has developed customers. We also use ML to munications (SWIFT) for an Indian banking was a long time become one of the biggest awalla Fincorp on 23 Decem- collaborative tool instead of a cies.
multiple AI use cases and deliver pre-approved offers to a AI-driven pilot to check pay- coming. They said tradition- recruiters of engineering tal- ber said it has integrated AI into replacement of human resour- [email protected]
LIVEMINT.COM CORPORATE THURSDAY, 26 DECEMBER 2024
NEW DELHI 07

AI-driven attacks push firms Big-budget movies stall amid

OTT, box office uncertainties
to strengthen cybersecurity Lata Jha
[email protected]
NEW DELHI

S
everal Hindi films star-
ring popular actors have
As GenAI rewrites cyber threat landscape, Indian companies see it as top menace to business made little progress
since their announcement,
and continue to remain in
Pratishtha Bagai & Jas Bardia cold storage, as producers
MUMBAI & BENGALURU struggle to find OTT buyers
and are unsure of what will

W
ith generative artifi- work at the box office.
cial intelligence, or While a big-budget period
GenAI transforming drama like Karna, which was
business operations, to feature Suriya and be
it is also contributing directed by Rakeysh Ompra- Ranveer Singh’s venture with director Shankar is stuck AFP
to escalating cyber threats. kash Mehra has been shelved,
Sophisticated cyberattacks leverag- several others like Sony’s size that not all shelved films some solace, but they come
ing AI-powered deepfakes, phishing, Shaktimaan trilogy, Ranveer belong to the larger-than-life with their own set of challen-
data manipulation, and malware are on Singh’s venture with Tamil spectacle genre, but this cate- ges,” said Sarthak Dasgupta,
the rise. To combat these complex director Shankar, and Kartik gory does seem to bear the founder and chief creative
threats, Indian companies are looking Aaryan’s film with Dharma brunt of financial challenges, officer, The Salt Inc., a con-
to upgrade their security infrastruc- Productions are yet to be as it often requires significant tent and design agency. “As
ture, experts said. taken to the floors. Producers investment. Such films need much as we want to push
Cybersecurity attacks, which started do not wish to take the risk of sprawling sets, cutting-edge boundaries, there’s a growing
around the 1980s, have evolved in the filming without finalising a VFX, and ensemble casts, all awareness that taking on
past 40-odd years. Earlier, what was streaming platform as a of which require massive high-risk ventures without a
only about corrupting standalone devi- buyer, which has meant that a budgets that are increasingly guaranteed return on invest-
ces with viruses, now has the capacity number of projects have difficult to justify in an uncer- ment could risk future oppor-
to cripple an organization and even an fallen by the wayside. tain market. tunities,” Dasgupta added.
entire country. “Cyberattacks are cur- “A lot of high-budget films, That said, even mid-budget Trade experts say that titles
rently in the 5th or 6th generation of especially those requiring and niche films are impacted, that are currently in cold stor-
what is known as multi-vector attacks. heavy VFX (visual effects) as they struggle to tie up fund- age will go on the floors as
These are not only targeting your end- work started out with great ing in a system soon as funding
point devices, but also your networks, Multi-vector attacks are very sophisticated cyber threats that exploit multiple vulnerabilities simultaneously ISTOCK ambition, but the makers that prioritizes Even mid-budget comes through.
data centres, cloud, etc. All of it is hap- soon realised the effects projects with and niche films While OTT plat-
pening in parallel, making it much cybercrime protection systems. “AI is a technologies like deepfake. “Algorith- In Indian outlook of PwC’s Global eco- would need skill and expertise guaranteed box- struggle to raise forms are
more complex and sophisticated, and double-edged sword. It is both a tool for mic attacks were mostly numeric, so nomic crime survey 2024, it said 33% of for which there weren’t ade- office or stream- funds without refraining from
difficult to prevent,” said Devroop companies to prevent and respond to attackers would write scripts to go vua senior executives surveyed highlighted quate budgets. Especially ing appeal. big buys, not too
guaranteed
Dhar, co-founder of management con- attacks and also a tool for cyber attack- millions of combinations of passwords cybercrime as one of the biggest prob- with the kind of fee A-list stars The spectacle many stars are
sulting firm Primus Partners. ers to increase the intensity of their to attack a user id. But now, with AI, the lems for businesses. Tata Consultancy demand, projects just weren’t genre, however, box-office and willing to take
Multi-vector attacks are very sophis- attacks,” Dhar highlighted. ability to create attacks such as deep- Services Ltd, the country’s largest soft- viable,” said a senior film pro- suffers most visi- streaming success pay cuts even
ticated cyber threats that exploit ware services company, has high- ducer, declining to be named. bly, as its success though there is
multiple vulnerabilities simultane- AI: THE NEW WEAPON lighted cyber threats posed by Gen The producer said while hinges on high- no certainty on
ously to breach an organization’s AI. “GenAI is enhancing opera- studios had done mental cal- risk, high-reward scenarios what could work at the box
defences. A typical example is a dis- COMBINED with A DDoS attack uses A sophisticated AI FIRMS are now using tional efficiency, but organizations culations on how much the that feel less sustainable in office.
tributed denial-of-service (DDoS) other advanced flooding of networks tool used by cyber
technologies like ML, and overwhelms criminals rampantly
AI to build advanced
cybercrime safety
must equip themselves to counter stars and production would today’s cautious environ- “The theatrical ecosystem
attack that combines multiple AI can be both a systems to maximize to generate attacks systems to identify cyber threats. It is imperative for cost while making announce- ment. is in the doldrums, non-theat-
techniques, such as flooding net- boon and a bane disruptions is deepfake unusual patterns organizations to harness advance- ments, VFX costs ballooned in “It’s not just about budget rical revenue is no longer
works and overwhelming systems, ments and implement GenAI-pow- during pre-production, mak- constraints—it’s about grap- guaranteed, and stars aren’t
to maximize disruption. ered threat detection and response ing recoveries seem impossi- pling with the hard truth of really driving returns. Pro-
Coupled with other sophisticated Companies are using AI tools to scan fakes, is much higher and to automate systems to stay ahead of the curve,” said ble. A similar challenge hit the market realities. With shifting ducers have to pause and
technologies such as machine learning, through humongous amounts of data them is significantly higher,” said Ajay Ganesa Subramanian Vaikuntam, the future instalments of Brah- audience preferences, rising rethink how to get the equi-
artificial intelligence (AI) can both be a to identify unusual patterns and detect Trehan, chief executive of authentica- global head of cybersecurity at TCS, in mastra franchise. “Currently, production costs, and the librium right, and if the vision
boon or a bane depending on who is cyber attacks, he added. tion firm Authbridge that helps firms the firm’s 2025 Cybersecurity Outlook. producers aren’t finding the unpredictability of box-office for a particular film carries
using it. Many cyber criminals are using As far as cyber criminals are con- with identity management. Trehan [email protected] cost model to make the films,” recovery we’re forced to think enough weight,” film pro-
AI technology to intensify their attacks. cerned, they are using AI rampantly to sees this trend grow further in 2025. For an extended version of the story go the producer added. beyond just creative aspira- ducer, trade and exhibition
Firms are using AI to build advanced generate sophisticated attacks using Cybercrime is becoming a concern. to livemint.com To be sure, experts empha- tions. OTT platforms offer expert Girish Johar said.

Connecting you to Have fun

Global Insights! with facts
on Sundays
Discover comprehensive business news
Catch the latest column of
& perspectives curated by the
Leaders in Journalism A
A quiz on the week’s development.

hindustantimes htTweets www.hindustantimes.com

08 THURSDAY, 26 DECEMBER 2024
NEW DELHI Looking back at 2024 LIVEMINT.COM

India’s stock mkt in 2024 and

what’s weighing on it next yr
Surging bond yields are predicated on fears of rising inflation expectations in the world’s biggest economy
The banking sector is facing macro headwinds. Still,
Ram Sahgal fundamentals for banks and NBFCs are stable. BLOOMBERG
[email protected]
MUMBAI
Wealth managers’
I
ndia’s stock market enjoyed a bull
run over the past five years, but
several factors, chiefly rising US
bond yields and a risk of slowing
top sectors to pick
domestic corporate earnings, are
likely to weigh on it in 2025.
Rising US bond yields amid disap-
pointing domestic corporate earn-
and avoid in 2025
ings growth and high stock valuations Dipti Sharma ticularly in US generics space,
in India have resulted in a recent rush [email protected] which is relatively unaffected
of foreign fund outflows. While MUMBAI by recent policy changes in the
domestic institutional investors (DIIs) US. “We expect revival in

F
can absorb some of the sales by for- ive wealth management mass/rural consumption,
eign investors, increasing primary experts identify their top which has been impacted
issuances mean a glut in stock supply, investments & strategies since covid... and prefer con-
which can impinge the stock markets for 2025. Here’s the lowdown. sumer discretionary to con-
negatively in 2025. sumer staples, given long-
US bond yields have risen even as Shreyash Devalkar, head term growth with increase in
the US Federal Reserve has cut its key equity, Axis Mutual Fund per capita incomes.”
policy rate by 100 basis points since Devalkar expects consumer He is underweight on capi-
mid-September, to 4.25-4.5% now. discretionary, healthcare and tal goods, cement, and staples.
This has resulted in global fund out- capital goods to perform well Valuations are above long-
flows from emerging markets such as in 2025. Consumer discretion- term averages for capital
India to the safety of the US dollar. (A ary benefits from the premi- goods stocks. Given the likely
basis point is one-hundredth of a per- umization theme as luxury muted growth in capex, vol-
centage point.) spending has done well, he ume growth in cement sector
Surging bond yields are predicated said, adding that capital goods could remain subdued.
on fears of rising inflation expecta- companies have strong order For staples, “Long-term rev-
tions in the world’s largest economy, books. Both domestic and enue growth in the sector
fuelled by a resilient US economy, export markets in pharma sec- appears to be lower than
and threats of higher import tariffs by tor are growing steadily. implied by current valua-
US president-elect Donald Trump Devalkar has avoided finan- tions,” he said. He is seeing dis-
once he takes office on 20 January. cial services, consumer sta- ruption in distribution chan-
While the US 10-year bond yield ples, and oil and gas. Lenders nels from quick commerce.
has risen from 3.71% on 18 Septem- face challenges from slowing Harsha Upadhyaya,
ber—when the Fed began to cut growth and pressure on net CIO—Equity, Kotak Mahin-
rates—to 4.52% on 20 December, the interest margins. Consumer dra Asset Management Co
Nifty fell 7% to 23,588 points over the staples are seeing weak urban He favours banking stocks,
same period, reducing the returns for consumption. Oil, gas, and and is optimistic about IT ser-
the year. their derivatives are expected vices, anticipating a recovery
This has caused the yield gap—the to remain soft due to slower in IT spending. Lastly, he sees
difference between the Nifty earn- global growth. potential in AI migration,
ings yield (the inverse of the price-to- Aniruddha Naha, CIO— where the immediate need for
earnings ratio) and the US 10-year Coupled with high valuations—the Nifty is trading at a one-year forward price-to-earnings multiple of 19.57 times versus its historic average of 18.25 times.. REUTERS alternatives, PGIM India cloud adoption presents sig-
bond yield—to shrink to near zero AMC nificant opportunities for
from 40 basis points on higher for- ments of shares) from September to keep rising on fears of inflationary Naha is posi- many Indian
Dow outperforms Nifty
eign portfolio investor (FPI) outflows November alone was ₹1.57 trillion, expectations fuelled by tariff hikes, it tive on pharma, Pharma and companies.
from India in that period. per Prime Database. While the Nifty 50 has fallen by 7% from 25,378 on 18 September to 23,588 on could put a pause on future rate cuts banks, non-bank- Upadhyaya
20 December, the Dow Jones has rallied 3.2% over the same period. healthcare
The Nifty earnings yield should This resulted in an excess supply of by the Fed, which during its recent ing financial ser- are promising, suggests avoiding
typically be higher than the US trea- ₹58,000 crore (or ₹580 billion) 27,000 46,000 policy meeting on 18 December vices and cement. metals. The sec-
driven by
sury yield as stocks are a riskier against demand in that period, based 25,377.55
DOW JONES halved its forecast for rate cuts in He sees tailwinds tor faces head-
NIFTY 50 regulatory
investment than the US benchmark on Prime Database data. While FPIs 45,000 2025 to just two. This could add pres- in pharma—“the winds such as
bond. If the yield gap is near zero or did invest in the primary market seg-
26,000
sure on Indian stocks and lead to fur- US price erosion changes and sluggish global
negative, that acts as a disincentive ment over this period, heavy selling ther FPI outflows, narrowing the cycle has turned ‘China plus one’ growth and per-
44,000
for FPIs, who prefer the safety of US by them in the secondary market 25,000
yield gap further. given drug short- sistent overca-
bonds over Indian equities. resulted in a market pullback of 7%. “While there is a different class of ages and only a pacity in China.
43,000
For the yield gap to move higher, The supply pipeline looks strong FPI that invests in debt and equity of mild increase in competitive Taher Badshah, CIO,
the Nifty ought to fall from current for the next year too. Sixty-two com- 24,000 EMs like India, the narrowing yield intensity; strong drug pipe- Invesco Mutual Fund
42,000
levels as prices and yields move in panies that have filed offer docu- 42,840.26 gap affects the FPI equity investor too lines across companies; stable Badshah expects power,
opposite direction. ments as of 13 December for approval 41,503.10 in light of the currency risk assumed domestic growth; and benign healthcare and banks to per-
23,587.50
FPIs have sold shares worth ₹1.03 by the Securities and Exchange Board 23,000
18 Sep 2024 20 Dec 2024
41,000 while investing in risky emerging cost environment.” form well in 2025. The push
trillion in the cash market between 2 of India are estimated to raise around Source: Bloomberg
market equities,” said Madan Sabna- The banking sector is facing for power transmission and
September and 20 December, per the ₹1.2 trillion, per Prime Database. vis, chief economist at Bank of Bar- macro headwinds, including renewable energy is expected
SATISH KUMAR/MINT
National Securities and Depository If FPI outflows from secondary oda. slowing credit growth, deposit to boost demand. Meanwhile,
Ltd (NSDL). markets continue—foreign investors contrarian trade I can look for is Nifty is trading at a one-year forward However, S.K. Joshi, a consultant at pressures, and rising credit he continues to favour indus-
The net profit of 4,370 companies tend to invest in the primary segment China.” price-to-earnings multiple of 19.57 Khambatta Securities, remains cau- costs. Still, fundamentals for trials, while defence stocks
listed on India’s stock market grew by and book profits in secondary market Nitin Jain, chief executive and times versus its historic average of tiously optimistic. banks and NBFCs are stable. look interesting.
just 4.84% to ₹3.75 trillion in the in India—domestic institutional chief investment officer at Kotak 18.25 times—this could queer the “Government spending, which Cement prices have slipped Pharma and healthcare are
quarter ended 30 September, against investors can well absorb the second- Mahindra Asset Management (Singa- pitch for markets unless corporate slowed in the first half (of FY25) on to a four-year low. Stable cost promising, driven by regula-
a 38% growth to ₹3.58 trillion in the ary sales. But excess supply pore), added: “In recent weeks, global earnings improve. account of the Lok Sabha election, structure, reasonable valua- tory changes and ‘China plus
corresponding year-earlier second would leave India’s stock market Some financial market con- could pick up in (the second half), tions, and expectations around one’. Pockets of CDMO (con-
quarter, per Capitaline. subject to the vagaries of FPI stituents are confident of corpo- resulting in an improvement in cor- increase in realizations give tract development and manu-
While domestic institutional activity. The net profit of 4,370 firms rate earnings improving and DII porate earnings,” he said. him confidence in the sector. facturing organizations) are
investors led by mutual funds “As far as FPI investment listed on India’s stock market support continuing in the face of Government spending in the seven On the other hand, sectors poised for strong growth. Hos-
stepped in to absorb the FPI selling in behaviour is concerned, the US likely FPI outflows in the sec- months through October stood at that he avoids are automobiles, pitals appear attractive. For
the cash markets between September market is by far the best market grew by just 4.84% to ₹3.75 tn in ondary market. 42% of the budgeted target of Rs 11.11 chemicals and consumer. banks, the recent CRR cut is
and December, primary issuances for them and there is no doubt the quarter ended 30 Sep While Kotak Securities trillion for the full fiscal year Neelesh Surana, CIO, expected to boost loan growth
have resulted in supply exceeding that no other market right now expects Nifty earnings per share (2024-25). Mirae Asset Investment and support a rise in deposits.
demand. compares with that,” said vet- (EPS) to grow by just 4.9% to The US markets have outper- Managers (India) Badshah thinks it’s better to
DIIs net purchased ₹2.02 trillion in eran investor Shankar Sharma. investors have been watchful about ₹1,036 in the current fiscal year (from formed Indian indices significantly He favours large private keep a low exposure or even
the cash market between 2 Septem- “Therefore, money will keep flow- EMs (emerging markets. Recent 20% to ₹989 in the previous fiscal since September. While the Nifty 50 banks due to reasonable valua- avoid metals and commodities
ber and 20 December—₹0.99 trillion ing towards the American market and macro data like GDP has been unfa- year), it sees a 16.4% EPS growth to has fallen by 7% from 25,378 on 18 tions, with potential for mone- for now. He’s not too keen on
more than what FPIs sold. However, the American dollar, and emerging vourable and corporate earnings ₹1,206 in FY26 and 14% to ₹1,372 in September to 23,588 on 20 Decem- tary stimulus to revive credit FMCG staples either.
total issuance (IPOs), offers-for-sale, markets in general may not be in have been weak.” FY27. ber, the Dow Jones has rallied 3.2% growth and margin stability. For an extended version of
and qualified institutional place- great shape,” he added. “The only Coupled with high valuations—the However, if the US bond yields over the same period. Healthcare is favourable, par- this story, visit livemint.com.

WEALTH NEEDS TIME TO COMPOUND, JUST LIKE A PLANT NEEDS WATER AND SUNSHINE
guided by momentum and others may swear by being contrarian. this process every year, from 1964 to 2010. The result was that on 80% with the listing of the actual creator of the app. I cannot think
There is no singular truth in the investing world and there are far average, 98 of the 100 monkey portfolios beat the 1,000-stock cap- of many fields in which poor research can be handsomely rewarded!
EXPERT too many approaches for me to list here. Each of these approaches
or ideologies has its pantheon of idols, who are cherished and hero-
italization weighted stock universe each year. So much for invest-
ing ideologies.
That I could be outscored by another student despite doing
everything right was not in the realm of possibilities described by
VIEW worshipped. Even a straightforward strategy like Index Investing One method of distinguishing luck from skill is proposed by my chemistry teacher. What appears to be the skill of an investor,
has its heroes. Michael J. Mauboussin, author of The Success Equation. Ask your- and the superiority of their ideology, often includes a component
VETRI SUBRAMANIAM Each of these investing strategies has worked for many, but not self whether you can lose on purpose. If you cannot lose on pur- of luck that remains invisible and unacknowledged.
everybody, and over time, but not at every moment! pose, it means luck plays a significant For investors what really matters is whether their wealth crea-
Respond to this column at
[email protected]
It’s good to remember that the stock market is a place designed Investing is role in the outcome. tion journey enables them to achieve their financial goals. A mara-
to humble you. When you combine investing ideology and an ego not a board During the covid pandemic, there thoner is a marathoner regardless of time. That is my experience
that cannot accept being outscored by another participant, it is a was a shortage of oxygen cylinders in from years of running. Focus on continuous improvement in your
examination

I
remember my chemistry teacher writing a question on the recipe for misery. Somebody will always be making more money India. The stock price of Bombay Oxy- process rather than picking holes in other methods. Before attrib-
blackboard, followed by five sacrosanct sentences! Writing those than you. The ardent, disciplined pursuit of your investment strat- with a gen doubled in 20 days from March to uting somebody else’s success to luck, consider the possibility that
five points in the answer ensured we would get the maximum egy is no guarantee of outperformance every day or every year. finite April 2021. Except the company had lady luck has blessed you too.
possible marks from the board examiner. This was almost ironclad, Mr Market is a rather moody person. He does not respect fore- date shut down its oxygen business a while Investing is not a board examination with a finite date. Wealth
and you knew nobody could outscore you on that answer. casts, calendar years, financial years or your birthday and anniver- back and what remained was a finance needs time to compound, just like a plant needs water and sunshine.
In school, a structured answer guarantees success; the rules are sary. Investors who change their ideology and heroes based on business. Lucky for some investors, not Don’t fall prey to your ego. May the wisdom of the Bhagwad Gita
clear, and outcomes are predictable. Unfortunately, in the invest- what is currently in fashion will likely find that the trend is always so lucky for others. be the guiding voice in your head during your investing journey:
ing world, there is no such equivalent. Whatever your chosen one step ahead of them and prone to inflexion. The stock market In the US, a few investors at Zoom Technologies were rewarded “Hell and self-destruction have three gates: lust, anger and greed’.
investing process, there is no guarantee that you will get the best is a costly place to discover who you are and what you believe in. with a near 100-fold increase in the stock price from March to April Resisting these gates can lead to more mindful wealth creation.”
possible score. You may well be outscored. Investing is a field in which monkeys throwing darts have beaten 2019. This was likely a case of mistaken identity, with the company Vetri Subramaniam is chief investment officer at UTI Asset Man-
It’s not that long-term investors have a singular style. Some professional stock-pickers. Rob Arnot of Research Affiliates simu- Zoom Video Communication (maker of the popular video confer- agement Co.
swear by the philosophy of margin of safety, while others may lated this process and randomly selected 100 portfolios containing encing software app Zoom) listing in April 2019. The stock of Zoom The views expressed are the author’s own views and do not necessa-
invest only in high-quality businesses with a moat. Some may be 30 stocks from a 1,000-stock universe in the US. They repeated Technologies, which had nothing to do with the Zoom App, dropped rily relect those of UTI AMC.
LIVEMINT.COM
LOOKING BACK AT 2024 THURSDAY, 26 DECEMBER 2024
NEW DELHI 09

How asset returns varied in EXPERT

VIEW

2024 and in the past 10 years

K A L P E N PA R E K H

Respond to this column at

[email protected]

ROOM NO 56,
Data does not throw up any pattern to predict winners of tomorrow; a diversified portfolio is the best approach
MIYAKO HOTEL: AN
Jash Kriplani
INVESTING LESSON
The asset allocation quilt
[email protected]
MUMBAI

W I
hile the winners will start with a disclaimer—this column is inspired by a chapter
among asset classes The table ranks 10 asset classes in order of their return performance -- from in “Fluke” by Brian Klaas—a good book in how luck plays an
keep rotating every the highest to lowest -- for each calendar year in the 10-year period from important role in life.
year, the absence of BOND The history we know tells us that the first atomic bombs were
2015 to 2024. The absence of any pattern in the returns of asset classes from
any such pattern one year to the next reinforces the importance of asset allocation to build a dropped on Hiroshima and Nagasaki in August of 1945, killing
over the past 10 years (see chart) rein- balanced portfolio against trying to consistently predict the next winning around 200,000 people. What we may not know is that Kyoto,
forces the importance of asset alloca- STOCK REAL home to wartime factories and an intellectual hub with an edu-
asset class. A diversified portfolio of stocks, bonds, and physical assets is ESTATE
tion in building a balanced portfolio. G-SEC cated population, was meant to be the first target for the bomb. The
Unlike last year, when Indian stock key to steering through every market condition. Such a portfolio may not other three cities in the target list were Hiroshima, Yokohama, and
markets were on a tear with the BSE deliver the highest return in any given year but will perform competitively GOLD Kokura as backup. Nagasaki wasn’t even part of the deliberations.
250 SmallCap Total Return Index across market cycles. An unrelated story had occurred 20 years ago. Henry Stimson
(TRI) delivering 47.3% returns, in T-BILL had gone to Kyoto with his wife for a holiday in 1926 and stayed at
2024 the markets seem to have taken Hotel Miyako in Room no 56. They enjoyed the beautiful city and
a breather. The BSE 250 SmallCap it turned out to be an extraordinary visit.
TRI is up 24.1% year-to-date (as of 23 Returns (in %) Nineteen years later, Stimson was America’s secretary of war and
December). The BSE 150 MidCap TRI 10 years the top civilian overseeing wartime operations. “I don’t want Kyoto
is up 26.2% (from 42.4% in 2023) and 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 bombed,” he said, as soon as the target committee picked Kyoto as
CAGR (%)
the BSE 100 TRI—which tracks large- the first city to be destroyed and informed him. While the generals
caps—is up 13.7% (23.2% in 2023). kept wondering why not Kyoto, Stimson finally went to the Presi-
In 2024, the markets have been Mid-cap G-sec Small-cap Gold S&P 500 Small-cap Small-cap Gold Small-cap S&P 500 Mid-cap dent and got Kyoto out of the list. Ultimately, the first bomb fell on
more volatile. The frontline indices— 12.6 15.0 57.1 8.4 31.8 27.9 59.1 11.7 47.3 26.9 19 Hiroshima.
BSE Sensex and Nifty 50—have cor- The second bomb was to be dropped on Kokura, as per plans.
rected 10% from their respective highs Unexpected clouds made it difficult for the bomber pilots to see the
touched on 26 September. Credit risk S&P 500 Mid-cap G-sec Gold Gold Mid-cap Large-cap Mid-cap Mid-cap Small-cap ground below. The crew decided to attack a secondary target and
That came amid a sell-off by foreign 10.0 12.5 52.7 8.0 21.1 27.6 48.7 6.0 42.4 26.2 16 approached Nagasaki. It had the same cloud cover but it cleared at
investors, downgrades to corporate the last minute and Nagasaki was bombed.
earnings, and slower economic It became a city doubly unlucky—first, it was a last-minute addi-
growth. Foreign portfolio investors Corporate
tion. And second, a brief window of clouds in the sky over Kokura
Corporate Large-cap Corporate G-sec Mid-cap S&P 500 Credit risk S&P 500 Small-cap S&P 500
(FPIs) have net sold Indian equities bond bond bond
made the pilot fly to Nagasaki.
worth Rs 95,558 crore since October. 9.0 33.3 12.0 26.3 29.1 5.4 25.1 24.1 15 Kokura civilians were lucky. It’s called Kokura’s luck to this day
Experts expect some moderation in
12.0 5.0 for someone escaping from disaster. Clouds spared Kokura and
the momentum, but retain faith in Stimson’s fond memories of his vacation saved Kyoto.
India’s structural growth story. G-sec Credit risk S&P 500 Credit risk Large-cap S&P 500 Large-cap Mid-cap Large-cap Gold Large-cap This real story tells us that the world doesn’t have single and sim-
“What we have seen in the last five 7.0 12.0 12.3 5.0 10.9 19.0 26.5 3.6 23.2 19.0 13 ple cause and effect relationships. We believe, delusionally, that we
years in terms of returns across large-, can understand, predict, control and forecast the future. The events
mid- and small-caps, we are unlikely to that happen today would be the result of multiple factors, not the
see a repeat of that in near-to-medium Corporate Corporate one we attribute as the primary reason.
T-Bill Gold Credit risk Real estate Large-cap Credit risk Gold Large-cap Gold
term,” said Nilesh Shah, managing
10.9
bond bond
12.3 11
Diversify, asset GDP growth means better equity
director of Kotak Mutual Fund. 5.4 8.0 4.8 10.0 16.8 8.6 2.9 13.7 market returns. But many variables in
allocate while
He said valuations are fair, the base China ensured that this equation failed.
is high, and nominal returns will also investing to Rate cuts mean bond yields fall. The Fed
decline in line with inflation. “Markets Real estate Real estate
Corporate
T-Bill Credit risk G-sec
Corporate
Real estate Credit risk G-sec Credit risk
safeguard your cut rates twice this year, yet yields spiked
will remain weak as long as they (FPIs) 4.5 9.6
bond
4.1 8.0 12.8
bond
2.7 9.3 9.9 9 portfolio from in the US. There were no rate cuts in
are selling aggressively. Their aggres- 7.0 4.9 fluctuations India, yet bond yields drifted lower.
sive buying can push market higher.” Stocks always make money in the
Devina Mehra, MD and chairperson Corporate long term, yet there are 24 out of 25
of First Global, said, “From one-two- S&P 500 Mid-cap Real estate Large-cap T-Bill Real estate G-sec G-sec Credit risk G-sec emerging market countries where their stocks earned less than
bond
year perspective, we are positive on 4.2 6.8 6.4 2.6 4.2 12.3 3.1 2.6 7.7 8.8 8 gold (in their local currency). Most countries have earned barely
large-caps and frontline indices, but 2-3% above inflation, many just 0. India and the US have earned
we are cautious on pockets which have 5-6% higher than inflation in the past three decades. Democracy
seen froth.” Corporate Corporate Corporate and capitalism work. Or, both are also more expensively valued
Small-cap Large-cap Gold S&P 500 Real estate Credit risk G-sec T-Bill
bond bond bond
She said when a correction follows 3.3 5.0 6.0 2.4 4.2 11.4 2.2 2.5 markets today, hence the inference could change in the future.
a bull run, and an uptrend resumes 7.0 7.6 8 Cheap stocks earn better returns, yet the best performing stocks
after that, it is usually not the same set in the past two years have been expensive stocks becoming more
of stocks that come back. “The index expensive—for example, capital goods and industrials. Financiali-
Large-cap T-Bill T-Bill Mid-cap Mid-cap T-Bill T-Bill Small-cap T-Bill T-Bill T-Bill
moves, but the composition of the sation of savings have seen private banks taking market share—yet
index changes; more so in the small- -2.0 4.7 4.0 -12.9 0.9 3.1 2.0 -1.0 4.3 4.6 4 some of the finest private Indian banks (even the world) earned less
cap space.” than FD returns for their shareholders.
Debt markets Large caps don’t have alpha & in India, small-& mid-caps enable
Government securities (G-Secs) Gold Small-cap G-sec Small-cap Small-cap Real estate Gold S&P 500 Real estate Real estate Real estate stock picking, hence more alpha. We read this many times in 2022
have delivered returns of 9.9% in 2024 -7.9 3.3 2.0 -23.6 -8.4 1.2 -2.7 -10.0 2.0 0.9 4 and in the last two years, the reverse happened. Quality stocks
(as of 30 November). G-sec yields have make the best returns, yet highest ROE companies (return on
fallen by around 38 basis points (bps) Domestic stock market returns as on 23 December, 2024; T-Bill: treasury bills; G-secs: government securities; for large cap, we have used BSE 100 Total Return Index (TRI); for mid cap, BSE 150
equity) aren’t the best rewarding stocks, not just today but even
in 2024. One basis point is one-hun- MidCap TRI; for small cap, BSE 250 SmallCap TRI - switched indices for Total Return Index for current year and previous years; for T-Bills, CCIL T-Bill Liquidity Weight data as of 18 December 2024; for over decades.
dredth of a percentage point. G-secs, CCIL All Sovereign Bond Index data as of 30 November 2024; for corporate bonds, Crisil Corporate Bond Composite Index data as of 17 December 2024; for credit risk, Crisil Composite Thus, while keeping investing simple, don’t oversimplify invest-
Credit Risk data as of 17 December 2024; for international, S&P 500 data (converted to rupee returns) as of 20 December 2024; for gold, this year we are switching from World Gold Council data to
“Rate hike cycle stopped in 2023, Nippon India ETF Gold BeES data - as of 23 December 2024 - as latter represents transaction-based prices and due to wide divergence between WGC and domestic gold ETF data; for real estate, RBI
ing views to such one-line popular statements. They lead to over-
and after that we saw inflation begin- Housing price Index up to Q2 of FY2024-25 (showing 9-month return) Source: Mint research; Bloomberg; BSE; Value Research; others mentioned in footnote simplification, lazy investing, and ignoring the unpredictable
ning to come down,” said Mahendra nature of world and hence markets.
PARAS JAIN/MINT
Jajoo, chief investment officer-fixed These are some of my learnings over time and in 2024 from my
income at Mirae Asset Mutual Fund. Jajoo sees a good 2025 for G-secs ing that it is not particularly “safe”. currency depreciation, especially saw general and assembly elections mistakes and poor judgement. Here are some actionable steps
“And then growth numbers in the US and also finds corporate bonds attract- International when people are travelling and send- and the accompanying slowing down from these learnings in my investing:
were not as per expectations, unem- ive as the liquidity improves. The S&P 500, which tracks the ing kids to study abroad. “Since I of project approvals and a wait-and- 1. Have a higher savings rate (vs aiming for high rates of returns
ployment was picking up in the US. So, Gold stock performance of 500 of the larg- started my career, the rupee has watch stance by some buyers, this was from markets)
there was expectation of a rate cut.” The yellow metal has also had est listed companies in the US, has moved from ₹12 against the dollar to to be expected,” he said. 2. Have a multi-asset approach (diversify across good stocks in
In India, there was no rate action, another good year, delivering ₹85. For anyone looking at long- Takeaways India & the world along with gold & bonds to act as defence when
but there was anticipation, Jajoo said, 19% returns so far in 2024, after term goals, global diversification As our study shows, there is no set stocks don’t do well. This enables me to stay put and stay invested
adding that it led to long-term rates 12% returns in the previous year. Trying to time investments, cannot be ignored,” she said. But pattern for when one asset class will for decades).
coming down, which resulted in good Chirag Shah, CIO at Quantum chasing past year’s winners, or she cautioned that in the near-to- outperform and another will lag. Try- 3. Stay invested for decades, so I allow compounding to happen.
performance of the long-term G-Secs. AMC, said 2025 is likely to be medium term, the developed ing to time investments, chasing past ₹1 crore at 12% over 30 years is ₹30 crore. The hero is not 12%. It’s
Liquidity was tight in 2024 as banks marked by further geopolitical deviating from one’s asset markets versus emerging mar- year’s winners, or deviating from one’s having ₹1 crore of savings left aside for three decades. The hero is
chasing deposits didn’t let short-term developments that could influ- allocation can backfire kets trade may turn. asset allocation to bet on next year’s time.
rates come down, he said. “So, that fur- ence both the US dollar and gold. Real estate potential winner, can backfire. 4. Aim for reasonable returns by investing for an unreasonable
ther magnified the performance of the “In times of rising uncertainty The housing price index is up Investors should plan for their tenor of time. Moderate fluctuations help. High volatility doesn’t.
long-term funds. “ and risk, investors are likely to seek been the best-performing index this 0.9% in 2024 (up to September). financial goals with a well-diversified The takeaway is what I always say, the world is generally unpre-
He pointed out that the US Fed is refuge in gold, which could lead to a year compared to other indices on the Anuj Puri, chairman at ANAROCK portfolio, which is a good balance dictable, we have illusions that we can forecast and markets fluctu-
still talking about a 50 bps rate cut. “So, significant surge in its price.” asset quilt. In INR terms, the S&P 500 Group said that there was marginal between one’s risk-tolerance and ate. Hence, diversify and asset allocate while investing to safeguard
still there is momentum on the rate- But Mehra of FirstGlobal added that has delivered 26.9% returns, slightly decrease in housing absorption in return expectations. your portfolio from unpredictable fluctuations.
cut side. RBI is also expected to start gold is also a volatile asset, if you look ahead of BSE 150 MidCap TRI. 2024, although overall sales value out- For an extended version of the story, Kalpen Parekh, managing director and chief executive officer of
the rate-cut cycle sometime in 2025.” at its past returns in dollar terms, add- Mehra said investors cannot ignore paced the previous year. “In a year that visit livemint.com DSP Mutual Fund

Investing in 2025: How often should you rebalance your portfolio?

Sashind Ningthoukhongjam spot is reviewing his invest- investors consider making Fee-Only Investment Advisors, ing 1/12 of the money every shifts its asset class within the
[email protected] ment portfolio once every six fresh investments before exit- said while people should keep month and put it towards liquid scheme, she said.
MUMBAI months. “It’s not too frequent ing investments and incurring their goals in mind while funds, which are less volatile She said people in their 20s,
nor too laid back.” a capital gains tax. investing, they should also plan and safe.” who just started earning and

I
t’s that time of year when Kumar added that if the For instance, if you feel the their exit strategy Menon of Pro- investing, should try to churn
people plan fresh starts. equity portion of an investor’s markets are overvalued and so emotions don’t Tax and other bitus Wealth their portfolio as little as possi-
While gym memberships are portfolio swells up when stocks want to trim your exposure to come into play. fees should added that retail ble to avoid paying transaction
part of many people’s resolu- do well, it is advisable to bring it equities, you can start by cut- “Just like we be carefully investors should charges and taxes in an already
tions, some take a step back to back to the predecided alloca- ting down on your systematic plan the entry in considered also invest in small portfolio. Those who
review their investments. tion level as per the investor’s investment plan (SIP) payouts any volatile asset diversified funds have accumulated a decent
before
In fact, several people make risk tolerance. towards equity mutual funds class, the with- such as multi-as- amount of corpus can review
it a habit to review their portfo- But do note: tax and other and investing more in debt or drawal should also selling set, hybrid, or how much SIPs should go into
lios at the end of every year. But fees should be considered liquid funds. be systematic,” investments equity savings debt and equity annually.
the question remains: how before selling investments, he “If someone targets a 50:50 said Roongta. funds. Asset allo- “Although investors can tweak
often should you tweak your said. Equities are taxed at 12.5% Several people make it a habit to review their portfolios at the portfolio between debt and “Let’s say you plan cation in such their asset allocation according
portfolio? of the gains if held for 12 end of every year. ISTOCKPHOTO equity, then they can make it to buy a car 5 years from now funds is managed by a fund to market conditions, they
There’s no straightforward months or longer and at 20% if 60:40 if they feel the markets and started putting money manager with greater expertise should also make sure that the
answer. held for under a year. There is gains of equity and equity-ori- Rebalancing investments are overvalued.” aside for it in equity mutual than the average investor, and allocation broadly falls under
Abhishek Kumar, founder of an exemption limit of up to ented funds. Debt funds are Probitus Wealth founder Mapping the exit routes funds. After 4 years, you can besides, investors don’t have to their target allocation based on
Sahaj Money, said his sweet ₹1.25 lakh in a year in capital taxed at the slab rate. Kavitha Menon suggested that Harsh Roongta, founder of start systematically withdraw- pay taxes when a mutual fund their risk and reward ratio.”
10 THURSDAY, 26 DECEMBER 2024
NEW DELHI GLOBAL LIVEMINT.COM

How a young mayor turned her town

into a hub for ‘pig butchering’ scammers
WSJ got rare access to a criminal enclave in the Philippines from which Chinese gangs targeted people around the world, including Americans
Feliz Solomon & human trafficking and corruption, painted on the side. contact people through the mes-
Patricia Kowsmann and is being investigated in more Guo won the election and saging apps WeChat and QQ, both
crimes. assumed office in June that year. Chinese platforms. He was sup-
BAMBAN, PHILIPPINES While industrial-scale scam One of her first acts as mayor was to posed to convince them to invest in
compounds have sprouted across paint the municipal hall pink, her bogus forex and oil schemes.

H
undreds of law-en- Southeast Asia, they have often favorite color. He said he used the mobile
forcement agents been located in lawless or conflict- She quickly gained popularity in phone to send secret messages to
burst into a large torn states such as Myanmar. But Bamban, where locals said she the embassy’s police attaché, who
walled enclave in the the enclave at Bamban shows how repaired roads and threw big par- traced his location. The Malaysians
middle of this town 60 the criminals behind them became ties with food and music. During informed a Philippine agency
miles northwest of Manila. From so emboldened by years of impu- her tenure, the town got two new called PAOCC, the Presidential
the outside, it looked like an ordi- nity that they barely bothered to fast-food joints—a McDonald’s and Anti-Organized Crime Commis-
nary cluster of buildings—shops, hide. They set up their operation in a Jollibee, a fried-chicken chain. sion.
offices, homes—but in fact, it was a plain sight in a town near the capital All along, authorities say, Guo Operatives from elite police units
crime den from which Chinese of one of Asia’s more stable democ- was raking in money from the crim- and other law-enforcement agen-
gangs ran scams called pig butcher- racies, taking advantage of perva- inal enclave. In August, they sought cies took part in the March 13 raid.
ing, swindling Americans and oth- sive corruption in the country. money-laundering charges against When they arrived they saw hun-
ers around the world out of millions It was so close to the mayor’s desk her and 35 alleged co-conspirators dreds of people lined up near the
of dollars. she could see the walls of the com- they say carried out a complex entrance holding their belongings,
The police hadn’t warned any- pound through the windows of her scheme of laundering proceeds ready to flee. The criminals had
one in local government, suspect- office building. from crimes including human traf- been tipped off and more than
ing that most of them were in The Wall Street Journal was given ficking and fraud. Authorities 2,000 had already gotten away,
cahoots with the criminals. What rare access to the 25-acre com- sought to recover more than $100 authorities said.
they didn’t know was that the pound. Inside were dormitories million worth of assets they said Lim’s eyes filled with tears when
town’s popular young mayor, Alice where some 3,000 workers—most Scammers entangle their targets in romantic relationships online and make them invest in bogus schemes. REUTERS were acquired by Guo and her asso- police officers arrived at his dormi-
Guo, was a key architect of the bra- of them Chinese, some Vietnamese ciates through unlawful activities. tory. “At times I thought that maybe
zen enterprise. Investigations later and Filipino—slept between shifts obtained a Philippine birth certifi- sympathized with her because she wanted on allegations related to These included real estate, a fleet I would die there,” he said.
showed how she charmed her way as scammers. Close by were offices cate under the name Alice Leal had no mother. running illegal online gambling of luxury vehicles and Guo’s heli- Agents searched the site for days.
to wealth and power and used that where police seized thousands of Guo, they say. One of the residents, Arsenia operations. Philippine police copter. Many of the luxury villas were still
to open up her town of 78,000 peo- devices filled with evidence, such as That name, they later discov- Mamangan, said that around 2005, described Huang, who is ethnically The raid under construction, but four
ple to thugs and thieves. fake social-media profiles and ered, also belonged to someone else she sold Guo’s father a small plot of Chinese and has a Cypriot passport, During the Covid-19 pandemic, appeared inhabited. In the base-
Philippine investigators say Guo, financial transaction records. The who had the same date of birth as land so he could start a piggery. as one of the key bosses of the com- scam compounds like the one in ment of one villa, behind a freezer,
who they believe is 34 years old, rooms still smelled like ashtrays, the one registered on the allegedly Mamangan, now 90, said she loved pound’s criminal operations. Bamban emerged all over South- a fake wall concealed a hidden pas-
owned the land on which the scam and were littered with rotting fruit fraudulent birth certificate. Investi- the girl, inviting her over for meals Authorities believe he fled the east Asia. They generate tens of bil- sageway to the house next door.
den was built, co-founded the firm and other food left in lunch con- gators haven’t been able to locate and sending her home with fresh country after the raid. He is wanted lions of dollars in illicit profits every Authorities say the tunnel helped
that managed it and was complicit tainers. the woman whose identity they say papayas from the garden. in the Philippines. year and employ hundreds of thou- the bosses escape.
in the illegal activity it hosted. With Police found several armored Guo stole. Locals said they admired how Two of the other co-founders sands of people, some of whom are The manhunt
her explicit support, they say, gang- Land Rovers and a Cadillac, and the Guo denies these allegations. She Guo worked hard from a young age. were Chinese nationals who were trafficked in and kept there by Lawmakers summoned Guo to
sters set up operations there for hidden entrance to a tunnel they testified to lawmakers in May that By the time she was about 17 she convicted this year in Singapore’s force. Survivors who managed to testify at a senate inquiry in May.
thousands of scammers to ensnare suspect was part of the escape route she was born in the Philippines to a was running the pig farm, they said, biggest-ever money laundering escape or were rescued have said After attending several hearings,
victims online. the crime bosses used to evade the Chinese father and a Filipina and her father was rarely around. case. Singapore authorities accused they were threatened and afraid to she disappeared.
The fraud is called pig butcher- raid. Across the street from the mother. Her mother abandoned They described her as an enterpris- the pair of laundering proceeds of alert the outside world. She was suspended as mayor in
ing because scammers “fatten” up compound, shopkeepers and hair- her when she was little. Her father ing woman, branching out over the their “overseas organized crime Most scammers inside the Bam- June. A few weeks later, staff in the
their targets by entangling them in dressers at a commercial strip said was from China’s Fujian province, next decade into real estate, buying activities” in the financial hub. The ban enclave worked there voluntar- mayor’s office said, the municipal
romantic relationships online, con- they didn’t know about the criminal she said. and managing Singapore Police Force declined to ily, but some were held against their building was painted white again.
vince them to invest in bogus finan- enterprise. Some neighbors She said she property. say if operations at the Bamban site will, Philippine authorities said. Guo slipped away under cover of
cial schemes, then “butcher” them thought it was a customer-service was born in her Official docu- were part of their probe. Often they were trapped by debts to darkness one night in late July, she
by disappearing with their money. call center, which are common in rural home, ments obtained The enclave’s construction their employers after taking out later testified. She said she boarded
U.S. officials say the scams often the Philippines, where English is which is why she had no birth cer- by the Journal show that in Febru- began around the time of the 2019 loans to get them there and board a yacht at a port in Manila and set off
target elderly American citizens, widely spoken. tificate, and was home-schooled for ary 2019, Guo purchased a plot of incorporation. Documents show them. on a dayslong journey to Malaysia,
and are difficult to monitor and A stranger comes to town most of her youth. farmland in the middle of town, the building permits were In early 2024, authorities got an changing vessels twice along the
trace. The facts about who Guo is and Guo’s testimony was vague and adjacent to the town hall. In March requested a year later and were important tip. A Malaysian named way and idling at sea for long peri-
The March raid set off a dizzying where she came from are so incon- at times contradictory. She that year, she asked the local gov- approved within a day. The com- Dylan Lim contacted his country’s ods. From there she entered Singa-
spiral of events that led Guo to flee sistent and unusual that some Fili- responded to several questions by ernment to reclassify the land as pound did at times have a license to embassy in Manila and told them he pore and then went on to Indonesia.
the Philippines. A weekslong multi- pino politicians have accused her of saying that she couldn’t remember. commercial. Less than three weeks run online gambling for players had been duped by a friend into After more than a month on the
national manhunt ensued, ending being a Chinese spy, although they Guo couldn’t be reached and her later, in what officials described as outside the country, called POGOs, entering the compound at Bamban lam, authorities flew her back to
with a late-night bust in September haven’t offered any evidence of lawyers didn’t respond to requests an unusually quick turnaround, her but Philippine investigators say the and wasn’t allowed out. He said a Manila. Police Maj. Jessie James
when Guo was found hiding behind espionage. for comment. request was approved. primary activity in the enclave was man took away his mobile phone Domingo, who took over as Bam-
a door in an apartment near the What Philippine investigators Hidden in plain sight To manage the property, Guo, scams, beginning around 2020. and told him if he wanted to leave ban’s acting police chief after Guo’s
Indonesian capital of Jakarta. Video say they are sure of is that she is a Locals spoke of Guo with affec- along with a few others, incorpo- In 2022, Guo ran for mayor of he would have to work there for six downfall, said the full scale of her
shows her asking for permission to Chinese national whose real name tion. She and her Chinese father rated a company called Baofu Land Bamban. Locals said she cam- months. crimes isn’t known.
change out of her pink pajamas is Guo Hua Ping, and that she came showed up in Bamban when she Development in May 2019. paigned in her private helicopter. Lim, 27, told the Journal he was “We’re still trying to connect the
before police took her away. to the Philippines from China when was about 14 years old, according to One of the co-founders was Children would clap and squeal trained for five days on how to run dots,” he said.
She is now in jail awaiting trial on she was a child. In 2005, when she four residents who knew the family. Huang Zhiyang, whom Chinese with joy each time they saw it over- a pig-butchering scam. He was © 2024 DOW JONES & CO. INC.
half a dozen charges, including was a teenager, she fraudulently She was a polite child, and people authorities later identified as head—black with a pink stripe given a mobile phone and asked to [email protected]

The big firms funding Trump’s inauguration despite denouncing Jan. 6

Rebecca Ballhaus, tions. Others suspended dona- $107 million they brought in for behaviors. tions. Shortly after Trump’s with Musk’s various businesses.
Dana Mattioli, tions to any lawmaker who Trump’s first inauguration. The cryptocurrency trading election, the company’s shares Musk has become one of
voted against certifying the President Biden’s inaugura- platform Kraken donated $1 declined on a report that the Trump’s closest advisers and
Shalini Ramachandran &
2020 electoral college results. tion, in contrast, raised $61 mil- million, a spokeswoman said. Elon Musk -led Department of has had a seat at the table for
Maggie Severns Some simply promised to factor lion. Trump’s 2017 inaugural Kraken Chairman Jesse Pow- Government Efficiency was transition meetings, worrying
integrity into their donation fund received donations of $1 ell and CEO Arjun Sethi met considering making a free tax- competitors that Musk’s com-
our years ago, dozens of decisions going forward. million or more from 18 com- with Trump throughout the filing app. While the com- panies could benefit from prox-

F companies denounced
the invasion of the U.S.
Capitol and pledged to with-
Now, as corporate execu-
tives hurry to make inroads
with an incoming president
panies, and this year’s fund is
on track to outpace that, people
familiar with the fundraising
campaign and have met with pany’s CEO has said he doesn’t
him since the election. Among think the Trump administra-
the priorities they discussed: tion would invest resources
imity to the president-elect. Jeff
Bezos, for instance, recently
dined with Trump at Mar-a-
hold support from those who whose agenda will have said. The Journal has identified ending “regulations by into such a project, he has said Lago and Amazon made a $1
disputed the 2020 election sweeping ramifications for the 13 companies that gave $1 mil- enforcement” and ending the he is “personally engaging” million contribution to
results. Now, many of those business world, many of those lion or more so far. refusal by some banks to take with the new administration Trump’s inauguration. In addi-
companies are lining up to pledges are a thing of the past. Donors who give $1 million crypto companies and their and eager to partner on areas tion to founding Amazon,
fund Donald Trump’s inaugu- Most of the companies or raise $2 million from others founders. like a simplified tax code. which could be hit by tariffs,
ration. didn’t comment on the reason receive six tickets to a series of Cryptocurrency exchange Intuit said that its “expanded Bezos founded Blue Origin, a
The Wall Street Journal has for their donation, though events in the days leading up Consultants have been advising companies that it is in their platform Coinbase, whose participation in the democratic space exploration company
identified at least 11 companies some noted that they had given to the inauguration, including interests to support US President Trump’s inauguration. REUTERS CEO met with Trump last process” reflects its “growth as that counts Musk’s SpaceX as
and trade associations that are to inaugurations for decades a reception with cabinet month, donated $1 million to a company” and the policy one of its largest competitors.
backing the inauguration, which regardless of party. Toyota appointees, a “candlelight din- clear,” said a representative at Some companies’ news releases the inauguration. issues that affect Some donors are substan-
is on track to be the most lucra- pointed to a 2022 statement in ner” with Trump and Melania one of the companies that is in the wake of the invasion of the Kara Calvert, Inauguration its consumers and tially boosting their inaugural
tive ever, after earlier pledging which it said it was resuming Trump and a black-tie ball. changing course and contrib- Capitol are no longer online, Coinbase’s vice officials have said it has had a donations from previous years.
to suspend or reconsider politi- PAC donations but wouldn’t Trump aides have said that uting to the inauguration. including a letter from then- president for U.S. told fundraisers “ d e c a d e s l o n g The telecom company Charter
cal-action committee donations support those who incite vio- the fundraising isn’t even Consultants have been advis- Stanley Black & Decker CEO policy, said the that they are commitment to Communications, which gave
after Jan. 6. lence. A PhRMA spokesperson really about drawing in money ing companies that it is in their Jim Loree condemning the company com- bipartisan advo- $350,000 to Biden’s fund and
Ford, said the anymore: It is a means for interests to support the inaugu- invasion of the Capitol and vow- mitted to backing
on track to cacy.” $250,000 to Trump’s 2017
Intuit, company extracting a mea culpa from ration and secure a meeting ing to “use our voice to advocate Trump’s transi- raise more than The pharma- fund, is donating $1 million this
Toyota and h a d corporate America for its with Trump. “The old saying is, for our democracy and a peace- tion and inaugu- $107 million ceutical indus- time. Uber, which gave $1 mil-
the Phar- “announce shunning of Trump. One if you’re not at the table, you’re ful transition of power.” ration before the try—for whom lion to Biden’s, donated $1 mil-
maceutical Research and d a pause on our giving at the Trump aide rolled his eyes on the menu,” said Kevin Mad- Stanley Black & Decker said election and said Kennedy as HHS lion to the inauguration, in
Manufacturers of America are time and then subsequently about tech billionaires “mak- den, a longtime Republican it is donating $1 million, a the company is “eager to work secretary is a worst-case sce- addition to another $1 million
each giving $1 million. Other added new criteria to guide our ing a pilgrimage to Mar-a- strategist who said he advises major increase from the with the most pro-crypto nario—has sought to improve from Uber CEO Dara Khos-
major donors that made Jan. contributions.” Lago” and cutting $1 million his corporate clients to be pro- $25,000 it gave to Trump’s administration in U.S. his- its relationship with the Trump rowshahi.
6-related pledges include Corporate executives have checks for the inauguration as active in getting involved in first inauguration. tory.” team. Pfizer CEO Albert Bourla, Trump’s 2017 inaugural fund
Goldman Sachs, General been flocking to Mar-a-Lago, if that would patch up prior policy discussions. “There’s Many of the companies Trump has vowed to ease PhRMA CEO Stephen Ubl and came under investigation by
Motors, Bank of America, Trump’s Florida resort, in the offenses. going to be a lot of work being donating to the inauguration the regulatory burden on Eli Lilly CEO David Ricks were federal prosecutors in Manhat-
AT&T and Stanley Black & weeks since the election to While many companies that done in 2025 and 2026, and the stand to see their industries crypto, and the crypto world is among the pharmaceutical tan, who probed whether the
Decker. meet with the president-elect paused donations after Jan. 6 process starts now.” substantially affected by the hoping that he and Congress executives who met with committee misspent some of
For Goldman, Intuit, Toyota and his team, in the hopes that had since resumed their giv- The president-elect appears incoming administration. will deliver on the industry’s Trump and Kennedy for dinner the money it raised and whether
and PhRMA, this marks the building a relationship could ing—including to lawmakers to be reveling in the outreach. They range from automakers longstanding goal of getting at Mar-a-Lago earlier this some of the committee’s top
first time in at least a decade make the incoming adminis- who objected to the 2020 “EVERYBODY WANTS TO like Toyota that would be rules that treat it differently month. donors gave money in exchange
that they are supporting an tration friendlier to their election results—the rush to BE MY FRIEND!!!” he posted affected by new tariffs, to from Wall Street. Eric Trump Pfizer said it plans to donate for access or policy concessions.
inauguration fund. causes. Trump has met with fund the inauguration is a sign on Truth Social last week. pharmaceutical interests that earlier this month retweeted a to the inauguration. The com- Two donors to the fund pleaded
After Trump supporters the CEOs of Meta Platforms , of how far corporate America Some Republican strategists are unnerved by Trump’s meme after the election of a pany also gave to the previous guilty to charges related to their
invaded the Capitol in 2021 to Amazon, Google, Pfizer, Eli has swung in anticipation of have also been instructing com- selection of Robert F. Kennedy bitcoin flag flying over the two inaugurations. The trade donations, including one who
protest the results of the presi- Lilly and others in recent Trump’s return to the White panies to scrub their websites Jr. to lead the Department of White House. group PhRMA said it is donat- funneled $50,000 from a
dential election, dozens of com- weeks. House. and corporate policies of lan- Health and Human Services, to Intuit, the tax-software ing $1 million to Trump’s inau- Ukrainian oligarch into the
panies vowed to rethink their Inauguration officials have “People just really want to guage that favors Democrats— Big Tech companies that maker, is donating $1 million gural after not giving to either committee.
political contributions going for- told fundraisers that they are move forward and move on. including pledges they made to Trump allies have accused of to the fund after not backing of the last two inaugurations. © 2024 DOW JONES & CO. INC.
ward. Some paused all dona- on track to raise more than the The election results were very pause donations after Jan. 6. censorship and monopolistic either of the last two inaugura- Some of the donors compete [email protected]
LIVEMINT.COM NEWS WRAP THURSDAY, 26 DECEMBER 2024
NEW DELHI 11

NEWS
$5 bn
THE AMOUNT private equity firms KKR
₹5,000 cr
NET INFLOWS from foreign institutional
200
THE NUMBER of Canadian colleges that
4.5%
THE FISCAL deficit that the government
$100 mn
THE TAX amount by which Lyft said the
IN and Bain Capital each offered for the investors into the equity market so far this are under a Directorate of Enforcement is committed to achieving in FY26 even city of San Francisco overcharged it over
NUMBERS non-core assets of Japanese retailer
Seven & i Holdings.
year, lower than in 2023, due to concerns
over valuations and geopolitical risks.
probe over their alleged involvement in
sending Indian nationals to the US illegally.
as it improves quality spending and
strengthens the social security net.
five years by unfairly characterizing driver
compensation as company revenue.

HOWINDIALIVES.COM

‘IndiGo to fly 112 mn TOURIST PARADISE Hisense in talks

passengers in ‘24’ with EDPL for stake

I H
ndiGo expects to carry 112 million passengers isense group, a China-based
in 2024 and is on the way to become a multinational appliance and electronics
leading player in global aviation, its chief manufacturer, is in talks with Epack
Pieter Elbers has said. Durable to acquire a minority stake in a step-
In 2023, IndiGo flew over 100 million down subsidiary of the Original Equipment
passengers. Manufacturer.
India is one of the world’s fastest-growing In a clarification to bourses on Tuesday,
civil aviation markets and IndiGo, which has a Epack Durable Private Limited (EDPL) said it is
domestic market share of 63.6%, is also in discussions with the Chinese manufacturer.
expanding its international network. “We would like to inform you that business
In a statement to PTI on the outlook for discussions are currently in the preliminary
2025, CEO Elbers said A321 XLRs will be stage,” said Epack Durable.
arriving next year. The Greater Noida-based company further
These narrow-body planes have a longer said it will file the requisite disclosure in
range and will help the airline to start longer- compliance with applicable laws when
duration direct international flights. required.
IndiGo has a fleet of over 400 aircraft and According to Epack Durable, it is India’s
also placed an order for 30 wide body A350- second-largest Original Design Manufacturer
900 widebodies. of room air-conditioners based on the total
Elbers said that the airline is on its way to number of indoor and outdoor units. PTI
becoming one of the global leaders. PTI

Tourists enjoy paragliding after fresh snowfall in Solang valley in Manali, Himachal Pradesh, on Wednesday. PTI

South Korea’s parliament voted to impeach

Govt aims to distribute 22 mn The post of revenue secretary fell vacant after
Sanjay Malhotra became RBI governor. MINT
President Yoon Suk Yeol earlier this month.

Korea’s Yoon skips

AFP

Svamitva rural property cards Arunish Chawla

named revenue sec
questioning again
S
enior bureaucrat Arunish Chawla has

S
outh Korea’s President Yoon Suk Yeol been appointed the revenue secretary as
again declined to appear for questioning The scheme aims to create records of rights for inhabited areas in villages part of a top-level bureaucratic reshuffle
by investigators over his martial law effected by Centre on Wednesday.
declaration as the embattled leader seeks to Chawla, a 1992 batch Indian Administrative
first defend himself at an impeachment trial. Puja Das “Land ownership is not clear in developing are targeted to be covered under the scheme, of Service (IAS) officer of the Bihar cadre, is
Yoon didn’t appear for scheduled [email protected] countries. If the property ownership right is not which 92% have already been surveyed via drones. currently the pharmaceuticals secretary. He
questioning by the Corruption Investigation NEW DELHI clear, no financial institute is ready to lend some- The parliamentary standing committee on rural has been appointed secretary, department of
Office (CIO) for high-ranking officials on one money. If they are unable to borrow from development and panchayati raj departments revenue, ministry of finance, according to a

T
Wednesday morning, the watchdog said, a he government aims to distribute 21.9 financial institutes, they cannot do any economic recently raised concerns over the implementation personnel ministry order.
week after he skipped the investigators’ initial million Svamitva property cards by activity. There are no credit linkages because asset of drone-based mapping of land parcels in rural The post of revenue secretary fell vacant
request. A Yoon representative didn’t March 2026 to validate properties in ownership is not areas. after incumbent Sanjay Malhotra was
immediately respond to a request seeking rural India and help villagers use their clearly defined,” The scheme cov- appointed the governor of the Reserve Bank of
comment. property as collateral against loans, said Bharadwaj said. About 344,868 villages are targeted ers aspects like facil- India (RBI) earlier this month.
The president’s decision to repeatedly avoid Vivek Bharadwaj, Union secretary of Panchayati “If your property to be covered under the scheme, of itating monetization Chawla will continue to hold the additional
questioning may initially delay proceedings Raj ministry, on Wednesday. ownership rights are of properties and charge of secretary, ministry of culture till the
against him, but it also raises the chances that This includes 5.8 million cards which will be dis- not clear and you which 92% have already been enabling bank loans, appointment of a regular incumbent, it said.
he could be arrested. It wasn’t immediately tributed by Prime Minister Narendra Modi to need to borrow, you surveyed via drones reducing property- Amit Agrawal, chief executive officer of
clear if the CIO would send a third summons or 50,000 villages across 12 states and Union territo- don’t have any assets related disputes, and Unique Identification Authority of India, will
seek an arrest warrant. South Korea’s ries on Thursday. The government has so far pro- or property which comprehensive vil- be the new pharmaceuticals secretary. PTI
parliament voted earlier this month to vided 13.7 million property cards under the Svam- you can use as collateral to get credit. Hence, we lage-level planning, which will be the stepping-
impeach Yoon. itva scheme. tried to cover Abadi (inhabited) land in rural India stone towards making rural India self-reliant.
Oh Dong-woon, head of the agency, said that The Svamitva scheme, launched by Modi in under the Svamitva scheme.” Bharadwaj said all 344,868 villages will be cov-
the agency had yet to decide whether to seek a
warrant for Yoon if he didn’t voluntarily show
April 2020, is aimed at creating records of rights
(RoR) in revenue documents for inhabited areas,
The scheme also aims to demarcate inhabited ered by March 2026, one year later than scheduled
land in rural areas through the latest surveying as several states are in the process of issuing prop-
‘25 mn sq. ft office
up for questioning. BLOOMBERG as opposed to agricultural land) in villages. drone and GIS technology. About 344,868 villages erty cards.
space being built’

W
ith rising demand of premium

The bank behind the fintech revolution stumbles as funds go missing workspaces, real estate consultant
Anarock has said that realty firms are
currently developing around 25 million sq. ft of
office space across major cities for catering to
FROM PAGE 1 ion, everyone involved is fee charges that he said were board of directors to present a the requirements of domestic and foreign
responsible.” unauthorized, according to plan to resolve the problems, companies.
Pathak said in a statement that Boom times on Beale the September correspond- people familiar with the matter Anarock entered into office leasing segment
Evolve’s inability to pay custom- Street ence . said. in April this year, expanding its business from
ers casts doubt on the “safety Lenoir and a small group of Evolve has disputed that the Silicon Valley leaves housing brokerage, capital market transactions
and security” of the financial investors bought what became fee charges were unautho- Evolve’s fintech business, its and leasing of retail as well as industrial and
system. Evolve Bank in 2005. For rized and said they are unre- engine of growth for many years, warehousing spaces, among others.
The bank, which is privately around a decade, it grew by lated to the current missing is struggling. The number of fin- In an interview with PTI, Peush Jain,
owned, remains well-capitalized catering to businesses and con- funds. Lenoir has also said tech-linked deposits at the bank managing director, commercial leasing and
and has ample funds, Lenoir said sumers in the Memphis region. there is no shortfall of funds at has declined by several billion advisory, Anarock, highlighted that the year
last month. In 2017, he hitched the bank’s Evolve. dollars over the past three years, 2024 has been extremely good for Indian office
The missing funds show fortunes to Silicon Valley and Lineage said it has restored to according to people familiar market with record gross leasing activities and
how Silicon Valley’s push to Synapse. customers 95% of the Synapse with its financials. drop in vacancy rates.
revolutionize consumer Pathak felt banking in Amer- funds it holds. Evolve was also hit by a ran- He expressed confidence that the demand
finance hasn’t quite lived up to ica was still stuck in the analog Staff at Evolve and Synapse somware attack that leaked momentum would continue next year. PTI
its lofty expectations. While era when he moved from India. spent months in 2023 and 2024 seven million customers’ data. In
fintechs proclaim themselves He started Synapse from his trying to figure out how large the June, it received a Fed order to
as new banking products, apartment in 2014, moved to San deficit was, people fix faulty systems
many aren’t actual banks and
rely instead on old-fashioned
Francisco and began working
with startups that were looking In the aftermath of its bankruptcy, the Federal Reserve summoned
familiar with the Evolve Bank at its and controls for fin-
matter said. But peak managed tech customers.
Centre launches
lenders, like Evolve. Even
though Evolve is FDIC-in-
to offer software-enabled sav-
ings products.
Evolve’s board of directors to present a plan to resolve its problems. AP they didn’t alert around $10 billion Evolve said it is
customers and for financial strengthening its 10,000 new PACS
sured, the bank isn’t the one Pathak needed to find a bank bank. Robert Gonzalez , Mer- It isn’t clear where the funds allowed withdraw- policies and proce-
technology firms, dures.

C
that failed, so deposit insur- to work with him and reached cury’s general counsel, said in went. But there were discrep- als to continue. ooperation minister Amit Shah launched
ance doesn’t apply. out to Lenoir, whom he had met a statement that Synapse “was ancies in the accounts holding During that time, including Stripe Stripe has started 10,000 new multi-purpose Primary
Lorena Baculima signed up through an acquaintance while not a reliable or trustworthy customer funds because of some fintech cus- and Affirm moving some cus- Agricultural Cooperative Societies (PACS)
with Juno, a Synapse customer, attending the University of partner” and that led them to several transfers over the tomers ended their tomer accounts to on Wednesday and asserted that the government
which offered to pay her 5% Memphis. leave Synapse “to protect our years. In the summer of 2022, relationship with Fifth Third Bank will achieve its target of establishing 200,000
interest on her cash deposits. Over a few days in Memphis, customers.” Synapse moved approximately Synapse and withdrew all of and banking app Dave is about to such societies before the five-year timeline.
She put approximately the pair hammered out an agree- On Sept. 25, 2023, Mercury $60 million of customer funds their funds, including Nomad, a start working with a new bank, Shah said prosperity through cooperation
$130,000 into an account with a ment. Synapse channeled said that it planned to move and placed them in a new Brazilian banking fintech, the people familiar with them said. cannot be achieved unless cooperatives
routing number belonging to around $10 million of deposits around $3 billion of deposits account for its own use at Lin- people said. Both intend to keep working function effectively at the panchayat level.
Evolve Bank. into the bank in 2017. By 2020, it from the Synapse account to its eage Bank, a small bank in Synapse tried to sell itself with Evolve, the people said. “We have kept a target of setting up
When she tried to use those was sending Evolve billions of own account at Evolve, accord- Tennessee. and neared a deal with Tab- In September, savings app 200,000 PACS in five years. I want to tell you
funds in May to make a down dollars in fintech deposits. ing to correspondence between Meanwhile, Evolve had been aPay, a payments technology Yotta sued Evolve, accusing it of that we will establish 200,000 PACS before
payment on a house, she Downturn Synapse and Evolve seen by The charging fees directly from the company, but TabaPay walked misplacing thousands of its cus- five years. In three months, we established
couldn’t access the money. In Around 2022, Lenoir began Wall Street Journal. Synapse customer accounts to away over concerns about the tomers’ funds. The suit is pend- 10,000 new PACS,” the minister said.
late November, Evolve told questioning if Synapse was a The same day, Evolve sent pay itself and to cover card potential size of the shortfall, ing, and Evolve is seeking to dis- The initiative will be rolled out in two
Baculima it only had $1,182 in necessary middleman to amass Synapse a breach of contract fees, according to bank state- people familiar with the mat- miss it. Founder and CEO Adam phases, with National Bank for Agriculture and
her name. deposits from fintechs. Mer- notice, ending its relationship ments. Those fees totaled ter said. Moelis said Yotta at first worried Rural Development establishing 32,750 new
“I thought my funds would be cury, a fintech company that with the middleman, claiming about $26 million between Synapse ran out of money and the freeze on its accounts at M-PACS in the first phase, while National Dairy
safe because they were in an helps early-stage startups there were funds missing 2019 and 2023. filed for bankruptcy in the Evolve could last two days. Development Board will set up 56,500 dairy
FDIC-insured account,” Bacu- manage their finances, started from the accounts where Syn- Pathak told Lenoir the spring of 2024. “It’s now been seven months,” cooperatives and National Fisheries
lima said. “Nobody has been negotiating with Evolve about apse kept fintech customers’ shortfall of customer funds In the aftermath, the Federal he said. Development Board 6,000 fishery
standing up for us. In my opin- working directly with the savings. was Evolve’s fault, citing the Reserve summoned Evolve’s © 2024 DOW JONES & CO. INC. cooperatives. PTI
12 THURSDAY, 26 DECEMBER 2024
NEW DELHI LONG STORY LIVEMINT.COM

STILL A WORK IN PROGRESS:

TECH LETDOWNS OF 2024
We shed light on the hurdles these technologies face, and explore their chances of bouncing back

Leslie D’Monte
[email protected]
BENGALURU

W
hile artificial intelli-
gence (AI) technologies
are showing a lot of
promise, many technol-
ogies, including gener-
ative AI (GenAI), fell short of expectations
this calendar year, exposing the gap
between innovation and commercial use.
The struggle in getting a return on
investment (RoI) from GenAI projects, the
metaverse’s lack of mainstream adoption,
volatility around bitcoins, the slow uptake
of consumer 5G, and limping smart city
projects underscored the difficulty of
moving from the pilot stage to imple-
menting full-scale projects.
We shed light on the hurdles these
technologies face and explore their chan-
ces of bouncing back.

GENAI: NO RETURNS

G enerative AI (GenAI) has shown

immense potential since OpenAI’s
ChatGPT gained over 100 million users
within two months of its launch in
December 2022. Unlike traditional
machine learning (ML), which predicts
data patterns, GenAI’s foundational mod-
els and large language models (LLMs)
learn the structure of various data types—
text, images, proteins, DNA, etc.—to cre-
ate new content through prompts in natu-
ral languages like English or Hindi.
Companies are fine-tuning tools like
ChatGPT, Bing Chat, Gemini, and
DALL-E 2 to cut costs in customer service,
content creation, and more. However,
most businesses remain cautious, testing
these tools rather than deploying them at
scale. Challenges include hallucinations
(generating false information and pre-
senting it confidently as accurate), biases,
intellectual property violations, high
energy consumption, and uncertain
returns on investment.
Goldman Sachs’ April report, GenAI:
Too Much Spend, Too Little Benefit?, ques-
tioned the $1 trillion investment in AI
infrastructure without clear benefits. Sim-
ilarly, Gartner’s July report predicts that
30% of GenAI projects will be discontin-
ued by 2025 due to poor data quality and
escalating costs, which range from $5 mil- A file photo of a person wearing a virtual reality headset and experiencing the metaverse at an event in Barcelona, Spain, in February 2022. BLOOMBERG
lion to $20 million.
In India, the AI market is expected to
grow by 25-35% annually over the next
three-four years, according to Nasscom of water supply through supervisory con- preserve its culture, landscapes, and legal mint
and EY’s 2024 AI Adoption Index. While trol and data acquisition systems, and identity. Alongside building sea walls and GREAT EXPECTATIONS
SHORT
75% of Indian organizations have AI strat- deployment of 5.2 million solar/LED reclaiming land, the government is creat- STORY Global and India AI markets are set to grow at 25-35% CAGR through 2027.
egies at the proof-of-concept (PoC) stage, (light-emitting diode) streetlights. The ing a digital replica of the country. Often 2023 2027 Expected global and India AI market growth, 2023-2027 (in $ bn)
only 40% are ready to move to production. mission has also delivered 4,700 km of referred to as a ‘digital twin’, the metav-
GenAI adoption is slow, particularly in smart roads, 49,300 dwelling units, 1,300 erse is a 3D representation of real-world WHAT 110-130 Global 7-10 India
legacy sectors such as energy, utilities, public spaces, and 199 PPP projects worth assets, offering immersive experiences
and manufacturing, according to the ₹9,200 crore, says the government. through technologies such as augmented Generative AI projects aren’t 320-380 17-22
report. While banking and financial But if controlling air pollution, reducing reality (AR), virtual reality (VR), and mixed generating returns, the
services (BFSI), retail, and CPG (con- chaotic traffic jams, building more public reality (MR). metaverse lacks mainstream
sumer packaged goods) are in the PoC transport, and providing good quality Despite the decades-old origins of these adoption, bitcoins are volatile, Future ready? Facing reality
stages, manufacturing and telecom have water are part of the deliverables of Smart technologies, experts, including research 5G adoption is slow, and smart When it comes to smartness, Meta’s Reality Labs unit, which develops augmented and virtual
city projects are limping. Indian cities have miles to go. reality technologies, has lost billions over many quarters.
moved beyond PoCs to collaborate with Cities, then India has done a woeful job. and advisory firm Emergen Research, pre-
City, country Rank Reality Labs operating loss (in $ bn)
industry disruptors. Globally, too, smart city projects have dict it could take 5-10 years for the metav-
Q3 2022 Q3 2024
The report insists that to transition struggled with data privacy concerns, with erse to evolve into a cohesive, widely used Zurich, Switzelrand 1
from AI-ready to AI-first, large enterprises a survey showing that 45% of urban resi- platform. In the meantime, numerous pri- SO
should focus on data standardization, stra- dents are hesitant to share personal data vate and open platforms, such as Sandbox Oslo, Norway 2
tegic partnerships, and balanced AI use. for city optimization. The lack of standard- and Decentraland, are emerging, with data The challenges faced by each
-3.7 -3.7 -3.7 -3.8
Small- and medium-sized businesses ized regulations further complicated col- portal Statista projecting metaverse reve- of these new technologies Canberra, Australia 3 -4.3 -4.0 -4.6 -4.5 -4.4
(SMBs), on their part, should emphasize laboration between public and private sec- nue will reach $490 billion by 2030. The in scaling underscore the
agile PoC processes, partnerships with tors, leading to delays and increased costs. metaverse is already being explored in difficulty of moving from the Geneva, Switzerland 4
tech SMEs, and strong leadership com- “The global landscape of smart cities creative ways, such as Colombia hosting a pilot stage to implementing Crypto trend
projects on a large scale. Singapore 5
mitment to overcome barriers. continues to change but at a slower pace court hearing within it. In 2024, investor confidence in Bitcoin made a sparkling return but
To be sure, advances in LLMs’ reasoning than in recent years,” notes the Interna- Businesses worldwide, including volatility can’t be ruled out, going ahead.
Delhi, India 106 12,000,000
capabilities, such as those tional Institute for Man- Indian companies, are embracing the Bitcoin Index 10,368,957.0
demonstrated by
In July, Gartner
agement Development metaverse. Automakers Maruti Suzuki NOW Mumbai, India 107 10,000,000
8,000,000
OpenAI’s o1 and o3 mod- Smart City Index 2024, and MG Motors use it for 3D visualization,
els and Gemini 2.0, do predicted that 30% of which was published in allowing clients to virtually customize Enterprises will also need Bengaluru, India 109 6,000,000 4,779,245.5

impress. And ‘Agentic AI’ partnership with the vehicles. Companies such as Tanishq, to consider regulatory 4,000,000
models are capable of GenAI projects will be Singapore University of Tata Tea, and MakeMyTrip have also guidelines and ethical practices Hyderabad, India 111 2,000,000
autonomous decision- Technology and Design. entered this space. evolving around cutting-edge Note: The index ranked 142 cities; four 0
discontinued by 2025 due technology before rolling them Indian cities are in the list 23 Dec 2021 24 Dec 2024
making and action to While Zurich, Oslo, Can- Roland Busch, CEO of Siemens AG,
Source: Nasscom; IMD Smart City Index 2024; Company statement; Bloomberg
achieve specific goals. to poor data quality and berra, Geneva and Sing- emphasizes that the industrial metaverse out on a mass scale.
But in asking whether apore were ranked the relies on digital twins, software-defined SATISH KUMAR/MINT
these models are herald- escalating costs top 5 smart cities, in that automation, and AI. Meanwhile, tech
ing artificial general order, not a single Indian giants Google and Apple have introduced significant. Critics also question the offering users digital ownership. potential, government policies have cre-
intelligence (AGI), we must first agree on city figured in the Top 100. New Delhi concepts such as “ambient computing” metaverse’s sustainability due to its energy Notable examples include Amitabh ated hurdles. Gains from virtual digital
what it means to “reason” like a human, Municipal Council, which was included as and “spatial computing”, highlighting demands. The rollout of 5G and advance- Bachchan’s NFT of Madhushala and digi- assets (VDAs) like Bitcoin and Dogecoin
which is more in the domain of philosophy a smart city in 2016, was ranked 106, fol- diverse interpretations of the metaverse. ments in edge computing is expected to tal artist Pak’s Merge, which sold for $91.8 are taxed at 30%, without the ability to
than technology. Further, real-world per- lowed by Mumbai (107), Bengaluru(109), Mark Zuckerberg remains optimistic address some issues by enabling faster data million in 2021. Collections like the offset losses or carry them forward.
formance often diverges from LLM demon- and Hyderabad (111). about the metaverse’s potential despite processing and supporting the metaverse’s Bored Ape Yacht Club (BAYC) further Transactions exceeding specified
strations. For instance, a September Stan- But there’s still hope. Data from the first Meta’s Reality Labs incurring a $4.4 bil- computational requirements. cemented NFTs’ exclusivity, thresholds incur 1% tax
ford study found no evidence that LLMs can smart cities mission is now being used to lion operating loss in Q3 2023. Meta con- The metaverse represents immense trading limited-edition digital deducted at source. Losses
generate novel, expert-level research ideas, speed up processes and launch Smart City tinues investing heavily in projects such as potential but requires overcoming signifi- art on Ethereum’s blockchain. from NFTs cannot be adjusted
highlighting their current limitations. 2.0. Whatever data Smart City 1.0 is pro- AI-powered glasses (Ray-Ban Meta), cant technical, economic, and sustainabil- But despite daily NFT trades against crypto gains, highlight-
ducing in 100 smart cities will come to the which integrate vision and language ity hurdles to fulfil its vision. worth millions, mainstream ing regulatory restrictions.
MISSING SMARTNESS IN CITIES data exchange, called Urban India Data understanding. These glasses aim to sim- media attention has waned. The Indian crypto space has

O n the face of it, India’s Smart Cities Mis- Exchange, which is fully funded by the plify tasks like translating foreign langua- WEB3, NFTS TAKE A BACKSEAT
sion, launched on 25 June 2015, is a ministry of housing and urban affairs. Fur- ges or generating photo captions, poten-
grand success. Going by government fig- ther, in August, India approved 12 new tially without needing a phone or app. I
Cryptocurrencies, particu- also faced controversies, such as
n 2021, the term ‘Web3’ entered public larly Bitcoin, have faced signifi- Liked this story? the WazirX-Binance ownership
consciousness, driving a surge in cryp- cant volatility. Events like Share it by dispute, adding to investor
ures, more than 90% of over 8,000 multi- industrial smart cities and other infra- Meta’s innovations also include holo- tocurrency and non-fungible token Donald Trump’s presidency scanning the uncertainty. Meanwhile, global
sectoral projects worth ₹1.6 trillion, across structure projects. These cities are aimed graphic AR glasses, Orion, and its latest (NFT) activity. Venture capitalists and policy endorsements QR code. incidents such as the Mt. Gox
100 cities have been completed. Seventeen at strengthening India’s domestic manu- mixed-reality headset, Quest 3S. invested over $30 billion in Web3 start- boosted Bitcoin, as did the crypto exchange collapse fur-
cities have achieved 100% project comple- facturing ecosystem, attracting foreign However, challenges persist. VR and AR ups globally, while Indian blockchain approval of US-listed spot Bitcoin ETFs. ther damaged cryptos’ reputation. Chal-
tion, while 34 cities have crossed 90%, and investments, and boosting job creation. headsets remain expensive, bulky, and startups raised $600 million, a 15-fold Yet, Bitcoin’s value dropped 10% in late lenges like regulatory crackdowns, taxa-
24 have completed over 75%. energy-intensive, with VR devices report- increase from 2020. Web3 is built on 2024, reflecting its susceptibility to regu- tion, and price volatility cloud Web3’s
Key accomplishments include opera- METAVERSE NEEDS MORE THAN AI edly consuming three times the energy of blockchain and related technologies latory decisions and global economics. prospects. However, its potential remains
tional integrated command and control
centres in all cities, installation of 83,000 T uvalu, a Pacific nation threatened by standard gaming consoles. Interoperabil- such as decentralized finance (DeFi), India’s approach to Web3 remains vast, with blockchain technology driving
rising sea levels due to climate ity between metaverse platforms is lim- decentralized autonomous organizations cautious. While the technology behind
CCTV cameras, monitoring of 9,900 km change, has turned to the metaverse to ited, and privacy and security concerns are (DAOs), cryptocurrencies, and NFTs, cryptocurrencies—blockchain—has TURN TO PAGE 13
LIVEMINT.COM MINT MONEY THURSDAY, 26 DECEMBER 2024
NEW DELHI 13

How to choose a crypto trading Finish

platform to invest in digital assets INVESTO

Start
WORD
CHALLENGE
The comparison covers KYC time, minimum investments, safety guidelines, process, user growth and volumes Play online to test your finance knowledge
and see where you stand on the leaderboard!

Anil Poste Guess the word

[email protected]
MUMBAI
How do prominent platforms compare What term refers to the cost
at which an asset or security can be bought or sold?
An overview of crypto exchanges, comparing investor protection, financial performance, and user experience.

B
itcoin, the world’s largest What exchanges say about investor protection
cryptocurrency, breached Platforms' performance on key metrics
measures
the $100,000 milestone Exchange CoinDCX CoinSwitch Mudrex
on 17 December, reaching CoinDCX Mudrex Scan to play
KYC Instant Instant Instant
a record high of $108,309,  Launched CIPF (Consumer  User funds held in insured
thanks to US President-elect Donald Documents required Govt ID, PAN Govt ID, PAN Govt ID, PAN Investment Protection Fund) last Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. An investor education and
wallets such as Sifu and Bitgo. awareness initiative by Bandhan Mutual Fund.

Trump’s support for digital assets. Minimum amount ₹100 ₹100 ₹100 year, contributing 2% of annual For more info on KYC, change in various KYC details & redressal of complaints, visit https://bit.ly/QJr. Investors may also register their
 These custodians serve finance complaint on SEBI SCORES portal. Investors are cautioned to deal only with the Mutual Funds registered with SEBI, details of which

Trump, a proponent of a friendly Withdrawals/deposits Instant Instant Instant revenue. and government entities and have
can be verified on the SEBI website under "Intermediaries/Market Infrastructure institutions."

regulatory environment for digital Assets (in ₹ crore) 6,135 4,466 21.2  Fund reserves currently at strong balance sheets to cover
assets, has also endorsed the idea of a ₹55.57 crore, with plans to add potential losses.
Number of coins listed 500 250 650 more.
strategic national Bitcoin stockpile.
Although the cryptocurrency has Users to exchange asset ratio* 1:1.03 1:1.19 Not disclosed
CoinSwitch
lost some of its gains since then, the
rally has renewed investor interest in
Registration origin
Trades recorded on blockchain
India
Yes
India
Yes
India
Yes  95% of funds stored
POWER
crypto trading. In India, platforms *The ratio shows the value of assets held by the exchange compared to its user liabilities, as reported to Mint. in highly secure cold
wallets.
POINT
such as CoinDCX, CoinSwitch, Mud-
rex and Binance facilitate trading in Fee for every ₹10,000 buy/sell transaction  Other exchanges AMIT KOTHARI
Bitcoin and other cryptocurrencies. ₹50 ₹40 ₹25 store most funds in hot
Ajeet Khurana, former ZebPay wallets. Respond to this column at
CEO, people should keep a few things [email protected]
Users VISHAL SRIDHAR RAHUL DAGA,
in mind when choosing an exchange, RAJESH SONI, SHIVARAM, Chief manager
share their
like would they be able to move
courts in India, or is the exchange
under a foreign jurisdiction? Is the
experiences: Fixed-income
dealer,
Mumbai
Assistant
manager, EY
Capital and
at a
nationalized
bank,
TRUTH ABOUT AIFs:
updated proof-of-reserve easily avail-
able? Is the exchange financially
healthy? What other businesses does
Debt Advisory,
Delhi
Mumbai
DEBUNKING MYTHS,
the exchange run? Is the exchange
registered with the Financial Intelli-
gence Unit (FIU)? Does it have robust Started 2019 2023 2023
TAPPING POTENTIAL
KYC and AML practices? Preferred app Binance, CoinDCX & CoinSwitch Bitsave Binance
Mint compares the three widely
used exchanges in India—CoinDCX, Investing in BTC, ETH & HBAR Index based bluechip crypto funds. BTC, Trading in alt coins and crypto futures
CoinSwitch, and Mudrex—based on Binance operates in India and is registered with the Financial Intelligence Unit (FIU), enabling it to accept INR transactions. The finance ministry has Cryptocurrency is not regulated in India.
flagged a ₹722.4 crore GST evasion involving a Binance Group company. Binance did not respond to Mint's queries regarding its Indian operations. This article should not be construed as a
key parameters, such as the time BTC - Bitcoin; ETH - Ethereum; HBAR - Hedera Hashgraph crypto recommendation by Mint
taken to complete the know-your-
customer (KYC) verification, process
to start investing, minimum invest- money into their account and start assets, it's critical to check crypto-trad- said this practice is a critical safe- strong balance sheets and large insur-
ment amounts, investor protection investing in minutes. CoinDCX also ing platforms' safety features. On 18 guard, as cold wallets are far less vul- ance funds, which provide further
measures, user growth, and transac- enables users to deposit instant funds July, WazirX, one of India’s largest nerable to cyberattacks than hot wal- protection against potential losses.
tion volumes. and begin trading. Mudrex allows cryptocurrency exchanges, reported a lets connected to the internet. User growth and volumes
KYC and onboarding systematic investment plans (SIPs) in $233-million hack that stole all of its By distributing funds across multi- Currently, CoinDCX boasts 16 mil-
All three platforms boast of instant crypto index funds, starting at ₹500 Ether tokens, leaving about 4 million ple cold wallets, CoinSwitch mini- lion active users and has recorded
KYC process. Users can complete their per month. of its users stranded. mizes the risk of a breach and ensures 15-20% growth over the past year,

A
KYC in under five minutes by upload- “UPI verification and The $233 million CoinDCX established that most user assets remain safe from while CoinSwitch has seen a 2.5x lternative investment funds (AIFs) have achieved a signifi-
ing proof of their government ID and deposit happen instantly, WazirX hack and the Consumer Invest- potential hacks or exchange down- increase in user registrations in 2024 cant milestone, crossing an estimated ₹5 trillion in funds
PAN. “Things are automated and made in 5-10 seconds. Once the lack of regulatory ment Protection Fund time. “To run our day-to-day opera- and a 7x surge in transaction volumes raised, with investment commitments surpassing nearly
smooth for users, so you can get the deposit is made, you can control of crypto in 2023. The fund is tions, we need only the remaining 5%, from January to December. Besides, ₹12 trillion as of September. Despite this growth, AIFs represent
KYC done very quickly,” said Balaji proceed to buy desired
assets in India are designed to protect cus- so there will be no issue with daily Mudrex reports 3 million users, with just about 5% of India's GDP, a stark contrast to around 50% in the
Srihari, vice president at CoinSwitch. cryptocurrencies,” Edul tomer funds in case of trading activities,” added Srihari. a monthly subscriber growth of 40% US and 10% in the UK, underlining immense growth potential.
Anjali Kakkar, vice president, cor- Patel, chief executive of a significant unforeseen events such Mudrex stores the funds in secured in 2023-24. Compared to mutual funds (MFs), with assets under management
porate communications, CoinDCX, Mudrex, said. All three concern as hacks or exchange institutional-grade custodians such (AUM) of around ₹67 trillion, AIFs have a long way to go. How-
claims that their KYC verification is platforms allow invest- failures, providing an as Sifu and BitGo. According to Patel, ever, the sector's growth is hindered by myths that stem from
instant and hassle-free. Mudrex also ments starting at ₹100, added layer of security. large financial institutions and gov- Scan the QR anecdotal evidence, oversimplification, or misrepresentation.
ensures swift onboarding via integra- Patel said. “You can buy just ₹100 Kakkar said the platform contrib- ernment entities trust these custodi- code to read Let’s debunk these misconceptions:
tion with India’s Digital Locker flow. worth of Bitcoin or Ethereum, as they utes 2% of its annual revenue to this ans, offering advanced security meas- an extended Myth #1: AIFs are for the wealthy or institutions: While
The process to start investing is are divisible cryptocurrencies.” fund, which stands at ₹55.57 crore. ures to manage and store the funds version of alternatives like private equity and venture capital were once
straightforward across all platforms. Safety and protection CoinSwitch stores 95% of the funds securely. this story. exclusive to institutional investors, this has changed. Today, indi-
On CoinSwitch, users can deposit When it comes to investing in digital in highly secure cold wallets. Srihari Additionally, the custodians have vidual investors can participate in AIFs through staggered invest-
ment plans over two to three years or direct investments in start-
ups. Factors such as India's rising number of millionaires, innova-
tive business ideas, and the need for portfolio diversification with

Compare NRE FD rates Still a work in progress: better risk-adjusted returns are driving AIF adoption. Profes-
sional fund management, regulatory reforms, and enhanced
transparency further bolster this trend.
Non-resident Indians (NRIs) can open NRE fixed deposits
with different Indian banks. The benefit of an NRE
deposit is that it can be opened simply by making inward
Tech letdowns of 2024 Myth #2: AIFs are inherently risky: All investments carry
risk, but many alternative assets can offer stability, particularly
against market volatility or inflation. For instance, absolute
remittance to India in any freely convertible currency. return strategies aim to deliver consistent returns regardless of
Another benefit is that the interest earned on NRE FROM PAGE 12 market direction. AIFs with exposure to derivatives or real estate
deposits are tax-free and the deposit is fully repatriable, often have low correlation with traditional stocks and bonds,
allowing NRIs to transfer funds back to their country of innovations in digital owner- making them valuable hedges during economic turbulence.
residence without restrictions. NRE FDs can be opened ship and decentralized ecosys- Myth #3: AIFs don’t offer liquid-
and managed online too with Indian banks. NRIs can also tems. AIFs emerge ity: Liquidity in AIFs depends on the
obtain loan against NRE FDs which can be used for a as a promising fund’s strategy. Category III AIFs, for
variety of purposes. These loans can be granted to the QUANTUM YEARS AWAY
avenue for asset example, provide liquidity on a fort-
NRI in India or outside India (by overseas branch of Indian
banks) or even to third parties. G overnments, tech com-
panies, and venture capi-
talists are investing billions in as well as for
nightly, monthly, or quarterly basis.
diversification, Most AIFs focused on capital apprecia-
tion or regular cash flows, such as
NRE Term Deposits Interest Rates (%) upto 1 crore
quantum computing, driven wealth creation those investing in private equity,
by the promise of revolution- credit, or real estate, typically have a
izing industries and commer- fund tenure of three to seven years.
1 to < 2 2 to < 3 3 to < 5 5 years cial and military advantages Within this period, transfers are permitted, subject to the invest-
years years years and above for global dominance. Quan- ment manager’s approval. Additionally, regulatory changes man-
tum systems promise break- dating the dematerialization of AIF units now allow investors to
DCB Bank 7.10-8.05 7.50-7.55 7.40-7.75 7.25-7.65 throughs in cryptography, The interior of an IBM quantum computer. leverage these investments for financing needs.
7.10 7.00 drug discovery, and logistics Myth #4: AIFs lack transparency: AIFs are designed to be
Axis Bank 6.70-7.25 7.10
optimization with their your normal computer. built by the Tata Institute of transparent, with frequent investor updates, monthly newslet-
HDFC Bank 6.60-7.25 7.00-7.35 7.00-7.40 7.00 incredible processing speeds. Stable quantum computers Fundamental Research in ters, NAV statements, portfolio disclosures, and annual audited
But they need to become sta- could accelerate AI model cre- partnership with the Defence accounts. These measures ensure investors are well-informed
IndusInd Bank 7.75-7.99 7.25-7.75 7.25 7.00-7.25 ble before being deployed for ation by performing parallel Research and Development about strategies, portfolios, and associated risks.
everyday use. computations that classical Organisation Young Scientists Myth #5: Fees charged regardless of results: Unlike tradi-
RBL Bank 7.50-8.00 7.50-7.80 7.10-7.50 7.00-7.10 Hence, Google’s quantum systems cannot do. Google’s Laboratory for Quantum tional asset management firms that charge fixed fees as a percent-
YES Bank 7.25-7.75 7.25 7.25 7.00-7.25 computing chip, named Wil- Willow claims to reduce errors Technologies and Tata Con- age of AUM, AIFs adopt performance-linked fees. These fees are
low, made waves this month when scaling. By doing so, it sultancy Service. levied only in case of outperformance, ensuring fund managers
ICICI Bank 6.70-7.25 7.00-7.25 7.00 6.90-7.00 for its ability to reduce system has indeed brought the world IT services company have skin in the game and incentivized to deliver strong results.
errors despite adding qubits a step closer to running a more Wipro believes enterprises Myth #6: Investing in one AIF provides diversification:
Canara Bank 6.85-7.25 7.30 7.40 6.70 (quantum bits) and solving in stable quantum computer. But will gear up for the Quantum True diversification requires categorizing AIFs into liquid, illiq-
under five minutes a computa- the next challenge, as Google Era with quantum comput- uid, and beta-plus strategies. Investors can then allocate across
Dhanlaxmi Bank 6.75-7.25 6.50-6.75 6.50-7.25 6.60-7.25
tion that would take a super- itself puts it, is “to demonstrate ing as a service (QCaaS). The these categories to align with objectives like capital appreciation,
Federal Bank 7.00-7.35 7.15-7.40 7.10-7.40 6.60-7.10 computer 10 septillion years (1 a first ‘useful, beyond-classical’ immediate priority for global regular cash flows, or a favourable risk-return matrix.
with 25 zeros), more than the computation on today’s quan- enterprises will be to prepare Myth #7: Higher tax rates apply to AIF income: Tax treat-
Bank of Baroda 6.85-7.30 7.00-7.15 6.80-7.15 6.50-6.80 age of the universe, to finish. tum chips that is relevant to a for post-quantum cryptogra- ment varies across AIF categories. For Categories I and II, income
Two normal computer bits real-world application”. phy, it cautions. is taxed in the hands of the investor as these are pass-through
Bank of Maharashtra 6.50-7.10 6.50-7.25 6.50 6.50 can exist in four possible With its National Quantum The biopharma and chem- vehicles. This includes capital gains or income, excluding busi-
Central Bank of India 6.85-7.45 6.50-7.00 6.75 6.50 states—00, 01, 10, or 11. But Mission, India plans to develop ical industries will be early ness income. For Category III AIFs, taxes are applied at the fund
they can represent only one of quantum computers with adopters of quantum com- level at maximum marginal rates, meaning investors do not face
Indian Overseas Bank 7.10-7.30 6.80 6.50 6.50 these at any given time. A 50-100 qubits in about five puting with applications in additional taxation on returns.
quantum computer allows years and accelerate it to 1,000 molecular modelling, predic- Since the Securities and Exchange Board of India introduced
State Bank of India 6.80-7.25 7.00 6.75 6.50 two quantum bits (qubits) to qubits and beyond in eight tive analytics, and drug AIF guidelines in 2013, the regulatory framework has strength-
represent the four states at the years. However, the focus will design. Enterprises will also ened considerably. Measures like independent audits, valuation
Union Bank of India 6.60-7.30 6.40-6.60 6.50-6.70 6.50
same time due to ‘superposi- also be on developing quan- need to consider regulatory norms, benchmarking, mandatory dematerialization, custodian-
IDFC First Bank 6.50-7.75 6.80-7.25 6.75-6.80 6.50-6.75 tion’ and ‘entanglement’ tum error correction to make guidelines and ethical prac- ship, liquidation norms, and compliance filings have enhanced
properties, akin to running quantum computers stable tices evolving around this investor confidence.
Jammu & Kashmir Bank 7.00 7.00 6.75 6.50 four computers. A quantum and functional for everyday cutting-edge technology. By dispelling these myths, AIFs emerge as a promising avenue
computer’s power grows use, and building quantum That said, despite the for asset diversification and wealth creation. Exploring this asset
Data taken from respective bank's website as on 23 December 2024; Only main entity of the merged banks are taken. Banks exponentially with more qub- algorithms for practical appli- progress, stable quantum class could redefine your investment strategy and unlock oppor-
which merged with its main entity are removed from the table; The list of 18 banks is based on highest fixed deposit rates
available for 5 years and above Source: BankBazaar
its but it also induces errors, cations. India currently has a computers may see the light tunities for financial growth.
making the system resemble six-qubit quantum computer of day only by 2030. Amit Kothari is chief operating officer at Alpha Alternatives.
14 THURSDAY, 26 DECEMBER 2024
NEW DELHI VIEWS LIVEMINT.COM

OUR VIEW THEIR VIEW

REUTERS

Policymaking as usual does not

suffice for periods of transition
Economic thinking across the world must look beyond the certainty of numbers in uncertain times

under such uncertainty requires the cient supply of housing, water and fuel
provision of calibrated short-term buff- to households.
ers on the basis of high frequency data While the government can ensure
and policies designed for the long-term. the accessibility of public goods, how do
India used both these levers of policy we ensure their utilization within
during the covid pandemic. On the basis households? Academics can contribute
of feedback from high-frequency data, by testing and devising behavioural
targeted support was provided to the strategies to nudge collectively respon-
country’s needy in the short-term. sible behaviour.
DEEKSHA SUPYAAL BISHT & Simultaneously, long-term policies Another example is that of our goal
MEERA UNNIKRISHNAN were implemented, including the pro- of financial inclusion, which has been
are, respectively, officer, Indian Economic duction-linked incentive scheme, Mis- nearly achieved. Further, with the
Service, and young professional, ministry of sion Life, National Hydrogen Mission unfolding of the digital revolution,
finance. and free trade agreements with Austra- there is ample scope to universalize

Panama isn’t the only US

lia, Mauritius and others. financial literacy and investment
Third, whenever a crisis hits, it is the behaviour, carefully steering people’s

A
s India steps into its Amrit Kaal, least-insured who bear the brunt of it. move away from physical savings to
the world appears increasingly This necessitates anticipatory policy- financial savings. Relatedly, how do we
uncertain and fraught with making as an insurance for inclusive induce responsible saving behaviour in

ally Trump has rattled unknown unknowns. While global chal-

lenges require nimble course correc-
tion, they must not deter us from aiming
high and using the window of opportu-
growth. Covid will be etched in memory
as a once-in-a-century event of global
uncertainty. Nations across the world
came to a halt in the face of the health
a young nation to prevent an ageing cri-
sis in the second half of this century?
Sixth, this is an opportune time to
comprehensively take account of the
nity that India has got. In this context, crises. Preventing one in the future multifarious issues women face in all
economic thought needs to tune itself requires us to develop policy responses walks of life and provide workable solu-
America’s president-elect seems bent on an expansive approach to its ‘manifest destiny’ but to India’s aspiration of becoming a founded on healthcare research. There tions. This is important not only from a
developed economy by 2047 in the is a need to adopt models of healthcare humanitarian perspective, but also for
overreach could unsettle Pax Americana. Neutral India, thankfully, needn’t worry much backdrop of a fluid global situation. suited to each country’s stage of devel- economic efficiency. We must utilize
Here’s what may need the engage- opment and demographic structures. the best talent for the nation’s progress.
ment of economic policy thinkers. Fourth, we need ways to leverage cap- The 2023 Economics Nobel Laureate
First, as the world embarks on a new ital to fight climate change. This is espe- Claudia Goldin undertook an analysis of

P
resident-elect Donald Trump mind that this world had a dozen-odd dicta- wave of technological evolution, we cially important for developing econo- women’s workforce outcomes in the US
appears keen to expand on the long- tors, such as Iraq’s Saddam Hussain, Indone- need policies to be devised that curb the mies that have little fiscal headroom. over a 200-year span. Academics of
widening of inequality it would bring. Countries must choose the kind of capi- other nations can build a similar wide-
standing American belief in the sia’s Suharto, The Philippines’ Marcos, Paki- From drones to driverless cars, technol- tal (private versus public) they want and ranged analysis suited to their unique
United States’ “manifest destiny” to stan’s Zia ul-Haq and also Iran’s Shah Reza ogy must remain an instrument in the the principal aim of green technology social context. We need to ask: ‘Is the
dominate its part of the world. His Pahlavi, whose 1979 overthrow in an Islamic hands of well-informed humans. We are (climate adaptation versus mitigation). world ready for this neo-empowered
utterances on buying up Greenland, Revolution opened a theatre of geopolitics that functioning at a time when, unlike com- Under India’s G20 presidency, a two- generation of women?’ If not, where do
enrolling Canada as a state and forcibly taking often seemed to rival its pre-1991 Cold War puter scientists, economists must use part report on the reform of multilateral we begin? What is the lowest hanging
their humanness to navigate the era of development banks specifically delved fruit in the tree of gender equality? In
over the Panama Canal all suggest that the with the Soviet Union. Trump seems to see the machine learning. into the issue of channelling capital the Indian context, this may be the logi-
US guiding principle under Trump would be past as irrelevant to future deals and likes to Second, while science is mostly stud- towards climate action. cal next step of “Beti Bachao, Beti Pad-
‘Might is Right.’ This might work in the face tell it like it is. He appears bent on the pursuit ied in controlled environments, econo- Fifth, economics is about human hao,” a mass programme that has had a
of a few small nation-states in no position to of US self-interest without making any bones mists make their predictions in a rapidly decision-making more than numbers or positive impact on girl-child survival
resist, but would rile bigger powers and also about it, even if that means casting aside rules, changing world. Therefore, good eco- models. Thus, economic thinking needs and education.
nomics is an art of designing policies to rise above forecasts and figures. In As Rabindranath Tagore put it: “A
weaken the alliances that have held Pax Ameri- conventions and treaties, or leaving American that reduce the impact of uncertainty. India, our social structures are evolving mind all logic is a knife all blade. It
cana in place under Washington’s watch. It is allies and dependants in the lurch. We are facing heightened levels of it. at a rapid pace. In less than a decade, we makes the hand bleed that uses it.”
not just economic and military might that The per capita GDP of Missouri, the poorest Globally, firms have resorted to friend- have transitioned from lacking basic Economic solutions must be driven by
underpins US leadership, but also its moral state of the US, is higher than that of Britain. shoring and re-shoring their supply sanitation facilities to achieving Open the kind of society we want to create,
suasion, as articulated by its diplomacy and The market cap of US tech giants is greater chains to mitigate risks arising from Defecation Free status. Holistic initia- evolving with the needs of our times.
geopolitical uncertainty. Policymaking tives have targeted large-scale and effi- These are the authors’ personal views.
cultural advocacy. To abandon that, as Trump than the value of all of Europe’s listed firms.
seems disposed to do once he takes office on The US military budget, at 40% of the global
20 January, would be to unravel the power total, is larger than the combined outlays of the
structures that uphold the world order and next seven biggest defence spenders. In tech-
open up at least a brief phase of instability. nology, only China can foreseeably hope to
India’s stance of being non- or multi-aligned rival the US. All this adds up to American
should help it be one of the countries least hubris, signs of which co-exist with anxiety www.livemint.com New Delhi, Mumbai, Bengaluru, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Friday, December 26, 2014 Vol.8 No.308 `4.00 in Delhi-NCR/`5.00 outside Delhi-NCR 32 PAGES
+ 24 PAGES MINT INDULGE

BJP eyes active

rattled by any Trumpian overreach. over this turning out to be an Asian rather than
POLITICS:
role in J&K >3
CORPORATE: Sumitomo Mitsui to buy
stake in Reliance Capital >3

The 19th century US gloried in the notion American century. However, hubris is brittle
INTERNATIONAL: Russia says currency
crisis over, but inflation set to soar >27
AVIATION: JPMorgan, Ajay Singh may

Accepting that the world is

twitter.com/ facebook.com/ plus.google.com/ pinterest.com/
livemint mint.live +livemint livemint/ buy Maran’s SpiceJet stake >32

that destiny had given it the duty to spread the and can shatter, as it did in Vietnam. Trump’s
SENSEX 27,208.61 ® NIFTY 8,174.1 ® DOLLAR `63.53 ® EURO `77.44 ® GOLD `26,515 ® OIL $60.22 ®

Apr-Dec bank DEVELOPMENT FOCUS The Dawood QUICK EDIT

credit growth
Modi, NDA still effect: why J&K: the

republican form of government and American disposition risks pushing US allies to seek the lowest
on record
BY J OEL R EBELLO
[email protected]
····························
popular with India
neighbours
doubt Pakistan’s
terrorism fight
BY T OM L ASSETER
Bloomberg
····························
right choice
J ammu and Kashmir is in
a strange political
situation.
The party with the
largest number of seats
after the recent election,
full of uncertainty and
way of life across the Americas. Its key role in alternate security arrangements, potentially ambiguity does not and
MUMBAI
New poll finds PM’s NEW DELHI
the Peoples Democratic

D emand for bank loans in the

first nine months of this fiscal
popularity has waned APPROVAL RATINGS W hen last seen in public
s o m e 2 5 y e a r s a g o,
Party (PDP), faces the
unappetizing prospect of
has fallen to its lowest since at from previous highs, Dawood Ibrahim was a chubby choosing either the
least 1998, shows data from but many believe govt man with oversized sunglasses Congress or the Bharatiya
Reserve Bank of India (RBI). Data and a droopy moustache. His Janata Party as a coalition
prior to 1998 was not available. is doing a good job fondness for betting on cricket partner. Paradoxically, the
Credit growth so far this fiscal matches and keeping company National Conference has
(between 1 April and 12 Decem- B Y P RETIKA K HANNA & A NUJA with movie stars has attracted more choices though it

World War II, the rebuilding of Europe and disrupting current power equations. The only
ber) has slowed to just 2.68%, ···························· police investigations and tabloid won far fewer seats.
NEW DELHI
according to the data. For the fort- headlines. Politically, a stable

O
should not stop people from
night ended 12 December, bank n the day the Narendra Ibrahim is also one of India’s government that focuses
credit has increased to `63.03 tril- Modi government com- most-wanted terrorists. He’s on providing good
lion from `61.39 trillion at the end pleted seven months, a linked to bombings that killed governance is essential for
of March, data from RBI’s website new poll reveals that although the hundreds of innocent men and the state now. Unlike in the
shows. prime minister’s popularity has women in his native country. militancy-marred decades,
Bankers and analysts blame this waned from previous highs, a India and the US accuse him of electoral politics has taken
slow growth on multiple factors, majority of Indians still believe the financing Pakistani militants who root in the valley.

setting of global rules, coupled with its eco- countries this would not impact adversely are
starting from the lack of corporate government is doing a good job. killed hundreds more, as well as What is needed now is a
investment to the recent fall in Further, the majority of those brokering a deal with al-Qaeda to stable government that can
market rates, which has allowed polled believe the government’s allow the group access to his restore the state’s economy
corporates to shift borrowings priority still remains development NOT GIVING MORE PRIORITY GIVING MORE PRIORITY NO OPINION smuggling routes. and provide jobs to the

being pretty sure about a lot

away from costlier bank loans and and that it has not been derailed And all available evidence youth. That is the antidote
tap alternative sources of funding. by the raft of religious controver- Are the BJP and its allies giving Do you think Prime Minister culled from accounts on the to secessionist ideas.
Lower working capital demand sies stoked by a minister and religion more priority over Modi is giving religious ground in India and Pakistan, Unpalatable as it may
from state-owned oil companies fringe groups of the ruling india's development? issues priority over India's buttressed by reports from the US sound, this is not the time
due to the recent fall in oil prices Bharatiya Janata Party (BJP). development? and United Nations, point to one for ideology.

nomic success, domination of the world’s a handful like India, which are either non-
has also played a part in the lower The findings should cheer up conclusion: Ibrahim is living in J&K needs an effective
demand for credit. the government, which has been 47% 33% 20% 53% 29% 18% Pakistan. government. If the PDP can
“There have been no major cornered by a united political Just as Osama bin Laden’s provide one, good;
investments and no major large opposition for some of its per- death at a house down the road otherwise it should sit in
projects in sectors like infrastruc- ceived infractions. In fact, this is from the Pakistan Military Acad- the opposition and play a
ture, roads and mining, which has what led to disruptions in the APPROVE DO NOT APPROVE NO OPINION constructive role.

of things.
led to a chain reaction in sectors Rajya Sabha, derailing the legisla- Do you approve of the job Prime Minister Modi had TURN TO PAGE 28®
like commercial vehicles. There tive agenda in the winter session, the BJP government is promised to bring 'achhe din' to

financial system and the rise of Communism, aligned or multi-aligned, depending on the
have been some projects which including bills relating to reform doing at the centre? India. Do you approve of the job he
have been approved but there has of the insurance and coal sectors. is doing as Prime Minister?
been no draw-down of credit,” said The survey was conducted by RISE IN INTOLERANCE
Abraham Chacko, executive direc- Bangalore-based Fourth Lion
tor at Federal Bank Ltd.
In its monetary policy review on
30 September, RBI acknowledged
that credit growth had ‘deceler-
Technologies using its high-speed
polling technology InstaVaani.
The survey polled 500 people in
both rural and urban India.
65% 21% 14% 68% 19% 13%
Why Twitter is a
ated’ despite liquidity conditions The prime minister enjoyed Prime Minister Modi’s approval among APPROVE DISAPPROVE
polarizing platform
led its leaders to envision its ‘manifest’ mission context. For the rest, it would mean a painful
remaining comfortable and high popularity ratings in August. people polled
deposit growth remaining normal. An InstaVaani survey conducted
“Partly, this sharp deceleration is immediately after he delivered his BY S UMIT M ISHRA ECONOMICS EXPRESS
on account of a high base—mone- Independence Day speech [email protected] SUMIT MISHRA
tary tightening to curb the returned an approval rating of Popularity in Popularity in ····························
exchange market pressures in July-
September last year raised interest
rates on alternative sources of
86%. The latest survey reveals that
the approval rating has dropped to
68%.
August 86% December 68%
I n his 2012 book Patriots and
Partisans, historian Ramachan-
dra Guha wrote a lengthy
form for idealistic protesters,
such as those involved in the
funds and pushed up the demand To be sure, the sample size dif- harangue about Internet trolls. Arab Spring of 2011, but the

as a girdle for the whole globe, even if it was not and costly reconfiguration of relations with
for credit from the banking sys- fers between the two surveys and Source: Using numerous conversations darker underbelly of the social

JU L I A N BAG G I N I
tem,” RBI had said. hence the results are only indica- over email and letters, Guha networking site has not received
SUBRATA JANA/MINT
This year, market conditions are tive of the popularity trend of the pointed out the general disdain the attention it deserves.
different and corporations are PM and not strictly comparable. gramme aired by state-run All BJP is in a minority, accusing the for diversity of opinions among While the importance of social
choosing to borrow via instru- Even so, while the sample size India Radio in which Modi shares government of allowing conver- his correspondents. Guha found media as an instrument of
ments like commercial paper in the latest survey is smaller, the his thoughts on various topics sions and remaining silent on the support from several others in change cannot be denied, new
rather than go in for bank loans. In results are still indicative of the with listeners. issue. India’s public life who have been studies show that there has been
its policy review on 2 December, national mood and should not be Since August, Modi has been The InstaVaani survey asked a at the receiving end of vitriolic a steady rise in intolerance to
the central bank had added that ignored, said a spokesperson for targeted by opposition parties on pointed question on whether the abuse for holding an opinion that diverse viewpoints on social

polite to say so openly. The US forged strategic other major powers. The global order, once
Fourth Lion Technologies. a range of issues including the Prime Minister himself was priori- may differ from the views of the media platforms such as Twitter,
TURN TO PAGE 2® While there may not have been controversial comments by Union tizing religious issues over the majority, or from that of a vocal leading to what is known vari-
any major changes since the last minister Sadhvi Niranjan Jyoti development agenda; 53% said no minority. ously as echo chambers and
time the poll was conducted in against minorities, religious con- and 29% said yes—personal rat- Over the past few years, such information cocoons.
MINT INDULGE August, certain initiatives by the versions and failure to deliver on ings that were better than those abuse has shifted from personal A recent study by Emma Pier-
Mint Indulge is being distributed prime minister may be affecting electoral promises like bringing garnered by his government. email conversations to public son, a statistics student at Oxford
with today’s edition. his image among the people, spe- back unaccounted money stashed “As far as the public is con- platforms such as Twitter and University, showed how opinion
cially the urban population, said away in foreign bank accounts by cerned, the impact of the conver- Facebook. Twitter has largely regarding the shooting of a black
Jai Mrug, a Mumbai-based politi- Indians. sions issue on the central govern- hogged headlines for being an

alliances in Europe, apart from the Far and scrambled, would be hard to unscramble, even
cal analyst. The survey shows that 47% of ment and Prime Minister is not efficient communication plat- TURN TO PAGE 2®
December 2014 | Vol 3 | No 12

New Delhi, Mumbai, Bangalore, Kolkata,

Chennai, Ahmedabad, Hyderabad, Chandigarh*,
Pune*

“Urban population is one that those surveyed said that the BJP- significant. Popular opinion is on
has higher and unrealistic expec- led government was not giving the side of the Prime Minister,” a
tations from the government. It is religious issues priority over statement by Instavaani said.
INSIDE
a volatile population that changes development, whereas 33% said it While 65% approved of the gov-
the
its stand. Initiatives taken by the
Prime Minister like mann ki baat
was and 20% had no opinion on
the issue.
ernment’s work, 21% did not and
14% said they did not have an
2014, the year in review
ANNUAL have given him an image of a
talker more than doer and that is
Key opposition parties includ-
ing the Congress, Janata Dal
opinion on it.
BJP spokesperson G.V.L. Nar- T his has been a landmark year for India, which for the first
time in 30 years elected a government with single-party

Middle East, to maintain its hegemony over with the horsepower of ‘Make America Great
what may not be working in his (United), Samajwadi Party, asimha Rao questioned the find- majority, handing it a decisive mandate for effecting change. In
favour,” Mrug said. Trinamool Congress and the Left ings of the sample survey. “In a a series of essays, Mint’s editors take stock of the year that has
Mint is also available for R8 with Mann ki baat, which translates Parties stalled Parliament, spe- been. >P6-15
apple, vanilla and some leather

Hindustan Times in Delhi-NCR only

notes will be evident in a well-constructed
Champagne will vary in flavour, bottle.
but the basics of fresh

Champagne will vary in flavour,

apple, vanilla and some leather but the basics of
notes will be evident in a well-constructed fresh
bottle.

loosely as ‘from the heart,’ is a pro- cially the Rajya Sabha where the TURN TO PAGE 2®

what it liked to call the “free world,” never Again’ behind the effort.

GUEST VIEW

One Nation, One Election: Consultation time has begun

election expenses and minimize disrup- development work and decision-making would be a difficult task in practical terms. regional issues to national ones, which
KRISHANGI SINHA & SANJAY KUMAR tions in governance caused by frequent processes. With the implementation of One The more substantive task, though, could give an advantage to national parties.
elections. Interestingly, this isn’t a new Nation, One Election, the MCC would only would be to make major amendments to the What lies ahead? Law minister Arjun
idea. Simultaneous elections were held in be implemented once every five years, thus Indian Constitution and electoral laws. Key Ram Meghwal had introduced the bills in
India up till two decades after independ- leading to a smoother execution of long- provisions such as Articles 83, 85, 172 and Parliament. The bills have now been sent to
ence—from 1952 to 1967. However, due to term policies and projects. 356, which govern the terms of the Lok a joint parliamentary committee to get a
Also, with elections happening one after Sabha, state assemblies and the dissolution

E
arlier this year, a nine-member com- political instability, the premature dissolu- wider understanding after consulting with
mittee led by former president Ram tion of state assembles and a change in the another under the current of governments, would various stakeholders.
Nath Kovind presented an 18,626- country’s political fabric, the system of system, there are chances require big revisions. The Joint Parliamentary Committee is
page report recommending simultaneous holding elections together was disrupted. of it leading to voter The idea of state It is also important to scheduled to meet early next year and is
assembly and Lok Sabha elections, popu- Why simultaneous elections have support: fatigue, with voters losing consider what happens if expected to begin consultations with vari-
larly being referred to as ‘One Nation, One Polls happening simultaneously can lead to interest in the electoral and central polls the government at either ous stakeholders to gather their opinions
Election.’ It also recommended local body a substantial reduction in financial costs. process. Under One the Centre or in some state on One Nation, One Election. Stakeholders
elections within 100 days of Lok Sabha and Under the current system, elections hap- Nation, One Election, vot-
being held in loses its majority support would include members of political parties,

are, respectively, a researcher

assembly elections. There have been recent
debates around the proposed One Nation,
pen in some part of India or the other every
year. This places a financial and administra-
ers will have to cast their
votes once every five years
sync has its pros before the House com-
pletes its five-year term.
former judges, senior advocates, current or
former election commissioners, state
with Lokniti, a research
program of the Centre for the
One Election bill, officially titled The Con-
stitution (One Hundred and Twenty Ninth
tive burden on the Election Commission
(EC). The EC must repeatedly deploy
for both central and state
representatives. This may
and cons that This would disrupt the
synchronized election
assembly speakers and potentially also the
general public.
Study of Developing Societies Amendment) Bill, 2024, and the Union resources that include security forces, elec- renew enthusiasm in the need careful cycle. It would be a chal- After that, the Joint Parliamentary Com-
(CSDS), and a professor at Territories Laws (Amendment Bill), 2024. tion officials, polling infrastructure and election process and result lenge to maintain the mittee will review and approve the bill’s
CSDS. If the bill is passed, voters across the coun- electronic voting machines (EVMs), leading in higher voter participa- examination country’s common poll proposed amendments clause-by-clause.
try would be able to cast their votes to elect to a high cost burden. With synchronized tion on the whole. schedule in situations The committee will submit its report to the
both levels of government (state and elections, these costs can be reduced. Structural challenges: where the Lok Sabha or a Lok Sabha speaker, who must then deter-
national) on the same day. The Union Terri- Before every election, the Model Code of The implementation of One Nation, One state assembly is dissolved prematurely. mine when it should be presented to the
tories Laws (Amendment Bill), 2024, would Conduct (MCC) is enforced, which restricts Election poses significant challenges, as In a diverse country like India, state elec- House. The proposed One Nation, One
align the elections of the Union territories the government from announcing new pro- multiple polls taking place across the coun- tions often centre around regional con- Election bill would bring about a major
of Jammu and Kashmir, Puducherry and jects, policies or welfare schemes during try would require massive logistical cerns, local leaders and specific develop- change in India’s electoral system. There-
NCT of Delhi. the election period. As elections occur arrangements. Overseeing polling infra- mental priorities. Holding both Lok Sabha fore, it is important to understand its pros
Through this reform, the government throughout the year in different states, the structure such as EVMs, voter verification and state assembly elections together could and cons in fine detail before it’s imple-
hopes to streamline governance, reduce MCC comes into effect frequently, delaying systems, security forces and election staff shift the voter’s focus from local and mented in the country.
LIVEMINT.COM VIEWS THURSDAY, 26 DECEMBER 2024
NEW DELHI 15

GUEST VIEW M I N T C U R AT O R

India’s leadership has a valuable Nike’s turnaround strategy will

need the second shoe to drop
role to play in a multipolar world Its new CEO has made a beginning but the real big test lies ahead

Its strategic autonomy and multi-alignment place it in a unique position to lead everyone towards globally shared goals

AFP

ANDREA FELSTED
is a Bloomberg Opinion columnist covering
consumer goods and the retail industry.

BØRGE BRENDE
is president and chief executive officer,
World Economic Forum

T
he first shoe has dropped at Nike
Inc. Last week, new chief executive
officer Elliott Hill set out his vision

T
he world is at a crossroads. As regional for turning around the [American maker of Nike’s Elliott Hill wants to revive the brand
conflicts continue to deepen geopoliti- sneakers whose ‘swoosh’ brand logo is glo- and its famous ad campaigns. ISTOCKPHOTO
cal pessimism, there are compelling bally recognized and “Just do it” slogan
reasons for increased geo-economic remains among the most memorable for motions accounted for half of sales.
optimism. Global growth is projected significant numbers]. The world’s biggest Instead, he plans to turn Nike’s own chan-
to hold steady at 3.2% in 2024 and sportswear company has lost out to rivals nels into premium destinations that ele-
2025, inflationary pressures have started to sub- after it prioritized selling through its own vate the brand and carry the broadest
side and the global economy has avoided a reces- stores and website, and did not deliver selection of products.
sion despite a sharp tightening of monetary policy enough new products, relying instead on He will use Nike’s outlet stores to clear
around the world, demonstrating unusual strength classic styles. any excess inventory, part of broader
and resilience. Hill warned that his efforts would be efforts to get rid of out-of-style stock,
However, significant risks persist, such as climate painful in the short term, with sales and making space for hot new items. The latter
change and its health impacts, unstable debt margins in the current fiscal quarter will be more carefully managed in an
dynamics and the ratcheting up of protectionist expected to fall more sharply than in the effort to make Nike’s sneakers desirable
measures. Even as fragmentation and polarization previous three months. But he stopped once more.
are on the rise globally, the most pressing challen- short of getting all the bad news out of the His blueprint is sensible, but will be
ges that the world faces—for instance, sustainable way early, for example by writing off those painful.
growth, an energy transition, creating meaningful out-of-fashion sneakers and lowering Consequently, Nike cautioned that
employment opportunities and responsible govern- sales and earnings expectations for the third-quarter sales would fall by a per-
ance of advanced technologies—require effective coming years. centage in the low double digits, worse
multilateral cooperation and collective action. That looks like a missed opportunity, than the 8% contraction in the three
India’s emphasis on a rule-based international and it means the continued threat of a months to 30 November, as it gets rid of
order, advocacy of collaboration to solve shared reset as Nike embarks on the difficult task stale footwear inventory.
issues and commitment to democratic values of winning once more. The gross margin, the difference
position it as a stabilizing force in an increasingly Rooted in the principles of strategic autonomy infrastructure and expanding domestic capabili- It has been obvious for some time what between the price at which a retailer buys
complex global order. and multi-alignment, India’s nuanced approach to ties through initiatives such as Make in India and it Nike should do. And Hill set out a plan to and sells goods, is expected to fall between
India’s expanding influence: The country has diplomacy has allowed it to maintain strong rela- production-linked incentive scheme have boosted just do it. 3 and 3.5 percentage points in this exer-
established itself as a responsible world leader, tionships with multiple global powers and engage its potential to capitalize on new growth opportu- The company will be obsessed with cise. Little wonder the shares fell almost
working alongside an array of stakeholders to meaningfully with the Global South. This unique nities. The world will soon welcome a new G3 era, sport once more. Hill will organize Nike 4% in pre-market trading.
champion an inclusive, human-centric and sus- approach has yielded economic and diplomatic in which India joins the US and China as the most into “fields of play” around basketball, But once more, Nike has stopped short
tainable developmental agenda. During the covid returns—indemnifying it against global fuel prices eminent countries driving the global agenda. If football and soccer, with common divi- of giving longer-term guidance. It might
pandemic, it supplied vaccines and critical medici- and supply shocks, strengthening its credibility to India continues to leverage its demographic divi- sions between men’s and women’s prod- do so when Hill delivers his full blueprint
nes to over 100 countries, and its remarkable act as an effective mediator for conflict resolution dend, invest in critical infrastructure and embrace ucts within these. The hope is to unleash at an investor day next year.
advances in digital public infrastructure (DPI), and peace talks, and cementing its position as a a digital transformation, it can play a defining role a wave of innovative new products. The company’s earnings call last week
highlighting its leadership in digital innovation, trusted partner and reliable leader of the Global in shaping the future of the global economy with He is right to focus on newness. Nike would have been a good opportunity to
offer adaptable models for the world. Initiatives South and beyond. Its unique position and ability contributions that resonate far beyond its borders. needs to release novel sports products that clear the decks. Inventory was flat at the
such as the International Solar Alliance and Global to balance competing interests and foster dialogue The path ahead: India’s journey to becoming a can drive broader trends. After all, while end of the third quarter, but taking a
Biofuels Alliance showcase India’s commitment to and stability amid rising multipolarity will define world leader is fuelled by its strong economy, its performance is the cornerstone of Nike, it charge for all the old Nike Dunks and Air
drive global progress on sustainable development, its role and relevance as one of the most powerful technological acumen and its diplomatic prowess. and rival Adidas also resemble fashion Jordans that need to be sold off might
climate resilience and the energy transition. diplomatic forces on the global stage. Continued stress on broad-based policy reforms brands, and need a pipeline of fresh items. have been wise. It would also have been a
India is also expanding its strategic economic Leading a new era of sustainable and inclusive focused on inclusive growth, the rapid adoption Hill will step up marketing action to tell good time to reset longer-term expecta-
partnerships through free trade agreements growth: India is the world’s most populous coun- and responsible governance of new technologies, the story of Nike as a brand, aiming to get tions for sales and profits that are more
(FTAs) with various countries across continents. It try, its largest democracy and fifth largest econ- its labour market and the skilling of its large work- back to the great campaigns the company realistic, and reflective of how difficult it
is liberalizing foreign direct investment (FDI) omy. It has been the fastest-growing major econ- force will be critical. On the geopolitical front, was traditionally known for. will be to reorient the Nike juggernaut.
restrictions in critical sectors to give global inves- omy for three consecutive years, contributing advancing multilateralism, strengthening regional He will give more power to its teams in This is what Hill’s counterpart, Bjorn
tors a chance to tap its vast market. It has been around 17% of global growth in 2023. partnerships, enhancing collaboration with inter- cities and counties to restore connections Gulden at Adidas did shortly after becom-
actively engaging with multilateral institutions Supported by the government’s strong efforts to national organizations and leveraging its position with local athletes. Nike, for instance, ing CEO at the beginning of 2023.
such as the United Nations and World Trade maintain stability and enact structural reforms, it is as a bridge between developed and developing became less focused on neighbourhood Hill will get few chances to make a deci-
Organization, apart from regional frameworks. It moving firmly on the path to becoming a $10 tril- nations can help India become a global power- running clubs, creating an opportunity for sive break with the past and provide him-
has sought greater north-south and south-south lion economy and the world’s third largest in this house and shape a more equitable world order that rivals such as Deckers Outdoor’s Hoka. self with a solid foundation. He has gone
cooperation, reforms for just multilateralism and decade and a developed nation by 2047, with its prioritizes cooperation over competition. The new CEO is also reconnecting with some way to that end, but it looks as if he
equitable representation in global governance real GDP growth expected to trace a high path. The World Economic Forum has been a partner the retailers that Nike abandoned under needs to go further.
and financial architecture across influential plat- With a vast middle class and one of the largest con- and supporter of India for more than 40 years. This his predecessor John Donahoe, as it He should not leave it too long. Nike’s
forms like the G20 and Brics. In the first months sumer markets in the world, it has emerged as a relationship has culminated in a multifaceted and sought to emulate luxury brands by con- recovery won’t be quick or easy, and the
of its G20 presidency in 2023, India convened the preferred destination for global businesses and meaningful collaboration with key stakeholders for trolling the offtake of large swathes of its more time that passes, the more it will
Voice of the Global South Summit to consult with investors and a partner of choice for many coun- several impactful initiatives that advance shared products through its own stores and digi- become Hill’s problem, rather than that of
leaders from 125 non-G20 countries, and its push tries looking to diversify their supply chains. priorities. We are proud to support India’s vision, tal channels. his predecessor.
to include the African Union in the Group has The government’s emphasis on building resil- ambitions and endeavours, paving the way for a As part of this pivot, Hill will cut back on Nike needs the second shoe to drop—
been among its key successes. ience against external shocks, developing critical more collaborative and prosperous future for all. discounting on Nike’s website, where pro- and fast. ©BLOOMBERG

MY VIEW | BEHAVIOUR BY BRAIN

Why are product displays on e-commerce sites so drab?

even on the top e-commerce sites would leader on how to improve sales seems to today’s world of commerce, more so if they Today, as the world of business evolves on
BIJU DOMINIC look dull. What explains this dismissal of have fallen on deaf ears among marketers. work for a business based on technology. the power of technology, including relative
online images? Digital marketers have no reason to be But it is likely that very few of them have ever novelties like artificial intelligence (AI), a
The ‘product tile’ is possibly the last mile complacent in their efforts to influence the been trained on the subtle art of human per- potential danger is emerging. The chasm
of a brand’s digital marketing initiatives. It is consumer’s behaviour. Rather, they should suasion. This art requires a sophisticated between the ‘quantitative’ world of data and
the final stimulus that could determine be a worried lot today. Click-through-rates understanding of the difference in emo- technology and the ‘qualitative’ world of

T
he e-commerce story, a business that whether the consumer buys a particular (CTRs) in e-commerce have been falling tions, for example, that a serif font will evoke design and creativity is widening. Drab
began a few decades ago with buying brand or not (or the one next to it). There sharply. In 1994, when instead of a non-serif font product shots against an undifferentiated
and selling used computers before have been many studies done to understand banner advertising first in the consumer’s brain. white background on e-commerce sites are
evolving to sell almost anything online, is how decisions are taken in the e-commerce started, a typical CTR was Businesses That this art is not being just one indication of this rising problem.
nothing short of dramatic. But this journey world. Our studies show that while buying 44%. By 2022, the count applied online shows. In the past, most famously in the success
of changes has had one constant: the back- frequently purchased products, the con- had crashed to a paltry based on The easiest way to of Apple as a company, one did see the magic
grounds of most product images on e-com sumer decides to click or not on a product 0.35%. There has been a achieve scale in the e-com- that happens when technology and design
platforms are white in colour. This socialist- tile in a matter of 0.92 seconds. Given such more than 100 times fall in
technology merce business is to create come together. But this synergy between the

is chief evangelist, Fractal

world principle of sameness should be seen
alongside the fact that these sites use some
near-instantaneous decisions, no one needs
a post-graduate degree in graphic design to
CTRs over the years.
This is a clear indication
shouldn’t lose a standardized template for
all product images. That is
two has varied, going up and down in waves,
even though many companies routinely
Analytics. of the drabbest product images across all
types of media. E-commerce companies use
recognize that a product tile with an evoca-
tive product shot (say, a soft drink bottle
of how e-commerce sites
are struggling to influence
touch with the what must have happened.
So, a white background, as
claim they look at problems through the
eyes of the consumer. It is good to note,
some of the most cutting-edge technology in with water droplets) is far likelier to attract a the consumer’s buying subtle art of recommended for some however, that slowly but surely, many more
various facets of its management. But why click than one with a drab product shot. decisions. It is in this con- visa application mug-shots, companies are seeing the benefits of com-
are they not bothered about the quality of Amazon is possibly the most prominent text that one should evalu- persuasion arose as the common stan- bining the power of engineering and design.
their display images? e-commerce company in the world. One can ate why brand images get dard. There was a rational This movement will gain strength once a
Just compare the product shots of brands safely assume that it would have done such little attention on justification that products good combination of ‘quantitative’ and
on e-commerce sites with those at brick- numerous trials to figure out what best influ- e-commerce websites. Does the problem stand out best against a white backdrop. But ‘qualitative’ education is delivered right at
and-mortar stores, like the shopfront of a ences consumer behaviour online. Ama- have deeper roots? what about brands whose packaging is pre- the technical college level.
kirana outlet. If a soft drink brand has spon- zon’s website states: “As against standalone The back-end operations of most e-com- dominantly white in colour? How will those Trans-disciplinary education should
sored the sign-board, it will ensure that an images of products against a white back- merce companies are run by engineers. It is brands stand out against a white back- become the norm of our technical education
evocative image is displayed on it. Even ground, products placed in a lifestyle con- evident that these engineers understand the ground? Such questions had no relevance in system. Only then will our engineers fully
water droplets on the soft drink’s bottle will text have 40% higher click-through rates.” world of numbers and technology. They also a world where standardization and scale understand the utility of art as a differentia-
look refreshing. But the same brand’s image This suggestion from a global e-commerce know the importance of achieving scale in were given priority. tor in a business based on technology.
16 THURSDAY, 26 DECEMBER 2024
NEW DELHI
LIVEMINT.COM