The primary aim of a democratically elected government is to provide good governance without an authoritarian approach to the administration of the people. Generally, the government concentrates on matters pertaining to financial and economic policies along with other functions like internal and external security and foreign affairs. Apart from this, it gives the utmost priority to public health, value addition for human resources, infrastructure for the ease of living and industrial setups, remunerative prices for agriculture and farm infrastructure, trade, industries and commerce for the furtherance of the nation with social responsibility.
The implementation of the post-1990s reforms became mandatory for the country irrespective of the ruling party, especially for executing their tasks in all the sectors connected to finance and the economy. The primary goal of any popularly elected government was to discharge its responsibilities for serving basic amenities to the people, along with the vital tasks of internal and external security, and minimize their role in other unimportant functions since the government had a limited role in those areas in the post-Reforms era. The then Union Government had established Public Sector Undertakings (PSUs) after 1947, since India was formed as a structured democratic country with new aspirations after the freedom struggle. Thereafter, there was a requirement to provide employment opportunities and boost economic activity for our new country as there was a huge investment crisis domestically at that point in the private sector, due to limited resources and other constraints. These PSUs have served the nation all these years without any doubt, but simultaneously, there have been a lot of changes in the global economic scenario in the last 30 years. These have impacted India, and given the competitive environment today, the output of our economic activity has become important because it affects our presence in the global market.
In the year 1990, the then Union Government had taken a policy decision to remove the License Raj and facilitate Foreign Direct Investment. It had recommended disinvestment from PSUs in a phased manner as taxpayer money was being utilized to provide assistance for the losses. Such assistance is seen as unproductive expenditure and such approaches caused a shortage of funds which were needed for productive developmental expenditure. But, instead of shutting down the PSUs causing losses, the Union Government is accepting offers for private participation by means of divestment of shares, in part or whole, in the loss-making non-strategic PSUs. The objective of disinvestment is to either operate the loss-making PSUs by provisioning to perform capacity utilisation efficiently to achieve productivity with the available sources and alternatives or to accept private participation by the disinvestment of government shares for achieving the targets of production, productivity and cost effectiveness by optimum utilization of existing capacities or the expansion of the capacities of the entities with automation and the use of modern technology. Both options are a positive approach to turn around sick and potentially sick PSUs.
Another option is that PSUs can have a synergy by the disinvestment of government shares to prestigious and internationally renowned firms with a good brand image and output quality. A success story in this case is that of Maruti Suzuki. The car brand reveals how synergy could be created through timely strategic decisions. The success of the joint venture of Maruti Suzuki led Suzuki to increase its equity from 26% to 40% in 1987, then 50% in 1992, and further to 56.21% in 2013. Simultaneously, Maruti Udyog Limited (MUL) showed remarkable performance. MUL sold about 1.20 lakh cars in FY 1993, which increased to 18 lakh cars in 2018-19, with present cash reserves around Rs 40,000 crores. Their healthy financial condition also served direct and indirect taxes of around Rs 1.80 lakh crores, created millions of jobs and supplied exports to numerous countries across the globe.
The CAG reported that 80% of 189 underperforming PSUs have eroded their capital and now account for accumulated losses of around Rs 1.50 lakh crores, which are a huge burden on the Union Government exchequer. The Union Government has tried to revive some of these entities by providing financial assistance through various measures, but most of them are still rated as underperforming. One important case study here is Air India. Although the Union Government provided it a bailout package of Rs 30,000 crores in 2012, the turnaround plan was a total failure and Air India has not shown the desired results. It continues with its operational losses with more than Rs 50,000 crores in debt.
The Union Government has kept its eye on underperforming PSUs in order to take appropriate remedial measures as per expert opinion with the consultation of the NITI Aayog. But the Vizag steel plant has now become a significant case study in the divestment in PSUs as it has taken the form of an emotional issue. Besides being an economic concern, it has established itself as a matter of Andhra pride, because it was built with the sacrifice of 32 lives in 1982. The steel factory had been established under the name Rashtriya Ispat Nigam Limited, with the support of the USSR, in the pre-reforms era. It began with a 3.5 metric ton capacity per annum. At that point, there was a lack of private investment opportunities for the corporate sector and it had been incorporated by the Union Government as a PSU. This company has been registering operating losses (profit before taxes) continuously: in the years 2015-16 it was Rs 1,702 crores, in 2016-17, Rs 1,690 crores, in 2017-18, Rs 307 crores, and in 2018-19, Rs 1,369 crores. The exact amount of losses during 2019-20 will be known after audited financial statements are available. Moreover, during the Covid-19 lockdowns, the capacity utilization of the plant reduced 13,000 tons to 14,000 tons of metal per day as against the previous capacity of 20,000 tons.
Critics are saying that the operating losses are only due to the higher side of the raw material input cost since no mines of its own are available to RINL. Hence, intellectuals are requesting the Union Government and State Government to allocate mines for its captive consumption to make the unit profitable or merge RINL with SAIL for its sustainability, keeping in view the emotions of the people of Andhra Pradesh, especially as “Vishaka ukku, Andhrula hakku” (the Visakha steel unit is the right of Andhra).
But there is a point of contention here. On 20 May 2006, the then Chief Minister of Andhra Pradesh, Y.S. Rajasekhar Reddy, had appealed to the Prime Minister not to merge the Visakhapatnam Steel Plant with SAIL. The Prime Minister had shown his concern for the state by allocating Rs. 8,600 crores for the expansion of the steel plant with an intention to merge it with SAIL. But it had been stopped due to the CM’s appeal. If RINL had been merged with SAIL then, the Visakha steel factory unit of RINL might have continued as part of SAIL today, without the problem of not having its own mines.
Prior to this, the Union government under the leadership of former Prime Minister Atal Bihari Vajpayee had provided assistance by restructuring capital two times. The first time, in 1993-94, the Government of India had converted a loan of Rs. 1,184 crores to equity capital and Rs 1,604 crores as 7% non-cumulative redeemable preference shares. Further, the Union Government had assisted with a Rs 149.40 crore loan interest waiver and converted a payable interest of Rs 791 crore into an interest-free loan. This had been facilitated to save about Rs 582 crore in interest per annum. The second time, in the year 1998, GoI had converted a Rs 1,333.47 crore loan into 7% non-cumulative redeemable preference shares to save about Rs 325 crore as interest per annum. Hence, the Union Government provided assistance as and when it was required, but the unit failed to turn around in its operating profits.
The privatization of the steel plant has caused an emotional outburst in Andhra Pradesh. However, the Union Government is concerned about the continuous losses, which will lead to the shutdown of the unit. The sacrifices of the 32 people will amount to nothing if the plant cannot be saved. The unit needs to be revived with the world-class, efficient management of South Korean steel giant POSCO. It is required to safeguard existing employees and others who are dependent on RINL. There is a lot of speculation about this proposal since the assets of RINL hold more than 24,000 acres of highly valuable lands, which may be alienated at a cheaper cost and incur huge losses for the Union Government. Meanwhile, POSCO has been approached by both the Union Government and State Government of Andhra Pradesh to express their interest in setting up the Greenfield Integrated Steel Plant in Visakhapatnam and it entered into an MoU with RINL. RINL Visakhapatnam has a 7.30 million tonne capacity plant and is a sea shore-based integrated steel plant. It holds over 24,000 acres of land with access to the Gangavaram Port, where raw materials arrive.
Earlier, POSCO had proposed a 12 metric tonne per annum capacity plant at Jagatsinghpur, Odisha at the projected cost of more than Rs 50,000 crores on 4000 acres for the Greenfield plant, with 1000 acres for developing a residential and commercial township. An MoU had been signed between POSCO and the Government of Odisha in 2005, but it did not materialise due to protests by locals. However, less than 5000 acres of land was more than sufficient for POSCO’s setup. In a nutshell, the assessment of land requirements shall be evaluated carefully and land shall be developed by the Union Government on its own for the better utilisation of resources in that local area by establishing a SEZ for auxiliary units for the proposed new steel plant with buyback tie-up and other possible future industrial development projects can be taken up. Otherwise, the decision of the disinvestment process of RINL will be black spotted and opposition parties will use it as a political opportunity against the BJP as both regional parties have already started agitations to oppose the disinvestment process in RINL by wooing people with provocative speeches. All this is just to grab the attention of the public, rather than solving the problem.
The world is now a global village and creating an environment conducive to the ease of doing business is a vital part of trade, commerce and industry. Hence, governments of all the countries need to review their priorities and align them towards inclusive growth and better living standards for all people, along with the growth of the economy. The aspirations of people have also changed over the last 70 years. Emotions are important, but in economics, the end result prevails over emotions since inclusive growth and prosperity are a priority. If disinvestment in PSUs is not done at the appropriate time, it may lead to disaster. However, the government must keep in mind public sentiments and ensure that all reasonable options are exercised before it begins the process of disinvestment.
The writer holds a degree in commerce and works as an FCA.
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‘Magic of 80s’: Raj Babbar & Padmini Kolhapure talk about their latest web series Dil Bekaraar
Actors Raj Babbar and Padmini Kolhapure joined NewsX for a candid chat as part of its special series NewsX India A-List. In the exclusive conversation, the duo spoke about their latest web series Dil Bekaraar on Hotstar, which is set in the 80s.
Speaking about what attracted him to the show, Raj Babbar said, “My first priority is my work. I give a lot of time to a lot of things but I thought this is my identity. If I am known as Raj Babbar, it is because of Mumbai and the Hindi Film Industry recognised me as a performer. No matter where I go, people recognise me as an actor and then other adjectives on whatever I am. I realise that I should give priority to the actor side of me, which gave me this recognition and gave me a place in the society. That’s why I feel my first priority is my work.”
He added, “When I heard this story, I remembered a book that I had read sometime in the past. It was a bestseller at that time. It was called, ‘Those Pricey Thakur Girls’ and it stayed in the mind. When I heard this story, I felt very nice, a very interesting subject and I am doing a very beautiful role in it. I found the innocence of 80s, magic of 80s in this. That romance, the comedy, all of this is beautifully captured in this. The USP of the 80s that people used to think is evil is the corruption and the corrupt is the evil. These fiery girls, my 5 daughters, they are brilliant and also very fiery and ambitious. It is this very interesting thing, which attracted me. When I heard the narration and got to know that Padmini ji and Poonam ji are doing this, I said okay. I got this confidence that we will be in majority. Meher and Akshay are beautiful actors. They are very energetic people and it was fun working with them.”
When the same question was posed to Padmini Kolhapure, she responded, “The first attraction was Mr Habib Faisal. I have seen his work and he is a brilliant director. After working with him, I realised truly how meticulous he is. This script and this story demanded a lot of nuances to recreate the 80s era, which he has done brilliantly. He has lived that era and knows a lot about it. We have been there and done that so it wasn’t very difficult for Raj, Poonam or me to do this. More challenging probably for the youngsters because they don’t know what the 80s era was. I am sure that they would have had to work on every little thing. Second thing was the production house, so it was Smriti Shinde and Sobo films and then the OTT platform, which was Disney + Hotstar, so what better could I have asked for. You have Raj Babbar, Poonam Dhillon, Akshay, Seher, Aditya. This entire ensemble cast and to top it all, my role. It being a web series, it runs into a couple of episodes so it was not like I am playing a primary character in it but I am playing a very important role. It is a very colourful role, which I was quite amused while performing. Every time I would finish my role, I would just look back and laugh. I’d say to myself, ‘what am I doing?’. It is really beautiful when you are an actor and performing such challenging roles. You realise what an actor you can be and what can come out. With a good director and co-actors, you can just create magic.”
GFI LAUNCHES INITIATIVE TO STRENGTHEN FARMER PRODUCER ORGANISATIONS
Grameen Foundation India (GFI) on Monday launched a special initiative ‘Catalyst Award’ under its MANDI (Market Enabled Access through Digital Innovation) project to support and develop the farmer producer organisations (FPOs) in Uttar Pradesh.
Speaking at the event, Prabhat Labh, Chief Executive Officer, GFI said, “Smallholder farmers, especially women, play the most critical role in ensuring food security in Uttar Pradesh. Grameen’s endeavour is to recognise the role of women smallholder farmers, and support them through linkage to markets, technology and finance in order to increase their incomes.” The MANDI project aims to strengthen the FPO’s capacity to connect smallholder farmers, especially women, to markets and finance, in order to improve farmers’ incomes and resilience. It predominantly works on four thematic areas such as financial linkage, access to market, FPO capacity building on day-to-day operation and compliance, and gender mainstreaming. It also focuses on leveraging data for decision-making and facilitates need-based modern technologies. The MANDI project is implemented by GFI in partnership with Walmart Foundation.
The Catalyst Award is a financial assistance program being offered to select FPOs to support their long-term institutional strengthening and growth. The financial assistance being extended to the FPOs would help them in serving their members, particularly women and smallholder farmers in a better and organised manner. The awards were given at a one-day workshop organized on Monday, 29 November 2021 on “FPO strengthening through Gender Mainstreaming” at the Shatabdi Krishi Prekshagrih, Institute of Agricultural Sciences, Banaras Hindu University, Varanasi.
Addressing the participants, Mahendra Singh, Joint Director, Agriculture, Government of Uttar Pradesh said, “FPOs can become business entities serving needs of small and marginal farmers and focusing on women participation. FPOs should focus on market and financial linkages to benefit shareholder farmers.”
The day also saw the launch of another initiative on which GFI is collaborating with ICRISAT (International Crops Research Institute for the Semi-Arid Tropics). Under the collaboration, it has developed a support fund for the FPCs (Farmer Producer Companies) in response to Covid-19 pandemic mainly to cope better with situation brought on by the pandemic. FPC support fund (FSF) is being given for promotion and expansion of business activities being conducted by registered FPCs promoted under the MANDI project. A total amount of INR 4.5 lakh will be given to the FPCs.
The overall objective is to provide immediate support to FPCs which will help the project beneficiaries cope better with the pandemic while building resilience and bringing things back on track— by providing access to ‘working capital’ to the farmers through the FPCs, so that the farmers can continue with their farming operations uninterruptedly. This will also help FPCs for strengthening business activities, innovative product and services design and delivery which will help the farmer members of FPCs. The program is implemented through GFI’s subsidiary Grameen Foundation for Social Impact (GFSI) with support from ICRISAT and would cover four districts of Ghazipur, Varanasi, Mirzapur and Prayagraj and would benefit about 11,500 farmers.
This event is part of a series of activities being organised by the GFI for generating awareness among the stakeholders of FPOs, and creating an ecosystem to foster women’s empowerment in agriculture. It aims to sensitise stakeholders on increasing women’s participation in decision-making and in the entire FPO value chain.
About 146 attendees representing FPOs, experts from financial technology, markets and convergence participated in the event and subsequent workshop. The companies such as Blue Soils, UPPRO (State Level Federation of FPOs of Uttar Pradesh), EF Polymer also displayed their products and services.
Grameen Foundation India is a leading social impact organisation, working on financial inclusion, agriculture-based livelihoods and health and nutrition initiatives with the mission to enable the poor, especially women to overcome poverty and hunger. Inspired by the work of Nobel Laureate Prof Muhammad Yunus, Grameen provides works in partnership with leading development organisations in India to ideate, innovate and scale breakthrough solutions that reach underserved populations, particularly women.
YOTTA TO BUILD NEXT TWO DATA CENTER BUILDINGS IN GREATER NOIDA
Yotta Infrastructure announced that it will commence construction of two more data centers in their Greater Noida Data Center Park in January 2022. The two buildings will have a capacity of 30MW IT load each and will be ready to go live in January 2024. The construction of the first of six data center buildings started in January 2021 and will go live for customer operations by July 2022, in a record time of less than 18 months. Once completed, it will have a capacity of 30 MW IT Load.
Commenting on the development and his vision to transform Uttar Pradesh as a technology hub, the Honourable Chief Minister of Uttar Pradesh, Shri Yogi Adityanath, said, “Uttar Pradesh today is at the forefront of all-round development. Data Centers are the hub of the digital revolution. They are the temples for digital democracy. The government of Uttar Pradesh has taken path-breaking steps, including a forward-looking Data Center policy helping and incentivising the development of high-quality, large-scale data centers in UP. I congratulate the Hiranandani Group and Yotta for taking this initiative which shall enhance the quality of life for citizens and shall grow the digital economy of the country, promise them all help and wish them success.” The Uttar Pradesh government, in October 2020, gave approvals to the company to set up a 20-acre hyper-scale data center park in Greater Noida. This will be the first data center park in the region, which will consist of 6 interconnected data center buildings offering 30,000 racks capacity powered by more than 250 MW of power. The estimated cost to set up the park is approximately INR 7000 Crore (~USD 950 Mn). The project will also generate direct and indirect employment in Uttar Pradesh as the company expands its team to operate and build the data centers.
Darshan Hiranandani, Group CEO – Hiranandani Group, said, “The Digital India initiative has opened up new avenues for businesses, and India has been on the upward trajectory with respect to digital transformation way before the pandemic hit us. The last couple of years have only reinstated the need to grow digital infrastructure in our country. We are grateful to the Government of Uttar Pradesh and the Honourable Chief Minister Shri Yogi Adityanath Ji for extending their constant cooperation that helped us speed up the construction process. Our Datacenter Park in Greater Noida will go a long way to augment the digital infrastructure not only in Uttar Pradesh but also in the entire north region of the country as Yotta continues to strive to bridge the demand-supply gap in the Indian data center industry.”
Sunil Gupta, Co-founder, and CEO of Yotta Infrastructure said, “Foreseeing increased demand from the region due to digital acceleration, we’ve decided to commence construction of two new data center buildings of 30MW IT load each from January 2022, much ahead of our earlier schedule. The data center park shall be the largest one in the region, powered by redundant 220 KV express feeders and an on-site substation, with an option of 100 percent green energy to customers. With the presence of multiple telco operators, redundant fiber paths and various public and private Internet exchanges and availability of Build To Suit (BTS), Bulk and Retail Colocation and various Cloud and Managed Services, this highly interconnected data center park is attracting customers from across the World and industry verticals.”
Riding on the digital revolution and a huge supply-demand gap in the country for high-quality, scalable data centers and benefitting from its all-around capabilities across the value chain of Datacenter from Build to Operate, Yotta is feverishly developing data center parks across the country. It has also signed MoUs with Tamil Nadu and West Bengal Government to set up data centers in Chennai and Kolkata, respectively. The company recently announced that its first data center in Navi Mumbai – Yotta NM1, is India’s first and the only Tier IV Constructed Facility certified by Uptime Institute (USA).
In sync with Guru Nanak’s ‘oneness’
An exhibition titled ‘Paradigm of Oneness’—a solo show by artist Dr Jaspal Singh Kalra—was held recently in the capital at the Visual Arts Gallery, India Habitat Centre wherein the artist attempts to imagine Baba Nanak in the content of his immortal Shabads.
Artist Dr. Jaspal Singh Kalra
Banrae Embroidery & sketch on linen by Dr. Jaspal Singh Kalra
Nanak’s oneness goes beyond just humans. His compositions talk of nature, animals, plants, earth, water, air and to love them all is true oneness with the divine. Imagining self as part of other is the paradigm of Nanak’s oneness that takes us beyond our ego. The series of artworks on display are Kalra’s journey of art as a personal expression. His art is not about deciphering or finding reasons but simplifying the complexities.
This personal expression of setting text in artworks has been part of Dr Kalra’s style for more than a decade. When his mother passed away, it transformed into interpretation.
The word ‘Sab Tera’ is also interpreted as ‘terah’ or thirteen and in keeping with this concept thirteen Shabads have been taken to create this series of artworks. Shabads by Baba Nanak, Kabirdas and Sheikh Farid range from oneness of humans, gender, nature, universe, divinity and value of sharing.
Speaking to The Daily Guardian, Kalra explained the title of the exhibition and said that oneness is about gender, people and moving away from discrimination. “When we started creating these artworks, we had people from different faith who understood his philosophy and tried to associate with it. Here it was about the oneness of thought and connecting it with art,” he said.
He added, “We gave it the name paradigm because it was not just about one single thing. There are smaller aspects. It has so many components to it that makes it a paradigm.”
Everyone knows that Guru Nanak is an important religious figure in Sikhism. But in the case of Kalra, he says it is important and a conscious effort to humanise him in order to understand his teachings. “When we humanise something, we connect to that person much closer. When we make someone a god or a demi-god, there’s an awe that comes in. If you have to love someone’s poetry and follow, the first step would be to be in one with that person,” he said while speaking to The Daily Guardian.
On the issue of the hurdles he faced while creating these works, he said that he did not face much of it and added that he was being guided by a force through the creative process. Kalra further said that every time he was working with a Shabad or a Doha of Kabir on his artwork, he was reliving them. “Every time when I was working on it, I would go deeper into the meaning because we were spending so much time in sketching and conceptualising. Then you really look (at the work and the verse) and get into another time zone,” he added.
“The whole process for us (of creating these works) became an act of respect and worship,” the artist said further. From his artwork, he said, the thing that the viewer must capture is the human values and make your own meanings out of them.
SARDAR UDHAM SINGH WOULD LEAD TO DISCUSSIONS ABOUT OTHER SUCH UNSUNG HEROES: VICKY KAUSHAL
In the exclusive conversation with us as part of NewsX India A-List, Vicky Kaushal and Shoojit Sircar opened up about the response to Sardar Udham Singh, their favourite scenes in the film and much more.
Actor Vicky Kaushal and Filmmaker Shoojit Sircar, who are basking in the success of their film Sardar Udham Singh, joined us for a candid chat as part of NewsX India A-List. In the exclusive conversation, the duo opened up about the response to Sardar Udham Singh, their favourite scenes in the film and much more.
When asked whether he expected so much love from the audience for the film, Shoojit Sircar said, “We knew that the final climax of the film will evoke some kind of a reaction but we didn’t expect these many praise-worthy messages and texts. That was absolutely overwhelming.”
On Sardar Udham Singh being a difficult character to portray, Vicky said, “Everyone attached with the making of the film, was in sync with why this story is important and why this story needs to be told. We were always in sync with that. Yes definitely, when you see that the film has resonated in such a beautiful way with the audience and connected with the audience, it does make you feel good. It makes you feel that your efforts have landed well. Not many people knew who Sardar Udham Singh was or what his sacrifices were. Now people would be aware of it, they would discuss it and this would probably lead to discussions about other such unsung heroes and other such sacrifices of that time. That of course is a big takeaway for a big victory for us.”
Speaking about that one compliment that stood out about his performance, Vicky said, “Actually in the initial stages, it was something that I read for the first time and it really brought a smile in my heart, rather than my face, was when somebody had just appreciated that this could have been the best tribute to Irrfan Saab. That really made my heart smile. That was really special for me.”
To this, Shoojit Sircar added, “When the film got over, most of the people were not able to talk and they felt a little numb. For some time, they didn’t want to talk to anyone and just be quiet. Everyone wrote to me and also on social media I read. That for me is quite a deep impact. I also get a little emotional when someone feels exactly what we feel. That is the biggest compliment I got.”
Talking about his favourite and the most difficult scene in the film, Vicky shared, “For me, the most challenging one has to be the Jallianwala Bagh scene. To recreate that and to touch upon the innocence of the 20-year-old Udham Singh, who was probably going through that kind of aftermath. You, as an actor, can never be too prepared to know what you are going to do, how you are going to do, how you are going to emote those sequences till you are thrown right in the middle of it. So, that was for me the most challenging.”
“The one scene I was looking forward to shoot was the jail portion, that lead up to that sequence. The conversation between Sardar Udham and Suhel. That trajectory was for me like the thread of the film. Shooting for those portions was kind of also telling me the graph of the character. Those sequences in the film were special for me,” Vicky added.
Aatmanirbhar bharat is a ‘phenomenal initiative’: Volvo group’s president, Kamal Bali
The President and Managing Director of the Volvo group, India, Mr Kamal Bali joined NewsX for an exclusive round of interview. Mr Bali has a distinguished career traversing over 3 decades, predominantly in the automobile division.
He addressed what a stressful and unprecedented sort of situation the ongoing coronavirus pandemic has created for the automotive industry. “This pandemic came out like a bolt from the blue and no one was prepared for it and especially our industry, the automotive industry which was already reeling under a demand slowdown towards the end of last year”.
Mr Bali was looking for better times with a lot of optimism, especially with the new emission norms coming in and lots of new models which were to come in for the entire auto industry. He told how the automotive industry’s slowdown impacts the entire country. “It was very big of a U-turn for the auto industry, it accounts for 7-8 per cent of our GDP, so it is a big jolt to the country and to the whole economy as such”.
Mr Bali believes that in terms of numbers, the recovery in the sector will be very slow. “The reason is that the industry was already going through a slowdown as I mentioned and in the current financial year 2020-21. There are estimates of different kinds but its likely that the industry will see a further contraction of between 25-35 per cent”.
According to Kamal Bali, it’s very difficult to say that what exactly they will end at because it will depend on the pathways of the pandemic. “How it does, how as an industry and how as a society we come in terms with. As ultimately, itsalso a question of lives and livelihoods”. So he thinks that its going to be challenging but he is still optimistic.
“Seeing numbers in June, there has been some improvement over May. May to June has been a huge, a positive reinforcement, which is good news for the industry even though it is much much lower than the June of last year”. So he thinks that there are some positive things but he also thinks that a lot more can be done. “Of course, it won’t be business going forward as usual but, a lot of other factors are going to come into play but I think if we can get a good fiscal stimulus, this industry can bounce back sooner than we expect”.
The Volvo President appreciates the limited elbow room, the finance minister had, and he thinks that despite that, she did a wonderful job. “I think the supply side thing was largely addressed, a lot of liquidity and monetary measures have been taken for the economy as a whole and also, addressing several vulnerable sections of the society and economy including the MSMEs and people at the economically weaker sections of the society, having said that I think the demand side also needs to be looked at now, this is the right time”.
He further said, “I think as the supply side is getting addressed, as factories have started manufacturing and remanufacturing, now, we have come to levels of 50-60 per cent of our original pre-COVID levels. I think now is the time when we also need a demand stimulus because discretionary demands have gone down. Since the economy is not at its full throttle the demand is not there”.
Mr Bali feels and what according to him the industry would like is four or five key things. “One is, a temporary reduction in the GST rates, things like trucks and buses fall under the luxury rate of tax which is 28 per cent GST. If this can be brought down to 12 or 18 per cent, if not permanently then at least for the next 6 months”.
He thinks that this can be a big boost because in any case, the industry has to spend more cost on the vehicles because of “transition from BS 4 to BS 6”. So this cost probably cannot be passed on fully to the customer as there are weaker sentiments in the marketplace.
So, if this reduction in the GST can be done temporarily, just to jump-start the economy, that’s one. The customers would be excited and they would like to look at the possibilities. “The second thing is lower interest rates, if some subventions can go on from typically 9 to 10 per cent to 6 per cent, I think that would be a big booster”.
According to Mr Kamal Bali, the third thing which could be the game-changer for the industry is the “scrap pitch policy”. He said, “So if they can decide on a 15-year or an 18-year scrappage policy, I think that could be a game-changer for the industry”.
Talking about the “Aatm nirbhar” campaign of Prime Minister Narendra Modi, Mr Bali called it a phenomenal initiative. “We completely support it. I think this gives very very good confidence to the industry and the society at large. If you look particularly at the automotive industry, we are in a large way self-reliant. Our industry as such is well matured. There are still some gaps, which of course we will, if global companies can start doing more and more work in India, I think we can fulfil the dream of aatmnirbhar Bharat”.
He said that as far as Volvo is concerned, they are fully committed to India. “We have been serial investors in India. In fact, over the last 20 years, we have made serial investments”. Mr Kamal shared an anecdote about a venture Volvo made with Eicher motors. “Eicher motors, which is a very very successful joint venture as well. So we believe in the India story and we believe that India is the market which is going to grow. There can be a temporary pause because of pandemic and because of certain other structural reasons. But I think, our trajectory, our direction is spot on”!
He thinks that they need to make the supply chain more integrated with the global supply chains. “I think the industry will respond to the clarion call of the Prime Minister for making India aatmnirbhar”. On behalf of the Volvo group, he said that Volvo group is completely committed and will do whatever is required in the interest of the country as well as the group itself.
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