Author
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
Despite a healthy increase in revenue from the four airports – Chennai, Kolkata, Ahmedabad and Jaipur – and fearing a start of any fresh protest from airport employee unions, the central government is in no mood to privatise them. Instead, the Civil Aviation Ministry has initiated the process of developing these four airports through public private partnership model, which is moving at a very slow pace, says a senior ministry official. For the record, Minister of State for Civil Aviation Mahesh Sharma has said: "There is no proposal of privatisation of these airports at present." Sharma informed the upper house of Parliament on the first day of the Monsoon session via a written reply. But according to the revenue figures submitted by the ministry, the Chennai airport has generated an average of 21 per cent increase in its revenue from the airports operation in the past two years. For 2013-14, Chennai airport clocked a revenue of Rs 908.32 crore, a jump of 31 per cent over the previous year. For 2014-15 (revised estimates), the airport revenue from Chennai stood at Rs 1,022.80 crore thereby showing a 12 per cent increase over FY13. Similarly, Kolkata airport clocked a revenue of Rs 670 crore for FY15 and Rs 630 crore for FY14. Even the airports of Ahmedabad and Jaipur have reported an increase in their respective revenue for the last two financial years. But the civil aviation ministry has already floated the Request for Qualification (RFQ) for these airports. When specifically asked whether the Airports Authority of India has opposed privatisation, the minister replied in the negative. But only three months ago, the unions at Kolkata airport had threatened to bring all operations to a standstill. The protest was against any move to privatise the Kolkata airport. When the UPA-I government had attempted to privatise the Kolkata airport on similar lines as the Delhi, Hyderabad and the Bangalore airport, the union had blocked the normal operations at the Kolkata airport. Under the Left Front government rule in West Bengal, the then civil aviation minister Praful Patel was forced to abandon plans for the privatisation of both Kolkata and Chennai airports. Instead, the ministry had conceded to allow the Airports Authority of India to redevelop these two airports.
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The Employees’ Provident Fund Organisation (EPFO) is thinking of laying down a few rules that it believes will ensure better security for its depositors when they are old and grey. For one, it is planning to put a stop to 100 per cent withdrawal from the PF account before the age of 58. And as a corollary, it is mulling capping the number of times one can apply for withdrawal.At present, EPFO rules allow depositors to withdraw the entire sum from their PF account if they are not employed for two continuous months. Also, there is no cap on the number of times an employee can withdraw from his PF account.In order to discourage premature withdrawals, the EPFO had recently issued a notification introducing tax deduction at source (TDS) for withdrawals in case of accounts that had a balance in excess of Rs 30,000 and where the employee had been in service for less than 60 months.Now, EPFO, which comes under the Ministry of Labour, says it wants to hold on to at least 25 per cent of the contributions made to the Provident Fund in the name of old age security. According to K.K. Jalan, the central provident fund commissioner, the provision of 100 per cent withdrawal at any time is misused to a large extent. “If we continue allowing 100 per cent withdrawal under various categories, which are generally planned events, it will defeat the purpose of retirement savings,” he says.Perhaps, there is more to it than meets the eye. Of the 13 million claims pending with the EPFO every year, over half are for 100 per cent withdrawal. According to one theory, by allowing only 75 per cent of the corpus to be withdrawn, the number of claims could be brought down to a manageable five million every year.Obviously, the trade union activists are opposed to such an idea. Ashok Singh of the Indian National Trade Union Congress says the money is 100 per cent earned by employees. So if the government takes a decision to cap PF withdrawals, it should increase minimum wages as compensation. “The PF money comes in handy in emergencies. Instead of allowing us to use our own funds, why does the government want us to borrow from banks or moneylenders,” asks Singh.It’s very easy for EPFO to do what it wants; a simple notification is enough for it. It is making a case for capping withdrawals from the PF accounts on two counts. One, the cap will help in maintaining the continuity of the Universal Account Number which is provided to each PF subscriber. Two, it wants PF subscribers to use it as an old-age security and not like a regular savings account. But do we have a say in this? Perhaps not!— Ashish Sinha(This story was published in BW | Businessworld Issue Dated 10-08-2015)
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Host broadcaster Sony India, sponsors like PepsiCo India, Vodafone India and certain key officials within the Board of Control for Cricket in India (BCCI) are in a huddle after two franchisee teams – Rajasthan Royals and Chennai Super Kings – were suspended from the Indian Premiere League (IPL) for two years by a Supreme Court appointed panel as a direct outcome the betting scandal that hit IPL two years ago.On Tuesday the verdict of the Justice Lodha committee was to suspend two of the most successful franchises of the league, Chennai Super Kings and Rajasthan Royals for two years on charges of betting and match-fixing. The co-owners of Chennai Super Kings (Gurunath Meiyappan ) and Rajasthan Royals (Raj Kundra) have been banned from cricket for life.The advertisers, officials related to broadcast of IPL and the media agencies that BW spoke to sounded in unison –the future of IPL, its financial viability, viewership etc will now depend on how BCCI takes course corrective steps. According to experts, a six-team IPL is financially not feasible due to reduced number of matches which in turn leads to reduced on-air advertising slots for the host broadcaster Multi Screen Media that airs the IPL matches on its network of Sony Entertainment Channels.“Two teams less means reduced matches which in turn mean lesser ad slots. That scenario simply means lesser revenue for the host broadcaster. Why will a host broadcaster suffer losses because of problems in the management of two franchisees? BCCI will need to get two more teams or compensate the broadcasters,” said a head of sports marketing firm that handles key IPL players. “There is some degree of uncertainty at the moment. Let’s wait for the BCCI to respond and let’s not get into speculations,” he added.When contacted, a senior sport administrator associated with the BCCI said: “The board has a lot on its plate. It must realise that the IPL is now under a global spotlight because of non-cricketing issues. Creating overnight teams out of thin air may not work every time to suite television interests.”BCCI insiders say in two months or so, the same Justice Lodha committee will come out with concrete suggestions on improving the functioning of the board itself. “Even the board may have to wait before looking into easy short cuts and quick fix solutions like it has done in the past,” said a former state-level cricketer who is familiar with cricket administration matters. Meanwhile, the IPL sponsors are maintaining a brave face. As per PepsiCo India, the title sponsor for IPL, discussions with BCCI will be able to find a solution with regard to the suspension of the two IPL teams. Vodafone India, one of the sponsors for IPL did not react on the day the news of suspension of the two IPL franchisee teams was out."The verdict has just been announced and we are reviewing our position in the matter," Aircel said in a statement on Tuesday.According to Shailendra Singh, Joint Managing Director, Percept Holdings, “T20 as a sport will survive, but the corrupt administration will finally fall apart”. Singh said he hopes that the BCCI will be able to now clean up some of its systems and unfair practices. “Advertisers should renegotiate as the brand IPL has taken severe hit now,” Singh said.Melroy D'Souza, chief operating officer at Professional Management Group believed that the sponsors associated with CSK and RR (like Aircel and Ultra Tech cement) will not suffer because of the manner in which the sponsorship contracts are drafted where payments are linked to team’s participation, etc.Paytm, the mobile wallet firm and a sponsor for IPL 2015 season has decided to adopt a “wait and watch” policy as there are eight more months to go before the start of next IPL season. ashish.sinha@businessworld.in
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The third phase of the auctions of private FM radio in the country may get delayed as news of broadcaster Sun TV Group mulling taking regal recourse against the rejection of its application for FM-III auctions surfaced on Wednesday (15 July) morning. The stocks of Kalanithi Maran’s Sun TV Ltd tumbled by over 4 per cent on Wednesday as the news of an inter-ministerial panel having rejected the Sun Group's application to participate in the next-stage FM radio auctions, surfaced. The markets also anticipated similar fate of 33 channels from Sun TV Group that were denied security clearance by the Union Home Ministry earlier. The Sun TV shares closed on Wednesday at Rs 269.40, down Rs 11.80 from its last closing price of Rs 279.20.Sources said the option of approaching a higher court rests with the Sun TV Group once it officially hears from the government about rejection of its application for the FM radio auctions. “Approaching the court may entail a temporary stay on the FM-III auctions that have already been delayed by over three years since the Cabinet under UPA-II had approved it,” said a media analyst who tracks the radio and television space. According to government sources, the decision to go ahead with the FM auction without the Sun Group was made on Tuesday at the Application Review Meeting consisting of representatives of various ministries. The committee, comprising officials from finance and law ministries and departments of industrial policy and promotion and telecom approved 25 other participants who had applied for the auction.Sources said that the I&B minister Arun Jaitley had had multiple meetings with the Home Minister Rajnath Singh over the issue of security clearance.It should be recalled that the I&B ministry had written to the Home Ministry in March when the later had denied security clearance to the FM channels of the Sun Group. “I&B ministry will have to write a letter to the companies whose applications have been rejected. Its only after the letter is received that any company will take legal recourse,” said an official explaining the procedure going forward. Reports suggest the the I&B ministry had sought the opinion of Attorney General Mukul Rohatgi when MHA had declined to give security clearance to Sun TV Channels. The AG is understood to have advised MHA for granting security clearance as its arguments were not tenable in a court of law. However, the MHA has not changed its stance since. The matter is expected to be settled in a court of law, experts said. ashish.sinha@businessworld.in
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Far away from the land of the rising sun, the fort city of Neemrana houses not one but two Japanese industrial conclaves. A Korean zone is also expected to come up soon. What is ticking for the city?
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At a time when e-commerce biggies like Myntra and Flipkart are going off Web to "app-only" stage, three-year-old Bangalore-based fashion e-commerce venture BreakbounceStreetwear is confident of being as successful in the "offline" marketplace as it is across e-commerce platforms. The company will be branching out into the traditional brick-and-mortar stores shortly. BreakbounceStreetwear is a casual fashion wear brand which will be present nationally across multi-brand outlets and trade partners from 2016 apart from maintaining its presence on the e-commerce websites. "Being available to our customers through the internet, as well as conventional physical retail set-ups, gives us greater reach. Certain customers prefer the convenience of online shopping while others like to physically verify what they are buying," says Sanjeev Mukhija, managing director at BreakbounceStreetwear. Makhija has been in the textiles industry, garment manufacture and garment imports business for over 17 years. BreakbounceStreetwear was launched in 2012 by partnering with leading e-commerce brands like Myntra, Flipkart, Jabong, Snapdeal and Amazon among others. The company claims to have raked in over Rs 35 crore in the last two-year period from online sales. In terms of sales per square-feet per day (SPSFD), the company says it now ranks as one of the top-five casual brands with the highest repeat purchases compared to several other brands which retail on a platform like Myntra. Additionally, it recorded one of the highest clicks-to-conversion ratios, as a fashion brand, on market-places like Flipkart. BreakbounceStreetwear’s product range includes t-shirts, shirts, jackets, hoodies, sweatshirts, chinos, denims, shorts, belts, headgear, wallets, bags and footwear. The brand seeks to balance high-end product finishing and affordable prices, to cater to quality and brand conscious young buyers. The company has identified this aggressive pricing strategy as a factor that places it at par with, if not beyond, other global fashion leaders who retail on the same Indian platforms. "Given the considerable increase in demand, and the fact that consumers are becoming more trend conscious, quality conscious, and experimental, this is the right time to expand our market presence,” says Makhija. The brand’s USP is its Dutch craftsmanship inspired street-wear aesthetic. The confidence of Makhija stems from the projected growth of the menswear market in India over next five years. The menswear market is expected to reach Rs 144,000 Crore mark by 2017. ashish.sinha@businessworld.in
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Charges for preferential seating, check-in baggage, meals etc are borne out of DGCA Circular of March subjected to certain ridersSharp hike in ticket cancellation charges, proposal to charge passengers for their check-in baggage or charging extra for window /aisle seats by domestic carriers: any such special charges levied on the airline passengers over and above the air-ticket price stems out of a circular issued in March this year by the office of the Director General for Civil Aviation (DGCA).On March 24, the DGCA had issued the “Air Transport Circular 1 of 2015” titled ‘Unbundle of services and fees by scheduled airlines’. The circular said: “Considering the fact that unbundling of services and charges thereto has the potential to make basic fare more affordable and provides consumer an option of paying for the services which he/she wishes to avail, it has been decided by the Government to allow following services to be unbundled and charged separately on opt-in basis. These include Preferential seating, meal/snack/drink charges (except drinking water), Charges for using airline lounges, check-in baggage charges, sports equipment charges, musical instrument carriage, and fee for special declaration of valuable baggage (allow for higher unit on carrier liability).”The circular, however, came with certain riders: “The unbundled services must be provided on “opt-in” basis and not on “opt-out” basis. Charges for the unbundled services shall be fixed amount and shall not vary with the base fare for a particular sector/flight. Changes, if any, should be announced at least 30 days in advance by the airlines; and the scheduled airlines shall display the unbundled services and charges thereto on their respective websites in a transparent and conspicuous manner.” The riders also ensured that the airlines will be responsible for ensuring that the charges for the unbundled services are displayed by the travel portals/travel agents too,” it said.Taking a cue from this circular, which sources say is born out of years of continuous presentations and convincing the aviations authorities by the domestic airlines, three Indian low cost carriers had sent in their proposal to offer lower fare for passengers who fly only with cabin baggage. This low fare option was suggested to be in addition to the regular fare offered currently where 15 kg of check-in baggage is allowed. According to DGCA officials, the proposal will be examined to see whether the low cost carriers give substantial benefit to flyers for not carrying check-in baggage and avoid a situation where the 15-kg baggage is taken without adequate advantage to the flyer.In effect, this suggestion entails the option of offering two sets of fares to the air traveller for the same destination - low fares (around Rs 500-1,000 less depending upon the airfare) for only hand baggage and the regular ones (with 15 kg of baggage allowed).A similar initiative was undertaken by AirAsia India -- a JV of Malaysia's AirAsia and Tata Group -- in 2014 summer. But the carrier had to abandon the plans after a public outcry. Now, such a plan is part of the circular issued by the DGCA itself.Hiking Cancellation ChargesBut where the domestic carriers seems to have goofed up is the unilateral hike in ticket cancellation charges by not one but three airlines - IndiGo, SpiceJet and Jet Airways. DGCA has now begin a probe into the matter, officials said. In the meanwhile, the Air Passengers Association of India (APAI) said it would also approach the Competition Commission of India (CCI) on the issue citing it as an incident of cartelisation and an unfair business practice.Last weekend, SpiceJet raised its ticket cancellation charges for both domestic as well as international travel. According to the revised fees, which came into immediate effect, the airline is deducting Rs 1,800 as cancellation fees for a domestic ticket while the charges for cancelling an international ticket would be Rs 2,250. Spicejet, reports suggest, followed in the footsteps of IndiGo and Jet Airways. Both these airlines had steeply increased their cancellation charges in April.IndiGo's cancellation charges range between Rs 1,250 and Rs 2,250 depending on the number of days left before scheduled departure. Minimum cancellation charges, which have been pegged at Rs 1,250, are applicable only if the ticket has been cancelled one month or more before the date of departure. Jet's ticket cancellation charges range between Rs 500 and Rs 2,750 depending on the class of fare.ashish.sinha@businessworld.in
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Launch of Colors Infinity, Colors Infinity HD on DTH, Digital Cable to grow the genre: ExpertsEntertainment network Viacom18 has entered the English entertainment sector with the channels Colors Infinity and Colors Infinity HD. Both these channels will be made available on the direct to home (DTH) and digital cable platforms. The channels are expected to be on air in less than a month's time. Media planners and advertisers expect the launch will help expansion of the English GEC space both in terms of volume and value of advertising.In order to present a unique blend of content mix, Viacom 18 has signed multi-year deals with leading US and Europe based content creators including Warner Bros. NBC Universal, Twentieth Century Fox, BBC and Endemol Shine among others.According to Sudhanshu Vats, Group CEO, Viacom18 India has the second largest English speaking population. “English is seen as a ladder to personal progress. Colors Infinity aims to speak to this larger audience which goes beyond the metros and has never been addressed by the category. English is an extremely important space for us and with this move we will further strengthen our share in the category,” said Vats.Viacom 18, a joint venture between U.S. media conglomerate Viacom and India’s Network 18 Group, operates several channels in India including Colors in various Indian languages, Rishtey, Nickelodeon, Sonic, MTV, MTV Indies, Nick jr, VH1, and Comedy Central.The network has not announced any shows yet, but it will offer a gamut of genres including reality, drama, superheroes, comedy, fantasy, crime, and thrillers, the network said during its launch event two days ago. The channels will be co-curated by film director, producer, TV host and actor Karan Johar and actress Alia Bhatt.Experts said since the English language television market has developed over the years due to the long presence of channels like Star World, Zee Cafe, Zee MGM, Star Premiere, AXN and others. Industry estimates suggest that the English general entertainment channels have a market worth around Rs 350-400 crore in terms of advertising revenue built over past 10-12 years.“With more channels like Colors Infinity and its HD avatar, the genre may just take off in the next couple of years. Premium advertisers will get attracted to the viewer-demographics who will ultimately consume the English content on these channels. But much will depend on the content mix Colors offers,” said a senior media planner representing some major automobile and aviation clients.ashish.sinha@businessworld.in
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The move is aimed at shielding government companies from strict provisions of new Companies Act, 2013 After waiting for almost two years, now most of the Government owned companies have been granted a slew of exemptions under the new Companies Act, 2013. While many of the exemptions are copied from the old Companies Act 1956, there are some noticeable new exemptions too.For example, the Government companies are now not required to specify the policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters which are otherwise applicable to all companies. Also, there is no restriction on the number of directors a Government company can have. For non-Government companies, the new company laws caps the number of directors to a maximum of 15. Of course, non-Government companies can add directors beyond the 15 by passing a special resolution, which then will have to be communicated to the government.The Government companies will also be exempted from provisions relating to proportional representation for appointment of directors on the Board. Non-Government companies have to have proportional representations of directors on their respective board.A Government company is also not required to comply with provisions of section 196 dealing with the restriction on appointing or re-appointing any person as its managing director, whole-time director or manager for a term exceeding five years at a time.A Government company is also exempted of provisions which specify limits for overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. This is not the case for non-Government companies.The provisions of Section 203 with respect to appointment of key managerial personnel, holding of office, period within which appointment to be made in case of vacation of office of key managerial personnel (KMP), will not apply to a managing director or Chief Executive Officer or manager and in their absence, a whole-time director of the Government company.Section 185 prohibiting granting of loans to directors and to any other person in whom director is interested shall not apply to Government companies in case such company obtains approval before making any loan or giving any guarantee.Another key exemption pertains to the provisions of related party transactions when a Government company is entering into contract or arrangement with another Government company. Section 188 of the new company laws prohibits companies from entering into related party transactions exceeding specified values without obtaining prior approval of shareholder and also restricts related party (who is a party to the contract) to abstain from voting. ashish.sinha@businessworld.in
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E-tailers are roping in women with hospitality industry background are roped in to deliver niche products for better customer experience Customers are really the kings and queens in the age of e-tailing. Not only are they a discerning lot, they are also fickle minded; always unsure of what they order, after they order. At such a time, an up and coming logistics service provider from Bangalore is thriving because of its women employees who deliver a unique service called “Daakiyaa Smile” short for ‘service till the last mile’. This service comes from a Bangalore-based boutique marketing and logistics company called Daakiyaa Marketing & Logistics Pvt Ltd. The company calls its self the “last mile enablers”. The service enables brand owners to connect with their e-commerce customers through women delivery persons. According to Rohit Singh, CEO and MD of the company, a number of brand-owners are concerned by the quality of representatives who deliver their goods. “The women in the Smile division understand the brand ethos of the products they are delivering. They deal with customers accordingly. “Niche products like lingerie and jewellery are dispatched through this service,” he says. The service can be availed across Delhi, Mumbai, Bangalore, Hyderabad among other cities. Online brands like Caratlane, Urbanladder, Fernsnpetals and Amrapali are using this service from Daakiyaa. The company also has a “Daakiyaa e-Motion” which is male-dominated because it implements deliveries of volume for product aggregator sites on the lines of Paytm and Fashionara. The company has hired the services of around 21 female employees who have prior experience from the hospitality sector. As per company, Daakiyaa Smile is pitched at brand-owners because it helps them maintain purchase-parity. This means the online customer benefits from the kind of person-to-person interaction otherwise associated with the offline shopping experience. “As a first in the e-tailing industry, we are bringing women to the forefront as the Brand Envoys. Traditionally, women were never the front-runners in the logistics industry, but as we move away from ‘logistics’ to ‘customer delight’ we believe women can add a lot of value to what we do,” says Singh. ashish.sinha@businessworld.in
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