PM’s eco panel zeroes in on 10 areas to spur growth, jobs

New Delhi: Acknowledging that the economy is in the midst of a slowdown, the Prime Minister’s Economic Advisory Council on Wednesday identified 10 key areas to revive growth and boost job crea-

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tion in the next six months.

The council, headed by NITI Aayog member Bibek Debroy, zeroed in on themes that included economic growth, employment and job creation, informal sector and integration, fiscal framework, monetary policy, public expenditure, institutions of eco- nomic governance, agriculture and animal husbandry, patterns of consumption and production and social sector.

“We will come out with implementable solutions for economic problems and present them to the Prime Minister,” Debroy told a news conference after the first meeting of the panel. The chief economic adviser in the finance ministry, Arvind Subramanian, gave an overview of the economy and various policy options to boost growth.

The council was set up by PM Narendra Modi shortly after growth slowed to a threeyear low of 5.7% in the quar- ter ended June. This was followed by several downgrades to growth projections by economists and multilateral agencies. The PM had opted not to set up an economic advisory council when he assumed power in May 2014.

The Debroy panel said there was a consensus that the government should stick to the fiscal consolidation roadmap and not go for a stimulus at the cost of fiscal prudence. Asked about the lack of jobs in the economy, Debroy said there was no reliable data available and the panel would examine the issue. Over the next one month, the panel is likely to work on various issues in the run-up to the budget for 2018-19.

“There is a consensus (among the members)... that the fiscal consolidation exercise should not be deviated," Debroy said when asked whether the government should provide a fiscal stimulus. The economic slowdown has triggered calls for a fiscal stimulus to revive growth but several economists and policy-makers have said the government should not deviate from the path of fiscal consolidation.

The Council’s reports would be structured in the coming months and developed by theme groups, led by its members, through “consultative processes involving sectoral ministries, states, experts, institutions, private sector and other key stakeholders,” a government statement said after the meeting.

Another key issue recognised was the need for effective tracking of key economic parameters and setting up an economy track monitor, using lead indicators and triggers for action, based on informed assessment and analysis. It was also agreed that specific issue papers will also be brought out by members to address key concerns and linkages will be es- tablished with key national institutions. “The deliberations of the new economic advisory council to the Prime Minister also reflect its value addition as an independent institutional mechanism, to provide informed advice to the Prime Minister on addressing issues of macroeconomic importance and related aspects,” the government statement said.

“It is clear that this Council is focused on critical interventions related to accelerating economic growth and employment over the next few months,” it added.

Nobel for ‘making economics more human’

US economist Richard Thaler won the Nobel Economics Prize today for showing that economic and financial decision-makers were not always rational, but mostly deeply human. Bridging the gap between economics and psychology, Thaler’s research focuses on behavioural economics which explores the impact of psychological and social factors on decisions by individuals or groups in the economy and financial markets.

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“He’s made economics more human,” the Nobel jury said, calling Thaler “a pioneer” on integrating economics and psychology.

“By exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes,” the jury's statement said.

“His empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioural economics, which has had a profound impact on many areas of economic research and policy.”

His work even earned him a glamorous foray into the movie business when he made a cameo appearance, alongside Christian Bale, Steve Carell and Ryan Gosling, in the 2015 movie “The Big Short” about the credit and housing bubble collapse that led to the 2008 global financial crisis.

Thaler told the Nobel committee by videoconference he was “pleased” at getting the award. “Well, I was pleased. I no longer will have to call my colleague Eugene Fama ‘Professor Fama’ on the golf course,” he joked, referring to his University of Chicago colleague who won the prize in 2013.

“I think the most important recognition is that economic agents are human, and economic models have to incorporate that,” he said. The 72-year-old takes home the nine million kronor ($1.1 million) prize money.

Thaler is a professor at the University of Chicago — a school popular with the Nobel economics committee. Of the 79 laureates so far, more than a third have been affiliated with the university's school of economics.

One of the founders of behavioural finance, which studies how cognitive limitations influence financial markets, Thaler developed a model for explaining how people tend to focus on the narrow impact rather than the overall effect of each decision they make, which is called limited rationality.

This includes the study of how people's loathing of losses can explain why they value the same things more when they own them as opposed to when they don't, which is called the endowment effect. Influential in theoretical and experimental research on fairness, Thaler showed “how consumers’ fairness concerns may stop firms from raising prices in periods of high demand, but not in times of rising costs”, the Nobel economics committee said in a statement. Along with his colleagues, Thaler created a tool called “the dictator game” that was used in several studies to measure people’s attitudes to fairness from around the world. — AFP

Airtel Takes on Jio with 4G Smartphone

Telco partnering with handset makers to offer 4G phones at featurephone rates as fight for consumer share intensifies

New Delhi: Bharti Airtel has taken the fight for consumer share directly to Reliance Jio by launching a 4G smartphone at an effective price of ₹ 1,399, lower than Jio Phone’s offer of ₹ 1,500. Intense competition between telcos has resulted in a bonanza for consumers who will now be spoilt for choice as both carriers offer low-cost phones bundled with unlimited voice and free data every day.

The country’s No 1 carrier has begun partnering with handset makers to offer 4G smartphones at never before prices — nearly the same as featurephones — under its ‘Mera Pehla 4G Smartphone’ initiative, the first of which was announced on Tuesday giving cashback of ₹ 1,500 over three years.

“As the market leader and pioneer of 4G services in India, Airtel’s aspiration is to digitally empower every Indian with high speed data access,” said Raj Pudipeddi, chief marketing officer at Bharti Airtel. “We plan to partner with multiple manufacturers to bring affordable smartphone options to the market and build an ‘open ecosystem’ of low cost devices,” he added.

ET first reported on the partnerships in its August 22 edition.

After having cornered more than 300 million internet users in India, mobile phone operators including Reliance Jio, Airtel, Vodafone and others are shifting focus to the nearly 500 million featurephone users who are yet to upgrade to smartphones for want of affordability or lack of use cases. Each of the carriers is adopting separate strategies as they step up efforts to prevent their customers from switching to Reliance Jio.

Analysts were divided on whether Airtel’s present and future partners- hips can compete with Jio, with some saying that despite cash backs, featurephone users may not sway to the smartphone due to its high upfront payment of ₹ 2,899, refundable in parts. Another issue highlighted was lack of free content in the Airtel scheme, compared to Jio which offered live TV, movies and music.

“This will not get featurephone buyers to migrate to smartphones… it might appeal to current 3G smartphone users,” said Navkender Singh, senior analyst at International Data Corporation India. “I feel there will be limited takers at ₹ 169 per month commitment, it is too high,” he said.

Analysts at brokerage house Credit Suisse seconded the view that the Airtel’s move was unlikely to impact the Jio Phone offer where consumers only need to shell out ₹ 1,500 upfront. “The upfront fee for Airtel is nearly 2x that for Jio — this is likely the most important factor in the customer’s mind while choosing the phone,” they said in a note to clients on Tuesday, seen by ET.

It also warned of further pressure on average revenue per user (ARPU) of Airtel, as the service cost net of refunds works out to nearly ₹ 140 over a month, for the customer. “Tariff actions in the last 12 months have shown that meaningful ARPU compression ensues as higher ARPU subs downgrade to these plans which offer more value.”

Some, said that Airtel’s move would propel movement of featurephone users to smartphones, which has been stagnant for several quarters. If Airtel were to offer upgrade to the next smartphone in a year or so, through the partnerships, it could have a winner deal on its hands as it would improve customer stickiness while giving variety to users, besides differentiating from competition.

Most analysts cautioned that Airtel and its partner brands should ensure high volumes of devices, considering that Jio Phone clocked 6 million bookings within days of launch, else the move could end up being a counter to Jio, ‘only on paper.’ Bharti Airtels’ scrip rose 5.04% to close at ₹ 403.4 on the BSE on Tuesday.

RBI Allows KYC-Compliant Digital Wallets To Send Money To Other Prepaid, Bank A/Cs

Mumbai: Digital wallets have been brought almost on a par with bank accounts in terms of interoperability and ‘know your customer’ (KYC) regulations. The Reserve Bank of India (RBI) has allowed KYC-compliant wallet accounts to send money to other wallets and bank accounts using the Unified Payment Interface — an account-to-account remittance platform.

The flip side is that nonKYC wallets can now no longer be used for peer-to-peer transfers. The RBI has barred issuers of prepaid instruments (PPIs) from creating new accounts each time to facilitate cash-based remittances to other PPIs/bank accounts. For subsequent remittances, issuers will have to use the same account each time. The move comes on the back of complaints that fraudsters are using wallets to siphon off funds from stolen debit and credit cards.

Paytm founder Vijay Shekhar Sharma said, “The wallet that we built in 2014 has now become a full-blown financial services system. It is a welcome step that the wallet is being treated practically on a par with bank account.” He added that Paytm will open its merchant network for all payment providers. “We are going to do what Elon Musk does. He offers Tesla batteries to all. We are not a champion of one company one business,” said Sharma.

The digital wallet compa-

Digital wallet cos will need to make major investments in getting customers to be KYC-compliant Paytm to spend $500m by 2020 on KYC

Fund transfers between bank accounts & e-wallets through the UPI platform to be allowed ny, which is now Paytm Payments Bank, has budgeted $500-million investments up to 2020 to complete KYC requirements on 50 crore account holders. According to Sharma, the new guidelines will ensure that only serious players are in the game.

Under the new norms, the RBI has said that KYC-compliant wallets can load up to Rs 1 lakh in cash. The move has been welcomed by all wallet providers. However, cash loading has been capped at Rs 50,000 per month. “As an in- dustry, we would like to seek clarity with the regulator and understand better reasons for a few downward revisions and limits, like the limit of Rs 10,000 on minimum KYC accounts,” said Bhavik Vasa, chief growth officer, ItzCash Ebix.

According to Naveen Su-

Non-KYC wallets cannot be used for remittances. Cash loading limits halved to 10,000

Ban on Non-KYC remittance triggered by fraudsters using e-wallets to siphon off funds from stolen cards rya, chairman, Payments Council of India, the new norms would ensure that PPIs contribution to digital payments from current share of less than 10% can move to 30-40% in next 5 years.

The norms have implication for widening the acceptance of digital payments in the country. Going forward, merchants acquired by the digital wallet companies can accept electronic payments from all players including banks thanks to the Unified Payment Interface.

TAILS UP, INDIA GET READY FOR ‘MOST DIFFICULT MATCH’ US take on Colombia with an eye on hosts

New Delhi: One just hopes India’s stupendous performance against powerhouse Colombia was not a flash in the pan.

Bubbling with confidence, the U-17 World Cup hosts have one more assignment in hand, against Ghana in the final group stage game, scheduled at the Capital’s Jawaharlala Nehru Stadium on Thursday evening.

T Jeakson lived the dream of scoring India’s first goal in the World Cup Finals not even for a full minute. Emotional outburst disturbed the team’s shape at the back and Colombia’s Juan Penaloza made India suffer almost immediately. Two-time U-17 World Cup champions Ghana will pose far difficult questions for sure. It is not just a perception. Coach Luis Norton de Matos strongly believes so. “Tomorrow is the most difficult match of the group because the African players bring a lot of incredible skills with them and are very unpredictable. They are very fast and strong. We must try to bring out all out strongest points on the pitch,” the coach said ahead of training on Wednesday evening.

The pitch at Delhi University’s Rugby ground looked like a fantasy land with the lights coming on and the pre-winter haze descending slowly. Captain Amarjit Kiyam and pony-tailed Anwar Ali, the new talk of the town, walked around the pitch segregated from the rest of the team who gathered at the centre of the field going through their warm-up drills. “They are injured. And we have to wait till tomorrow to get a final say on their selection,” the coach said. Ali and Namit Deshpande kept the Colombian marauders at bay and won most of the aerial battles. Winning the air war is one of the standout features of this team. Against Ghana, too, their services will be severely put to test by the youngsters from the West African nation. And Jeakson, at the heart of India’s midfield, has an unenviable job of not letting the Africans run berserk, as is their wont.

The coach of Ghana, European clubs’ nursery for decades now, is facing a different problem. Scouts from across the world have flown in to pick out future stars who could be sold at a premium. Coach Samuel Fabin said, “The players know that they are being watched. It affects the team game and pretty often individuals forget their collective responsibility and resort to showboating. We have to be careful.” Still their first aim on Thursday will be to keep the partisan crowd quiet. “We must find ways to keep the crowd silent. They make a lot of noise.” That’s a warning of sorts for de Matos’ boys.

Since Ghana’s qualification is also not certain, the pressure of reputation can play on the mind. Ghana, having won the U-17 World Cup in 1991 and 1995, will not like allow any blemish on their record. Winning their first game against Colombia and losing the second against USA, Ghana and Colombia are on same points. A win against India will ensure their passage to the next round.

With Ghana having a similar style of play as the Colombians, Indian coach De Matos had other insights to offer. “Ghana have four or five players who you call game-changers. Their two wing backs constantly overlap to support the attack. And like the South Americans, their wingers are always a threat. Their No. 18 (Mohammed Iddriss) is their key organiser. He is the heartbeat of the team.”

One can understand that de Matos has done his homework well. He even claimed that the “boys are ready to die on the pitch tomorrow”. With emotions running high alongside a new-found conviction, India have raised visions of a win. If it comes, it will be the brightest chapter in India’s recent football history. Mumbai: John Hackworth, the head coach of the US U-17 World Cup team said he will be cheering for India when the hosts take on Ghana in the final Group A league match in New Delhi.

Hackworth will be several hundred kilometres away at the DY Patil Stadium in Navi Mumbai where they take on Colombia. Hackworth has good reasons to cheer India. If India can manage an improbable win or even a draw, it will give US more time in Navi Mumbai.

“I will be hoping that India can win or draw against Ghana. If that happens and if we win against Colombia, we get to stay in Navi Mumbai for a longer period and get five days rest. We will be playing our pre-quarterfinal game here,” explained Hackworth. Hackworth’s boys are in pole position in Group A, having won both their games. And now, with the senior US men’s team failing to qualify for the 2018 World Cup, he feels the focus will be on his wards.

“It is absolutely unacceptable that we could not qualify. It is a tough day for American football. These U-17 boys may not understand the consequence of the situation, but the attention may turn on these boys now,” said Hackworth.

Hackworth’s bunch needs a draw to top the group to ensure they stay in Mumbai. And Colombia, who struggled to a 2-1 win over India, may not pose a great challenge for the US boys.

The pressure is on Colombia to defeat US and ensure that they finish with six points. If they win on Thursday and if Ghana, as expected, defeat India, three teams in Group A will have six points.

It will be a good situation for Colombia for it will ensure qualification as one of the four best third-placed teams.

$1.1 Billion in Boot, Ola on the Road to Raise Another $1 Billion by Year-end

Bengaluru: India’s largest ridehailing application, Ola, is in advanced discussions with investors to raise an additional $1 billion after securing $1.1 billion in financing led by Chinese Inter- net conglomerate Tencent.

The additional fund-raising is part of the current financing round that values Ola at about $4 billion, the company said in a statement. Ola wants to close the entire $2-billion financing round by the end of the year, according to people aware of the company’s plans.

Existing investor SoftBank and “other new US-based financial investors” participated in the financing led by Tencent, Ola said without disclosing the names of the new investors.

ET was the first to report, in July, that Tencent was in advanced talks to invest in Ola.

While Ola’s massive fund-raising will give it firepower to stay ahead of Uber in India, the company will also strongly focus on its electrical vehicles project, according to people familiar with developments in the company.

Both Ola and Uber are also wor- king on integrating their apps with public transportation services.

“Partnerships are being discussed with bus services and the companies already have partnerships with airport authorities and the Indian Railways,” said an analyst on condition of anonymity. “One common goal the two have is public transport integration.”

Ola executives said the company was bullish on its electric vehicle project scaling up in six months. “That hasn’t happened yet due to a few technical and infrastructural issues that need to be addressed,” said an executive.

“But that’s an area where one can expect to see Ola making its presence felt within a six-month span,” said the executive.

Ola’s electric vehicle project has the blessings of SoftBank chief executive Masayoshi Son. Although the Japanese Internet conglomerate is the largest shareholder in Ola, it is in the process of picking up a large stake in San Francisco-headquartered Uber as well.

Uber executives in India said the cab-hailing platform, in addition to expanding to new cities, was also focused on its fooddelivery service, UberEATS, and motorcycle-taxi service, UberMOTO, picking up steam. “New products or features to improve customer experience may be tested out in the Indian market soon,” one of them said, declining to be identified.

Ola executives said the company will use its new capital also to add drivers through an increased focus on its cab leasing business. The company also plans deeper investments in technology, primarily in data sciences and its electric vehicle infrastructure, they said.

“The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India,” Ola CEO Bhavish Aggarwal said after announcing the fund-raising led by Tencent.

Ola first received commitments for the current financing in November last year when it closed a $250-million fund-raise from SoftBank, following which it kept the funding round open. The company then raised about $150 million this year from funds including Ratan Tata’s venture fund RNT Capital Advisors, US hedge fund Falcon Edge and New York-based hedge fund Tekne Capital Management. The funding momentum comes after Ola decided to raise capital from SoftBank at a lower valuation of $3 billion — down from its estimated worth of $4.5-5 billion in 2015. It was the first so-called down round — a term used to define fund-raising at a lower valuation — for an Indian Internet company valued at over $1 billion.

US flies bombers over Korea as Trump discusses options

Seoul/Washington: The US military flew two strategic bombers over the Korean peninsula in a show of force late on Tuesday, as President Donald Trump met top defence officials to discuss how to respond to any threat from North Korea.

Tensions have soared between the United States and North Korea following a series of weapons tests by Pyongyang and a string of increasingly bellicose exchanges between Trump and North Korean leader Kim Jong-un.

North Korea has launched two missiles over Japan and conducted its sixth nuclear test in recent weeks as it fast advances towards its goal of developing a nucleartipped missile capable of hitting the US mainland.

The two US Air Force B-1B bombers were joined by two F-15K fighters from the South Korean military after leaving their base in Guam, South Korea’s joint chiefs of staff said in a statement on Wednesday.

After entering South Korean airspace, the two bombers carried out air-to-ground missile drills in waters off the east coast of South Korea, then flew over the South to waters between it and China to repeat the drill, the release said.

The US military said in a separate statement it conducted drills with Japanese fighters after the exercise with South Korea, making it the first time US bombers have conducted training with fighters from both Japan and South Korea at night.

The US bombers had taken off from the Andersen Air Force Base in Guam. In August, Pyongyang threatened to fire intermediaterange missiles towards the vicinity of Guam, a US Pacific territory that is frequently subjected to sabre-rattling from the North.

South Korean and US government officials have been raising their guard against more North Korean provocations with the approach of the 72nd anniversary of the founding of North Korea’s ruling party, which fell on Tuesday.

Trump hosted a discussion on Tuesday on options to respond to any North Korean aggression or, if necessary, to prevent Pyongyang from threatening the United States and its allies with nuclear weapons, the White House said in a statement.

Trump was briefed by secretary of defence James Mattis and chairman of the joint chiefs of staff General Joseph Dunford at a national security team meeting, the statement said.

US and South Korean wartime operational plans, including a plan to wipe out the North Korean leadership, were stolen by North Korean hackers last year, a South Korean ruling party lawmaker said on Wednesday.

Some 235 gigabytes of military documents were taken from South Korea’s Defence Integrated Data Centre in September last year, Democratic Party representative Rhee Cheol-hee said in radio appearances on Wednesday, citing information from unidentified South Korean defence officials.

The United Nations Security Council, which has imposed a series of ever tighter sanctions on North Korea, has banned four ships from ports globally for carrying coal from North Korea, including one vessel that also had ammunition.

The vessels are the first to be designated under stepped-up sanctions imposed on North Korea by the 15-member council in August and September over two longrange ballistic missile launches and Pyongyang’s sixth and largest nuclear test.

China, North Korea’s main ally and trading partner, has consistently argued sanctions alone will not work, urging Washington and Pyongyang to lower their rhetoric and return to the negotiating table. China’s influential Global Times tabloid expressed alarm at how far the rhetoric on both sides had gone and how it had increased the risk of a “fatal misjudgment”.

“The international community won’t accept North Korea as a nuclear power. North Korea needs time and proof to believe that abandoning its nuclear programme will contribute to its own political and economic advantage. This positive process is worth a try,” the paper said in an editorial late on Tuesday.