Monday, 25 September 2017

Google enters India’s digital payments space with Tez

BHIM Aadhaar enables fingerprint banking, a better tech than UPI

India’s digital payments industry is possibly the world’s fastest-growing technology adoption. Since the controversial and brave move of demonetisation, large transactions in cash are looked down upon with the eye of suspicion. Going cashless has made a trillion dollar opportunity for payment banks namely PayTM, Airtel and India Post. With the launch of BHIM, the question of interoperability of payments has come to close. BHIM is amongst the most downloaded app on Play Store and iOS platforms. It has recorded more than 7 million transactions with an epic rise of 240% in volume.

Google is already late to India’s payment business. But India is fortunate enough to get technological support in its cashless mission from the likes of Google. Recently, IT ministry has requested major mobile manufacturers to preload applications for digital payments in India. This could be a big opportunity for homegrown BHIM and Google Tez. Google says in less than 24 hours of launch its payment app Tez has over 500k users and its GMV index was close to Rs 2 crores. It provides promising features which are in line with the requirements. It is multilingual and covers many major languages. It is too early to say whether it can be a game changer as evolution in this business is going to continue, but yes it has the capabilities to bring some disruption as of now.

Google Tez was launched by Arun Jaitley in an event in New Delhi. Google Tez runs on United Payments Interface, a product of National Payments Corporation of India. UPI is virtual payment address. For instance, rather than remembering lengthy bank account number, IFSC code, all you have to enter is beneficiary’s Aadhaar registered mobile number. If not available, one can even create secondary UPI address. Mine is theindiancapitalist@upi. To compete PayTM and Google Tez, WhatsApp has also released a beta for UPI enabled payments through chats.

Let’s say you want to pay at a random store where you don’t want to share your mobile number or bank details for payments, Tez does the work with a click. It enables cash mode which uses Audio QR technology. Like BHIM, Google is eyeing its Tez for the masses. The app weighs just 7MB and runs on devices above Android KitKat and iOS 8.0. India’s payment space is already disrupted. is of an opinion that we should look beyond phones when it comes to payments. Why use phones for payments when all you need is a fingerprint. It’s time when the government acts as an aggregator for all payments solution. India has been in the forefront in financial innovation. Fintech analysts are affirmative that India can show the solution to the world.

- Chaitanya Kulkarni

Thursday, 21 September 2017

India's loss making PSUs - Part II

Central Public Sector Enterprises are created to spur specific industrial growth.They are known for high salaries, less proportionate of work and job security, a perfect mix suitable for India’s ever-growing young and ageing population. It can be said that CPSEs are best to bring innovation, competition and development of industrialisation in initial stages. Like Air India being the pioneer of air travel, BSNL for its spread of telephone and mobile service and Bharat Broadband Limited for last mile fiber optic connectivity. Due to fiscal discipline era, the government expect profits from every single CPSEs along with the vision of fulfilment of the cause. Jaitley, India's finance minsiter pointed out that capitalism driven India after 1991 doesn’t need CPSEs in industries like tourism, pharma, aviation, textiles etc. But in future India will mull CPSEs to develop industries related high-speed transit, electric cars, solid waste management, river cleaning etc.

In Part I, we featured the downfall of CPSEs namely Air India, PEC Ltd, Hindustan Organic Chemicals, Indian Drugs and Pharmaceuticals Ltd and Fertilizers and Chemical Travancore Ltd. The organisations incurring loss are not able to reconstruct themselves in the era of competition, innovation and automation. It is likely to note that only a few CPSEs from Maharatna, Navratna and Mini-Ratna series are in losses. The BJP-led NDA government is all set to embark on its strategic disinvestment programme by 2018. NITI Aayog’s proposal for shutting down 17 sick or loss-making government companies has received the go-ahead from Prime Minister’s Office (PMO). The second set of proposals from the Aayog for strategic sales aimed at reducing government ownership to below 51 percent in about 22 public sector companies has also got the green signal from the PMO. Let’s take a look at major loss making CPSEs.

Bharat Sanchar Nigam Ltd & MTNL

BSNL connected India. It was created by Department of Telecom in September 2000 to spread last mile connectivity of telephone and mobile services across India. BSNL is a major promoter of the BharatNet project, an ambitious plan to connect more than 2,75,000 lakh gram panchayats across India. The potential of high-speed internet through fibre optics is immense. Digital economy, if rightly used can triple India’s GDP in few decades. BSNL is making losses because it spends more in the economy which earns less.

After 2002, as the mobile-phone revolution spread, BSNL's landline subscriber-base fell from 33.7 million in 2006-07 to 16 million in 2014-15, according to telecom ministry data. On an average, BSNL was spending Rs 702 per line per month on rural landline services against a revenue of about Rs 78 per line per month, according to the 2008-09 audited accounts of BSNL. Of 593,601 inhabited villages in the country, according to Census 2001, BSNL had installed public telephones in 586, 000 of them by December 2014. Since returns are low, private telecom operators ignore village landline networks, providing no more than 2% of connections in 2010.

The audited reports of FY2015-16 report a loss of Rs. 3879. BSNL plans to invest more than Rs. 6,000 crores on network expansion and improvement. Under smart city initiative, BSNL also plans to install more than 1,00,000 public wi-fi amounting to Rs. 1,800 crores.

Though BSNL has seen improvement in its performance, Mahanagar Telecom Nigam Limited's net loss for the year ended March 2017, widened to Rs 2,963.05 crore from Rs 1,945.86 crore at the end of previous fiscal. The annual income of MTNL also declined by 3.6 percent to Rs 3,654.69 crore for 2016-17 from Rs 3,793.89 crore at the end of 2015-16. Telecom Minister Manoj Sinha said based on the financial results of MTNL for the FY 2016-17, the telecom operator has been classified as Incipient Sick CPSE as per Department of Public Enterprise (DPE) Guidelines.

As per the DPE guidelines, Department of Telecommunications has to formulate revival/ restructuring/ closure roadmap for MTNL, the process of which has been initiated. At present, there is no proposal for merger of BSNL and MTNL.

Hindustan Cables Ltd

Hindustan Cables Limited (HCL), a Government of India Undertaking, under the Ministry of Heavy Industries and Public Enterprises is a pioneer in the field of telecom cables in India. The Company was set up at Rupnarainpur, West Bengal in 1952 to make the country self-reliant in the manufacture and supply of various types of telecom cables. The Company’s main products are Jelly filled and Fibre optic cables. It has one of the largest capacities of 120 lacs conductor kilometres (LCKM) of Jelly filled cables. Manufacturing capacity for fibre optic cables is 40,000 fibre kilometres (FKM) per annum.

A fibre optic manufacturer is making losses at the time when more than 50,000 villages are connected to the optic network every year. Defence ministry declined to buy such heavy loss enterprise. In September 2016, the Cabinet has given its final nod for the strategic closure of Hindustan Cables that has stopped output since 2003. It has also approved an outlay of more than Rs.48 billion to pay statutory dues to these firms’ employees and creditors. The company has incurred a heavy loss of nearly Rs. 31.39 billion.

Hindustan Photo Films Manufacturing Co. Ltd

Hindustan Photo Films Manufacturing Company Limited (HPF) is an Indian-based public sector manufacturer of photographic films, cine films, X-ray films, graphic arts films, photographic paper, and chemistry. It is based at Udhagamandalam, a hill station in Tamil Nadu. Their photographic films are sold under the name "Indu", which means silver in Sanskrit (silver halides are used in the film).

Hindustan Photo Films Ltd, which employed over 714 employees as of 31 March 2012, was declared sick by the Board for Industrial and Financial Reconstruction in 1996. In the month of March 2013, a Rs 181 crore VRS package for employees of the ailing PSU Hindustan Photo Films based on notional pay scales of 2007. The audited financial report of HPFM for FY2014-15 incurs a loss of Rs. 2527 crores.

HMT Ltd and subsidiaries

With a cash assistance of Rs. 427.48 crore, the three loss-making subsidiaries of HMT, namely HMT Watches, HMT Chinar Watches and HMT Bearings will attain closure after separation of about a thousand employees through attractive VRS/VSS and settlement of their dues.

HMT Limited, formerly Hindustan Machine Tools Limited, was a state-owned manufacturing company under the Ministry of Heavy Industries and Public Enterprises in India. The company mainly manufactures industrial machines and tools with a workforce of around 2,500 under its six manufacturing units situated at Bangalore, Kochi, Hyderabad, Pinjore and Ajmer. HMT Ltd and its subsidiaries reported a loss of approx. Rs. 450 in FY2015-16.

- Chaitanya Kulkarni.

Wednesday, 20 September 2017

India’s loss-making PSUs.

Source -

As India eyes precious capital from foreign and domestic lenders, loss-making PSUs are now seen as a black dot for Ministry of Finance. The government plans to raise thousands of crores of rupees from bustling stock markets. Public Sector Units like Cochin Shipyard has tried their luck in the bullish Bombay Stock Exchange and has been successfully oversubscribed. Next on foray are NHAI, IRCTC, IRCON and RITES, the organisations related to surface transport. Arun Jaitley, India’s finance ministry and ex-defence minister said that organisations related to Ministry of Defence namely Mazgoan Dock Limited and Mishra Dhatu Nigam Ltd will be also lined up for divestments by the end of the year. The man on the divestment mission has been displeased by continuous loss making CPSEs. Naming Air India and ITDC, Jaitley made headlines saying, "Why should the government be in the business of hotels? Why is Air India making losses when new players like Indigo and Spice Jet are in the green?".

MoS for Heavy Industries and Public Enterprises, Babul Supriyo, said in the Lok Sabha reply that “the reasons for losses in CPSEs vary from enterprise to enterprise. However, some common problems for losses in CPSEs include old and obsolete plant and machinery, outdated technology, low capacity utilisation, excess manpower, weak marketing strategies, stiff competition, heavy interest burden, high input cost, resource crunch etc.” The accumulated losses of sick public-sector enterprises as of March 31, 2014, stood at Rs 1.04 lakh crore. This essentially means that the government of India has pumped a lot of money into these companies over the years to keep them going. Here’s the list of top loss-making PSUs in random order.

Hindustan Organic Chemicals Ltd.

Hindustan Organic Chemicals Limited(HOC) was set up by the Government of India in 1960 with an objective of attaining self-reliance in basic organic chemicals needs. In fact, this was the first endeavour to an indigenise manufacture of basic chemicals and to reduce country’s dependence on import of vital organic chemicals. HOC started as a small chemical unit, has today acquired the status of a multiunit company with two fast-growing units and one subsidiary unit. As private chemical industry picks pace, government organisation like HOC failed to cope up.

HOC’s fiscal loss for 2015-16 stands at Rs.173 crores. The company also made a loss of Rs. 215 crores and Rs. 176 crores in the year 2014-15 and 2013-14 respectively. The company has been declared as sick by Board of Financial Reconstruction in 2015.

Fertilizers and Chemicals (Travancore) Ltd.

Fertilizers and Chemicals Travancore Limited (FACT), a Government of India Enterprise established in 1943 has business interests in manufacturing and marketing of fertilizers, caprolactam, engineering consultancy and fabrication of equipments. Units of FACT include the two manufacturing divisions in Udyogamandal, Kerala and Wellington Island, Kochi. The Company has also interests in petrochemicals, hydrometallurgy, chemicals and pharmaceuticals.

The company’s audited financial results report an accumulated loss of Rs. 2143 crores in 2016-17 and its net worth has been fully eroded. The company has been continuously making losses of thousands of crores. Such brutal financial condition raises questions on the existence of material uncertainty and arises significant doubts on company’s ability to continue.

Indian Drug and Pharmaceuticals Ltd.

IDPL is the largest CPSE in India with plants at Rishikesh, Gurgaon & Hyderabad and two Subsidiary Units at Chennai, Muzaffarpur and Gurgaon. Established in 1961, IDPL played a major role in the strategic National Health Programmes like Family Welfare Programme & Population Control (Mala-D & Mala-N) anti-malarials (Chloroquine) and prevention of dehydration (ORS) by providing quality medicines. During the country’s calamity of an outbreak of Plague in 1994, IDPL was the only company which played the sheet anchor role in supplying Tetracycline for the entire Nation. Similarly, the company had made an uninterrupted supply of Chloroquine to combat Malaria epidemic in different parts of the country. In 2005 to combat national emergency (leptospirosis) arising due to flood in Mumbai, IDPL had supplied required Doxycycline Caps. within no time.

IDPL’s loss in 2015-16, 2014-15, and 2014-14 respectively – Rs 166 crore, Rs. 167 crores and Rs. 176 crores.

Air India Limited & Subsidiaries

Air India needs no introduction. The Maharaja of airlines is a national flag carrier and the airline with the membership of the prestigious Star Alliance. Air India is today serving to all major airports in India along with 60 international locations. Air India operates like a PSUs in the business which is marked by operational efficiency. Crews member and employees of Air India ltd. are relatively paid more than major low-cost airlines. Air India also use big planes when compared with low-cost airlines, loosing out of cost-conscious passengers. 

India’s aviation industry has more serious issues. Air fuel is expensive, the major airports are overloaded and the trains provide a cheap & convenient alternative pushing down the prices. There are way too many employees after the Indian Airlines-Air India merger and the government is reluctant to downsize. Around the world, there about 120 staff for every aircraft. Air India has 256. These extra people and salaries are a huge drain. While Jet airways spend only 10% of its revenues on salaries & benefits, Air India spends 20%. And the menace of corruption, CBI report also slams Air India regarding irregularities in the leasing of 111 aircrafts.

Air India and its subsidiary reported a loss of Rs. 4441 crores in the financial year 2015-16. Cabinet committee on the recommendations of NITI Aayog has given an in-priniciple approval for considering strategic divestment of Air India and five other subsidiaries. To reduce the loss, the government is selling high valued properties owned by Air India in plush areas of Mumbai, Delhi and other Tier 1 cities. Tata, Indigo and international players like Singapore Airlines have shown interest in Air India divestment. The government may need to amend rules for international bidders.


PEC Ltd (formerly – The Project and Equipment Corporation of India Ltd.) was carved out of the STC in 1971-72 to take over the canalized business of STC’s (State Trading Corporation of India Ltd.) railway equipment division, to diversify into turn-key projects especially outside India and to aid and assist in the promotion of exports of Indian engineering equipment. PEC Ltd reported a loss of Rs. 1142 crores in 2015-16.

To Be Continued in Part II.

Links –,,,,,

Monday, 18 September 2017

In every way, Dell EMC Forum 2017 was a journey to realize transformation, faster.

Keeping pace with competitive pressure and capitalizing on emerging opportunities today demands the fast uptake of digital transformation at the enterprise level. With digital imperative steadily redefining the rules of the game, digital transformation has gone beyond mere a technology initiative to be a part of the business strategy. In view of this changing business as well as technology landscape, this year’s Dell EMC Forum focused on the next step of the transformation journey. More specifically, how we could realize digital transformation, faster.

While preparing to attend the event, I thought to myself how the idea of enterprise-level digital transformation resonated powerfully with the digital India initiative—aimed at bringing transformation to realize. Or in other words, transforming India into a completely digitally powered society as well as the knowledge economy.

At the event, I got a chance to interact with some IT practitioners to understand their perceptions. They explained that the sessions of the Forum would help them solve business problems with a more cohesive approach.  Furthermore, I realized how vigorously each of them was transforming their business to be more dynamic and serviceable to their customer-base.

All these ideas were nicely included in this year's India Dell EMC Forum, at the core of which was the theme "Realize your digital future,” with a clear intent to see how emerging technologies worked reshaping lives and entire industries. The entire forum was divided into several sub-themes, with DIGITAL TRANSFORMATION, MODERN INFRASTRUCTURE: BEST OF BREED PLATFORMS, CLOUD STRATEGY & CONVERGED SYSTEMS, and WORKFORCE TRANSFORMATION being the prominent ones.

Every session revolved around these subjects was not only insightful but also helped me gain a first-hand look at the future of digital transformation. Moreover, I got some real hands-on experience and understanding of industry-leading Dell EMC consulting, Dell's Cloud Client Computing Portfolio, more specifically its Cloud Solutions for Microsoft Azure Stack, Dell PowerEdge Servers, Dell's midrange storage portfolio, just to name a few.

The discussions around 'Workforce Transformation' I found to be very intriguing for larger enterprises who are struggling hard to transform their workforce. It assisted them in understanding how to keep up their workforce with the rate of change. Indeed, it is an important aspect to understand, as the intersection of latest tools, efficient processes, and a dynamic culture is all set to help organizations bring the most out of their workforce.

And there are good reasons too. In 2030, every organization is likely to be a technology organization and as such businesses need to start thinking today about how to future-proof their infrastructure and workforce, according to a report published by Dell Technologies. The report, titled ‘The Next Era of Human-Machine Partnerships’, forecasts that emerging technologies, supported by massive advancements in software, big data, and processing power, would reshape lives. And the society would enter a new phase in its relationship with machines.

Given all things, participating in this year’s Dell EMC Forum was a valuable experience for me.

Originally published on | Tech that transforms life.

The RuPay Rise

The inception of RuPay is linked with the vision of financial inclusion. If India as a whole wants to progress sustainably, it requires robust financial systems in place. Before RuPay, debits card networks run by MNCs only focused on Tier 1 and Tier 2 cities. People transacting through debit cards would complain about lack of financial infrastructure in the district heads and rural areas. RuPay acted as a digital enabler for small towns and especially in those areas where banking network was not available.

RuPay is a brand name of National Payments Corporation of India. RuPay has been conceived to fulfil the vision of Reserve Bank of India of offering a domestic, open-loop, multilateral payment system to all banks and financial institutions in India. A truly ‘Make In India’ initiative for all 126 crore Indians. Since inception in 2012, RuPay has been instrumental in creating a less-cash economy and furthering the electronic payment system to make India a financial inclusive economy.

2014 had been a blessed year for India and National Payments Corporation of India. With the launch of Pradhan Mantri Jan Dhan Yojana, ordinary citizens of India got an opportunity to open basic zero balance savings account. Earlier, a banking account was considered a sign of elitism and an instrument only for people with worthy savings. Along with Jan Dhan account, holders were introduced with a RuPay card for transacting digitally. Expanding the base of RuPay cards and ATM network nationally was soon a priority. With this introduction, India witnessed a paradigmatic shift of an account holder from being a branch visitor to a more independent customer who is able to use an ATM and self-help kiosks. This was a major achievement not only in rural areas but also in Tier I cities that included senior citizens being more tech savvy.

The success of RuPay is closely associated with the progress made by PMJDY. Bank accounts opened through PMJDY envisages universal access to banking facilities with at least one basic savings account for every household, financial literacy, and access to credit, insurance and pension facilities. These measures will help the unbanked poor become a part of a formal financial system and take them out of the clutches of unauthorised money lenders. Within months, 12 crore Jan Dhan accounts were opened making it a new world record.  Jan Dhan, Aadhaar and Mobile are the three words changed ‘the way we pay’. To ensure last mile reach, the government encouraged people all from the sections of the society to open a bank account and use RuPay debit card.  With 40 crore Aadhaar linked accounts, more attention was given to ‘the way we pay’. The success of RuPay will further continue with the rise of new payment banks.

Highlights of RuPay
  •          Standardised card scheme for all banks in India.
  •         380 + million RuPay cards issued by 800+ participating banks.
  •         Market share of more than 30%
  •          #MakeInIndia initiative for 126 billion Indians.
  •         Common network, switching and interchange fees across all banks
  •          All regional rural banks and major state co-operative banks are offering RuPay cards.
  •      Dual verification process through OTP makes it secure.
RuPay had widened its portfolio by introducing Platinum debit card in 2014. The platinum RuPay debit cards are targeted towards technology savvy users from the upper middle-class background. These cards come with benefits like

  •         Access to 30+ domestic lounges, twice per quarter
  •         24/7 concierge services
  •         Exclusive Merchant Offers
  •      Cashback on utility bill payments
Platinum Credit cards come with benefits such as access to International Interoperability with RuPay Select along with an Insurance cover of INR 10 Lacs. 

Under National Urban Mobility card scheme, the Government of India envisages a single card for all payments of tickets for transports like Metro trains, Monorails, Indian Railways and State Transport buses, as well as normal day-to-day retails payments.

NPCI has developed RuPay Dual Interface contactless specification, that are EMV based, open standards, interoperable and scalable in nature. The card supports contactless transactions in both online and offline modes; adhering to the Smart City guidelines. Such cards can be issued on Debit, Credit or prepaid platforms. Since the offline transaction is permitted against available balance, there is no risk of loss to the bank. With innovation at the forefront, NPCI is fast forwarding India into the digital age.

- Chaitanya Kulkarni