by admin | May 25, 2021 | Economy, Markets, News
Traders call for Bharat bandh against Pulwama attack (Image: Zee News)
New Delhi : The Confederation of All India Traders (CAIT) on Monday said that business worth about Rs 25,000 crore was hit due to the “Bharat Trade Bandh” that was called to protest against the recent Pulwama terror attack.
According to CAIT, the day-long bandh saw seven crore business establishments remain closed across the country, including Delhi.
“Business of about Rs 25,000 crore was hit due to today’s ‘Bharat Trade Bandh’,” the confederation said in a statement.
“In the wake of tremendous and spontaneous voluntary response from traders across the country, the CAIT has decided to create a Special Relief Fund exclusively for the welfare of the forces,” it said.
In the worst-ever terror attack in Jammu and Kashmir since militancy erupted in 1989, a suicide bomber on Thursday rammed his SUV packed with explosives into a CRPF bus on the Srinagar-Jammu highway in Pulwama district, killing as many as 40 troopers and leaving many injured.
—IANS
by admin | May 25, 2021 | Business, Business Summit, Corporate, Corporate finance, Corporate Governance, Economy, Emerging Businesses, Events, Investing, News, Politics, SMEs
Gandhinagar : Prime Minister Narendra Modi on Friday said that his government had made doing business in India easier, cheaper, faster and smarter with his term accounting for almost 45 per cent of the Foreign Direct Investment (FDI) that the country received in the last 18 years.
Speaking at the inaugural function of the Vibrant Gujarat Global Summit 2019 here, he said India was now one of the most open countries for FDI with over 90 per cent approvals put on the automatic route.
“In the last four years, we have received FDI worth $263 billion. This is 45 per cent of the FDI received in last 18 years,” Modi told the gathering.
He said India was among the top 10 FDI destinations.
Modi, who is on a three-day visit to his home state to throw open his pet biennial Vibrant Gujarat Global Summit, said the India of today was a land of “immense opportunities” being the only place that offered democracy, demography and demand.
“Fifty cities in India are ready to build metro rail systems. We have to build 50 million houses. The requirement of road, rail and waterways is enormous. We want world class technologies to achieve our goal in a faster and cleaner way. India is thus, a land of immense opportunities.” he said.
The Prime Minister said the challenge for India, as in most emerging economies, was to grow horizontally as well as vertically to ensure that the benefits of development spread to regions and communities that have lagged behind while also meeting enhanced expectations in terms of quality of life, quality of services and quality of infrastructure.
“We are well aware that our achievements, here in India, will directly impact one sixth of humanity.”
Modi said his government had removed the barriers which were preventing India from achieving its full potential and now it was ready for business like never before.
The government has made doing business easier. cheaper, faster and smarter, he said.
“In the last four years, we have jumped 65 places in the global ranking of World Bank’s Doing Business Report. From 142 in 2014 to 77 now, but we are still not satisfied. I have asked my team to work harder so that India is in the top 50 next year.
“We have also made doing business cheaper. The historic implementation of Goods and Services Tax and other measures of simplification and consolidation of taxes have reduced transaction costs and made processes efficient.
“We have also made doing business faster through digital processes, online transactions and single point inter-faces,” he said.
He said his government had made doing business smarter by insisting on IT based transactions and digital payments including direct transfer of government benefits.
Modi added that he understood that being a young nation, India needs to create job opportunities and better infrastructure, which are both linked with investments.
“Therefore, in recent years, there has been unprecedented focus on manufacturing and infrastructure,” he said.
Listing the achievements of his government, he said for the first time, India had become a net exporter of electricity, had installed transmission lines at an unprecedented pace and had doubled the speed of road construction with rural road connectivity now at 90 per cent.
“At 7.3 per cent, the average GDP growth, over the entire term of our government, has been the highest of any Indian government since 1991. At the same time,the rate of inflation at 4.6 per cent is the lowest for any Indian government since 1991, when India began its process of liberalisation,” he said.
Modi had conceptualised the summit as Gujarat Chief Minister in 2003 to position the state as an ideal investment destination after the 2002 riots.
—IANS
by admin | May 25, 2021 | Business, Investing, Opinions, Property
By Taponeel Mukherjee,
As 2018 ends and we head into 2019, it would be worthwhile to s an the investment horizon and identify important strategies that investors and entrepreneurs could explore to create businesses that can benefit significantly from growth in the Indian markets.
As incomes rise steadily in India, “premiumisation” business models will gain traction among investors in the foreseeable future. The ability of businesses to create high-quality premium products and services to cater to the upper end of the market needs renewed attention. While the “premiumisation” theme has been applied in things like baby products and food, there is a need for the trend to pick up further steam.
The “premiumisation” theme applies as much to consumer businesses as to services and infrastructure providers. In largely commoditised businesses such as offices, logistics and warehousing, the ability to create a niche — as demand for high-quality assets increases — will be the driver of the “premiumisation” theme.
For example, with the economy growing, the demand for high-quality office space should see further expansion, driven primarily by the services industry. As the industry becomes more significant in size (in both absolute terms and percentage terms), one can expect additional demand for top-notch office space in the form of both buildings and office parks. The ability to deliver high-quality premium assets in land-constrained urban areas will help businesses stand out.
Additionally, business opportunities in areas such as specialised premium warehousing should gain traction. With increasing healthcare penetration and greater longevity, industries such as pharmaceuticals will demand high-quality, sophisticated warehousing and logistics infrastructure to cater to the growing demand. Infrastructure businesses that can create the necessary logistics infrastructure will be able to charge a premium for the asset in a sector that is primarily viewed as a commoditised service.
Essentially, for patient capital, long-term structural trends present opportunities to create premium assets that benefit from the changes sweeping through the Indian economy. Whether it is trends such as increased per capita healthcare expense and the greater longevity that creates opportunities in the pharmaceutical sector or patterns such as increased urbanisation, nuclear families and higher women’s work participation that creates the need for online grocery delivery, the essential point is that long-term trends will create the need for premium specialised infrastructure. Such infrastructure creation is full of investment opportunities.
The coming year and beyond also present both investors and the government opportunities to assess additional sectors such as energy storage and water, where decentralised infrastructure can have a significant role to play. While subsidies are an essential component of a policy package for accelerating the creation of infrastructure, financially viable platform structures that can help aggregate assets can be a game changer for decentralised assets that have significant demand.
It is essential to channel adequate funding towards the decentralised infrastructure sector, such as water assets or energy storage assets, to expedite infrastructure creation. For generating sufficient funding for an infrastructure asset at a rapid pace, it is vital that the infrastructure asset moves towards becoming an asset class eventually.
For instance, two themes that have received significant attention are “clean energy” and “access to clean water”. Decentralised infrastructure platforms can contribute significantly to these two aims. It is also vital to not look at decentralised infrastructure as a replacement for centralised systems, but rather as an alternative solution for specific scenarios.
There have been innovative models that are being utilised where investors are using platforms to aggregate distributed water treatment businesses catering to medium- to large-sized businesses as opposed to centralised water treatment businesses that require large-scale water transportation infrastructure to be created. Specialised industries the world over are benefitting from decentralised water solutions. The years ahead will provide opportunities for infrastructure investors to utilise investment platform-type structures to aggregate decentralised assets further. Such innovative solutions need to get a further impetus.
Most importantly, the government must also realise that decentralised infrastructure is essential to complement the larger infrastructure-creation process and hence must ensure that policies help promote the sector.
The year ahead provides an opportunity to innovate to create investment opportunities that deliver both investment returns and broader societal benefits. Strategies such as “premiumisation” and “decentralised infrastructure” will help cater to demand in a rapidly-growing consumer market through financially-viable business models.
(Taponeel Mukherjee heads Development Tracks, an infrastructure advisory firm. Views expressed are personal. He can be contacted at taponeel.mukherjee@development-tracks.com or @Taponeel on Twitter)
—IANS
by admin | May 25, 2021 | Opinions
Frank F. Islam
By Frank Islam.
In our book Renewing the American Dream published in 2010, we provided the following conceptualization of the American Dream:
The American Dream is the opportunity each and every citizen has to realize one’s personal potential and to achieve success, generally measured as economic security. The fundamental elements of the dream are getting educated and working hard in order to have a good job that pays decent wages, provides adequate benefits, puts food on the table, a roof over one’s head, and allows for retirement with dignity.
From 1950 to approximately 1975, American big business was a key contributor to the growth of the American economy and the American Dream. Since that time until today, it has played a diminishing role.
In this 18th year of the 21st century, it is not likely that contribution will increase. In fact, it will most likely decrease — perhaps substantially.
This is so for a variety of reasons, including:
The enormous gap between CEO compensation and employee pay
The new tax law
Tax havens
Stock buybacks
Business consolidation
Equilar, an executive compensation consulting firm, did an analysis of CEO compensation in 2017 for both the Associated Press (AP) and the New York Times (Times).
The AP study of the biggest S&P 500 public companies showed that the median pay package for CEOs was $11.7 million and they received an 8.5% raise last year. The Times study of the 200 Highest-Paid CEO rankings showed a median pay package of over $17.5 million.
The Times study disclosed that the pay ratio — a comparison of the total compensation package for the CEO to the median compensation of the other employees in the company — was 275. This is a large number. It pales in comparison, however, when looking at individual cases. For example, as the Times reports:
A Walmart employee earning the company’s median salary of $19,177 would have to work more than a thousand years to earn the $22.2 million that Doug McMillon, the company’s CEO, was awarded in 2017.
These differences are stunning. Are corporate CEOs worth 1,000 times. 500 times, or 100 times more than the median pay of the company’s other employees? In their minds, the minds of the board members, and the minds of shareholders, they probably are.
And, we believe that in certain instances, that a big business leader is worth the multiple he or she earns. In general, however, we believe not. The overriding issue is that many American big businesses today do not have equitable compensation plans and programs.
These programs and plans used to be much more fair and balanced. That is no longer true. Today, they are heavily skewed toward those on the top rungs of the ladder.
The new tax law enhances the potential for increasing that skewing. The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35 percent to 21 percent.
Corporate taxes have been going down since the Reagan presidency. There is no hard evidence for why this decline started then. But Robert Shiller comments, in an article for the New York Times, that it may have begun at that time because “people may simply have returned to more individualistic, self-centered views of society and the economy.”
Shiller’s hypothesis can’t be tested. But it does make some sense. Especially when one recognizes that the effective tax rate that big businesses pay has been in decline as well. As Shiller points out, “the fraction of profits on corporate income tax taken by federal, state, local and foreign taxes peaked during World War II and has shown a fairly linear, steady and steep downward trend ever since.”
In 2017, the statutory corporate tax rate in the United States, including the top federal rate combined with average state and local taxes, was 38.9%. The effective rate was a mere 18.6%.
The new and substantially reduced statutory tax rate of 21% will undoubtedly lead to a reduced effective tax rate much below the current rate of 18.6%. This lower effective rate will mean lower tax payments and keep far more money in corporate coffers.
In the first five months of this year corporate tax collections “fell by a third from the same period one year ago.” This drop brought the total collection for a comparable period close to a 75-year low.
This means the corporations are already sheltering profits. Those profits could be used for a number of purposes such as job creation, research and development, and wage increases for employees. Recently, however, studies suggest that much of it has gone to people at the top of the organizational totem pole.
The tax cuts may help keep some corporate profits in the United States. In stark contrast, tax havens are used to move business profits offshore to countries with low to near zero tax rates such as Bermuda, the Cayman Islands, and Luxembourg.
A 2014 report from the Citizens for Tax Justice and the U.S. PIRG Education Fund reported that almost one-third of the U.S. Fortune 500 companies had subsidiaries in Luxembourg. American companies that employ tax havens include, but are definitely not limited to: Apple, Amazon, Google, Marriott, Pfizer, Pepsi, and Wells Fargo.
A new study by economists from the University of California, Berkeley and the University of Copenhagen found that multinational corporations headquartered in the U.S. and other higher taxation countries have moved nearly 40% of their profits to tax havens. This ensures that no taxes are paid on these profits in the home country of a business, and that the benefits from those profits flow through only to shareholders and not to the government or the business’ employees.
On its website, Americans for Tax Fairness, using data from various sources, highlights that U.S. corporations dodge $90 billion a year in income taxes using tax havens, and that in 2014 U.S. corporations held $2.1 trillion offshore — much of it in tax havens.
While tax havens are used to shelter profits, stock buybacks are used to ensure the value of a stock. As we noted in a 2015 blog, the buyback process is frequently used to enable the company to hit quarterly earnings per share targets to ensure that executives and major shareholders who get rewarded based upon stock value can maximize their personal returns.
In the Schumpeter column in its June 2 issue, The Economist tried to provide a defense of buybacks. Near the end the column stated, however, “Most criticism is motivated by legitimate concerns about serious problems, including excessively high profits and squeezed wages, the concentrated ownership of firms and the reluctance of the financial industry to back more capital hungry startups.”
Those concerns are legitimate indeed. As just one example of the downside of buybacks, consider General Electric under the leadership of Jeff Immelt.
During his tenure as CEO, GE spent $93 billion buying back stock. Only $7 billion of that $93 billion was acquired between 2008 through 2011 when the price of a share was “mainly in the teens”. The remainder was purchased at prices over $30 per share between 2012 and Immelt’s departure in June of 2017.
Buybacks are inside baseball maneuvers by a big business to manipulate stock value. Industry consolidation is designed to change the nature of the playing field on which the game is played and the rules of the game itself.
David Leonhardt summarizes the extreme threats of big business consolidation in his New York Times article. He writes:
All of these companies have decided that their best strategy for raising profits involves getting bigger. Larger companies simply have more power — to compete with other giants, to restrain workers’ pay, to influence government policy, and, in the long run to increase prices.
Leonhardt points that big companies with more than 10,000 workers employ more than companies with fewer than 50 workers. He then observes that “large companies today are often taking advantage of workers, consumers, taxpayers and small businesses.”
This “taking advantage” is not a 21st century phenomenon. Major U.S. corporations began:
Offshoring manufacturing jobs in the 1960’s and knowledge and service jobs in the 1970’s eventually moving millions of good-paying American jobs to locations around the world through a process euphemistically called “globalization.”
Implementing a steady and almost continuous stream of organizational restructuring and downsizing to reduce the incumbent workforce throughout the 1980’s and ‘90’s.
At the same time, restructuring the nature of jobs from full time employment into temporary and contract employment.
A study by the Congressional Research Service in 2014 disclosed that since 1983, 75 U.S. corporations have moved their tax domiciles outside the U.S. to avoid paying U.S. taxes. A little more than sixty years ago, U.S. corporations provided one-third of federal tax revenue. Currently, they provide around one-tenth of that revenue.
American big business did not create the American Dream, but it used to contribute to the dream’s growth and realization. Today, through its actions and inaction, it is stifling the dream.
This must be reversed. The country is at a pivot point. For America to be America again, big business must step up to the plate and use its clout to benefit not only the CEOs and the shareholders but also their employees, customers, and the communities in which they operate.
America needs big businesses and big business leaders who are committed to an agenda to renew America and the American Dream. Those leaders and organizations can not and should not do it by themselves.
But their absence will condemn the dream to being merely a memory of some long ago time when things were much better and everything seemed possible for America and Americans.
by admin | May 25, 2021 | Business, Corporate, Corporate Buzz, Economy, Large Enterprise, Markets, News
By Seshasai K.V.S.,
Mumbai : It is important to understand and accept that we are in the era of technology and the demand for an upgraded education system is necessary. The integration of business and technology is an essential one as, with the changing times, it is necessary to dictate the evolution of one’s business model and blend with the current business ecosystem.
Indian Industry Facts:
Research shows that the Indian education market, in terms of revenue, stood at $97.8 billion in 2016 while FDI in education sector in India stood at $1.4 billion (April 2000-Dec 2016). India has one of the world’s largest higher education systems with enrollments of 33.3 million students in colleges, institutions, across 50,000-plus higher education institutes and 750-plus universities.
The past findings of the ‘Child Population & Literacy Rate’ section of the 2011 Census showed that the gap between the male and female literacy rates fell from 21.59 per cent (2001 report) to 16.68 per cent in 2011. States and Union territories like Kerala, Goa, Daman and Diu, Tripura and more attained literacy rates of 85 per cent and above.
Let us now fast-forward to the current times and see the school-going population in India and the opportunity it provides.
According to Technopak report released in 2016, the current value of India’s education market is $100 billion. The key findings include:
* The K-12 (kindergarten to 12th grade) segment occupies and offers the largest market in the business at 52 per cent
While higher education occupies 15 per cent of the business market, textbooks, e-learning and allied services comprise 28 per cent while vocational education in manufacturing and services occupy five per cent with K-12.
* The CAGR growth rate is estimated to increase by 16 per cent by 2020, moving from $100 billion to $180 billion
These points reiterate the fact that more and more students are enrolled in schools today to get a formal education. According to the Annual State of Education Report (ASER) surveys, one of the most striking trends in Indian school education is the increase of private sector participation with an estimated 300,000 private schools with 40 per cent of the total student enrolment.
Private enrolment in elementary schools is approximately 35 per cent and over 50 per cent at the secondary level. Studies show that upward of 75 per cent of children in cities are attending private schools and interestingly, this trend holds true in rural India as well.
The ASER shows that enrolment in private schools at the elementary in rural India has increased from 19 per cent to 29 per cent.
Why the education sector:
Starting any business is a daunting task. Every entrepreneur wants to have a business that gives guaranteed returns. Education is one such industry, only because there is a high demand for quality education and the number of good schools is limited.
Years back, schools were run only by the government or we had convent schools where fees were minimal. There were very few single property private schools. As policies change over the years, so do the scenarios. There are various private schools that have taken the franchise route; they offer varied options to parent’s right from different boards to fee points to facilities to a holistic curriculum. Parents now prefer to send their children to private schools as they use the latest technology and have worked at upgrading the syllabus and teaching methodologies.
Investing in education is the rewarding in every sense. As stated above, education is at the core of any economy so you are taking part in nation building, you have the opportunity to leave a legacy behind and you have the opportunity to groom the future of tomorrow. Education is one of the most rewarding businesses in every way an entrepreneur can invest in – it is a qualitative yield.
(Seshasai K.V.S. is the CEO of Kangaroo Kids Education Ltd)
—IANS
