All Newspaper editorials in one place – January 25, 2024
- THE HINDU – Dangerous status quo
- THE HINDU – Narrowing field
- THE INDIAN EXPRESS – Bharat’s Ratna
- THE INDIAN EXPRESS – Dal, roti, cheeni
- THE INDIAN EXPRESS – Twist in the tale
- THE TIMES OF INDIA – Oil’s Well? Not Quite
- THE TIMES OF INDIA – Invisible Voters
- THE ECONOMIC TIMES – ZZZtime for Mergers In the M&E Industry?
- THE ECONOMIC TIMES – Fiddling on the Roof To Brighten Solar
- THE HINDU BUSINESSLINE – Curbing mule accounts
- BUSINESS STANDARD – China’s long stumble
- BUSINESS STANDARD – Sunroof power
- FINANCIAL EXPRESS – Poor lessons
- FINANCIAL EXPRESS – Boeing’s culture needs an overhaul, per its customers
January 25, 2024
Dangerous status quo
In Manipur, unless non-state actors are demilitarised, hostilities will persist
Eight months after ethnic violence broke out between the largely valley-dwelling Meitei and the hill-dwelling Kuki-Zo communities in Manipur, hostilities continue. The ethnic polarisation has persisted and displaced people on both sides are still unable to return to their homes; schooling and health care remain disrupted and the writ of the State government does not run in the Kuki-Zo hill areas. The government’s inability to win peace and the failure of institutions such as the State Assembly to deliberate on the problem have compounded the conflict even as the Chief Minister, N. Biren Singh, continues to be seen more as an ethnic leader, preventing the possibility of any thaw in the pervasive hostility. Even media and civil society organisations seem to be divided on ethnic lines and, more dangerously, the role of the army and central paramilitary forces is being seen through this lens, evident in the utterances of the Chief Minister and representatives of ethnic chauvinist groups. The Union government’s response has been to rely on a smoke and mirrors approach — a de facto assumption of powers related to law and order enforcement without publicly announcing the imposition of Article 355 that enables it to do so. There has been little follow-up on confidence-building measures between the representatives of the ethnic groups after visits by the Union Home Minister Amit Shah and others from his Ministry. The latest visit by a Home Ministry team is a reaction to a resolution by some MLAs to take collective action following fresh killings and violence in Moreh town.
The predominance of militant outfits is alarming. Militias such as the Meitei radical Arambai Tenggol have been allowed to act as “defence squads”, brandishing weapons and being allowed to vitiate the already perilous discourse in the valley even as Kuki insurgents do the same in the hill areas. The arms looted from police stations and camps have still to be recovered, which suggests that there is a dangerous militarisation of non-state groups. The Union government must focus on addressing this key issue on either side of the divide. Meanwhile, Mr. Singh has tried to erroneously link the prevailing conflict and the ethnic polarisation to the refugee situation in Manipur with many, predominantly from the Chin communities, fleeing the civil war in Myanmar following attacks by the junta. This has led to the demand for ending the Free Movement Regime (FMR) enabling trade and people-to-people contact near the border. While the porous border has also enabled drug trafficking and the movement of insurgents, a cessation of the FMR would be a case of throwing the baby out with the bathwater.
THE HINDU
January 25, 2024
Narrowing field
Trump’s ad hoc policymaking has many takers among Republicans
Choppy waters
India and the Maldives must persist with quiet diplomacy to reset ties
Within weeks of the India-Maldives showdown over derogatory remarks by Maldivian Ministers and the call for Indian tourists to boycott the archipelago, as well as the tussle over Indian troops stationed in Maldives, Delhi and Male are dealing with another controversy. This time it is over the Chinese “research” ship Xiang Yang Hong 03, that is expected to dock in Male in February. India has made its concerns over Chinese ships in the Indian Ocean clear. After objecting to visits by Chinese “research” vessels to Sri Lanka, New Delhi managed to ensure that Colombo banned, from 2024, all foreign research ships, that are believed to collect data for military and civilian purposes, from docking there. For New Delhi, the welcome mat for Chinese ships, at a time the new government of President Muizzu has scrapped the India-Maldives hydrography agreement, has played out as a rebuff. Male also welcomed a visit by the commander of the United States Indo-Pacific Command, who presented equipment. That the developments follow other setbacks, beginning with Mr. Muizzu’s electoral win last year after he ran with an “India Out” campaign slogan, his government’s plans to push out Indian personnel and his decision to prioritise visits to Türkiye, the UAE and China have made it more worrying.
It is significant that despite Male’s pushback and hyper nationalist calls within India, New Delhi has not stopped engaging the Muizzu government. Prime Minister Narendra Modi met Mr. Muizzu in December and set up a high-level core group for bilateral negotiations on tricky issues. External Affairs Minister S. Jaishankar also met with his Maldivian counterpart last week. It is hoped that both sides realise that their tensions are merely symptoms of problems that could get larger: one, a regional power that aspires to be a global power, and the other, an archipelago dependent for its economic and regional security needs on external forces. While sovereignty is paramount for any country, it is important that the two sides see the benefit of a détente over confrontation. For India, whose neighbourhood first policy focuses on helping according to its neighbour’s priorities, it is ungainly to be seen as foisting its military, that has carried out humanitarian operations, on the Maldives. For the Muizzu government, that just lost a significant election for Male mayor, the impact of the animus with India on upcoming Majlis (parliamentary) elections should also be a worry. In that sense, the Maldives decision to invite the Xiang Yang Hong 03, but not to allow it more than a routine port call is hopefully a sign that quiet diplomacy is working. A rational approach is more likely to shore troubled bilateral ties out of the choppy waters now.
THE INDIAN EXPRESS
January 25, 2024
Bharat’s Ratna
By honouring affirmative action’s founding father, BJP marks a significant foray into the fraught and competitive politics of social justice
The Bharat Ratna to Karpoori Thakur is richly deserved and apparently politically timed. The award to the socialist stalwart, described by Prime Minister Narendra Modi as the “champion for the marginalised” and “beacon of social justice”, comes 35 years after his death and less than three months before the next Lok Sabha election. In a storied career that began with the Quit India movement and saw him become chief minister of Bihar twice, Karpoori Thakur’s achievements were several and influential, and they have endured — especially his contribution in shaping the public conversation on caste in the country. For the BJP, having just fulfilled its Mandir promise with the consecration of the Ram temple in Ayodhya, the honouring of Thakur could be read as a significant foray into Mandal territory that lies ostensibly on the other side of the political fence — ostensibly, because the BJP is no stranger to caste politics, having successfully appropriated pieces of the Mandal vocabulary. In the run-up to the parliamentary election, with the Congress-led Opposition making the demand for a nation-wide caste census a primary plank, the Bharat Ratna to Thakur confirms the BJP government’s inventive use of the award to make a political point — past recipients have included Atal Bihari Vajpayee and Nanaji Deshmukh, Madan Mohan Malviya and Pranab Mukherjee — and to lay claim to the Karpoori legacy.
Karpoori Thakur laid the ground for the architecture of the affirmative action regime established after the Centre implemented the Mandal Commission Report in 1990. In 1978 in Bihar, the Karpoori government had accepted the Mungeri Lal Commission’s recommendations and instituted a layered quota framework that recognised the cleavage within the backward castes and also acknowledged the need to address the disadvantages faced by women — of the 26 per cent quota, 12 per cent was given to the extremely backward castes or EBCs, 8 per cent to OBCs, 3 per cent to women and 3 per cent to the economically backward upper castes. Over the last several elections in Bihar and elsewhere in the country’s north, the EBCs, for long relegated to the margins by the Backward versus Forward cleavage, have emerged as a critical constituency — the BJP has focused on the mobilisation of these castes as part of its strategy to court non-Jatav Dalits and non-Yadav OBCs. In Bihar, the Nitish Kumar government carried out a caste survey in October last year and an important finding was that the EBCs are the largest social bloc, accounting for 36.1 per cent of the state’s population. To keep the issue alive ahead of Lok Sabha polls, JD(U) workers and leaders have been fanning out to conduct “Karpoori charchas” across the state’s constituencies.
The BJP government’s decision seeks to paper over the fissures between the politics of the Sangh Parivar and that of the stream Karpoori Thakur belonged to. Even as anti-Congressism brought them together — first in the Samyukta Vidhayak Dal and then the Janata Party government in Bihar — it was not enough to keep them together. Now, as a new election draws closer, however, a contest has begun that may draw upon history but will not be bound by it. In this moment, the Bharat Ratna by the BJP-led government to a socialist icon sends a signal that is bound to be decoded politically.
THE INDIAN EXPRESS
January 25, 2024
Dal, roti, cheeni
Both producers and consumers would benefit from policy that is predictable and stable, not knee-jerk and reactive
International food prices have eased considerably from their 2022 peaks. The benchmark FAO Food Price Index in December was 10.1 per cent below its level one year ago and 28 per cent down from its all-time high scaled in March 2022, after Russia’s invasion of Ukraine. But this story of global deflation is contrary to the Indian situation, where the official consumer food price index inflation ruled at 9.5 per cent in December. The domestic inflationary pressures are coming from basic foods: Pulses, cereals and sugar. In other words, dal-roti-cheeni. It’s not for nothing that the Centre is worried, especially with national elections due in hardly three months’ time. Retail food inflation averaged just 0.2 per cent during the year leading to the last Lok Sabha polls in April-May 2019. The Narendra Modi government knows that food prices matter for voter sentiment.
The government’s strategy to rein in food inflation has been a heterodox mix of export and trading curbs along with import liberalisation. Thus, exports of wheat, non-basmati white rice, sugar and onion have been banned, denying Indian farmers and agri- businesses the opportunity to benefit from high international prices, whether in 2022 (for the first) or now (for the other three). Stocking limits have been imposed in wheat and pulses for traders, processors as well as big-chain retailers. Curbs have been placed on sugar mills with regard to diversion of cane juice and intermediate-stage molasses for manufacture of fuel ethanol, industrial-grade rectified spirit and potable alcohol. Simultaneously, imports of major pulses and crude edible oils have been allowed at zero or very low duties till March 31, 2025. Notwithstanding all these supply-side measures, rice is retailing at an all-India average (modal) price of Rs 40/kg (Rs 35 a year ago), milled arhar (pigeon pea) at Rs 150/kg (Rs 110), chana (chickpea) at Rs 80/kg (Rs 68), sugar at Rs 45/kg (Rs 40) and onion at Rs 30/kg (Rs 25).
The government approach reflects an excessive pro-consumer policy bias. Such bias, apart from being anti-producer, isn’t in long-term consumer interest either. Both producers and consumers benefit from policy that is predictable and stable, not knee-jerk and reactive. Indian agriculture has been a victim of short-termism, which has deterred much-needed investments in processing, cold storage, marketing and research. Such investments will unleash the productive potential of the farm sector, providing a more sustainable solution to food inflation. Post election, that should also be the focus of the next government.
THE INDIAN EXPRESS
January 25, 2024
Twist in the tale
If the Oscar nominations this year are rich in cinema, they are richer in irony
The announcement of the nominations for the 96th annual Academy Awards might as well have been scripted by a Hollywood writer, one who knows just how to balance the predictable with a twist or two, in order to get a buzz going. And so, the nominees, across a slew of categories, include some of the biggest hits of 2023 as well as its most critically acclaimed: Barbie, Oppenheimer, Killers of the Flower Moon, Past Lives, Anatomy of a Fall, Maestro, The Zone of Interest, Poor Things and The Holdovers.
The big picture is of an industry that, after years of struggling against audience apathy for anything that is not a “tent pole” film (such as one from the Marvel Cinematic Universe), seems to be rediscovering its creativity. If the summer of 2023 belonged to the “Barbenheimer Effect”, wherein two highly original, idiosyncratic films also manage to find a massive global audience, the rest of the year was peppered with smaller, but no less distinctive projects.
Yet, the nominations themselves send out a more mixed message. If this year marks the first time a Native American actor has an Oscar shot (Lily Gladstone for Killers of the Flower Moon) and has a solid representation from non-American cinema (Anatomy of a Fall, Past Lives, The Zone of Interest and Poor Things), there is also the snub to the two women behind one of the year’s most successful films. For Barbie fans, director Greta Gerwig and lead actor/producer Margot Robbie were shoo-ins for their categories and the fact that they have been ignored, while male lead Ryan Gosling scored a nomination, only underlines the message of their film: In a male-dominated world, women are sidelined. If the Oscars this year are rich in cinema, they’re richer in irony.
THE TIMES OF INDIA
January 25, 2024
Oil’s Well? Not Quite
Low global fuel price helps GOI. But frozen domestic pump prices are a distortion
Modi government heads into its last budget this term with international crude prices working in its favour. Indian basket was priced at $80.5 a barrel on Tuesday. Price trends since Israel-Hamas conflict began in October have defied market fears of a surge. Separately, oil marketing companies (OMCs) are sitting pretty, getting a healthy profit margin out of each litre of petrol or diesel sold. This confluence of favourable factors, however, masks a worrisome reality. Oil pricing reforms are in cold storage.
Market-linked, on paper | Retail petrol and diesel pricing has been market-linked since 2010 and 2014, respectively. GOI introduced a daily reset of prices from 2017 to allow fluctuations in international crude price to be passed on to retail consumers. That remains policy, but only in name.
Frozen pump prices | Retail prices of petrol and diesel have been frozen since May 2022. International crude prices kept fluctuating. But prices have trended downwards since 2022. This played a key role in helping central banks control inflation faster than initially expected after Russia-Ukraine conflict broke out in February 2022.
No economic case | Countries often shield consumers from oil shocks through subsidies. But it’s usually a temporary measure and is meant to help markets adjust without sudden disruptions. This happened in May 2022 as monthly average oil price shot past psychologically important $100/barrel just after the outbreak of conflict in Europe. But this spike lasted just five months. After that, monthly average prices have consistently stayed below $100/barrel.
Budgetary consequences | Expanding subsidies for petrol, diesel and cooking gas comes from GOI’s budget. In 2022-23, there was a one-time grant of ₹25,288 crore to OMCs to offset subsidies on cooking gas. In budget estimates of 2023-24, GOI set aside ₹30,000 crore as capital support to OMCs, something that hasn’t happened for a while.
Don’t mess with market | Real damage from burying oil reform is that it’s shut down price mechanism. When prices are allowed to fluctuate in response to demand and supply, it forces everyone to adjust to reality. But once price signals are switched off, it distorts consumer, producer decisions.
THE TIMES OF INDIA
January 25, 2024
Invisible Voters
On National Voters Day, all parties must recognise EC’s efforts to get migrants to vote are important
Nothing like voting, I vote for sure’. EC’s ‘theme’ for National Voters Day 2024, observed today, draws attention once again to that large population of seasonal or circular migrants, who simply cannot vote.
Invisible as voters | This large undefined floating population, those who peopled Covid’s lockdown exodus, those who labour in construction and brick kilns, in factories, restaurants and transport sectors, in mines and quarries – they are invisible as voters. Their numbers too are grossly underestimated. Mostly from marginalised sections, their loss of political rights is not a simple matter.
Neither here nor there | Vote is tied to a geographical area. Circular migrants live in mostly difficult conditions, can never ‘belong’ to cities where they work or whose infra they build, leave families behind in places of origin, and move from place to place for work. They find it too costly to head home on poll day.
Fodder for parties | Political party apathy to migrants’ voting rights in host cities is partly explained by fact that many politicians in host states build their sub-nationalist politics by ‘othering’ these very migrants, ahead of elections, sometimes even triggering anti-migrant violence. Another reason is that barring national parties with multi-state outreach, regional parties in migrants’ home states find it unfeasible to fund outreach to migrant voters.
Tech & distrust | Smaller parties’ difficulty in canvassing away migrants was cited by several parties as a reason for refusing pilot tests of EC’s remote voting machine. Apart from unsubstantiated ‘distrust’ in these machines, their fear was remote voting would give bigger parties an advantage. But a more realistic challenge is how to identify seasonal migrants.
Migrants matter | Political parties must realise migrants’ absence in elections can impact electoral outcomes – most seasonal migrants move en masse basis personal networks of kith and kin from villages and districts. In close contests, their ability to vote can make a difference. For migrants, a vote makes them matter; it makes their living conditions a political issue. That outcome is much required.
THE ECONOMIC TIMES
January 25, 2024
ZZZtime for Mergers In the M&E Industry?
Thwarted Hollywood overtures continue
Even as Zee reportedly moved National Company Law Tribunal (NCLT) and Singapore International Arbitration Centre (SIAC) on Wednesday after Sony had earlier terminated their $10 billion merger deal, India’s media and entertainment (M&E) industry is seen as continuing to thwart Hollywood’s overtures due to market imperfections, entrenched local players and faltering shareholder support. Sony and Disney are reviewing their strategies for a growing consumer market after running into problems with inorganic growth and low user revenue. This leaves India’s M&E industry underserved in terms of investment, a void the tech industry has exploited to ramp up its presence. On their own, India’s M&E consumers don’t support investment in content creation or distribution, and an advertising-led approach discourages scale. Concentrated consumer interest in Bollywood and cricket distorts the market further, with shareholders looking askance at the risk-reward trade-off.
This leaves the field open to social media platforms like Instagram and YouTube that carry cheap user-generated content and benefit from the network effect. Video streaming companies like Netflix ride on low cellular tariffs to push content. But Hollywood studios struggle with linear models and need local help with distribution. Disney’s talks with Reliance and Sony’s merger with Zee were meant to stitch up three-fourths of India’s TV viewership. Sony will need a Plan B if Disney succeeds in building a moat around its market leadership.
M&E consolidation is inevitable, with broadcasting rights and streaming costs escalating. India’s cinema hungry audience has also returned to theatres, creating space for bigger-budget movies alongside a growing funnel of less expensive OTT content. Indian telcos have been asking for a share of OTT content revenue generated on investments they have made in buying spectrum and rolling out cellular networks. With online gaming the fastest-growing segment, Hollywood would be better placed to crack the India market before Big Tech drives a deeper wedge in user engagement.
THE ECONOMIC TIMES
January 25, 2024
Fiddling on the Roof To Brighten Solar
On January 22, Prime Minister Narendra Modi announced the Pradhanmantri Suryodaya Yojana. This aims to instal rooftop solar (RTS) power systems on 1 crore houses. With this announcement, Modi has targeted a key pain point in India’s solar power journey: slow uptake of RTS systems. In 2015, GoI increased its solar power generation target from 22 GW to 100 GW by 2022. India fell short of that target, and one laggard has been RTS power generation. Of the 100 GW, 40 GW was supposed to come from RTS. By the end of 2023, rooftop power generation was 11 GW, and energy generated from residences was about one-fifth of that. Recently, GoI increased central financial assistance for the residential RTS programme.
There are several reasons for public disinterest in RTS: one, lack of consumer awareness about the technology, government subsidies and net-metering (a method by which a bill is lowered by deducting the electricity a consumer’s RTS produces from what she consumes); two, reluctance of discoms to let go of their high-paying commercial users; and, three, initial high costs of setting up RTS.
India experiences clear, sunny weather for 250-300 days a year. So, the potential is massive. A Council on Energy, Environment and Water (CEEW) study showed that households can technically deploy more than 640 GW of RTS. About 7-8 lakh households have installed RTS, about 4 GW of solar capacity. PM’s announcement will give the necessary push to the sector. A higher uptake of RTS can help individuals cut their energy bills and meet personal clean-energy goals, states save on electricity subsidies, improve discoms’ financial health and pave the way for greater uptake of RE, a must if the country wants to meet its decarbonisation goals.
THE HINDU BUSINESSLINE
January 25, 2024
Curbing mule accounts
IPO malpractices should be penalised
As the equity market scaled record highs last year, the primary market segment also witnessed heightened interest. But it is widely believed that many investors who subscribe to initial public offers do so with the intention to benefit from the short-term gain from the spurt in stock prices, immediately after listing.
This suspicion was confirmed by the Securities and Exchange Board of India (SEBI) chief Madhabi Puri Buch recently when she stated that 43 per cent of retail investors and 68 per cent of high networth individuals who receive allotment in an initial public offer, sell the stock within a week of listing. Of greater concern was the SEBI chief’s statement that some companies have been found using ‘mule’ accounts to apply to their own IPOs, in order to show a large oversubscription. The regulator should make haste in completing its investigation into the three companies which are suspected to have inflated their subscription numbers with fake accounts, and take stiff penal action where necessary. The action in the primary market in 2023 was heartening with a large number of smaller companies raising funds. There were 196 public offers in the first nine months of FY24, raising ₹53,023 crore, of which 141 were from SMEs. The sum of ₹4,154 crore raised through primary offers of SME companies in the first nine months of FY24 is 78 per cent higher than the sum raised on this platform in the whole of FY23.
The surge in smaller companies approaching the capital market for their funding must be encouraged. But to make capital markets an effective source for fund raising, it needs to be free of unsavoury practices such as stock price manipulations, inflated IPO subscription numbers, insider trading and so on. Using ‘mule’ accounts or accounts of related entities to subscribe to the primary offer is another such practice. With the listing day premium of the issue linked to the extent of oversubscription, there is an incentive for promoters to inflate subscription numbers through such ‘mule’ accounts. This is not the first time that such malpractices have been detected in the primary market. In the IPO scam of 2003-05, Roopalben Panchal and her family members were found guilty of using 18 fictitious demat accounts to subscribe in the retail category of IPOs. Investigation by SEBI into several IPOs made in 2010 revealed a nexus between promoters and brokers with circular trading done after listing to provide listing gains to investors.
SEBI has done well to highlight this illegal practice but with such misconduct being rampant in both secondary and primary markets, it is up to the regulator and the exchanges to make the most of the surveillance tools at their disposal. Stiff penalties should be slapped on the guilty. As for investors flipping their IPO allotment, there is little that the regulator can do. An awareness campaign on the risks in speculating and the benefits of long-term investing, will be beneficial.
BUSINESS STANDARD
January 25, 2024
China’s long stumble
Stock market decline an opportunity for other developing nations
Most of the time, rumours of a $278 billion capital infusion into a stock market would send shares soaring. Not so in 2024 China, however. Even after Premier Li Qiang called for “forceful steps” to prop up the country’s economy — and despite the news that billions might be funnelled from state-owned enterprises’ overseas accounts into equities — Chinese stock indices rose by just a couple of percentage points. Given that the benchmark CSI 300 Index for mainland stocks had fallen to a five-year low, this was not exactly seen as a recovery. In fact, rather than restoring some dynamism to Chinese markets, this seemed to confirm the widely held suspicion that a fatal loss of confidence had taken hold. There is a near-consensus that the country’s robust growth of decades has reached an end, and that the government in Beijing has neither the tools nor the inclination to change that. This is fundamentally different from the earlier claims of China being close to a crisis or collapse of one or another sort. No collapse is foreseen; it is merely a slow-moving constriction driven by a real estate market that seems impossible to reform, and local-government debt that may be difficult to restructure.
Official data coming out of China in the past few days has been disquieting. A broad indicator of prices revealed that deflation might have set in; the price of residential real estate fell the most in nearly a decade. And while China met its official gross domestic product growth target of 5.2 per cent in 2023, the yuan’s loss in value meant that the dollar value of China’s national output shrank for the first time in decades. When the fundamentals are weakening, investors look for signs of policy support. In this case, a cut in interest rates might have helped stabilise the property market. But the People’s Bank of China refused to lower borrowing costs earlier this month. That might have been because the difference between lending and borrowing rates necessary to keep banks afloat was already at the minimum. President Xi Jinping, meanwhile, clearly seemed far more focused on political issues like elections in Taiwan than on addressing the fears about China’s economic future. Taken together, most investors concluded that there were too few growth drivers within the Chinese economy.
Since hitting a peak early in 2021, the Chinese stock market has seen a drop of $6 trillion in market capitalisation — from $20 trillion to $14 trillion. Worse, investors seem convinced that this is not even a major concern for the leadership in Beijing. The government, increasingly driven by old-style statist ideology, sees financialisation as inherently dangerous — because it reduces the level of the Party’s control over the private sector. Few expect a return to overall growth and market rallies in China in the short term, or even the medium term. For other emerging markets, including India, meanwhile, an interesting phenomenon has emerged: A decoupling of investors’ expectations from what they predict for China. For the past year or more, Chinese stocks have been declining, while other emerging markets have been on an upward path. This is the first time in two decades that such a divergence has been seen. In China’s stumble lies an opportunity for other developing nations.
BUSINESS STANDARD
January 25, 2024
Sunroof power
Suryodaya Yojana must address the challenges
The Pradhan Mantri Suryodaya Yojana, announced by Prime Minister Narendra Modi on January 22, aims to install rooftop solar panels at 10 million homes. The details of the policy are yet to be announced, but the broad intent is clear: To provide the poor and middle-class households with a clean and cheaper source of electricity. On the face of it, rooftop solar power offers a meaningful way to achieve universal electrification targets, since it precludes the need for last-mile connectivity infrastructure of the conventional electricity-generating models. It is also a useful means of moving the needle on India’s international renewable energy commitments. India aims to have 50 per cent of its installed energy-generation capacity coming from renewable sources. But to achieve this, the new scheme must address several challenges that rooftop solar projects have faced since inception.
The Suryodaya Yojana is the fourth rooftop solar scheme to be announced since 2010, when the Jawaharlal Nehru National Solar Mission was launched. The second had come in 2015 to incentivise households and state power distribution companies (discoms) to install projects. In 2017, the government had announced the Solar Transfiguration of India (SRISTI) scheme, which sought to strengthen discoms’ role as the nodal agency for implementing rooftop solar schemes by offering financial incentives. The upshot of 13 years of policy support has been a grid-connected rooftop solar installed capacity of just 11 Gw. While 70,000 to 80,000 homes are powered by solar energy at present, the deadline to achieve the 40-Gw installed capacity target has been pushed from 2022 to 2026.
Lack of awareness, high cost and poor availability of financing options, and discoms’ reluctance to implement such projects are the three major hurdles in the wider adoption of rooftop solar systems. To be successful, therefore, the Suryodaya Yojana will have to work on convincing people of the benefits. But doing so would first require the demonstration of several successful projects. As for costs, the bill to set up a rooftop solar plant can range from Rs 2.2 lakh to Rs 3.5 lakh. And the few available financing options are accessible only to the rich or upper-middle class. Given that most Indian households fall within the low-consumption slab, rooftop solar will become feasible only with heavy subsidy support. Financing also plays a role in discoms’ reluctance, as most fear that a net metering system will lead to a loss of revenue from high-value consumers and worsen their already weak finances.
The Suryodaya Yojana is the first scheme to set a target for the number of households rather than the amount of electricity to be generated. The aggregate number seems ambitious, but it is quite modest when set against the potential. According to a report by the independent think-tank Council on Energy, Environment and Water, over 250 million households across India have the potential to deploy 637 Gw of solar energy capacity on rooftops. To be sure, the government has now gained the institutional experience of implementing household infrastructure programmes for toilets, drinking water and cooking gas. But bringing rooftop solar power to less affluent households might require addressing a new set of challenges.
FINANCIAL EXPRESS
January 25, 2024
Poor lessons
Through its dodgy accounting, Byju’s has queered the pitch for India’s start-ups
The start-up world’s once-upon-a-time poster boy finds its finances and reputations in tatters. The sharp reversal of Byju’s fortunes, evident in the much-delayed FY22 results announced on Tuesday, came as a shocker. But that’s not merely because of the whopping loss of `8,245 crore on an income of `5,300 crore. It is obvious that not everything at the edtech firm seems kosher. While there have been several mishaps over the years, the near-collapse of Byju’s business is bad news for the country’s start-up ecosystem. This is a sector that held out much promise—by one estimate, around one million jobs was created till 2023. Since the bulk of the capital has been invested by private equity funds and, to some extent, by private debt players, the burden of risk has not fallen on local banks or shadow banks. Tracxn estimates that the number of investors has increased from 2,450 in 2014 to 16,300 in 2021.
However, the severe funding winter of the past two years was an indication of investors’ reluctance to back businesses they believed were not robust enough. Raising money has been twice as hard and in some cases—PharmEasy, for instance—we have seen local white knights step in. The many red flags raised by Byju’s auditors will make investors even more cautious. One can live with a business going bust, or because the assumptions were optimistic, but the near total breakdown of corporate governance practices is unacceptable. The charges are damning as Byju’s has been accused of violating several rules in the Companies Act, apart from lending to associate companies without board approval.
It is truly unfortunate that a company, which enjoyed the support of marquee investors and was running a sound business model, should let things fall apart in this manner. At one point, Byju’s commanded a valuation of $22 billion, but it has abused the confidence that its investors placed in it. The problem is that it is not just Byju’s; there have been many other instances of companies mismanaging funds—GoMechanic for instance. But the Byju’s episode is the ugliest of them all and will put more investors on guard to the detriment of deserving entrepreneurs. The sad fact is instead of being an example of how to scale up, Byju’s has become an example of what start-ups ought not to do.
To be sure, the investors too should have kept a much closer watch on the company. For example, it is surprising they allowed the auditors to delay the finalisation of the accounts. The mess at the edtech firm was clearly not made in a day, it must have been unravelling for some time now. While cash burn in the initial stages of growth is par for the course, it is strange that investors allowed Byju’s to run up a financial liability of close to `17,700 crore by the end of FY22; up from just `3,116 crore in the previous year. They also needed to have cautioned the company on the 11 acquisitions that it made. Byju’s is reportedly looking to raise $100 million at a valuation of $2 billion to help it tide of the current crisis. But the comment s from the auditors to the effect that there is “material uncertainty” and doubts on its ability to continue as a “going concern”, could hurt its fund-raising plans. Whatever the outcome, there are lessons to be learnt by all stakeholders: Play it straight.
FINANCIAL EXPRESS
January 25, 2024
Boeing’s culture needs an overhaul, per its customers
Boeing Co. executives seem to be about the only ones who don’t think the company has a culture problem.
Some 171 of the company’s 737 Max 9 jets remain grounded while the Federal Aviation Administration assesses how an auxiliary exit door that was meant to be sealed shut blew open on an Alaska Airlines flight. While Boeing Chief Executive Officer Dave Calhoun has committed to full transparency so that such safety incidents “can never happen again” and has acknowledged the company’s “mistake” on the Max, he has framed the issue as a serious but isolated quality oversight rather than a symptom of deeper-rooted problems. The company’s customers have a different opinion: “I’m disappointed that the manufacturing challenges do keep happening at Boeing. This isn’t new, “‘United Airlines Holdings Inc. CEO Scott Kirby said Tuesday in an interview on CNBC. “My own assessment is that this goes all the way back to the McDonnell Douglas merger, and it started a change in culture.”
Boeing acquired St. Louis, Missouri-based McDonnell Douglas Corp. in 1997 for about $16.3 billion, having purchased the aerospace and defense business of the former Rockwell International Corp. the previous year. The acquisitions effectively created the plane manufacturing duopoly that has persisted to this day, with Airbus SE serving as Boeing’s only true competitor.
The company’s current challenges may have a more recent origin story: Boeing’s infamous “partnering for success” efficiency program, initially launched in 2012, squeezed its supply chain for cost cuts in the pursuit of profit margins, leaving parts-makers such as fuselage manufacturer Spirit AeroSystems Holdings Inc. strained and vulnerable. Partnering for success “was a naked exercise in extracting price from suppliers in exchange for pretty much nothing, “Vertical Research Partners analyst Rob Stallard said in an e-mail.”You can’t do that and not expect consequences.”
Whether there was one specific turning point or a slow burn of bad decisions, something in Boeing’s culture is clearly broken. There’s no other conclusion to draw when a company whose primary purpose is manufacturing and delivering high-quality aircraft can’t do either of those things consistently. Kirby credited Calhoun with making some “really positive changes” at Boeing even as he called for the company to move faster. The Boeing CEO has toughened up internal accountability safeguards and safety reporting protocols in the engineering ranks in the wake of the Max crisis. But it remains far from dear that Boeing has properly reckoned with the missteps of its past. For example, Calhoun elected in 2022 to once again move the Boeing headquarters even farther from Seattle, this time to an Arlington, Virginia, office complex that neither he nor Chief Financial Officer Brian West reportedly frequent.
Airline customers and supply-chain partners aren’t going to be the ones to ultimately restore Boeing’s central nervous system and manufacturing mindset. But when so many of them are willing to call for meaningful overhauls, Boeing needs to listen—or risk handing even more market share over to Airbus. Boeing has faced a chorus of critics in high places before: Michael O’Leary, CEO of budget carrier Ryanair Holdings Plc, in 2022 compared Boeing executives to “headless chickens, “‘while Domhnal Slattery, the former CEO of lessor Avolon Holdings Ltd., reportedly lamented that Boeing had “lost its way” and likely requires “fresh vision, maybe fresh leadership.”
“How many times can ‘won’t happen again’, happen again?” Bank of America Corp. analyst Ron Epstein wrote in a report this month. “Both Boeing and Spirit need a drastic cultural overhaul… For culture to move from corporate jargon to being embodied in the habits and minds of both workforces, we see it as necessary for Boeing and Spirit to drastically rethink the ways they have operated.”
Boeing may choose not to care what analysts say. It shouldn’t brush off customers.
Also See :
Today’s Editorials: What Every Newspaper Is Saying – Jan 24, 2024
All Newspaper editorials in one place – January 23, 2024
All Newspaper editorials in one place – January 22, 2024
All Newspaper editorials in one place – January 20, 2024
All Newspaper editorials in one place – January 19, 2024
All Newspaper editorials in one place – January 18, 2024
All Newspaper editorials in one place – January 17, 2024
All Newspaper editorials in one place – January 16, 2024
All Newspaper editorials in one place – January 15, 2024
All Newspaper editorials in one place – January 13, 2024
All Newspaper editorials in one place – January 12, 2024
All Newspaper editorials in one place – January 11, 2024