MAGAZINE PLUS 12 PAGES KOCHI l SUNDAY l SEPTEMBER 08, 2019 l `8.00 l PAGES 28 l LATE CITY EDITION COVER STORY ‘MY GOALS ARE NOT UNREALISTIC’ FINDING HIS ROOTS ONE STITCH AT A TIME Ahead of her upcoming release Dream Girl, actor Nushrat Bharucha talks about carving out her own path in Bollywood. She also comments on her personal life and her search for a dream boy Artist Abhishek Singh presents the heroic story of trees through his mural Vrikshadootam at a Gond exhibition on conservation From drought-ravaged regions of Kutch and poverty stricken Central India to a quaint Himalayan village, embroidery pioneers are breathing life into a lost art THE UNFIT INDIAN EXCLUSIVE VOICES Indians are unfit. Full stop. Now that the Fit India Movement has been kicked off by the prime minister, urgent action is needed at both government and private sector levels to make citizens healthy and productive T J S George Nambi Narayanan ■ Shankkar Aiyar ■ ■ CHENNAI ■ MADURAI ■ VIJAYAWADA ■ BENGALURU ■ KOCHI ■ HYDERABAD ■ VISAKHAPATNAM ■ COIMBATORE ■ KOZHIKODE ■ THIRUVANANTHAPURAM ■ BELAGAVI ■ BHUBANESWAR ■ SHIVAMOGGA ■ MANGALURU ■ TIRUPATI ■ TIRUCHY ■ TIRUNELVELI ■ SAMBALPUR ■ HUBBALLI ■ DHARMAPURI ■ KOTTAYAM ■ KANNUR ■ VILLUPURAM ■ KOLLAM ■ WARANGAL ■ TADEPALLIGUDEM ■ NAGAPATTINAM ■ THRISSUR ■ KALABURAGI Most Kashmiris support Article 370, says Doval We came very close but we need to cover more ground in the times to come. Learning from today will make us stronger and better. The nation is proud of our space programme and scientists. The best is yet to come. There are new frontiers to discover and new places to go — PM Narendra Modi MODI STEPS IN TO LIFT THE MOOD Prime minister spends time with ISRO scientists, revives their spirits, says this is not a small achievement and the nation is proud of them P E A R L M A R I A D ’ S O U Z A @ Bengaluru AFTER a lull through the early hours of Saturday at the ISRO Telemetry, Tracking and Command Network (ISTRAC), following lander Vikram going incommunicado with the ground station, the dawn brought some positivity into the Mission Operations Complex. Prime Minister Narendra Modi spent time with the crestfallen scientists, offering words of encouragement and reviving spirits. Modi hugged a teary K Sivan, ISRO chairman, comforting him. In fact, soon after communication was lost with Vikram, Modi had addressed a few senior scientists, and reassured Sivan of his support. “You are very courageous. I am with you. This is not a small achievement. The country is proud of you,” he had said, patting Sivan on the back. The PM’s interaction put the scientists in the control room at ease. Here, about 500 scientists had worked through many sleepless nights for the success of Chandrayaan, and waited with bated breath as the countdown for Vikram’s touchdown began. They cheered as he recounted the achievements of the organisation and said, “We are full of confidence that when it comes to our space programmes... we will rise to the occasion and scale newer In these difficult times, CNES and France stand with ISRO and India. Space is very difficult. India is a great space power. The journey continues Jean-Yves Le Gall, president of CNES, French space agency heights. To the scientists, I want to say India is with you.” There was thunderous applause as he also saluted the families of the scientists who have been quietly supporting them. The PM was earlier scheduled to meet the scientists and possibly address the media in case the mission was successful. However, after lander Vikram lost connectivity with the ground station during the final phases of softlanding, the mood in the control room grew tense and sombre. “Your eyes said a lot. I could read the sadness on your faces,” said Modi, trying to boost the morale of the scientists. “I have lived those moments with you when the communication went out and all were shaken... Even after that, some showed signs of optimism because the efforts that went into it. That is because of the utmost care that each one has put into the mission,” he added. He urged the scientists to cover more ground in future, and patted their backs for the MOM mission, launch of 100 satellites simultaneously, and considered Chandrayaan-2 just a blip, compared to ISRO’s success stories. As of Saturday officials are yet , to declare the status of the lander Vikram and rover Pragyan, which is located within Vikram. P6,8,9 Chandrayaan-2 was a highly complex mission, which represented a significant technological leap compared to the previous missions of ISRO to explore the unexplored south pole of the moon — Indian Space Research Organisation (ISRO) Space is hard. We commend ISRO’s attempt to land Chandrayaan-2 on the moon’s south pole. You have inspired us with your journey and look forward to future opportunities to explore our solar system together — America’s NASA We are proud of India and its scientists today. Knowing Prime Minister Narendra Modi, I have no doubt he and his ISRO team will make it happen one day Lotay Tshering, Bhutan PM E X P R E S S N E W S S E R V I C E @ New Delhi PM Narendra Modi consoles ISRO Chairman K Sivan as the latter got emotional WILL FUTURE MISSIONS BE HIT? Experts say that ISRO’s manned Gaganyaan mission may get a bit affected along with plans to land on other planetary bodies. But orbiter missions such as Aditya (to sun) won’t be hit ‘MISSION NOT A FAILURE’ We have achieved everything other than the soft landing, former senior ISRO scientist Nambi Narayanan told TNIE. “There is no need to term the Chandrayaan 2 mission a failure. The orbiter is still there,” Narayanan added | P10 ORBITER LIFE 7 YRS, NOT 1, SAYS ISRO “The precise launch & mission management has ensured a long life of almost 7 years instead of the planned 1 year” for the orbiter, ISRO has said. Many new technologies such as Vikram’s variable thrust propulsion were successful, its statement added TESTS MISSED? Why Vikram has not called back S V K R I S H N A C H A I TA N YA @ Chennai VIKRAM, the Chandrayaan-2 mission lander, tumbled and crashed on the lunar surface, which resulted in the snapping of communication links with the orbiter, confirmed ISRO sources to TNIE even as the space agency said through Saturday that it was analysing the data. Sources said Vikram’s antennas have a beam width of 180°, which means they can stay connected with the orbiter only if the antennas’ angular manoeuvre is within 180°. “If the lander starts to tumble and when antennas face the lunar surface, the communication link is lost. It’s like losing your DTH connection when the antenna on your terrace is pushed by a bird or the wind. Here the situation is far more grave as Vikram was tumbling. The rotation was so high that Vikram along with Pragyan rover crashed,” said an ISRO scientist, who was inside the Mission Control Room, on condition of anonymity . To a query on why Vikram tumbled, sources said there could be multiple reasons, including design failure. They even said the lander was not put through elaborate tests. “The tests were conducted using a crane manually, instead of testing it in a free-fall condition with a balloon in autonomous mode. Only the last 60 metres descent was tested. A spare lander should have been used to drop it from an aircraft and see if all the parameters were met. This would have given a more realistic picture,” sources said. Soft landing was always a challenge. However, the 1,471-kg Vikram completed its rough braking phase as envisaged bringing smiles, but little after the commencement of the fine braking phase and just before the hover phase was set to begin, Vikram was seen drifting away from the designated descent trajectory on the telemetry screen. EASING of restrictions from all parts of Jammu & Kashmir will depend on how Pakistan behaves as they are hell bent on creating trouble in J&K, National Security Advisor Ajit Doval said on Saturday Doval as. serted that restrictions in Kashmir are aimed at preventing Pakistan from creating more mischief through proxies and terrorists. “We will not allow people to become victims of Pakistan’s machinations and its bullets sent across the border. We will do everything in power to protect the people,” he said. He noted restrictions have been eased progressively and only 10 of the , 199 police districts in Kashmir, Jammu and Laddakh still have prohibitory orders. Land-line phones have ‘TERRORISTS been restored fully in all three areas. ON THE Doval justified the restrictions im- PROWL’ posed on mobile phone and Internet Doval said some services, saying they can easily be 230 terrorists used by Pakistan and terrorists for were recorded in subversive activities, but the denial PoK, some of of these services should not prevent whom have people from going about their lives. sneaked across “Even before Internet came into the border to our lives, people were going about create trouble, their lives doing business,” he said, which includes while acknowledging that people are intimidating unhappy with these restrictions. traders and The NSA said that he is “fully con- local populace vinced” that a majority of Kashmiris to prevent them support the abrogation of Article 370 from going as it was not a special status but a spe- about their cial discrimination. “With its abroga- business tion we have brought Kashmiris on par with Indians,” Doval said during an interaction with journalists. On the alleged human rights abuses by the Army, Doval said only the local police and paramilitary forces are deployed to maintain law and order. So, there is no question of atrocities by the Army he clarified. , India slams Pak over its refusal to allow Kovind to use airspace E X P R E S S N E W S S E R V I C E @ New Delhi AFTER Pakistan on Saturday refused India’s request to allow President Ram Nath Kovind to use its airspace, New Delhi criticised Islamabad and said it should recognise the futility of such unilateral actions. The President is set to embark on a visit to Iceland, Switzerland and Slovenia from Monday. “We regret the decision of the government of Pakistan to deny overflight clearance for the VVIP special flight which is otherwise granted routinely by any normal country MEA ,” spokesperson Raveesh Kumar said. Some Pakistani ministers have asked their government to stop flights from India from using their airspace after the Article 370 decision, but there is no blanket ban till now. EXPRESS READ ALMANAC TODAY Bypoll: ‘Pineapple’ symbol for UDF candidate PSC exam fraud: 2 accused surrender before court Two nurses suspended for unethical behaviour L7 cr sanctioned for repair of roads in Kochi Kottayam: UDF candidate Jose Tom Pulikkunnel will contest the byelection to the Pala assembly segment on ‘pineapple’ symbol. Jose expressed satisfaction over the Election Commission’s decision to award him the ‘pineapple’ symbol, stating it is the symbol of farmers | P6 T’Puram: P P Pranav and Safeer, two accused in the PSC exam fraud, surrendered before the Chief Judicial Magistrate court here on Saturday. They were remanded to judicial custody till September 20. The Crime Branch has sought the court’s nod to subject all the accused to polygraph test | P4 T’Puram: Two male nurses of the Thiruvananthapuram Government Medical College, who were suspected of defrauding patients for some time, were finally caught red-handed. The nurses, R Shameer and Bipin S Lal, were on Saturday suspended pending inquiry for cheating patients | P6 Kochi: Following the inspection of Kundannoor service road renovation and several other Kochi roads which are in a dilapidated condition, Public Works Minister G Sudhakaran on Saturday announced D7 crore for the renovation of roads in the city and its suburbs | P3 Sunday: 08-09-2019 Year: Hemalambin Malayalam Era: 1195 Month: Chingam 23 Bhadrapada: 9 Nakshathra (Star): Moolam Rahu Kalam: 4.30 pm to 6.00 pm Yamakantakam: Noon to 1.30 pm Gulikakalam: 3.00 pm to 4.30 pm 02 SUNDAY THRISSUR l MAX Sunrise 06:15 Sunset 18:30 FORECAST Showers, mostly cloudy Moonrise 14:23 Moonset 01:22 l BEYOND BUSINESS- THE GROUND REALITY Kerala economy’s striking feature is the relatively low size of its manufacturing sector. Manufacturing sector contributes only 7.5 per cent to Kerala’s GSDP, but employs about 14 per cent of the state’s total workforce in 2011-12. Manufacturing sector’s shares in GDP and employment were 15.8 per cent and 13.0 per cent respectively at the national level. This points to a relative lopsidedness in the structure of Kerala’s manufacturing sector. WORKING MASS AND SECTORS 18L Workforce 3.8L workers in coir and allied sectors 1.9% THE KERALA’S SHARE IN TOTAL INVESTMENT BY CENTRAL GOVERNMENT PUBLIC SECTOR ENTERPRISES DURING 2013-14 THE GROWING JOB STATISTICS Out of a total manufacturing workforce of 18 lakh (in 2011-12) in Kerala, only 3.8 lakh workers (in 2012-13) were employed in the factory sector. The rest was in unorganised/unregistered sector. GRAVEYARD OF DEAD COMPANIES A list of high-profile companies that have shutdown their Kerala factories included Gwalior Rayons, Mavoor (Grasim Industries), Toshiba Anand, Premier Cables and Madura Coats. 2.5L UNEMPLOYMENT workers in cashew processing sector Though Kerala scores high on human-development indicators such as literacy and maternal health, it has not done well as job-creators. Unemployment in the state came in at 12.5%, while in Tripura and Himachal Pradesh it stood at 19.7 % and 10.6% respectively. The failure to create a conducive business environment is cited for this. In contrast, dynamic states which are actively improving their ease of doing business including Chhattisgarh (1.9%), Karnataka (1.5%) and Gujarat (0.9%) recorded the lowest unemployment rates. LABOUR’S LOVE LOST AMID BIZ BUZZ R A J E S H A B R A H A M @Kochi The CITU-sponsored strike in Muthoot Finance, a leading gold finance company listed on both the Bombay Stock Exchange and NIFTY, has come as a bolt from the blue to the state striving hard to improve its business climate and move up the ‘Ease of Doing Business’ rankings. And the over a fortnight-long open spat, involving the company management and the labour union, became a talking point nationwide after Muthoot vowed to close down its 300-plus branches in Kerala. Now, are trade unions which held sway during the 1970s and 80s back to their old ways of haunting businesses? Or is this just the odd one? Express weighs in. If the management feels that our demands are unfair, and the employees do not support the demands, then let them conduct a referendum through a secret ballot K Chandran Pillai, Trade union leader and CPM’s former Rajya Sabha MP A striking past Last year, a strike by workers belonging to CITU-backed union at Synthite Industries’ main factory at Kadayiruppu near Kolenchery in Ernakulam, forced the company to shutdown operations for several days. BIG BANK THEORY MIN 250C 300C WEATHER WATCH 08 09 2019 In October 2016, a car carrier ship MV Dresden decided not to call at Cochin Port due to labour disputes. Following the strike, the Muthoot has threatened that it would close down over 300 branches if these branches are not allowed to function. K ERALA has a long history of militant trade unionism tarnishing its image as an investment destination of choice for companies. The 1970s and 80s saw a large number of companies, mostly in the manufacturing sector, exiting Kerala due to a combination of factors, including hostile trade unions, frequent strikes and environment-related issues. Some of the high-profile companies that have shutdown Kerala factories included Gwalior Rayons, Mavoor (Grasim Industries), Toshiba Anand, Premier Cables and Madura Coats. The once-flourishing industrial belts in Eloor near Kochi and Koratty near Thrissur now look more like a graveyard of dead companies. Over the last couple of decades, however, Kerala has been striving to get rid off the bad image and with reasonable success too. It has attracted several big companies, especially in the IT sector, to set up units in the state. Several large home-grown companies such as Manappuram Finance, Muthoot Finance, Geojit Financial Services, V-Guard and Wonderla have flourished and were able to raise funds from the capital markets by listing its shares on the stock markets. STRIKES GETTING TOO FREQUENT? Over the last couple of weeks, a strike by CPM’s trade union wing CITU at leading gold loan company Muthoot Finance seems like spiralling out of control, spoiling all the efforts by the government to move up the ‘ease of doing business’ rankings. Following the strike, the Kochi-headquartered company has threatened that it would close down over 300 branches if these branches are not allowed to function. Last year, a strike by workers belonging to CITU-backed union at Synthite Industries’ main factory at Kadayiruppu near Kolenchery in Ernakulam, forced the company to shutdown operations for several days. In October 2016, a car carrier ship MV Dresden decided not to call at Cochin Port due to labour disputes. Are trade unions taking back Kerala to the old era? Is militant trade unionism on the ascent in Kerala? Navas Meeran, past Chairman, CII (Southern Region) & Kerala and managing director of Eastern Condiments Pvt Ltd, said the incidents at Muthoot Finance should not be escalated as it would affect the investments coming to Kerala. “The companies should have the freedom to operate in Kerala. If employees want to work, then no one has the right to physically stop from joining for duty,” he said. According to him, when an overwhelming majority of the employees do not want to join a trade union, the companies may find it difficult to recog- nise those unions. “At least 1/3rd of employees should be part of a union to recognise it. Natural justice demands it,” felt Navas. While the Muthoot Finance Employees’ Union (MFEU) under the banner of CITU-backed Non-Banking and Private Finance Employees Association wants recognition, besides wage hikes, the company management has been sticking to the position that it will not approve a trade union, which doesn’t command “even 99 per cent” of employees’ support. C P John, general secretary of the Communist Marxist Party (CMP), said no management can deny the formation of a trade union in their companies. Companies, which have large presence across the country, like Muthoot Finance, there has to be an agreement to recognise unions if they have at least 10 per cent of the employees or 1,000 employees, whichever is lower. “Finally, it’s the government’s responsibility to resolve the dispute between the union and the company’s management. Just because CITU and government are from the same party does not mean that it is the trade union’s responsibility to settle the issue with the management,” he said. In both Muthoot Finance and Synthite Industries’ cases, the dispute arose when the managements chose not to recognise the CITU-affiliated unions. Trade union leader and CPM’s former Rajya Sabha MP K Chandran Pillai said it was “wrong” on the part of the Muthoot Finance’s management to say that it will not recognise the trade union. “If the management feels that our demands are unfair, and the employees do not support the demands, then let them conduct a referendum through a secret ballot,” Pillai challenged. ILLUS: EXPRESS ‘KERALA IS EMPLOYEE-FRIENDLY DUE TO LABOUR RIGHT AWARENESS’ A head of a company, which has all-India presence, echoed similar view, and said Kerala enjoys some of the best environment for workers, including highest wages -- `700/day for an unskilled worker and `1,000/day -- due to the strikes for labour rights in the 1970s and 1980s. “Now Kerala society demands certain work environment, which the companies have to provide for their employees. An air-conditioned facility for offices or other benefits are a given. This may not be the case in other states,” he said, adding that the trade unions should also be reasonable in their demands. “There is now a perception that trade unions are unnecessarily involving themselves in a company’s affairs. Due to this perception, the trade unions now are not getting the sympathy from society at large,” he said. He pointed out that trade unions are very active and strong in developed countries such as France and Germany . “The problem comes when the trade unions become unreasonable in their demands. The managements should also be flexible to accept the reality and sit down with the union representatives to resolve the workers’ issues,” he said. MUTHOOT STRIKE SHOULD NOT SPILL INTO IT SECTOR The Information Technology (IT) sector in Kerala has been insulated from the trade unions, though they have made several attempts to infiltrate into the organisation. The ‘Mutual trust, cooperation can prevent lose-lose outcomes’ ficult for normal business to function by preventing non-striking workers HE imbroglio at Muthoot Fi- from reporting for work and inflictnance has reignited concerns ing major financial losses on, what over Kerala’s business climate. many claim is, an otherwise generHowever, the hard positions taken by ous and well paying employer. the management and the unUltimately these are hard ion are not surprising as in bargaining tactics and the final any negotiation it is quite outcome will depend on how expected that both parties much each party has to gain or will show aggression even lose from their actions. The parwhen they end up suffering ty that has more to lose and less short-term losses. The Mutto gain has the weaker bargain(The writer is hoot management is being ing position (for instance if professor of blamed for insensitive han- economics at Muthoot really does not want to dling of the union’s concerns, IIM-Kozhikode) leave Kerala) but they typically closing down branches withconceal their true positions as in out doing enough to find a solution a bluffing game like Poker. It is usuand even threatening to quit the ally the case that both parties end up state. On the other hand, the union is losing somewhat because of the agfacing criticism for apparently strik- gressive posturing but one of them ing work without the support of ma- may gain certain concessions that jority of workers and making it dif- will become useful in the future. The RUDRA SENSARMA result arising out of the impasse also depends on the skills of the negotiators or the role played by an arbitrator such as the Labour Commissioner. nopoly of the dominant union. Companies should understand that dealing with well functioning unions is better than handling an unorganised workforce, particularly during periods of crisis or change. A union can try to win the management’s trust by showing greater understanding of the latter’s genuine concerns and ordinarily playing a collaborative role for growth of the business. Mutual trust and cooperation can prevent lose-lose outcomes in a bargaining game. The government and the political class can also help in this regard by calming things down rather than take unilateral positions or stay aloof just for short-term gains. As is widely acknowledged, such incidents do little to help Kerala’s unflattering image as a poor business destination. STRIKES MAY HIT STATE’S ‘EASE OF DOING BUSINESS’ RANKING Technopark in Thiruvananthapuram and the Infopark in Kochi have been able to aterala’s ranking in the ‘Ease tract some of the big names in of doing business’ index is as the IT industry including Orlow as 21 in 2018. When the acle Corp, Tata Consultancy LDF Government announced new Services, Wipro, Tech Mahinindustrial policy last year, the obdra and UST Global employjective was to climb up the ranking ing over 70,000 people. to the top 10 this year. The Kerala Last year when Japanese chapter of The IndUS Entrepreauto-maker Nissan Motor Co, neurs (TiE) said if the strikes conLtd, opened its first global retinue to disrupt the functioning of search hub to develop futurisestablishments, it would hamtic driverless cars and per the state’s image in terms electric vehicles in Kerala’s of Ease of Doing Business T hir uvananranking in and will further degenerthapuram, it created the ‘Ease of doing ate the employment scea buzz across the business’ index is as nario in the state. country . low as 21 in 2018. Bid George Alexander MutN ava s M e e r a n for upgrading goes hoot, who is a Charter said the CITU-led in vain Member of TiE Kerala and strike in Muthoot Finance, which is a listed executive director of Muthoot Group, said there had been entity with branches no trade union activity in Muthoot. across the country, may send “CITU has been trying to create one the wrong signals, hampering for the past three years. Despite future investments, especially calling for 12 strikes totalling 52 in the IT sector -- a big job provider for the state’s aspiring working days over the past three young generation. “These years, they have been unsuccessful days even a small issue gets in creating it,” he said. Chandran blown up through social mePillai of CPM, however, said the dia, which may lead to a situCITU does not believe in physically ation where big IT companies blocking employees who turn up for may choose to stay away from work. “Ever since the LDF Government came to power, the investment Kerala. All the good work climate has improved in a signifidone so far may come to a cant way Nobody can deny this,” he . nought if the strike at Muthsaid. oot Finance drags on,” he said. According to him, cities like Coimbatore with good connectivity and other advanCITU has been trying to create a tages, are competing with union for the past three years. Kerala to attract investments. Despite calling for 12 strikes totalling “We have to be careful that in52 working days over the past three vestments that we could atyears, they have been unsuccessful tract do not go to Coimbatore, in creating it -George Alexander which is fast developing as an Muthoot, exec director of Muthoot Group IT destination,” said Navas. K Are trade unions which held sway during the 1970s and 80s back to their old ways of haunting businesses in Kerala? Or strike at Muthoot Finance is just the odd one? Express weighs in. | P2 Trivandrum Golf Club State wants Tvm Golf Club back from SAI A R U N L A K S H M A N @ T’Puram UNHAPPY over the management of the Trivandrum Golf Club by the Sports Authority of India (SAI), the state government has approached the Centre for taking over the iconic establishment. The 9-hole golf club, spread across 25.38 acres, was built by the late Maharaja Sree Moolam Tirunal of the erstwhile kingdom of Travancore in 1850. The club was leased out to SAI in 2017 with infrastructure for transforming it into a national academy for the promotion of golfbased tourism. SAI had submitted a detailed project report, which was approved by the Union Ministry of Tourism. Also, an amount of `24.69 crore was sanctioned in this regard in 2017. The Ministry had also allotted 50 per cent of the fund. Now, Chief Secretary of Kerala Tom Jose has shot off a letter to Radhey Shyam Julaniya, Secretary, Ministry of Sports and Youth Affairs, stating that Trivandrum Golf Club is not functioning properly and that the state government wants the lease agreement to be cancelled. In the letter, the Chief Secretary said the SAI representative in Thiruvananthapuram - principal of Lakshmibai National College for Physical Education (LNCPE) G Kishore - was not taking active interest in developing the golf tourism circuit. Jose said the LNCPE principal, even after several representations from the Golf Club members, was reluctant to spend the money lying idle. “I stand by the letter which I have written to the Secretary, Ministry of Sports and Youth affairs. The state gover nment wants the lease agreement cancelled and the amount of `24.69 crore allotted by the Ministry of Tourism to be transferred to Secretary Tourism/Secretary Sports, Government of Kerala, for promotion of golf tourism in the state,” Jose told Ex● More on P6 press. Deferred Payment Scheme for industrial land a game changer Why public sector banks will continue to bleed the exchequer even after mega merger T S U N I T H A N AT T I @ Hyderabad SOON after announcing the historic bank mergers last month, the government handed a `60,000 cr bill to taxpayers. That’s the sum state-run lenders (and IDBI Bank) are charging us this quarter to make up for their collective inability to shore up equity capital. This fiscal act is boringly called bank recapitalisation. Ideally the hodgepodge of 10 , public sector banks (PSBs) into four should reduce the burden of socialising future losses, but Finance Minister Nir mala Sitharaman promised to rescue lenders anytime with more free money. For taxpayers, there’s no such luck as similar such bills need to picked up later. By merging the banks, the government wants us to believe that the souped-up banks will lead us to the $5-trillion economy, but here’s the thing: the move, experts warn, is wrong at every turn. “Asset quality and profitability will remain broadly unchanged after consolidation. PSBs already score poorly on these two factors, and there’s no reason to assume that the merged entities will make significant improvements in these metrics,” said Srikanth Vadlamani, Vice President and Senior Credit Of ficer at Moody’s. Vikas Jain, Senior Research Analyst at Reliance Securities, believes it’ll take long time for better economics of scale to materialise and that integration won’t be without initial profitability pain. That stands true for multiple reasons. For one, compulsive mergers are guaranteed disappointments. We’ve Oriental Bank of Commerce-Global Trust Bank and Punjab National Bank-New Bank of India alliances as living proof. Two, integration takes time, during which period credit growth declines. The merger of SBI associate banks with the parent bank LOSE-LOSE POINT OF NO RETURN Are there steps which businesses, unions and the government can take to prevent things from reaching a lose-lose point of no return? Big companies like Muthoot should consider using their Corporate Social Responsibility(CSR) Fund to spend on the community and create a sympathetic impression in the minds of employees’ families and the local people so that they can gain the union’s trust and also make it hard for the union to show aggression. The company can also encourage other sections of its workforce to start parallel unions who can weaken the mo- and the Bank of Baroda-VijayaDena Bank merger are recent test cases. “Consolidation would limit downsides to stressed PSB balance sheets and not lead to any meaningful upside for credit growth in near-term. For any long-ter m uptick in credit growth, we will need to wait for emerging synergies on costs, processes, geographical presence and customers. As of now, we believe synergies could take 3-5 years to realise against 2-3 years for private players, typically said Avneesh Sukh,” E X P R E S S N E W S S E R V I C E @T’Puram THE Muthoot exit fiasco notwithstanding, the state government is going steadfast in its resolve to showcase the state as an investment-friendly destination. The government believes an innovative ‘Deferred Payment Scheme’ for industrial land, to be rolled out soon, will prove a game changer on the state’s industrial landscape. “Under this, the entrepreneur will be able to get land earmarked for industrial use at 50 per cent of the cost. The remaining 50 per cent can be paid in instalments over a five-year period without in- terest. The interest will be borne by the state government,” K Ellangovan, Industries Secretary, told ‘Express’ According to Ellangovan, land cost is widely seen as a major impediment to setting up business ventures in the state. It is precisely this aspect which the state aims to address through the scheme in which the Kerala State Industrial Development Corporation (KSIDC) which provides the land will be reimbursed by the state government. “We are planning to unveil the scheme over the next six months,” he said. ija of BNP Paribas. Three, committee after committee suggested two things: Closure of weaker banks, and privatisation. If the Narasimhan committee in 1998 proposed three to four large banks with minions, besides suggesting shutting down of weaklings instead of merging them with strong banks, the P J Nayak committee in 2014 recommended outright privatisation. Such a move eliminates public sector banks’ addiction to government handouts every time they mess up. This dependency on taxpayer funds, in everyday personal finance jargon, is like you blowing up earnings on fancy cars, and expensive Micheline-star lunches only to approach your obliging father to cover your bills out of the family piggy bank. Because PSBs have an implicit sovereign guarantee ensuring safety of deposits, perpetual capital infusion is stripping our coffers bare. Since 2015, we have pumped `3 lakh crore in PSBs, which gave dismal returns. Will mergers end the constant flow of funds to banks? There are no easy answers. CONTINUED ON: P13
Express Publications (Madurai) Limited publishes the prestigious English language newspaper The New Indian Express from 21 centres in Tamil Nadu, Karnataka, Andhra Pradesh, Kerala and Orissa.
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