The TRAI on Tuesday came out openly in favour of the net neutrality by prohibiting any discrimination by a service provider purely on the basis of content. That literally rules out projects Facebook Free Basics and Airtel Zero where the intent was to incentivise certain categories of content. However, the offer of cheaper data services to all customers as a limited period offer has been kept out of this purview. That is likely to be positive for companies like Reliance Jio, which pioneered this move. Not surprisingly, the major telecom players and even the COAI were not in favour of net neutrality.
TCS is undertaking a major of revamp of its supply chain to become more efficient and fleet-footed. The focus will be largely on improving client experience by reducing the number of people involved and rely more on automation and artificial intelligence. In fact, TCS is also open to the idea of having its own revenues being cannibalized if it would eventually result in enhancing the customer experience. IT spending is reducing its focus on traditional outsourcing and the surplus is being reallocated to areas like digital, cloud, analytics, mobility and other social software. TCS is already a major player in digital.
As India gears up for its quarterly GDP numbers on November 30th, a recent poll by Reuters estimates that the Indian economy may finally be reversing the 5-quarter slide in GDP growth. In the June quarter, the GDP growth came in at a multi-year low of 5.7% as industries struggled as an outcome of demonetization and in preparation for GST. The September quarter will be the first full quarter wherein the GST impact will actually be felt. The Reuters poll estimates GDP growth for this quarter at 6.4%, which will still mean that India’s full year GDP growth could lag that of China.
One of the iconic names of the Indian venture capital and P/E industry, Renuka Ramnath, is of the firm view that it may early days still for venture funds to invest in stressed assets of banks, although she does see a huge opportunity a few years down the line. According to Ramnath, funds like Multiples are more interested in how the banks move from legislation to action; and that could be the big challenge. The stressed assets market has not matured to the extent that there is a clarity on how much the fund should keep and how much the fund should pay out. That will largely depend on the legislative discourse.
With oil and gas continuing to remain outside the ambit of GST, the energy minister Dharmendra Pradhan has suggested starting off by bringing gas under the purview of GST. According to Pradhan, natural gas is a cleaner fuel than coal and if coal can be brought under 5% GST there is no reason why gas cannot be brought under GST. By keeping natural gas out of the ambit of GST has increased the cost for power producers and hence there is a strident demand too bring natural gas under the 5% category. India has aggressive plans on gas and wants to increase the share of gas in the energy mix from 6.5% currently up to 15%. India is likely to consume 25% of the world’s overall energy resources compared to just 6% today. This shift can be actually catalysed by the introduction of GST on natural gas, according to Pradhan.
Mr. Pradeep Singh Kharola, who is seen as a turnaround artist, has been appointed as the chairman and MD of Air India. The big challenge for Kharola will be to see through the massive restructuring at Air India where the company will be sub-divided on asset packages and sold off. Air India sits on a debt pile of Rs.50,000 crore and has been largely running on public money. To begin with there has been a huge demand for the land parcels that Air India holds but that is where the real challenge at Air India arises. Kharola will have to see the sale of Air India through and ensure it does not become asset stripping.
