<ul><li>In Q3, Signify was 64% carbon neutral and 79% of its revenue came from sustainable products. It will be executing the same programs to reduce its carbon footprint in India to drive sustainable revenues. </li><li>On the other hand, the brand also aims to become an intelligent software company that offers lighting solutions designed for the IoT world. It invests 4.5% of its global budget on R&amp;D and its latest bet is LiFi. </li><li>Signify currently spends only 5% on digital and 55% of its overall marketing spends on TV, here is why...</li></ul>Philips Lighting, for more than a century, has remained synonymous to bulbs across the globe. Being one of the first in its category, Philips started its operations in India back in 1931 and now, after renewing its brand name to Signify Innovations, aims to become an intelligent software company that offers lighting solutions designed for the IoT world. ‘Lighting can now make every home smarter, cities safer and offices more energy efficient’ and Signify aims to drive this change across the world. Currently, the Indian lighting industry is worth Rs 15,000 crore with LED lighting constituting almost 80% of this. Last year, Signify invested 4.5% of its global sales on Research and Development (R&amp;D) and its latest innovative bet is on Light Fidelity (LiFi), a technology in which high quality LED lighting provides a stable and fast broadband Internet connection through light waves. The company has installed 7 LiFi pilot stations in India across different segments and on the other hand, it also aiming to gain 80% of its revenues from sustainable products. While the company is focusing more on innovation and technology, it continues to spend 55% of its marketing monnies on television and only 5% goes to digital. Sumit Padmakar Joshi, Vice Chairman and Managing Director, <keyword id="7600657" type="UNKNOWN" weightage="100" keywordseo="Signify-Innovations-India">Signify Innovations India</keyword>, has led the company through this transformation. He talks to us about the vision for Signify, its plan to recover from the ‘slightly muted’ quarter, making the company sustainable, and much more. Excerpts: Q. What have some of the key highlights of your journey with the brand been? One of the key highlights of my journey here has been the transformation of the company from a bulb manufacturer to a software company, now offering lighting solutions designed for the IoT world. Our new company name – Signify reflects our company’s purpose – the meaning of light. Light is now a language and can be used to transmit data via LiFi or communicate with other devices via the IoT. Moving away from a pure hardware manufacturer, we have transformed into a company that offers not just lighting but also important business insights and data that can help our customers become smarter and more productive. Leading the company through this phase has been an exciting journey so far. Q. Why did the brand change its name from Philips to Signify, considering Philips is a household name in India? Founded as Philips in Eindhoven, the Netherlands, we’ve led the lighting industry with innovations that serve professional and consumer markets for over 127 years. In 2016, we spun off from Philips, becoming a separate company, listed on Amsterdam’s Euronext Stock Exchange. The renaming of our company was the next logical step in our transformation journey since we became a standalone company in 2016. We changed our company name in line with contractual requirements of the Company Name License agreement with Royal Philips, which requires that we change our company name after Royal Philips, who no longer has a controlling interest. Signify will continue to use the Philips brand for its products, under the existing licensing agreement with Royal Philips. The choice of our new company name originates from the way light has become an intelligent language, which connects and conveys meaning. It’s a clear expression of our strategic vision and purpose to unlock the extraordinary potential of light for brighter lives and a better world. We believe that our new name will further shape our company’s profile as both the world leader in lighting and the lighting company for the Internet of Things. Q. We have seen advanced technology and innovations at Signify now, where did Signify source that new technology? We invest heavily in R&amp;D to stay at the forefront of technological developments. In 2018, we invested 4.5% of our global sales in R&amp;D. We spot an opportunity which nobody focuses on and grow in that segment by coming up with futuristic solutions. As a leader in lighting, we innovate, design, build, and deliver world-class lighting systems embedded with intelligence and connected through software to deliver capability to manage, monitor and control lighting assets, enable data harvesting and analysis for improvement of lighting operation and business performance. We are positioning ourselves as the lighting company for the Internet of Things. We recently announced the launch of our Interact IoT platform for connected lighting, which will enable our professional customers to unlock the full potential of their connected lighting assets. The platform delivers new insights to help customers drive operational efficiencies and take more effective decisions. It also supports our company’s strategy to deliver new data-enabled services as value expands from lighting products and systems to services. Q. Talking about innovations, are you seeing LiFi changing the game in India? How has the response been so far? Light Fidelity (LiFi) is a technology in which high quality LED lighting provides a stable and fast broadband Internet connection through light waves. Unlike other forms of wireless communications (WiFi, 4G/5G, Bluetooth, etc.) that use radio waves, LiFi uses the broader spectrum of light waves to transmit and receive data wirelessly. LiFi’s bandwidth is more than 1,000 times the size of the radio spectrum. LiFi works in such a way that each luminaire is equipped with a built-in modem that modulates light at speeds imperceptible to the human eye. The light is detected by a USB access key/dongle plugged into the socket of a laptop or tablet (in the future such technology will be inbuilt into laptops, mobile phones, and devices). The USB access key returns data to the luminaire through an infrared link. While radio frequencies are becoming congested, with more devices trying to connect and overloading networks, the visible light spectrum is an untapped resource with a large bandwidth suitable for stable simultaneous connection for a vast array of Internet of Things devices. With our efforts and constant drive for LiFi in the market, we already have 7 pilot installations in India across different segments, including banks, Information technology, Co-Working spaces, B2G, Infrastructure amongst others. We were also specially invited by the Prime Minister’s Office (PMO) and Government of Gujarat to showcase LiFi as a Futuristic Technology at the Vibrant Gujarat summit which received a footfall of 25,000 delegates, including Central and State Ministers, several corporate houses and government officials. Q. Globally, Signify has been talking about becoming Carbon-neutral. How successful have you been so far? What exactly are you doing in India to become Carbon-neutral? We are taking a leading role to bring better light to the world and to help provide a more sustainable future. We do this by delivering light which is energy efficient, saves resources, and improves lives. At Signify, we also ‘walk the talk’ and commit to becoming carbon neutral by 2020. We are already carbon neutral in 9 markets as of 2019. We have made some bold promises that we’ll deliver on by 2020. 80% of our revenues will be sustainable and we’ll also deliver 2 billion LED lamps and luminaires to the world. As of Q3, 2019, we are 64% carbon neutral and already 79% of our revenues come from sustainable products. 89% of our purchased electricity comes from renewable sources and we are recycling 82% of our manufacturing waste. We are executing the same programs to reduce our carbon footprint in India as well, including driving sustainable revenues, zero waste to landfill, striving for a zero-injury workplace, and building a sustainable supply chain. Q. With your brand repositioning and new brand endorsers, we have seen your focus shifting to smart lighting. What part of revenue do you make from that category now? Which category brings the lion’s share home? In India, smart lighting for homes is a Rs 100 crores+ category and is expected to grow by 45% over the next 3 years as many more houses adopt connected lighting in a major way. We are by far the market leader in this segment as well, as we virtually created this category when we launched our Philips Hue range in India 4 years back. While smart lighting constitutes a very small share of our overall business right now, it has a lot of potential for growth in the future owing to increasing urbanization and internet penetration. Ultimately our focus is on new homes and renovations, where we see a lot of consumers trying out connected lighting for the first time. The biggest categories for our company are LED lighting in both professional and consumer applications. We recently introduced a range of new products for the consumer segment, including our Philips T Beamer, Philips CeilingSecure and Philips EyePro Bulb. For our professional users, we recently introduced lighting solutions such as Interact and LiFi. Q. How has the year been, in terms of business? We witnessed high single digit growth in the first half of this calendar year, and expect growth to be ‘slightly muted’ during the remaining half of this year due to overall economic slowdown in the country. In Q2 we saw some projects getting delayed due to elections in the country, however, we were expecting a recovery but it looks like it is getting slightly delayed. It will take another three-to-six months for things to start picking up in the Indian lighting sector. The current economic slowdown has impacted industries across sectors in India and we are no different. Q. People in rural areas are still not ready to accept LEDs in their lives because of high costs. What are you doing to bring down the cost of your products? Government electrification schemes like Suabhagya are helping even remote towns and villages to have access to electricity. Moreover, with rising rural incomes and penetration of media, aspirations and awareness about new products amongst rural households has increased over the past few years. While rural households still use conventional lighting in a big way, we’re witnessing a steady and growing demand for LEDs from these areas as well, owing to its reduced prices and enhanced awareness about its advantages, such as high durability and lower power consumption. We have launched an LED range of products, Philips Ujjwal, to cater to this audience, offering a better price value suited to their budget. The technical specifications of these products have been specially designed keeping in mind rural lighting requirements and preferences. Q. Can you walk us through your larger marketing strategy for the brand? India is amongst the top 5 markets for Signify globally and we invest a lot in marketing to support our brand and activities. Our spends on TV Advertising in India are by far the highest across all Signify markets, keeping in mind that India has traditionally been a TV-advertising-focused market. 55% of our overall marketing spends in India are towards TV advertising to reach out to our target audience. Our TV advertising in India is biased towards promoting our new product categories like TBulb, Ceiling Secure. In the last two years, we have launched 2 major TV ad campaigns for these two products. 5% of our overall marketing spends are on digital marketing in India, whereas the lighting category’s digital spends in India stand at 3-4%. Majority of our digital marketing spends are towards SEM and lead generation, highlighting our IoT products like Interact, LiFi and Philips Hue. 26% of our overall marketing spends in India are directed towards creating brand awareness and preference. Q. What areas will you focus on going ahead, to amplify growth? The overall market size of the Indian lighting industry is Rs 15,000 crore with LED lighting constituting almost 80% of this. The LED portion of the industry is expected to grow in high single digits. The conventional lighting market is, however, expected to decline in double digits, owing to faster conversion towards LED. It is not possible for companies to deliver on their top-line as well as bottom-line costs without category-first innovations. As a result, we don’t see many companies in India being able to manage that equation successfully. We’ve managed to increase our profitability over the last 3-4 years, thanks to new innovative products like Philips T Beamer, Philips EYE PRO and Philips Smart WiFi LED bulb. We will also focus on expanding our presence in the rural channel with our customized offerings. Our focus is on innovation and expanding the premium segment where nobody focuses on right now. We believe that companies that don’t innovate, that are entering the lighting industry from other backgrounds are going to have a difficult time surviving in this market. However, if the government continues to allow cheap and sub-standard products to be sold in the market, we foresee that it will become a big roadblock for the industry, which can further impact the price point for the whole industry. We are also investing significantly to grow our smart home lighting business in both offline and online channels, through our exclusive Philips Smart Light Hubs and with our presence on all major e-commerce portals. By the end of the year, we expect to double our retail presence for smart lighting in the country with new Philips Smart Light Hubs opening across various cities. In the professional lighting space, we will strive to grow our Interact connected lighting installations in offices, public buildings, retail stores, hotels and landmarks. Signify has already installed 53 million connected light points worldwide and plans for every new LED product it produces to be connectable by 2020. The highly secure, scalable cloud-based Interact platform uses sophisticated and modern data management and data processing capabilities, including machine learning, to bring sense to all manner of data – creating data-enabled services for customers that will deliver benefits beyond illumination. In the coming year, we will focus on new LiFi installations, trying to expand to new user applications. There is a lot of potential for LiFi in India, with millions of internet devices being added into the connected ecosystem every day.

Signify to make 80% of its revenue from sustainable products in 2020; will continue investing 55% of its marketing monnies on TV

<keyword id="71" type="POSITION" weightage="20" keywordseo="Prime-Minister">Prime Minister</keyword> <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>’s ambitious project for school children, it seems like, is breathing its last as corporate India and PSUs both have failed to deliver. The grand plan of providing toilets to each school across nation had its deadline of August 15th of this year. 
 
As reported by Economic Times, the ministry of Human Resource sought help of state governments to also get directly involved in construction of toilets if needed. 
 
A senior HRD official, on condition of anonymity said, "Eleven big corporate, 67 public sector undertakings including banks had taken the responsibility of constructing toilets but barring few, most have not yet reached even 50 per cent mark." 
 
He also alleged that many companies have told the government that the fear of Naxal violence stopped them of going ahead with the project. "But not all toilets fall in Naxal dominated areas. We have been let down," the official further added. The official also explained that though it expects corporate groups and PSUs to fulfill the obligation it is unlikely that it will happen. 
 The latest data revealed by the HRD ministry showed that out of 138 constructions by Confederation of Indian Industries (CII) only 23 have come up so far. <keyword id="86463" type="ORGANIZATION" weightage="20" keywordseo="INfosys-Foundation">Infosys Foundation</keyword> was supposed to develop 254 toilets but have constructed only five. <keyword id="6355744" type="CITY" weightage="20" keywordseo="Mahindra-Group">Mahindra Group</keyword>, however, has done better as it has constructed 671 out of 1,214 toilets approved for them. 
 Among all, Tata Consultancy remained the best as it has constructed 1,157 out of 1,537 allotted to it. On the contrary, <keyword id="6355001" type="CITY" weightage="20" keywordseo="FICCI">FICCI</keyword> and <keyword id="1824765" type="UNKNOWN" weightage="20" keywordseo="Titan-company">Titan Company</keyword> failed to make any. 
 PSUs were asked to construct 1,47,548 toilets but so far only 49,577 have been constructed. Coal India had committed to construct 50,469 toilets but only 15,871 have come up. <keyword id="45179" type="CITY" weightage="20" keywordseo="NTPC">NTPC</keyword> has completed only 9,664 toilets out of 25,410 assigned to them. <keyword id="54875" type="ORGANIZATION" weightage="20" keywordseo="Airports-Authority-of-India">Airports Authority of India</keyword> has constructed a little over 10 per cent of the toilets it had agreed to build. Rural Electrification Corporation has made only 3,795 toilets out of 14,626 it was to construct. 
 
Image: indiatimes

PM Modi’s Swachha Bharat could be dying a slow, but steady death

It will be a grave injustice if we do not mention the backdrop in which FM has to present the budget. The FM has a difficult task of meeting twin objectives – sticking to the path of Fiscal consolidation and increasing public investment. Also, the country has suffered from poor monsoons in previous two years contributing to agrarian distress. Most of the economic indicators are in red and even there is a global slowdown. The CPI is around 5.5% but the WPI is -0.9%. The GDP Deflator is also negative. The Index of Industrial Productivity is also falling to -1.3%. The burden of the Seventh Pay Commission and the One Rank One Pension also adds to this. In such a scenario, one thing is certain, you have to be a magician to appease all the sections of society. 
 

	This budget is aimed at addressing the structural issues which the country is facing. It is good to see that government has identified the key pillars on which it needs to lay emphasis. It signifies the intent and the purpose with which the government is going ahead in front of the people. From the various measures taken, it is quite evident that the government was very clear that it has to address the problem of agriculture sector in the country. A sector which employs around 50 % of the population should be given a major share of the budgetary allocation, and the FM has struck the right chord this time. Clear focus on the irrigation allocation of 20000 crores will aim to reduce the monsoon dependence of the agricultural sector. The increase in the outlay towards rural and social infrastructure is also in line with financial inclusion mission of the Government.
 From the macroeconomic standpoint, it will spur the rural consumption and will contribute to the GDP of our <keyword id="34412" type="ORGANIZATION" weightage="20" keywordseo="economy">economy</keyword>. It is unfortunate that after 68 years of independence, we are still plagued with the same problems of poverty, inequality, agrarian distress, rural electrification etc. Increasing the MNREGA spending, waiving the loans of farmers, etc. are artificial measures which in the short term is perceived to be a solution, but it pushes deep into the vicious cycle of poverty. So, though government celebrates that they have increased the rural expenditure on the budget statement and addressed the problems of the rural people, but somewhere they forget that the real monster is alive and time and again it will keep on coming to haunt you. So, skilling is one such area which the present Government is taking seriously. So far we have had many schemes running over the years, but the problem hasn’t been addressed. Every time a new government comes, it either changes the name of the policy or come up with similar schemes. And, the problem still remains as it is. The reason is if you are trying to address a problem that has a lot of ramifications, you can’t have a unidimensional scheme to fix it. We will have to see the holistic picture, and realize that schemes can’t work in silos; they need to be integrated with each other to address the common objective. On the infrastructure and investment front, the government has decided to invest 2.18 lakh crore on roads and railways. This is a very good step in the right direction. Investors were also expecting more concrete steps as far as retrospective tax is concerned. Merely stating that government has no intentions to go for retrospective <keyword id="6383566" type="PERSON" weightage="20" keywordseo="Taxation">taxation</keyword> is not enough to gain the full trust of investors. A clearly defined unambiguous action plan is needed. GOI has engineered a new way to curb black money evasion. In this budget, they came up with a proposal that if people will disclose their black money within a specified time then apart from 30% tax only 15 % will be charged as penalty. If the government later identifies such persons then a penalty of 90% will be charged. This can help the exchequer if some disclosures do take place. Also the government hasn’t explained in detail that how it will generate revenue to fund the expenditure which is lying in front of it like the Seventh Pay Commission and the One Rank One Pension. <keyword id="6365485" type="UNKNOWN" weightage="20" keywordseo="fiscal-deficit">Fiscal deficit</keyword> target which government has stated seems very good on paper, but it is based on the assumption that global crude oil prices will remain at an average of $35 per barrel. It was good to see that government has made education a part of the nine pillars and increased the budgetary allocation from Rs 68,963 crore in FY 16 to Rs 72,394 crore in FY 17, which translates to a 4.9 % increase in education sector compared to last year. On deeper analysis, if we take <keyword id="22195" type="COMPANY" weightage="20" keywordseo="Inflation">inflation</keyword> and GDP growth rate into account, the budgetary allocation is effectively lesser than the last year. Moreover, we are still off target as far as the requirement of the sectoral budget allocation of 6 % of GDP is concerned. Also the budget allocation in the health sector remains a low of 1.28%. This is small compared to the total spending in this sector (4.2% of the GDP). So most of the spending in this sector continues to be out of pocket with about 70% in the private sector. One of the causes of bankruptcy for the poor is the lack of access and the high cost of healthcare. So it was expected that more allocation to the health sector, especially in the sector of preventive and primary sector, would take place. Also some new scheme in government health <keyword id="35450" type="COMPANY" weightage="20" keywordseo="insurance">insurance</keyword> or strengthening the existing health schemes like RSBY, VAS was expected. But no such steps were taken towards this sector. 

	After the RBI suggested the cleaning up of bad loans, it was observed that for the public sector banks, the gross NPA rose to 26 % compared to last year. Though the government has allocated 25,000 crores for the recapitalization of the banks, it is peanuts compared to the mess in which the banks are in. On a little bit of number crunching, it was observed that this amount is not even sufficient to compensate for the quarterly losses of the public sector banks. So, currently we are facing a twin balance sheet challenge – both the banks and corporate sector balance sheet are in distress, which is significantly affecting the private investment. Concrete steps in the form of action plans to revive the present situation of banks were missing in the budget.
 We see that the global market is going through a slowdown. The global commodity prices are low. Our industries which are dependent on the export are slowing down as a result. The domestic demand is also slow. So most heavy industries like the Steel, Petrochemicals are at a loss. They are operating well below their potential capacity. So the industry was expecting a boost from this financial budget. A major step in the process would have been lowering the Corporate Tax as earlier envisioned by this government. Corporate tax rebate for industries with a turnover of Rs. 5 crore only, will exclude most medium and large size industries. There were no concrete steps towards <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> and no mention was done about the exit policy of the industries which could have revived the sentiments of the private investors. However, the finance minister has laid the measures to boost the startup ecosystem. A proposal for tax exemption on profits, one-day registration of companies and the exemption of capital gains tax for the startup <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword> are the key notifications. The FM also announced setting of a fund to raise Rs. 2500 crore annually for four years to fund the startups. This is definitely a positive step towards the startup India movement. 

	Lastly, we often jump the gun and declare a budget as pro-agriculture or pro-corporate. It is high time that we realize that any scheme addressed to a particular section should be treated as pro-India scheme, because as we can’t function if one our body part is not functioning properly. In the same way, our economy will not touch its true potential unless all sections of society grow together. We need to get out of this silo mentality and look at the picture holistically. If corporate houses benefit from a policy, it, in turn, generates employment opportunities, which benefits the unemployed people from a rural background. On the other hand, if the policies are aimed at improving the standard of living of the rural population, then the rural consumption increases. This increase in consumption, in turn, generates demand for corporate houses to leverage. In a nutshell, a change in outlook will help us realize that there exists a symbiotic relationship between corporate houses and rural agriculture, unlike the zero sum game which is portrayed for selfish political interest.
 

	 
	
		(The article is written by Siddharth Jain and Joydeep Chakraborty)
	 
	
		Disclaimer- the views published in this article are the personal opinion of the author.

IIM students review Budget: Is India's balance sheet good enough for structural Reforms?

In order to fund their business plans and meeting the capital requirements, Indian companies garnered Rs 4.32 lakh crore in the financial year 2014-15 through <keyword id="70439" type="UNKNOWN" weightage="20" keywordseo="Private-placement">private placement</keyword> of corporate bonds. 

	An Economic Times report revealed that this mop up was up 60% as against Rs 2.71 lakh crore mopped up by firms in the preceding fiscal 2013-14. This was the highest ever fund raising by companies in a financial year, as per the Prime Database report.
 "On an industry-wise basis, the <keyword id="6354241" type="COMPANY" weightage="20" keywordseo="Financial-Services">financial services</keyword> sector continued to dominate the market, collectively raising Rs 3.19 lakh crore or 74% of the total amount. Power sector ranked second with an 8% share (Rs 35,312 crore)," Sanjeev Khandelwal, Prime Database executive director, told the financial daily. During the period, the highest mobilisation through the channel of private placement of debt was by <keyword id="126337" type="COMPANY" weightage="20" keywordseo="Power-Finance-Corp">Power Finance Corp</keyword> (Rs 46,920 crore). This was followed by Rural Electrification Corp (Rs 34,538 crore), HDFC (Rs 29,170 crore), <keyword id="6367143" type="ORGANIZATION" weightage="20" keywordseo="LIC">LIC</keyword> <keyword id="100080" type="ORGANIZATION" weightage="20" keywordseo="housing-finance">Housing Finance</keyword> (Rs 24,791 crore), IDFC (Rs 15,114 crore), PGCIL (Rs 10,887 crore) and EXIM Bank (Rs 10,863 crore), as per ET. Despite a rally of 25% in BSE's benchmark <keyword id="6484188" type="CITY" weightage="20" keywordseo="Sensex">Sensex</keyword> last fiscal, Indian companies flocked to the debt route instead of raising capital through public offers, the report added. 

	On the other hand, in the previous year, government organisations and financial institutions mobilised 47% of the total amount, which is less than the 54%.

	(Image: Thinkstock)

India Inc mops up Rs 4.32 lakh crore via private placement last fiscal

It is quite natural for expectations to be high, given the fact that the NDA government had been voted to power with an overwhelming majority. During the eight months in power, Prime Minister Narendra Modi and his key ministers have displayed a clear intent to take forward reforms, and they have also sent out the right signals to the investor community. 
 The ‘India story’ is again under global spotlight. The <keyword id="6358021" type="PERSON" weightage="20" keywordseo="budget">Budget</keyword> now has to set the right vision for the economy and lay out a plan with clear, time-bound milestones. I am quite confident that Finance Minister Arun Jaitley will be able to lay out such a roadmap. Of late, the PM’s assurance towards removing tax uncertainties seems to have been successful to some extent in soothing investors’ nerves. I expect more announcements on the direct tax front in the forthcoming Budget which will put to rest issues on the ill-famed ‘tax terrorism.’ 
 
Tax collections have been slow, but going by the media interactions of the finance minister and his key team members, it seems they are quite confident that they would be able to adhere to the fiscal deficit targets that they have set for themselves. The fall in crude prices has definitely helped. I guess the finance minister and his team are also banking on the revenue that would be generated from the proposed disinvestments and the spectrum auction in order to get their fiscal arithmetic correct. 
 
Tax-related issues 
 
The government needs to remove the hurdles in implementation and simplify tax laws. It will also help to increase tax revenue if the tax base is expanded, coupled with reduction in tax administration expenses. The infrastructure sector, undoubtedly, needs the requisite boost, which will meet the expectations of both the industry as well as people. The interest rate needs to come down by about 200 basis points this year, and both direct and indirect taxes need streamlining and rationalisation. 
 
Till the private investment sentiment revives, I think it would be good if the government can set the ball rolling by raising public investments, especially in infrastructure projects. I stress on infrastructure projects because of the multiplier impact they have on the economy in terms of creating jobs, generating domestic demand and enhancing the competitiveness in the economy. 
 
The government has to explore avenues regarding how to mobilise the requisite resources. Apart from foreign funds, the government must now seriously work out a mechanism on how to channelise the long-term funds lying with insurance and pension funds into infrastructure financing. Infrastructure projects have long gestation periods and these long-term funds ideally suit the asset-liability profile of infrastructure projects. 
 First and foremost, direct taxes need to be rationalised and the tax net needs to be spread. Compared to our peers, the effective tax rates, both income and corporate taxes continue to remain high – in fact, the tax rates in India are among the highest in Asia. On the indirect tax front, we have been already told that <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> will be rolled out from 1st April 2016. Its roll-out has got deferred on multiple occasions earlier, let us hope it does not get delayed any further, and let us hope that the Centre and the states are able to arrive at a consensus on implementing a unified GST rate. That would go a long way in creating a seamless unified market and bring in certainty in terms of tax incidence. 
 
Infrastructure financing and refinancing must be put in place to fast-track infrastructure creation. In the last budget, Infrastructure Investment Trusts (InvITs) were announced on the lines of Real Estate Investment Trusts. However, the tax incidence needs to be fine-tuned in order to make the InvITs more effective. Also, mobilising resources from abroad should be eased for all the infrastructure financing vehicles. Recently, RBI has permitted resident entities/companies in India, authorised by the government, to issue tax-free, secured, redeemable, non-convertible bonds in rupees to persons residing outside India to use such borrowed funds for on lending/re-lending to the infrastructure sector and for keeping in fixed deposits with banks in India, pending utilisation by them for permissible end-uses. This implies that eligible entities will be only the companies controlled and owned by the Government of India, such as Power Finance Corporation, Rural Electrification Corporation, National Housing Bank, etc. Ideally, government should expand the list of such eligible entities beyond PSUs and include Public Financial Institutions (PFIs) also for issuing overseas bonds. 
 
Keeping in mind the lending constraints of the banks, the government should ensure that the infrastructure financing NBFCs, namely the asset financing companies (NBFC-AFCs) and the infrastructure finance companies (NBFC-IFCs) are given the maximum policy support so that they are able to carry out their functions seamlessly. 
 
It is imperative to design long tenure financial instruments with attractive returns so that domestic savings can be channelised into infrastructure creation, instead of being invested in unproductive assets like gold. Inflation-linked bonds need to be tried out as well. Ideally any financial institution which has been accorded public financial institution (PFI) status should be allowed to mobilise resource by using these instruments. 
 
Infrastructure sector 
 
In Indian infrastructure, some of the major problems faced by infrastructure project developers (especially roads, power and mining) relate to green clearances, land acquisition or absence of fuel linkages. These pertain to the quality of governance and the pace of official decision-making processes, rather than financing per se. Indeed, it is the inability to secure statutory approvals in time that has led to many infrastructure projects ending up as stressed loans for banks. To make our PPP model successful, it is essential that the government plays its part in the partnership by getting all the necessary approvals within some time frame. If the responsibility of getting all these clearances is also left to the private player, time and cost overruns are bound to make many a project commercially unviable. I do not think it will be possible for the finance minister to address problems like these in a single Budget, but ideally on matters related to land and environment, I feel state governments should get greater say in deciding which norms need to be adhered to and which clearances are compulsory. State governments have better knowledge of ground realities, and thus, should have a greater say in deciding what is good and not good for their states. State autonomy in such matters will ultimately usher in a healthy inter-state competition that will augur well for the economy as a whole. The finance minister must address this aspect outside the Budget exercise. 
 
In the infrastructure space, I feel the major focus areas should be the power and road sectors. Let me briefly share my thoughts on how to improve the scenario in these two sectors. 
 
100% fuel linkage to all power plants must be ensured. This calls for reforms on the coal-mining front by allowing the entry of private sector for mining development. Inducting state-of-the-art technology through private sector participation will augment production and control pollution levels. The government has to ensure that the right quality of coal is available to the user from the nearest possible source in order to keep transportation costs under control. This has to be supplemented with distribution sector reforms by revisiting tariff-setting norms, which should adopt a principle of not passing through the aggregate technical and commercial (AT&amp;C) losses beyond a certain percentage. The concept of different feeder lines for different user groups will also help in arresting leakage. Reforms across the entire value chain can help in keeping the cost of power production under control, and thus, help in making power available to user groups at reasonable tariffs while maintaining the commercial viability of investments in power sector. 
 
On the road front, government is now inclining towards engineering, procurement and construction (EPC) rather than build-operate-transfer (BOT). I feel both EPC and BOT must co-exist. EPC approach will limit the government’s ability to spend on more number of projects. Also, the government needs to explore new financing techniques which can address the mismatch between loan tenure and concession period (the former much shorter than the latter, thus leading to problems in servicing loans). For BOT projects, a financing structure can be thought of where the repayment schedule is such that 50% of the total debt is repaid during the loan period and balance 50% is to be repaid by way of bullet payment at the end of the loan period. The bullet payment shall be made by arranging refinancing of the balance 50% debt, repayable over the remaining concession period. This would enable practically spreading out the repayment of the debt over the entire concession period. Steps like these can help in improving the investment sentiment quickly. 
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Pre-budget expectations: Script India’s growth story with clear, time-bound milestones

<keyword id="66" type="COMPANY" weightage="100" keywordseo="Delhi">Delhi</keyword> wears the crown of achievements with an increase in literacy rate (86.) and sex ratio, according to Economic Survey of Delhi 2014-15 tabled in the <keyword id="6356117" type="ORGANIZATION" weightage="20" keywordseo="Delhi-assembly">Delhi Assembly</keyword> today. 

	The sex ratio has improved from 821 in 2001 to 868 in 2011. The density of population has increased from 9,340 persons per square km in 2001 to 11,297 persons per sq km in 2011. 
 

	According to the survey, the literacy rate has increased from 81.67 per cent in 2001 to 86.34 per cent in 2011. The urban population of the national capital increased from 93.18 per cent in 2001 to 97.50 per cent in 2011. 

	Per capita income of India’s national capital is almost three times its value for the country, which stands at Rs. 87,748. Its per capita income during financial year 2014-15 has increased to Rs 2.41 lakh from Rs 2.12 lakh in the previous fiscal, a rise of nearly 13.50 per cent over the period. 
 

	As per the survey, the Gross State Domestic Product (GSDP) at current prices during 2014-15 has increased to over Rs 4.51 lakh crore, a growth of 15.35 per cent over the previous year. 
 

	At constant prices, the growth of the Gross State Domestic Product for 2014-15 is 8.2 per cent as compared to 7.4 per cent recorded at national level. 
 As per the survey, the fiscal deficit of <keyword id="6354952" type="ORGANIZATION" weightage="20" keywordseo="Delhi-Government">Delhi government</keyword> was Rs 2,21.25 crore in 2014-15, which is 0.049 per cent of GSDP, as compared to estimated fiscal deficit of 2.35 per cent of all states during the same year. 

	The expenditure incurred on social service sectors in Delhi increased from 48.79 per cent in 10th Five Year Plan to 57.12 per cent in the 11th Five Year Plan and 65.75 per cent for the first three years of the 12th Five Year Plan. 
 

	Tax collection of Delhi government registered a growth of 2.64 per cent in 2014-15 as compared to the growth of 10.60 per cent in 2013-14, it said. 
 

	Delhi has maintained its consistent revenue surplus which was Rs 6,079.53 crore in 2014-15 as compared to Rs 5,615.37 crore in 2013-14. 
 

	As per Census 2011, about 97.50 per cent of the population lived in urban area. Rural area of Delhi reduced from 558.32 sqm in 2001 to 369.35 sqm in 2011. The number of villages has declined from 165 in 2001 to 112 in 2011, as per the survey. 
 

	The decennial population growth of Delhi during 2001-2011 was recorded as 20.96 per cent as compared to around 50 per cent in each decade between 1961 and 1991 and 47 per cent between 1991 and 2001. The population of Delhi as on March 2011 was recorded at 167.53 lakh. 
 
 

	About greenery, the survey said, tree cover area in 2013 was 297.81 sq km, which is 20.08 per cent of the total area of Delhi. 
 

	The total cropped area reduced from 52,816 hectares in 2000-01 to 34,312 hectares in 2014-15. 
 

	The number of agricultural operational holdings has reduced from 25311 in 2005-06 to 20497 in 2010-11, it said. 
 

	The main reasons behind such reduction are fast urbanisation and shift in occupational pattern especially during the last two decades. 
 

	On power sector, it said the electricity supply in Delhi increased from 23,537 million units in 2005-06 to 37,484 million units in 2014-15. The total number of electricity consumer in Delhi is 54.05 lakh in 2014-15 with power consumption recording an annual growth of 3.63 per cent.
 

	Peak demand increased from 3,626 MW in 2005-06 to 5,925 MW in 2014-15. AT&amp;C (Aggregate Technical and Commercial) losses were brought down from 52 per cent in the pre-reform era to 12.83 per cent in 2014-15. 
 As per the survey to encourage <keyword id="6357019" type="UNKNOWN" weightage="20" keywordseo="solar-energy">solar energy</keyword>, a new Solar Photo Voltaic (SPV) Power Plant of 2.14 MWp at <keyword id="6354478" type="PERSON" weightage="20" keywordseo="Indira-Gandhi">Indira Gandhi</keyword> International Airport has been successfully installed and commissioned. 

	New Delhi Municipal Council (NDMC) area will be developed as a 'Solar City' by installing SPV panels on rooftops of government buildings, metro stations, bus stops, among other places. 
 

	The total number of motor vehicles on road in Delhi as on March 31, 2015 touched to 88.27 lakh, showing an increase of 6.4 per cent over previous year. 
 

	Total road network of Delhi has increased from 32,131 lane km in 2007-08 to 33198 lane km in 2014-15. 
 

	Average ridership of Delhi Metro was approximately 24 lakh per day during 2014-15 with around 238 Metro Feeder bus services available at 41 metro stations. 
 

	DTC operates 3,781 low-floor AC and non-AC CNG buses and 924 standard-floor buses to take care of about 39 lakh passengers daily, while private sector corporate carriage operators are operating 1,406 cluster buses in 9 clusters. Government has installed CCTV cameras on a pilot basis in 200 DTC buses. 
 

	As per 2011 Census, 81 per cent of total households were having piped water supply system. 
 

	The total number of water connections provided by Delhi Jal Board (DJB) has increased from 17.85 lakhs in 2009-10 to 20.65 lakhs in 2013-14. 
 

	The survey said that about 142 MGD of treated waste water is being utilised for cooling of power plants, horticulture, parks, irrigation as well as crops irrigation. 
 

	According to the report, 35.98 per cent of total population of Delhi is residing in urban areas. There is a near universal electrification and 99 per cent of the households have access to sanitation facilities. 
 

	Close to 31.76 lakh houses (77.6 per cent) were being used exclusively for residential purposes in 2011. The DUSIB has setup 271 night-shelters for the shelter-less population. 
 

	In the education sector, Delhi has a variety of quality schools, colleges and universities as well as centres for research and higher education with male and female literacy rate of 91.03 per cent and 80.93 per cent respectively. 
 

	As per the survey, the literacy rate of Delhi is at around 86 per cent, which is much higher than the all India level of 74 per cent as per the 2011 Census. 
 

	Delhi government has invested massively in education sector for improving the education as around 20 per cent of the total budget of 2014-15 was allocated to the education sector. 
 

	The total number of schools increased from 5043 in 2009-10 to 5798 in 2014-15. Even the number of students enrolled in schools increased from 37.38 lakh in 2009-10 to 44.13 lakh in 2014-15. 
 

	About 25,000 students got admitted under EWS quota in 1200 recognised private unaided.
 
 It is said the number of students in ITIs and Polytechnics increased from 22,070 in 2009-10 to 28628 in 2013-14, with a growth of 30 per cent in five years. More than 16000 trainees were trained under <keyword id="985247" type="ORGANIZATION" weightage="20" keywordseo="Skill-Development-Mission">Skill Development Mission</keyword> during 2014-15. 

	As per economic survey, Delhi has a wide network of health sector infrastructure comprising 95 hospitals, 1,389 dispensaries, 267 maternity homes, 973 polyclinics and 16 medical colleges. 
 

	It is said total number of hospital beds increased from 41,706 in 2010 to 48,096 in 2014 simultaneously bed population ratio increased from 2.54 to 2.71 in the same period. 
 

	About 82 per cent of the total births were institutional in 2013. 
 

	The life expectancy in Delhi is of 72 years four years more than the national average of 68. 
 

	In social security and welfare sector around 95 Integrated Child Development Services (ICDS) with a network of 10,897 Anganwadi Centers took care of 14.58 lakh pregnant and lactating women and children up to the age of 6 years. 
 

	About 3.32 lakh senior citizens were provided monthly old age pension during 2014-15. 
 

	Around 7.5 lakh girls registered under Ladli Yojana and 84,305 girls received the final maturity value upto March 2015. 
 

	The survey said that around 3400 households were provided financial support of Rs 10,000 under National Family Benefit Scheme during the year 2014-15. 
 

	About 27,000 students of SC/ST/OBC/Minority category studying in recognized unaided public schools got reimbursement of tuition fee. 
 

	Delhi is one of pioneer state in implementation of the National Food Security Act, 2013 with effect from September 1, 2013. It issued 17.68 lakh National Food Security Smart Cards have been issued to eligible households and all the digital Food Security Cards are Aadhar enabled. 
 

	The survey said the number of persons below Poverty Line in Delhi has reduced from 23.3 lakhs (14.2 per cent) in 2009-10 to 16.96 lakhs (9.91 per cent) in 2011-12.

	 
	 
	(image credits: wallpapers.brothersoft.com)

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