Coronavirus: ‘Govt needs to allow treatment by private hospitals’

‘We are going to be overwhelmed by the need for hospital beds. There are simply not enough beds in government hospitals.’
‘We will need a large number of medical professionals and without the private sector’s involvement, the government won’t be able to expand capacity.’

In view of the covid-19 pandemic, the government has given clearance for the manufacturing of PCR (polymerase chain reaction)-based kits in India to detect the virus.

There are other methods, such as antibody-based tests — which are faster and suitable for large-scale screenings. 

In an interview, Biocon CMD Kiran Mazumdar-Shaw tells Samreen Ahmad her company’s research arm Syngene is working towards developing such kits.

The government has allowed private labs for testing of coronavirus. Is the price cap of Rs 4,500 reasonable?

It is very reasonable because this price cap has been derived from the cost of imported kits.

What other steps should the government take to encourage private participation?

We need to test more people, so opening it up for private labs was a very important step.

Next, the government needs to allow (covid-19) treatment by private hospitals because we are going to be overwhelmed by the need for hospital beds.

There are simply not enough beds in government hospitals.

We will need a large number of medical professionals and without the private sector’s involvement, the government won’t be able to expand capacity..

What role can corporate India play to contain the covid-19 pandemic?

We have to prevent the spread without a vaccine and the least that every corporate can do is to ensure that it reduces the office-going or factory going staff to the minimum. Also, those who can afford to shut down should do that for two weeks.

Corporates can contribute to a large number of financial needs related to control the spread of the disease.

CSR (corporate social responsibility) should be directed towards testing, purchasing ventilators, and all the resources required for dealing with the disease.

This is about the whole of India cooperating in terms of the lockdown.

Until we get a treatment, it is difficult to contain this pandemic.

So the only way to control it is to have a massive lockdown, which is what the government has done. Except for essential services, everyone should be asked to work from home.

What is the rapid diagnostic test for covid-19 that Biocon is working on?

There are several tests which can be developed to detect the virus. Indian labs have done well by coming up with real-time PCR kits.

Our lab and players like CoSara can manufacture hundreds of thousands of kits per week. Hopefully, those kits will be able to increase the testing significantly.

There are also antibody-based kits, which allow rapid tests. They can quickly tell three things — one whether you are infected; two, whether you are infected and recovering; and whether you have recovered.

These kits are even more accurate than PCR tests as they also indicate the phase of recovery. We are making efforts at Syngene to develop these antibody-based tests.

How important is it to create a database of covid-19 patients?

We need to learn from the covid-19 situation and get well-analysed data to understand who did badly and who did well.

Epidemiological data is very important in a pandemic as it explains how the disease spread, why it spread, was it to do with living conditions, poor sanitation, poor health or ageing. All these need to be analysed.

If we don’t have a database which captures all of these, we will just get numbers.

What should be done to strengthen the pharma and biopharma industry to make them ready for a pandemic in the future?

Every country in the world today realises that it has neglected communicable diseases. Most of the R&D budget is only going into researching non-communicable diseases, such as diabetes, cancer, and neurological diseases.

Very little money goes into infectious diseases because it is considered to be a developing world problem.

The world has now realised that because of travel and globalisation, infectious diseases can spread fast. Advanced countries, such as Italy, the US, and France, are reeling from the spread of covid-19 and this shows their unpreparedness.

Therefore, it is really important to research infectious diseases and be prepared for the future and come up with a rapid response to the next epidemic.

We need to invest a lot in life sciences, and areas of infectious diseases and microbial-borne diseases. Companies need to be incentivised and supported by the government for this.

What will the post-covoid-19 world look like?

I hope we become a cleaner country and think of work-from-home kind of models much more seriously.

I also hope washing of hands regularly becomes a post-covid-19 necessity.

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Coronavirus crisis pushes India to work on drug security

The current crisis has forced the government to announce measures to ensure that India becomes self-sustaining for any kind of bulk drug.
The government says India will not depend on any other country for vital key ingredients for drugs within six years, reports Sheela Bhatt.

The coronavirus crisis has suddenly raised national drug security at the top of India’s national priorities.

Due to its relaxed environmental restrictions and cheaper cost of production, China has produced cheaper raw materials known as active pharmaceuticals ingredients, API, and key starting materials, KSM, to make vital medicines.

For the last 25-plus years Indian drugs manufacturers have been increasingly dependent on China for raw materials to pare the cost of their final products.

A top government source reveals that a shipment carrying API bulk drugs arrived from China a few days ago, indicating that Chinese API manufacturing firms have restarted production sooner than expected.

However, the current crisis has forced the government, a bit late in the day, to announce measures to ensure that India becomes self-sustaining for any kind of bulk drugs.

The government claims that India will not depend on any other country for vital key ingredients for drugs within six years.

Dharmesh Shah, chairman and managing director, BDR pharma, one of the biggest cancer drugs manufacturers, says India has 60% drug security currently.

In the late 1990s, says Shah, Indian drug researchers and technologists were hired by China for 10-fold salaries to work on technologies to make API and KSM drugs.

Eventually, adds Shah, India became dependent on China for around 30% of the supply of KSM and around 20% of API.

“We Indians are responsible for where China is in the drugs industry today,” states Shah.

His point: India was always strong on API production and ahead of China, but many years ago, a few Indian technocrats went to China for small gains and taught them forward integration to make API and also taught the Chinesee regulatory aspects.

Today not just India but most countries of the world, small and big, depend on China for bulk drugs for only one reason.

Chinese bulk drugs are 20% cheaper than Indian bulk drugs.

Not only does the Chinese government provide a lax environment and pollution management, but also cheap electricity as result of which Chinese drug manufacturers have been successfully attempting to control the global market.

Notwithstanding the increasing Chinese stranglehold on bulk drugs, Shah says India is fortunate to have the knowhow and capacity to produce enough drugs needed for the covid-19 crisis right now.

Even though dependence on China is decades old, India started thinking in terms of ‘drug security’ three years ago.

The government formed a task force on drugs which discussed in detail about 53 APIs/KSMs, including 26 fermentation-based bulk drugs, with all stakeholders.

Drug manufacturers wanted to develop all capacities to produce inhouse KSMs, but for which they need special zones with a good treatment plant and common utilities to bring down costs.

Given the current urgency over covid-19, the government has accepted many suggestions of the task force and announced a policy to manufacture bulk drugs and medical devices.

Following the unexpected crisis, the Union Cabinet approved on March 21 a package of Rs 13,760 crores to ensure that India does not depend on imports of any essential raw materials for medical emergencies of any kind.

Mansukh Mandaviya, minister of state for chemicals, pharmaceuticals and fertilisers, told a press conference that India aims to achieve ‘national security in drugs’ in six years’s time.

The government’s announcement, in a nutshell, is to give 20% incentive in various forms to overcome competition from China. Three bulk drugs park will be given a grant of Rs 1,000 crore each.

Similar is the case for medical devices. Post-covid-19 the government has announced a medical devices park.

Embarrassingly for India, it imports 85% of its modern medical devices, ranging from advanced X-ray machines to pacemakers to ventilators and dialysis machines, worth more than Rs 38,000 crores.

Again a little late in the day, on March 21, the Union Cabinet announced a Rs 3,420 crore package to boost the domestic manufacture of medical devices.

If bulk drugs and medical devices are made largely in India, then the country can save more than Rs 190,000 crores every year.

Currently the Indian pharma industry is approximately worth Rs 3 lakh crore.

India’s domestic drugs consumption is more than Rs 1 lakh crore. Pharmaceuticals are top traded Indian items, with 12,000 drugs manufacturers including 56 giant pharma companies.

However, due to market competition and logistics issues, 40 per cent of the installed capacity in the drugs manufacturing industry is under-utilised.

Covid-19 has given a wake-up call to Indian industry and the government.

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What UPA’s economists prescribe for covid-19 pain

‘There should not be a shortage of cash. You are instilling the fears into the system by saying that if you handle cash it would be infectious. But, what alternative do the people have?’ 

The UPA’s economic czars C Rangarajan, Montek Singh Ahluwalia and Pronab Sen on what Modi Sarkar should do now. 

Economy doctors of the United Progressive Alliance government — C Rangarajan, Montek Singh Ahluwalia, and Pronab Sen — had played a pivotal role in fixing the 2008-09 crisis. 

They say the present crisis is different from the one then and requires a different prescription. 

Indivjal Dhasmana finds out what each one of them has to prescribe. 

C Rangarajan

Former chairman of the Prime Minister’s Economic Advisory Council 

The 2008-9 crisis was a typical economic crisis. It started with the collapse of financial institutions, then it affected the overall economic situation and it engulfed the world, including India. 

Currently, external demand is falling, domestic demand is going down, and there are disruptions to the supply chain. It is here that the RBI and the government should take the measures. 


i) Banks are going to face a situation where repayments of loans are delayed and so a certain amount of regulatory forbearance becomes necessary. This can be in terms of relaxing the rules of what constitutes non-performing assets. Income recognition norms need to be relaxed. This must apply to bank loans to all sectors and all sizes not only MSMEs but also large corporate. 

ii) RBI must supply more liquidity to the banking system. It has already taken some steps. Besides open market operations, it has started long term repos. In 2008, US central bank bought corporate bonds.

That is not legally permissible in India. But banks are holding government securities. So it is possible for them through open market operations and other standard techniques to provide additional liquidity to the banking system. 

iii) The policy rate needs to be brought down. But please remember that it is a double-edged sword. Some people are dependent on interest income on deposits. 

B) Government 

i) It must incur all expenditure necessary to combat virus. Expenditures for testing not only in the government but also private hospitals. There should be additional creation of isolation wards in hospitals, arrangement of more masks, sanitisers. It should also incur costs of importing equipment for testing. 

ii) There are industries which are particularly affected — travel, transport, hospitality industries. Some help needs to be provided to them. The government must defer dues of industries such as excise duty, license fee and others. 

iii) It should ensure that business units do not retrench workers. Advice should go from the government that they should not do this. It has already done that. Certainly some people would be thrown out of the employment. There should be cash transfer. Some state governments are doing it. 

The government should do what it does at the time of droughts and floods. The government in collaboration with non-government organisations should provide the basic amenities of life like food and clothing and certain other things to the people who are directly affected by the virus. 

Montek Singh Ahluwalia

Former Planning Commission deputy chairman 

We are facing a health emergency that also has serious economic effects. It is unprecedented and so there is no rule book. 

The first priority has to be health and since there isn’t yet a vaccine or curative therapy, the only way of avoiding massive infections is lockdowns and social distancing. 

This will be disruptive. We do not really know how long this disruption will last. But it is bound to spill over beyond the end of March. 

The economy was limping even before the crisis and it will now do much worse. The usual source of information about the global economy is the International Monetary Fund. 

It has not updated its somewhat upbeat forecast made in January before the pandemic but independent analysts now project negative growth for the world for two quarters at least. 

The highly adverse negative global environment will depress our performance. To this we have to add the domestic disruption from lockdowns and loss of income and uncertainty about the future … we can try to start recovering in the third quarter of 2020-21. 

Health will involve more expenditure and the central government has to help the states. We also need to take steps to expand existing social security to help those in the informal sector who will lose jobs and income. 

Business also needs to be supported by expanding credit and regulatory forbearance. Otherwise there will be a string of bankruptcies, which would be a system failure. 

The fiscal deficit will exceed the Budget target not just because of additional health expenditure but because revenues will fall short, with gross domestic growth (GDP) growth being very low. 

We can worry about bringing the deficit under control through a credible medium-term strategy once the downturn is arrested. For the present, the focus of fiscal, monetary and credit policy must be to limit damage. 

Hopefully the group under the finance minister, working along with the Reserve Bank of India, will come up with concrete proposals very soon. 

Pronab Sen

Former chief statistician 

The 2008-09 crisis essentially originated in the financial sector but it affected the global trade — the second part is similar to what is happening. 

However, within the country we were relatively insulated then. So, most of the losses that we took in terms of GDP growth came from exports that time. 

Generally, it is believed that exports constitute 20 per cent of GDP. But this is not correct, exports are in the manufacturing sector so you should look at value added and this comes to about five per cent of GDP. 

What we are looking at now is that because you have restrictions on everything other than essentials you are looking at industry which are closed and constitute 15-20 per cent of GDP. So, the magnitude of the crisis is much larger on GDP now than in 2008-09. And, then second round effect is going to be there. 

The kind of V-shape recovery that we had in the aftermath of the earlier crisis was because of the demand that the government pumped through fiscal measures. Now, the hit that you are essentially witnessing is the supply side problem because you are forcing the industry to shut shop. 

So, demand boost measures would not really solve the problem. The only thing we can now do is to focus on the income hit that has taken place. 

People who are now unable to buy essentials that we have to focus on. We are trying to prevent possible food riots. 

Whatever the government may say, the requirement of cash is not going to go down — it will go up. You and I can buy essentials through credit or debit cards, but not all. So, liquidity management should be clearly the RBI’s first step. 

There should not be a shortage of cash. You are instilling the fears into the system by saying that if you handle cash it would be infectious. But, what alternative do the people have? 

The second order issue is force majeure. You have essentially asked industries to shut shops. The revenue flows of these industries have come to a stop. Unless these industries have large retained earnings in their balance sheets, they will simply not be able to service their debts. 

It is extremely important for the RBI to go for forbearance of asset recognition, hold it off till it starts counting again. RBI should keep it open ended and not classify any assets as NPAs. It should re-set the zero date from which the clock will again start to tick. 

It will lead to lots of pressure on banks because they will have to pay interests on deposit but they will not be able to earn interests on very large chunk of their assets. The RBI should then say I am the lender of the last resort, I would take care of that problem. 

Eventually, this will have to come from the fiscal side, the government will have to pump in money.

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E-commerce deliveries come to a grinding halt

There is a lot of police action on the ground and even inter-state movement has been stopped, because of which deliveries of essential items via platforms, such as Flipkart, Amazon, Grofers, and Milkbasket, aren’t happening.  Food-delivery firms — Swiggy and Zomato — are facing similar challenges, according to the sources. 

The Indian e-commerce sector has come to a near standstill across the country, hurting the supply of essential commodities, amid lockdowns in several states and cities to prevent the spread of coronavirus, according to industry executives. 

They said there is a lot of police action on the ground and even inter-state movement has been stopped, because of which deliveries of essential items via platforms, such as Flipkart, Amazon, Grofers, and Milkbasket, aren’t happening.

Food-delivery firms — Swiggy and Zomato — are facing similar challenges, according to the sources. 

“There are a lot of ambiguities. The authorities keep coming up with circulars which are contradictory to the previous ones,” said an e-commerce industry executive. “It is more a miscommunication issue.” 

E-commerce companies are facing challenges in delivering essential items such as rice, wheat, pulses, baby food, milk and dairy products, and fruits and vegetables. The other important items include hygiene products such as soaps, sanitary pads, sanitisers, and masks. 

As most of the people are working from home, e-commerce industry insiders said that etailers are also finding it a challenge to deliver items like power banks, laptops, routers, headsets, and tables and chairs to their customers, despite a tremendous increase in demand. 

Heeding the challenges, the government of Karnataka on Monday put out an order saying that e-commerce and home delivery come under essential services and shall be excluded from the restrictions imposed to contain the spread of the virus. 

Maharashtra, too, put out an order saying that e-commerce services providing essential goods, including pharmaceutical and medical equipment, should be excluded from the restrictions. 

According to the sources, other than essentials, for which demand is huge, most e-commerce categories are witnessing at least a 60 per cent drop in sales. 

Many consumers have reported on community platform LocalCircles that deliveries from e-commerce grocery apps like Grofers, BigBasket, Amazon, and Flipkart are not reaching them. 

About 35 per cent consumers could not get most of the essential goods via e-commerce apps because of the lockdown, according to a survey by LocalCircles, which received more than 15,000 responses from consumers. Also, about 17 per cent consumers could not find most essentials in retail stores. 

“The state machinery must sensitise the police leadership so that officials on the ground do not create bottlenecks in the supply of essential goods to wholesale and retail stores, and homes of people,” said LocalCircles. “The last thing we as a country want in this COVID-19 outbreak is long queues outside stores or scuffles for who gets to buy that last sugar packet in the store,” stated LocalCircles, which is going to share its findings with the government. 

Milkbasket, a Gurugram-based daily grocery delivery service, said the company’s staff, vendors, and vehicles are not being allowed to ply on the road by local police, disrupting its operations. 

“Yesterday, we had to cancel thousands of orders. We could only operate at 40 per cent capacity in Gurugram. Even lower in Noida. We might have to cancel all the orders today, impacting over 150,000 families across 4 cities,” the company had stated on Monday. “We are being told to shut down our distribution centres.” 

The company urged the authorities to look into the matter and support the firm in ensuring smooth service. 

Online grocery firm Grofers said according to the directive of the central government, the firm continued to provide essential goods to customers across the country on the day of Janata Curfew. However, because of some confusion over the exemption of the services, many of its delivery riders were stopped and arrested, leading to a delay in the delivery of almost 60,000 orders countrywide. 

“This does not only affect the morale of the delivery staff who are working selflessly to support people, but also causes inconvenience to many customers,” said Albinder Dhindsa, co-founder and CEO of Grofers, which is backed by SoftBank. 

In a few states, including Maharashtra, the company is facing forced shut down of warehouses. “Our teams are working relentlessly to support people and managing deliveries to avoid any kind of panic among consumers and we request authorities to take measures to ensure that the process of essential items delivery remains smooth,” said Dhindsa. 

Saurabh Kumar, another co-founder of Grofers, said on Twitter that despite assurances that grocery is an essential service and Grofers should continue to operate, police and the local authorities keep shutting its warehouses. 

“All the proactive initiatives of (the) government and central authorities (are) going to waste because of overzealous enforcement agencies,” said Kumar. 

E-commerce firms are requesting state governments to resolve various issues. This includes movement of goods for e-commerce by trucks plying state and inter-state. There are letters issued by these companies to truckers, which need to be accepted by the authorities. 

These letters say that the products are for e-commerce service delivery ensuring families are getting what is essential for them to have at home “during isolation so they don’t have to leave their homes,” said a source. 

These firms are also requesting for the opening of multi-products warehouses, distribution, and sort centres. Also, the safe movement of personnel for e-commerce activities after showing the letter and government-issued identification documents. 

“We request for a strong coordinating mechanism between the central and state governments to ensure that these guidances are percolated down to the ground level,” said an e-commerce industry executive. 

The companies are also asking to allow customer and IT support operations, and movement between home and office for operations and logistic services. 

All types and milk, milk products, and poultry items were out of stock on BigBasket. Everything was out of stock even on Licious, the branded online meat start-up, with no further information on when these items would be available next. 

Other Bengaluru-based grocery delivery start-ups, such as Supr Daily and Daily Ninja, were also down with most items not available on their online stores. 

“We are fully-stocked but are currently experiencing a shortage of manpower to service the high demand,” said online supermarket store Nature’s Basket in a note on its app.

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In India, jobs the biggest casualty of coronavirus

‘The impact of economic shocks on the labour markets is usually on the young who delay their entry in response to a fall in job opportunities,’ says Mahesh Vyas.

The coronavirus pandemic is the third shock to the Indian economy in a little over three years.

The economy will not escape unhurt.

More importantly, households are likely to be hit through loss of jobs and/or earnings.

The impact of such economic shocks on the labour markets is usually on the young who delay their entry into the labour market in response to a fall in job opportunities.

This shows up in a fall in the labour force participation rate.

And, quite perversely, leads to a fall in the unemployment rate.

The labour participation rate did plummet in the last week of February to below 42 per cent. It was 41.96 per cent.

It continued to remain close to 42 per cent in the following two weeks at 42.1 and 42.3 per cent.

The lowest monthly labour force participation recorded so far was 42.3 per cent in November 2019.

India may test such levels again this summer. The unemployment rate fell to 6.7 per cent in the week ended March 15.

The two shocks of the recent past have shown a lesser impact on employment.

Employment did fall, but not as severely as the labour participation rate or the employment rate.

The coronavirus impact began working initially through the supply shock of China’s shutdown, then through the impact of travel bans across the globe and finally through the awareness or enforcement of social distancing.

So far, India is spared the impact of widespread deterioration in health of workers.

We expect the impact of the coronavirus shock on the labour markets to show in the data for April and May.

Labour statistics of March could provide the first glimpse.

Meanwhile, the slowdown in economic activities is palpable in train stations, bus stands, malls and markets in general.

The small uptick in industrial production and an equally welcome fall in inflation announced last week passed without much ado.

They seemed to belong to a different world.

The world we face today is full of new challenges and uncertainties.

India is lucky to remain relatively safe so far.

But the Indian economy is too weak and Indian medical facilities are grossly inadequate to deal with a serious health challenge, if it were to strike.

The World Travel and Tourism Council has projected that travel could fall by 25 per cent in 2020 putting to risk 12 to 14 per cent of the jobs in the sector.

This translates into 50 million jobs at risk, globally.

Of this, 30 million jobs at risk would be in Asia.

Tourism accounts for 10 per cent of global GDP and jobs according to the council.

According to estimates from CMIE’s Consumer Pyramids Household Survey, travel and tourism accounts for 5 per cent of the total employment in India.

Travel and tourism accounts for nearly 20 million jobs in India.

Hotels and restaurants account for another four million jobs.

Employment in the travel and tourism industry has been on a declining gradient since late 2017.

The sector has already lost over two million jobs since then.

The hotels and restaurant sector has lost fewer jobs. But even this is on a sloppy gradient.

With government restrictions on travel by foreigners into the country, these sectors may be expected to see a further hit in employment.

The Indian Association of Tour Operators expects a loss of 1.2 million tourists on a base of 10 million, following government restrictions.

Airlines have been asked to waive cancellation charges.

This would lead to a welcome increase in cancellations as this would help contain the spread of the virus.

But the collateral damage would be a further slowing down of the economy and a possible loss of jobs.

Newspaper reports suggest that malls and restaurants have registered a 30 to 35 per cent fall in footfalls.

BEST buses in Mumbai reported a three per cent fall in riders over a week.

Ola and Uber have also reported a fall in traffic.

The shutdowns have just begun in large cities.

The impact of the shutdowns on the economy would show up later. But this would help contain the spread of the virus.

From a health perspective, the most vulnerable are senior citizens.

Most global fatalities are among senior citizens of over 80 years of age with prior respiratory conditions.

But 80 years is not a magical cut-off. The gradient of risk starts rising after 60 years of age.

Data from China show that fatality rate till age 59 is less than 1.3 per cent.

It rises to 3.6 per cent for those in their 60s, then to 8 per cent for those in their 70s and then to 14.8 per cent for those in their 80s.

We estimate that in India, there are well over 100 million who are over 60 years of age.

There are nearly 69 million who are over 65 years of age.

According to CMIE’s Consumer Pyramids Household Survey only 3.5 million are employed in the health care industry.

This includes doctors, nurses, dental practitioners, midwives etc.

India is ill-equipped to deal with the scale of testing and treatment that a coronavirus pandemic requires.

Containment is the best strategy.

Mahesh Vyas is MD & CEO, CMIE.

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PNB fraud case: Nirav Modi remanded in custody till April 15

Most of the legal cases in the UK are switching to videolink and telephonic options where possible, with all new jury trials suspended amid the social distancing rules in place to combat the COVID-19 pandemic.

Fugitive diamond merchant Nirav Modi, fighting extradition to India on charges over the nearly $2 billion Punjab National Bank (PNB) fraud and money laundering case, has been remanded in custody by a UK court until April 15.

The 49-year-old, who has been lodged at Wandsworth Prison in south-west London since his arrest last year, was due to appear via videolink from prison for his regular 28-day call-over hearing on Tuesday but Westminster Magistrates’ Court in London said that the formality was completed last Thursday.

“This case is next listed for a call-over videolink hearing for April 15,” a court official said on Monday.

Modi’s legal team and the Crown Prosecution Service (CPS), representing the Indian government in the extradition proceedings, are scheduled to hold a “lawyers-only” case management hearing in the case on April 15, with a five-day trial scheduled between May 11 and 15.

Most of the legal cases in the UK are switching to videolink and telephonic options where possible, with all new jury trials suspended amid the social distancing rules in place to combat the COVID-19 pandemic.

All UK prisons have also been issued with health guidance related to the coronavirus outbreak, with strict rules around hand-washing for inmates, staff and visitors.

“The government’s absolute priority is to protect life, and we have robust and flexible plans in place to keep prisoners, staff and the wider public safe based on the latest advice from Public Health England,” said a UK Ministry of Justice spokesperson.

Modi had made a fifth attempt at bail in the high court earlier this month, which was rejected as the judge ruled that he continued to pose a flight risk.

Justice Ian Dove presided over the bail hearing at the Royal Courts of Justice on March 5, during which Modi appeared via videolink from Wandsworth Prison as his legal team offered a package of “stringent” bail measures, including bail security of 4 million pounds, house arrest at his central London luxury apartment with a 24-hour electronic tag as well as a private security guard service and a strictly monitored access to gadgets and telephones.

“My central concern of risks of absconding are not obviated by the measures presented,” Justice Dove had concluded.

Modi was arrested on March 19, 2019, on an extradition warrant executed by Scotland Yard on charges brought by the Indian government.

During subsequent hearings, Westminster Magistrates’ Court was told that Modi was the “principal beneficiary” of the fraudulent issuance of letters of undertaking (LoUs) as part of a conspiracy to defraud PNB and then laundering the proceeds of crime.

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How the world will change after coronavirus

‘Tens of millions will be working from home for months at a time, which means the smartest brains in business will be focussed on creating more efficient WFH processes,’ predicts Devangshu Datta.

A popular sub-genre of science fiction is the ‘post-apocalyptic’ novel.

In these, the author assumes a disaster and imagines how the world will cope in the aftermath.

It could be nuclear war; it could be climate change; it could be an alien attack; it could be a killer disease.

COVID-19 doesn’t qualify as a killer disease like the flu described in Stephen King’s The Stand or the alien disease Michael Crichton dreamt up in The Andromeda Strain.

Covid-19 has a relatively low mortality rate.

It is far less lethal than real-life Ebola, Nipah and SARS.

Despite the lower mortality rate, COVID-19 will, however, change the world in ways that those diseases did not.

Ebola, Nipah, SARS and MERS, et al, were contained outbreaks.

COVID-19 is not.

It started in China and has since spread to every major country.

The economic damage is far greater, and the absolute death-toll magnitudes more.

The post-COVID-19 era will be different in several significant ways from the world in November 2019.

Industries will re-engineer their internal work processes and retool supply chains.

Some service industries will practically evaporate, though they will surely rise again, in different avatars.

Policymakers will have to rethink accepted wisdom on handling public transport and healthcare.

Insurers will have to review premium assumptions.

Manufacturers around the world have been hit by the lack of critical components out of China.

They have already started creating better models for identifying critical gaps and weaknesses in their supply chains.

Multinational corporations will surely find ways to diversify supply chains across regions to ensure that they are better prepared the next time something like this happens.

This will add to costs: China is a hub because it is the cheapest and most efficient manufacturer of anything at scale.

Second, manufacturers will look at ways to sanitise workspaces, and factories, and embed a paradigm of social distancing in corporate work culture.

Any labour-intensive industry will have to figure this out.

Whether it’s a construction site, a warehouse, a server ant-farm, or a textile sweat-shop, no business can live with the possibility that workers placed cheek by jowl will be infected en masse.

Insurers who are now looking at writing pandemic disruption policies will not be happy with current work processes, which means lenders will also be unhappy, which means businesses have strong incentives to change.

The office, as a management centre, will probably decline in importance.

Tens of millions will be working from home for months at a time, which means the smartest brains in business will be focussed on creating more efficient WFH processes.

There will be big investments in tools that empower better WFH.

Every major city survives, and thrives, on the foundations of a robust public transport system, be it a metro, or rapid transit buses, or ride-hailing cabs.

Those systems will need to be reviewed and municipalities will have to find ways to sanitise them to brace for the next crisis.

Transport industries such as aviation, shipping and railways will go through hell until this crisis is over.

They will have to create disaster management systems to engender confidence in users.

The entertainment sector, and its close relative, organised sports, must weather this knock and find ways to substitute online audiences for live spectators.

Hospitality will also go through a dark period of soul-searching until customers come back or they find ways to deliver the same fine dining experiences off-site.

Educational institutions, which are mostly currently shut, will have to invent new paradigms of online teaching at scale.

Healthcare will, one way or another, have to find ways to ramp up ‘just-in-time’ capacity.

Policymakers and pharma companies will have to work together to speed up trials of new vaccines and legislate to ensure essential drugs and tests are affordable and available.

One fear is that authoritarian regimes will now use the need to generate fast, actionable information about the next potential epidemic to force even higher levels of surveillance down every citizen’s throat.

There is an old saying ‘that which doesn’t kill you, makes you stronger.’

The post COVID-19 world will certainly be more resilient in many ways.


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‘Defensive portfolio strategy is recommended’

‘Investors should reduce cash gradually and look for value investing.’

The outbreak of coronavirus opens up an unanticipated and unmeasured downside risk, Nischal Maheshwari, bottom, chief executive officer for institutional equities & advisory, Centrum Broking, tells Puneet Wadhwa.

How are the markets likely to play out over the next 3 to 6 months?

The outbreak of coronavirus has occurred at a time when the global and the domestic economies are facing a slowdown.

The fear of supply-chain disruptions, likely to occur because of the industrial clampdown in certain Chinese provinces, has obstructed the nascent signs of global economic stabilisation displayed through the ceasefire in the trade war between the US and China, coupled with a few green shoots in India.

In the absence of any meaningful domestic triggers, the markets are most likely to track virus-related developments across the globe.

In this backdrop, they are likely to remain range-bound in the near term.

The RBI can do a pre-emptive rate cut of around 25 basis point (bps) in the April policy, or even earlier.

Other measures to improve transmission through another round of long-term repo operations cannot be ruled out.

Will foreign investors allocate more to Indian equities?

Given the ongoing global risk sentiment, investors are flocking to safe-haven asset classes and avoiding risky emerging-market (EM) asset classes.

However, if one needs to choose among EMs, India remains an attractive investment destination.

Also, favourable policy initiatives, coupled with persistent efforts to garner more foreign capital to support the government’s growth objectives, have provided a significant boost to Indian capital markets.

The Indian economy may enjoy the position of being less vulnerable to such shocks as India’s integration into global value chains is minimal, compared to its Asian peers.

However, if the situation is not contained, India may be affected, too.

Optimistically, for 2020, we expect foreign institutional investor inflows to continue gathering momentum as the better macroeconomic stability makes investments in India relatively attractive.

What’s your view on the banking sector given the recent developments?

Given the challenges faced by corporate and non-banking financial companies in the last 12 to 18 months, banks with high corporate exposure should be avoided.

Investors should consider retail-focused banks.

Domestic demand is likely to witness increased traction in the next few quarters, given pockets of rural economic activity gathering momentum, along with recent announcements on personal income tax cuts.

This will drive credit growth in retail-focused banks.

Your estimates for corporate earnings growth in FY21?

Given the gradual pick-up in growth on account of measures adopted by the government and the RBI, we had estimated 22 to 23 per cent growth in Nifty earnings for FY21.

However, the outbreak of coronavirus in China has raised trepidations regarding disruptions in global industrial production and trade channels, thereby putting global growth at risk.

If the epidemic is not contained in the near term, chances are that growth could further trend lower.

With the relative lower participate rate in global value chains, India may stay less vulnerable than other East Asian economies, but the spillover of a global slowdown is certain to have an impact.

Investors are more likely to play defensive and sectors, such as information technology and fast-moving consumer goods, are likely to surprise amid risk-off sentiment.

Will the polarisation that we see in the markets now get entrenched over the next one year?

At this juncture, the market remains polarised with consumer durables, information technology and banking providing the bulk of the returns.

Since we do not expect a broad-based recovery in FY21 as structural bottlenecks are likely to impede the path of normalised growth recovery, we expect the markets — that are being driven by only a few stocks — to remain polarised.

Overall earnings are likely to see limited traction.

How do you see the consumption-related theme play out in the back-drop of sub-par economic growth?

The FMCG sector should start seeing traction as it holds the key potential of acting as a contrarian play.

Auto stocks have corrected significantly and we do not see elongation of coronavirus beyond spring.

Expect things to normalise in the summer.

Investors can look at the auto space — passenger vehicles and two-wheelers — but should refrain from investing in commercial vehicles.

Your investment strategy amid all these developments?

Though the worst seems to be behind us, it is going to be a slow path towards normalisation.

Given the current government has a political mandate and acknowledged the slowdown, it will continuously intervene to bring the economy back on track.

In this background, investors should reduce cash gradually and look for value investing.

However, the outbreak of coronavirus opens up an unanticipated and unmeasured downside risk.

In the short to medium term, since the coronavirus scare will hamper growth world over, a defensive portfolio strategy is recommended.

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Top 3 IT firms lose $31 bn in a fortnight

Stock market crash: TCS sheds $21 billion in market capitalisation, Infosys $7 billion and Wipro around $3 billion.

Top three IT services firms of the country lost a combined market capitalisation (m-cap) of around $31 billion in the past fortnight as coronavirus continued to roil the stock market.

Given the global spread of the virus, the fall in m-cap is not limited to India as all global IT services majors, including IBM, Accenture and DXC Technology have also witnessed fall in their market capitalisation.

From March 2 until Tuesday (March 17), m-cap of India’s largest IT services player Tata Consultancy Services (TCS) dropped by Rs 1.45 trillion (around $21 billion) as investors sold their positions in anticipation of demand slowdown.

Similarly, country’s second-largest IT firm Infosys saw its m-cap drop by around Rs 70,000 crore (around $7 billion) in the past fortnight to touch Rs 2.36 trillion.

In case of Wipro, m-cap fell by around Rs 26,000 crore (around $3.7 billion) to touch Rs 98,902 crore on Tuesday.

Globally, the phenomenon is not different. DXC Technology’s m-cap fell to around $3 billion.

Though the IT services company, which has been spun off from Hewlett Packard’s enterprise service business, has seen fall in its m-cap last year, has accelerated in the past three months.

DXC Technology, which has an annual revenue of $21 billion and is the fourth-largest IT services firm globally, saw its m-cap falling to one fourth of what it used to be in January owing to market meltdown.

“With the global spread of coronavirus, the IT industry, which is projected to grow at 5 per cent this year, can also see negative growth.

“Now, the industry is likely to grow in -5 to +5 range. This has definitely spooked the investors,” said Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting.

According to global research firm Gartner, global spend on IT is likely to grow at 3.7 per cent in 2020.

However, with major countries shutting down establishment to contain the virus, demand slowdown has now become a reality.

“Both oil & gas and travel & hospitality contribute 40 per cent of IT spend. As these sectors are facing major growth headwinds now, recovery in m-cap seems challenging,” said Jain of Pareekh Consulting.

In a note, global consulting firm Everest Group said the situation was likely to continue until June 2020.

“We believe this situation is going to disrupt one quarter of demand-related revenue growth (quarter ending June 2020) with some tail beyond,” said Peter Bendor-Samuel, founder and chief executive officer of outsourcing advisory firm Everest Group.

With such demand slowdown, IT firms across the board will face severe pricing pressure in the current year, even if the outbreak was contained, he added.

IT firms have been witnessing delay in wining large deals.

“If both the demand and supply side situations improve in the coming quarters, m-cap will rebound. All depends on the containment of the virus,” Jain added.

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Coronavirus fears halt export of buffalo meat

Since 2013-14, buffalo meat had been the largest export item in the agri commodity basket for a few years. Since the coronavirus outbreak in January, Indian exporters have received no fresh orders from Southeast Asian and West Asian countries, which cumulatively contribute nearly 65 per cent of India’s overall buffalo meat shipment.

Buffalo meat exports have come to standstill after Malaysia, Vietnam and Turkey, the three major destinations of India’s exports, stopped placing orders following the global coronavirus (Covid-19) pandemic.

This is the worst ever crisis for these exporters.

Since 2013-14, buffalo meat had been the largest export item in the agri commodity basket for a few years. Since the coronavirus outbreak in January, Indian exporters have received no fresh orders from Southeast Asian and West Asian countries, which cumulatively contribute nearly 65 per cent of India’s overall buffalo meat shipment.

With coronavirus gradually spilling over to China’s trade partners and other countries now, buffalo meat exports have come to a standstill.

Many consignments that were shipped to various countries, including Hong Kong, Vietnam and Malaysia, ahead of the New Year celebrations in China on January 25, 2020, are still stuck at ports due to the lockdown there. Those who had already shipped their consignments before the Chinese New Year are still waiting to get paid from importers there.

Exporters fear default in buffalo meat shipments could be in millions and may create business hurdles in the future.

Trade with Malaysia and Turkey were also hit due to their anti-Indian stand over abrogation of Article 370 and 35A in Jammu and Kashmir.

“There is absolutely no orders received since the coronavirus outbreak in China. Tonnes of exported buffalo meat await clearances at various ports. Millions of dollars of receivables are still pending due to the lockdown there. We are trying to convince local authorities of importing countries to clear the consignments and deposit them in cold storages there,” said Soeb Khan, managing partner, Fresh N Frozen Tech, a Hyderabad-based manufacturer and merchant of buffalo meat.

The delay in clearing consignments at importing ports resulted in huge amounts of demurrage being paid over and above the container and freight charges. 

Data compiled by the Agricultural and Processed Foods Export Development Authority (Apeda) showed that India’s buffalo meat exports declined by 8 per cent in value terms to $2.8 billion between April 2019 and January 2020 compared with $3.05 billion in the corresponding period last year.

In terms of quantity, however, the decline was a mere 2.4 per cent to 1 million tonnes.

Photograph: Anindito Mukherjee/Reuters.

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