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The Himalayan Mail8 JAMMU TUESDAY NOVEMBER 03, 2020 NEWS

NEW DELHI, NOV 2:Manufacturers indicatedthat the ongoing relaxationof COVID-19 restrictions,better market conditionsand improved demandhelped them to secure newwork in October.

India's manufacturingsector activity improved forthe third straight month inOctober with companiesraising output to the greatestextent in 13 years amid ro-bust sales growth, amonthly survey said onMonday.

The headline seasonallyadjusted IHS Markit IndiaManufacturing PurchasingManagers' Index (PMI) rosefrom 56.8 in September to58.9 in October, andpointed to the strongest im-provement in the health ofthe sector in over a decade.

In April, the index hadslipped into contractionmode, after remaining inthe growth territory for 32consecutive months. In PMIparlance, a print above 50means expansion, while ascore below that denotes

contraction."Levels of new orders and

output at Indian manufac-turers continued to recoverfrom the COVID-19 inducedcontractions seen earlier inthe year, with the PMI re-sults for October highlight-ing historically-sharpmonthly rates of expan-sion," said Pollyanna DeLima, Economics AssociateDirector at IHS Markit.

Lima further noted that"companies were convincedthat the resurgence in saleswill be sustained in comingmonths, as indicated by astrong upturn in input buy-

ing amid restocking ef-forts".

Manufacturers indicatedthat the ongoing relaxationof COVID-19 restrictions,better market conditionsand improved demandhelped them to secure newwork in October.

On the employmentfront, the compliance ofgovernment guidelines re-lated to the COVID-19 pan-demic caused a further re-duction in employment.The fall was the seventh inconsecutive months.

"There was disappointingnews on the employment

front though, with Octoberseeing another reduction inpayroll numbers.

“Survey participants thatnoted job shedding men-tioned having observedcontainment measures tohalt the spread of the coron-avirus disease 2019," Limasaid.

Inflationary pressures,meanwhile, remained sub-dued as seen by a modestincrease in input costs andonly marginal rise in selling

prices.Meanwhile, hopes of an

end to COVID-19 cases andthe reopening of other sec-tors in the economy under-pinned positive sentimenttowards the year-ahead out-look for production.

The level of confidencewas at a 50-month high.

"Also, confidence towardsthe year-ahead outlook forproduction improved asfirms hoped that fewerCOVID-19 cases and the re-opening of other businessescould boost output growth,"Lima noted.

Factory output rises atquickest pace since Oct 2007 NEW DELHI, NOV

02: Labour market statis-tics derived from CMIE'sConsumer PyramidsHousehold Survey havebeen indicating a stagnationof India's economic recov-ery process from its April2020 shock.

The recovery was smart inMay and spectacular inJune.

It continued well intoJuly.

Then, it stalled in Augustand September.

Now, it appears that thestagnation could extend orworsen in October.

We measure labour mar-ket conditions by the mostapt summary measure for adeveloping country like In-dia -- the employment rate.

This is the proportion ofworking age population thatis employed.

Fiscal 2019-2020 endedwith an employment rate of39.4 per cent.

It fell to 27.2 per cent inApril 2020 but, it recovered300 basis points to reach30.2 per cent in May.

In June, the recovery wasof a very impressive 600 ba-sis points to 36.2 per cent.

In July, the employmentrate climbed up another 140basis points to 37.6 per cent.

The fatigue set in in Au-gust when the rate fell to37.5 per cent. Then, therewas a small recovery to 38per cent in September.

Note that the fatigue setin well before recovering tothe 2019-20 average em-ployment rate.

October shows signs ofcontinued stress.

All the first three weeksending in the month pen-cilled employment rateslower than the 38 per centrecorded in September.

The rates, in sequence,were 37.6 per cent, 37.5 percent and 37.9 per cent.

Keeping the employment

rate from slipping is chal-lenging.

To merely keep the em-ployment rate unchanged,the economy has to gener-ate additional jobs.

It needs to run to staywhere it is.

This is because the de-nominator -- the workingage population -- keeps ris-ing naturally.

Employment has to risein tandem to ensure that theratio, the employment rate,remains constant.

In the past four years, theemployment rate has fallensteadily in each year. This isbecause employment hasbeen stagnant.

Fall of the employmentrate revealed in the firstthree weeks of October2020 is entirely because ofa fall in the employmentrate in rural India.

The employment rate inrural India was 39.8 percent in September.

This was its highest levelsince the lockdown and wasnot too far from the 40.7 percent clocked in 2019-2020.

However, it appears thatrural India is not able tosustain an employment rateof 40 per cent or more.

The weekly employmentrate had touched 39.9 percent in the week ended Sep-tember 6.

But it has slid since then.

In the week ended Octo-ber 4, the rate was down to39 per cent and then itslipped further to 38.8 percent in the week ended Octo-ber 11.

It recovered to 39.5 percent in the week ended Octo-ber 18.

But, it was still lower thanthe September average. Theaverage of the first threeweeks of October was 39.1per cent.

The fall in the rural em-ployment rate in October issomewhat surprising be-cause this is the peak seasonfor harvesting the kharifcrop.

While sowing is spreadover four months, most ofthe crop is harvested in Oc-tober.

Different crops have dif-ferent gestation periods butsave for cotton and sugar-cane, most of the kharifcrop is harvested in Octo-ber.

It is possible that employ-ment under the MGNREGShas declined significantly inOctober.

Till October 19 this year,the scheme had provided58.5 million person-days ofemployment compared to138 million person-days ofemployment provided dur-ing the entire month of Oc-tober 2019.

These numbers do get re-

vised very substantially andtherefore, it may be haz-ardous to draw inferences atthis stage.

Yet, the fall evident so faris quite large.

The average person-daysof employment per day inOctober 2019 was 4.47 mil-lion. In the first 19 days ofOctober 2020 it was 3.08million, a fall of 31 per cent.

Given that rural India hasa much larger weight in all-India estimates, it is imper-ative that its employmentrate stops falling any fur-ther.

In contrast to the fallingtrend seen in rural India,urban India has shown animprovement in the em-ployment rate in October2020.

The employment rate inurban India in Septemberwas 34.4 per cent.

The recovering trend inurban India in October is incontrast to the sharp fall inemployment rate seen inSeptember.

The urban employmentrate at 34.4 per cent was asubstantial 254 basis pointslower than the average 36.9per cent rate in 2019-20.

The average employmentrate in urban India in thefirst three weeks of Octoberwas 34.8 per cent.

Even this was over 200basis points lower than the2019-2020 level.

The falling employmentrate in rural India and thecontinued low employmentrate in urban India are theweaknesses in India'slabour market recoveryprocess.

The gap between themonthly employment ratein 2020-21 and the corre-sponding month of 2019-20narrowed consistently tillAugust 2020 when it wasjust 182 basis points.

It then rose to 254 basispoints in September.

Jobs: October has some bad news

NEW DELHI, NOV02: After having stood itsground for four years fromReliance Jio’s sustained on-slaught, Bharti Airtel is nowhitting back on manyfronts: subscriber addi-tions, defending and ex-panding its postpaid cus-tomer base, taking on Jio inbroadband fiber-to-the-home (FTTH), and develop-ing its own 5G open radioaccess network in collabo-ration with partners.

Airtel announced its sec-ond quarter (Q2) 2020-21(FY21) results last week,springing a surprise by de-claring a net subscriber ad-dition of 13.9 million,mostly in 4G.

That’s nearly double thatof Jio’s (7.3-million net addi-tions in the same quarter) -its lowest in two years.

This is also the first timeAirtel has surpassed Jio interms of net additions sincethe latter launched 4G ser-vices.

Airtel is also pleased thatits churn was at an all-timelow of 1.7 per cent (lastquarter it was 2.2 per cent)and that Jio’s churn, whichwas low at 0.46 per cent inthe April-June quarter,went up this quarter to thesame levels as Airtel’s (1.7per cent).

Despite the increase insubscribers, Airtel’s averagerevenue per users (ARPU)are still up by 3 per cent,partly because of 4G sub-scriber net additions andalso due to an increase inpostpaid subscribers.

All this, moreover, with-out an increase in tariffs(still a million-dollar ques-tion).

Airtel says that, with apremium in tariffs over Jioof 20 per cent, it won’t bethe first mover.

However, SBI Caps pro-jects that Airtel will exitFY21 with an ARPU of Rs171, going up to Rs 182 in

2021-22, with 65 per cent ofits subscriber base becom-ing 4G in the next four tofive quarters.

Analysts say that Jio’ssubstantial slowing down innet additions is possibly be-cause the company has dra-matically reduced its bun-dled 4G feature phoneoffering, which contributedan average 30-40 per centof its net additions.

It attracted 2G customersto upgrade to 4G at a verylow cost of sub-Rs 2,000.

to JPMorgan, based onthe IDC data, shipments ofthe Jio phone during thisperiod were soft at only 1.1million devices.

The success of this over18-month long strategy canbe gauged by the fact thatthe 4G feature phone at-tracted more than 110 mil-lion customers to Jio, ac-counting for a fourth of itssubscriber base.

The company announceda few months ago that it willcome out with low-cost,smart, Android phones in atie-up with Google.

But insiders say thelaunch might take anotherthree to four months.

Analysts argue that Airtelcould leverage this time,when Jio does not have anykiller bundled offer, to woomore customers away fromVodafone Idea, which hasseen a consistent loss of cus-tomers month-on-month.

And there is also nothing

stopping Airtel from work-ing out a similar offeringbundled with a smart-phone, even though theyhave not done it so long.

They also argue that Air-tel is closing the wirelessrevenue growth gap, quar-ter-on-quarter with Jio.

For instance, Airtel’swireless revenues are up 7per cent in Q2, compared toa fall of 1 per cent the previ-ous quarter.

Jio revenues in Q2 are up5.5 per cent, compared to 12per cent the previous quar-ter.

Airtel has also shown agrowth spurt in postpaidcustomers, despite Jio ag-gressively offering new tariffoffers bundled with over-the-top (OTT) platforms.

Jio’s earlier tryst withpostpaid was very luke-warm and its share of sub-scribers has been minimal -less than 1 per cent of its to-tal.

In contrast, Airtel hasadded 0.8 million postpaidcustomers - the highest in20 quarters.

Their importance is evi-dent from the fact that theiraverage ARPUs, based onpast trends, are nearly 2-3xof that of prepaid cus-tomers.

The full impact of Jio’spostpaid entry tariff of Rs399 (up from Rs 199)launched in September-endand bundled with OTT plat-forms such as Netflix, Ama-

zon Prime, and Hotstar, onVIP subscriptions will onlybe reflected in the thirdquarter FY21 results.

Airtel executives are non-chalant.

“They have substantiallyincreased the postpaid tar-iffs and added OTT whichyou can, in any case, buy onyour own. In postpaid, theyhave avoided getting into aprice war.

"Our experience is thatpostpaid customers aresticky to the service anddon’t churn,” said an Airtelexecutive.

Airtel is also moving ag-gressively in the FTTHspace where, again, it facesJio in the ring.

For instance, in Q2, homebroadband subscriberswere up by 129,000 to 2.6million as it increased roll-out of FTTH in 50 morecities, reaching 150 cities.

While Jio does not giveFTTH subscriber numbersseparately in its Q2 results,based on the latest TelecomRegulatory Authority of In-dia data of July, Jio had1.16-million wired broad-band customers, half that ofAirtel.

Jio’s offer and price arebeing matched by Airtel too.In the first week of Septem-ber, Jio launched an aggres-sive Rs 399 plan but with akiller deal: an offer of un-limited data across all tariffsfor FTTH.

Six days later, Airtelmatched the unlimited dataoffer and reduced the priceof its entry-level FTTH fromRs 799 to Rs 499.

The even bigger play putin place by Airtel is to sub-stantially reduce the gapwith Jio in the number ofcities where FTTH servicesare available.

To this end, it has tied upwith local cable operatorswho will provide the last-mile connectivity.

Airtel overtakes Jio for firsttime in new 4G subscriptions

NEW DELHI, NOV 02: Financesecretary Ajay Bhushan Pandey onSunday hinted that the governmentwas working on another stimuluspackage but he refrained from givinga timeframe.

"We keep monitoring the situationon the ground to assess which sectorof the economy or segment of the pop-ulation needs what kind of help atwhich time and respond accordingly.We keep taking suggestions from in-dustry bodies, trade associations, var-ious ministries and after goingthrough their suggestions and require-ments of the economy, we come outwith timely measures," Ajay BhushanPandey said in an exclusive interview toPandey said that he could not give atimeframe for the stimulus package,“but yes the government was on it anddeliberations on further interventionswere on”.

Talking about the current state ofthe economy, Pandey said that theeconomy was recovering and movingtowards sustained growth.

The October GST collection hasbeen Rs 105,155 crore which is 10 percent higher year-on-year for the cor-responding month last year. This Sep-tember, the economy had also shown 4per cent growth at Rs 95,480 crore inGST collections y-o-y. Further, thecountry has seen a growth in electricityconsumption, exports, and imports,he said.

"September and October data showsthat we have reached pre-Covid-19level and gone into positive territory.If we compare with the last year, the e-way bill in September has seen year onyear growth of 10 per cent and in Octo-ber it has seen a growth of 21 per cent,"he said.

"If we are able to maintain thisgrowth for the next five months, thenwe can say that we can transition fromdeep negative zone to near-zerogrowth zone by March 2021. Interna-tional Monetary Fund (IMF) has pro-jected India's GDP to contract 10.3 percent this fiscal year, revised from itsforecast of a 4.5 per cent decline in

June," he added.The Reserve Bank of India had last

month said that the economy is likely tocontract by 9.5 per cent in the currentfiscal. GDP contracted 23.9 per cent inthe first quarter of the fiscal, as per theestimates of the Central Statistics Office(CSO).

The finance secretary said the gov-ernment has started electronic in-voices from October 1. On an average 8lakh invoices were being generateddaily. It picked up quickly and on Octo-ber 30, in a single day 29 lakh elec-tronic invoices were generated. "If wesee the growth of the FMCG, auto sec-tors, it shows that we are going in thedirection of sustained growth," hesaid.Pandey said, "We are analysingevery sector and this is a continuousprocess. Since the COVID-19 out-break, we have been continuouslymonitoring every sector. Whateverwas required for helping migrants,vulnerable sections of the rural or ur-ban populations, we did. When the na-tion was in lockdown, we gave cash towomen Jan Dhan account holders intheir bank accounts through DBT. Weprovided early instalments to farmersunder PM Kisan Yojana."

"We helped employees and employ-ers in their EPF contribution. We ear-marked Rs 3 lakh crore for enhancedworking capital to MSMEs, out of

which Rs 2 lakh crore has been sanc-tioned and amounts are being dis-bursed. MSMEs were also given thebenefits of loan moratorium. We havegiven income tax refunds of Rs 1.27lakh crores in last seven months. Wehave given GST refunds of Rs 70,000crore," he added.

He said that a total refund of Rs 2lakh crore has been given in the lastseven months. During this period, rev-enue collections were impacted butthe government did not stop or slowdown the refunds.

Ruling out the possibility of any cutin GST rates in near future during theCOVID pandemic, he said that there isthe wrong impression that rate cutboosts sales and growth.

"One may see the example of mobilephones. Mobile phones are attractingan 18 per cent GST rate from April 1,2020, up from the earlier rate of 12 percent, after the GST Council correctedthe inverted duty structure. Now seethe current sales figures for mobilephones. Despite the increased tax rate,their sales are up," he said.

"Frequent tinkering with the taxrates is not good for the economy. Italso sends wrong signals to domesticindustry and international investors.We have to provide stability and pre-dictability in our tax systems," headded.

Another stimulus package inpipeline, says finance secretary

Former HDFC Bank CEOAditya Puri will be guidingglobal Carlyle on invest-ment opportunities acrossAsia as a senior advisor, theglobal private equity majorsaid on Monday.

The announcement hascome within a week ofPuri's retirement fromHDFC Bank as the chief ex-ecutive and managing di-rector.

Puri is widely credited forbuilding HDFC Bank fromscratch and making it thelargest in the private sectorspace and the most valu-able one.

Puri will advise the Car-lyle team on investment

opportunities across Asiaand provide guidance onthe evolving market land-scape and new investmentopportunities, Carlyle saidin a statement.

He will also be advisingCarlyle's investment pro-fessionals and portfoliomanagement teams onbuilding differentiated high

quality businesses, it said.Carlyle's financial sector

lead for Asia and managingdirector Sunil Kaul said hehas known Puri since hisCitibank days.

“To have someone of hisstature join Carlyle as a se-nior advisor will add signif-icant value to our capabili-ties across the region, notonly in financial services,but across sectors givenPuri's unparalleled experi-ence in the businessworld,” Kaul said.

Carlyle's investments inIndia include SBI Cards. Ithad recently announced in-vestments in Ajay Piramal'spharmaceutical business

and also a stake in BhartiAirtel's datacentre arm.

“I am very impressedwith Carlyle's track recordin a number of key industrysectors, including its lead-ership position in financialservices, not just in Indiabut across Asia,” Puri wasquoted as saying in thestatement.

Carlyle Asia's ManagingDirector and Chairman X DYang said the PE major willbe leveraging Puri's “deepexpertise and relation-ships” to source new in-vestment opportunitiesand to help the its portfoliocompanies build betterbusinesses.

HDFC Bank ex-CEO Aditya Purijoins Carlyle as senior advisor