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BW Businessworld

Jottings: Bleak Prospects

As Delhi’s streets become paved with mountains of garbage and the usual political game continues to be played out in the corridors of power, there seems to be no solution in sight to the woes of the municipal workers.

Steel companies remain in the limelight for the wrong reasons. The government followed up its 20 per cent safeguard duties of September 2015 with minimum import price on 173 items to restrict dumping of cheap steel mainly by China. Yet, the earnings of steelmakers will take a hit. Of the two major companies that have released their third quarter results, Tata Steel reported a net loss of Rs 2,127 crore. For the nine months this fiscal its profit shrank to Rs 164 crore compared with Rs 1,749 crore a year ago. JSW Steel, an investors’ darling, too succumbed to a loss of Rs 923 crore on a consolidated basis and Rs 4,142 crore on a standalone basis. Both these companies have new capacities in the pipeline and also international operations, making it tougher to control costs in the near term. Though others are yet to announce their results, steel shares are heading southwards. From their 52-week highs, Jindal Steel & Power has plunged 70 per cent, Bhushan Steel 62 per cent, Steel Authority of India 49 per cent, Tata Steel 39 per cent, Kalyani Steel 23 per cent and JSW Steel 7 per cent. Keep a watch.
— Sumit Sharma

No App For Rubbish
As Delhi’s streets become paved with mountains of garbage and the usual political game continues to be played out in the corridors of power, there seems to be no solution in sight to the woes of the municipal workers. The workers, it appears, are caught between the devil and the deep blue sea: co-workers threaten acid attacks if others fail to support the strike, and supervisors who threaten long-term consequences if work is not done. Meanwhile, the Ministry for Urban Development has dreamt up another mobile app, Swachh City, to be operational by April. The app is supposed to help citizens complain more easily about garbage problems. Ironically, with garbage strewn all over the place, such an app is a little redundant. If only apps were the solution to India’s festering problems, the country would be squeaky clean by now. Instead, one should be able to see the garbage from the air fairly soon when flying over the capital.
— Mala Bhargava

Number Crunching
The final calculation for the much delayed and much debated One Rank One Pension (OROP) scheme for the ex-servicemen is out. As opposed to the projected estimates of Rs 8,300 crore, the OROP will cost the government Rs 7,500 crore per year. In simpler terms, the defence pension outlay for 2016-17 goes up by 20 per cent — from Rs 54,000 crore to Rs 65,000 crore. Which means the government may need supplementary funds. And that will require Parliament’s approval. Since the OROP scheme will be implemented from 1 July 2014 and not 1 April 2014 as was demanded by the ex-servicemen, the arrears till the end of December 2015 has been worked out to be Rs 10,900 crore. Payment of arrears will be made by the Pension Disbursing Authorities in four installments. Hopefully, this move settles the OROP issue for good even though there are murmurs of an agitation for an annual revision.
— Ashish Sinha

Putting Patients At Risk
The central government’s decision to hike import duty on medical devices was intended to provide an impetus to domestic industry. Basic customs duty on specified medical devices has been increased from 5 per cent to 7.5 per cent, while exemption from additional customs duty on some has been withdrawn. This will result in a sudden spike in retail prices of essential, imported medical care products. It will hit the patients the most, considering that 75 per cent of people are not covered by medical insurance. As it is, most surgical products such as stents and patient wearables are beyond the reach of the common man. Moreover, the medical devices industry in India is still at a nascent stage and is unlikely to meet demand and quality standards. More worrisome is the fact that the import duty hike for medical devices comes on the heels of the health ministry’s proposal to drop for now a stringent drug regulatory law. There has obviously been intense lobbying by the local medical devices industry. And it seems, it has succeeded at the cost of good and affordable healthcare.
— C.H. Unnikrishnan

Pricey Privilege
BlackBerry has recently launched its BlackBerry Priv smartphone globally and in India and the price is so staggering it has overshadowed what is an interesting device. The once iconic brand is today spoken of more commonly as a company on the brink of shutting down. The last thing this company needed is a product with a prohibitive price of Rs 63,990. This isn’t the first time BlackBerry is pricing its smartphones unrealistically, or as some would say, suicidally. Its flagship Passport smartphone, solid but strangely square, launched at Rs 49,990 in 2014 — and that was considered too much. As a result, one does not see many people carrying the Passport. With that and a few more similar experiences behind them, it is difficult to understand the company’s pricing strategy at a time when fewer and fewer users will see the BlackBerry Priv as a privilege.
— Mala Bhargava