Responsible Netizen

This Sunday i.e. on 17/03/2019, our Investment Guidance cell in association with Janakalyan Sahakari Bank has organized a presentation on the subject "Responsible Netizen", by Shri Unmesh Joshi, an expert in this field, at Gokhale Sabhagriha, 1st Floor. The presentation will start exactly at 10.00am as is our usual practice and conclude at 12.30noon.

You are aware that now a days we use the internet for many transactions. This program will guide us about how to utilise the internet safely and securely.

UPI - Unified Payment Interface

The way we undertake money transactions in India is expected to change dramatically with the introduction of the Unified Payment Interface (UPI), which aims to move the country towards a more cashless model. Developed by The National Payment Corporation of India (NPCI), the payment interface is expected to be a game changer in mobile banking.

Shikha Sharma, managing director and CEO of Axis Bank, considers UPI the ‘WhatsApp moment’ for payments in India.

The Reserve Bank of India (RBI) in its Payment System Vision Document (2012-2015) had mentioned the use of UPI for achieving its goal of a lower cash-intensive society and financial inclusion using the latest technology.

Here’s a closer look at what the RBI is trying to achieve through UPI and how it will make our lives easier. But before that, let’s look at the current status of non-cash transactions in the country.

According to an NPCI document, the number of non-cash transactions per person stands at just 6 per year. Only a fraction of the 10 million-plus retailers in India have card payment acceptance infrastructure – presently this number stands at 0.6 million, or 6%. What these numbers reflect is the potential that exists as penetration of smart phones is projected to increase from the current level of 150 million to 500 million over the next few years.

What are the key drivers of UPI?

The NPCI document points out that the key goal of implementing UPI was to simplify and provide a single interface across all segments. The key drivers for this are:

Simplicity: The thinking behind the UPI was to make the application as simple as possible. Paying and receiving payments should be as easy as swiping a phonebook entry and making a call on mobile phone, says the document. An account holder should be able to send and receive money from their mobile phone with just an identifier without having any other bank/account details. All they need to do is to "pay to" or "collect from" a “payment address” (such as Aadhaar number, Mobile number, RuPay Card, virtual payment address, etc.) with a single click.

Innovation:  The idea here was to come up with a solution so that innovations on both payee and payer side can evolve without having to change the whole interface. It should allow application providers to take advantage of enhancements in mobile devices, provide integrated payments on new consumer devices provide innovative user interface features, take advantage of newer authentication services, etc.

Adoption:  Given the size of the potential user base, the key was to have a solution which should not crash and be scalable to a billion users and enable large scale adoption. It should allow gradual adoption across smartphone and feature phone users and provide full interoperability across all payment players, phones, and use cases. People using smartphone should be able to send money to others who are not yet using any mobile application and vice versa. Similarly, it should allow full interoperability between multiple identifiers such as Aadhaar number, mobile number, and new virtual payment addresses.

Security: One of the key areas of concern among users is security. The solution had to provide end-to-end strong security and data protection. The trick here was not to reveal too much data like banking or other personal details which could be misused. For convenience, the solution also had to offer 1-click 2-factor authentication, protection from phishing, risk scoring, etc.

Cost:  India is a cost-conscious country and any product with a high cost is likely to have a short life. Since mobile phone number is used as an authentication (credential capture) device, use of virtual payment addresses, and use of third party portable authentication schemes such as Aadhaar should allow both acquiring side and issuing side cost to be driven down.

What are the objectives of UPI?

The key objective of a unified system is to offer an architecture to facilitate next generation online immediate payments leveraging trends such as increasing smartphone adoption, Indian language interfaces, and universal access to Internet and data.

UPI is expected to further propel easy instant payments via mobile, web, and other applications. The payments can be both sender (payer) and receiver (payee) initiated and will be carried out in a secure, convenient, and integrated fashion. Virtual payment addresses, 1-click 2-factor authentication, Aadhaar integration, use of payer’s smartphone for secure credential capture, etc. are some of the core features. It supports the growth of e-commerce, while simultaneously meeting the target of financial inclusion.

Who can use UPI?

Anyone with a mobile phone and a bank account will be able to take benefit of UPI for either receiving or transferring money.

How is it different from the existing system?

In the present system, in order to make any transaction the account holder’s bank IFSC code is needed, which reveals bank account details. But using UPI, all one needs is a virtual address which is unique to you and it camouflages the bank and personal detail of the user or the receiver behind it.

What is the level of security in UPI?

UPI has a single click-two factor authentication system which means that with one click the transaction is authenticated at two levels. The user will need a mobile phone with a mobile pin called MPIN and a virtual ID offered by the provider. With a click the transaction is checked if the mobile pin matches with the virtual address only then does the transaction goes through.

Here is an example to explain the process.

Suppose you have bought some goods at a mall and need to make a payment for it. You have to inform your virtual address to the person at the counter who enters the address in his or her system. The mall’s system then sends an authentication message to the virtual address which is mapped to your mobile. Only after receiving the message and acknowledging it by entering your password is the transaction complete and the amount debited from your bank account or wallet.

Is virtual address unique to the user?

Virtual addresses offered by the provider need not be permanent. For example, a provider may offer “one time use” addresses or “amount/time limited” addresses to customers. In addition, innovative usage of virtual addresses such as "limit to specific payees" (e.g., a virtual address that is whitelisted only for transactions from IRCTC) can help increase security without sacrificing convenience. PSPs can allow their customers to create any number of virtual payment addresses and allow attaching various authorisation rules to them.

UPI is important for implementation of the JAM (Jhan Dhan Yojana, Aadhar and Mobile) trinity which Finance Minister Arun Jaitley spoke of during his Union Budget presentation. Raj Jain, chairman and managing director of RS Software, the company that helped NPCI launch UPI, said: “The launch of UPI will go down in history as amongst the most important initiatives to transform India.”

Business Identification Number

To improve ease of doing business, the government will soon introduce Business Identification Number (BIN) for companies, doing away with multiple registration numbers a single entity needs to obtain for various regulatory purposes.

The BIN would act as an identification number for different regulatory purposes and do away with the need for procuring separate registration numbers such as Company Identification Number and Labour Identification Number. Normally, a company is required to obtain 18 different registration numbers.

As per the proposal, the permanent account number ( PAN) may become the BIN for companies, an official said.

The Department of Industrial Policy and Promotion is discussing the matter with the Ministry of Corporate Affairs.

"The DIPP is expected to come out with the BIN in the next 2-3 months. It will help in reducing the time of registration processes of the companies," the official said adding the firms will have to apply for the BIN on the e-Biz portal.

The portal provides one-stop clearance platform for investment proposals.

India has been ranked at 130th for 2016 among 189 countries in the World Bank report on ease of doing business, improving four places from last year's ranking. The government is aiming to bring India into the top 50 ranks.

Several initiatives have been taken up by the government for improving ease of doing business in India through simplification and rationalisation of the existing rules and introduction of information technology to make governance more efficient and effective.

Bill for bankruptcy law

The bill seeks to consolidate and amend the laws relating to reorganization and insolvency resolution and will also apply to partnership firms and individuals. 

The bill is a money bill, implying that Rajya Sabha will have a limited role in it, brightening its chances of passage. 

Bankruptcy bill provides for creation of an Insolvency and Bankruptcy Fund, an Insolvency and Bankruptcy Board of India to regulate insolvency professional, agencies and information utilities. 

The code allows a corporate debtor itself to initiate insolvency resolution process once it has defaulted on a debt. 

The code provides for time limit of 180, days extendable by further 90 days, for completion of insolvency resolution process 

Financial creditors can also initiate corporate insolvency resolution process. 

The cumbersome insolvency resolution is one of key reasons for India's low ranking of 130 on the World Bank's Ease of doing business ranking. India is currently ranked at 136 on this measure in the 189-country ranking. Resolving a bankruptcy case can take on an average over four years in India. The government is keen to address this through a specific law to resolve insolvency. 

Read more at:
http://economictimes.indiatimes.com/articleshow/50265232.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

The vision of Digital India

The vision of Digital India programme aims at inclusive growth in areas of electronic services, products, manufacturing and job opportunities etc. The vision of Digital India is centred on three key areas -

(i) Digital Infrastructure as a utility to every citizen

(ii) Governance & services on demand

(iii) Digital Empowerment of citizens

The Digital India programme aims to provide broadband highways, universal access to mobile connectivity, public internet access programme, e-governance: Reforming government through technology, eKranti - Electronic delivery of services, Information for all, Electronics manufacturing: Target net zero imports, IT for jobs and early harvest programmes.

In line with these objectives, the government has launched some inititaives. Others are being readied for launch. We take a look at some of them:

1. Digital Locker System aims to minimize the usage of physical documents and enable sharing of e-documents across agencies. The sharing of the e-documents will be done through registered repositories thereby ensuring the authenticity of the documents online, says the government.

2. MyGov.in has been implemented as a platform for citizen engagement in governance, through a "Discuss", "Do" and "Disseminate" approach. The mobile app for MyGov would bring these features to users on a mobile phone.

3. Swachh Bharat Mission (SBM) Mobile app would be used by people and Government organizations for achieving the goals of Swachh Bharat Mission.

4. eSign framework would allow citizens to digitally sign a document online using Aadhaar authentication.

5. The Online Registration System (ORS) under the eHospital application has been introduced. This application provides important services such as online registration, payment of fees and appointment, online diagnostic reports, enquiring availability of blood online etc, the government claims.

6. National Scholarships Portal is said to be a one stop solution for end to end scholarship process right from submission of student application, verification, sanction and disbursal to end beneficiary for all the scholarships provided by the Government of India.

7. DeitY has undertaken an initiative namely Digitize India Platform (DIP) for large scale digitization of records in the country that would facilitate efficient delivery of services to the citizens.

8. The Government of India has undertaken an initiative namely Bharat Net, a high speed digital highway to connect all 2.5 lakh Gram Panchayats of country. This would be the world's largest rural broadband connectivity project using optical fibre.

9. Policy initiatives have also been undertaken by DeitY in the e-Governance domain like e-Kranti Framework, Policy on Adoption of Open Source Software for Government of India, Framework for Adoption of Open Source Software in e-Governance Systems, Policy on Open Application Programming Interfaces (APIs) for Government of India, E-mail Policy of Government of India, Policy on Use of IT Resources of Government of India, Policy on Collaborative Application Development by Opening the Source Code of Government Applications, Application Development & Re-Engineering Guidelines for Cloud Ready Applications

10. BSNL has introduced Next Generation Network (NGN), to replace 30 year old exchanges, which is an IP based technology to manage all types of services like voice, data, multimedia/ video and other types of packet switched communication services.

11. BSNL has undertaken large scale deployment of Wi-Fi hotspots throughout the country. The user can latch on the BSNL Wi-Fi network through their mobile devices.

12. BPO Policy has been approved to create BPO centres in different North Eastern states and also in smaller / mofussil towns of other states.

13. Electronics Development Fund (EDF) Policy aims to promote Innovation, R&D, and Product Development and to create a resource pool of IP within the country to create a self-sustaining eco-system of Venture Funds.

14. National Centre for Flexible Electronics (NCFlexE) is an initiative of Government of India to promote research and innovation in the emerging area of Flexible Electronics.

15. Centre of Excellence on Internet on Things (IoT) is a joint initiative of Department of Electronics & Information Technology (DeitY), ERNET and NASSCOM.

"The estimated impact of Digital India by 2019 would be cross cutting, ranging from broadband connectivity in all Panchayats, Wi-fi in schools and universities and Public Wi-Fihotspots. The programme will generate huge number of IT, Telecom and Electronics jobs, both directly and indirectly. Success of this programme will make India Digitally empowered and the leader in usage of IT in delivery of services related to various domains such as health, education, agriculture, banking, etc,"

DigiLocker

https://digitallocker.gov.in/

What is DigiLocker?

Dedicated personal storage space, linked to each resident’s Aadhaar number. DigiLocker can be used to securely store e-documents as well as store Uniform Resource Identifier (URI) link of e-documents issued by various issuer departments. The e-Sign facility provided as part of DigiLocker system can be used to digitally sign e-documents.

How does DigiLocker work?

To Sign-up for the DigiLocker you need to have an Aadhaar and mobile number registered with Aadhaar. Type your Aadhaar number and the captcha code. After clicking signup button, an OTP (One Time Password) will be sent to the registered mobile number and email-id. Enter OTP and click on “Validate OTP” button to complete the sign up and login.

How is DigiLocker going to help me?

It will minimize the use of physical documents and will provide authenticity of the e-documents It will provide secure access to Govt. issued documents. It will also reduce administrative overhead of Govt. departments and agencies and make it easy for the residents to receive services.

Send your queries to :support@digitallocker.gov.in

Railway Budget 2015-16: On the right track for a long journey

Key points

The Union Railway Budget for 2015-16 aims to achieve the dual objectives of improving the financial health of the Indian Railways and significantly increase the capital expenditure (capex) on modernisation, expansion and improvement of customer amenities & services of the railways at the same time.

The new rail minister’s mantra for improving the financial health of the railways is to improve the operational efficiencies and customer experience through better management, transparency and accountability.

On the other hand, the minister has increased the planned expenditure by 52% to over Rs1 trillion in 2015-16 for an aggressive network expansion plan including 16,400km of new lines, gauge conversion, doubling/tripling of lines, electrification and freight corridor. What’s more, the government has come out with a five-year plan that envisages capital investment of Rs8.5 trillion. The aggressive capital outlay would boost the morale of the domestic industry especially with a five-year visibility of possible business opportunity spelt out. It is also a step towards reviving the industrial activity and the investment cycle in India. In this regard, the government is also going to release a vision document outlining investments to be made till 2030.

A marginally negative step from the corporate standpoint is the revision done in the freight charges that would increase the freight cost for cement, coal, steel, urea and some other commodities. Moreover, there are questions regarding the government’s ability to raise financial resources to fund the aggressive capital investment plan outlined in the rail budget.

However, the positive takeaway is that the government has shown a clear intent to considerably increase the capital outlay for infrastructure projects and we could see a similar policy push in the Union Budget for 2015-16. Thus, we believe that the railway budget is positive for corporate India and the equity market. To play on the capital spending by the railways from the long-term investment perspective we prefer stocks like: Larsen and Toubro, Kalpataru Power Transmission and Thomas Cook (its subsidiary Quess is among the largest maintenance & housekeeping companies in India) in our coverage stocks along with companies like Gateway Distriparks and Container Corporation of India, which would see a significant improvement in their rail freight business with a better railway line network and a lower turnaround time.

NITI Aayog: Forget differences for growth, investment & jobs, PM Modi tells CMs

Exhorting Chief Ministers to personally monitor factors slowing projects, Prime Minister Narendra Modi today asked states to bury differences to boost growth, create jobs and revive investment cycle.

He also suggested that an officer be identified in state governments to monitor and ensure a smooth resolution of pending issues so as to expedite projects implementation.

Addressing the first meeting of the Governing Council of NITI Aayog, the Prime Minister identified "alleviation of poverty" as the biggest challenge before the county and said the newly formed body will forge a model of co-operative and competitive federalism".

The recently constituted National Institution for Transforming India (NITI Aayog) has replaced over six-decade old Planning Commission as a think-tank for Centre and state governments as also to suggest policy directions. The Prime Minister is the chairperson of the new body.

"Forgetting all our differences, let us focus on the cycle of investment, growth, job creation and prosperity," he said at the meeting attended by several Chief Ministers and representatives of 31 states and Union Territories.

The Prime Minister announced constitution of three sub-groups comprising Chief Ministers to suggest rationalisation of 66 central schemes, on skill development and to make Clean India a continuous programme.

The first sub-group will suggest which of the central schemes should be continued and those which need to be curtailed or transfered to states for better implementation.

"We will move away from 'one size fits all' schemes and forge a better match between the schemes and the needs of states," Modi said.

Noting that projects are often held up for want of timely decisions, Modi asked Chief Ministers "to give personal attention" to factors slowing down projects and asked them to "focus on the cycle of investment, growth, job creation and prosperity".

He also asked states to set up two task forces each to help the country get out of problem of poverty and increase agricultural production.

West Bengal Chief Minister Mamata Banerjee skipped the meet, but Bihar Chief Minister Jitan Manjhi, who is facing a political turmoil back home, was present.

Others who attended the meeting included Akhilesh Yadav (Uttar Pradesh), Tarun Gogoi (Assam), Prakash Singh Badal, O Panneerselvam (Tamil Nadu), Oommen Chandy (Kerala) and Virbhadra Singh (Himachal Pradesh), as well as Chief Ministers from BJP ruled states.

Modi called upon Chief Ministers to work with the Centre to forge a model of co-operative federalism where the two work as Team India and "come together to resolve differences, and chart a common course to progress and prosperity." 

Describing the meeting as one that has the potential to bring about historic changes, he said the Governing Council of NITI Aayog would help advance the national cause "as we jointly define it". 

Noting that India cannot advance without all its states advancing in tandem, the Prime Minister said the idea was to bring up all states together in the spirit of 'Sabka Saath, Sabka Vikas'.

Modi Government & Indian Economy today & Tomorrow

Mr.Chandrashekhar Tilak is an economist & well known commentator on Budget analysis. He has been delivering budget speeches since 1988 and has completed a feat of over 1,000 lectures until date. He has been with NSDL, heading Indian Capital Market Division, for last 18 years. He was also member of the BSE Board for several Years. He has written books on the Indian Economy.

Principal M.D.Limaye Memorial Lecture by Mr. Chandrashekhar Tilak (Executive Vice-President at NSDL ) on 17^th January 2015, in Tilak Mandir, Gokhale Hall.

According to Mr.ChandrashekharTilak, Modi Govt. means business, & actions. He does not mix economic interest of the nation with politics. He gave four following examples to confirm his statements.

Appointment of Union Minister of state for Home Affairs, Mr.Kiren Rijiju, an iconic political leader from Arunanchal. PM almost cajoled, persuaded him to take up the responsibility, as he was the only competent person to fill the post..

Kiren Rijiju was elected from Arunanchal Pradesh for the second time for the 16^th Lok Sabha. He is considered the face of BJP & Voice of North East India. He made a statement  for construction of border roads along the border of China in Arunanchal & is considered as a one of the bold statement from any politician of India. Also for improving the communication in Arunanchal, he asked for 878 Telecom towers to be installed, which was sanctioned immediately, budget being monitored by the minister himself. Arunanchal is mineral rich belt, particularly for oil & gas, needs development for India’s future.

Second example he gave was Regular trains from Delhi to Katra for resettlement of Hindu refugees (Pandits) from J & K who are presently settled in camps out side New Delhi. This is a very important issue for not only Pandits but also strong entrenching of BJP in J &K at grass root level.

Third example was Horticulture centre for Assam and Bihar. 4^th major component of India’s CAD is the import of fruits, flowers, Toys & Electronic goods from China & other countries. This can be curtailed by promoting Horticulture in North Eastern states, not only creating employment but also enhancing GDP of the region. Rs.136 cr were sanctioned & no political issues were raised by Modi govt.

Fourth example, is establishing Sports Academy in Manipur & sanctioning Rs.125 cr for the development sports & athletes for the forthcoming Olympics games. No. of medals won by sportspersons from Manipur, Meghalaya & Nagaland was 25% of All India tally of medals.

Mr.Tilak particularly mentioned about the Asian Games Gold medalist boxer Mary Kom who asked for award money to be given to Sports Academy rather than for herself.

Lastly, Modi Govt is shifting the focus to Younger generation while selecting the bureaucrats & ministers as well as members of NITI Aayog. Present Govt. which has started projects like “JanaDhan, Swatcha Bharat is convinced that it is the young generation who is prepared to change India, & should be motivated through participation in Govt sponsored schemes.

The talk by Mr.Chandrashekhar Tilak was appreciated by all & Mr. Mukund Chitale, President of the Lokmanya Seva Sangh in his concluding session, appealed to all to implement the good thoughts of the present Govt.   

- Vinod Borkar

Corporate Governance & Value Creation

Y.M.Deosthalee 
MD, L&T Finance Holding

During his inaugural address, Y. M. Deosthalee (MD, L&T Finance Holding) informed that Governance is much discussed & talked about in various forums, appreciated by investor community but still things go wrong in corporate sector year after year. He felt that investor community must understand the basics as they are the main stake holders of the company.

Although the issues have been adequately addressed in the legislature by company Law and watch-dog institutions like SEBI, at the end of the day it is the character of those who manage is important. Professionally managed company like L&T had the Corporate Governance in place even much before the legislature was in acted. The reason for the same is honesty & integrity of the management & accountability towards the stake holders. He emphasized that it the culture of the management team that delivers the Corporate governance & generally this is observed in the mindsets of the people who govern. Simply put, this character is required in their genes of the promoters in the corporate seat.

Governance is the internal system which should be transparent regarding directing the organization & should be portrayed as such for the outside world.

Value creation is for the stakeholders like Share holders, employees, vendors, service providers & in general for society at large. Long term value creation is quality of product and services and how problems are dealt with on long term basis.

YMD enumerated a few pertinent processes which govern & has potential for value creation. They are Quality & culture of the Board of directors, Long & short term strategy, Involvement of the board in Governance issues, Process of risk management in the company, Disclosures, Internal & external audit findings and the action taken reports, share holder’s roles and rights, & transparent Accountability of professionals for owning the process.

YMD concluded by saying that Mindset of ethical governance & commitment to social responsibility are basics for good governance if you require value creation for all stake holders over long life of the organization.