India bags third slot in global startup space
- After the success in the IT services industries, India has now emerged as the youngest startup nation in the world with over 72 per cent of founders are less than 35 years old. With the presence of more than 4,200 startups, the country has also become the third largest startup base worldwide.
- By registering a growth of 40 per cent over the last year, India has overtaken Israel to become the third largest startup base after the U.S. and the U.K.
- According to a report published by Nasscom in association with research firm Zinnov, around 1,200 tech startups were born in the year 2015, out of which more than 50 per cent focus on e-commerce, consumer services and aggregators business.
- “India is the youngest startup nations in the world with around 72 per cent of the founders less than 35 years old, and 50 per cent rise in share of female entrepreneurs in 2015 over 2014,” said Ravi Gururaj, Chairman, Nasscom, Product Council.
- Bengaluru remains the hot destination for entrepreneurs to launch their business and was ranked 15 globally. More than 65 per cent of the startups are located in Bengaluru, Mumbai and NCR. Around 26 per cent of India’s start-ups are located in Bengaluru; and NCR and Mumbai had 23 and 17 per cent respectively.
- Another reason cited for the growth of the entrepreneur ecosystem is the investment of business tycoons like Ratan Tata and Azim Premji in startups. So far, Mr. Tata has made around 10 investments in startups.
- Large Indian enterprises have also formed dedicated corpus to invest in startups. Wipro has set up $100 million VC fund to invest in startups while Infosys has formed a $500 million innovation fund, of which $250 million is dedicated for India.
- As per the report, one of the major reasons for India’s growth in the new age business is the rapid increase in the availability of risk capital.
- In 2015, Indian startup founders have managed to raise capital to the tune of around $4.9 billion, an increase of over 125 per cent against last year. This is also much higher compared to cumulative funding of approximately $3.2 billion over 2010-14 period.
- While the overall VC/PE funding has grown by 2.2 times the seed stage funding has grown by 6.5 times. More than 390 startups have received funding compared to 175 startups in 2014, stated the report ‘StartUp India Momentous rise of the Indian Start-up Ecosystem’.
- “The maturing Indian startup ecosystem is now contributing to the Indian economy in many ways. Apart from positively impacting the lifestyles of citizens involved, start-ups are now creating innovative technology solutions that are addressing the key social problems that India is facing and creating significant growth opportunities for every stakeholder,” said R. Chandrashekhar, President, Nasscom.
- Some of the major rounds of funding this year was $700 million by Flipkart from Tiger Global and Steadview Capital, Snapdeal’s $500 million round from Alibaba Group, SoftBank, Foxconn among others and Paytm $635 million.
Singapore Airlines to restart world’s longest 19-hour flight service
- Singapore Airlines (SIA) said it would restart flight services between the U.S. and Singapore, making it the world’s longest non-stop commercial flight service, using the newly launched ultra-long range version of the Airbus A350-900.
- Being the launch customers for the new aircraft, Singapore Airlines will buy the first seven units.. The 19-hour journey for a distance of about 8,700 nautical miles, will beat the proposed 17.5 hours flight that Emirates intends to start in February next year from Dubai to Panama City.
- The move is likely to also help Indian consumers who can take the connecting flight to the U.S. from Singapore.
- “The New York-Singapore service will be the world’s longest commercial passenger route, with an expected flight time of up to 19 hours,” the company said.
- The airline had ended the service between Singapore and both Los Angeles and New York in 2013 after nine years as the A340-500s that were used for the services were retired, besides the fuel costs were also rising.
- First deliveries of the A350-900ULR aircraft are slated for 2018, according to Airbus. “Our customers have been asking us to restart non-stop Singapore-U.S. flights and we are pleased that Airbus was able to offer the right aircraft to do so in a commercially viable manner,” Singapore Airlines CEO Goh Choon Phong said.
- Non-stop flights between Singapore and additional points in the U.S. are also under consideration. Optimised for non-stop flights to the U.S., planes will include a modified fuel system to increase fuel-carrying capacity
India most attractive investment destination: EY
- India emerged the most attractive investment destination in the world for the next three years in a global survey of top decision-makers in multinational corporations. The second most favoured investment destination is China, followed by Southeast Asia and Brazil.
- Of the polled business leaders from global corporations, 32 per cent said India was the most attractive investment destination in the world.
- Perception about India’s macroeconomic stability is up to 76 per cent in 2015 in comparison to 70 per cent in the 2014 survey, said global consultancy firm EY that published the survey . Similarly the perception about political and social stability is up from 59 per cent in 2014 to 74 per cent in 2015.
- The same is also true for relaxation in FDI policy (the score improved from 60 per cent in 2014 to 68 per cent in 2015) and the government’s efforts to ease doing business (up from 57 per cent in 2014 to 67 per cent in 2015).
- About 62 per cent said they were looking at manufacturing, both to serve the Indian and global markets from India.
- The survey, ‘Ready, set, grow: EY’s 2015 India attractiveness survey’, conducted during March and April 2015, includes the views of more than 500 decision-makers from multinational organisations across sectors.
- Compared to the 2014 survey, the number of respondents, who believe that India would be among the world’s leading top three destinations for manufacturing by 2020, had increased from 24 per cent to 35 per cent, while those who believed India would evolve as a regional and global hub for operations was up from 9 per cent to 21 per cent.
- Implementation of Goods and Services Tax (GST) and legislation on land acquisition were also mentioned by investors as important for attracting FDI.
- Speaking at the launch of the report, Industrial Policy and Promotion Secretary Amitabh Kant said: “We are determined to make India an extremely easy and simple place to do business…Our first priority is to do away with the many procedures and rules, followed by bringing in consistency and clarity in all our policies and tax regime and developing a world-class infrastructure.”
- Within six months of its launch in September 2014, the Modi Government’s ‘Make in India’ program resonated with investors, with 55 per cent of respondents saying that they are aware of the initiative. Those aware of Make in India are more upbeat about expansion plans, with 70 per cent stating that they are likely to expand or relocate their manufacturing facilities to India in the next five years.
- While Bengaluru, Mumbai, Delhi-NCR, Chennai and Pune continue to be the top destinations for overall FDI, the top five emerging cities for FDI ranked by the respondents are: Ahmedabad, Jaipur, Vadodara, Coimbatore and Visakhapatnam.
- EY Chairman of the Global Emerging Markets Committee and India Regional Managing Partner Rajiv Memani said: “Over the last year, the improvements in India’s macroeconomic indicators, accompanied with the ongoing efforts to revitalize growth have offered new hope to investors.”
- Investors rated India’s domestic market and availability of labour among the most attractive features for doing business.
Tata Housing ties up with Facebook to sell leisure homes in Goa
- Tata Housing has announced “Social Sell”, on Facebook, a first of its kind initiative in India to sell houses in its upcoming project in Goa.
- Through this initiative prospective buyers can register themselves through Facebook to ensure they receive their unique invite code which will allow them to login on October 26 to book limited homes at this project “Codename: Goa Paradise” on a first come first basis.
- Spread across 5 acres, the project is a premium resort themed residential project offering a range of homes extending from a 1BHK to a 3BHK starting Rs.29 lakh.
- Located close to the Goa airport at Dabolim this project is marketed as a leisure home.
- “This first of its kind collaboration with Facebook is unprecedented in the history of real estate industry. The success of the online platform has strengthened our belief that accessibility and convenience of the internet makes it an ideal medium for customers.
- The increasing penetration of internet will be the next game changer for the real estate industry,” said Brotin Banerjee, MD & CEO, Tata Housing.
- “Over 132 million monthly active people in India and people across the world on Facebook can participate and get an opportunity to book a dream home in Goa. This initiative will provide inspiration to other brands to drive awareness, generate leads and deliver sales on Facebook,” said Kirthiga Reddy, MD, Facebook India.
- Tata Housing pioneered the concept of online home buying in India when it partnered with The Great Online Shopping Festival by Google in December 2013. Since then the company is coming up with innovative ideas to sell homes at its various projects.
Ease of doing business: States to be graded on 344 points
- Buoyed by the response to the first rankings of states on ease of doing business, the World Bank and the Centre are working on expanding the coverage to include an analysis on 344 parameters as part of the Business Reform Action Plan for 2016.
- The idea is to get states to guarantee time-bound service delivery, set up an agency as the sole point of contact for starting a business along with paperless courts, and also have a transparent system for land allotment by ranking them on these points.
- Sources said the states would be evaluated on a dynamic basis, which will help them get an instant assessment on how they fare against competitors. The new parameters have been finalized for the current year and are being circulated to the states.
- Although the broad parameters have been drawn from the World Bank’s doing business index, there are several details that would be studied before finalizing the rankings.
- For instance, the new parameters would look at the access to information even before a unit or a company is set up, which will look at aspects such as the list of licences, registrations and NOCs that are required for starting a business.
- Similarly, the idea is to get the states to have a single ID for all taxes and mandate that VAT registration is done within a day. A legislation like the Right to Services Act for time-bound delivery of government services is also being recommended.
- Similarly, the states would be required to go beyond the promise of offering a single-window clearance, with a dedicated bureau of senior officers and the online platform offering a host of services.
- Then, states are also being advised to disclose information on land banks that are available and have an objective criteria for land allotment, a move that comes at a time when acquiring land for private projects is seen as a major hurdle to doing business.
- On property registration, building plan approvals, and construction permits also states would be rated on a detailed checklist.
- Last year, DIPP had devised a 100-point checklist and the World Bank rated the states based on these parameters.
- The expanded parameters come at a time when the Narendra Modi government is keen to ensure that India climbs up the Ease of Doing Charts to be among the top 50 destinations in two years, compared to its current ranking of 142.
Australia approves Adani’s $7bn coal mine project
- The Australian government reissued environmental permit to Gautam Adani-led Adani Enterprises for construction of a multi-billion dollar coal mine project, but with “strictest conditions” amid environmental concerns.
- “The project has been approved under national environment law, subject to 36 strict conditions,” the Australian environment ministry said on its website, while clearing the A$10 billion (US $7 billion) Carmichael coal mine in the Galilee Basin.
- The construction of one of the world’s biggest coal mines in Queensland has attracted fierce criticism from environmentalists who say the development, which requires coal to be shipped to a port on the coast, risks the World Heritage-listed reef’s health and destroys local habitats.
- “The project was assessed through the accredited New South Wales Environmental Impact Assessment process,” the environment ministry release said.
- In August, an Australian court had revoked the environmental approval given to the Adani project, opposed by green groups and local residents.
- The Australian court had said that a July 2014 clearance granted to Adani would impact two species — yakka skink and ornamental snake.
- Geoff Cousins, president of the Australian Conservation Foundation, a non-government organisation that had opposed the mine, termed the Australian government’s approval as being “grossly irresponsible.”
- At a time when the world is desperately seeking cleaner energy options this huge new coal mine will make the effort to combat climate change all the more difficult.”
ICICI Bank introduces ‘Money2World’
- ICICI Bank has introduced ‘Money2World’ a fully online outward remittance service for resident Indians to enable resident Indians to transfer money to any bank overseas.
India Ranks Last in Global Pension Index: Mercer
- The country’s retirement system ranks last in the global pension index, says a study by global consulting major Mercer.
- Still, the National Pension System (NPS), which was launched by the government in June as part of Pradhan Mantri Jan Dhan Yojana, will help the country improve its index, the study said.
- The country’s index value fell from 43.5 in 2014 to 40.3 in 2015, primarily due to a recent review conducted by the economic intelligence unit that showed a material reduction in its household savings rate, Melbourne Mercer Global Pension Index (MMGPI) report said.
- Enhanced participation in the National Pension System will help the country increase its index value, it added. Denmark has been rated as the country with the best retirement system in the world. Australia, Germany, Japan, Singapore and the UK have increased their pension age to offset the increase in life expectancies.
- Now in its seventh year, the MMGPI measured 25 retirement income systems against more than 40 indicators, under the sub-indices of adequacy, sustainability and integrity. The report covers close to 60 per cent of the world’s population and suggests how governments can provide adequate and sustainable benefits that protect their citizens, against longevity risk.
- The report rated Denmark as the country with the best retirement system for the fourth consecutive year in 2015, with an overall score of 81.7. However, it said that the Indian retirement system continues to rank last. “The NPS is gradually gaining popularity in India.
- Continuing to improve education and communication will help increase coverage of pension arrangements for the working population in the organised sector, particularly popularising the corporate model of NPS among Indian employers,” Anil Lobo, India Business Leader for Retirement, Mercer India, said in a statement.
- “The government’s recent initiative, giving thrust to the participation of individuals from the unorganised sector by launching the Atal Pension Yojana (APY) in June, should encourage workers in the unorganised sector to voluntarily save for retirement,” he said.
- “This should give impetus to individuals to join the NPS scheme, thereby helping enhance coverage, adequacy and sustainability of the country’s overall retirement system and this should help increase India’s index value in the future,” he added.
- All the 11 countries, that have been part of the MMGPI since it began in 2009, have experienced an increase in the expected length of retirement from 2009 to 2015, with the average length rising from 16.6 years to 18.4 years.
Goa begins export of low-grade iron ore
- Goa started export of 88,000 tonnes of low-grade-ore to China amid global volatility in the iron ore industry.
- The state begins operation after three years, following the removal of the ban imposed by the Supreme Court relying on Justice MB Shah Commission’s report on Rs 35,000 crore worth of illegal mining in the state last year.
- Officials of the mining firm Vedanta said that despite competition from Australian and Brazilian ore’s that have taken Goa’s spot in the Chinese steel industry, Goa’s low grade ores are still lucrative.
Exim Bank’s red flag: Why most Africa deals go to so few firms?
- The state-owned Export Import Bank of India, or Exim Bank, has raised a “red flag” pointing out that a large number of hugely concessional lines of credit (LoCs) extended by India to highly indebted poor, low and middle income countries in Africa and the sub-continent during the last 10 years have been cornered by four little-known companies.
- Of these, an investigation by The Indian Express has revealed, a bulk of the 510 projects awarded by 61 countries from 2004-2014 — 62 projects in 28 countries worth $1.1bn — has gone to Delhi-based Angelique International Ltd, headed by Ajay Krishna Goyal.
- The three other companies — Overseas Infrastructure Alliance (Pvt) Ltd (OIA), Lucky Exports and Jaguar Overseas Ltd — have together contracted 110 projects. OIA has executed 20 projects, Lucky Exports 17 and Jaguar Overseas 11. The Exim Bank has alerted the finance and external affairs ministries about these findings.
- With most of these LoCs extended to African countries, the “red flag” assumes significance with at least 54 heads of government from the continent scheduled to gather in Delhi from October 26-29 for the Africa Summit.
- LoCs are essentially soft loans with interest rates as low as one per cent per year for tenures upto 20 years, with a moratorium of five years for repayment. They serve as an important tool in the government’s outreach endeavour and provide a diplomatic lever in enlisting the support of poor and developing countries on a range of issues.
- The bulk of countries (24) where Angelique has executed or is still undertaking projects are in Africa. It has also contracted nine contracts in Cuba, Honduras, Myanmar and Lao PDR.
- When contacted, Exim Bank chairman and managing director Yaduvendra Mathur, a 1986-batch IAS officer, told The Indian Express: “We have pointed this out to the ministries of finance and external affairs. These are projects awarded by foreign countries. There is not much we can do about it.”
- Exim Bank raises funds for these LoCs from international debt markets and signs agreements with foreign countries on behalf of the Government. It receives a subsidy called the ‘interest equalisation support’ for providing such concessional finance.
- In the last 10 years, the Government has allotted through the Budget Rs 1,904 crore to make up for the difference between the cost at which it raises funds and the concessional rates at which it lends to the countries.
- Initiated in 1985, the LoC programme got a new direction in 2003-04, the last year of the previous NDA regime. In Budget 2003-04, then finance minister Jaswant Singh said it was time for India to review its dependence on external donors and re-examine the LoC route of international assistance to others.
- Initially called the India Development Initiative, it was renamed as the Indian Development and Economic Assistance (IDEA) Scheme and gathered momentum under the subsequent UPA government.
- The scheme was extended by the UPA in March 2011 for five years till 2014-15 — a review is pending for over six months now.
- Responding to a detailed questionnaire, the MEA said that projects under LoCs are awarded by the borrowing countries in accordance with their own procurement laws and regulations. “(But) it is correct to say that a small number of our companies who compete aggressively for these projects have won a majority of the contracts,” it said.
- Asked about the pending IDEA Scheme review, the MEA said: “It expired on March 31, 2015 and is currently in the process of being renewed. The accompanying LoC operational guidelines are also being reviewed with inputs from multiple sources, including Exim Bank.
- The objective is to try and improve the process so that projects are better conceived, prepared, appraised and implemented. Greater transparency and accountability is also sought to be engendered.”
RIL, 9 global oil companies commit to mitigate climate change
- Oil companies have traditionally favoured baking the earth for profits. But now, Reliance Industries Ltd, India’s largest private oil company, has joined nine other global peers in a charm offensive to stay relevant as clamour for renewable energy grows.
- At a time when the oil producers’ fraternity is divided over the fall in crude prices, chief executives of 10 global oil companies gathered in Paris in a rare show of unity to call for an effective agreement at the UN climate change summit next month.
- Reliance chairman Mukesh Ambani missed the green carpet event organized by Oil and Gas Climate Initiative, a CEO-led forum, due to the market-moving company’s board meeting for declaring quarterly results.
- But, he has signed the joint declaration committing measures by the oil industry to mitigate climate change.
- Neither of India’s state run flagship oil companies, explorer ONGC and refiner retailer Indian Oil, have signed up for the initiative.
- In contrast, national oil companies of Saudi Arabia (Saudi Aramco), Mexico (Pemex), Spain (Repsol) and Norway (Statoil) have signed up.