India’s gross defence budget may reach $112 bn by FY27 clocking 11% CAGR: ASSOCHAM-KPMG report

India’s gross defence budget is expected to reach US$ 112 billion (bn) by FY27 from $45 bn announced by the Government of India in 2018-19, owing to significant steps been taken by the Centre to bolster country’s position as a major aerospace and defence power, noted a recent ASSOCHAM-KPMG joint study.
 
The study titled, ‘Creating a level playing field to facilitate Make in India in defence,’ jointly conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and global professional services firm KPMG also noted that while in 2018-19 the budgetary increase was a meagre 7.8 per cent over the previous year, it is expected to clock an estimated compound annual growth rate (CAGR) of about 11 per cent until FY27.
 
The study however raised concerns that about 10 per cent of defence budget is surrendered to Ministry of Defence (MoD) at the end of each financial year owing to underutilisation as the reserved budget is not mapped with capital acquisition.
 
It said that country’s capital expenditure for defence procurement is expected to exceed $250 bn over the next 10 years, primarily to replace the Soviet-era vintage equipment and meet the growing modernisation needs of Indian Armed Forces. However, out of this the domestic industry would only be able to manufacture defence equipment worth just about $80 bn while rest of it would have to be imported.
 
Thus, the study suggested the government to incentivise private enterprises for developing large scale research and development (R&D) and manufacturing capabilities.
 
It said that a vibrant domestic manufacturing ecosystem that includes both public and private defence manufacturing entities is essential for success of ‘Make in India,’ in the defence sector.
 
Issues plaguing defence sector:
 
The study also noted that despite large quantum of opportunities, fast growing economy and availability of skilled talent pool, India has achieved very limited success in terms of aerospace and defence self-reliance.
 
It further said that highly protracted procurement timelines and cancellation of tenders together with tenders awarded based on lowest cost and non-existence of a level playing field are certain key issues in the defence procurement process.
 
Besides, issues like awarding tenders to defence public sector undertakings (DPSUs) on nomination, higher multiplier for offset discharge through Defence Research and Development Organization (DRDO), difference in cost of capital resulting in undue advantage for foreign players/DPSUs.
 
The study suggested that government should treat private players in defence industry as partners rather than mere equipment/service providers as similar approach had been highly successful in space and atomic energy programs.
 
With an aim to provide a level playing field and boost defence manufacturing in India, the ASSOCHAM-KPMG study gave following recommendations to MoD:
 
1. Award all defence tenders only through competitive bidding.
2. Offer equal multiplier on offsets for Toll Operate Transfer (TOT) to all public and private Indian entities and create a mechanism for priority sector lending or soft loans for private defence manufacturers.
3. Exclusively reserve designated programs only for competitive bidding among private shipyards only as a short-term measure to utilise vacant capacity.
4. Develop an equitable payment structure without significant back-ended payments and include provisions for imposition of penalties in case of delayed payments.
5. Avoid conflict between production and procurement functions.
6. Include provision for cost escalation in defence procurement contracts on lines of Indian Railways and Department of Atomic Energy.
7. Permit private players to provide indemnity bonds in lieu of bank guarantees to obviate additional financial burden imposed on them.
Advertisements

Senior Leadership of Satin Creditcare Confered with ‘Golden Globe Tiger Awards 2018’ in Malaysia

Senior leadership of Satin Creditcare Network Limited has been conferred with the ‘Golden Globe Tiger Awards’ at the recently held awards ceremony in the global city of Malaysia. While, Mr. H. P. Singh, the Chairman and Managing Director of the company received the ‘Exemplary Leader’ Award, Mr. Dev Verma– the Chief Operating Officer has been awarded with ‘Leader of the Year’ Award. These prestigious awards aim at recognizing the highest levels of standards and benchmarks amongst individual and organizations.

The awards aim to recognize “TIGERS” in marketing, branding CSR & social innovation, education & academics across leadership levels who believe that excellence is infinite and perfection has no limits.

Acknowledging the Award, Mr. HP Singh- Chairman cum Managing Director, Satin Creditcare Network Limited, said, “I am humbled to have received this award. Any such award is a testimony of the work that team Satin is doing in the microfinance sector towards achieving government’s vision of inclusive growth. We want to be seen as one stop solution for the financially excluded households at the bottom of the pyramid for all their financial requirements.

Under Mr. Singh’s leadership, SCNL has grown substantially to become the 2nd largest microfinance institution in India, today. Currently, the company has its footprints in 18 states with 898 branches across India. He has channelized his business acumen, strategies and entrepreneur skills in building an entire ecosystem for delivering financial services to the unbanked, low-income households, thereby uplifting their lives significantly.

On Dev Verma’s achievement, Mr. Singh said, “I feel immensely proud of Dev on having received the ‘Leader of the Year Award’.  During the demonetization, SCNL business was impacted, Dev exhibited exceptional leadership skills and persistence by forging business partnerships, building team alignment and thereby successfully navigated Satin through this adversity.”

Recognizing the Award, Mr. Dev Verma- Chief Operating Officer, Satin Creditcare Network Limited, said “I am extremely delighted to receive this award. The last one year, has been challenging yet exciting and this award is a testimony of all the efforts the teams have put in. My endeavor is to make continuous efforts towards taking Satin Creditcare to greater heights by bringing in the best practices, building a robust back-end operations team.”

Capillary Technologies Grows its Global Business by 200%

 Capillary Technologies today announced that it has grown its global business by 200% YoY and has elevated Abhijeet Vijayvergiya as its President & Managing Director, Global Accounts and Asia Pacific.

In FY 18, Capillary crossed a landmark 1 Million transactions per day. The number of customer communications per month exceeded 50 million, and the value of annual transactions processed across geos crossed $15 billion in FY18.

Till date, Capillary has raised more than $100 million in funding, including the recent $20 million round. While Capillary has a strong presence in India, South East and Middle East, it’s looking to further strengthen presence in China and the Middle East, besides penetrating further into Southeast Asia. The company is opening its second office in China at Guangzhou and then another at Beijing later this year. Capillary is also scaling its operations in developed market such as US and UK with In-store AI products.

“Increasingly, our global customers such as Pizza Hut, VF Brands, KFC, Bata, Asics, Unilever, Siam Makro, to name a few, are leveraging our product suite across multiple countries. Brands are unlocking tremendous value with us for many reasons. Firstly, as the brands scale to multiple countries with our product suite, they realize better ROI. Secondly, our co-innovation focused agile delivery model helps brands to launch new ideas across markets in faster time. Finally, our global Center of Excellence (CoE) set-up helps brands to leverage learnings across countries,” quoted Ganesh Lakshminarayanan, COO, Capillary Technologies.

 

“Abhijeet is responsible for 3X growth in Southeast Asia business alongside scaling up India. Asia Pacific countries are strategic markets for us. Abhijeet will play a vital role in growing our Asia Pacific Business excluding India and China. He will also lead our global accounts segment across all geographies,” added Ganesh.

Robust food processing sector key to doubling farmers’ income: Sadhvi Niranjan Jyoti at Assocham

Strengthening food processing sector is key to achieving government’s aim to double farmers’ income, union minister Sadhvi Niranjan Jyoti said at an ASSOCHAM event held in New Delhi today.

“The government aims to double the farmers’ income by 2022 but we won’t be able to achieve that goal until we uplift and promote the food processing sector which is also important to provide pure food to consumers, create employment opportunities for people and provide fair price to farmers for their produce,” said the Union Minister for Food Processing Industries (MoFPI), Sadhvi Niranjan Jyoti while inaugurating ASSOCHAM National Conference on Cold chain technologies, convergence and capacity building.

She also said that government is working towards linking its objective of doubling farmers’ income with the need to promote food processing industry and providing consumers with easy access to quality food.

The minister also informed that India got investments worth over Rs 31,000 crore in the ‘World Food India,’ held in November last year.

In her address, she further said that government had sanctioned setting up of 14 cold chains to be set up in Uttar Pradesh (UP) out of the total 40 applications received for setting up cold chain projects across states. Similarly, many states were also working on setting up cold chains.

Talking about her recent visit to Poland she said that Poland is quite keen to make its agricultural ties with India a lot more stronger and has even proposed to become a hub for exporting Indian mangoes in its part of the world.

Addressing the ASSOCHAM conference, Mr Pawnexh Kohli, chief advisor and CEO, NCCD (National Centre for Cold-chain Development Department) stressed upon the need to build backend farm gate aggregation points as though there are enough number of cold stores in India but it is due to dearth of infrastructure we are unable to transport farmers’ produce directly to markets.

Dr B.B. Pattanaik, chairman, Warehousing Development and Regulatory Authority (WDRA) in his address talked about the need to promote capacity building in terms of creating requisite infrastructure and skill development.

Mr Viney Khunger, managing director, Carrier Air Conditioning & Refrigeration Limited said that one-third of everything that is produced in India gets wasted as such there is need for setting up an effective and integrated cold chain infrastructure.

Indian MedTech market to touch Rs. 55,040 crore by 2020: ASSOCHAM-MRSSIndia.com

The Indian MedTech market may see twofold rise as its size in value terms is likely to reach Rs. 55,040 crore by 2020 from the current level of Rs. 26,048, growing at a compounded annual growth rate (CAGR) of 15 per cent against the expected global industry growth of 4-6 percent, according to an ASSOCHAM-MRSSIndia.com joint paper.
 
The Medtech sector, which is an indispensible part of the Indian healthcare industry, is at a nascent stage with most of the indigenous manufacturing restricted to medical consumables. Imports still constitute over 75% of the current medtech market. India is looking to improve self-sufficiency in medtech as a part of the “Make in India” initiative. The rapidly expanding sector presents immense opportunities to global players, stated the study titled, ‘Medical Technologies,’ jointly conducted by ASSOCHAM and MRSSIndia.com.

Diagnostic imaging represents the second-largest segment of the medical devices industry in India, constituting 31 percent (8075 crore) of the industry in 2015-16. It is expected to grow at a rate of 13 percent over 2015–2020. Building on the existing installed base of electro-diagnostic and radiation apparatus, imaging parts and accessories are expected to lead this segment, growing at a CAGR of 15 percent over the next few years.
 
Syringes, Needles and catheters form major part of consumables and disposables. Consumables and Disposables are the only trade surplus segment of the medical device sector with domestic players having a larger market share. Key players include Hindustan Syringes, Lotus Surgicals, Sutures India, B Braun, Beckton Dickinson. Most of the requirements are met through domestic manufacturing. Consumables and implants constituted 19 percent (4949 crore) of the industry in 2015-16. It is expected to grow at a rate of 14 percent over 2015–2020. Implants segment is expected to grow faster than the other segments in the medical device industry.
 
Patient aids and other products is the fastest growing segment of the medical devices industry in India and constituted 16 percent (4168 crore) of the total industry size in 2015-16. It is expected to grow at a rate of 19 percent over 2015–2020.Hearing aids and Pacemakers form major part of the Patients Aids segments and constitute 70% of the market collectively.
 
Patient aids segment is basically an import driven segment with most products primarily sourced from Ireland, USA, Australia, Singapore, China and South Korea. Key Players include St Jude Medical, Shree Pacetronics, Medisafe International, Medtronics.
 
The global MedTech market is expected to grow from nearly USD 371 billion in 2015 to almost USD 529.8 billion in 2022, reflecting a seven-year compound annual growth rate (CAGR) of 5.2 percent, noted the joint study.
 
The growth in the medical devices industry will be driven by the rapid expansion of the emerging markets, allied with steady growth in mature markets as the effects of the economic crisis begin to fade. The expansion of the middle class income group in emerging economies will result in a larger proportion of the population being able to afford procedures and treatments that were previously deemed too expensive.
 
The United States remains the largest medical device market in the world with a market size of around $140 billion, and the U.S. market represented about 40 percent of the global medical device market in 2015. U.S. exports of medical devices in key product categories identified by the Department of Commerce exceeded $44 billion in 2015.
 
The European medical technology industry employs more than 650,000 people. Germany had the highest absolute number of people employed in the medical technology sector (195,000), while the number of medtech employees per capita is highest in Switzerland and Ireland. 95% of Europe’s 26,000 medical technology companies are small and medium-sized enterprises (SMEs). The European medical technology market in 2015 is estimated at roughly €110 billion.
 
The biggest medtech markets in Europe are Germany, France, the United Kingdom, Italy and Spain. The same countries form the top 5 IVD markets in Europe. The European medical technology market has been growing on average by 4.6% per annum over the past 8 years, while the European IVD market growth has been slowing down until 2013, while annual growth rates in the pre-crisis period were at around 2-4%.
Currently there are 800 medical device manufacturers in India of which close to 65 percent of companies have turnover of over Rs 10 crore ($1.5 million) and 2 per cent companies with a turnover of more than Rs 500 crore ($73 million). With upcoming changes in the regulatory and policy Medical Technologies: A Roadmap for Unlocking Future Growth Opportunities for India 18 framework and inherent growth potential of the industry, this sector is expected to undergo a phase of consolidation.
 

Credit deployment stays negative in several key sectors; ASSOCHAM calls for urgent fixing of twin balance sheet problem

Inability of the banks, reeling under the mammoth problem of non-performing assets (NPA) to lend, coupled with lack of appetite for fresh investment by highly indebted India Inc has resulted in most of the industry sectors reporting negative growth in deployment of gross bank credit, the ASSOCHAM has said.
 
Dissecting the RBI data, the ASSOCHAM noted with concern how sectors after sectors , including sugar, petroleum, coal products, petro-chemicals, cement and cement products , basic metals and metal products ,have  shown drop in deployment of gross bank credit between minus two per cent and 19 per cent in the financial year of 2017-18. .
 
Even the fertiliser sector which holds better prospects due to expectations of normal Monsoon, has shown a huge degrowth in credit  deployment to the extent of 19.3 per cent  up to February 16, in the financial year 2017-18, on  sequential basis.
 
Likewise, petro-chemicals firms also showed a huge negative growth of over 19 per cent in credit deployment up to February 16. Besides the industry sectors, the key infrastructure like road, power and telecommunication, also showed a negative trend between 1.6 per cent and six per cent.
 
“The problem of twin balance sheets is very much reflected in the RBI data of credit deployment. While the banks are struggling with their rising NPAs and huge requirements of provisioning that goes with the same, the corporate India is still reeling under high leverage in sectors like roads, power, telecommunication and others,” said ASSOCHAM Secretary General Mr D S Rawat.
 
However, things seem to be improving for some sectors like mining and quarrying, tea, manmade textiles, rubber, plastic and glassware etc.  “But a large part of the industy is still not out of the woods, if the credit deployment is any indication,” the chamber said, adding that it would still take a few more quarters before things look up brighter.
 
Mr Rawat said, there needs to be a sense of urgency in repairing the balance sheets of the PSU banks. The Rs 2 lakh crore capial infusion, as announced by the government must be speeded up, even as the lenders wait impatiently from some cash accruing back as a result of successful resolution plans under the Insolvency process. Tough RBI guidelines on provisioning for the NPAs, are also adding to the pressure, he said.
 

Govt. to recreate 20 monuments using 3D technology in 2 years: DST secy

With a view to facilitate tourists visiting India, the Centre would be using 3D technology to digitally reconstruct 20 historic monuments in the next two years and put them in Delhi, a top government official said at an ASSOCHAM event held in New Delhi today.
 
“By 3D printing we can create Taj Mahal, Ghats of Benares, Buddhist circuit and any heritage or any monument. So tourists coming in can see and decide what they like and where they want to go,” said Prof. Ashutosh Sharma, secretary, Department of Science & Technology (DST) while inaugurating an ASSOCHAM International Conference on Artificial Intelligence (AI).
 
He said that using the 3D technology one can track/decide own path with the help of a laser light and it would seem as if one was visiting that monument and could see exactly what one would have seen if one was actually walking there and it would give information like a tourist guide.
 
“You can stop, climb up, can change the perspective, or the sky be it morning or night sky as it depends on how you are going to view it,” said Prof. Sharma.
 
He also informed that Government is going to launch a huge mission on cyber physical systems which is three layered and has 25 centers of excellence focussed on each sector with basic knowledge layers, algorithms of AI and a fusion layer in between which is the physical layer i.e. the machine, robots, actuators, sensors in different contexts.
 
“This mission will cover from basic fundamental knowledge generation R&D to technology development, translational aspects, incubators, start-ups in this particular area thereby commercialising the technology which comes out of there,” added the DST secretary.
 
Explaining about the same he said, “When we started thinking about AI in the DST about two and a half years ago, we started in a modest way by putting in couple of hundred crores and now we are going to scale up those efforts on several thousand crores level in a very holistic way in the entire spectrum of AI that covers everything from theme knowledge generation in AI areas of deep learning, machine learning, contextual learning and all varieties of AI that one can think about.”
 
He further said that it would basically be an end-to-end system which is integrated from discovery science to solution science.
 
Prof. Sharma also urged the industry for robust participation and partnership in this mission. “There would be huge opportunities for industry to leverage infrastructure and human resources that will be developed through this mission.”
 
He also informed that DST along with Intel had started a Rs 35 crore worth project on intelligent sensors for air and water quality under the public-private partnership (PPP) mode. “So scientists here and in the US are working on cutting edge to make smart pebbles, which are small miniaturised censors having on-board power, communication and sensing of whatever you want in air or water.”
 
Talking about another big project supported by the DST, he said it was about having infrared (IR) sensing to get hyper spectrum analysis of soil, and vegetation, crop. “You get a map based on this and with AI you can actually tell the quality of soil, moisture in soil, (see) if it needs more nitrogen fertiliser, look at the quality of crop, and see if it ready for harvesting.”
 
The DST secretary also informed that government is committed to get all the digital data compiled by the Survey of India (a 250 year old organisation under DST) would be made available to every  citizen in the country which would help in comparing information about things like climate, environmental changes and others.
 
“So every Panchayat level, every local governance body can actually access and use this data for their developmental and governance related activities,” added Prof. Sharma.
 
In his address at the ASSOCHAM conference, Mr R. Ramanan, head, Atal Innovation Mission (AIM), NITI Aayog allayed fears that AI would not lead to loss of jobs, instead it would generate various employment opportunities in different domains.