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1.6.21 Editorials with thanks to original source


Barely a day before the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 came into force, WhatsApp moved the Delhi High Court against the rules — specifically the one that mandates that a “significant social media intermediary providing services primarily in the nature of messaging shall enable the identification of the first originator of the information on its computer resource as may be required by a judicial order”. Given the specification that a “significant social media intermediary” is one with more than 50 lakh registered users, WhatsApp’s messenger service would clearly be affected. WhatsApp’s contention is that for compliance and traceability, it would have to break its end-to-end encryption service that allows messages to be read only by the sender and the receiver. Its argument is that the encryption feature allows for privacy protections and breaking it would mean a violation of privacy. The question to be asked is whether the traceability guidelines (by breaking encryption) are vital to law enforcement in cases of harmful content. A release by the Ministry of Electronics and IT has said that the traceability measure will be used by law enforcement as the “last resort” and will come by only in specific situations, such as “for the purposes of prevention, detection, investigation, prosecution or punishment of an offence related to the sovereignty and integrity of India... or child sexual abuse material, punishable with imprisonment....” The assertion suggests that this requirement is in line with the Puttaswamy judgment that clarified that any restriction to the right of privacy must be necessary, proportionate and include safeguards against abuse.

But the Government, as the law stands now, can already seek access to encrypted data under Section 69(3) of the IT Act, and Rules 17 and 13 of the 2009 Surveillance Rules that require intermediaries to assist with decryption when they have the technical ability to do so and when law enforcement has no other alternative. Besides, it can still seek unencrypted data, metadata and digital trails from intermediaries such as WhatsApp. The trouble with enforcing traceability is that without safeguards such as having any independent or judicial oversight, government agencies could seek any user’s identity on vague grounds and this could compromise the anonymity of whistle-blowers and journalistic sources, who can claim to be acting in the public interest. WhatsApp’s contention that “requiring messaging apps to ‘trace’ chats is the equivalent of asking us to keep a fingerprint of every single message sent... and fundamentally undermines right to privacy” is, therefore, not hyperbole. If anything, the Government needs to revisit its position on traceability commitments of intermediaries and instead revise the IT Act, 2000 in line with existing global best practices besides legislating the long-pending Data Protection Bill.


1.Mandates (V)-give (someone) authority to act in a certain way. जनादेश

2.Contention (N)-disagreement or dispute. विवाद

3.Compliance (N)-the act of obeying an order, rule, or request. अनुपालन

4.Encryption (N)-the process of converting information or data into a code, especially to prevent unauthorized access.

5.Vital (Adj)-very important, necessary, or essential. महत्वपूर्ण, अत्यावश्यक

6.Vague (Adj)-not expressed or explained clearly. अस्पष्ट

7.Anonymity (N)-the situation in which someone's name is not given or known. गुमनामी

8.Hyperbole (N)-exaggerated statements or claims not meant to be taken literally. अतिशयोक्ति



At 23, Naomi Osaka has the tennis world at her feet. With four Grand Slam titles and now ranked second in the world, Osaka has tremendous brand equity. She also speaks her mind beyond sport, be it on racism or on her mixed lineage of being born to a Haitian father and Japanese mother while growing up in the United States. It looked as though the baton of success had passed from the great Serena Williams to Osaka. Yet, the Japanese star’s fresh halo suffered a dent with her media boycott in the current French Open at Paris. Shooting the messenger is a petulant attribute that crops up in politics, sport and the arts. Often these are impulsive reactions to a bad day at work. The odd tennis press conference was skipped in the past with Serena and Novak Djokovic being guilty of such violations. But what makes it worse for Osaka is her premeditated stance revealed through her message before the French Open: ‘I am not going to do any press during Roland Garros.’ She also juxtaposed her cold-shoulder of the media with mental-health issues, hinting that journalists tend to exacerbate the fragile minds of athletes, especially those who lost a match. In one fell swoop, Osaka ignored nuance, dished out a lame excuse and trivialised the serious issue of mental health.

In a universe where athletes prefer social-media posts over media interactions, the official press-conference is the last remaining avenue for probing questions that elicit insightful answers. Player-journalist interactions are the only substitute for source-based inferences that colour the narrative. Closer home, M.S. Dhoni revealed his international retirement through Instagram and lapsed into silence. Sports bodies have sensed this diffidence and in the cricket World Cup or a Grand Slam event, the post-match press-conference is a contractual obligation. In this era of click-bait headlines, it is not that all Fourth Estate members are perceptive. There have been instances of the odd insensitive question but the athlete can always offer a counter or stick to a ‘no-comments’ response. Osaka deciding to constantly pay a fine for not honouring her media commitments at the French Open has set a terrible precedent and it is fitting that the consortium of Grand Slams have hinted at harsher measures including ejecting her from the tournament. Besides excellence on the turf, commerce off the field equally drives sport. Corporate sponsors, who get some play through advertorial material as background screen in press-conferences, are obviously aggrieved. Legends such as Rafael Nadal have also spoken about how sport evolves through the symbiosis between athletes and the media. It is a pity that Osaka has suddenly turned blind to this reality.


1.Dent (N)-a depression or hollow made by a blow or by pressure.

2.Petulant (Adj)-easily irritated or annoyed.

3.Crops Up (Phrasal Verb)-to happen or appear unexpectedly.

4.Impulsive (Adj)-acting or done without forethought. आवेशपूर्ण

5.Premeditated (Adj)-thought of or planned before being done. पहले से नियोजित

6.Juxtaposed (V)-place or deal with close together for contrasting effect.

7.Cold-Shoulder (N)-a show of intentional unfriendliness.

8.Exacerbate (V)-to make something that is already bad even worse. बढ़ाना

9.In One Fell Swoop (Idiom)-with a single, quick action or effort.

10.Dished Out (Phrasal Verb)-to give or say things to people without thinking about them carefully.

11.Lame Excuse (N)-an excuse of poor quality or lack of thought or an inappropriate excuse.

12.Diffidence (N)-modesty or shyness resulting from a lack of self-confidence.



Carlyle Group to acquire controlling stake in PNB Housing Finance

Abhijit Lele | 01/06/2021 | 5 hours ago

Private equity firm Carlyle Group and associates will acquire a controlling stake of over 50 per cent in PNB Housing Finance by investing in the Rs 4,000 crore preferential issue of equity and warrants of the Delhi-based mortgage lender.

After the proposed transactions, expected to be completed by January 1, 2022, Carlyle will also have the right to nominate the chairperson of PNB Housing Finance (PNB HF). This right will continue as long as it holds at least 40 per cent of the share capital on a fully diluted basis.

Pluto Investments, affiliate of Carlyle Asia Partners, will invest up to Rs 3,185 crore through a preferential allotment of equity shares and convertible warrants at Rs 390 per share, for a 30.2 per cent in PNB HF’s expanded capital.

Quality Investment Holdings (QIH), a unit of Carlyle Group, currently holds 32.21 per cent in PNB Housing Finance. After the issue of shares and warrants, QIH's stake will stand reduced to 20 per cent on the expanded equity base.

Both QIH and Pluto are part of “The Carlyle Group”, a global entity.

Together, they will hold 50.2 per cent in PNB HF.

Public sector lender Punjab National Bank (PNB) will continue to be promoter and a key stakeholder in the company. It held a 32.65 per cent stake in the company as of March 31, 2021. Its stake will fall to 20.3 per cent in the expanded capital base.

Along with Carlyle Group, Aditya Puri, former managing director of HDFC Bank, will infuse capital into PNB Housing Finance through family investment firm Salisbury Investments. He will be Carlyle’s nominee director in due course.

QIH, Pluto, and Salisbury Investments will be classified as part of the “promoter group” following the transactions.

Existing shareholders of the company, funds managed by Ares SSG and General Atlantic, are also participating in the capital raise. They will pay Rs 390 per share for equity and warrant transactions.

This proposed transaction would also trigger an open offer by Pluto Investments to purchase up to 26 per cent equity shares of PNB HFC from public shareholders.

The board has approved a capital raise of up to Rs 4,000 crore. The transaction is subject to customary regulatory approvals as well as shareholder approval, PNB HFC said in a statement filed with BSE.

In all, PNB HF will issue 102.56 million shares (including shares on warrant conversion) at Rs 390 each. The warrants are exercisable within 18 months of the date of allotment, the housing financier said.

On Monday, its stock was up 20 per cent and locked in the upper circuit (no sellers) for most part of the day. It closed at Rs 525.2 per share on the BSE.

Amit Tandon, founder and managing director, Institutional Advisory Services (IiAS), said with the proposed transaction, Carlyle Group as the largest investor would have a decisive say in running the business and board decisions.

Assuming the capital infusion (including warrants), the capital adequacy ratio of the company will increase from 18.7 per cent (as of March 31, 2021) to over 28 per cent, the company said.

Hardayal Prasad, managing director and chief executive officer of PNB Housing Finance, said this fund raise, and Carlyle’s continued support, would help the company to benefit from the growing opportunities, including affordable housing loans and self-employed segments.

PNB Housing Finance is the fourth-largest housing finance company in India in terms of loan assets (Rs 62,255 crore as of March 31, 2021) and the second-largest in deposits (Rs 17,129 crore as of March 31, 2021).

In India alone, affiliates of Carlyle have invested more than $1.7 billion of equity in eight financial services companies as of March 31, 2021, and $3.2 billion in India overall.

On May 24, PNB and PNB HFC executed a revised trademark agreement to replace the existing deal. Under the revised pact, PNB HFC will pay a royalty to PNB for the trademark if the bank’s stake falls below 30 per cent. It will pay a royalty that is higher of 0.2 per cent of revenue and 2 per cent of profit after tax (PAT), with the minimum being Rs 14.97 crore and the maximum Rs 30 crore.

When PNB’s shareholding in PNB Housing falls below 20 per cent, the public sector lender will have the right to terminate the revised agreement. Following such termination, PNB Housing will get 24 months as the transition period to change its brand name.

🛑Recovery gains strength: GDP grows 1.6% in Q4, shrinks 7.3% in FY21

Abhishek Waghmare | 01/06/2021 | 5 hours ago

India’s economy grew 1.6 per cent in the fourth quarter of 2020-21, indicating that a recovery was well underway before the second wave of Covid-19 struck. For the full year (FY21), the country's gross domestic product (GDP) contracted 7.3 per cent. The growth in 2019-20 was 4 per cent.

Gross value added (GVA) grew 3.7 per cent in real terms in the March quarter, showing a sequential pick-up, as expected. For the full financial year, real GVA fell 6.2 per cent, slightly better than the earlier assessment of 6.5 per cent contraction. The improvement in GVA in Q4 came in when the Covid-19 caseload in India was at its lowest since the pandemic began — the trough appeared somewhere in the middle of February.

The recovery, however, is certain to have lost steam due to the second wave, which began in March and peaked in April and May, or during the first two months of the first quarter (Q1) of FY22. This is certain to have a substantial impact on growth in the new fiscal year.

The recovery in Q4 was nevertheless impressive in the sense that nominal GDP grew at 8.7 per cent, which was faster than the growth witnessed in Q2 and Q3 of 2019-20, showing the gravity of economic slowdown that began before Covid-19.

What stands out is the sharp recovery in construction activity. Real GVA in construction grew by a staggering 14.5 per cent in Q4, after growing 6.5 per cent in Q3. This mass-employment sector had shown the highest contraction in GVA in the first quarter of FY21, when a national lockdown was in place.

This could mean that the projects that were stuck during the lockdown and were reviving during the unlock phase got expedited in Q4, reflecting strong growth, Pronab Sen, former chief statistician of India, told Business Standard.

“If new investments do not come in, which seems to be the case, then the construction pipeline may dry up and it may dent investments in the second and third quarters of FY22,” he said.

The recovery in investments on the expenditure side was in line with that in construction on the supply side. Real Gross Fixed Capital Formation grew 10.6 per cent in Q4.

Manufacturing GVA, too, rebounded strongly, growing the fastest in 11 quarters in Q4, at 6.9 per cent over the previous year. Agriculture grew in the range of 3-4.5 per cent in all the four quarters, showing resilience.

The crisis in services, however, seems worrisome. They occupy more than half of India’s economy, and failed to revive even when most of the economy was opened up in the January - March period. Services GVA, excluding construction, grew by only 1.8 per cent in Q4, followed by three quarters of contraction.

On the expenditure side, real consumer spending grew feebly in Q4, by 2.7 per cent over the previous year. As a result, real Private Final Consumption Expenditure fell 9.1 per cent for the full year FY21. Real Government Final Consumption Expenditure grew 28.3 per cent in Q4, backed by massive spending by the Centre in the March quarter, that included clearing of subsidy arrears.

Unlike consumer spending, real investments grew at 10.6 per cent. This took the investment rate, which is the rate of GFCF to GDP, above the 30 per cent barrier after almost six years, to reach 31.2 per cent of GDP.

,🛑Food, fertiliser bills push govt subsidy up three times in FY21

Jyoti Mukul | 31/05/2021 | 10 hours ago

The Union government overshot its expenditure on subsidies in 2020-21 by 11 per cent despite paying less on account of petroleum and fertiliser subsidies. In 2019-20, it had managed to keep its subsidy at 98 per cent of the revised estimates for the year.

The increase in total subsidy outgo was primarily because it paid more on account of food subsidy which overshot the estimates by 24 per cent or Rs 1 trillion. The government spent Rs 5.3 trillion in food subsidies during the pandemic hit last year which was more than fivefold increase over 2019-20 when it spent Rs 1.08 trillion on this account.

According to figures released by the Controller General of Accounts on Monday, among all the major subsidies, it was petroleum subsidy at Rs 36,178.43 crore, which was the lowest at 93 per cent of the revised estimates presented in the General Budget in February 2021. This implies that petroleum subsidy on cooking fuel LPG and kerosene was less that what was estimated despite the Atmanirbhar package, which gave beneficiaries three free cylinders under Pradhan Mantri Ujjwala Yojana. In the current year, the government anticipates no spending on kerosene subsidy since consumers have moved to LPG-based cooking. Those who have LPG connections do not get any subsidised kerosene under the government policy.

By contrast, food subsidy overshot FY2021 revised estimate by a highest 24.3 per cent because of payment of dues to Food Corporation of India during the year. The government had earlier planned to pay them in the current 2021-22. “This suggests a cushion of Rs. 1.0 trillion in FY2022 within the budgeted level of expenditure, which will help to absorb the already announced costs related to free foodgrain and fertiliser subsidy, as well as the expected enhancement in the MGNREGA allocation that may be needed following the second Covid surge,” said Aditi Nayar, chief economist, ICRA.

According to a CARE Ratings analysis, there has been a sharp increase in the spending towards subsidies aggregating Rs 4.6 trillion in the quarter ending March 2021 as against the previous quarter when it was Rs 0.7 trillion. “Total subsidies for the full year have almost tripled during FY21 compared with the previous year owing to payment of dues to FCI towards foodgrains which was announced in Budget 2021-22 and higher payment towards fertiliser subsidies,” said the analysis.

Both the nutrient based fertiliser subsidy and urea subsidy, were, however, lower at 96 per cent and 95 per cent of the revised estimates during 2020-21. The government, therefore, managed to save Rs 6,026 crore during the year in fertiliser subsidy. Both these subsidies were 58 per cent higher in 2020-21 than what was paid in 2019-20. The increase was because of high fertiliser prices.

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