Growing AI adoption in India, but still some way to go: Romal Shetty, Deloitte India

Source: Economic Times, Apr 01, 2021

While financial services, Hi Tech, telecom, oil and gas, FMCG verticals in India are ahead of the curve in AI adoption, there is huge potential to be tapped in large parts of transport/logistics, retail, education, government, said Romal Shetty, President Consulting, Deloitte India in an interview regarding Deloitte- CII’s recent report titled ‘The Age of with: Humans and Machines’. Edited excerpts:

Are you witnessing trends in AI adoption across certain industries more so than others? If so, what are the key industries where you see major AI adoption?
India is a major developer of AI solutions, and has seen its analytics industry move from dashboards and data warehouses, to advanced industrial and services applications of AI. Across industries, companies are trying to reap the benefits of AI. While financial services, Hi Tech, telecom, oil and gas, FMCG verticals in in India are ahead of the curve in AI adoption, there is huge potential to be tapped in large parts of transport/logistics, retail, education, government, etc.

To democratize AI usage, the Indian Government’s policy think tank, NITI Aayog has been actively working on the #AIforAll program. As part of the Digital India initiative, the Government also intends to leverage AI in healthcare, agriculture and e-governance. Today, solutions are being developed from India for both the domestic and global market.

How have Indian organizations fared in terms of AI adoption when compared to other nations?Indian companies both big and small (Indian MNCs and family-run businesses) have responded at speed to the opportunities that have been thrown up in the past year due to the pandemic disruption – specifically more so in customer facing and manufacturing areas, but also in virtualization of various parts of the enterprise, given the new normal of work, workplace and workforce.

AI has come to be used in the customer facing (sales and marketing, customer experience), operations (supply chain, logistics, manufacturing) as well as support (HR, IT, finance) functions. While a lot of companies have initiated on this journey, there is still some way to go before all of these would be used at scale enterprise wide.

As far as AI is concerned, while India is still behind developed countries, we are seeing a drive towards this direction – India-centric innovation (for India from India). This has increased significantly as lift-and-shift models haven’t really worked given Indian realities.

What type of governance and policy problems occur with increasing AI adoption? Furthermore, could you elaborate on Deloitte’s framework to tackle this?
Despite wide adoption, organizations count ethical risks as one of their top challenges in implementing AI initiatives. Concerns include lack of explainability and transparency in AI-derived decisions, using AI to manipulate people’s thinking and behavior. A well-established governance and ethical model guides organizations to adopt AI more efficiently.

Deloitte’s Trustworthy AI framework is an effective tool in diagnosing the ethical health of AI while maintaining customer privacy and abiding by relevant policies. The key features of the framework put an emphasis on privacy, on AI being fair and impartial, transparent and explainable, the organisational policies being responsible and accountable, keeping systems and stakeholders safe and secure, and AI-driven output being robust and reliable.

Historically, have investors and stakeholders responded positively to companies adopting AI?Companies that are adopting AI are forward looking and ready for change. This has typically been appreciated by investors, all else being equal. For example, we were working with an EPC company which is looking to use AI-driven forecasts in order to look at bid values and walk-away prices for infrastructure bids. Strategic, as well as institutional/retail investors, have looked upon this company with a lens that they will be on another level compared to their peers in delivering shareholder value.

The PE/VC community already has a clear view that AI-driven solutions are valued better, in fact there is a joke that any company AI-driven will necessarily be funded.

Having said that, the story is not the same with all stakeholders. Some  employees have been a bit apprehensive of being shown that machines can potentially do a better job than them, especially in areas where there are long years of experience. It is a potential classical “Deep Blue beats Garry Kasparov” moment, where machines pitted against humans can show better results in many fields (for example, even cancer detection from visual inspection apparently can be done better by AI algorithms than expert doctors).  Also, in many countries, regulators and governments have sought to regulate the usage of AI – whether it is purely AI-driven decision making, for instance for credit card approvals (which may bring in biases), autonomous cars, conversation-AI enabled digital voice assistants answering first line calls at call centres, etc, which can risk bringing up various socio-legal issues as well as create an unfair playing field. Overall, the march of AI like any other technology will have supporters and detractors. However, the technology itself is a revolutionary one, and mankind has to figure out the right ways to use it in a meaningful and positive fashion to improve the lives of citizens and consumers.

Lastly, how can the fear of AI replacing human jobs be remedied? As we call it the “Age of With” where humans and machines together bring disproportionate value, not one or the other. Human creativity, judgement and intelligence is as vital a component as machine intelligence, and therefore we will have both co-exist.  We at Deloitte, looking at Technology Trends, observe three stages towards achieving full utilization of AI. First being assisted intelligence – e.g. a car warning a driver when they change lanes. Second, augmented intelligence – e.g. a car warning a driver when they change lanes and if they do not act in time, it takes the decision on the driver’s behalf. Last, autonomous intelligence – e.g. a car driving itself from source to destination point. While autonomous intelligence forms the holy grail that everyone would want to get to, we believe that most of the AI that assists in decision support on core business issues would fall in the first or second category. That is where AI will not replace humans, but assist and augment the intelligence of humans. It will be humans who will make the decisions based on their judgements.

6-digit HSN code mandatory in invoices for biz with over Rs 5crore turnover

Source: Financial Express. Apr 01, 2021

Businesses with turnover of more than Rs 5 crore will have to furnish six-digit HSN or tariff code on the invoices issued for supplies of taxable goods and services from April 1

Businesses with turnover of more than Rs 5 crore will have to furnish six-digit HSN or tariff code on the invoices issued for supplies of taxable goods and services from April 1, the Finance Ministry said on Wednesday. Those with turnover of up to Rs 5 crore in the preceding financial year would be required to mandatorily furnish four-digit HSN code on B2B invoices. Earlier, the requirement was four-digits and two-digits respectively. “With effect from the 1st April, 2021, GST taxpayers will have to furnish HSN (Harmonised System of Nomenclature Code), or Service Accounting Code (SAC) in their invoices, as per the revised requirement, the Ministry said in a statement.

In trade parlance, every product is categorised under an HSN code (Harmonised System of Nomenclature). It helps in systematic classification of goods across the globe. HSN codes for goods at 6 digits are universally common. Therefore, common HSN codes apply to Customs and GST. Accordingly, codes prescribed in the Customs tariff are used for the GST purposes too. The Ministry said manufacturers and importers/exporters have been commonly using HSN Codes. Manufacturers were furnishing these codes even in the pre-GST regime. Importers and exporters have been furnishing these codes in import/export documents. Traders would mostly be using HSN codes furnished in the invoices issued to them by the manufacturer or importer suppliers.

“A large number of GST taxpayers are already furnishing HS codes/SAC at 6/8 digits on voluntary basis on the invoices, e -way bills and GSTR 1 returns,” it added. AMRG & Associates Senior Partner Rajat Mohan said traders, manufacturers and services providers would be required to give more precise HSN code while issuing an invoice to the supplies with effect from April 1. “This will help tax officers with deeper data analytics for every item supplied and help them in arresting tax evasion emanating from fake invoices and irregular tax credit claims,” Mohan added.

Toyota Kirloskar sells 15,001 units, its highest dispatch during March in eight years

Source: The Economic Times, Apr 01, 2021

Toyota Kirloskar Motor (TKM) on Thursday said it sold a total of 15,001 units in March, registering the highest ever domestic sales in the month of March since 2013. The automaker had sold 7,023 units in March 2020, amid a nationwide lockdown due to the COVID-19 pandemic.

In February this year, the company had reported wholesales of 14,075 units.

“We have been able to sustain the growth momentum as we closed the last quarter registering a 73 per cent growth in domestic sales, when compared to the sales in the corresponding period last year (January-March 2020). In fact, last month witnessed the highest ever domestic sales in the month of March since 2013,” TKM Senior Vice President Naveen Soni said in a statement.

The company’s sales performance in the last quarter proved to be better than the sales in the festive season of the third quarter (October- December 2021), he added.

“The demand for personal mobility still continues to grow as we witness a surge in both enquiries and customer orders thereby registering a 7 per cent growth in domestic sales in March 2021 when compared to the sales in February 2021,” Soni noted.

This reiterates the popularity of the brand amidst customers which has been further enhanced by the two new recent launches of the new Innova Crysta and the New Fortuner, as well as the Legender, he said.

India’s inflation “uncomfortably high”: Moody’s Analytics

Source: ETRetail.com, Mar 30, 2021

India’s inflation is at an “uncomfortably high” level, which is an exception among Asian economies, Moody’s Analytics said on Tuesday.

Higher fuel prices will keep upward pressure on retail inflation and keep the RBI from offering further rate cuts, said Moody’s Analytics, a financial intelligence company.

Retail inflation rose to 5 per cent in February, from 4.1 per cent in January. The Reserve Bank mainly takes into account retail inflation while deciding on the monetary policy.

Core inflation (which excludes food, fuel and light) was up 5.6 per cent in February, from 5.3 per cent in January, Moody’s Analytics said, adding India’s inflation is “uncomfortably high”.

In its macro roundup, Moody’s Analytics said inflation is subdued in most of Asia, and expected to only gradually pick up over 2021 because of rising oil prices and economies starting to reopen. Brent crude has climbed 26 per cent this year at around USD 64 per barrel. It was around USD 30 per barrel in March 2020, when the COVID-19 crisis was near its peak.

“India and the Philippines are exceptions. In these economies, inflation is above comfort levels, adding to the list of challenges for policymakers,” it said.

Stating that India’s inflation is “worrisome”, it said volatile food prices and rising oil prices led retail inflation to exceed the upper band of 6 per cent several times in 2020, inhibiting the RBI’s ability to keep accommodative monetary settings in place during the height of the pandemic.

Under the monetary policy framework, RBI has a target for maintaining retail inflation at 4 per cent (+/- 2 per cent).

” RBI is expected to retain its current inflation-targeting band beyond its current expiry date of March 31,” Moody’s Analytics added.

DGFT extends deadline for track and trace system in pharma exports till April 1, 2022

Source: The Hindu Business Line, Mar 30, 2021

The Directorate General of Foreign Trade (DGFT) has extended the deadline for implementation of the track and trace system in pharma exports till April 1, 2022.

A public notice has been issued by the DGFT in this regard.

According to the DGFT’s previous order, the system was to be implemented from April 1, 2021.

“With this, the date for implementation of Track and Trace system for export of drug formulations with respect to maintaining the Parent-Child relationship in packaging levels and its uploading on Central portal has been extended till April 1, 2022,” R Uday Bhaskar, Director General, Pharmaceutical Export Promotion Council told BusinessLine. The Pharmexcil had earlier represented to the Commerce Department on the difficulties expressed by its member exporters with respect to the implementation of track and trace and had requested for an extension of timeline.

Centre tightens rules of grant allocation for transparency, efficiency

Source: Business Standard, Mar 31, 2021

New Delhi: The government has enforced new rules that will change the operating procedure for Centrally Sponsored Schemes (CSS). The new rules will tighten the procedure for grant allocation and increase the scrutiny on utilisation of funds disbursed, according to report in the Economic Times .

The Department of Expenditure order, dated March 23, vouches for “more effective cash management and bring more efficiency in public expenditure management”, said the report.

From July 1, 2021, all the state will have to set up a Single Nodal Agency for each Centrally Sponsored Schemes. The states will have to open with an account in a commercial bank to carry out their government business. If reqiued, separate SNAs may be created for sub schemes of an umbrella scheme.

All Union ministries and departments will release the central share for each CSS to a state government’s account held in the RBI for further release to this SNA account.

Then, the state governments will transfer the Central share within 21 days and release its own share within 40 days of the release of the Centre’s share.

CSS had become one of the largest financial outgo for the Centre. Several committees and finance commissions have recommended pruning and rationalisation to increase its effective. The time lag in release of grants, poor utilisation of funding and parking of funds in states for interest are among the issues red-flagged.

CBIC notifies ICEGATE as common portal for registration, bills of entry

Source: The Economic Times, Mar 30, 2021

The Central Board of Indirect Taxes and Customs (CBIC) notified ICEGATE or Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange (EC/EDI) Gateway as the common customs electronic portal for all customs related documentation and duty payments.

In a notification issued Monday, the Board has specified the portal as the one for facilitating registration, filing of bills of entry, shipping bills, other documents and forms prescribed under the Customs Act or any other law, besides duty payments and data exchange with other systems within or outside India.

CBIC has also amended the bill of entry forms for goods arriving via land, sea or air prescribing the use of the common portal for submitting bills of entry. The Board has also specified that bills of entry must be filed before the end of the preceding day on which the goods arrive at the customs port, other than inland container depot and air freight station.

If goods are arriving from Bangladesh, Maldives, Myanmar, Pakistan, and Sri Lanka, the authorised person will have to file the bill of entry before the end of the day of arrival of the vessel.

In case of goods arriving at customs airport, the authorised person will have to file the bill of entry before the end of the day of arrival of the aircraft.

In case of an inland container depot, air freight station, land customs station, at which goods are to be cleared for home consumption or warehousing, the authorised person has been directed to file the bill of entry before the end of the day before the vehicle, including train, arrives.
The changes form part of the move to making the customs processing of bills of entry and declarations more electronic, paperless and seamless, so as to facilitate trade.

Actis to set up 2 green firms with $850 million

Source: LiveMint.com, Mar 29, 2021

Private equity firm Actis Llp plans to invest $850 million in India to build two green energy platforms, said two people aware of the development, highlighting continuing interest among global investors in the domestic renewable energy market.

The first platform will focus on setting up grid-connected solar and wind power parks while the second will cater to the growing commercial and industrial (C&I) segment. These investments will be made from Actis Energy 5 LP fund.

“While Actis plans to make an equity investment of around $600 million for the new firm that will set up grid-connected wind and solar projects, the other new firm that will cater to the C&I segment may see an equity investment of around $250 million,” said one of the two people cited above requesting anonymity.

The person added that these firms will be set up shortly.

Considering the regulatory risks over green energy contracts and their enforcement, investors are increasingly looking at the C&I space as it tends to be insulated from risks such as curtailment in procuring power and tariff-shopping by state-owned distribution companies (discoms).

Green energy companies backed by global investors such as Petroliam Nasional Bhd-owned Amplus Energy Solutions Pvt. Ltd, Royal Dutch Shell-backed Cleantech Solar Energy, Netherlands Development Finance Co.-backed Avaada Energy Pvt. Ltd and Warburg Pincus-backed CleanMax Solar are currently supplying power to third-party as well as captive consumers in India who prefer such suppliers instead of depending on a more expensive electricity grid.

Also, there is considerable interest in the grid-connected clean energy space as well, given marquee deals such as the Goldman Sachs-backed ReNew Power’s proposed merger with Nasdaq-listed special purpose acquisition company (SPAC) RMG Acquisition Corp. II (RMG II), at an enterprise value of around $8 billion. Also, Greenko recently raised $940 million for refinancing through its latest dollar bond issue.

The third and the fourth firm clean energy firms being set up by Actis in India follow its earlier deal wherein it sold Ostro Energy Pvt. Ltd to ReNew Power Ventures in 2018 at an enterprise value of $1.5 billion.

Actis’s renewable energy platform in India—Sprng Energy—has an operational portfolio of 800 megawatts (MW) comprising wind and solar assets. With another 400MW coming online shortly, the PE firm plans to grow Sprng Energy to 2-gigawatt (GW) capacity before it monetizes it.

Some of the other clean energy platforms in India backed by private equity investors include KKR’s Virescent Infrastructure and European alternative asset manager EQT and Singapore’s state investment firm Temasek Holdings Pte.’s O2 Power.

The enthusiasm among global investors stems from India setting a target of 450GW renewable energy capacity by 2030. It currently has an installed renewable energy capacity of 89.63GW, with 49.59GW under execution. Also, ₹4.7 trillion has been invested in the country’s renewable energy space in the past six years, with an expected ₹1 trillion investment opportunity annually till 2030.

Actis, which invests only in emerging markets, has committed $2.1 billion in the Indian market so far spanning the energy, financial services and real estate sectors.

“Actis will also buy operating renewable and road assets through the Actis Long Life Infrastructure Fund, a yield-based fund,” said the first person cited above.

A spokesperson for Actis declined comment. Actis acquired two solar projects totaling 400MW from Acme Solar Holdings Ltd last year through Actis Long Life Infrastructure Fund. It has bid to acquire Ashoka Concessions Ltd.

CBDT notifies new rules, forms for trusts and non-profit organisations

Source: The Hindu Business Line, Mar 28, 2021

New Delhi: The Income Tax Department has notified a new set of rules and forms for trusts and non-profit organisations. Registration under these rules will help these organisations to get tax exemption for their own income. Also, the new rules will help in attracting funds where contributors will get exemption.

The Central Board of Direct Taxes (CDBT) has come out with a specific format of application to grant the approval of a fund, trust, institution, university, any hospital or other medical institution under various provisions of section 10.

As per the provision, mentioned in this section, there are incomes from certain funds, universities, educational institutions, hospitals, etc, that are not included in the total income for the taxation purpose.

The notification has also stated the rules are related to the approval of the institution for the fund under various provisions of Section 80G. Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act. All donations, however, are not eligible for deductions under section 80G. Only donations made to the prescribed funds qualify as a deduction. These funds and institutions have been defined in the notification.

Sanjoli Maheshwarri, Director at Nangia Andersen India said the CBDT has finally issued a notification about amendments in the IT Rules and Forms for granting the approval to various non-profit organisations , under section 80G(5). Notably, the amendments were enacted through Finance Act 2020 wherein compliance and registration procedure for such entities were entirely revamped.

However, the required rules and forms to be prescribed got delayed given the nationwide pandemic crises. The rules and forms prescribed in the said notification indicates the procedure and details to be complied in the applicable forms for seeking registration of charitable & religious entities, hospitals, schools, scientific and industrial research organisation by DSIR, etc.

The newly notified forms are comprehensive and detailed as compared to the earlier forms requiring certain key details to be filled in the applications. “As per Section 12A, the requirement for registration has been mandated for all the existing registered entities under12AA as well as for the new entities seeking provisional registration. Further, the timeline to file the application for provisional registration was at least one month prior to the commencement of the previous year from which the said registration is sought,” Maheshwari said. However, considering the said notification has been issued on the verge of year end and the timeline for filing the application for seeking provisional registration has already lapsed, it has been provided that for applications filed during previous year on or after April 1 2021, the provisional registration sought shall be effective from AY 2022-23. “With this clarification, the Government has helped in removing various concerns and anxiousness of the concerned entities who were in dilemma and perplexed as to how to proceed and strategize in the absence of forms notified,” she said.

Biocon partners with Libbs Farmaceutica to launch generic drugs in Brazil

Source: Business Standard, Mar 30, 2021

New Delhi: Biotechnology major Biocon on Monday said its subsidiary has joined hands with Libbs Farmaceutica to launch generic drugs in Brazil, the world’s sixth most populous country.

Biocon Pharma, a unit of the company, has tied up with Brazil-based Libbs Farmaceutica to introduce generic formulations in the Latin American country, Biocon Ltd said in a statement.

This partnership, which marks the entry of Biocon’s generic formulations into Latin America, builds upon a successful association with Libbs, which began in 2017 to launch biosimilar Trastuzumab in Brazil, it added.

As part of the out-licensing deal with Libbs, Biocon Pharma will be responsible for drug development and manufacturing, while Libbs will leverage its deep expertise and reach in Brazil to import, distribute and market, subject to approvals from the Brazilian health regulatory agency, ANVISA.

“Expanding our association with Libbs Farmaceutica, a trusted partner, to our generic formulations, will help us establish a firm footing in Latin America, starting with Brazil,” Biocon Ltd Chief Executive Officer and Managing Director Siddharth Mittal said.

The company remains committed to expanding its global presence with high quality and affordable medicines and invest in strengthening capabilities that enables it to serve patients globally, he added.

Libbs Executive President Alcebades de Mendona Athayde Junior said the partnership that is going to make a difference in patients’ lives. “We started with Biocon Biologics years ago, and we were very successful: our Trastuzumab became a leader in the private market, a milestone for our company. We will now continue making a difference in people’s lives with Biocon, with the goal to expand access to quality, safe and effective treatments to our patients,” he added.