Asset Monetization and Positioning on The Track

The pandemic has worsened the government’s finances to survive the arduous times of the public health care crisis in India. This has led the government monetization to run a fiscal deficit that might not materialize well for the fiscal health of the economy.

The government, in order to provide impetus to the economy, has unveiled a constructive, expansionary budget that will help raise funds. In addition to an expansionary budget, it has been witnessed that an asset monetization scheme too will contribute to replenishing the empty coffers of the government.

It is to be noted that NITI Aayog is effectively and intensely pushing the ministries to considerably accelerate the Union government’s asset monetization plans. This is being pursued to credibly and diligently achieve the current fiscal’s target that has been set by the government at the amount of Rs 88,190 crore.

Given India’s recent finance history, such a humongous fiscal deficit target set by the government is a delineating behavior from the precedent practices of the fiscal health of the economy.

Various ministries are being monitored to implement the crucial program by the Cabinet Secretary to emphatically ensure that part of the monetization plan is swiftly implemented and the targets are hit. If the monetization plan or the procedure is to be broken down, it entails the creation of new sources of revenue by substantially and efficiently unlocking the value or potential of the investments that are made by the government in public assets.

These are primarily focused on the public sector undertakings, which have not been yielding substantial or appropriate returns and are in desperate need of revamping in order to realize their utility and potential in the economy.

Thus, the government, in the recent budget, has come forward to unlock the lost potential and underutilization of such assets to raise revenues and thus replenish the emptying financial coffers of the government.

It is no news that government-regulated investments are usually seen as inefficient. Thus, in order to counter such a discrepancy, the government has invited the private sector to increase participation in the brownfield projects.

The plan has been efficiently concocted to make the aforementioned assets value-accretive, through substantial and efficient operation.

But what role do the ministries play in such a scheme of events devised by the government? It is to be noted that various brownfield assets that have been chosen include roads and the power sector where the concerned ministries are in charge.

Thus, these ministries are being forced or motivated by the government to complete their targets, as the petroleum, Railways, sports, and mining industries seem to be behind schedule. As a matter of fact, the railway ministry has been accused of being the biggest “laggard” after a change of guard. However the same cannot be maintained for all the industries in the market.

This is due to the impressionable and appreciable role that has been played by the Real Estate Investment Trusts and Infrastructure Investment Trusts or InvITs in the road and power projects.

In addition to the aforementioned real estate investment funds and the infrastructure investment trusts, public-private partnerships (PPPs) are also being highly preferred as the modes for asset monetization. This case can be scrutinized in the railways which account for humungous 25% of the Rs 6 lakh crore of assets that have been identified to be monetized.

According to the reports, it has been conjured that such PPPs will effectively help redevelop 400 railway stations around the countries. Other tasks at hand of PPP also include 90 passenger trains that need to run, leasing of the track on dedicated freight corridors, etc.

In the PPO agreement, in the specific case of the passenger trains, there is a model concession agreement that is in place to strategically operate these trains for a period of 35 years. This is being effectively achieved in return for an upfront payment.

In order to incentivize the private players, the private partner has been enticed with offers stating that the concerned parties have the right to collect fares and avail of the Railways’ maintenance infrastructure. Though, given the great incentive that is being provided by the government, the Railways is still falling behind in meeting the target that has been set for it at Rs 17,810 crore this fiscal.

This has led to a strategic revision in the policy and the terms that are being formulated to attract more participation from private players in the market.
One might ask what is the use of increased incentives, given the fact that private players will apparently witness spectacular profits which will definitely guarantee their participation? It is to be noted that undivided attention of the private players is needed for the Asset monetization plan.

The plan will effectively take off only when and if the private sector is on board. Thus, the delays which might come with expected profits, cannot be afforded. Therefore utmost transparency needs to be ensured for such participation. There must be a balance between risk and reward, between private and public interests.

It is to be noted that the ambitious, innovative project of the government will be seriously fraught with difficulties if the various projects that are cornered, have the participation of a few private parties.

Thus, in totality, it can be stated that the government’s incentives and undivided participation of the private players in the market are critical for the success of the asset monetization plan drafted by the government.

Also, Read Intellectual Property Rights

Protecting Gig Workers and Gig Economy

Everyone knows that the odious tussle between the employers and the gig workers has reached the courts. A response has been demanded by the apex court from the Centre to a PIL that was effectively filed by the Indian Federation of App-Based Transport Workers (IFAT).

The IFAT has strongly put on the table its demand which effectively includes much-needed pension, health insurance, social security benefits, pension, and cash transfers amounting to Rs 1,175 per day. These have been demanded for the app-based drivers and Rs 675 per day effectively for others.

The timeline for such cash transfers has been provided till December 31. The association has also argued that the cash transfers can also effectively continue till the pandemic subsidies to support its workers, who have been hard hit by the arduous pandemic.

Do the demands of IFAT end here? It is to be noted that there is more to the story. In fact, most importantly, the IFAT wants gig workers to be recognized as unorganized workers. This should be done as per the Unorganized Workers’ Social Welfare Security Act of 2008.

Tipping scale in favor of the gig workers.

1. Globalization has integrated economies around the world, so much so that Westernization has found its huge impact on the policies and laws in the eastern and developing countries like India. Precisely due to this reason, given the dramatic turn of events in some Western economies, the scales appear to be tipped in favor of the gig workers in the Indian economy.
2. To quote an example, in a turn of recent events in the UK, the Supreme Court had emphatically upheld an earlier ruling by the employment tribunal. This ruling had stated that the 25 drivers who had effectively filed a case against Uber were employees and not mere contractors.
3. But what was the impact of the same, you might ask? It is to be noted that this landmark decision by the supreme court had earned the drivers a minimum wage, pension, and holiday pay.
4. Thus, one can argue quite well that the welfare of the workers was upheld in the UK. Given that UK, a western country, that upholds the moral of capitalization, held the judgment in favor of the workers, India, being a welfare economy, is all the more required to abide by the rules of welfare and prosperity.
5. In fact, the topic of the welfare of workers has taken the European Union by storm as a draft proposal to make companies like Instacart, Uber, and Amazon effectively categorize their gig workforce as employees.
6. This will positively lead the corporate giants to provide the workers more benefits, which is especially the need of the hour given the financial standing of many workers in the economy has been crippled by the onset of the pandemic.
   But has the welfare trend caught upon all the western nations?
7. Apparently not. Platform companies in the US have been successfully able to stall such welfare legislation, but AB5 in California has been vehemently and emphatically aiming at reclassifying the gig workers as employees.
8. Thus, one can pliantly state that the tide is turning. The turning tide in the US can be guaranteed by the fact that it is being seconded by the US labor secretary Marty Walsh, who has been working towards recognizing the workers as employees.
9. The main reason given for the same is that the humungous profits being accrued by the corporates In America should be trickled down to the workers as well.
10. This has led to the blockade of the Trump era rule of classifying gig workers as of individual contractors in America. Thus, America might emphatically encounter a paradigm policy shift for the gig workers.

Upsetting news for the economics of aggregators

• Though, one can argue that the legislation will be a welcomed step for the gig workers, can the same be stated for the employers? Apparently not. In Fact, the legislation might come as a piece of upsetting news for the economics of aggregators.
• This is mainly due to the fact that such legislation will lead to higher operating costs and will definitely pressure the profit margins of the corporates. Given that the corporates love profits, the introduction of such legislation is sure to upset many money-mongering entrepreneurs and CEOs.
• The operating cost is anticipated to shoot up mainly due to the fact that permanent employees can be twice as expensive as contract hires. Though, given the propensity of enactment of such legislation, the Platform employers will effectively try to point out the strength of their model.
• This strength of the model lies in the fact that it provides an ability to the corporates to use the services of large numbers of workers. Thus, this leads to timely payment for a specific task for many workers in the economy, and this way they are emphatically and efficiently paying for the specified job done during the defined period.

1. Thus, this ensures productivity and efficiency of the gig workers in the economy and subsequently keeps the costs down. Given the aforementioned argument, is the legislation the need of the hour?
2. While one cannot deny the arguments being put forward by the corporate workers, it cannot be forgotten that a big section of gig economy workers belongs to the more vulnerable sections of society.
3. Thus, they have a higher need for a stable income and much more than subsistence wages. Given the remunerations that are being paid to the workers are not enough to sustain the pandemic or the livelihood of the workers.
4. Also, /another problem that poses itself in such a scenario is that such informal contractual agreements don’t hold up well in a court of law.
5. Thus, even though employers might insist and assert that flexibility in the workplace is a humungous advantage but the truth lies in the fact that in a country like India, workers strongly prefer to be employed with one company in return for assured benefits. Thus, will the scale tip in favor of the gig workers? Guess, we’ll have to scrutinize as the matter unfolds.

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Fueling Pharma Innovation

The Indian pharma sector garners much attention during the odious times of the detestable pandemic. with low investments in the sector, one can witness declining utility of the same.

The Indian pharma sector hence needs to discover and create a pipeline of new molecules that will effectively help the sector become a fully original innovation-driven industry.

The pharma industry can be developed on the facets of innovation that involve a considerable level of risk. The risk in the sector is due to the fact that innovation demands the cost of technology and the cost of long gestation period.

With the aforementioned costs comes the cost of new capabilities and even the cost of failure. Factoring in all the costs that might be incurred, the cost of setting up an innovative pharma sector is incredibly high.

Therefore, given the humongous cost, the risk-taking that needs to be inculcated in the process can only be achieved within an enabling ecosystem.

Given the immense costs mentioned above, it is to be noted that funding will definitely be one of the biggest and prime drivers of innovative R&D in the pharma sector. Given that investors have a huge potential to build an impressive ecosystem, another stakeholder that has an important role is the government, startup and tech entrepreneurs and regulators, academia, private funders, etc.

This is apparent due to the fact that most major and innovative discovery in the pharma sector has been made through government spending.

We are quite aware of the fact that some of the biggest and most influential historic pharma discoveries made around the world have successfully succeeded in a large part due to the continued government funding.

Thus, given the government’s increased and necessary involvement in the innovative development of the sector, some thought should be put into the restoration of policy incentives. These efforts can be attributed to the weighted education in R&D expenditure and patent box.

On top of enhanced education and inculcation of skill sets in the workers, the government can also emphatically incentivize the right kind of projects with real potential to succeed and which have the right amount of capacity that will definitely have a significant role to play in the future.

On the other hand, private equity funding and private spending through venture capitalists, etc. too can prove beneficial for the development of the aforementioned, innovative ecosystem. Given that healthcare and pharma assets have been presumed as enticing by the private lenders, one can positively expect great enthusiasm amongst the private investors.

It is to be noted here that investing in assets from the early discovery stage might be beneficial for the investors compared to late-stage acquisition as these can contribute immensely to the R&D successes.

Thus to quantify the gist of the argument stated above, it can be emphatically stated that with the right kind of government or private support, academia, or start-ups, the pharma sector in India can grow to newer heights in efficiently and effectively identifying the unmet patient needs in the sector.

This can be possible due to thorough research in concentrated sectors which can help in better conditionalities of the sector, given its vital role in the pandemic.

Having talked about the need of the sector, one cannot emphatically deny the contributions of the government and academia throughout the years to make the pharma sector a possibility. It is no news that funding is required for the innovative R&D constitutes which is a central pillar for the innovative industry that the R&D is.

To provide policy support, the landmark Indian Patents Act of the year 1970 was enacted to turn things around for the Indian pharma sector. It is to be noted that this effectively and efficiently has assisted in the genesis of the effective Active Pharmaceutical Ingredients (API) and generic formulations.

Thus one can argue that the policy support through the government has greatly facilitated innovation and efficiency in the pharma sector. In fact, the road to spectacular discovery in the sector has been opened through the regulatory landscape that effectively lays down unambiguous timelines and accountabilities that sagaciously support clinical trials in the country.

Talking about the industry-academia contribution towards the pharma sector, one can state that not much has been achieved. But the same is prevalent around the world such as in Israel, the United States, Japan, and others. These countries can staunchly corroborate the fact that corporate academia does play a phenomenal pivotal role leading to spectacular pharmaceutical innovation in the industry.

Mentioning the requisite role of the policymakers in the industry, the Creation of innovation hubs in the country, through motivating the right talent is always an overlooked, but important aspect that needs to be scrutinized.

There is an immediate need for try facilitation of a national hub for the aforementioned aspects of the government to coexist and facilitate synergy.

Taking all these factors into consideration, the recent draft of the R&D policy is under consideration. Such a formidable step is heartedly welcome and an inclusive move by the government of India.

It is also emphatically a much-needed realistic view and address of the present-day and future requirements of the country battered by the pandemic.

It is, in fact, yet another step towards the mutually responsive partnership that is bound to be formed between the government and the pharma industry. Thus, will the R&D policy be able to bring around the change? It is something we’ll have to wait and watch

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