Ponzi Scheme

The Great Indian banking Ponzi scheme

 ponzi

 

One of the themes that I have regularly explored in The Daily Reckoning newsletters is the mess that the Indian banking sector currently is in. This newsletter is another one in the series.

The RBI Financial Stability Report released in June earlier this year pointed out: “Five sub-sectors, namely, mining, iron & steel, textiles, infrastructure and aviation, which together constituted 24.8 per cent of the total advances of scheduled commercial banks, had a much larger share of 51.1 per cent in the total stressed advances. Among these five sectors, infrastructure and iron & steel had a significant contribution in total stressed advances accounting for nearly 40 per cent of the total.”

Within the infrastructure sector, the power sector is a big defaulter. Loans to the power sector form around 8.3% of the total loans. But at the same time they form around 16.1% of the stressed advances.

The stressed advances or loans are arrived at by adding the gross non-performing assets (or bad loans) plus restructured loans divided by the total assets held by the Indian banking system. The borrower has either stopped to repay this loan or the loan has been restructured, where the borrower has been allowed easier terms to repay the loan by increasing the tenure of the loan or lowering the interest rate.

So what would typically happen in such a scenario? Banks would go slow on lending to sectors that have been defaulting on their loans. But is that really the case? The sectoral deployment of credit data released by the Reserve Bank of India (RBI) earlier this month suggests otherwise. This despite the fact that banks claim every quarter that they continue to stay away from the sectors that have given them pain in the past.

People may not always tell the right story but numbers do. And here are the numbers. The RBI sectoral deployment data suggests that between July 2014 and July 2015 banks lent a total of Rs 1,20,900 crore to industry as a whole. The lending to industry went up by 4.8%, in comparison to 10.2% growth between July 2013 and July 2014.

The situation gets even more interesting when we take a closer look at the numbers. The bank lending to the infrastructure sector between July 2014 and July 2015 grew by Rs 71,600 crore. Within the infrastructure sector lending to the power sector grew by Rs 59,400 crore.

Lending to the iron and steel sector grew by Rs 27,100 crore during the course of the year. Loans to the iron and steel sector form around 4.5% of the total loans and 10.2% of the total stressed advances.

What does this tell us? In the last one year banks gave Rs 98,700 crore of the Rs 1,20,900 crore that they lent to industry to the two most troubled sectors of infrastructure and iron and steel. This means that 81.6% of all industrial lending carried out by banks in the last one year went to the two most troubled sectors of infrastructure and iron and steel.

These sectors form around 19.5% of the total lending carried out by banks and 40% of their stressed assets. The overenthusiasm of banks to lend to these sectors comes even after the RBI in the Financial Stability Report had raised a red flag.

The report had warned that the “the debt servicing ability of power generation companies[which are a part of the infrastructure sector] in the near-term may continue to remain weak given the high leverage and weak cash flows. Banks, therefore, need to exercise adequate caution while dealing with the sector and need to continue monitoring the developments very closely.”

With regard to the iron and steel sector the report had said that “the sector holds very good long term prospects, though it is currently under stress, necessitating a close watch by lenders.” But the July numbers on the sectoral deployment of credit clearly suggest that banks are not listening to the RBI.
What does this really mean? By lending more and more money to sectors which are in trouble, banks are essentially kicking the can down the road.

The banks are giving new loans to companies operating in these troubled sectors so that they can repay their old loans. They are effectively running a Ponzi scheme. A Ponzi scheme is essentially a fraudulent investment scheme where money being brought in by new investors is used to pay off old investors.
Over and above this conversations I have had with some industry insiders I have come to know that banks(in particular public sector banks) have been using the 5/25 scheme in order to postpone dealing with the bad loans issue, in the hope that these loans will become viable in the years to come.

The 5/25 scheme allows banks to extend the loans given to infrastructure projects to up to 25 years while refinancing them every five to seven years. As a December 2014 newsreport in the Mint newspaper points out: “Banks were typically not lending beyond 10-12 years. As a result, cash flows of infrastructure firms were stretched as they tried to meet shorter repayment schedules.”

In fact when the scheme was first introduced it was available only for new projects. However, in December 2014, it was also extended to existing projects as well. Banks were allowed to increase the repayment tenure for companies which had borrowed money for infrastructure projects and come up with fresh amortisation schedules for repayment of loans.

Such an increase in the tenure of repayment would not be treated as a restructuring of assets. An increase in tenure brought down the amount of money that the companies had to pay during the course of a year, in order to repay the loan. And this increased their chances of continuing to repay the loan.

This 5/25 scheme is also available for projects lending against which has already been classified as a restructured asset (i.e. its repayment schedule has already been extended or the interest rate has been lowered). When such a loan is brought under the 5/25 scheme it continues to be classified as a restructured asset up until the project gets upgraded on the satisfactory servicing of the loan.

RBI’s rationale behind extending the 5/25 scheme to existing projects was that that instead of giving up on an asset under stress, if efforts were made to make it viable, then the loan could be paid back and therefore the pressure of bad loans could be eased.

As RBI governor Raghuram Rajan said on August 4, 2015, while addressing a press conference: “We have said that there is no problem to lend to a project even if it is a non-performing asset, so long as it has done something to bring the project back on track and not for evergreening the loan.” But is that really the way banks also look at it?

Rajan further said in a speech on August 24, 2015: “To deal with genuine problems of poor structuring, it has allowed bankers to stretch repayment profiles…to infrastructure and the core sector (the so-called “5/25” rule), provided the project has reached commercial take-off, has a genuinely long commercial life, and the value of the NPV of loans is maintained. RBI is undertaking periodic examination of randomly selected “5/25” deals to ensure they are facilitating genuine adjustment rather than becoming a back-door means of postponing principal payments indefinitely.”

I sincerely hope that RBI is carefully examining the 5/25 loans. As Rajan said, the RBI making it “easy for banks to “extend and pretend”, is not a solution.” I agree.

The column originally appeared in The Daily Reckoning on Sep 11, 2015

Why real estate Ponzi scheme will continue despite new Real Estate Bill


On April 7, 2015, the union cabinet cleared the Real Estate (Regulation and Development) Bill. The Bill essentially mandates that every state needs to set up a Real Estate Regulatory Authority (RERA), to protect consumer interests.
Every commercial as well as residential real estate project needs to be compulsorily registered with the RERA of the concerned state. Real estate companies need to file project details, design and specifications, with the concerned RERA. They need to put up details concerning the approvals from various authorities regarding the project, the design and the layout of the project, the brokers selling the project etc., on the RERA’s website.
Consumers will be able to check these details on the website of the real estate regulator. Further, only once a project is registered with the RERA will it be allowed to be sold. Also, like is the case currently, a real estate company will not be able to go about arbitrarily changing the design of the project midway through the project. In order to do this the company will need approval of two thirds of the buyers.
If the real estate company makes incorrect disclosures or does not follow what it has stated at the time of filing the project with the RERA, it will have to pay a penalty. There are other provisions also that seek to protect consumer interests. Real estate companies will have to clearly state the carpet area of the home/office they are trying to sell, instead of all the fancy jargons that they come up with these days. Further, the bill allows buyers to claim a refund along with interest, in case the real estate company fails to deliver.
So on paper the bill actually looks great. But there is one provision that essentially makes all these provisions meaningless in a way. The Bill requires real estate companies to compulsorily deposit half of the money raised from buyers for a particular project into a monitorable account. This money can then be spent only for the construction of that project against which the money has been raised from prospective buyers.
This is an improvement from the way things currently are. The way things currently work are—a real estate company launches a project, collects the money and then uses that money to do what it feels like. This might mean repaying debt that it has accumulated or diverting the money to complete the projects that are pending. Given this, at times there is no money left for the project against which the money has been raised. In order to get the money for that, another project will have to be launched. Meanwhile the prospective buyers are stuck.
Developers love launching new projects simply because it is the cheapest way to raise money. Money from the bank or the informal market, means paying high interest. Hence, they raise money for the first project and use it to pay off debt or the interest on it. To build homes under the first project, a second project is launched. Money from this is then used to build homes for the first project.
Now, to build homes promised under the second project, a third project is launched and so the story goes on. In the process, all the buyers get screwed and the builder manages to run a perfect Ponzi scheme. A perfect Ponzi scheme is one where money brought in by the newer investors is used to pay off older investors. In this case money brought in by the newer buyers is used to build homes for the older buyers.
The Real Estate Bill seeks to stop real estate companies from running such Ponzi schemes. As explained above, half the money raised for a particular project needs to be deposited in a monitorable bank account and be spent on the project against which the money has been raised.
The thing is when the Bill was first presented in the Parliament in 2013, the real estate companies had to deposit 70% of the money raised against a particular project in a monitorable account and spend that money on that particular project.
Between then and now the real estate lobby has been able to dilute the 70% level to 50%. What this means that the real estate companies can still use 50% of the money raised against a particular project for other things. And this will essentially ensure that the real estate Ponzi scheme will continue.
Real estate companies will continue to launch new projects to raise money and use half of that money for things other than building the project for which they have raised the money for.
Also, this provision will allow the real estate companies to continue to hold on to their existing inventory and not sell it off at lower prices in order to pay off their debt, given that they can continue to raise money by launching a new project.
The question to ask here is why should a ‘new’ regulation allow money being raised for a particular project to be diverted to other things? It goes totally against the prospective buyers who are handing over their hard earned money(or taking on a big home loan) to the real estate company, in the hope of living in their own home.
A possible answer lies in the fact that if the government had regulated that the money raised for a project should used to build that project, it would have closed an easy way that the real estate companies have of raising money. This would have ultimately led to real estate prices coming down. And any crash in real estate prices would have hurt politicians who run this country, given that their ill-gotten wealth is stashed in real estate.

(Vivek Kaul is the author of Easy Money. He tweets @kaul_vivek)

The column originally appeared on Firstpost on Apr 21, 2015 

Here’s how India’s government unwittingly aids the growth of ponzi schemes

J164133002Over the last few years a spate of Ponzi schemes have come to light. These include Sahara, Saradha Chit Fund, Rose Valley Hotels and Entertainment and most recently PACL. A Ponzi scheme is essentially a fraudulent investment scheme in which money brought in by new investors is used to redeem the payment that is due to existing investors.
The instrument in which the money collected is invested appears to be a genuine investment opportunity but at the same time it is obscure enough, to prevent any scrutiny by the investors. So PACL invested the money it collected in agricultural land. Rose Valley, Sahara and Saradha had different businesses in which this money collected was invested.
These Ponzi schemes managed to raise thousands of crore over the years. In a recent order against PACL, the Securities and Exchange Board of India(Sebi) estimated that the company had managed to collect close to Rs 50,000 crore from investors. Sahara is in the process of returning more than Rs 20,000 crore that it had managed to collect from investors, over the years.
The question is how do these schemes manage to collect such a large amount of money. A June 2011, news-report in The Economic Times had estimated that PACL had managed to collect Rs 20,000 crore from investors at that point of time. This means that since then the company has managed to collect Rs 30,000 crore more from investors. An April 2013 report in the Mint quoting state officials had put the total amount of money collected by the Saradha at Rs 20,000 crore.
These Ponzi schemes have managed to collect a lot of money in an environment where the household financial savings in India have been falling. Household financial savings is essentially the money invested by individuals in fixed deposits, small savings scheme, mutual funds, shares, insurance etc.
The latest RBI annual report points out that “the household financial saving rate remained low during 2013-14, increasing only marginally to 7.2 per cent of GDP in 2013-14 from 7.1 per cent of GDP in 2012-13 and 7.0 per cent of GDP in 2011-12…the household financial saving rate [has] dipped sharply from 12 per cent in 2009-10.”
While the household financial savings have dipped, the money collected by Ponzi schemes has grown by leaps and bounds. What explains this dichotomy? Some experts have blamed the low penetration of banks as a reason behind the rapid spread of Ponzi schemes in the last few years. K C Chakrabarty, former deputy governor of the Reserve Bank of India, in September 2013 had pointed out that only 40,000 out of the 6 lakh villages in India have a bank branch.
Hence, investors find it easier to invest their money with Ponzi schemes, which seem to have a better geographical presence than banks. While this sounds logical enough, the trouble with this reasoning is that the bank penetration in India has always been low. It clearly isn’t a recent phenomenon. So, why have so many Ponzi schemes come to light only in the last few years?
Another reason offered is that the rate of return promised by these Ponzi schemes is high and is fixed at the time the investor enters the scheme. This is an essential characteristic of almost all Ponzi schemes. Take the case of Rose Valley. The return on the various investment schemes run by the company varied from anywhere between 11.2% to 17.65%.
In case of PACL The Economic Times report referred to earlier pointed out that “If a customer puts down Rs 50,000 for a 500 square yard plot, he or she can expect to get back Rs 1,01,365 in six years, or Rs 1.85 lakh in 10 years.” This meant a return of 12.5% and 14% on investments. An April 2013 report in the Business Standard pointed out that the fixed deposits of Saradha “promised to multiply the principal 1.5 times in two-and-a-half years, 2.5 times in 5 years and 4 times in 7 years.” This basically implied a return of 17.5-22%.
It is clear that returns promised by these Ponzi schemes have been significantly higher than the returns available on fixed income investments like fixed deposits, small savings schemes, provident funds etc., which ranged between 8-10%. Given this, it was the greed of the investors which drove them to these Ponzi schemes, and in the end they had to pay for it.
Again that would be a simplistic conclusion to draw. Rose Valley was paying 11.2% on one of its schemes. PACL was offering 12.5%. This returns weren’t very high in comparison to the returns on offer on other fixed income investments.
In fact, most Ponzi schemes tend to offer atrociously higher returns than this. Charles Ponzi on whom the scheme is named had offered to double investors’ money in 90 days. Or take the case of the Russian Ponzi scheme MMM, which came to India sometime back. Its sales pitch was that Rs 5000 could grow to Rs 3.4 crore in a period of twelve months. Speak Asia, a Ponzi scheme which made a huge splash across the Indian media a few years back, promised that an initial investment of Rs 11,000 would grow to Rs 52,000 at the end of an year. This meant a return of 373% in one year. Another Ponzi scheme Stock Guru, offered a return of 20% per month for a period of up to 6 months.
In comparison, the returns
offered by the likes of Rose Valley, Saradha, Sahara and PACL are very low indeed. But investors have still flocked to them. In fact, in its order against PACL, Sebi estimated that the company had close to 5.85 crore investors. So, the question is why are so many people investing money in such schemes?
The answer lies in the high inflation that has prevailed in the county since 2008. For most of this period the consumer price inflation and food inflation have been greater than 10%. In this scenario, the returns on offer on fixed income investments have been lower than the rate of inflation. Hence, people have had to look at other modes of investment, in order to protect the purchasing power of their accumulated wealth. A lot of this money found its way into real estate and gold. And some of it also found its way into Ponzi schemes. This is the “real” reason behind the explosion in the kind of money that has been raised by these Ponzi schemes.
But why is the rate of interest on offer on fixed income investments been lower than the rate of inflation? This is where things get really interesting. Take a look at the graph that follows. The government of India since 2007-2008 has been able to raise money at a much lower rate of interest than the prevailing inflation. The red line which represent the estimated average cost of public debt(i.e. Interest paid on government borrowings) has been below the green line which represents the consumer price inflation, since around 2007-2008. 
cost of borrowing

How has the government managed to do this? The answer lies in the fact that India is a financially repressed nation. Currently banks need to invest Rs 22 out of every Rs 100 they raise as deposits in government bonds. This number was at higher levels earlier and has constantly been brought down. Over and above this Indian provident funds like the employee provident fund, the coal mines provident fund, the general provident fund etc. are not allowed to invest in equity. Hence, all the money collected by these funds ends up being invested in government bonds.
As the Report of the Expert Committee to Revise and Strengthen the Monetary Policy Framework points out “Large government market borrowing has been supported by regulatory prescriptions under which most financial institutions in India, including banks, are statutorily required to invest a certain portion of their specified liabilities in government securities and/or maintain a statutory liquidity ratio (SLR).”
This ensures that there is huge demand for government bonds and the government can get away by offering a low rate of interest on its bonds. “The SLR prescription provides a captive market for government securities and helps to artificially suppress the cost of borrowing for the Government, dampening the transmission of interest rate changes across the term structure,” the Expert Committee report points out.
The rate of return on government bonds becomes the benchmark for all other kinds of loans and deposits. As can be seen from the graph above, the government has managed to raise loans at much lower than the rate of inflation since 2007-2008. And if the government can raise money at a rate of interest below the rate of inflation, banks can’t be far behind. Hence, the interest offered on fixed deposits by banks and other forms of fixed income investments has also been lower than the rate of inflation over the last few years.
This explains why so much money has founds its way into Ponzi schemes, even though the rate of return they have been offering is not very high in comparison to other forms of fixed income investment. To conclude, the government of India has had a significant role to play in the spread of Ponzi schemes.

A slightly different version of this article appeared on Quartz India on September 10, 2014

 

(Vivek Kaul is the author of Easy Money: Evolution of the Global Financial System to the Great Bubble Burst. He can be reached at [email protected])

How PACL ran a Rs 50,000 crore Ponzi scheme

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So another Ponzi scheme has been busted.
The Securities and Exchange Board of India(Sebi) in an order issued on August 23, 2014, banned Delhi based PACL, from collecting any more money from investors. Sebi also asked PACL to refund the money to investors over the next three months.
A Ponzi scheme is essentially a fraudulent investment scheme in which money brought in by new investors is used to redeem the payment that is due to existing investors. The instrument in which the money collected is invested appears to be a genuine investment opportunity but at the same time it is obscure enough, to prevent any scrutiny by the investors.
In case of PACL, the money collected was supposedly invested in “ agricultural land”. As the Sebi order on the company written by Whole Time Member Prashant Saran points out “According to PACL, it mainly deals in the sale and purchase of agricultural land and development of the land…PACL’s business model is not limited to simple trading in barren agricultural land but to provide significant value addition to such low value barren land by developing it into productive agricultural land.”
This land bought by PACL after collecting money from the investors wasn’t handed over to them. As the Sebi order points out “PACL has also submitted that only symbolic possession of plots are handed over to the customers as fragmentation of land/ plot into smaller sizes may not be practical or permissible under the applicable revenue laws.”
The Sebi order goes on to inform that till March 31, 2012, Rs 44,736 crore was invested in PACL schemes. The company further informed Sebi that Rs 4,364.78 crore was collected by it between February 26, 2013 and June 15, 2014. Hence, the total amount collected amounts to a whopping Rs 49,100 crore. “This figure could have been even more if PACL would have provided the details of the funds mobilized during the period of April 01, 2012 to February 25, 2013,” the Sebi order points out.
The order goes on to note that “from the available records, it is also noted that since inception till 2012, PACL has allotted land to about 1.22 crore customers.” PACL also informed Sebi that the company has more than 4.63 crore customers to whom land hasn’t been allotted. Hence, “the total number of the customer of PACL comes to around 5.85 crore.”
To summarize, the company has close to 5.85 crore customers who have invested around Rs 50,000 crore with it. This is the basic back story of PACL, which has been put together brilliantly by Saran in the Sebi order. So what are the holes in this story?
First and foremost if the company has Rs 50,000 crore invested with it, it must have used that money to buy “agricultural land” worth a similar value. But the Sebi order clearly points out that PACL hasn’t done so. “The company has only lands worth Rs 11,706.96 crore [i.e. agricultural lands (Rs 7,322.11 crores) and commercial lands (Rs 4,384.84 crores)] out of which it has not only to satisfy the claim of 4.63 crore customers who have deposited Rs 29,420 crore with it but also to satisfy 1.22 crore customers to whom the land has been allotted but sale deeds have not been executed.”
PACL claims to have more land but hasn’t been able to share those details with Sebi “In view of the above, the proposal does not appear to be serious and reasonable,” writes Saran of Sebi. This throws up several questions? If the company has land worth Rs 11,706.96 crore only, where is the remaining money that it has raised from its customers? Why hasn’t it been invested?
Further, how does it plan to repay the customers at the end of the tenure of their investment? The customers have been promised a certain rate of return. And that return can be paid only when the land which PACL claims to invest in grows in value. But without the company investing money in land, that isn’t going to happen.
Also, at the end of the tenure of his investment, the investor either has the option of taking land or money. Saran of Sebi had asked PACL to provide him a sample of 500 customers. From this sample, 421 customers had taken their money back. The question is how were these customers repaid if the money being raised is not being invested totally?
In fact, in a news report published in The Economic Times in June 2011 PACL director S Bhattacharya had said that “about 80% of customers opt to take the money at the end of the plan term instead of the plot of land they supposedly paid for.” So the remaining 20% must be taking on the land, they had originally invested in, is a fair conclusion that one can draw. But as the Sebi order also points out “Not a single applicant out of the 500 samples selected has registered a sale deed of the land he had proceeded to purchase in the first instance…These facts raise serious doubt the real estate business that PACL claims to carry out.”
In fact, the situation gets even more intriguing when one considers the total number of investors in the scheme. As summarised earlier nearly 5.85 crore investors have invested around Rs 50,000 crore in the scheme. But interestingly Bhattacharya had told The Economic Times in 2011 that the “the company has no more than 50 lakh customers”. So how did the number go from 50 lakh to 5.85 crore in just over three years? Or like Sahara, PACL does not really know how many customers does it really have?
All these lacunae lead Saran to conclude that “the lack of maintenance of proper records/ data is a clear indication that the activities of PACL are in the nature of ponzi scheme.” Hence, like most Ponzi schemes which run for a while, the company over the years has managed to build in the minds of its customers some sort of a façade of a business model, where they make money by buying and selling agricultural land.
But the available data does not lead to that conclusion. What the company seems to have been doing is to take money from new investors and hand it over to the investors whose investment had been maturing. That was all it did. It did not have a business model. It was an out and out Ponzi scheme.

The article originally appeared on www.Firstbiz.com on August 26, 2014.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

How Chidambaram, UPA have turned India into a ponzi scheme

congress-party-symbol1Vivek Kaul 

The Congress led United Progressive Alliance (UPA) government has turned India into a big Ponzi scheme. Allow me to explain.
Most governments all over the world spend more than they earn. This difference is referred to as the fiscal deficit and is financed through borrowing. Any government borrows by selling bonds. On these bonds a certain rate of interest is paid every year by the government to the investor who has bought these bonds.
The bonds also have a certain maturity period and once they mature the money invested in the bonds needs to be repaid by the government to the investor who had bought these bonds.
The trouble is that India has reached a stage where the sum of the interest that the government needs to pay on the existing bonds along with the money the government requires to repay the maturing bonds is greater than the value of fresh bonds being issued (which is equal to the value of the fiscal deficit).
Take the current financial year 2013-2014 (i.e. the period between April 2013 and March 2014). The interest to be paid on existing bonds amounts to Rs 3,80,067 crore. The amount that needs to be paid to investors who hold bonds that are maturing is Rs 1,63,200 crore. This total, referred to as the debt servicing cost, comes to Rs 5,43,267 crore (as can be seen in the following table).
ponzi ratioThe ratio of the debt servicing cost divided by fiscal deficit(referred to as the Ponzi ratio in the above table) for the year 2013-2014 comes to 1.04 (Rs 5,43,267 crore/ Rs 5,24,539 crore). What this means in simple English is that the government is issuing fresh bonds and raising money to repay maturing bonds as well as to pay interest on the existing bonds.
This is akin to a Ponzi scheme, in which money brought in by new investors is used to redeem the payment that is due to existing investors. So investors buying new bonds issued by the government are providing it with money, to repay the older investors, whose interest is due and whose bonds are maturing. The Ponzi scheme runs till the money being brought in by the new investors is greater than the money being paid out by the existing investors.
In the Indian case, the Ponziness has gone up over the years. In 2009-2010, the Ponzi ratio was at 0.70. This means that money raised by 70% of the new bonds issued by the government went towards meeting the debt servicing cost. In 2013-2014, the Ponzi ratio touched 1.04. This means that the money raised through all the fresh bonds issued were used to pay for the interest on existing bonds and repay the maturing bonds.
In fact, the projection for 2014-2015 (i.e. the period between April 2014 and March 31, 2015) puts the Ponzi ratio at 1.28. This means that all the money collected through issuing fresh bonds will go towards debt servicing. But over and above that a certain portion of the government earnings will also go towards meeting the debt servicing cost.
The increasing level of the Ponzi ratio from 0.70 in 2009-2010 to 1.28 in 2014-2015, is a clear indication of the fiscal profligacy that the Congress led UPA government has indulged in over the last few years. This has led to a situation where the expenditure of the government has shot up much faster than its earnings. This difference has been financed by the government issuing more bonds. Now its gradually reached a stage wherein the government needs to issue more and more new bonds to pay interest on the existing bonds and repay the maturing bonds.
This is nothing but a giant Ponzi scheme. To unravel, this Ponzi scheme the next government will have to cut down on expenditure dramatically. At the same time it will have to look at various ways of increasing its earnings.

The article originally appeared on www.firstpost.com on February 18, 2014

(Vivek Kaul is a writer. He tweets @kaul_vivek)