Through the Looking Glass

The Economic Times By Jayant Sinha & Akhilesh Tilotia Providing regional air connectivity is an important policy goal for the government. Such services deliver a host of benefits by fulfilling latent consumer demand for convenient travel, making businesses and trade more efficient, unlocking India’s tourism potential, enabling fast medical service and promoting national integration. Moreover, building connections to tier-2 and tier-3 cities also generates powerful network effects with many regional passengers transferring on to the national aviation network between tier-1cities. The Udan (Ude Desh ka Aam Naagrik) programme is designed to jump start the regional aviation market by improving the profitability of under-developed regional routes. Udan is a market-based policy intervention that builds on similar programmes in the US, Canada and Australia. It is also consistent with universal service approaches established for other network-based services such as railways and te

Business Standard As the aviation market in India deepens, the creation of hubs for regional connectivity, international travel, mega- tourist destinations and freight connectivity will ensure the flow of more foreign Jayant Sinha & Akhilesh Tilotia Airports and airlines share a symbiotic relationship. Large airlines make big airports their hubs: The airport gets a dedicated anchor bringing in passenger footfalls and the airline builds out a full “hub-and-spoke” model centred around this airport. Typically, large airlines operate out of hubs: Such airports are among the largest in the world. Flag carriers like Emirates (244 planes in the sky in calendar year 2015), Etihad (121 planes) and Singapore Airlines (117 planes) have made their home city of Dubai (which handled 78 million passengers in CY2015), Abu Dhabi (23 million) and Singapore (55 million) their hubs. Large commercial airlines such as American (1,064 planes) or Delta (891 planes) hub at Dallas (66 million) and

The Times of India Jayant Sinha and Akhilesh Tilotia India’s aviation sector is being rapidly transformed and air travel is becoming indispensable for the general public. India is now the fastest growing major aviation market – the number of air passengers has been growing more than 20% year-on-year. In the past 12 months, more than 9 crore passengers flew domestically and another 5 crores or so flew internationally. In the next few years, India will likely become the third largest aviation market in the world after the US and China. The new National Civil Aviation Policy (NCAP), particularly the Regional Connectivity Scheme, will further accelerate this transformation. Spurred by supportive government policies and the NCAP announced in June 2016, the aviation sector has taken off. Along with plunging oil prices and lower interest rates, air travel has become much more affordable and accessible. In fact, air travel is approaching “rail parity” in terms of AC fares and passengers

The Financial Express Unless it reverses sustainably, India’s net foreign assets are expected to remain negative India’s financial relationship with the world has two large components: (1) a large trade account deficit balanced by services exports and remittances which still leaves a meaningful CAD financed by (2) large net inward flows of foreign capital. India’s large and consistent current account deficit (CAD) shows up in its changing net international investment position (NIIP). Data released by the Reserve Bank of India shows that as of March 2016 foreigners own $361 billion of assets in India more than what Indians own abroad (17.4% of India’s FY16 GDP), up from $165 billion in June 2010 (11.3% of the then annual GDP). A negative NIIP is the balance sheet corollary of running a persistent CAD: the valuation impacts of NIIP in an uncertain world can in turn impact CAD. Look beyond P&L to balance sheet India’s financial relationship with the world has two l

CFA Institute Talented enough to be hired at one of the world's leading management consulting firms, Akhilesh Tilotia, CFA, is a numbers guy at heart and, in his head, likes to chase the big picture. At Kotak Institutional Equities, Akhilesh interacts with institutional investors who want to understand the long-term perspective of the India investment story across a range of asset types. Akhilesh is well-versed on macroeconomic and political scenarios playing out in the country in both the short and long term, which helps him advise clients on the implications. Akhilesh completed his post-graduate diploma in management (PGDM) at the Indian Institute of Management (IIM), Ahmedabad, and began his career at the Boston Consulting Group. A couple of years later, he joined the research team of Kotak Institutional Equities. Following an entrepreneurial itch, he left to set up PARK Financial Advisors, a niche financial advisory, wealth management, and investment banking firm. He suc

The Financial Express A spike in prices near the next general elections could test the building up of fiscal buffers An important point that Ruchir Sharma makes in his new book, The Rise and Fall of Nations is: don’t ask what the world would look like if the current trends hold; ask what happens if the normal pattern holds and cycles continue to turn every five years or so. It is anybody’s call whether oil at $100 per barrel was a short-term ‘current trend’ or a long-term normal. Be that as it may, it would pay to build out a scenario of oil going back to $100 per barrel to see how India’s current account could look. This will help (1) stress-test the strengths of the Indian current account in dealing with such a situation and (2) detail the policy imperatives that should act as a guide in an uncertain world. Given the importance and magnitude of energy imports into India, the country has been surprised significantly—both on the upside and the downside—due to gyrating energy pr

The Financial Express As the practice of sharing becomes more prevalent, cities will develop their own culture, and it is fascinating to see that emerge Over the last month or so, since car-pooling apps launched their pooling or shared services in Mumbai, they have become a favourite mode of transport for many of us office-goers. Concerns on sharing rides with unfamiliar people have given way to the joys of looking forward to meeting with strangers. The stories that are narrated, the experiences shared, the friendships that are made make up for the few minutes of detour that sharing inevitably entails. Of course, the cost of travel coming down has also been a big positive. The co-passengers typically cover the same route as I do, and both of us can do with company in the hour-long ride. It speaks volumes of Mumbai’s infrastructure that a 12-km ride back home in the evening via the Western Express Highway typically takes around an hour. Earlier, the way to while away time was to

The Financial Express A revised estimate of the labour market in 2022 finds 500 million Indians could still be dependent on agriculture India’s consumption story is predicated upon the millennial and post-millennial demographic performing productive, paying jobs. A revised forecast of India’s labour market by 2022E is sobering: half-a-billion people are expected to be dependent on agriculture, contributing to only a ninth of the GDP. The pace of transition is not encouraging—we examine the implications of this on urbanisation, inequality and women empowerment, among other factors. A review of 24 industry reports commissioned by the National Skills Development Council (NSDC) and their comparison with similar reports that NSDC had put together around the end of the last decade shows a sharp fall in overall expected job creation. The earlier forecast expected to see 654 million working Indians by 2022E, this number is now lower at 575 million. The earlier estimate pegged Indians em

The Financial Express For the citizen to be confident, the state has to first believe that it can enforce the rule of law In Mumbai (and this may be true in many other cities in India), many traffic signals start blinking the yellow lights after around 10 pm. These traffic signals are not tucked away in the low density residential areas; they are a common sight on key arterial roads and dense junctions. The blinking yellow lights are supposed to signal to the traffic that they are on their own—the drivers and the pedestrians need to look out for their own selves: the state or the law will have been considered to have done its bit by warning them to slow down. The scenes at many such junctions left to fend for themselves suggest that the state abandoning its responsibility creates a low equilibrium for all its citizens. The traffic slows down, gridlocks emerge which take patience or fights to sort out, loud honking and road rage add a dash of rough music to the brew and pedestria

My Kitaab podcast Akhilesh Tilotia leads thematic research for KIE and co-authors market strategy reports. His first book, ‘The Making of India – Game Changing Transitions’ chronicles the journey of India’s demographic dividend through varied economic transitions—the forces shaping India’s job market, its cities, its industry and agriculture and its equation with the rest of the world. Akhilesh has a PGDM from IIM, Ahmedabad (class of 2004) and an alumnus of St Xavier’s College, Kolkata. He has taken several courses in Mumbai University including Securities Law and Astronomy. Akhilesh lives in Mumbai with his family which includes his wife, daughter and parents. Discussion with Akhilesh Tilotia Akhilesh Tilotia is an entrepreneur who sold off his business and eventually took up his current role. He is a thematic analyst in his day job and he writes reports on the Indian economy, which are targeted towards institutional investors. Over a 4 to 5 year period, Akhilesh and his te

Forbes India The country faces many challenges in diverse sectors but reforms in education and skilling its workforce can script a new growth story India’s demographic dividend has already begun and over the next few decades will be powering the rise of its workforce. India’s workforce of 484 million people (in 2011) has the potential to increase to 850 million by 2025. This compares with the peak workforce of 830 million that China is expected to have in 2016. As China loses numbers in its workforce, potentially, 366 million people would have joined the Indian labour pool over a decade and a half. Women have hardly been a part of India’s workforce and therefore, their entry will power the demand for jobs and supply of labour. India needs to create 20-24 million jobs a year, or around 2 million jobs a month—double of what we are accustomed to hearing. India has failed to move people out of agriculture, with half the workforce (240 million people) still stuck in an activity that