Category: Quota

One chance to change our fate and of our Nation – Vote for India , vote for BJP


Please read this before you think about whom to vote for ?  We cannot afford to experiment with new parties or give another chance to a privately owned political party… We need a party with a proven track record of delivering results , and that is BJP ….

State of the Nation: – A Decade of Decay

Decade under the UPA I & II can rightly be summed in one line, the ‘Decade of Decay’, in which India had a free fall on all fronts – be it economic failure, diplomatic humiliation, failure of foreign policy, intrusions across borders, corruption & scams or crimes against women. There has been gross misuse & total denigration of government & constitutional institutions and this has eroded the office of the Prime Minister. The Government dithered by each passing day, casting gloom and doom on the country that was once under the NDA regime called the ‘Emerging Super Power’. In 2004, NDA left the Government with 8.1 % growth. The UPA could not even maintain that growth and mismanaged the country so badly, that the growth rate declined to 4.8 %, with the nation in a deep mess. We have lost a wonderful opportunity and have pushed the nation 20 years behind and rendered millions jobless and hopeless.

Economy mismanaged

CAD now exceeds even 1990-91 Level – India is revisiting the crisis of 1991.

Between 2001-02 and 2003-04, the nation had a pleasant experience on balance of payments, turning surplus for continuously three years, which was unprecedented after the post-independence period. All the gains of the NDA period have been frittered away in saving the dynasty rule through various election-financing schemes

Debt Trap – A result of Wrong policies

Total public debt on India is Rs 4,606,350 crore, and the debt per capita stands at about Rs 38,000

Rising NPAs – things are going from bad to worse

Economy is slowing down and the banks are under strain. Defaults have led to NPAs almost doubling from the 2009 levels. Rs. 2.43 lac Crore of estimated NPAs are in 40 listed banks as on December 2013. Rs.4.0 Lac crore is the amount of restructured loan under the CDR scheme.

Rupee Downfall

The Indian rupee, which was at par with the American currency at the time of Independence in 1947, has touched its historic record low of below 68.80 against the dollar under the UPA

Jobs – Shrinking job market

The employment generation actually decreased sharply between 2004-05 and 2009-10, especially when compared to the earlier five-year period.

In the five years from 1999-2000 – 2004-05, NDA created 60.7 million new jobs against the 2.76 million new jobs between the years 2004-05 to 2009-10 under the UPA. Now, India is going to lose more jobs in the coming years due to the wrong policies of the UPA

Poverty & illiteracy is the result of Congress misrule

416 million poor, 316 million illiterate & more than 600 million population without toilets sums up the outcome of the economic policies followed by Congress

India continues to be one of the hungriest nations in the world & accounts for 42 per cent of the world’s underweight children.

India’s Human Development Index rank has a negative trend for the time period 2007-12, which indicates deterioration in the indicators determining the Human Development Index.

Inflation: Price rise during the UPA years – Contrary to the Global Phenomenon

Whenever it came to low rate of growth, UPA justified that it was due to global economic situation, but the same cannot be justified for the increasing food prices in India. In November 2013, the Food Prices Index fell by 4.4 % globally, while in India, the Wholesale Price Index (WPI) was estimated to be close to 20 % in November 2013.

 

On one side, we have European Union’s inflation rate declining to a four-year low, and on the other side, UPA is groping in the dark for the past decade to find a solution for inflation and deficits. Country’s growth that reached near double-digit due to initiatives of the NDA government has come down to 4.5 %, that too remained because monsoons played a face saver and there was a high growth in agriculture ( 4 %). Year 2013 had an unusually good monsoon favoring a good agricultural yield, but had the monsoons been average, the growth would have been below 3 %. It was the agriculture & not the Government Policies that saved the nation from a collapse!

The State of the Education Sector in India declining

Health and education are defining sectors for equitable human development and sustainable and inclusive economic growth of India.

Despite levying a tax to fund education and enacting a law to ensure access to education for all children between the ages of 6 and 14, the government hasn’t succeeded in improving the learning outcomes in India’s schools, because the UPA thoroughly bungled the Sarva Shiksha Abhiyaan initiated by the NDA.The quality of learning has either shown no improvement or actually worsened in the nine years of the UPA’s rule

Recognized as a critical element for India’s growth, the UPA government had claimed way back in its first term, that 6% of the GDP would be spent on education, which is a bare minimum for an emerging economy like ours. Nonetheless, the sector still stands at around 4% of the GDP today.

 

It is unfortunate, but the UPA government and the Ministry of Human Resource Development have surely missed the focus on Education and Employment, and the Research & Development expenditure has stagnated under the UPA.

Health care – India’s ticking time bomb

Healthcare is still inaccessible and unaffordable to the masses. Out of pocket spending is still high at 78 %. Goals set forth under NRHM have not been achieved and the scheme has floundered. UPA has failed to deliver health, or healthcare, despite a huge spending.

Agriculture Sector – Farmers and Farming Neglected

Due to lack of investment (both public & private) in agriculture, the share of agriculture in GDP has dropped to less than 15%. UPA has failed to increase investment, productivity & profitability of agriculture, leading to farmer suicides, migration from agriculture and widening the urban-rural divide. The Nation is left at the mercy of rain Gods!

India’s Foreign Policy – Alien to India’s strategic interests!

The past decade has witnessed, a directionless Indian Foreign Policy under the UPA I & II; of alienation and antagonism in relations with South Asian neighbours, & of international humiliation. India has been miserably failing in accomplishing its national interest due to poor diplomacy

Global Competitiveness

India has slipped to 60th position in terms of its competitiveness globally. This is India’s lowest ever rank and also 31 place below its peer emerging market -China. With regards to GCI, India is placed at 60th position out of 148 economies

India is ranked 134th position out of 189 countries in terms of ease of doing business

Transparency International’s Corruption Perception Index in 2012 ranked India at 94, out of 176 nations

In the global happiness-ranking list, India stands at rank 111-much after Pakistan (rank: 81) and Bangladesh (108).

Downgrade to downfall !

International rating agencies have been warning that India’s Baa3 rating is in danger of a downgrade, which has vitiated the investment climate. Any further downgrade would club the economy with junk-grade countries.

The fiscal profligacy of the UPA government has put India into a tight corner when it comes to repayment of borrowings. Government bonds worth Rs 1567 billion (Rs 1,56,700 crore) is coming up for redemption in fiscal year 2014-15 & In the fiscal years 2015-16, 2016-17, 2017-18 and 2018-19, government bonds worth Rs 114600 crore, Rs 231200 crore, Rs 256700 crore and Rs 242400 crore are coming up for redemption, respectively.

 

Where is India headed ?

Erosion of moral and societal values and governance

Crimes & corruption are on the rise across the nation and scams have impacted all the sectors like Panchayat, Housing, Education, Health, Agriculture, Mining, telecom etc. No one is untouched from corruption in the UPA regime

 

Corruption has become a part of the daily life. There is hardly any day when we do not come across the cases of flourishing corrupt practices getting exposed in one form or another. The policies of UPA have resulted in fast degradation of moral, societal,and cultural values

Use your right to vote to seek a change for a better India

Rajendra Pratap Gupta 

 

 

 

 

 

 

 

 

 

 

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Economy to grow 6 % ? Are we fooling ourselves !


Car sales in India slumped 25.7 percent in February, the biggest fall in more than 12 years and the fourth consecutive monthly slide, an industry body said on Monday, as sluggish economic growth continues to weigh on demand.

The industry is expected to see it first decline in annual sales in a decade as high interest rates and rising fuel costs in Asia’s third-largest economy put off buyers in a market that was once one of the world’s most promising.

Automakers sold 158,513 cars in India last month, data from the Society of Indian Automobile Manufacturers (SIAM) showed. Car sales are down 4.6 percent for the first 11 months of the fiscal year ending in March, it said.

“There is no improvement in the market sentiment. People have more or less stopped discretionary purchases,” Sugato Sen, deputy director general of SIAM told Reuters.

“This has really impacted the bottom of the pyramid, people who buy the smaller cars,” he said, referring to the slowing economy that is expected to grow 5 percent, a decade low. “That is getting reflected in the numbers.”

http://in.reuters.com/article/2013/03/11/india-autos-cars-idINDEE92A04R20130311

Our Finance Minister is now doing road shows in Hong Kong, Japan etc to attract investors ….. If the Finance Minister of India has to take to road shows, Indian economy is entering a ‘No show’ time ……

This is what i have been writing for the past one year ……..Wake up call for our ‘Learned Handicapped’ Politicians, who are disconnected from the ground realities

Rajendra Pratap Gupta

http://www.commonmansblog.com

Have we oversold the India story ?


Indian Economy From Aviation, Retail , Healthcare & SEZ Perspective

A lot of experts spoke about the robustness of the Indian economy when the global recession of 2008 did not entirely slow down India’s growth. Experts spoke at length about the pragmatism of India’s central bank leadership and its policies to have evaded the crisis. They even spoke about the sturdiness of the capital market and the role of the regulatory authority.  Today the global crisis is over in most of the nations. United States is back on track with the unemployment figures at a controllable rate and the retail spending picking up. Similarly Japan is expecting the return on investments it made after the Tsunami crisis last year. The amount spent on reconstruction has boosted the economy and it is expected to grow at respectable 2 percent this year. Only Europe seems to be lagging behind, however it must be taken into account that integrating economies of over 30 nations is a daunting task and credit has to be given to EU’s leadership for having dealt with the crisis in a respectable manner.

When compared to the growth rates of these developed nations India’s 7.6 percent growth rate seems to be enviable. So is everything great with the Indian economy? Is it really faring the way it is being projected? Every year fiscal consolidation is the buzzword yet the budget keeps running into deficit. The finance minister keeps promising to bring it under control yet deficit has increased from 4.6 percent last fiscal to 5.9 percent this fiscal year. Most of the deficit is on the account of food, fuel and fertilizer subsidies. The government keeps making provisions for the underprivileged but it is equally true that they are not getting the desired benefits. Most of the provisions are limited to mike & paper.

Let us evaluate the top most (so-called Sunrise )  sectors in India that are consumer driven and how they are faring – Retail , Healthcare , Aviation and also the ‘Oversold & over hyped SEZ story’.

We will have a moment of truth !

Aviation Industry

The India Aviation industry is in a tailspin. Every other day Air India, Kingfisher, Jet Airways etc are making the headlines for all the wrong reason.

Air India the state-owned company has been relying on frequent government bailouts for its existence. Air India alone was responsible for the 10 percent of the global aviation industry losses in the year 2008 while it handled dismal 0.35 percent of the global passenger traffic.  It is also over staffed with over 500 employees per aircraft whereas the industry average is around 120.

Kingfisher airlines owned by the flamboyant liquor baron Vijay Mallya is in troubles. Banks have finally decided to withdraw support in terms of providing further debt.  The only hope which the country’s third largest carrier can have right now is a government bailout. However there is a vehement opposition to such an action by the government. Experts and other industrial groups have strongly advised against such an action as it is a free market economy and it would amount to sheer wastage of taxpayers’ money.

Jet Airways has recently been in news when the tax authorities decided to freeze its account as it was about to default on its service tax payments. The Jet Airways spokesperson attributed the problem to rising crude oil prices and the high airport duties and lack of support from government in terms of policies. According to them the delay in service tax payment was a minor operational issue. However the mounting losses over past few years tell an entirely different story.  They were in news few years back for having laid off over 1200 employees and later taking them back next day after intervention from a local politician.

Other airlines in India like Spice jet, Go Air etc. have been on the fringe and have been moving back and forth from black to red.  An only Indigo airline is making profits. Several other have bowed down under pressure. They were either forced to shut down operations like Paramount Airlines or they managed to exit at the right time like Air Deccan and Sahara Airlines.

So what exactly is ailing the airlines in India?  Rising crude oil prices are often quoted as the culprit. In India fuel cost is almost 40 percent of the operational cost of running an airline whereas in other countries it remains around 15 percent. High fuels cost give little margin to maneuver in terms of other aspects like offering attractive tickets rates and other offers. However this is not the entire picture. Even though the crude prices reduced from $ 156 barrel to $70 barrel in 2008 to 2009, the Indian carriers continued to bleed and posted losses.

The real problem is of excess capacity due to overselling of India’s growth story . India’s daily domestic passenger traffic is approximately 1.51 lakh passengers whereas the capacity is around 2.16 lakh passengers. Imagine the revenue loss everyday on account of unused capacity. This has happened only due to the mindless unplanned expansion by the airlines hoping to cash on the Indian Incorporation growth story sold by the gang of politicians right from Sonia , Manmohan & inefficient Pranab and highly promoted Montek !  The airlines promoters were chasing numbers which was arrived on mere speculation & playing a ‘Valuation game to make quick buck’. They went on buying spree and expanded their fleet. Today the aircrafts remain underutilized.  India has the aircraft flying hours of 12 per day compared to 16 per day internationally.

Looking at the complete picture it is difficult fix the responsibility on the airline owners. They are capitalists who are driven by market forces. They anticipated growth in market based on market forecasts and other factors like projected rate of growth of GDP. They expected growth in industrial output and service industry output and subsequent increase in airline travel. However the reality was far removed from it. The India Incorporation failed to deliver and they were left in lurch. Today they are hoping for a miracle to save them from their predicament.

Losses Made by Major Domestic Carriers in India

Carrier Cumulative Loss 3 years (Cr)
Air India 13,000
Kingfisher Airlines 3900
Jet Airways 2400

Retail Industry

According to the experts the retail trade industry in India is having a bright future & is consumption driven due to the ‘reducing poverty due to social schemes and increasing middle class due to India’s growth story ‘. One of the studies by North bride capital expects it reach about USD 850 billion by 2012. Out of which organised retail will be having a share of over 20 percent. In numbers it over USD 175 billion. That is a huge market. According to others this figure will be achieved by 2015. Similarly other reports have painted rosy picture for the entire industry.  Currently it is increasing at a rate of 5% yearly.  A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption.

As per consulting firm KPMG’s findings in a March 2009 report, the organised retail market in India has witnessed steady growth at 15 per cent in fiscal 2009. It will grow much faster, at the rate of 30-35 per cent annually, than the traditional one in the coming years. Fast moving consumer goods (FMCG) and apparel sectors are likely to drive this growth.

According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India retail industry is the most promising emerging market for investment. In 2007, the retail trade in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose to 12%. It is also expected to reach 22% by 2010.

A India’s Retail Market Report by Boston Consulting Group

Year

Total Size ($ Billions)

Organised Retail ($ Billions)

Percentage

2005

244

8

3

2006

276

11

4

2007

316

15

5

2008

362

19

5

2009

368

22

6

2010

425

28

7

2011

471

35

7

2012*

528

44

8

2013*

590

55

9

*Forecast

 

The true story of the retail industry: It has become a ‘Valuation game’ due to over selling the India story of the growing middle class 

Subhiksha, Vishal Mega Mart, Koutons , Wadhawan group’s Spinach etc; do these names sound familiar and have something in common. Yes these are players in the organised retail industry who have succumbed and failed to deliver at their promoters expectations. These chain stores were at one time case studies of India’s organised retail success. So what actually forced them lower their shutters.   

According to Jagannadham Thunuguntla, head of SMC Global all these cases are classic examples of the retailers getting carried away by the India’s fascinating growth story and the phenomenal rise of the middle class.

The phenomenon is not limited with these cases mentioned above but also with the so-called successful ones in the industry. Country’s largest department store Shoppers Stop for instance posted an overall loss of Rs.4 crore in the last five years, while its debt soared to Rs.390 crore. The Tata group’s retail arm, Trent decided to close down its loss making chain, Fashion Yatra. It was launched in Oct 2008 and it was aiming at low-income shoppers in Tier 2 – 4 towns. Similarly Reliance Retail decided to close its Reliance Wellness format and not only that it scaled its hypermarket format down in some cities. Hypercity closed down its catalogue selling venture and also got rid of its Gourmet City format.

For the modern retailers penetrating further into urban markets has become a challenge. They have no option but to continue to create, preserve and then destroy the store formats they have come up with. Having closed down and revived several formats, most retailers have realised they need to constantly experiment with them to stay afloat.

So we can clearly see that India’s organised retail industry, which has the coveted potential of nearly a billion plus customers with enough cash to spare, has so far claimed a number of players, small and large. These players expanded too soon based on mere speculations.

While these retail stores were expanding and accumulating debts they hoped that the middle class with disposable income would be ready in short time to support them.  Things did not turn out the way they had planned. India Incorporation failed to deliver and along with that came the global economic crisis. These firms ultimately paid the price by closing down their shutters. For instance Subhiksha had expanded to over 1600 stores country-wide entirely on debt. This was a blunder that it committed as it was counting on the rising customer demand which was only on papers.

Not only the growth stories are misleading, at the same time the country’s back-end is not developed and huge investments go into developing it.  The vital supply chain required for the retail networks are entirely missing. This leads to a huge inventory cost which the small retailers are unable to cope up with. Take for example, it is estimated that in the food retail business in India, the wastage due to lack of proper storage facility is staggering 40%. This entire situation is largely the result of the lack of proper policy framework from the government.

The Indian retailers like Future group , Reliance and others are backing FDI so that they can get investment and save themselves from the fate of Subhiksha , Koutons , Gini & Jony , Spkykar , Vishal Mega mart , Foodland super markets, Surya Group etc . We have more companies going into CDR – Corporate debt re-structuring post the closure of the financial year 2011 ( March 2012 ). Banks do not wish to announce the failures or NPA’s in this year.

Ideally , retail businesses should have been making money due to consumer demand but the fact remains that India’s income and growth story is limited only to 6-10 towns and impacts less than 10 % of India’s population

 SEZ’s in India

India adopted the concept of zones from as early as 1965. Kandla in Gujarat was the first Asian export processing zone till the advent of the modern SEZ’s as such zones are now known as. With the passing of the SEZ Act in 2005, it was hoped that the Chinese success story would be replicated in India. It was expected that investor’s confidence would be established in the Government’s commitment to a stable policy regime. The real aim was to generate greater economic activity and employment with the establishment of SEZ’s following the Chinese model of economic growth !

There were numerous applications from multiple sources with individuals, indigenous companies, foreign MNC’s all rushing to have a share in the pie. Sadly it was a short phenomenon. The initial excitement was over as the problems started cropping up. Today in the last two years, as many as 60 applications for SEZs have been withdrawn, while 35 developers have applied for de-notification, according to data by CB Richard Ellis (CBRE), the real estate consultants.

Till date, the government has approved 584 SEZs. There are 381 notified SEZs, of which 148 are operational. Of these 148, only 17 are multiproduct SEZs. The remaining ones are SEZs dealing in engineering, electronics, IT/ITeS, hardware, textiles, bio-technology and gems & jewellery.

So what exactly is wrong with the SEZ idea in India which paid its dividends in China, Poland and Philippines?

On the whole the SEZ idea in India seems to be very much the product of the irrational expectation which has been fueled by imagination.

Healthcare Companies :  Most of the healthcare companies are ‘managing profits’ and as i write , a major healthcare ( hospital ) chain and a pharmaceutical conglomerate is about to wind up in the next 3 months . Imagine a healthcare & hospital company winding up ?

So the Congress party has sold the India story purely on ‘Imaginative basis and on speculative data’ numbers , have no idea of what is fueling inflation and what will deliver growth ? With all sunrise sectors on a downslide , it is better to replace these ‘ignorant intellectuals’ and bring in people who can understand the economy and run it efficiently .

Based on the governments high-octane pitches for the India’s growth story , consulting companies have brought out reports supporting government announcements , and  business houses have approached investors or moved to stock market and raised money and have put up expansion plans . But the reality is that, India does not have a growth story with the current fundamentals being very weak and ‘Leaky’ social schemes are making the party rich and not the population !

Also,  that the current stand of the government to raise the tax issue with Vodafone is a clear proof of what i am writing . India is desperate for funds and behaving like a dictator reversing a five decade legislation for just 10,000 crore ( USD 2 billion ). Does it not show the lack of morality and desperation for funds ? Rest will become apparent in April – May-June Quarter !

Lastly , the financial deficit of the government proves the rest ; all is not well with the India ‘bubble’ story ! Tough times are ahead , if we don’t take immediate action !

Rajendra Pratap Gupta

Healthcare I Retail I Rural Economy I Public Policy

www.commonmansblog.com

Why only seek quotas for Muslims ?


According to the study done by NCAER along with the University of Maryland ,nearly one third of the muslims in the nation live below the poverty line on less than Rs.550 a month,  and those in villages survive on Rs. 338 a month .

Same study also revealed that over 50 % of the Adivasi and 32 of the Dalits are leaving below the poverty despite quotas for over 60 years  .

Mandal battle started and was won on the Gangetic plains , but the reservations have failed to raise the standards and serve its purpose .

Two questions :

Why are the quotas only asked for Muslims even in the recent debate on reservations for Women ?

Have quotas lived upto their expectations ?

Should we not do away with caste or religion based quotas and move to a financial denominator driven reservation system that does not discriminate on the basis of caste but on financial status ?

Time to evolve

Rajendra Pratap Gupta

Email : office@rajendragupta.in