My friend Manish Dureja helped me redefine the Food Security Bill . So this is what Food Security Bill stands for ;
Food for Party Workers
Security for Congress &
Bill for the Tax Payers
I guess, this is the simplest definition
Message from Prime Minister Shinzo Abe:
Yesterday in the speech I made on the second round of policies forming my Growth Strategy, I stated that we will double the income of agricultural enterprises and farming communities over ten years.
Losing no time, today I have come to a tea plantation in Oita Prefecture on the island of Kyushu. A construction firm newly launched agricultural operations, turning abandoned farmland into a beautiful tea plantation. Through a tie-up with a major beverage manufacturer, this company is now engaged in sixth-sector industry, extending its operations to processing, commercializing its products, and other areas.
I felt very strongly that people with drive are opening up new worlds within agriculture.
We will support agricultural enterprises that are working hard, aiming to make agriculture attractive to young people.
(Originally posted in Japanese at 13:10, May 18, 2013)
On 22nd March 2012, i had written that we have ‘Oversold the India story’ ( https://commonmansblog.com/2012/03/ ) , and what i had predicted for the economy in the April , May and June quarter, happened !
Again , on 11th October 2012, i wrote on my blog ‘How India was fast turning from a ‘Emerging economy’ to a ‘Submerging Economy’ ( web link : https://commonmansblog.com/2012/10/11/india-from-emerging-to-a-submerging-economy/ ) . Now , read the fact about our Central Bank . As i said earlier , i am not worried on the 2014 for elections , but for the economic scene that will unfold in 2013 for the average Indian middle class , we are building a disaster & fooling ourselves ! It is a call to action !
On November 5th ,2012 , The Economic Times carried the report that , the country’s central bank , Reserve Bank of India ( RBI ) would run into losses if asked to pay interest on mandatory percentage of deposits banks have to park with the centre bank , called the Cash Reserve Ratio ( CRR). The RBI has stopped paying interest on such mandatory reserves since 2007. Finance ministry had suggested the bank to pay 7 % interest on these deposits .
Does it mean that the country’s central bank has collapsed ? If yes , why have we not discussed this in parliament, and are looking at FDI and other ways like stake sales in PSU’s and auctions of the sovereign assets to hide this news and infuse money in the system .
NEW DELHI: The finance ministry has decided to review the expenditure and reserves position of the Reserve Bank of India (RBI) after the central bank indicated that it is not in position to pay interest on the reserves banks maintain with it.
A government official downplayed it as a routine review of the reporting structure and disclosure requirements of the RBI, but it comes at a time when there is already obvious tension between the finance ministry and the central bank over the conduct of monetary policy.
“It is the government which tables the annual report of RBI in Parliament, so there is nothing wrong if it (government) wants to know how RBI prepares its balance sheet. We are not questioning them or raising objections,” a ministry official said.
However, another finance ministry official admitted that the review started after the RBI had indicated that it would run into losses if asked to pay interest on mandatory percentage of deposits banks have to park with the central bank, called the cash reserve ratio (CRR). The RBI had stopped paying interest on such mandatory reserves since 2007.
The finance ministry had suggested that the RBI should pay 7% interest on these deposits, pitching it as a measure that will help lower rates even if the central bank does not ease monetary policy. It had argued that all major central banks either do not mandate a reserve ratio or pay an interest on the mandatory reserves they ask banks to set aside.
“RBI had made certain arguments. Now, we want to understand their expenditure sub heads, format of disclosures so that we both are on the same page,” the official said.
The government is studying RBI’s expenditure, revenue, contingency reserves and investments, he added. On Tuesday, the RBI dashed hopes of a rate cut, but lowered the cash reserve ratio (CRR) by 25 basis points to 4.25%.
Please check more eye-opening statistics on Indian Economy on my blog .
From January , 2013, i will be working full-time to figure out the economic model for India , that will take the country out of the current crisis
The New year ( 2012 ) will not be a good year for India . The industrial production is falling , interest rates have gone up , corruption is on the rise , inflation is going up, rupee is going down compared to the dollar, and the investment outlook for India is negative due to wrong policies pursued by the congress government over the past several years .
It is time to change and bring a fresh look at the fundamentals of the economic policy & social disbursements
I was speaking with one of my friend from abroad , and he was of the view that USA / Europe is headed for the worst and India is no better off ! Hope it is not true !
Hoping that things will change miraculously !
Rajendra Pratap Gupta
Government’s arguments for FDI in retail are a proof of the fact, that this government does not understand India, and looks at Indians from USA’s businessmen’s perspective. Congress government has become the biggest lobbyist for pursuing the business interest of nuclear & retail corporations from USA & Europe at the cost of India’s middle class
Today’s Economic Times (26th November 2011) headline ‘ Govt Sells Multi-Brand FDI with best bargains’ gives a list of reasons why the government is supporting, (rather pushing FDI ) in retail. Let me put the Common Man’s view and take on each of these arguments
1. It will create 10 million jobs in the next 3 years
A) According to the CII report in 2007, ‘India will need 10 to 12 million skilled workers every year for the next five years to meet the growing demand from the support services and there is a need for strong intervention to ensure the availability of the workforce’. So is the government trying to say that it is only the retail chains that will create 10 million jobs in the next three years?
B) Let us examine how many jobs Wal-Mart created in America & how many jobs did Wal-Mart create in India for the past 3 years of operations both as a wholesaler and as a retailer ? How many jobs our Indian retailers like Future group, Aditya Birla retail and Reliance retail created in the past 3 years? We will clearly see that they did not even create a million jobs!
C) Also, government does not talk how many Kirana stores will shut down in the next 5 years and how many homes will be denied of a source of income ?
D) Wal-Mart or for that matter any retailer works on the least number of workers per square feet (lean management structures ) ,and so it will kill the 50 Kirana stores thereby get at least 250 people out of jobs and then create 50 jobs per super market. Is this factored in the statement? I am willing to prove this in the current retail scenario leave alone the scenario when the foreign retailers come in?
2. Several billion dollars of investment in retail
A) If retail is a great business, the government banks should give loans from domestic financial institutions and let the homegrown retailers grow and build scale and size and let the profits remain in India. Why should we give 51 % of the ownership to foreign players, as these people will sell to Indians and take the profits out of our country. USA / Europe will solve their income and earnings problems and India will get into problems of high inflation and more volatile stock market. Also, Indian retailer being less than 50 % of their share in the retail will become servants to these MNC chains under the current 51 % FDI norms.
B) Why did the government not start with 26 % FDI in multi brand retail for the first five years? Why suddenly start with 51 %. Please justify?
C) Often it has been quoted that the foreign retailers will bring technical know how to Indian retail market and boost the economies of scale and productivity? Which technical know how is the government talking, it needs to explain? I have been a COO / Board member of a major fortune 20 company’s retail operations in India, and I can tell you that these foreign retailers only bring money and no other expertise! They work on high profits, highly automated environment and lean man power structures. So government’s reason of the technical know how is fallacious and is showing that we Indians do not understand retail. Let us look inward and see our home-grown retailers like Future group and Aditya Birla retail .They are certainly growing . Government must bring out a detailed white paper on the so-called ‘Technical Know how’ these foreign retailers bring to Indian retail market?
D) With these billions of dollars coming in India, India’s real estate will become expensive thereby, contributing to keep the inflations levels high for the medium class not just for real estate but for all the sectors
E) Also, these billions of dollars are not charities to India or Indians . These are investments by retailers which follow a ROI ( return on investment concept ) for every dollar spent. So for sure , they people will invest in retail one dollar and take out 10 dollars from India over the next couple of years . Retail is mostly done on inventory management which is on credit from vendors . These retailers follow a credit cycle which ranges from 15 days to over month . So with a double-digit profit margin , these retailers will only be investing one time into infrastructure and then make money without investing at all ,as all the inventory is on a credit cycle . ‘Sell and pay’ is the mantra for these FMCG retailers ! Even the space which is rented by these retailers is leased to product companies for hefty display charges. These retailers charge a heavy fee for listing products in its store before selling .Our policy makers , wake up and understand the real dangerous game of FDI in retail and don’t get carried away by the billions of dollars of investment . It is not true . One time investment by these retailers will be a life long profit for their parent company’s home country
3) Farmers will get more than 12-15 % of the consumer price they get for fruits and vegetables
A) In reality, farmers will never get a higher price but will be exploited by these MNC Chains .In fact, these MNC retailers will push in for stringent quality checks and other prohibitively expensive conditions for these farmers thereby, forcing the poor Indian farmer out of his livelihood. Most of the retailers will take to contract farming, and thus the farmers will be reduced to being laborers in the hands of these MNC chains.
B) The History of these MNC chains has shown the these chains are out to squeeze blood out of their vendors and farmers will certainly be vendors for these MNC chains and nothing else . Wal-Mart and other retailers are facing dozens of cases of exploitation and gender bias in developed country where the legal system is strong . Imagine what will happen in our country ?
4) Consumers will get producers at Cheaper Prices, as competition will bring down the prices
A) Even without competition the prices will come down by a few paisas or may be a few rupees, but, all these chains will increase the MRP (Maximum retail prices) of the products, and so the consumer will end up paying more than what s/he pays today. Take an example of the MNC pharma companies. Since there is a ceiling of price increase by 10 %, so every year the pharma companies increase the prices by 9-9.5 % and thereby, circumventing the price increase regulations.
B) It is clear that the consumer is not a winner, no one pay’s from its pocket OR profits to the consumer. If there is a price increase on the input costs, the same is passed on to the as an increased MRP or the quantity is reduced for the same price. So the consumer’s pocket is always ripped apart by these retailers
5) 30 % mandatory sourcing from small-scale sector will help small industry
A) This has not been a convincing argument, so we are trying to tell that a small company out of Varanasi will compete with HUL and win? Come on Dr.Manmohan Singh, are you trying to fool Indians? I understand that you studied at Oxford, doesn’t mean that rest of the Indians are going to get carried away with these statements
B) Also, these MNC chains will put conditions that are either too stringent to be complied to or prohibitively expensive to be implemented by these SME’s, and so finally, these chains will find a reason to evade buying from these SME’s. Also, that the SME’s are not just limited to India, but across the world, so probably, Chinese SME’s would benefit more than Indian SME’s
C) These retailers charge a heavy fee for listing products in its store before selling. How will SME’s afford that ? The fee currently for Indian retailers varies from few thousand to over a lac for products for companies . SME’s will never be able to benefit from these chains even if they are able sell to them, as they will pay for listing and then cry for the payment – which will depend on the vendor payment cycle varying for weeks to months and small vendors (SME’s ) cannot survive this big box retail game
6) 70 % of retail is in food items and these are mostly sourced locally
A) If 70 % of the retail is in food items and this is sourced locally, why allow 51 % of the profits to go out of India? So FDI should not have crossed more than 30 %!
B) Local Indian retailers (existing Kirana stores ) must be trained to deal in these food items and deliver better value for the country and its economy.
C) This argument of the government goes against its own policy. So whereas, 70 % of the products would be food items, 51 % profits from these categories would go out of our country, thereby, clearing pushing the inflation higher perpetually for the next couple of decades. As there will be less money in our country chasing more goods ( as money would have found its way to parent MNC) – Simple economics Mr. Kaushik Basu!
7) Ikea already sourcing 30 % of inputs from India
A) So if Ikea is already sourcing 30 % inputs from India, let other chains also do the same before starting their shop in India.
B) If these MNC chains buy from India and sell in India and take 51% of the profits abroad, what is India’s gain? The government must come out clean on this?
8) Approval only after investors meet all conditions, including 50 % investment in back end
A) This statement of investment in backend is a foolish statement. Already 100 % FDI is allowed in wholesale, why justify it for retail and link it up? Let these retailers first invest in back-end for the first five years and next five years invest in front end
B) Government has FCI (Food corporation of India) godowns and what is the government doing for enhancing the efficiency of this biggest warehousing corporation – Can this FCI not become the Cash and Carry for small retailers ? A drastic improvement in supply chain of FCI godowns can bring down the wastage of food grains by hundreds of tons if not thousands of tons. Please pursue the project of Mr.Atal Behari Vajpayee of Golden Quadrilateral and link up all the FCI godowns, and start a national Agriculture produce transport corporation to start weekly transport during the harvesting season from the farms to FCI and nearest towns. The farmers co-operative and IFFCO should manage this. With this, farmers will not only get good prices but the wastage will be reduced substantially. Why are you looking at FDI to solve this simple problem of inflation . This can not only solve the inflation problem but also improve productivity at all levels , create more jobs ( may be , millions of low & middle-income but high productivity jobs ) and reduce inflation .
C) Learn from ‘operation flood’ by AMUL and how it solved the shortage of milk problem of our country and created a world-class brand. See what M.S.Swaminathan did with ‘Green Revolution’ to increase the production of grains in our country. Please do not justify that foreign retailers will help you bring down inflation. Remember that ‘Inflation is reversible but FDI is not’ and do not sell our country to foreigners for a short-term gain of a few billion dollars to our economy. This is anyway not the dollars to our economy, but the investment of dollars to take back dollars. I am sure that all these MNC chains a ROI (return of investment) method of calculating the investment returns. So I wish to ask our government that what does the ‘retail FDI dollar’ bring to India, which Indian government cannot do with its own money?
9) Government will have the first right over procurement of farm produce
A) This statement has no value. Government has shown no concern for farmers except considering them as voters and leaving them at the mercy of rain gods.
Questions that the government must answer
- What has the government spent to train local Kirana stores in the past five years? When yesterday only the government asked for Rs.56000 crore of the tax payers money despite a huge budget deficit, why did it not ask for even a Rs. 1000 crore for retailers training and up gradation?
- Why did the government not start with FDI in retail at 26 %? Why suddenly at 51 %? Has the government become a lobbyist for MNC chains?
- Has the government done its own independent studies for the impact of retail chains on Kirana stores?
- The biggest plank of allowing the FDI is that inflation will come down. So despite allowing FDI, if the inflation does not come down, will the government revoke FDI in retail? Does that rider appear in the CP (Condition Precedents) for allowing FDI in retail?
- Government needs to prove that FDI in retail can create million jobs every year. How and why, and which retailer will do that. All this must be put in the business case for allowing FDI? Why is government becoming the spokesperson for these MNC retail chains? What is the deal?
- Where and how much wills the retailers invest in back-end? This has not been specified?
- Why has the government not capped the retail margins of foreign retailers in India?
- See point 5 B, why have women self-help groups / handicrafts been excluded from being the beneficiaries of the retail entry
- Why are retailers not mandated to invest in retail training ?
- More questions to follow
Rajendra Pratap Gupta
Healthcare I Retail I Public Policy
Dear Mr. Singh ,
Last year was the worst year of the decade, and perhaps after independence due to your weak leadership as Prime Minister.
I read today in the newspapers that, the food inflation is in double digits , i feel it is not just double digits , but a double blow for the poor or medium class fixed earners, whose salary does not increase with inflation . Think about daily wage earners that earn 40-60 Rs a day and manage their family of four ( two children and parents , though we know that poor people have more than two children !!) ? Do you not feel the guilt , that you have caused irreparable damage to the nation, and its people both economically , and its image in the eyes of the world ? Today we are called a scam friendly corrupt nation – a nation of scamsters!!
People have got carried away with your degrees, but seeing your miserable performance , i have realised the difference between being educated , being knowledgeable and being wise . You might be educated , but you are definitely not knowledgeable and not at all wise ! A Prime Minister is expected to be Wise and pro-active on important issues . You have built your good image , but ruined the nation’s image !
You and Pranab are fooling the people of this nation by showing 8-9 % GDP growth and a higher forecast . Reality is before us, it is difficult to survive for a common man in today’s time when one cannot get anything done without paying money , when one cannot live within his salary seeing the high price of daily food intake . A big Shame on you both and Sonia !! With such revolting conditions , i am sure you are working for pushing people to take to Naxalism and crime !!
Two days back i was talking to Dr.Murli Manohar Joshi and discussing the current developments , and i told him that, Dr.Joshi you could have proved to be a better PM ! Incidentally , there is only one Dr. in Congress and in BJP. In Congress ,It is yourself , and Dr.Joshi is the Dr. of BJP. I have had a chance to work with him on several issues , and have seen his grasp of real issues facing the nation, and no wonder , even you have been high in praise for his abilities as PAC , Chairman, besides, other colleagues in congress . I am sure that he would have proved to be a much better Prime Minister . I cannot comment on others , as i do not know other leaders much .
My humble request Manmohan ji, give Indians a chance to celebrate the new year , Please resign and go ……………we do not want more corruption , more inflation and more GDP !!
We would happily settle for no corruption , low inflation or no inflation and a moderate GDP .
Go now Sir , take rest .Let’s celebrate New Year with a new Hope
Hope this does not fall on deaf ears
Wish you a great year ahead
Rajendra Pratap Gupta
Email : Office@rajendragupta.in
Dear Mr. Manmohan ji,
More than six years back, we handed the reins of a great country to you, assuming that, you were the person who had turned around India in the late 80’s. It was on the basis of the past credentials that you were asked to be the supreme custodian of the nation, its values, its sovereignty and its 1.2 billion people . We were wrong , it was Narasimha Rao who did it , and you just got the credit . Also, i presume, that besides devaluing the currency , and giving into the IMF’s demands, you did not have any alternatives , so unnecessarily , you took the credit after being pushed to the wall. Now where is your economic understanding and knowledge in taming inflation , when inflation is killing the common man for over about years now ??
Your men ( ministers) have looted the nation to the tune of Rs. 3.0Lac crore ( 1.72 Lac in the 2G scam and 70,000 Crore in CWG + other routine scams and bribes will add up to the figure of Rs.3.0+ Lac Crore , and now you are claiming innocence and stating that you have nothing to hide !!
You cannot hide anything Manmohan ji, you are already exposed by the taped conversations and the reports of the CAG ! The technology ( mobile phone licenses ) which gave your men 1000’s of Crores , that same technology ( Taped phone conversations of Niira Radia ) exposed you bare before the common man !! People are now asking you to go under the scanner to be punished and that’s a fair thing to ask, as the nation has been under siege by your men, who have recklessly looted the nation and thrown the laws to the wind . This in itself shows how serious the issue is ? You come from a party that that have never respected democracy , and still believes that Gandhi family is the start and end of all. Congress have even strangulated the democracy & its institutions , and has put to stake the interests of the nation before the interests of the dynasty . Do not forget that Indira became a dictator by imposing emergency , and that’s the party you belong to right now . So when congress arm twists politicians with CBI raids and IT notices , you are just carrying on with the DNA of Indira’s dictatorial policies, that were like ‘ either support us or else get harassed’ . Do you not see that Jagan was denied his father’s role , and Rahul has been appointed the Secretary of Congress due to his Surname !! Does it not prove double standards .
As a head of the gang that has looted the nation of Rs. 3 lac crore , you should be thankful to the opposition that they have not asked for your resignation till now . As head of the gang ( basically , what i am saying is that , you are an offender and have committed a crime of betraying the trust of a billion people ) , you have no right to decide who will probe you and how ? You are a big fat offender in supreme office ? You must voluntarily step down and face the law. You cannot be probed till you are in the seat of the Prime Minister . How can a thief decide who will put him to trial ? and which laws will apply to him ? Aren’t you doing just that ? You are a miserable failure as a PM on all accounts , and people have just got carried away by your fanciful & foreign degrees and your old age for which you are being respected .
You loot the nation first and then cry aloud that you are as Pristine as the silver clouds in the sky ?
I am marking this mail to the top leaders of the opposition to ensure that they reconsider their demand, and ask for your resignation besides JPC. If the leaders fail to do so , the public will punish them for not caring for the interest of the common man ! Manmohan ji , You have failed in your fiduciary responsibility as the custodian of this nations , its democratic values and institutions , and now Sonia , Rahul and you are talking like an opposition party , stating that we will have a five pronged approach to fight corruption ? That too, after systematically looting the nation, you are trying to become saintly policemen ? Were you not the PM when you supported Raja, and said that you are in the loop of all that is happening in the DOT ? You were the one who gave him a clean chit ? Now , it’s your time to surrender to the law of the land for a fair probe, and that is a reasonable demand from the opposition . In that , i as a common man , am adding one more genuine request . People with questionable credentials and dubious record of governance must immediately resign
Time to pay for your sins
Rajendra Pratap Gupta
Email : Office@rajendragupta.in