Food Security Bill

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

Indian Economy – econoquake waiting to happen, with disastrous seismic cracks

Indian Economy – econoquake waiting to happen, with disastrous seismic cracks

It is a known fact that when symptoms become visible for a chronic disease, complications are tough to treat and the disease is in an advanced stage, but if the disease is diagnosed in earlier stages, the diseases are easy to treat and cure. In India, now symptoms like fiscal deficit, current account deficit, increasing NPAs, inflation, unemployment, lack of investment sentiment, withdrawing of investors etc. are symptoms of a economic earth quake (what I call as econoquake), and it is like a disaster in slow motion for India.

The Indian economy has passed through its worst phase after independence since 2004 and the rot continues to grow.

Here are some symptoms that tell how serious is the disease; Indian rupee was trading at 8 Rupee to a dollar in 1973, and has become Rs. 60 to a dollar. Does it not indicate that valuations of this country, and the fact that the economy has weakened by about 750 % in the past 40 years! Ideally, we should have grown and become 1 Rs. to 1 US $, but the poor leadership from these ‘Text Book economists’ (Manmohan Singh, Chidambaram, Montek, Subbarao) have brought down this great nation. Let us analyze a little more in detail

All the data or facts I am quoting are from credible sources and are publicily accessible . (http://blogs.economictimes.indiatimes.com/Whathappensif/entry/rbi-data-shows-how-upa-killed-the-rupee?fb_action_ids=10151534667996725)

If the 10-year RBI data on short-term foreign debt is analyzed, it is fairly obvious that the UPA destroyed the value of the Rupee. In 2004 when the Vajpayee Government was voted out, the foreign debt at $ 112.4 billion was well covered by the forex reserves. Nine years later it has grown by 350 percent to $ 390 billion and the forex reserves cover falls 25 percent short.

However the rise of foreign debt is not the only reason why the Rupee collapsed from Rs 39 to a dollar to Rs 61 for a dollar during the intervening period. Foreign debt is a necessary evil that is needed by developing countries to push forward their needs to fund foreign capital funded infrastructure. Usually such addition of infrastructure results in long-term asset building that adds to improved productivity of the nation. However in India’s case the rise of external debt has been primarily to fund the current account deficits catering largely to the working capital needs and funded through the short-term loan at higher interest rates. This short-term debt component was very comfortable at just 3.9 percent of the Forex reserves when the NDA was voted out of power nine years ago. By 2009 when the UPA II was re- elected it was around 17.2 percent and by March 2013 the short-term external debt rose to a whopping 33.1 percent of the Forex reserves, which had fallen to $ 292.65 billion. With the reserves further dropping to $ 280.18 billion following RBI’s intervention to stem the Rupee slide in July, the ratio would have worsened.

Short term debts and the External Commercial Borrowings that would need repayment during this FY 2013-14 is high and would cause large outflow of dollars and put pressure on the currency intermittently. For example during May 22 and June 19 there was a net debt outflow of $4.7 billion, one of the prime reasons why Rupee tanked.

These ECB’s and short-term debt have grown to an enormous 56 percent of the total debt by March 2013 almost 2.5 times what they were when the UPA came to power nine years ago. As per RBI data short term debt payable during this Financial year is $ 96.7 billion while ECB’s with 6 month to 1 year maturity that need to be repaid are around $ 21 billion, and NRI deposits maturing during the year are $49 billion. The Rupee is catching a cold because the total foreign debt to be repaid this year works out to a massive $172 billion that is around two-thirds the foreign exchange reserves. Even if interim measures to stop speculation are taking by the RBI it will not address the inherent weakness of the system. Rather it may enhance volatility, as speculative traders if restricted will move offshore to short the Rupee.

Similarly, if we compare our neighbor, China with larger population, Chinese currency has become strong. Though, I must admit, it is not a fair comparison! But the essence is, India is also intervening to control the rupee and Chinese central bank also intervenes, but I guess they have done a better job and the Chinese currency has strengthened compared to US dollar over the past decade and the Indian rupee has not just been weakened, it has been ‘hammered’, and continues to be the worst performing currency in Asia. We can compare Malaysian Ringgit, Singapore dollar or UAE Dirham. All these currencies have strengthened against the Indian rupee

Why rupee will continue to fall?

Domestic markets are failing.

CDR gives an indication that the corporate sector is crashing!

http://www.livemint.com/Industry/h7u6wQngeSZ6jL8MfCBpGL/Restructured-loans-cross-227-trillion-pace-slows.html

The latest data from the CDR cell suggests that Indian banks added Rs. 15,016 Crore of restructured loans in the March quarter, about Rs. 9,000 Crore less than what they had done in the pre ceding quarter. On a cumulative basis, total restructured loans crossed Rs. 2.27 trillion, or 4.4% of the total loans given by Indian banks.

Gross non-performing assets (NPAs) of 40 listed Indian banks rose to Rs.1.79 trillion in December fromRs.1.25 trillion a year ago, an increase of 43.1%. In the past, the Reserve Bank of India (RBI) had cautioned banks about the need for enhanced risk assessment tools to monitor loan quality.

Defaults in Agricultural credit in another bubble?

http://www.livemint.com/Industry/ph30HumD1FPAGaBj0XCOyH/Kisan-Credit-Cards-Bad-loan-bubble-waiting-to-burst.html

A surge in exposure to farm debt through Kisan Credit Cards (KCCs) could emerge as a risk for India’s state-run banks, according to experts.

Subsidized loans are given to farmers through KCCs by state-owned banks. Until March 2012, the outstanding amount on such loans was Rs.1.6 trillion through 20.3 million cards, as per the latest Reserve Bank of India (RBI) data. This may have risen to around Rs.2 trillion, bankers said.

Agriculture is one of the largest sources of bad loans for most banks. It is contributing 9.72% to the gross NPAs of SBI and 7% of Central Bank of India. The nation’s largest lender SBI has the largest gross NPAs —Rs.53, 457.79 Crore, or 5.3% of loans, followed by Punjab National Bank (Rs.13, 997.82 Crore, or 4.61% of loans), Central Bank of India (Rs.8, 938.47 Crore, or 5.64% of loans) and UCO Bank (Rs.6, 711.29 Crore, or 5.53% of loans).

FDI is like mirage for UPA

Government’s efforts to promote India as an investment destination does not seem to be yielding fruits as FDI inflows registered 38 per cent decline to $22.42 billion in 2012-13 compared to the previous year.

It is clear that the UPA government is on the ventilator and no sensible MNC or investor is going to even announce investment for during this government. Knowing well, that the next government will certainly not be either from congress or due to its support. That is one major reason why we have seen in the last week POSCO cancelled its Rs. 30,000 Crore steel plant on July 16^th, L.N.Mittal cancelled its Rs. 50,000 Crore steel plant on 17^th July 2013. This is a loss of Rs. 80,000 Crore worth of investment committed to India. Normally, when the government is about to be re-elected, we know that practically, all the companies wants to wash its hands in Ganges, and get speedy approvals for obvious reasons. A ‘Needy’ political party in power wants to ‘cash in’ and so does the ‘greedy’ corporates. We have seen how business leaders get national awards like padamshree and padmavibhushan in the election years or the year preceding the election year … but this time, the scene is different. No sensible business house, no matter how ‘greedy’ it is, will commit any investment before the next general elections. So, I see no respite to Indian economy till 2014 end or may be, 2015.

FII’s the real culprits for rupee slide? May be!

FDI Inflows in India and Outflows from India from 2007 to 2012: (amount in US$ billion)

	FDI Inflows to India					FDI Outflows from India
	2008-09	2009-10	2010-11	2011-12		2008-09	2009-10	2010-11	2011-12
Total	43.4	35.6	27.4	36.5		19.3	15.9	15.3	12.6
As a % of GDP	3.4%	2.6%	1.7%	2.0%		1.5%	1.2%	0.9%	0.7%
FDI Investment Stocks	125.2	171.4	204.7	203.9		63.3	80.9	96.4	108.8
FDI Investments Stocks as % of GDP	9.8%	12.7%	12.6%	11.2%		4.9%	6.0%	5.9%	6.0%
Country	2008-09	2009-10	2010-11	2011-12	Total	2008-09	2009-10	2010-11	2011-12	Total
Singapore	3.42	2.38	1.70	4.31	11.81	4.06	4.20	3.99	1.86	14.11
Mauritius	11.04	10.34	6.98	8.92	37.28	2.08	2.15	5.08	2.27	11.57
Netherlands	0.85	0.90	1.21	1.16	4.12	2.79	1.53	1.52	0.70	6.54
USA	1.80	1.94	1.17	0.91	5.82	1.02	0.87	1.21	0.87	3.97
UAE	0.25	0.63	0.34	0.33	1.55	0.63	0.64	0.86	0.38	2.51
British Virgin Islands	No data	No data	No data	No data	No data	0.00	0.75	0.28	0.52	1.55
UK	0.83	0.66	0.76	2.75	5.00	0.35	0.34	0.40	0.44	1.53
Cayman Islands	No data	No data	No data	No data	No data	0.00	0.04	0.44	0.14	0.62
Hong Kong	No data	No data	No data	No data	No data	0.00	0.00	0.16	0.31	0.46
Switzerland	No data	No data	No data	No data	No data	0.00	0.00	0.25	0.16	0.41
Other Countries	No data	No data	No data	No data	No data	7.65	3.19	2.65	1.23	14.71
Japan	0.41	1.18	1.56	2.75	5.90	No data	No data	No data	No data	No data
Cyprus	1.30	1.63	0.91	1.32	5.16	No data	No data	No data	No data	No data
Germany	0.60	0.63	0.20	1.46	2.89	No data	No data	No data	No data	No data
France	0.46	0.30	0.73	0.47	1.96	No data	No data	No data	No data	No data

References:

(1) OECD data on FDI in Figures as on January 15, 2013.

(2) Zenith International Journal of Business Economics and Management Research, July 2012.

(3) World Investment Report various issues.

(4) If there are any inadvertent errors in the data, it is regretted

Please see how foreigners are investing money in stock markets, and have taken over 100 Billion USD (108.8 Billion dollars, Which is 6 % of India’s GDP) outside India just in one year (2011-12).

How will our Finance Minister address the Balance of payment issue, which needs 75 billion USD?

11 % of GDP is in the hands of FDI / FIIs? Are we safe? Is our growth trickling down or trickling outward? This is in complete deviation of the path of a self-reliant India propounded by our freedom fighters. We are not building a West India company on the lines of the erstwhile East India Company? Time to take a serious look at the data and take concrete actions. It is a wake-up-call for India

Dr.Akash Mehta compiled this data on FII’s on my request. Acknowledged with thanks Dr.Mehta.

Vehicle sales – another symptom of the anemic economy

Car sales in India fell for a record eighth month in row in June with a dip of 9 percent as economic slowdown and low consumer sentiments continue to hit demand, prompting industry body SIAM to seek stimulus package for the automobile sector from the government.

With actual sales in the first quarter of this fiscal turning out to be wide off the mark from what it had forecast in April, Society of Indian Automobile Manufacturers (SIAM) stayed away from revising sales projections it had made in April this year and stated that even those targets were unlikely to be met, except in two-wheeler segment.

According to the latest figures, domestic car sales stood at 1,39,632 units in June as against 1,53,450 units in the same month last year.

We know the problem. So what next?

India has focused too much on FDI / FII’s to bring in dollars, and the capitalists countries are like Shylock (Merchant of Venice). They will extract their pound of flesh. So, India got quick dollars from FII’s, and FII’s made quicker returns and exited the markets and today FIIs have 11 % of the investment in stocks, as I have given the data above. The fact is that, a clutch of foreign investors can destabilize India by withdrawing their investment. FIIs are short-term hedgers and they damage infringe long-term damage to our currency & country. Small retail investors become bankrupt because of FIIs. What came out as a myopic solution to our fiscal deficit and balance of payment crises has today turned into a major national security issue?

Economic Competitiveness: We need to focus on economic competitiveness. We have lost in the last few decades.

Areas to focus, agriculture – we need to amulify agriculture (taking a cue from Amul’s experiment of cooperative movement in milk). We need to support farmers. Make a paradigm shift in modernizing agriculture, training, and equipping farmers to set up SME food processing units. This should make us the top most processed food country in the world in the next decade. The national highways project of Shri. Vajpayee (Golden Quadrilateral Project) was the best step taken since independence for inclusive growth, and this must be pursued aggressively. During NDA regime the road building was 20 KMs a day and under UPA it is down to a KM or two. The Atal Behari Vajpayee government bequeathed a robust economy to the UPA. Remember that the growth rate registered in 2003-04, the last year of the NDA regime, was an impressive 8.5%. Foreign exchange reserves were plentiful. General prices were well under control. Share markets were booming. And there was a general sense of well-being. Work on the Golden Quadrilateral highway linking four corners of India was on in full swing. And various public infrastructure projects under the Public-Private-Partnership model were proceeding without any hitch.

Now, in the last year of the UPA-II, we are back to the Hindu rate of growth. If the economy logs anything above 5% it would be a miracle

(http://www.sunday-guardian.com/analysis/back-to-where-the-economy-was-during-the-early-90s)

My personal prediction is, that we will be below 4 % in growth soon if the regime continues the same way and I have predicted it long back

(https://commonmansblog.com/2013/06/04/the-titanic-is-sinking-can-we-do-something/)

Tourism- spiritual tourism – Tourism is the next best bet after agriculture and we must focus on it by innovating in this sector. I have detailed plan for creating millions of jobs and billions of dollars through employing matriculate youths in this sector.

Intellectual property (IP): India has become a sweatshop and nothing wrong in it, but we need to focus on building IP in science, technology, defense, & agriculture. It is shame that India has not even built a software platform (operating system) and still relies on Microsoft and IOS. Indians in software arena should take a challenge and build the best operating system rather than spending billions of dollars buying MS Office and Apple operating system or Google. We need a search engine developed by Indians. India spends billions of dollars on universities but the IP registered by just one company Texas Instruments (for the sake of giving example I am quoting Texas Instruments) from its Bangalore office might exceed the patents granted to researchers in Indian universities. We need a complete over haul in our education systems that give the world the most valuable IPs, which can be monetized.

Geographical indicators (GI’s): We all are aware that many Geographical Indications like Darjeeling Tea, Mysore Silk, and Champagne across the world have become premium global products. While protection of GIs is very important, it is all the more important to extract economic benefit out of registered GIs. In India we have 184 Indian GIs has been registered till now but hardly a few of them have accessed global market.

On the other hand we are also seeing growing number of GIs from other countries like Peruvian Pisco, Scotch whisky, Cognac, Prosciutto de Parma, Tequila etc. have registered in India.

While it is understood that not every Indian GI has the potential of capturing global market, but many of them have. However we have not seen enough initiative and support system for such promising GIs having healthy export market. There must be a plan to build on the legacy of these GI’s, and targeted GI must be turned into a USD 10 billion global markets for Indians.

Boost manufacturing with a focus on SME’s: Women’s employment has taken an alarming dip in rural areas in the past two years, a government survey has revealed. In jobs that are done for ‘the major part of the year’, rural women lost a staggering 9.1 million jobs. This emerges from comparing employment data of two consecutive surveys conducted by the National Sample Survey Organization (NSSO) in 2009-10 and 2011-12. NDA, during 1999-2004, 60.7 million jobs were created while UPA Government, during 2004-2009, created only 2.7 million jobs. (Data source: National Sample Survey Office).

Organic farming, Herbals & Nutraceuticals: The whole world is moving to traditional and complimentary medicine and India has a scientific traditional medicine dating back to 5000 years. We can create rotation farming for herbals and organic foods and create millions of jobs and billions of dollars worth of exports.

Foreign policy: Neighbors can help. We need not be hooked to G8 / 14/ 20. It is time to have a strategic alliance in Asia, A-2 (India and China) on the lines of G-4, we need to create A-4, the big 4 Asian economies must come together to lead Asia. This is where India must initiate moving from G-20 to A-4.

Lastly, it would not be wrong to say that lakhs of small and medium enterprises , and even 27 big corporate houses have 41 trillion rupee debts (http://www.livemint.com/Companies/7TnLNfHilL2UOkPVNku8UM/Kumar-Mangalam-Birla-is-the-highestpaid-director.html ) . So , this is a steriod induced survival for most of the corporate entitites be it small or big .More pain is expected by this year end. So the government needs to keeps its head low and overheads lower and find solutions to avoid NPA’s . Though, it is an another thing, that UPA has in itself become an NPA.

Rajendra Pratap Gupta

www.commonmansblog.com

Potato Politics and Commercial Airport in Rae Barielly !

Dear Rahul,

Last week you made a statement that , ‘ 50 grams of potato chip are sold for Rs. 10 , and that this is made from just half potato’ ! Correct ! But again , Rahul don’t forget that the foreign companies no lesser than Wal-Mart ( likes of Pepsico ) are selling these expensive potato chips made from half a potato . So, does it not make more sense to check the growth of MNC retail chains / companies in India, who are buying cheap potato but ‘profiteering’ by selling chips at Rs. 10 per packet and the poor farmer is losing his produce at a throw away price ?

Also, I wish to draw your attention towards the fact that currently the farmers are paid Rs. 1 per KG. I cannot understand why will ‘Profit & balance sheet obsessed’ Retail chains pay more to these poor farmers !

Simply stating that the middlemen would be removed and so farmers will get more, is a fallacious statement and conveys a lack of your ignorance about the realities. I think your party and Maya ji are fighting in the ‘aerial warfare’ with no touch of realities on the ground

I can clearly see the trick in getting the farmer leader Ajit Singh into Congress. Clearly , he will help you pitch farmers in favor of FDI and also convert a few of them as voters . But these tactics might not work in the long run , hopefully there are millions like myself who know the reality of these old tricks of congress for vote bank politics !

I read another news that Rae Bareilly will get a commercial airport

Let me enlighten you about the Awadh region where your dad , mom & yourself have fought & won elections for decades

The Awadh region once ruled by nawabs and taluqdars and known as granary of India because of its fertile Gangetic plain. The area has given prime ministers to the country – Indira Gandhi, Rajiv Gandhi, and Atal Bihari Vajpayee. But most districts are still backward.

Population | 3.654 Cr

Per Capita Income | Rs 13,150.81

Faizabad division | Faizabad, Ambedkar Nagar, Sultanpur, Chhatrapati Shahuji Maharaj Nagar, Barabanki

Devipatan division | Gonda, Balrampur, Shravasti, Bahraich

Kanpur division | Kanpur, Ramabai Nagar, Auraiya, Farrukkhabad, Kannauj, Etawah

Lucknow division | Lakhimpur, Lucknow, Sitapur, Hardoi, Unnao, Rae Bareli

Now here is an interesting fact : Purulia is better off than Rae Bareli and Amethi and this was quoted in this article of Business Standard & Mid-Day. http://www.mid-day.com/poll2009/2009/apr/270409-Purulia-is-better-than-Amethi-Left-tells-Rahul.htm

Let me walk you through a planning commission report on the per capita domestic product , and the NDP per capita in your family’s constituency.

Net domestic product (total and per capita) 2006-7 as per planning commission, Government of India

	At Current Prices		At Constant Prices 1999-2000
	Domestic Product (Total) Rs. in CR.	Per Capita Domestic Product (Rs.)	Domestic Product (Total) (Rs. in Cr.)	Per Capita Domestic Product (Rs.)
Rae Barielly	3288	10361	2489	7844
Sultanpur	3955	11168	3077	8687

Source:http://planning.up.nic.in/Annual%20Plan%202010-11%20for%20website/Volume%20-%20I%20(%20Part-II)/Chapter-6.prn.pdf

So clearly, getting an airport in Rae Barielly is a stupidity of the highest order, and that too, when it is clear that the region is back ward and people can barely survive a year without good rains leave alone travelling by air ! Please read the per capita income and check out if the poor people of that district can even afford the air port taxes leave along the airfare !

I have visited Amethi and met up with dozens of self-help groups that you have formed in Amethi, and let me tell you that, you are just ‘Using’ the emotions of these poor people for becoming a member of Lok Sabha from Amethi

While I was travelling to Amethi, none else than your own people (close associates) have informed me that the worst road in India is between Rae Bareilly and Sultanpur. Do I write more!

Learn from Mr. Vajpayee , who started the Golden Quadrilateral project for the Aam Aaadmi and your government is more interested in airports, so that you can fly directly to Amethi rather than taking the 2 hour road drive to Amethi via Lucknow . You are wasting the hard earned money of common men like myself , who earn by hard work and pay 1/3^rd of our income as taxes to the government , and people like you go and throw it for things like building an airport at Rae Barielly !

By the way i could not understand that in the same week you talked about potato being sold at Rs.1 per KG and the other side an Airport in Rae Barielly ?

Gandhi Dynasty has taken India back ward by at least 30 years , and we need to stop it soon.

I also don’t understand what is your intent for the so-called ‘Food Security Bill’ and ‘Job Guarantee Bill’. You will give fixed income to people so that they do not have to work and then you guarantee them food ? So it means that people will not have to work and earn the food , and will get it free ? Where will the Rs. 5 lac crore come from for these schemes ? Will these things take India forward or your party men who will get the ration shops to distribute ( read divert ) grains and sell them to the open market, and finally , the poor Aam Aadmi will be left stranded on the road !

Wake up Rahul ! Time will never forgive your people, and the elections will decide your fate not this ‘aerial warfare’ .

Rajendra Pratap Gupta

Healthcare I Retail I Rural Economy I Public Policy

www.commonmansblog.com

New Year might have plenty of bad news for the Economy

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

FDI in retail – This is a harsh reality – Is FDI really a boon for India at this time ?

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

Email: office@rajendragupta.in , office.rajendra@gmail.com

Growth, Recession & Realities

Dear Blog Readers,

Thanks for your continuous feedback .

I am attempting to address the issues that you have talked about .

Over the last few months, i have been reading a lot about inflation , double digit growth and so on………………..

We need to understand the real issues a little deeper and better if we wish to do something worthwhile for this nation

Consider the following :

A few decades back , government thought that nationalization was in the best interest of this nation and it nationalised the airlines , banks etc…….Now after a few decades , privatization is considered in the best interest of the nation !!!

The government was cursing the huge population in 80”s and termed it as ‘Population Explosion’ . Now the government is talking of the demographic dividend , because everyone across the world is talking about the same ! We are having the government that does not have original ideas but have copy cat versions or China inspired & induced growth !

What is the government doing to convert ‘No productivity jobs into low productivity jobs and finally into high productivity jobs’ Every district should focus on productivity . People do not reason the government and never questions the actions and government even does not know if it is doing the right things .

Look at these facts

Between 2010 and 2020, India will add 120 million people in the ‘working age population’ . It will also add 43 Million senior citizens to its population . Does the government have a concrete plan to address this ?

If we do not plan for 120 million people that we are adding to the working age population , we will be provoking between 10-30 % of them into naxalites or anti-social elements . Imagine , 12-36 million gun wielding naxalites !!

If there is no growth , it does not lead to poverty . It either leads to ill health & evil minds . Which is more disastrous than poverty In the next 10 years , some parts of India will become more developed than they are today. We will become a more materialistic nation in places like Mumbai , Goregaon , Bangalore , Pune etc…………….. Media would have exposed this ‘Have not’s’ to this material world .This will lead to aspirations in youth for a better life style, and with no means to make it to this elite league with legitimate means , the criminal route to making money will lead to more extortion , more drug lords and criminals in politics – GDP growth can be 8.5 % or 10 % but criminal activity will growth much faster under such conditions . There is no doubt on this . India will become a naxalite factory and will surpass Pakistan in producing anti-social elements

GDP attributable to agriculture is de-growing , GDP attributable to services and industry is growing . Agriculture not only supports 57 % of the work force & has low productivity per capita but has to feed the 1.2 Billion population else , we know the triple digit inflation that will strike India by 2050.

Agricultural productivity can go up if we bring down the cost of logistics from the current of 16 %. Worldwide , it is around 9 % …………. Government must plan in detail how to boost the agricultural productivity

We are treading a difficult path and the “demographic dividend will become a ‘demographic disaster’ or the ‘Demographic bomb’.

People with many educational degrees ( Indian experts from USA recruited by the government as advisors ) are working for people with no degrees (poor population ) . So they do not identify the real problem leave alone addressing the issues . Recently , i have heard about the food coupons being distributed to the BPL families . What a joke ? BPL people do not know how to read and write & also this is bound to be misused ( 10 paisa of every 10 rupees will reach the BPL families )

Few fundamentals have to change .

India has not to change , Indians have to change .

Made in India has to become made in ‘rural India’

We are talking of CSR ( Corporate Social Responsibility ) but what we need is ISR –(Individual’s Social Responsibility )

We are all talking of divestment . The government is looking to raise Rs.40,000.00 crore through divestment but why is government not looking at investing back 10 % of the divestment money to build another PSU that can yield returns disproportionate on its investments ? How about setting up the Solar Energy Corporation of India or the Hydro Power corporation of India ? Build them now . Don’t just sell

Governments tax collection targets have been missed by around Rs. 40000 crore, i am sure that divestment target is also going to be missed !! Where will be the GDP deficit be in 2011-12 ?

Indian government has not just to create jobs ( employment ) but also create entrepreneurs . It has to think inside the box only ( forget out of box ). Imagine , if different cities with tourism potential start training tourist guides , taxi drivers and listing them on a central website . People travelling to these towns can avail the services of the government approved guides at the pre-decided rates & can pay in advance through the website . The money can be transferred electronically directly to the service provider after a referral cut ( government can retail 20 % & transfer 80 % money). Safety & savings for tourists and income for self employed people .

Back to my favourite recession & India :

Why did recession in the USA / Europe not affect India so much Or you all believed that government was able to protect India from recession effectively ? Think about this report

Times of India , 17th March 2010. According to the WHO – UNICEF report ,58 % of all the people in the world who defecate in the open are in India . 638 Million people in India have no access to toilets . Will India, with such living conditions ever get effected by recession ? The same government could not control inflation . Imagine how they can control affects of recession – they faked the efforts and impacts and we all believed it like fools !

In 62 years after Independence , we have more than 60 % population having no access to ( toilets ) hygiene , 2/3rd of the population living in absolute poverty , 1/6th of the nation living in naxalites controlled areas . And we are already a “recession proof” India . Entire India has still not felt the impact of growth except a few urban towns , so recession hitting us is a joke ?

By the way , next few days will show India conquering the world as ‘ BHARTI is acquiring an African Telecom Giant’. Read all the headlines …………………………..

While you read these headlines , more than 50 % of India will go to sleep without a meal ………………………..

And also, according to the government , the austerity drive for Indian government is over & our babu’s and politico’s can fly business class, so finally , India is out of recession & on a high growth phase

Rajendra Pratap Gupta

Email : Office@rajendragupta.org

Budget , Governance & Political leadership

Few important points :

Paridhi : Here is the answer on how budget could have been better: Besides ,there are many other points that i have covered based on queries from other Blog subscribers

1. If the budget was not just a statement of account or an announcement . All the investments should be related to quantifiable outcomes

2. What will 37 % investment in infrastructure lead to ? How many jobs ? How much time will it take ? Were there any other opportunities that can have a better ROD ( Return on decision ?? )

3. If the PSU will get divested , what is the return on Divestment (ROD ). When you divest, you are giving away profits to the investor forever . How much profit will we give away because of divestment ? one is the ROD ( Return on divestment ) or the cost of divestment ( COD ) over the next 10 years & the last is the Return on Opportunity loss ( ROOL ) .

4. Every year 3 % of the population ( 30 million ) go below the poverty line due to healthcare costs . Last year due to recession , at least 3 % more would have gone down below the poverty line + 1.55 % annual population growth rate adds another 15.5 million people to India every year . Where does the budget put in place these numbers and the plan to address the needs of additional 75.5 Million people ? . Can we call the current budget without such considerations & provisions an all-inclusive budget ?

5. Budget should also give an account of the last year’s budget versus achievement and also state how many plans have been shelved and what is the amount that has been unused by the various departments . So that we can ensure the sanctity of the budget and the accountability of the people at the helm of affairs

6. On one side we are talking of revenue / budget deficit , on the other side , we have given a 30 year tax holiday to SEZ ? What is the logic ?

7. Over Rs.6 Lac crore worth of Black money is lying in the banks . Government should promise the people that the money will be brought back to the country in the next few years . This should actually cover the revenue deficit

8. The current budget is provoking budget for Naxalites . Naxalites strives on poverty and poverty thrives on poor governance

9. If the government wants to increase spending for employment generation , it must pass a rule that from 2015, any company bidding for government tenders should have a manufacturing base in India to cater to 50 % of the delivery of products and services

from its Indian company . This will fuel large-scale investments and generate phenomenal employment opportunities .

10. The budget must have allocated money for solar energy in Rajasthan and for villages that still do not have electricity

11. Pentakota in Orissa has one school for 40,000. We need one university and 15 -30 schools in that town. Such things should be considered if we talk about all-inclusive growth .

12. It will take 320 years to clear the judicial back log, Every Indian judge has a load of about 2147 cases. This must be addressed or else i might consider becoming a hard core criminal than writing such emails expecting a change . Simply because my case would beyond 2147 and it will never get settled in my lifetime at least !!

India has the biggest problem with the average age of the political leadership that is a big disadvantage seeing the average age of Indians . The ratio’s are out of sync . Age of political leadership should match the national age group . I am totally against reservation that divides the society and the nation. The best thing would be to provide financial and institutional support to those who need and may be get 50 % of the youth in government ( without any reservation )to lead this nation’s political agenda

. RESERVATION PROVES THAT PEOPLE AT THE HELM OF AFFIARS ARE NOT WILLFULLY WANTING TO CHANGE AND NEED LAWS TO ENSURE THAT CHANGE HAPPENS BY FORCE !

WHY RESERVATION FOR WOMEN ? GIVE THEM 50 % TICKETS TO FIGHT ELECTIONS ON YOUR WILL

See the case of 3G spectrum : few questions .

Why are we launching 3G. Can we not move directly to 4G ? Smaller countries like Sri Lanka started 3 G five years ago. Why are we so late ? It could be a better decision to move directly to 4G . Government wants to collect more than Rs.30,000.00 crore. But it has not stated what is the benefit of 3G for the investor over the next 5 years . What is the life cycle (Span )of 3G, when the 4 G comes , what will the players do then ? This could prove to be very costly and killer for some of the telecom players. India is still a voice driven cell phone market .

2. Why India should have 16 circles . Why not one India . USA has single geography for its mobile user

3. I personally believe that 3 G will hit the telecom companies mercilessly . It might lead to losses and mergers & finally consolidation amongst telecom companies in India

In India , i believe that the basic problem is ‘powerful announcements and powerless execution’

Corruption & leakage is leading to a black money economy : Why it is that giving bribe is a crime ? No one gives bribe willingly . It is only a choice-less option when you are pushed against the wall . We need to encourage people to report bribing . But seems that the current law is to protect and patronizing bribe takers. The law must be amended with a clause that giving bribe is not a crime as long as it is reported with the vigilance authorities after the bribe has met its purpose. This will help ensure that the work will get done and the person taking bribe can be brought to the book. We must encourage people to come out and report without the fear of getting caught and that their genuine work does not stop !

China – India : Politicians in India are trying to ape china . The fact is that, a few decades from now China will be a big economy and an old nation. India is not a big economy now but is a young nation today and we will lose our Future demographic advantage (FAD ), if our politicians do not act with right policies now .

We are a victim of a good government , but poor governance .

Increase in prices for the common Man- Solution

Price increase of basic commodities – Solution

Recently , we heard what Sharad Pawar said . ‘ I am not an astrologer to predict when the prices will come down’. He also stated that, t is the collective responsibility of the cabinet and not just his to take the blame’

With this , two things are clear :

One , he agrees that he has no plan to control prices, and Secondly, the government does acknowledge his wrong policies that lead to increase in prices. The blame must go to the failure of the congress government to take care of the common man. More people may die due to high price of basic food stuff this year

I suggest that we have a State Food pricing Authority in each state to fix the price of Agricultural products and the same should be strictly enforced . This department should be entrusted with the Public Distribution system . All this should come under Central Food Pricing Authority as it will involve imports and exports in some cases. The price for each and every agricultural produce like wheat , rice , pulses and vegetables should be fixed annually by the authority .

No trader should have the right to charge on the whims and fancies, and all the prices should be as fixed by state food pricing authority with the involvement of the Central Food Pricing Authority.

Food Should be made the Fundamental right . After all , we don’t expect the Hungry person standing up and asking for right to freedom , equality ,etc.. etc….Food first ……………country later……..

Hope it works Rajendra Gupta ————————————————————————

Rajendra Pratap Gupta President

Country First

Email: President@countryfirst.org / mail@rajendragupta.org

USA & the New World Order – Rajendra Pratap Gupta

Speech delivered by Rajendra Pratap Gupta at the US-ASIA Business forum at Los Angeles , USA on 12th September 2009 at the Los Angeles Convention Center , LA, USA

Global Economy – in the new world order

Good Morning ladies and Gentlemen

A very interesting session !!

Like an earth quake changes the topography , the recession changes the eco-geography ( Economic Geography ) . Every time a recession has sets in , the world is put on a reset button. We have seen in the past that the earlier recessions have changed the world order. The 20th century recession changed the world .The supremacy of the British empire ended paving the way for a bi-polar world from a uni-polar world. This recession will shift the world order again . It will now change to a multi-polar world . It is a natural progression from a uni-polar world to a bi-polar world to a multi-polar world

For more than a century since the invention of the Steam Engine, America has been a source of inspiration and awe for the world. Today , it is a source of learning and unlearning . It has shown the difference between being ‘Big’ and being ‘Great’.

Over the years , we have also seen the growing interdependence of the developed economies on the developing world.
We have seen how G-4 nations, the group of four biggest economies have, over a period of time expanded to G-5, G-8, G-14 & now G-20. After the recent crises , India, China & other developing economies have been invited to participate and play a role in revival of the Global economy. We are just seeing the economic evolution , which is similar to the Human evolution. It was earlier the survival of the biggest , then came the survival of the fittest and now will be the survival of the most agile & interdependent economies .

We have seen that the corporations that stood tall for over 150 years, collapsed in weeks last year. It had a cascading effect . Companies that were associated with such global corporations suffered huge losses. Nothing is infallible in this dynamic world. We need to have foresight , intelligence & be responsible to keep standing tall.

I see that there has been a lot of hue and cry on outsourcing, and I don’t understand how can people drive the market by such ad hoc policies ? We must not forget that outsourcing was started to create economic, internal efficiencies and customer focus , and this finally lead to Globalization. Globalization is an irreversible process . It is a fact that market conditions drive the economies today. It is more important to see the index of the stock exchange every day and not the GDP of a nation to gauge the market sentiment and the economic outlook. Today, the companies are not driven by market share but by share market . So are the economies. We must not forget that the developed economies or the world class cities & global conglomerates have been built by immigrants and locals working together . Today, this is more relevant . We have moved to an interdependent World

Out sourcing is market driven and it will always exist, where ever companies & countries want to grow .

This year, for the first time, we have seen that about 20000 of the 65000 H1B VISA’s have not been used out of the yearly quota . This signals a drastic shift . Till last year , the applications were over quota on the first few days of the opening . And there used to be a lucky draw for allocating H1B Visa to applicants in India. Suddenly , there are no takers this year. The very ‘brand America’ is hit badly.

Today, there is one world economy interlinked with three category of customers – developed , developing and under-developed countries

The developed countries have reached the peak and are saturated , and growth is going to be marginal . Investments will not be forth-coming in such a scenario and money invested might not yield good returns . The major corporations from the developed world need to support and get support from the rest of the world for future growth.

Developing countries like India & China support more than 2.4 Billion consumers . A great place !! These customers need more investment, and growth & returns would be fantastic . These countries also need to learn from the experience of the developed world , they need knowledge sharing , technology support & investment to scale up and work with the developed world

Under –developed countries; The more we invest, the more better & bigger markets we will be able to create for developed & developing countries . This is the future

Today , the mix of the world economies present a unique synergy and a tremendous opportunity to work together and progress; much more , much faster. There is no competition at all globally , we just require to understand the growth equation in the world order & invest , collaborate and scale much ahead . Horizons are expanding as we are trying to reach them. The world is not just a market where we represent either sellers or buyers , but it is a family knit more closely than ever before . Globalization is not just irreversible but is also indispensible force that drives us together , ahead . Remember , we are equity partners in the global economic progress where wars drive down our returns and growth increases our returns . We know that , today, business interests drive the political decisions . So we require a more close and a strong business relationship between the developed , developing and the under-developed economies to ensure a lasting peace and progress universally.

For more than a decade , America has been a land of opportunity for the rest of the world . Today, the rest of the world is a land of opportunity for America .

I would like to define the developed , developing and under-developed economies as the past , present and future of the new world order and without past , you cannot plan your future !

Two important points to note :

First : There is a reversal of destinations , innovation has moved out of the developed world , as innovation always follows the struggling race. Today , developing and under-developed world houses the world’s best innovative minds & the real consumers . They are the fertile economies . Let’s accept this fact and shape our vision accordingly. The destinations have reversed in the last 15 years and we need to see them as interdependent destinations

Second: You cannot give up outsourcing and still sell your products and services to the developing and under-developed countries. You need to understand that the developing economies are also the consumers. Today China might be a developing economy but also is the biggest lender to America & has 1.3 billion consumers . If China decided to en-cash all the American bonds , the American economy will come down today evening . But we understand that the valuation of dollar is what holds the value of Chinese economy’s reserves. If China decides to en-cash US securities , Dollar will fall and so both the economies will collapse simultaneously. So today , we are closely inter woven and cannot bully a nation. We are partners in progress and partners in downfall alike . Today no country can be independent in resources to meet its population’s needs without interdependence . We depend on oil from Middle East , manufacturing from China & IT & Knowledge from the eastern countries like India . Indian & Chinese economy suffered a hit due to slowing down of the US economy but do you know why Germany slowed down ? Because the Chinese and Indian companies stopped buying heavy machinery from Germany and so was the case with many such countries . It was not just the US economy driving down production , it was also the developing economies that affected the developed world. We have to understand the fact that, it is a either win –win –win or a lose-lose-lose for the interdependent world in today’s equation. The world has come close together like one family during this crisis . We need to use this as an opportunity to develop more understanding for a longer and a deeper global partnership so that we can avoid future recessions . We are all living in a fully integrated and inter-dependent world. It is like a necklace . One weak link can break the entire chain and the necklace will fall off.

Also, America needs to have a re-think on some of its strategies . It needs to invest more on development of the developing world . Just think $ 568 billion was given as aid in S. Africa for the last 42 years and more than $ 642 Billion is being spent on Iraq war . Today the world could have been a much better place & probably out of recession, had the war money gone to the development of the world’s under-developed and developing economies . These could have been the biggest customers for US companies !! We should not forget the point that the majority of the biggest corporations in the world are from America .

Globalization according to me, means a truly interdependent and an intertwined world.

So, it is clear that we live in a truly interdependent world & that we need more even distribution of opportunity and challenges all over the world , and invest more on economic opportunities than enhancing military capabilities; to share more wealth to a much larger mass of population . Thriving businesses can do that faster without much involvement from the government . The forums like US-ASIA business forums must happen more frequently to develop an understanding , partnerships and facilitate a better flow of resources , ideas , goods & services to all the three categories of customers & vice versa

I would suggest my friend Kevin Kaul to take the US- ASIA business forum to a much broader scale and help develop the understanding of interdependence of the new world order between the past , present & future i.e. developed , developing and under developed economies to bring all round progress for the whole world
Thank you and enjoy the rest of your day

Rajendra Pratap Gupta

515-450-8036 (USA)
+91-922 33 44 542 ( India )
+971-553 121829 (UAE )

Email : office@rajendragupta.org
office.rajendra@gmail.com

Michael Jackson’s death & the Indian Economy have similarities – Rajendra Pratap Gupta

Indian Economy Opti – ‘mystic’ about growth numbers- Rajendra Pratap Gupta

Why is an economy of a billion people failing ? why are we fast becoming a junk economy ? I know it is quite good to hear 7.5 % growth estimates coming from the government, with riders that are totally justifiable for our failure to achieve 7.5 % growth or ‘cook’ the numbers to show ‘Illusionary statistic’. The future predictions of 7.5 % growth are dependent on US Economy , Oil economy & Rain Gods . Do you still believe our politicians for the growth numbers ?

Growth in 2008-09 : A large part of our 6.7 % growth in 2008-09 was nothing more than an illusion. 1.8 % out of it is accounted for by a 7 % spurt in ‘community , social and personal services’. Which is the arrears paid to 20 million government servants in 2008. If we deduct this out of the 2008-9 estimate , the actual growth was 4.8 % and not 6.7 %.

Confirming the correction of the GDP data to only the second half of 2008-09 , which is when the pay commission awards were paid out, reveals the GDP grew not by 5.8 % but only 2.2 %. This is the harsh reality. Check the fact that , agriculture grew by 1.6 % and industry, utilities & construction reported 2.4 % growth in the entire year as stated by the economic survey. Did we actually grow by 6.7 % ?

This year could be the worst for the economy. Outlook for industry is more bleak; zero growth till May 09. Agriculture is slipping due to poor show from the rain Gods . Even World Bank’s estimate for growth at 4 % looks optimistic

Now that government has to borrow about 4 lac crore to finance its largesse . If the government is borrowing 4 lac crore , what will happen to such an economy . Are we not already a bankrupt & Junk Economy ? Are we waiting for it to be rated as junk !!

No government or department talks about the ‘Job deficit ‘. Hiring Indra Nooyi or Raghuram Rajan to drive in ideas don’t work, as these people have stayed away from India for long and they themselves are in out of touch with the common man’s problems . So their solutions would all be on financial reforms, and they cannot suggest things that can salvage the common man. Till the common man does not become financially strong , Indian economy cannot take off. NAREGA is not the soultion , it is just a temporary morphine like injection to ease out pain . Indian economy will collapse like Michael Jackson, who died of drug overdose .

The status of the government is better than the citizens who cannot even borrow money to run their finances. We need a miracle to happen to save this nation .