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

  1. 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?
  2. 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?
  3. Has the government done its own independent studies for the impact of retail chains on Kirana stores?
  4. 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?
  5. 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?
  6. Where and how much wills the retailers invest in back-end? This has not been specified?
  7. Why has the government not capped the retail margins of foreign retailers in India?
  8. See point 5 B, why have women self-help groups / handicrafts been excluded from being the beneficiaries of the retail entry
  9. Why are retailers not mandated to invest in retail training ?
  10. More questions to follow

Rajendra Pratap Gupta

Healthcare I Retail I Public Policy

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

Post Pone FDI in retail for another five years


Prime Minister Dr. Singh,

Yesterday , I attended the meeting of CAIT ( Confederation of all India Traders ), I felt really bad seeing the plight of the traders, and the hell they would be subjected to , should FDI be allowed in India at this point .

Over the last few months, you have rallied all associated departments and ministries to build a case for FDI in retail. I feel sad that you & your government have ignored the fact , that FDI in retail at this juncture will put a big question mark on the means of livelihoods of over a Crore traders in the country .

I have seen that you / your government has been saying that inflation will come down as Wal-Mart , Carrefour , Tesco’s of the world come to India ( Wal-Mart has already come in few years ago ! ).

Prime Minister , remember, that Inflation has not come down despite Wal-Mart being in India . Your government’s logic that supply chain will get strengthened and prices will fall is fallacious . FDI in retail is a wrong justification for strengthening the supply chain , as FDI in supply chain is already allowed, and a lot of wholesalers are already around and more can come in without needing FDI – Why are you fooling around Manmohan ji ? How low will you stoop now to push to agenda of foreigners !!

Even those who are operating Cash & Carry business , are issuing cards to individuals to buy from them, thereby , stabbing the small retailers . Shut down Cash & Carry immediately after a proper investigation . I go to Sam’s Club in the US ( For your information , Sam’s Club is Wal-Mart’s Cash & Carry Venture in the US). Anyone can buy a card for USD 40 and start buying from Sam’s Club. I have gone twice with my friends to Sam’s club and brought goods from the store , my friends are not retailers , but Indian professionals working in the US . So when these retailers do the same in India , what will we do ???

Your government has failed to understand the cause of inflation , and firstly , you said that recession caused inflation ; then recession got over but inflation did not come down. Then you said that irregular and deficient rainfalls are the cause of inflation. Last year , we had good rains and inflation still did not come down. Realizing that there was no answer with your US educated ( read brain washed ) consultants ( Rajan ,Montek, Kaushik & Sam ) , your government said that inflation was due to high growth and it would continue . Study our next door neighbor – China . They have had high growth with less than 5 % inflation !! All your predictions have failed !!

Also remember dear economist, that ‘inflation is reversible but FDI is not’ . What I mean to say is that , when BJP comes to power, it will bring down inflation , but if you permit FDI ( As your government is hell bent on it ) , we will not be able to reverse FDI . So think before -hand !! Don’t jump like the nuclear deal & do another fiasco !!

Sonia Ji is shouting aloud on NAC podium for poor people on one side, and on the other side , both of you have already done a deal with major international retailers , and are hell bent on cracking the back bone of small retailers by allowing FDI

Government has a flawed policy with regards to FDI, as you are saying that you will allow FDI in top 35 towns to start with. This goes contrary to strengthening the supply chain. If you really want to strengthen the supply chain then please ask this big giants to start retail in ‘C’ class towns and then come to B & A class towns !!

Your statement that farmers will get better value because of FDI in retail : Wal-Mart’s of the world are known for extracting even the ‘blood’ of suppliers !! Their labor policy record needs to be closely examined , and how many times they have been fined !

Also, Wal-Mart is failure in Japan ( social dumping & doubts about its quality ) , Korea ( Wal– Mart failed to understand local customers) , Brazil ( Lack of understanding about local culture ) & Germany ( due to cultural insensitivity ) .

I am producing an excerpt from a report

‘Walmartization does not travel well’ Clearly, neither Wal-Mart’s business concept nor its social dumping – the so-called Walmartization – work in developed economies with a social dimension. Many consumers shun the Bentonville giant and prefer to do their shopping in stores where they know that workers are treated correctly and with dignity. There is also more and more uneasiness and suspicion about many of the products sold. Squeezing the last drop from suppliers can hardly promote safety and quality. There is also a growing aversion against buying, consuming and using products which could well have been made under inhuman conditions. That the tide is fast turning against Wal-Mart at home has not gone unnoticed abroad. Consumers start to know that the retail giant denies its American workers their fundamental rights, and many of them vote with their legs, going to other stores if they have a choice. The poor business results in Germany, Korea and Japan should be taken seriously in Bentonville

Another report : This article appears in the November 21, 2003 issue of Executive Intelligence Review. Wal-Mart Collapses U.S. Cities and Towns by Richard Freeman

During the last 20 years, Wal-Mart has moved into communities and destroyed them, wiping out stores, slashing the tax base, and turning downtown areas into ghost-towns. This is accomplished through Wal-Mart’s policy of paying workers below subsistence wages, and importing goods that have been produced under slave-labor conditions overseas. Often, communities will even give Wal-Mart tax incentives, for the right to be destroyed. Wal-Mart both reflects, and is, a major driving force for America’s deadly implementation of the Imperial Rome model. Unable to produce physical goods to sustain its own existence, the United States, like Rome, sucks in imported goods from around the world, using, in this case, a dollar that is over-valued by 50-60%. America has been transformed from a producer to a consumer society.

I believe that Wal-Mart destroyed American Economy and now it is here to kill ours !! Also, since we know that Wal-Mart is a failure in four countries , please produce a report on those four countries .

Also, let us examine that how many small mom & pop stores have shut down with the advent of Wal-Mart in the United States ? Similar study we must do in China .

Let me also tell you why Biyani’s & Ambani’s of the world are wanting FDI ?

Let me ask these retailers one question ? If the retail trade is so good and profitable , why they have the problem in raising money , investing and growing their business – why do they need foreign investment ? The talk that these MNC retailers bring latest technology is also misleading , as Indian retailers are working in a different environment and all foreign CEO’s have been an utter failure so far in India . You can see the example of Reliance Retail ; How many CEO’s have been brought from outside India in the last four years ? I understand that recently a new CEO was hired from Wal-Mart China !! These traders are actually looking at exiting the business by selling their business to these multinationals to make a quick buck !! That’s the real reason they need FDI .

Once FDI comes , farmers will cry for a good deal and Wal-Mart would never give them a fair deal . On one side , farmers are forced to sell land and other side whatever is left with land & cultivation , they would be forced to sell to these MNC chains at a wafer thin margin .

Congress is a killer party for the poor !! Prime Minister Singh , where is your plan to upgrade the current Kirana stores ? Why are you not excited with their welfare . Give them FDI ( Finance from domestic institutions ) , and provide them training .

I call upon Shri Nitin Gadkari , President BJP to stand behind these standalone Kirana store and oppose FDI . We should post pone FDI for another five years and then revisit the issue. A massive peaceful agitation is called for to stop FDI in Retail for the next five years .

Mail is marked to Montek, Raj Jain of Wal-Mart , CAIT and all leading retailers & political parties in India

A Common Man

Rajendra Pratap Gupta

http://www.rajendragupta.wordpress.com

Demystifying FDI


All the major retailers be it Pantaloon , RPG ,Reliance or Bharti . All are shouting from the top of their retail roofs about their demand that India needs to become more liberal and allow Foreign Direct Investment ( FDI ) in retail

Let’s study where retail is,  and why do we need FDI ?

A lot of people jumped into retail around 2000 including Pantaloons, Subhiksha , Vishal , Adani group etc . A few years later, excited by the ‘unsubstantiated reports’ from the top consulting firms about the fantastic retail sector  , every major corporate houses like RPG, TATA , Birla’s and Reliance also joined the bandwagon. It lead to competitive retail . All Retailers were vying for the same space , same people & same vendors for a much higher price . Marketing costs increased but margins decreased .

Finally , everyone in retail burned their fingers and lost hundreds of Crores . A few merged or died a natural death !!

I have written earlier ( in 2007 ) in my column that retail in the current form and format was unviable . We see that , when we look at the closures of stores at all major retailers. I think that the way forward is clear , either you have to get into Hypermarkets or small ( Kirana ) format . There is no place for medium ( so called super market ) retail format . I see that the Indian customer’s fondness for variety and prices coupled with the entertainment options within the retail super space !! No other format except Hypermarket will succeed

Back to my main topic why do we need FDI :

What do retailers need to succeed ?

  • Technical knowhow – This can be had by hiring experienced people from abroad who are happily willing to come and work in India or through the franchising route
  • Vendor or sourcing arrangements – can be done via franchising tie ups
  • Merchandising mix– Actually , this is the least of problems as one can go around and see what all is visible and can be copied
  • Brand value – Franchising tie ups can bring brands like Wal-mart etc
  • Training the retail staff – Can be locally developed in collaboration with international tie ups
  • Money to grow – Here is where the answer lies – Retailers in India are loss making and even if a few who are reporting profits , they have uncertainty over the consistent growth  and profits . Retailers know that, they need to make the best of the opportunity with major foreign retailers entering India. Whenever FDI is allowed , it is a foregone conclusion that major foreign retailers  would either pick up a stake or buy the local retailers out at ‘Decent valuations’ and the promoters will cash out with big bucks .

I do not understand if the retailers are successful , why should they have problems with raising money locally ? Any investor would be keen to invest in a profitable venture or the money can be raised from the stock markets .Rest all can be had as mentioned above via tie up or recruitment of experienced people from abroad

PE / VC’s do not invest in retail as it is not profitable and the successful model is still to be seen. Government must be firm that it will not allow FDI in retail , as it will definitely kill smaller retailers . Government should evaluate what the retailers need and understand their reasons for asking FDI to open in retail sector ?  These ‘failed retailers’ will cash on and exit and the Indian retail scene  with the opening of the  FDI . Indian retail sector will get dominated by biggies in retail like Wal-mart or Carrefour or Tesco’s of the world . I see more deaths in retail in the times ahead.  Indian  retailers have still not figured out a successful retail format and that is the challenge,  and FDI in retail does not have an answer .  Indian government should only allow franchising in retail and nothing else. If retailers want to raise money they must either raise it privately or through the stock market

If we allow FDI in retail at this point , it will be like creating another East India company and India will lose heavily

Rajendra Pratap Gupta

emai: office@rajendragupta.in

Create wealth , increase employment – Shape up Dr.Manmohan Singh


14th February 2010

Dr. Manmohan Singh

Prime Minister of India

7, Race Course road,

New Delhi.110011

 

Sub : Some important issues that needs to be attended on priority

Dear Dr.Singh,

This note needs your esteem , kind and personal attention

I have written to you in the past on healthcare reforms agenda with a detailed note on what needs to be done. Through this note, I wish to draw your attention to broader topics that have a deeper impact on our all inclusive growth agenda and if attended properly, can result in more than 10 % GDP growth.

I have been watching the economy across sectors, government initiatives and speaking to people from all walks of life. I feel that it is the time to do an introspection , look carefully at the realities and take immediate corrective action. This letter might be a bit long for you to read, but it might be worth spending a few minutes .

We all know that India has been passing through a trying time . Last two years, we had a recession and it played havoc on our growth and also rural India. This year we are passing through one of the worst inflation & in not the very best of times. We had not fully recovered from recession when inflation hit us. Today, because of inflation, where the prices of essential food items is beyond the reach of 2/3rd of India’s population for its recommended daily calorific  intake , we are slowly pushing people towards ‘Partial Starvation’.  Exceptional circumstances require exceptional decisions .We need immediate intervention. I recently read that you formed a committee for price control. I had presumed that we must be already having a department for price monitoring & regulating supplies in the ministry of agriculture .  It is high time that the current Minister for Agriculture is replaced and the right person is chosen for a very important job. A job that determines the lives of farmers (2/3rd of the population ) cannot be handling cricket and agriculture and also a political party (NCP is headed by Sharad ). He is dedicating just 1/3rd of his time to his ministry. Also, I see that firstly a wrong person was appointed and now he is wrongly blamed for food price hike ! It is an irony that as a Prime Minister , you are equally responsible for the situation that is created and the congress is just playing a blame game when millions of people are being pushed below the poverty line and death. If you see,  Agriculture , forestry and fishing recorded negative growth in 2009 but I still don’t see proactive approach of the government . I know price rise is an urgent issue , but there is a more important issue ; Supply versus demand of agricultural products. You must take note of the statement issued by Dr.Murli Manohar Joshi , M.P. on 17th January about the sugar prices going up due to bulk allocation of the sugar produce to soft drink companies and chocolate manufacturers. I must state that these MNC’s take cheap raw material from Indian system and sell expensive drinks & chocolates to our people !! High time that they import their raw materials or produce them . Government must not let the common man pay a price for their products in such a manner . Also, let each state have a state farmers pricing authority that fixes the prices of common products till the next season based on regional produce , buffer stock and demand . No one should be allowed to trade in agricultural commodities , hoarding and speculative pricing

Fund utilization : I understand that CAG has stated in his latest report that most of the programs that were announced have not used the funds allocated to them . So, in all, the government’s commitment and efficiency is put to a serious question.

Recently , i also learned that the plan is to discontinue the NUHM ( National Urban Health Mission ). This shows clearly that either the projects are not thoroughly planned or not properly executed. Infact, it is a truth that major projects do not cross the announcements stage and do not go beyond the paper work

Some of the action points I feel are important are mentioned herewith & I would like you to act on them or let me know your views :

Employment generation : It is high time that the government thinks about increasing employment and earnings to raise the GDP numbers of the nation. All I see from the statements of  your finance minister is that the tax collections have gone up or missed their targets .  So , are we confusing the portfolio of finance minister with Union Minister for tax collections ? There is no wealth generation happening in the country . Whatever we have we are depleting our resources . You can privatise our PSU’s , Banks etc and reduce our deficit for the next 2-3 years . What will you sell after that ? We will go back to the World Bank & IMF for loans ? We need to create wealth for rural masses and for India . This is the precursor for an All inclusive growth. NAREGA is a bottomless pit and there are suspicions that this scheme is used to rehabilitate political workers for the ruling party. Please understand the seriousness of the situation and act . We need wealth creation strategies .

Here are suggestions of some of the means to create employment opportunities in India in the existing government set up.

Post offices : India has 155,000 post offices( Check http://www.indiapost.gov.in/New_Code.pdf ) . Whereas , it might be worthwhile to implement PAL code instead of PIN code but it more important to create 1 million employment opportunities out of this network. Just think, Post offices remain open from morning to evening on weekdays, they are closed after 5 PM ( Except the 24 hour post offices ), and on weekends and holidays . If we gave an opportunity to college going students and unemployed youth to provide some basic services of post offices which do not have a time bound delivery like selling stamps etc  from their residence, and they can work on some commission or may be , take a surcharge for the convenience offered say @ 10 %. We can create a minimum of one million jobs  @ home

Passport : Let us look at appointing government authorised agents for each pin code at least in urban and semi urban India , and let people use their services . This gives the citizens the convenience to get things done locally and they will be willing to pay a little more for their comfort , and this will also create additional jobs . People can work from their home .

Bill payment : Bill payment agents can be appointed by the government and these can be the people who can operate from their residence and get a commission on bill payments

RTO : Learning license should not be issued by RTO because people actually don’t know driving when they apply for the new  or driving license . Like I mentioned in the above 3 options , people can get their temporary driving license or their learners license from these approved agents and then go to the nearest RTO  and give a test to get the permanent license . This will free up a lot of people at RTO from the job of learners license and the proceed of issuing the permanent driving license can be speeded up as well.

Train tickets : Why should only railway stations issue tickets ( Only reservation is available online , normal tickets are still procured from the local station booking counter ). Say even for local trains in Mumbai. There are around 79 sub-urban stations and people should have the comfort to buy a local train ticket at their comfort in their locality , and step in to board the train at the station . This will ease the queue at the stations and people will not hurry up and get tense reaching the station and buying the tickets and then boarding the train

Forms for different office work should be sold by such agents @home .

India is the global capital in Information Technology. We can have MPRSO’s ( Multi-Purpose Resident Service Officers ), who operate from their homes and provide services 24 X 7. It is do-able . We need political will , rest is possible

Indian Restaurants abroad : The world is turning towards vegetarian food and we have an opportunity to open restaurants abroad , create the India brand abroad and win the hearts of people and feed them healthy Indian food. Indian dishes are relished in U.K. / U.S etc . Same is possible for Indian herbs & Ayurveda , Yoga schools , mediation etc . These opportunities create employment , wealth , and do brand building for India

Tourism : India has tremendous potential and the irony is that , it remains to be ‘Potential’.  Giving advertisements in newspapers does not help. Major tourism destinations have terrible infrastructure and poor connectivity

Organic food presents a great opportunity for farmers , industry and India . We are missing a multi –billion dollar opportunity . If we work on this , I see that some farmers in every state can earn enough to have their own helicopters to spray insecticides etc and drive BMW’s .  Today , even after 62 years of Independence , when we think of farmers , the image that we get is that of an ill clad , dark skinned , white bearded old age person looking at the sky . We must live up to the fact that ‘ Farmers of the nation are the fathers of the nation’ and give top most priority to the sector. Government must allot land to the tillers. When government can acquire land for SEZ for big business houses why not for landless farmers !!

SEZ should not be allowed. No more development should be allowed in already crowded towns . New towns should be built in remotest part of the country .

Courier Service : Government must start courier service as a PPP with existing players or with unemployed youth . This can create lacs of jobs across India .

There is a lesson to learn from Dubai. The vision of one man could convert a desert into  a business and tourism hub ( Though they overdid it !! ). People from all over the world go to Dubai . India has a desert ( We too can have a desert safari ) and our products are cheapest . So we can have a shopping festival and our Duty free can be the cheapest in the world . But unfortunately , our politicians are ‘Duty Free’ !

Youth : We have reduced the age for voting and increased the age for retirement but no one thinks about lowering the age for employment . India is yet to ratify the minimum age convention ( No.138 ) of the International Labour Organization (ILO ). Rahul must rethink about the call to youth to join politics at young age and change the politics .Rahul has been running around the country to do that- I find this call quite ridiculous ! While Congress party is in power why are your people asking the poor Indians to join politics ? You run the government, and can change the things the way you want ! I would say let the youth do their jobs and let you do your job rightly. Please do not drag people for doing what you have already been voted for doing . Only message that you, or for that sake any politician must give is to ‘vote’ during elections and keep a watch on the tax payers money.

Remember it is not the defence, technology , Industry, SME , agriculture that will take the nation to the next level of growth, but it is the power of the youth that will push the nation ahead on 10 + % growth per year and we can do it only by empowering the youth with employment and wealth creation opportunities .

Today , every youth is disturbed by competitiveness and lack of options after doing hard work at school and college . Students are committing suicides . Please control the same . Those who are not committing suicides live worse lives .

Agriculture supports more than 65 % of the population but government still has a casual approach towards agriculture . In 2009, agriculture , forestry and fisheries grew negatively . If this sector can grow 4 % , the overall economy will grow more than 10 % . Which will be an all inclusive growth . Government spending in agriculture is neither planned and neither committed .  Occasional waver of loans does partially solve the problems of the past but does not open opportunities for the future .

Foreign policy : We do not have a single friendly neighbour . All our neighbours are hostile.

Our relations with the three big world powers are on a shaky ground . Recent statements made by Barack has created a lot of unrest in the IT & BPO industry. We are failing in our foreign policy

Internal security : Blasts in Pune and continuous increase in infiltration are not a good omen . Some areas of the country are not under the control of the government . Go and see in Darjeeling & Maoists areas which is approximately 1/6th of the nation . They run their rule of law  . Police and politicians fear treading into their territory .

Healthcare : I will not mention much about what needs to be done as i have already written to you about the same in November 2009. (Link https://rajendragupta.wordpress.com/2009/12/04/india-needs-massive-healthcare-reforms-rajendra-pratap-gupta/ .I read that the Ministry of Health & Ministry of Railways are working on setting up hospitals on railway land near stations . I believe that this is not the best option, as some of the medical equipments need pin drop silence ( For Electron Microscope , the doctors even have to stop their breath for a second to avoid any noise for the sake of accurate results ). Please drop this plan . Else , there could be more harm than general good . Remember bad decisions taken with good intentions are still bad decisions !!

You are building six AIIMS like institutes ,but you are not even able to control the exits from AIIMS ? AIIMS  has become a center of excellence due to its intellectual wealth and not due its buildings or medical equipments . You must realise this point . There is no fun spending thousands of Crores from our money ( taxes that we pay ) for things that you will not be able to manage .  Work out alternatives, or  go back to the drawing board .

I don’t see that the government has concrete plans for healthcare . Ideally , along with six AIIMS , government should have set up National Research & Resource Center for Diabetes, Similar centres for Epidemiology , CVD , Arthritis , mental health , Telehealth etc. Healthcare is becoming expensive due to the high cost of equipments. MRI costs a few thousand due to our lack of technical R&D . Our health minister must push more funds & incentives for research for technical & clinical R&D. This one factor will drive down the cost of diagnostics . Retail margins must be increased from 20 to 25 % for pharmacies so that the storage conditions can improve and the public can take medicines that are efficacious . Still you can drive down the cost of medications by asking doctors to write just generic medications. Please refer my earlier note on healthcare reforms sent to your office in November 2009.

Legal System or Judiciary ? : I will quote CJI , Justice K.G Balakrishanan , who apprehends public revolt because of delayed justice with an every –increasing back log . He once said ; For many , real life is different from reel life . Our judicial system has become an adjournment based judicial system  . Parties take stay order in initial date , and then never care to allow the case to proceed by seeking adjournments on one excuse or the other

My personal view is that , we do not have a judicial system at all. What we have is a legal system that works for the benefit of lawyers ,criminals & politicians in power. We can safely say that the current CJI will be sitting on some assignment after retirement. Similarly , we can say the same about our Chief Election Commissioner or the Chief of Armed forces or the Chief of CBI etc. The possible rehabilitation after retirement in return for their political obedience and return gifts.

Judicial system is one that not only acquits or convicts but delivers justice . Our judicial system delivers only incomplete judgements about either conviction or about acquittal ; mostly about acquittal. I will quote two cases for your better understanding

Jessica lall murder case : The judgement that came can be safely concluded as that ‘No one killed Jessica ‘ . This is what it meant when it acquitted the so called ‘Suspects’. Ideally a judicial system should have stated that Jessica was killed by ———– and he is found guilty and convicted . Stating that the suspect was not guilty and freed, the judiciary did not state who killed Jessica ? Why at all we call ‘Black coats’ as ‘Judges’ or ‘Justice’ ? . You cannot call it a judicial system !! It is a legal system where all can argue but outcome is one ‘Justice delayed if not denied or both in most of the cases’.

Second case – Babri Masjid :  It took few hours to demolish the mosque with all video clippings and it took 17 years to figure out who did it ? It took seventeen years for Justice Liberhan to deliver his ‘TRASH Report’ on the demolition of Babri Masjid. While a lot of finger pointing is being done at Raji Gandhi who did the Shilanyas in 1989 and opened the doors to the problem , then it comes to the turn of P.V.Narasmiha Rao, during whose ‘Rule’ the Masjid was demolished and lastly, comes the names of politicians like Atal Behari Vajpayee , Dr.Murli Manohar Joshi and Shri L.K.Advani et al. From different political perspectives , you can blame all of them or either of them !! History is always written by who wins the war !! This time the history was written by ——————-( Anyone’s Guess ) !!

Over the last few weeks i have followed the Liberhan Commission report , the discussions and the writings in the media about the blame game on this Babri Demolition . If i were Justice M.S.Liberhan , i would have concluded my report in just three lines .

When love fails , people resort to justice ,

When justice fails people resort to power,

When power fails , people resort to violence

My understanding is that ,the  Babri Masjid case has been running for decades. What the hell was judiciary doing for all these years ? Had they decided the case , the people would not have taken the law in their hands . History has proven that whenever law fails to deliver justice on time , people lose patience and take the law in their hands . So I would say that , neither Congress nor BJP nor Kar sevaks nor the politics of this nation was responsible for the demolition of the Babri Masjid . It was the failure of the Indian Judicial system that led to the demolition.  I have been reading that our CJI has been asking for reimbursements for his wife’s bill who travelled with him abroad. Shame on him ! India is running a huge budgetary deficit and the government is following an austerity drive .  CJI must understand that his legal system is a sham when it comes to efficiency but he has the temerity to demand allowances from a government in deficit . On the contrary , he should not have taken his spouse with him under the current circumstances and given up the cabinet status enjoyed by him as CJI .

RTI : We must move RTI online and provide information by email as well. Why should I have to go to a post office to give my form . Get an online payment gateway so that the people can use online application and get an online form . The process saves hassles of travel ( Fuel cost ), Paper ( Eco friendly ) and time .

Role of ministers : We have approximately 100 people who work as union ministers and it is their responsibility under your leadership to run this nation as per the mandate of the people.

Delay of the 3G auction has cost our tax payers a loss of approximately Rs. 7000.00 crore. Read this : https://rajendragupta.wordpress.com/2009/10/18/vulgar-salaries-indian-corporate-world/I would say that the basic responsibility of each and every minster should be measured on few Key parameters every six months against targets set for each . Incase people fail thrice, remove them. They cannot be wasting our money.

  1. Wealth creation – ironically no ministry works for it . Please don’t take divestment as wealth creation !
  2. Job creation
  3. Managing expenditure
  4. Regulation , controls & reputation ( Brand building for India )
  5. Protecting the citizens
  6. Enhancing the international foot print of their respective ministries as applicable .
  7. All the above should be self-sustaining  and the ministers must spend half of their work time amidst the public and not in the comforts of their AC cabins and cars.

Charitable public work cannot be a long term plan. It can at best work as a short time gimmick which costs exorbitant to the exchequer and loss to the citizens ; in a sense it is like a bottomless pit . One must remember that , any investment that does not build assets or results in outcomes that positively impact the future become ‘case studies of fraud, faulty implementation and finally, failure ‘

Dr.Singh, you are known for knowledge ,integrity and obedience to 10 Janpath . But that is no measure of your performance. I tried to rate you on the following parameters as a Prime Minister of India on a 10 marks report card for each of the following key performance Indicators:

  1. Performance on national integrity & Secularism: 00/10 ( India is fast becoming regional – A dangerous sign that can split India )
  2. Performance on Preparedness for war – defence capability – 2/10
  3. Performance on population control : 00/10
  4. Performance on forecasting , identifying key priorities : 00/10 .
  5. Performance on preparation and pro-activeness of the government for unforeseen contingencies : 00/10
  6. Performance on action time from the time of identification of problem : 3/10.
  7. Performance on Team work  :  5 /10 .
  8. Performance on foreign policy : 0.5 /10 ( 0.5 marks for signing the nuclear deal )
  9. Performance on law and order at home : 2 /10
  10. Performance on planning , fund allocation and utilization : 2/10
  11. Performance on enhancing the competitiveness of Indian industry & exports :  2/10
  12. Performance on making India’s voice heard in the global affairs : 3/10
  13. Performance on rural upliftment  – farmers , rural infrastructure : 3/10
  14. Performance on healthcare : 2/10
  15. Performance on delivery of justice : 00 /10
  16. Performance on Raising funds from divestment, issue of Telecom licenses : 1/10
  17. Performance on wealth creation in India : 00 /10
  18. Performance on brand building for India : 1/10
  19. Performance on climate change : 00 /10
  20. Performance on empowerment of youth : 1/10
  21. Performance on women welfare : 1/10
  22. Performance on long term planning : 00 /10 ( Infact, there is no plan )
  23. Performance on budget / deficit : 2 /10
  24. Performance on approvals / industry : 3/10
  25. Performance on SME : 2/10
  26. Performance on Education reforms and capacity building including vocational courses : 2/10
  27. Performance on infrastructure creation & new towns : 1/ 10
  28. Performance on curbing corruption : 00 /10
  29. Performance evaluation of the team / reports : 00 /10
  30. Performance on transparency & accountability of public servants and representatives  : 00/10
  31. Performance on public perception : 2 /10 ( This was much higher before elections in 2009 )
  32. Overall performance versus commitment & mandate : 1.5 /10

Dr.Singh , i believe that leadership is performance and you are failing badly. Time to shape up  !! Good image is not performance !I am not surprised as your team of advisors lack ‘common man’ and internal critiques . You have advisors who are out of touch with reality . Correct this immediately .

As a honest tax payer , it is my duty to seek answers from the people who use our money and run the ministries and as bureaucrats . Every minute you people spend in your office or every inch that you move is funded by money collected as tax from people like us . I need your response

Please respond at your convenience . Should you require any details , feel free to connect . This is an environmental friendly mail and so not sending a hard copy

Best wishes & with warm regards

Rajendra Pratap Gupta

Email : office@rajendragupta.org

Office.rajendra@gmail.com

Cell : +91 9 22 33 44 542

Aditya Birla Retail – Dead end ????


Aditya Birla retail seems to be nearing a dead end. With arround 640 stores and losing close to Rs.30 crore a month. It might be the most difficult business for the Birla Group so far. What is interesting to note is , that there are 640 stores, and out of them 100 stores are having a sales of Rs. 5 to 6 per sq.feet. Whereas , the expenses are above Rs.200 per sq.feet. Knowing well, that any expenses including rental , if exceeds Rs.110 per sq.ft. It is a loss making proposition.

All this started with Kumar Managalam pushing for numbers in the initial days. Due to intense pressure, Sumanta Sinha did what the master expected. So the pressure filtered downwards , leading to the number game and the quality of the locations and the rentals were compromised heavily.

Now more than 100 stores need to be closed in my view, and earlier the better, or the business gets on the block. The grapevine is, that Mckinsey is doing a valuation excercise.

Adding to this mistake of chasing number game is the expat seniors who take crores of package , and learn the Indian retail business at the expense of the biggies like Reliance or Birla’s. Time will tell us, those who don’t know what is being sold and where, are teaching India how to sell ???

Hiring expats is another stupidity from the Indian retailers. Who will learn the lesson the hard way.