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Economy on the move Jamming
jails |
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Allies
in Lalooland
Save the retailer
Remembering a
“Noorjahan”
More phones at
cheaper rates From
Pakistan
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Economy on the move It has been rare for the country to usher in a New Year with such optimism. The state of the economy inspires hope. Foreign institutional investors and rating agencies are upbeat on India’s future. The GDP growth is pegged at 6.5 per cent despite a slowdown in agriculture. The exports have gown at 24 per cent. This is despite the dollar fall vis-a-vis rupee. The BSE sensex has touched a new high of 6,680. Corporate results, by and large, have been encouraging. Indian companies mobilised a staggering amount of Rs 30,511 crore in 2004. Who should get the credit for the feel-good situation? The measured response of the Manmohan Singh government to the challenge of the global oil price rise has been its most significant achievement. Even the World Bank has recognised this. After a steep rise, inflation is on the retreat. Pushing bits of reforms despite hurdles put up by the Leftist allies of the government is also commendable. Much of the economy, however, now swings up and down with global trends. Global developments and the monsoon largely decide the shape of things to come. The base of India’s economic upswing is narrow and fragile. Rural India is yet to benefit from reforms. The vast majority of the population and a large part of the industry depend on agriculture, which is not keeping pace with the march of the industry. Only select sectors of the economy like the IT, steel, textiles and services are growing robustly. The manufacturing sector needs a push with labour law reforms and technological upgradation. Food processing potential remains untapped. Tourism has not grown fully for lack of infrastructure. Global rating agency Standard and Poor’s latest observation is quite valid: “The Indian government runs larger fiscal deficit and has accumulated more debt as a share of GDP than its Chinese counterpart... India is unlikely to follow the path of East Asian Tigers... It may follow the path of Thailand or Italy, which experienced good economic growth and falling poverty thanks to a dynamic private sector, despite many years of squabbling coalition governments”. The Indian economy is indeed on the move and the world as well as India itself have begun realising it. |
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Jamming jails THE concern of the Supreme Court over the use of mobile phones by the inmates in various jails is understandable. But it is difficult to concur with the solution the court has thought of. It has asked the mobile phone companies to study the feasibility of installing "jammers" in all jails. Since the state governments have to bear the burden, the phone companies may not have much problem in installing the devices that will jam the mobile phones within a specified area. Already such jammers are used by security agencies, restaurants and hospitals. In other words, it is technically possible to bar use of telephones in jails. But the question is, does the situation warrant use of such hi-tech equipment to deal with it? As is well known, the Supreme Court woke up to the problem when it was found that Pappu Yadav, accused of many heinous crimes, had access to a mobile phone in his cell. A search ordered by the High Court found that use of mobile phones by influential criminals was not unusual in most of the jails. How does this happen? Anybody who knows anything about the jail manual knows that it prohibits the inmates from keeping in their possession anything other than a pair of clothes, bedding and basic utensils. Full body search is conducted every time they are taken to the courts and brought back. So there is little scope for the inmates to smuggle in mobile phones. What this points to is the high-level of corruption in jails where the moneyed and the influential can buy any comforts they need. The terrorists who escaped from the central jail in Chandigarh by digging a long tunnel had all modern gadgets in their cells. All this happens because of two reasons, laxity in the enforcement of rules and rampant corruption. Responsibility for lapses is seldom fixed even when it leads to situations like criminals organising mega parties inside jails. Even if jammers are installed in all jails, there is no guarantee that influential persons like Pappu Yadav will not be able to communicate with their chosen people. A jammer will not distinguish between the mobiles of the jail officials and the jailbirds. Such implications also need to be studied before going ahead with the proposal. An easier and simpler option will be to follow the jail manual in both letter and spirit. |
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Allies in Lalooland With political parties gearing up in right earnest for the coming assembly elections in Bihar, the first round of the contest is between partners within the UPA and the NDA. The bigger problem is for the UPA because it has bigger stakes, besides being in office both at the Centre and in the state. Unlike in the Lok Sabha election, for the assembly poll, the Congress is in no mood to be fobbed off with a handful of seats. For his part, Mr Laloo Prasad Yadav’s Rashtriya Janata Dal is determined to retain the bulk of the seats. The Congress party with a mere 14 seats in the 243-member assembly is demanding 113 seats whereas the RJD is not inclined to part with a total of more than 43 seats for all the allies, including the Congress; and the Congress is in no mood to settle for this. But nobody is crunching numbers yet as these are figures floated around to get the negotiations started. Mr Laloo Prasad may be the most vocal supporter of Congress President Sonia Gandhi, but when it comes to his fiefdom, he is not unwilling to part with more than a few seats. The Congress knows that if it stands decimated in Bihar today, it is because of Mr Laloo Prasad and it was in recognition of this that it settled for a mere four seats during the general election last year. But now, being at the head of the ruling coalition, the Congress presumes that it can beat the RJD into submission. The RJD chieftain is refusing to play ball saying that winnability cannot be compromised to accommodate the Congress. The Congress, which has defended the indefensible – retaining tainted ministers — in the Union Cabinet with an eye on the assembly elections – now feels that the RJD must reciprocate by sharing seats more generously. The RJD is unyielding. However, it is early days yet. The fun and games are just beginning. At stake for the Congress is its future in Bihar; it cannot mortgage it to Mr Laloo Prasad’s whims. |
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There can be no economy where there is no
efficiency. — Benjamin Disraeli |
Save the retailer
The
retail industry in India is often hailed as one of the sunrise sectors. AT Kearney, the well-known international management consultancy, recently identified India as the “second most attractive retail destination” from among 30 emerging markets. This has made India the cynosure of many foreign eyes. With a contribution of 14 per cent to the national GDP and employing 7 per cent of the total workforce or 42 million (only agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian economy. It is the largest component of the services sector. The retail industry is divided into organised and unorganised sectors. Organised retailing refers to businesses employing more than 10 persons and includes the corporate-backed hypermarkets and retail chains. The organised sector accounts for just 2 per cent of the trade and employs just five lakh persons. Unorganised retailing refers to the traditional formats of low-cost retailing such as the local kirana shops, owner-manned general stores, paan/beedi shops, convenience stores, handcart and pavement vendors, etc, and employs over four crore persons. Obviously, India’s retail sector is highly fragmented, with about 11 million outlets operating in the country and only 4 per cent of them being larger than 500 square feet in size. Its greatest contribution is that it is labour-intensive. Compare this with an employment of just 0.9 million in the US, yet doing a business more than 13 times of the Indian retail market size. Estimates vary widely about the true size of the retail business in India. AT Kearney has estimated it to be Rs 4,00,000 crore, which is poised to double in 2005. On the other hand, if one used the government’s figures, the retail trade in 2002-03 amounted to Rs 3,82,000 crore. One thing all consultants are agreed upon is that the total size of the corporate-owned retail business was Rs 15,000 crore in 1999 and it is poised to grow to Rs 35,000 crore by 2005 and keep growing at a rate of 40 per cent per annum. A simple glance at the employment figures is enough to paint a good picture of the relative sizes of these two forms of trade in India. Organised trade employs roughly five lakh people, whereas the unorganised retail trade employs nearly 3.95 crores! According to a GoI study, the number of workers in retail trade in 1998 was almost 175 lakhs. Given the recent numbers indicated by other studies, this is only indicative of the magnitude of expansion the retail trade is experiencing, both due to economic expansion and the “jobless growth” that we have seen in the past decade. That about 4 per cent of India’s population is in the retail trade says a lot about how vital this business is to the socio-economic equilibrium in the country. Food sales, estimated to be 60 per cent of all retail business, is a very large segment of the economic activity in the country. Due to its vast employment potential, it deserves very special focused attention. Efficiency enhancements and an increase in the food retail sales activity would have a cascading effect on employment and economic activity in the rural areas for marginalised workers. Thus even without FDI driving it, the corporate-owned sector is expanding at a furious rate. The question then that arises is that since there is obviously no dearth of indigenous capital, what is the need for FDI? It is not that retailing in India is in the need of any technology special to foreign chains. But a report prepared by McKinsey & Company and the Confederation of Indian Industry (CII) predicted that global retail giants such as Tesco, Kingfisher, Carrefour and Ahold were waiting in the wings to enter the retail arena. This report also states that the Indian retail market holds the potential of becoming a $300 billion per year market by 2010, provided the sector is opened up significantly. It does not talk about creating additional jobs however, which should be the prime concern of the policy maker. One of the principal reasons behind the explosion of retail and its fragmented nature in the country is the fact that retailing is probably the primary form of disguised unemploy-ment/underemployment in the country. Given the already over-crowded agriculture sector, and the stagnating manufacturing sector, and the hard nature and relatively low-wage jobs in both, many million Indians are virtually forced into the services sector. Here, given the lack of opportunities, it is almost a natural decision for an individual to set up a small shop or store, depending on his or her means and capital. And thus, a retailer is born, seemingly out of circumstance rather than choice. This phenomenon quite aptly explains the millions of kirana shops and small stores. The explosion of retail outlets in the more busy streets of Indian villages and towns is a visible testimony of this. The presence of more than one retailer for every hundred persons is indicative of the lack of economic opportunities that is forcing people into this form of self-employment, even though much of it is marginal. Because of this fragmentation, the Indian retail sector typically suffers from limited access to capital, labour and real estate options. Since jobs are so hard to come by, retailing with low capital and infrastructure needs is by far the easiest business to enter, and as such performs a vital function in the economy as an alternative social security net for the unemployed. India, being a free and democratic country, provides its people with this cushion of being able to make a living for oneself through self-employment as opposed to, say, China where society is highly regulated. In this light, one could brand this sector as one of “forced employment”, where the retailer is pushed into it purely because of the paucity of opportunities in other sectors. Let alone the average Indian retailer in the unorganised sector, no Indian retailer in the organised sector will be able to meet the onslaught from a firm such as Wal-Mart — when it comes to that situation. With its incredibly deep pockets, Wal-Mart will be able to sustain losses for many years till its immediate competitor is wiped out. This is a normal predatory strategy used by large players to drive out small and dispersed competition. This entails job losses by the millions. A great deal of prudence should go into policy-making. Rather we seem to moving towards a policy steamrolled obviously by vested interests acting in concert with the CII and FICCI. In this context we must be concerned about the statement the Finance Minister, Mr. P. Chidambaram, made while making the mid-year review for 2004-05. On retail, the review noted that creating an effective supply chain from the producer to the consumer is critical for development of many sectors, particularly processed and semi-processed agro-products. In this context, it says, the role that could be played by organised retail chains, including international ones, merits careful attention. Indeed, a hard look is called for, but not just through Mr Chidambaram’s eyes. |
Remembering a “Noorjahan”
JULIA Glancy, the wife of Sir Bertrand James Glancy, Governor of pre-partition Punjab from April 8, 1945 to April 7, 1946, used to be called “Noorjahan” of Punjab at that time by the Urdu press of Lahore because of her beauty, assertiveness, prudence and advisory role with Sir Glancy. The simile given was that of Empress Noorjahan and her control over Emperor Jehangir in Mughal period (not to be misunderstood with Noorjahan, the famous singer and actress of Pakistan who came from a Kanjar family of Kasur). Sir James Glancy was an ICS officer of the 1906 batch and belonged to the Delhi, Punjab NWFP and Baluchistan cadre. He was a popular officer during his long service. Sir Glancy initially wanted to remain a bachelor. However, while working as Commissioner of Lahore division in 1929 he suddenly changed his mind and fell head over heels in love with Julia; the daughter of a retired Colonel of the British Indian Army who lived in Shimla. Julia was 20 years younger to Sir Glancy and was teaching in F.C. College of Lahore at the time of her marriage. As Lady Governor Julia Glancy made her conspicuous presence felt in social circles of Lahore. Such was the wiseness and sagacity in her replies that some of her off-the-cuff remarks used to make news items in the Lahore press. One such incident took place in Shimla. The Shimla of those days had only one British-owned petrol station. Once while on a visit to Shimla, Governor Glancy and Julia stopped there. The British clerk on duty had come from Liverpool like Julia. He stoically and gleefully addressed the lady and said: “Remember me? We dated in high school”. “I remember you,” said Julia. Governor Glancy, who heard the remarks, said: “I’ ll bet you’re glad you married me and not him.” “Why do you say that” Mrs Julia Glancy wanted to know. “Why”, echoed Governor Glancy a bit impatiently, “because he’s a petrol clerk and I am Governor of Punjab”. “Sure”, said Julia,” but if I had married him then he would have been the Governor.” Once during World War II, when Julia learnt that her husband donated his monthly salary of Rs 8533 to the government’s war efforts she cried before a group of journalists: “I wish he had donated some of it to me.” One of her famous remarks about Indian social relationships is still remembered and that was when she addressed the students of Kinniard College for Girls: “In India the strongest human relationship is between mother and son and not husband and wife.” This “Noorjahan” died 10 years ago, on December 31, 1994, at Liverpool.
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More phones at cheaper rates Telecom Commission Chairman Nripendra Misra says this level of target will require a “paradigm shift” in telecom policy. Mr Dilip Modi, President of the COAI (Cellular Operators Association of India), insists that the industry as a whole should avoid duplication and telecom should be treated as a basic utility service like power, water or roads where infrastructure built with government money is shared by all operators. Without committing himself on infrastructure sharing, Mr Misra adds the Telecom Commission would like to be “facilitator” for this paradigm shift. BSNL and MTNL largely own infrastructure of wireline telephone reaching out to 45 million subscribers across the country. Of the 35,000 exchanges, 30,000 are connected by optic fibre now but the exchange to customer premises, called local loop, is largely copper wire. The Telecom Regulatory Authority of India wants this copper wire to be available for competitors of BSNL/MTNL to run broadband services, specially to rural areas, at a heavily slashed price. Using what is known as DSL technology, the copper wire that has a present capacity of 64 kilobits per second bandwidth could be made to provide 256 kbps connectivity — the standard set for broadband in India. Besides, the four lakh route km of fibre with BSNL has huge bandwidth of up to 20 Gigabits per second ( 20 billion bits per second) to each exchange. This fibre capacity can also be shared with private Internet and broadband operators. The government has not accepted the TRAI proposal for “unbundling of the local loop”. So BSNL’s copper wire would not be available to others. BSNL itself is launching broadband services on it giving it on franchise to private operators under BSNL logo. But TRAI hopes that the fibre cables with BSNL will be allowed for all operators to run broadband services using their bandwidth. For exchange to customer connectivity wireless technologies could also be used like Wi-Max, the futurist development in wireless or the already available wireless CDMA or CorDECT technologies. BSNL opposes this sharing as it will give unfair advantage to its private sector competitors who have consistently ignored the obligation they took up to provide rural connectivity when they got the basic service licence in 1995. (Instead they pay 5 per cent of their revenue to a universal service obligation fund out of which rural connectivity is subsidised this year onwards). In sharp contrast BSNL, points out its Finance Director S.D. Saxena, has made a huge investment in reaching out to all but 66,000 of the six lakh villages already. BSNL itself has plans to provide 2 million of its 40 million customers with broadband services by 2006 itself using franchising of its logo to private operators. The private operators have not shared infrastructure even among themselves. In Delhi alone each of the four mobile operators has put up 750 towers to support their separate infrastructure while they could have saved a lot by sharing just one set of 750 towers between them. They are lately learning to do that. They have been demanding that MTNL in Delhi should let them use its space in its exchanges to locate their facilities, but MTNL opposes this with its own arguments. TRAI Chairman Pradip Baijal favours infrastructure sharing even warning BSNL that without such sharing, its fibre capability would remain largely unused. But BSNL has the grouse that he is unfair to its interests. The PSU is extremely concerned at the TRAI’s proposal to further reduce the access deficit charge that private operators pay to it for the losses it suffers in providing call charges at much lower rate than what is justified by the standard rate of return on its investment. Baijal’s favourite one liner is that “universal service should be seen not as an obligation but as an opportunity.” The 30 paise per minute which is ADC for domestic calls and Rs 4.50 per minute that is the ADC for international calls, is also leading to the emergence of a gray market where private operators are showing international calls as domestic calls. The two PSUs and the DoT together have recently fined Reliance Rs 400 crore alleging such diversion. BSNL sources say that TRAI might reduce ADC for international calls as well in a bid to end this gray market. Telecom Commission Chairman Misra says ADC is not the only reason why the gray market exists. The commission has initiated other steps too against the call diversion and they were showing results. Baijal insists that only by further reduction in mobile phone tariffs could a doubling of subscriber base every year be achieved. He displayed graphics at a Broadband India 2005 event to emphasise how subscriber base for mobiles shot up from 13 million to 34 million in just 12 months of 2003-04 with the tariff reduction and calling party pays reform the TRAI recommended since March ‘02. He has already indicated that operators must be prepared for further reduction in tariff to accelerate this sharp rise in subscriber base. Industry leaders believe that the major driver of broadband will be services like electronic governance, telemedicine and distant education rather than entertainment. Content development for this emerging demand will have to be simultaneously launched if the proposed mobile and broadband revolution is to be fruitful. |
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From Pakistan MULTAN: Five brothers with their four accomplices allegedly killed their sister, her husband, infant son and two others over “honour” in Khanewal on Tuesday. “It is a case of honour killing because Munawwar Mai eloped with and married Mukhtar Ahmed in 2001. She gave birth to a son Mohsin, 2, but her family nursed the grudge and allegedly killed her and her in-laws,” said Khanewal DPO Dr Jamil Ahmed. He said they had arrested five accused. However, four of the brothers were at large. The police said Ashfaq Ahmed, Mumtaz Ahmed, Ijaz Ahmed and Zahoor Ahmed and five others raided Mukhtar’s home early in the morning. They killed the victims, who were sleeping, with pistols and rifles.
— The News
Canal system to
be remodelled
LAHORE: The Balochistan government has signed an agreement with two local engineering firms for remodelling the Pat Feeder irrigation system. The project is estimated to cost Rs 2 billion. The provincial irrigation and power department signed the agreement with a joint venture of the National Development Consultants (NDC) and Engineering Consultants International Limited (ECIL) for preparing a detailed design of the project and providing engineering services, including the project’s construction supervision. An NDC spokesman said here on Tuesday that the Pat Feeder irrigation system, including the Kirthar, Uch and Minulty canals, would be remodelled within the next three years that would increase their capacity from 6,700 cusecs to 8,560 cusecs and bring an additional area of 159,000 acres under cultivation.
— The Dawn
Opposition’s slot for PPP
ISLAMABAD: The government has contacted the People’s Party Parliamentarians (PPP) afresh to seek its cooperation in running the forthcoming sessions of the Senate and National Assembly smoothly and in return offered the slot of opposition leader in the Senate to it, sources told Dawn here on Tuesday. The party sources said Senate Chairman Mohammadmian Soomro had invited PPP parliamentary leader in the Senate Mian Raza Rabbani in his chamber to discuss the ways to run the session smoothly. Ruling party secretary-general Senator Mushahid Hussain and ARD parliamentary secretary Izhar Amrohvi were also present at the meeting, the sources said.
— The Dawn
50 pc below poverty line
KARACHI: According to a report published by SPDC here recently, the incidence of poverty is much higher in Balochistan than in any other province. The position is much better in Punjab, said the report. On an average 48 per cent people are living below poverty line. The condition in rural areas is worse as 51 per cent population does not have proper food, clothing and shelter. Moreover, they do not have access to pure water, health and education. It can be concluded that about 50 per cent of the people are living in a miserable condition. The report says that overall and rural poverty is the lowest in Punjab, 26 and 24 per cent respectively. On an average, the incidence of poverty in Balochistan is about twice that of Punjab. The incidence of overall as well as rural poverty in the NWFP is the lower, 29 and 27 per cent than in Sindh.
— The Nation |
Who the name of God recites, His arduous toil is over, indeed, redemption-lit his visage shines, and many others he has freed. — Guru Nanak Do not be impressed by empty numbers. A poem may have thousands lines yet mean nothing. One word of sense which makes a man reflect is better than all such poems. — The Buddha  |
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