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Lights
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Learn
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Parallel
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Triumph
of Europe Organised retail on
the rise Father may have known
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Cream matters
THE decision of the Union Cabinet on Friday raising the creamy layer income criterion from Rs 2.5 lakh to Rs 4.5 lakh for providing the Other Backward Castes (OBCs) the benefit of reservation in professional institutions like the IITs and the IIMs as well as government jobs does not come as a surprise. It has been planning such a move ever since the National Commission for Backward Classes recommended it in July last. Moreover, after the Supreme Court firmly rejected any quota benefit to the creamy layer among the OBCs, the UPA government at the Centre has been under pressure from its allies to find a way out and accommodate their wish. Its coalition partners like the DMK, the PMK, the Rashtriya Janata Dal and the Lok Janshakti Party have been forcing the government to safeguard the interests of the OBCs and protect their vote banks. As the Supreme Court has upheld the constitutional validity of the Central legislation for the OBCs, no one would grudge the Centre’s attempt to extend the quota benefit to a much larger section by raising the creamy layer income criterion. However, it remains to be seen to what extent it would help the actual beneficiaries. There is a general impression that it is the creamy layer among the Scheduled Castes and the Scheduled Tribes that has been knocking off the quota benefit, leaving the really deserving ones in the lurch. It is feared that the same experience may be repeated in the case of the OBCs too. While upholding the Mandal Commission’s recommendation, the Supreme Court had introduced the creamy layer concept. Owing to unprecedented inflation, raising the creamy layer income criterion may seem justifiable, but it should also stand the test of judicial scrutiny. In fact, the very purpose of reservation will be defeated if the children of ministers, MPs, MLAs, rich farmers, bureaucrats, engineers and doctors, all of whom constitute the creamy layer, enjoy quotas. Opinion is sharply divided on the very concept of creamy layer. The protagonists would do well to appreciate that its exclusion will help the cause of the backward castes much more than its inclusion.
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Lights off
IT takes a strike that turns off the lights, camera and action to see how badly Bollywood treats its workers. Not only are many of those working down the line paid low wages, but even these wages are not paid regularly. In fact, payments are delayed by months and, often, as long as a year. In a world where one sees only the stars on the firmament and not the reality of those who sweat it out on the ground, it is high time that labour is given its due. Behind all that glamour and glitter are over a lakh of workers who toil for the success of the blockbusters and to make the cash registers ring. It is a cruel paradox that these workers, who prop up the “hero” on the screen and bring alive his “heroic acts” should be the victims of such villainous deprivation. India produces the largest number of films in the world and Bollywood is estimated to account for about 1000 productions a year. Media and entertainment are expanding as never before. Given the boom in this business, which has brought in unprecedented money, it is appalling that the film industry has failed to ensure proper pay and working conditions. Although there are unions for cine workers, most producers violate wage agreements, bypass organised labour, hire people on daily wages and are generally negligent about their obligations to those they employ. The exploitative practices in the film world should be put an end to and decent work standards created, especially at a time when the industry is acquiring a corporate culture and is more organised in terms of finance and production. A few top movie stars are reported to have “heeded” the non-cooperation call of the cine workers. These megastars, who collect their big bucks upfront, need to do more than lend their name and face to the workers’ cause. It is in their interest, as much as in that of the industry, to make sure that the workers engaged in their productions are paid decent wages and on time.
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The hottest places in hell are reserved for those who in times of great moral crises maintain their neutrality. — Dante
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Learn from the US THE scourge of terrorism has not spared any major country. Even a super power like the US had its share of embarrassing moments. The US used to have a multitude of agencies to deal with the menace of terrorism, but in the absence of a unified nationwide command and control system, it was becoming difficult to deal with this monster. The magnitude of the embarrassing death and destruction on September 11, 2001, was so enormous that the nation was left with no alternative but to move into a swift and decisive forestalling and preventive regime. The Department of Homeland Security is the end product of the US efforts to rid itself of the scourge of terrorism. After the latest bomb blasts in the heart of India’s national capital, we are left with no alternative but to create our own, equally broad-based department of homeland security. On a cumulative scale, over the years, India has suffered much more destruction in terms of loss of life, limb and property, but we are uniquely bestowed with so much patience and fortitude that we take every tragedy in stride and move on as if nothing had happened. This uncommon tolerance in our psyche has emboldened the would-be terrorists into bigger and more destructive actions in future. To start with, the US had a fiercely independent Federal Bureau of Investigation (FBI). Once its powerful director is appointed, with the mutual consent of the President and the US Congress, no authority, however powerful, is permitted to interfere in its investigative and professional independence. On the contrary, its counterpart in India, the Central Bureau of Investigation, is firmly under the control of the Prime Minister and the Home Ministry. In order to give more teeth to the FBI, it has been made an integral part of the newly created Department of Homeland Security. The US is highly prone to hurricanes, twisters, tropical storms, river flooding, forest fires, earthquakes and other catastrophic natural calamities. Since the states, even in the US, have poorer fiscal resources compared to the Federal Government, a centrally funded “Federal Emergency Management Agency” has been in existence for decades in that country. This agency has also been made a part of the newly created department. In order to control entry and immigration into the US and to accord citizenship rights to the legally admitted aliens (green card holders), there is an agency called the “US Immigration and Naturalization Service”, which used to be administered as a separate agency under the US Department of State. This agency has now been renamed the “U.S. Citizenship and Immigration Service” (CIS) and merged into the Department of Homeland Security. This agency has started finger printing of all incoming foreigners. Previously, every illegal entrant had a lot of rights of appeal against the actions of the immigration and naturalisation service. He/she could not be deported without the culmination of a prolonged litigation process in the US court system. Now, under the new department, the citizenship and immigration service has the right to deport the suspects and criminals to the countries of their origin without going through elaborate legal proceedings. Even the legally admitted aliens (those holding green cards), if caught and convicted of a serious crime, can be deported to the country of origin. Some of the alien registration card holders are subjected to elaborate finger printing process involving all ten fingers before their applications are approved for citizenship. Applications for citizenship can be kept under name and identity check for several years until it is established beyond doubt that the nation will not be harmed by conferring citizenship on the alien. These stringent measures have helped in reducing crimes against the state and the citizens of the US. Some suspicious people are not even allowed to land in the US. They are bundled up at the ports of entry and deported back to their countries of origin in the returning flights. Such tough actions, which cannot be appealed, have had the desired results. A criminal now thinks twice before embarking on a journey to the US. In India, our problem goes back to 1970, when hordes of refugees poured into the Indian states of West Bengal and Assam from across its border with the then East Pakistan. More than 10 million refugees entered India in a year’s time. Even after the end of the Bangladesh war, when there was a pro-Indian government in Bangladesh, no genuine effort was made to deport these foreigners back to their newly liberated country. A majority of those crossing illegally into India stayed put in their new home. The careless and laidback attitude demonstrated by the authorities of India and the affected states, encouraged so many of their brethren in Bangladesh to enter India clandestinely. According to some estimates, there are 25 million illegal Bangladeshis living and working in India today. Among them are several criminals and anti-India elements. These sleeper cells normally lie low, but when the need arises, they can become a part of the network of terror in the country. India has not been able to identify and deal with such elements. The intelligence agencies in Pakistan and Bangladesh have infiltrated into this Bangladeshi refugee population and they are using these elements as the carriers of explosives and contraband materials. The undocumented refugees from Bangladesh have not confined their activities only to the states surrounding Bangladesh, but have spread to virtually all the states of India. It appears that the Government of India has no will to deport these elements. Several of them have acquired ration cards in their new cities and towns and many have got registered as voters. Every passing day is making it more and more difficult to identify and deport these illegal Bangladeshis. No efforts have been made to fingerprint these people to create a database, which could be helpful in identifying the criminals, by comparing their data with that obtained from the scenes of terror strikes. The present situation in India is not conducive to fighting terrorism. After a new terrorist incident, the Central Government routinely passes on the blame to the state governments and if the state government belongs to an opposition party, its government takes no time in passing on the blame to the Central Government. Such a blame-game hampers proper investigation. Right now the states in India, particularly those ruled by the BJP, are resisting Central intervention in their sphere of influence. But the American experience of the Department of Homeland Security indicates that in the long run the states will benefit from the “Indian Department of Homeland Security”. Why should the states not allow the Central Government to assume full responsibility in dealing with the incidents of terrorism? In the US, the Department of Homeland Security has huge sums of money at its disposal. It aids the states, financially and logistically, in upgrading their security apparatus. They acquire and distribute new weapons to the state law-enforcing agencies and they impart training in the use of these weapons. Even in the event of devastating floods, earthquakes, twisters and hurricanes, the department undertakes relief and rehabilitation efforts and the states are required only to cooperate with it. I think India’s financially poor states will, in the long run, gain a lot from the Indian Department of Homeland
Security.
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Parallel lines TAKE my number, and chill, no parallels in my house,” said a schoolgirl to her friend at the school gates. “You are so lucky! Our phone has a parallel in every room, even the kitchen!” came the disgusted response. While parents have a lot to say about the lifestyles of their children, it is interesting to hear (overhear?) what children have to say about their parents. Surely having parallel lines for the lone house telephone could only be a convenience tool, not an espionage device! But look at it from the child’s point of view. Parental involvement is seen by the peer group as interference, safety measures are seen as surveillance tactics. Parents know best but children think they know best. Children want freedom but parents like to retain the reins. If one reflects on how our parents masterminded our every step and generally controlled our lives in the name of good parenting, one would think that our children have a really easy time growing up. After all, we are indulgent without being interfering, appreciative without being demanding and tolerant of their small and big mistakes. We ferry them around to summer workshops and carpool them to swimming lessons. We nurture their educational pursuits and cheer their bungee jumping efforts even as our hearts stop beating in fright. We buy them shoes worth a week’s salary, hoping our parents (their grandparents) won’t notice; who wants to hear one’s parents clucking in disapproval at our supposed extravagance ! We sit through dubious high school musicals and clap proudly at athletic meets. We accept and even try to like their strange friends, reminding ourselves that we will have to welcome their future spouses too, no matter what. We provide our children with a trapeze artist’s safety net, as if telling them, “Go ahead and soar, we’ll hold you should you fall.” Our generation of parents is so keen to get it right. We look at safety devices for our homes and security gadgets for our kids with equal gusto. Times are tough for kids, crime is high and no place safe enough if even parents are suspected of killing or harming their children. A Latin maxim comes to mind - ’Quis custodiet ipsos custodes’, meaning, ‘Who will guard the guards’. Nobody has cracked the parent’s paradox : you can equip your child with taekwondo lessons but who will keep an eye on the taekwondo teacher! Precisely why our lines must stay abuzz with communication. Like the book goes, ‘talk so kids will listen and listen so kids will talk.’ We worry because we fear our children will follow our example instead of our advice, I read recently. Elsewhere, a wry metro slogan, circa 2007 goes, “Our enemies are reborn as our children!” Wisecracks abound. Parallel telephone lines may be symbolic of parental mistrust even if intended merely to make conversations possible sitting anywhere in the house. You do not have to actively eavesdrop on a conversation…it’s just an uncomfortable feeling that makes for disharmony and stress. After all, parallel lines never meet! To be an unparalleled parent, one must be cool (kewl, folks!) and very very
lucky!
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Triumph of Europe
President
Sarkozy has called European leaders to Paris on Saturday to discuss what everyone is fatalistically calling the global financial crisis. But it is not a world financial crisis, is it? It would be more accurate to describe it as a crisis of what the French used to call, with a contemptuous Gallic shrug, the “Anglo-Saxon model”. This is the high-salary, low-tax, easy-credit model that has now been exposed for the con it always was. The Continental Europeans - and they could be forgiven for pointing this out at the very top of their communiqué - ran their economies according to a very different, social market, model. It is a model that has now been triumphantly vindicated. In the Anglo-Saxon world, of course - that is, in the US and Britain, but not many other places - you will hear it argued that globalisation lands us all in this together. But this confuses cause and effect and blurs responsibility. The Continental European economies are affected only in so far as they have been contaminated by US and British excesses. The German, Dutch and Icelandic banks that have needed rescuing were in trouble because they fell for the seductive patter of our transatlantic friends. In Europe, the crisis is more one of fear than insolvency. The vast majority of European financial institutions - and that includes the Spanish bank, Santander, which is buying up ailing chunks of our own financial sector - are not in difficulty. They have stuck to a more old-fashioned form of banking: more local, more personal and more responsible. Until very recently, the differences between banking in the UK and France were glaring. Our British bank seemed to be a stream of lost letters, call centres, confused lines of responsibility, deceptive savings rates and offers of “financial products”. Banking in France meant a direct phone number to the branch manager, emails if needed, and a stern letter and interest charges if the account went a centime overdrawn. Alas, “financial products” and call centres have been gaining ground there, too, along with many other aspects of the Anglo-Saxon model, such as casualisation of the work force. And regrettably, the British bear much of the blame. Citing our - as it now turns out, inflated - growth, we were enthusiastic advocates of the so-called Lisbon agenda, designed to make the European Union more “competitive” - competitive being defined by the particular economic indices that showed Britain and the US to best advantage. The growth rate was king; and the sure way to growth, as we argued it, was deregulation of pretty much everything that remained in the public sector. Why this diktat of the growth rate - rather than, for instance, sanitary housing, clean air or low crime - deserves to be debated at more leisure. But the French and Germans spent the best part of the next eight years figuring out how to meet the Lisbon targets without sacrificing too many positive elements of their way of life. The political and institutional contortions this entailed were little short of heroic. Angela Merkel’s centre-right alliance barely won a German election fought on this very issue. Looking back, the hectoring that the French and Germans suffered from Tony Blair and Gordon Brown about their supposedly stagnating economies, high unemployment and short working hours deserved some smart ripostes about the less desirable by-products of the Anglo-Saxon model, such as unstable house prices, violent crime, hospital infection rates and low educational attainment. Our high employment and low tax rates should have been exposed for what they were: very similar, or inferior, to those of our Continental neighbours, only disguised by stealth accounting. If only, it is tempting to wish, the Continental Europeans had not been swayed by our boasts and burnished statistics, there would now be an
alternative economic template out there. It would be a social market model that preserved a balance between private and public, services and manufacturing, domestic and global, and kept the issuing of credit within bounds. Unfortunately, that model has been so adulterated that it will be hard
to reconstruct. The tragedy of the present crisis for Europe - a tragedy that must take its place alongside the individual tragedies of repossessions, failed businesses and lost pensions - is that France and Germany allowed themselves to be dragged reluctantly towards the “Anglo-Saxon” way of doing things, just as that model started to come unstuck. Not only are they now stranded between two conflicting models of growth, but they can no longer preach back to the Americans and the British as unequivocally as they would once have been qualified to do. — By arrangement
with The Independent
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Organised retail on the rise The
entry of corporates in the retail sector in the recent past has triggered a controversy with a lot of resistance coming from small shopkeepers who fear the loss of their business. The rage is so furious that mobs have smashed outlets of Reliance Fresh at many places. A few years ago almost the whole of retail in India was in the unorganised sector in the form of small shops, also known as “mom-n-pop” stores, and the organised retail was just 3 per cent of the total in 2003-04 and confined to the metro cities only. Though it is growing at the rate of 25 per cent per annum, still the share of the organised retail will be only 10 per cent by 2010. At present giants like Reliance, Bharti, RPG, Godrej, ITC, the Tatas, Escorts, Mahindra & Mahindra have jumped into the retail fray and some foreign players like Spencer, Wall-Mart, Levi’s, Nike and Nokia are waiting in the wings. In the fast food segment, multinational brands like McDonalds, Pizza Hut, KFC, Dominos and Wimpy are already doing a brisk business. Retail comprises 70 per cent of the total business in the developed countries. India too is emerging as a huge retail market with a major portion of household spending going to food items. At present retail business contributes around 10 per cent to the GDP and 8 per cent to the total employment. According to various studies, the retail market in India at present is worth $200 billion annually, which will climb to $300 bn by 2010 and $550 bn by 2015. The study conducted by KSA Technopak predicts the total retail to touch the magic figure of $ 1 trillion annually by 2017, a whopping 28 per cent of which will be in the organised sector. The consumer is the first beneficiary of the organised retail. He chooses it because of physical comfort, one-stop shopping, assured quality products, no price haggling and, above all, paucity of time due to the fast life of today. The farmer is the next gainer, who earlier stood exploited by middlemen. Corporate houses directly buy food stuff, fruits and vegetables from him, offering an assured market and income security. Earlier, he was at the mercy of small traders and middlemen with small purchasing power, who often forced him to either sell cheap or throw the produce. Most of the farm products being perishable in nature need processing or preservation for longer shelf life, facilities for which are not there in place. Out of the total 185 million tonnes of horticulture and vegetables produced in India, 30 per cent get wasted every year due to lack of cold chains and post-harvest infrastructure. This being capital-intensive is beyond the reach of the farmer and the government. Corporate houses can create the necessary infrastructure. Air Deccan plans to start cargo services from 400 airports across the country, whereas the Bharti group is planning to set up a cold chain network, thereby promoting efficient forward and backward integration. The third section to gain from the organised retail is the unemployed youth as 10 to 15 million jobs are to be created in the coming five years in the fields of contract production and processing, supply chain and logistics, real estate development and management. A fourth of this employment will be direct and the rest indirect. The governments too benefit because tax collection takes an automatic route as every sale and purchase is billed, translating into higher realisation of VAT and other taxes. Four major fast food chains — McDonalds, Pizza Hut, Dominos and KFC — in Punjab paid VAT of Rs 4.75 crore in 2007-08, 44 per cent up from Rs 3.3 crore paid in 2006-07. McDonalds was the leader in the pack with a contribution of Rs 2.36 crore from just three outlets in the state! Similarly, another leading retail chain, Vishal Mega Mart paid VAT of Rs 3 crore in 2007-08 in Punjab, 20 per cent higher than Rs. 2.5 crore paid in 2006-07. The main reason of higher VAT collection in neighbouring Haryana is reportedly due to the presence of malls and multiplexes in big number in Gurgaon and other cities of the state in the NCR. The retailer in the unorganised sector, on the other hand, is not known for paying taxes honestly as most of the sales are executed without billing, resulting in huge tax losses to the state governments. It further harms the economy by creating huge untaxed black money finding a safe haven in real estate and gold, jacking up their prices and creating a parallel economy. The fear of losing business in the minds of unorganised retailers is unfounded on the ground that only 10 to 20 per cent of the total retail will be going to the organised sector in the coming two decades. Moreover, nearly 48 per cent of the organised retail merchandise comprises clothing, textiles, fashion accessories and footwear and only 18 per cent are of food and grocery items, the stuff sold by small shops.
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Father may have known best It’s
not like I didn’t get sound financial advice. My parents are children of the Great Depression who put great emphasis on building nest eggs and living within one’s means. They never forgot the words to Bing Crosby’s 1932 hard-knocks song “Brother, Can You Spare a Dime?” But I wasn’t listening. When a TV infomercial said I could buy a flat-ab squeezer and get a fountain-of-youth drink free if I called now, I called. No wonder I’m broke. After taking an early retirement a couple of years ago, I invested in what I had thought were two bedrocks of American economic life: newspapers and real estate. Now, as the nation faces the worst economic crisis since the Great Depression, my land deals are worth less than dirt, and my newspaper stocks are barely worth the paper they are printed on. In the past four months, the value of my home has plummeted so low that I now owe more than it’s worth. As Wall Street posted a record point loss Monday, my financial portfolio was reduced to chump change. Brother, can you spare a trillion dollars? My parents’ financial wisdom would not have staved off the nation’s economic storm, but it might have helped me hedge my bets. Suddenly, the low-yield, low-risk treasury bills that they purchased through the years look much better than, say, the once high-yielding stock in Lehman Brothers. But I’m a baby boomer, a product of the narcissistic “age of desire.” Delayed gratification is anathema to me; I want quick returns. Get me a house, flip it, take the equity out. Repeat. My parents used say to me, “Early to bed, early to rise makes a man healthy, wealthy and wise.” But in my later years, I figured out that if you stayed up late playing poker and won a big pot, then you could sleep late and still wake up feeling wealthy and wise, if not always healthy. Now, visions of an economic depression have shattered all high-stakes poker fantasies. My parents had seen the food and unemployment lines, watched drifters riding the rails, heard the stories about people committing suicide after losing their savings in the stock market. Suddenly, that didn’t seem like a quaint parable from the past anymore. And their principles of responsible living apply today as much as the days before specialty coffeehouses. I called Larry Bailey, a friend and accountant to the stars (such as Venus and Serena Williams), for advice on how to get out of this jam. “When I go to Africa sometimes, I’ll come upon a place that has a total cash economy,” he said. “You don’t buy a car on credit; you save up until you can buy it outright. You don’t build a house until you have the cash to pay for it. You can build it in stages, one room at a time, but you have to pay as you go. Of course, nobody wants to go back to something like that, but if our economy is going to start expanding again, we’ll need to find a happier medium between using cash and relying on credit.” It hurt just listening to him. But my parents had tried to warn me. Moderation in all things, they’d say. A fool and his money are soon parted. — By arrangement
with LA Times-Washington Post
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