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India needs FDI
Playing politics will not do
by S. S. Johl
The
Government of India has allowed the entry of foreign corporate giants into the domestic retail market of the country and permitted foreign direct investment (FDI) up to 51 per cent in aviation and other infrastructural sectors also. Although opposition parties are, as usual, up against these policy decisions, the issue needs a dispassionate analysis in the interest of the economy. The issue is so crucial that it should not be used for playing political games. We need to be reminded of the vengeance with which our socialists opposed the entry of Pepsi Co and later Coke into the country’s market on the plea that their entry will eliminate the domestic soft drinks industry. Today, Thumbs Up and other soft drinks are right there in the market with improved efficiency and competitiveness. Consumers have gained with better quality of products and lower prices. Another example is of the automobile sector. Two companies that produced Ambassador and Fiat cars operated in their captive market of the country for more than four decades. Every time they came up with new models, they compromised on quality and increased the prices. The buyers had to wait for years together for the delivery of vehicles, and this developed a deep black market. With the opening of the automobile market to foreign companies in collaboration with local entrepreneurs, not only has the consumer choice increased in terms of brands, quality, prices and instant delivery, the two domestic companies have also not gone out of the market. They have rather improved their models and efficiency of their vehicles, and have become competitive. With foreign direct investment comes the modern infrastructure, scientific management of scarce resources, modern production and trading technologies and improvement in market conduct and performance. Unfortunately, the entry of domestic corporate houses has so far not been able to provide an effective alternative, particularly in agricultural commodities. The volumes they handle in retail are not much larger, and prices charged are not lower, rather higher sometimes and quality no better. Their mindset does not appear to be very different from that of small vendors. There is a need to bring about a sea change in the structure and conduct of the retail market, specially for perishable commodities, linking the production point to the sale end for the consumer. Producers must respond to the quantity and quality of the products demanded by consumers. This can be achieved through an organised market that operates on modern and scientific lines in a transparent manner, which can be achieved through collaboration with international-level operators in the market. Another aspect of the issue from the national angle is that India needs foreign direct investment of at least $ 20 billion in the retail sector alone, to begin with, to improve the system both for producers and consumers. The Indian foreign currency reserves have been depleted to the extent of $ 29 billion during the last one year and this drain is continuing unabated. This has affected the rupee value adversely which is one of the factors for a higher rate of inflation also. With FDI inflow, the Indian rupee will become stronger to the advantage of the importers of goods, especially intermediary capital goods that will provide a considerable boost to the economy of the country. We have to keep in mind that FDI has been allowed to the extent of 51 per cent to provide the foreign investor a higher degree of freedom in the scientific management and introduction of cutting-edge methods and techniques for making the retail market more efficient in the globalised economy and deliver quality products to the consumers at competitive prices. There is also a stipulation that these companies will have to procure at least 30 per cent of the material from local producers. The fear that this will hurt the interests of small vendors is totally misplaced. Small vendors will certainly co-exist with the corporate retail openings. They will have their niche market, but will have to become competitive in terms of quality and prices, because the consumers will have the alternatives for them. We must not forget that there are 1200 million consumers in the country. Their interests as well as those of hapless producers should be of paramount importance and should not be sacrificed to protect the inefficient captive market for a few crore exploitative small vendors, who, in any case, are not going to be out of business. Punjab, in particular, needs foreign direct investment in the retail sector and more so for agricultural commodities. The state is suffering from the deteriorating underground water balance, poisoning of soil, chemical pollution of water and environmental degradation due to the cultivation of rice and wheat in rotation on a continuous basis. The state needs to diversify its agricultural production pattern replacing a considerable area from under rice crop with high-value crops like vegetables and fruits, and also forages for the development of dairy and meat enterprises. Yet the effort in this direction is constrained by lack of efficient market clearance at remunerative prices in comparison with assured minimum support prices and higher returns from these two crops. It is a known fact that the producers of these perishable commodities hardly get 20 to 30 per cent of the prices paid by the consumers. In the wholesale market, the farmers may be selling their produce through open bids, yet the retailer sitting outside just on the fringe of the wholesale market doubles up the price for the consumer. At a distance of a few kilometres in the urban areas, the same commodity is sold at three to four times the price the producer-seller gets in the wholesale market. The unorganised retail vendors are de facto highly organised and have developed a captive market which does not let the demand and supply pulses pass on to the producer-sellers. There is, therefore, a need for an alternative that can help develop a competitive market clearance system to the advantage of both the consumers as well as the producers. Producers must respond to the quantity and quality of the products demanded by the consumers. This can be achieved through an organised market only that operates on modern and scientific lines in a transparent manner, which can be achieved through collaboration with international-level operators in the market, which should work on the strength of larger volumes of business and lower profit margins, thereby reducing the retail prices for the consumers and passing on a substantial portion of profit margin back to the producers. The vote bank politics being played in the country should have no place when it comes to the interests of the national economy in a globalised market and the integration of production systems with the fast-changing consumer market of the country. Punjab badly needs foreign direct investment and should welcome it, particularly in the agricultural commodities retail
sector. The writer is a well-known agricultural economist of the region.
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MIDDLE |
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Gratitude that was never expressed
by Harish Dhillon
Many
of my former pupils and colleagues, whom I meet, go to great lengths to tell me what a difference I have made to their lives. When this happens, my mind goes back again and again to my own teachers and colleagues, to all that I learnt from them. I regret that I never had the grace to thank them, tell them how much they had mattered to me. There was Mr Kemp, my chemistry teacher and my first housemaster. He recognised my awkwardness and self-consciousness and to help me gain some measure of confidence, encouraged me in my efforts to write and to learn to play the piano. Because of him I found my niche and went on to write plays for the House Shows and to win the music prize. Mr Cowell was the Senior Master: he was so strict that whenever his dog Wendy appeared, we would disappear down the hillside. But he tempered his strictness with an unfailing and unflinching fairness. All punishment was meted out equally . Miss Chatterji was my teacher of English and though we weren’t very fond of each other, she taught me the value of meticulous corrections and making sure that correction work was done. Mr B. Singh was my history teacher and the Deputy Head when I came back to teach. He taught me that it was imperative to spend as much time with the children as possible and to attend all their functions: matches, debates, performances and even rehearsals. Mr Das, who was the Headmaster when I was a teacher, and his wife Phirozadi taught me how important it was to keep an open house and to welcome children, staff, parents and visitors, at all times with open arms. Mr Manley was the Bursar and he and his wife, Aunty Tutu, taught me how important it was to treat all members of staff as one’s own family. How much did I practise what I had learnt? One of my former students said that he had never liked me because of my terrible strictness but he had come to admire me because he realised that I was always fair. Another said that she was able to write so well because of my emphasis on corrections and because of the praise I lavished on her first bumbling efforts. A third said that he could never forget how I seemed to be everywhere, how in spite of my artificial leg I would rush from Barnes to the New Field to watch the next match. “We hated it because you were always everywhere but we hated it even more when you weren’t there.” However, the best compliment came from a former colleague who said, “For you, your staff was your family. You were always there for us.” I know that for each of these successes there are hundreds of others whom I failed. But I like to feel that I have been a slightly better teacher, a slightly better head and a slightly better human being, for attempting to live up to the values and ideals of these wonderful
people.
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OPED
— Diaspora |
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london latitude
why vaz opposed supermarkets
Shyam Bhatia
Retail giants are seen as a threat to small shops in Britain too. |
A
respected NRI politician, who served as a minister in Britain's previous Labour government, has thrown his weight behind blocking the efforts of multinational supermarket chains gaining a foothold in the Indian market.Keith Vaz, MP from Leicester East, says it would not be appropriate for him to comment on what the Congress government decides to do about allowing the likes of Walmart, Sainsburys and Tesco in India. But some years earlier he led efforts within the UK to try and prevent Tesco from opening up on the main street of Leicester, risking the livelihoods of many small, family owned grocery shops within his constituency. Vaz's initial efforts were successful, but later failed on appeal. That has not prevented him from continuing to worry about what happens to small shops and their owners when the big giants move in and start selling their products at substantially lower prices.
Keith Vaz, MP from Leicester East, led efforts within the UK to try and prevent Tesco from opening up on the main street of Leicester, risking the livelihoods of many small, family owned grocery shops within his constituency. |
Vaz's comments about the big super markets were made at a dinner- given in London by the Indian Journalists Association -- commemorating his 25 years as a British MP -- where he also touched on other big issue items like racism, human rights and bilateral ties between India and the UK. When he first entered the House of Commons in 1987 Vaz had a slim majority of only 1,924. At the last general election in 2010, his majority had soared to 14,802, a tribute to his work and reputation as a safe and reliable pair of hands. In a special message of congratulations Prime Minister David Cameron reflected on Vaz's "selfless dedication and commitment", adding, "however, it is Keith's role as Chairman of the Home Affairs Select Committee since 2007 for which he is most well known, and in which he continues to make a significant impact -- both in Parliament, around the country, and overseas. Keith will probe every detail to ensure no stone is left unturned in his Committee's investigations and, through doing so, he has earned a reputation as an outstanding Committee Chairman and a true public servant." Labour leader of the Opposition Ed Milliband describes Vaz as the first Labour MP of Asian origin since 1922, the first Asian Minister and now the longest-serving MP of Asian origin. "Throughout his career he has been a stalwart supporter of diversity, and stood up for Britain's ethnic minority communities. Thanks to his championing of the Race Relations (Remedies) Act 1994 the limits to the amount of compensation awarded in industrial and employment tribunals in respect of acts of racial discrimination were removed."
Jaguar: Legal dispute
over the name
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Jaguar
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The Indian-owned Jaguar car company is locked in a dispute with a celebrity café, bar and art gallery located in the fashionable Shoreditch suburb of East London, which was once renowned as a centre for selling leather shoes and bags. Jaguar Shoes, which takes its name from a former bag and shoe store, was founded by a brother and sister team, Nick and Teresa Letchford, who kept the original storefront signs for their business which soon became an arts collective visited by music celebrities. But the Letchfords ran into trouble when they tried to protect Jaguar Shoes with a trademark. It was then that Jaguar Land Rover objected, resulting in the dispute being referred to the UK's Intellectual Property Office. Nick Letchford, a former assistant film director, commenting on "irrational and inappropriate pressure" from Jaguar cars, told the media, "This has been going on for about two years. We've tried to settle it, we're looking to settle, but it feels like we're banging our heads against a brick wall. "Conceptually, Jaguar Shoes is a very different thing to a Jaguar (car). If I think what Jaguar shoes are, what they represent, most people are going to see a pair of catskin shoes," he added. "I think it's basically a default objection to any other use of jaguar, the word." He added, "We inherited the name and it is part of the history of the area, which was full of shoes and fashion wholesalers. Our customers are either angered or think it's ridiculous." Meanwhile an online petition has received more than 1,000 signatures from people who say they have never experienced any confusion between the bar/gallery and the car maker. For its part Jaguar Shoes is proud of promoting more than 600 artists, musicians and fashion designers. It is also home to four full-time artists. A spokeswoman for Jaguar cars said, "Unfortunately, we can't comment on legal proceedings." The ongoing dispute with Jaguar Shoes is the least of the worries for the car company, which was bought by Tata Motors in 2008. A recent report by one of the UK's leading motoring websites has highlighted the depreciation value of one of the company's prestige car brands. The report looks at the Jaguar XJ Ultimate -- currently retailing at more than £50,000 -- which it claims will lose some 77 per cent of its list price value by 2015.
Hawk contract warms
up Indo-UK ties
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Hawk
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India's stock has risen ( slightly) in the UK following Hindustan Aeronautics Limited's decision to buy an extra 20 Hawk additional jet trainers from the UK's BAE systems for an estimated Rs 2,000 crore (more than £200 million). The aircraft to be built in Bengaluru are intended for the IAF's Surya Kiran aerobatics team that previously depended on the Kiran Mkll jets that had to be abandoned following an air crash in 2009. Whether this order will significantly raise the status and/or prestige of Indian diplomats in London remains to be seen because the Hawk purchase is worth only a fraction of the £7 billion order that the UK government hoped to secure earlier this year when Delhi was mulling options for the next generation of IAF fighter jets. In the event India declared the front runner for the contract was the Rafale fighter, manufactured by the French company Dassault, ruling out the Eurofighter Typhoon, which is one-third owned by BAE. There was so much heart-burning in London following India's decision that some MPs of the ruling Conservative Party even questioned the wisdom of continuing British aid to India. Embattled British Prime Minister David Cameron said in the House of Commons that the Typhoon was a "superb aircraft, far better than Rafale. Of course, I will do everything to encourage the Indians to look at Typhoon, because I think it is such a good aircraft." Seasoned observers of the British-Indian bilateral ties have subsequently spoken of a 'chill' or 'bruising' of what is otherwise considered a special relationship between the two Commonwealth partners. But for those who believe London is responding childishly to the defence contract, it is worth remembering how the cash-strapped West is desperate for export orders from emerging economic giants like India and China. For its part BAE Systems has trumpeted the latest Hawk order as the third contract for the Hawk, building on a first order in 2004 for 66 aircraft and a second order in 2010 for 57 aircraft. The cumulative value of the two orders was assessed at more than Rs 12,300 crore. "This is a tremendous opportunity to build on the success of Hawk in India and demonstrate the progress we are making in capturing significant opportunities to address the defence modernisation requirements of the Indian Government", said Guy Griffiths, group Managing Director of BAE Systems Intermational. “Together with HAL, we look forward to giving the Indian Air Force's display team a fantastic aircraft."
A delightful painter of
historic buildings
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Swaroop Mukerji
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Avisiting Indian painter has delighted Londoners with previews of some of his works of art completed during his current trip to the UK. What singles out Kolkata-based Swaroop Mukerji from other well-known Indian artists is his focus on painting historic buildings, rather than abstracts and portraits favoured by the likes of Satish Gujral or M.F. Husain. He started off with his paintings of Raj Bhavan in Kolkata (Government House in British times) from where, as he points out, India was ruled for more than 200 years. His easel and brush later took him to the grounds of Rashtrapati Bhavan where he was taken under the wings of the then President A.P.J. Abdul Kalam. For his part, Mukerji describes Kalam as a "wonderful" and "outstanding" human being who took a personal interest in his work and welfare. At the time Mukerji was recovering from cancer (doctors have now given him a clean bill of health as he has been cancer free for more than seven years) and Kalam took it upon himself to look up treatments and remedies that might help his recovery. A man of immense personal charm, Mukerji was previously a successful participant in the corporate rat race. Before becoming a full-time painter he worked for Dunlop and then for 20 years with what he describes as another multi-faceted business house. He had been painting since the age of 10 and for the next 40 years managed to combine his private passion with whatever professional demands were made of him. But in 2000, possibly for health and other personal reasons, he quit the corporate sector for good to devote himself to the world of art. Successful exhibitions have followed all over the world, including at the World Bank in 1998 and in 2007 at the Indian High Commission in London. During his current trip, Mukerji has had the backing of English Heritage, which has allowed him to visit and paint pictures of Chiswick House -- inspired by the architecture of ancient Rome and 16th century Italy -- and described as one of the finest examples of neo-Palladian design in England. His trip has also taken him to Osborne House on the Isle of Wight, a former summer residence of Queen Victoria and one of the British royal sites visited by Maharaja Dalip Singh, although not where he handed over the precious Kohinoor diamond to the British monarch.
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