Why FDI ?

Ah yes I know every second soul on this earth is ranting about FDI. Well, here is a little piece from me. I had written it while applying for a research internship on Public Policy.

Like a coin with two sides, every issue can be interpreted to have its own merits and demerits and FDI in multi-brand retail is no exception. However, the key lies in differentiating between foresight and myopia. Allowing 51% FDI in multi-brand retail will surely impact already established system in India’s largely unorganized retail sector, resulting in a redistribution of profits and dividends, which may benefit a large number of other people while it may not be in the best interests of some others. As was the case with the economic reforms of 1991, there are uncertainties surrounding the opening up of our large retail sector to foreign forces. However, we must set aside our xenophobia and look at the issue rationally in its right perspective.

With over 50% of our working population practicing agriculture, but contributing less than 20% to our GDP(CRISIL, November 2010),  it is evident that Indian farmers are largely denied their dues and most of the profits are reaped by the middlemen who source their produce to the markets. In India, farmers receive only ~30% of the end consumer price as compared to 50-70 percent in more developed countries (Mall and Singhi, BCG/CII, Feb 2011). Moreover, due to the fragmentation of the current retail sector, the inefficient supply chain infrastructure results in large quantities of produce being wasted. This not only hurts the farmers but also increases prices, thereby affecting the consumers. Professional multi-national companies that will enter markets following the reform would deal directly with the producer and eventually develop cutting edge infrastructure to carry the produce directly to the market. This would eliminate the intermediaries, thus increasing price realization by the farmer by 10-30 percent and reduce handling and wastage by 25-30 percent (Mall and Singhi, BCG/CII, Feb 2011). The farmer not only earns better but his produce is also free from being at the mercy of the inefficient supply chain infrastructure of the fragmented industry.

While India has a rich human capital, lack of quality institutions for higher education and low literacy rate result in large number of youth with an education level of class XII or below. They are not prepared to compete in India’s service based economy. With the set of qualifications that they possess, such individuals, largely from lower middle class families, would benefit from the millions of jobs that the organized retail would create. Moreover, the additional vocational training that the multinationals would provide would not only enhance their personality but also add to their skill set. Additionally, due to increased competition and free market dynamics, it is the consumer who stands to gain. The prices will be curbed leading to higher savings and an overall improvement in the living standard of an average Indian. Not only will the prices of commodities go down, consumers will also benefit from the enhanced variety and quality.

According to a random survey of 1.6 million samples in 2008 by the Government under the Prevention of Food Adulteration Act, about 7 percent of food products are adulterated (Mall and Singhi, BCG/CII, Feb 2011). Organized retail through FDI will not only ensure quality standards but will also bear accountability towards the common man. A greater transparency in the entire procurement process will result in reduced tax evasion. This will eventually lead to huge savings for the exchequer, which can be invested in the country’s other development initiatives such as education or healthcare. The estimated investment required in the supply chain infrastructure for post harvest agricultural produce during the 11th Five Year Plan is Rs. 64,312 crores (Kumar, FICCI, JIPF). Such a large investment requires crucial participation from the private sector and FDI will pave a way for the same.

As discussed, the primary losers in the new system would be the intermediaries and for good. Another set of people who may face certain difficulties are the local kirana shop dealers and ‘Mom and Pop’ stores, who would not be able to compete with the advanced setups and lower prices of the multinational companies and may thus run out of business. However, the impact of organized retail on this fragmented sector would not be as severe as it is projected to be. Firstly, the multinationals would only be permitted to set up their stores in cities with a population of over one million. As per the census of 2011, there are only 46 such cities in India (Census 2011). These cities already have a certain sector of organized retail dominated by local players such as Reliance and Bharti among others. Entry of global players in such markets will only increase efficiency and benefit the consumer. Secondary, kirana stores share certain chemistry with their customers through services such as credits, discounts and convenience among other which no multi-national can provide. Hence, they would retain a certain loyal customer base. Thirdly, the sons and daughters of the owners of these ‘Mom and Pop’ stores would find well paying jobs in these companies resulting in a better standard of living of the family in the long run. Lastly, I believe there is plenty of market both for organized and unorganized retail to thrive even after the entry of global players. McDonald’s did not kill Haldiram’s, neither did Vodafone kill Idea.

                                                                                                       

Thus, the benefits of FDI in the form of better returns to the farmer, better supply chain infrastructure, increased employment, benefits to the consumer and transparency outweigh a few strict measures that are required to be carried out. FDI in multi-brand retail is a huge leap and as is usually the case with reforms, this bitter-tasting medicine will reap high dividends in the long run.

References:

1.    Dharmakriti Joshi, Vidya Mahambre  and Poonam Munjal , ‘Skilling India – The Billion People Challenge’, (A report by CRISIL Centre of Economic Research), November 2010.

2.    Abhishek Singh and Amitabh Mall, ‘Building a New India – The Role of Organized Retail in Driving Inclusive Growth’, (A report by Boston Consulting Group and Confederation of Indian Industry), February 2011.

3.    Rajiv Kumar, FDI in Multi-Brand Retail in India,( A Report presented as Secretary General of FICCI, Japan India Partnership Forum).

4.    Demographics of India, Wikipedia, Last modified 27th October, 2012. (http://en.wikipedia.org/wiki/Demographics_of_India)

5.    Ravi Aron, “FDI in Indian Retail: The Big Benefits Will Come Tomorrow, Not Today”, Law and Public Policy, India Knowledge@Wharton, September 20, 2012 (http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4702)

6.    Census 2011, (http://censusindia.gov.in)

Quriosity - 0

      

      14 years before the event took place, in 1898, a novel “Futility” by Morgan Robertson released which described incidents incredibly similar to those involving the incident. What incident does the  novel speaks about ?


Answer (Highlight Blank Space to view): The sinking of RMS Titanic

Fundae

Initially, I had thought I would just my blog to rants and things close and personal but then wouldn't it be a little too boring, no ? Here is an oldie, a gem that makes you laugh your guts out. Ladies and Gentleman, presenting Mr. Vishwa Bandu Gupta.

Doppelgangers

I found these awesome celeb doppelgangers on Quora.
Frankly, admitting I see a lot of non-celeb ones in my real life too. Friends, Acquaintances, Strangers. :D

Ekla Cholo Re

Now that I am relatively free, I think it’s high time I continue with my blogging activity and as always I promise to be fairly regular. I write this article on a lazy Wednesday, sitting in an empty room. I apologize for any tone of negativity that my surroundings and my frame of mind may render to this piece.

When I was a kid, I had this fear of being left alone. I was mischievous as a rat, with an everlasting curiosity that provided me with the audacity to meddle with all that came my way. Be it a person or a thing, I constantly mused myself by my surroundings. Life was bliss. People-people everywhere. They were all nice to you. Smiles, hugs, kisses and candies were more than common. Everything added up so easily. You could stop talking to friends with the little finger and make up with your thumb. Cricket and Football games were the only places where you bickered and cold drinks and Uncle Chips were the ultimate panacea that swung your mood instantly. Reductionism at its best. You could be Sachin Tendulkar one instant, Spiderman the next. When your day started with a hot glass of milk and Pokemon and ended tucked up in bed by your father’s side, watching news and asking the silliest of questions and having them answered patiently, you know that this just was it.  In short, life was simple.

Then, I grew up.

I met a whole new set of friends when I moved to Nainital. Since I used to live in a boarding school they were pretty much all I had. I don’t know whether it was some fault of mine or just the fact that I was a vulnerable kid, I faced a tough time with some of my batch mates. The bad-ass ones – you know the kind that act really smart in school and then end up nowhere. Had it not been for a select few ones who stood by my side, I’d have dropped out midway. This was followed by friends, cousins and relatives in when I pursued my higher education in Delhi. New relations were forged, some old broken. I learned several lessons one of which was that no matter who you are, where you stand and what you do, deep down everyone is alone, for good.

You are your own warrior, your own savior and you need to fight your own battles. Your problems are your very own. Shifting either the burden or the outcome to friends/relatives only strains the relationship. Most of the times, nobody is going to think for you. You need to think for yourself. Don’t expect people to solve your problems or share your woes. Without being unduly selfish, it is you who need to love and take care of yourself. Expectations are an unnecessary complication and getting rid of them leads to a happier and healthier relationship. I’m not asking you to be selfish, just independent. If everybody took care of themselves and fought their problems, there would problems left for us to face. After all in order to live happily with others, it is important to be happy by yourself first.

An old favorite written by one of the most genius man ever to have walked on the face of earth and sung by another as competent:

Exam Blues

I never thought I'd be writing before I get through my CAT, which is on the 29th of October. Though my preparation is quite not what I wanted it to be, I still feel, with my mock results, there is a good chance that I may strike gold. On some other parameters, 29th is the day to be. Why so? They're coming back again. Fear. Anxiety. Panic. Anxiety runs in my blood, a quality that I attribute largely to my mother. I have never felt what it is like to be calm in tight situations. It is a quality I have always fancied, but never possessed. Most of my defeats in life have have been a result of my failure to hold myself together when faced with adversities and uncertainties. Over-thinking has been as genetically passed to me as thick black hair or my large white teeth. Damn! Not now. Not once more. If there is a time to get rid of it, it is now. I believe CAT tests you more on your mental strength than your preparation. Even if I do not perform to the optimum in CAT, this is a test I should not fail. Not again. As is true with life, winning is more about character and less about skill. It's time I start winning. or at least start making efforts to win.

And they come back to you
Demons of the Past
And if you don't fight them now
May be you'll never do.


It's time to sleep.

What is a Boy?

Okay, this one is special. It was my first tryst with public speaking when Mrs. Rathore (I still  remember that benign lady, our Geography teacher) handed me this piece. I absolutely loved it. I worked round the hours with Miss Deepa Shah and Miss Nirija Bisht, and tried my best to master this piece. I still  vividly remember how nervous I was that day. The competition was among six speakers. While the fact that the "Gods of elocution" like Abhay Pande did not participate was true, we still had the better and more experienced speakers of the two sections which included stalwarts like Pappi Don (Swapnil), Sagar Lohani, Dushyant Joshi, Nishant Joshi and Craig Mcgowan. I was the only first-timer. I was a great deal scared. But somehow I had faith in my piece and (a little) faith in myself. Moreover, Miss Deepa Shah told me that I was improving significantly which did more to boost my confidence than any other thing. The day arrived. I had to speak sixth. The fact that everyone had spoken smoothly did enervate me a little. I made a few mistakes and flinched at them, which is a bad thing to do as you let the judge know that you have made one even if they may have actually missed it. However, overall it went quite fine. When we climbed down the podium, the speakers from the senior class who had spoken just before us congratulated us. A few of them told me that I did a decent job and stood a fairly decent chance to win a medal. I kept my fingers crossed. The results were announced. There was no doubt that Craig would win it as he had both a wonderful piece and a handsome persona. I don't exactly remember the name of his poem but it was something on men versus women. Nishant Joshi with his awesome recitation of Christabel by Samuel Taylor Colerdige stood second. By now my hopes had dwindled. But then, Mr. Emmanuel, in his usual slow way, announced my name. I was absolutely elated. Then I have no idea what happened. A lot of merry-making perhaps. Enough of jabber now, here is the piece:

WHAT IS A BOY ?

- Alan Beck

Between the innocence of babyhood and the dignity of manhood we find a delightful creature called a boy. Boys come in assorted sizes, weights, and colors, but all boys have the same creed: to enjoy every second of every minute of every hour of every day and to protest with noise (their only weapon) when their last minute is finished and the adult males pack them off to bed at night.

Boys are found everywhere—on top of, underneath, inside of, climbing on, swinging from, running around, or jumping to.

Mothers love them, little girls hate them, older sisters and brothers tolerate them, adults ignore them, and Heaven protects them.

A boy is Truth with dirt on its face, Beauty with a cut on its finger, Wisdom with bubble gum in its hair, and the Hope of the future with a frog in its pocket. When you are busy, a boy is an inconsiderate, bothersome, intruding jangle of noise. When you want him to make a good impression, his brain turns to jelly or else he becomes a savage, sadistic, jungle creature bent on destroying the world and himself with it.

A boy is a composite—he has the appetite of a horse, the digestion of a sword-swallower, the energy of a pocket-sized atomic bomb, the curiosity of a cat, the lungs of a dictator, the imagination of a Paul Bunyan, the shyness of a violet, the audacity of a steel trap, the enthusiasm of a firecracker, and when he makes something, he has five thumbs on each hand. He likes ice cream, knives, saws, Christmas, comic books, the boy across the street, woods, water (in its natural habitat), large animals, Dad, trains, Saturday mornings, and fire engines.

He is not much for Sunday School, company, schools, books without pictures, music lessons, neckties, barbers, girls, overcoats, adults, or bedtime. Nobody else is so early to rise, or so late to supper. Nobody else gets so much fun out of trees, dogs, and breezes. Nobody else can cram into one pocket a rusty knife, a half-eaten apple, three feet of string, an empty Bull Durham sack, two gum drops, six cents, a slingshot, a chunk of unknown substance, and a genuine supersonic code ring with a secret compartment.

A boy is a magical creature—you can lock him out of your workshop, but you can’t lock him out of your heart. You can get him out of your study, but you can’t get him out of your mind. Might as well give up—he is your captor, your jailer, your boss, and your master—a freckled-faced, pint-sized, cat-chasing, bundle of noise. But when you come home at night with only shattered pieces of your hopes and dreams, he can mend them like new with two magic words, "Hi Dad!"

A Long Break

I know I had promised stories of my Mumbai extravaganza but I guess I am still powerless against my lazy self. Maintaining a blog takes much more effort than I had imagined. That story, along with many others, is lying there in my draft box waiting to be completed. I guess they will all have their day. For now I shall continue with my rants. 

Life has once again been paced at a fast-forward mode. College. Quizzing. The Attic. Placement Committee. TIME. and much more almost always keeps me pretty much busy. Of late, I have been been listening to some real good music. What a wonderful world, Soundtrack of Five Hundred Days of Summer and a number of other songs. Needless to say, primary credit goes to my music specialist, Miss Shruti Bhati :) . However, the last four days have been a complete waste. I realized that these exams not only kill your time during the period for which they are scheduled, but have an after effect too. Post exams I have resisted all work and have either slept, read or loitered around at facebook. I feel sleepy and out of words. 

For now I'll leave with this one: