"FDI in retail" - a disaster in making?

The principal argument for 'FDI in retail' is that the deep pocket and know-how of the multinational supermarket chains (read Walmart) to establish supply chain will make rural India and farmers prosperous. One needn’t be a connoisseur to discard this argument to dustbins.  This only showcases the 'Impotence' of the Govt, to be relying upon Walmarts and Carrefours to develop our agricultural infrastructure.. SHAME!! After 65 odd years of independence, do we really need MNC's to install cold storage facilities for us..?  Cold storage chain is neither a proprietary technology nor rocket science.  Is it not sheer sheepishness..?  Read on.

Let us not favor our country’s food security to be outsourced to foreign giants who are nothing but crony capitalists struggling with a slowing economy, with huge investable capital which is otherwise non-deployable.  I am not saying they are wrong, as they protect their interest, shouldn’t we be protecting ours?  They can operate for loss and can afford a gestation period of even 10 years or more before they break-even, now that is a good enough period to ‘wipe off’ the competition by eliminating all the marginal players.  And the so called “organized retail” players will be bought off, if not washed off.

I would wish to remind what Pepsi and Coke did to our domestic beverage industry.  All the local bottle manufacturing companies were acquired by these giants, empty bottle supplies were refused to the local players, the soda bottles in circulation were bought and crushed, fridges were given free of cost to all shops and forced not to stock any local brands, a few best selling brands like gold spot, thumbs up were acquired and killed despite huge popularity and demand.  Is this is what you call as “market expertise”..? my foot, isn’t this bloody unethical crony capitalism?  Pepsi and Coke broke even after I don’t know how many years, may be it took them decades, can our players afford that..?  Take it from me, the same will happen to Indian retail & food chain if the Walmarts, Sears and Carrefours are let in. 

Yet another huge threat, the market will be flooded with cheap Chinese products as the FDI clause allows them to source 30% from anywhere in the world and need not necessarily be sourced locally, there will be no mechanism to track how much is being imported, I wouldn’t be surprised even if 70% is sourced from China, that will be a huge blow to our already struggling domestic SME’s.  The need of the hour is reforms in manufacturing sector to nurture local Entrepreneurship and SME’s, if not nurture, at least don’t kill them for heaven sake.  Again you might argue why can’t we compete with the multinational giants, remember, you must first ‘live’ in order to compete.

Many argue the point that since we have already allowed big local players like Reliance, TATA and Birla, why should we really oppose foreign players.  Read on.

The homegrown supermarket chains does not control the food distribution chain unlike the foreign giants who propose & intend to.  Moreover, Domestic retailers source domestically whereas international retailers operate on the principle of buying internationally at the cheapest cost (read china).

Traditionally self-employment has been the largest source of bread earning in this country.  Agriculture and retail are the largest job providers in India especially, rural India, has the UPA Govt proposed any credible plan for alternate source of employment for the millions self employed in Retail Industry..? Has the UPA Govt initiated manufacturing sector reforms to make sure that we remain competitive vis-à-vis China (so that the Multinational retailers may source domestically)..? once all this is said and done, we may accept 100% FDI in retail, why just 51%.

Now let us consider the economic consequences.  In India, agriculture has been operating as a perfectly competitive market.  In economics, perfect competition implies a market where there are innumerable number of buyers and sellers.  In a perfectly competitive market like that of agriculture, everyone is a price taker and no one is a price maker, which essentially means that the market decides the price of the goods produced and not any individual buyer or seller.  Say if the multinationals are allowed to take stock of our agricultural sourcing and food chain, farmers will be forced to sell their entire proceeds to the cartel formed by a handful of foreign retailers, eventually farmers will be forced to cultivate what the MNC's want them to.

After installing their godowns and cold chains, they will have absolute control over agricultural procurement & marketing, and they will no more be price takers but 'price makers'.  In a nutshell, the perfectly competitive agricultural economy will be disrupted to become an oligopolistic market, where the cartel becomes the price maker and consumers will be price takers (similar to oil marketing companies, I am quoting this example since there are a handful of companies selling oil, whereas there are large number of consumers).  The entire management of the food economy will be in the hands of a few wealthy retailers like Walmart, Sears, Carrefour.  In a country like India where we have marginal farmers and population exceeding a billion, (which is ever growing), we simply cannot afford our food economy to be managed by multinational retailers who are only concerned about 'private profits'.

What we brand as ‘unorganized retail’ contributes a mighty 40% to the services GDP which is 60% of the total GDP.  These people are community entrepreneurs who make their livelihood without any dependence / help / support from the Govt, not even Bank credit and yet contribute 40% to the services GDP!! Is it not criminal to brand them as “unorganized”. .?  I am sorry, I don’t buy that..  I know I would be alone on this, what can I expect from a society where even the word ‘Local’ is synonymous to ‘Cheap’!!

Jai hind.

Election Day

It wasn’t a usual morning, it was the Election Day in my state (Tamil Nadu), I consider it as one of the most important days in my personal calendar, of course, after all it is not every day that you get to change Governments, isn’t it.

My brother woke me at around 7 30 in the morning, our plan was to enter the polling booth as early as possible, primarily for two reasons, one, the Q would really get long as it gets late, two, it is the month of April, the Sun comes to duty as early as 9 in the morning.

I brushed my teeth and was going through The New Indian Express, the only paper that I trust. I read the express not just for news but for its views and distinguished columns in the editorial which echo’s honest opinions. I enjoyed every sip of my morning Tea, prepared with mashed ginger, fresh leaves of thulasi and cardamom, yes, I prefer making my own tea. I have always believed that I craft a unique blend which is not so easy to replicate. A cup of Tea prepared even in the finest restaurant, fails to impress me.

Are you ready? I am leaving in 5 mins, get ready if you wish to join me, warned my brother from the other end of the house, fine, I shall get ready in 10 mins, I retorted.

Mom was busy cooking, so myself and bro started off to exercise our fundamental / constitutional right. We chose to walk as we weren’t sure if we could park our vehicle near the polling booth, moreover, a walk was an obvious choice since it was so pleasant in the morning, coupled with the fact that the polling booth was pretty close from where we put up.

It was quite a shocker when I saw a long Q in the booth, we never expected such a monstrous Q as the Booth was supposed to open only by 8 and we were there by 8 15, though I was happy for the fact that people consider voting a serious business. We got to see quite a few familiar faces, shared pleasantries.

Not knowing how to kill time while in Q, my eyes spotted a beautiful girl :), she was in a parallel Q, must be around 20, she was wearing a half white salwar, her hair was wet, she must have taken head bath, she looked really fresh, her round face was so fresh so clean, I wish I too had taken bath :P.

The scene out there was so poetic and beautiful, as the Sun was yet to kick off. I could feel the morning breeze, her hair was flowing in the air like waves in the deep blue sea, she had to set them right with her fingers every now and then. Those little unconscious deeds of girls always fascinate me, it is a pleasure to watch those cute, semiconscious natural gestures of a pretty women, of course without being noticed, there is no point if the girl gets conscious, in that case you only make them uncomfortable. Unfortunately her Q happened to move fast and soon she disappeared :(.

I started observing people in the booth (its one amongst my long list of hobbies), as it helps me to come up with better write ups. There were a lot of senior citizens around, one amongst them was constantly cribbing that there was no separate Q for senior citizens, another one who stood before me responded that there is no separate Q as such. He turned back to me and said “boy, I am 90 yrs old and I don’t feel the need for a separate Q, I am hale and healthy, I could even run at this age”. I smiled at him in sheer admiration, he too smiled.

He was a tall gentleman, didn’t talk much unlike other oldies, who were either cursing the system or cribbing about the atrocities of Gen X. He was quite fair with wrinkles all around his face, he is indeed 90 yrs old. He was patiently waiting for his turn, calm and composed, I could notice him carrying 2 voter id’s and booth slips with him, must be his wife’s, I thought, but he was all alone, might be his wife would join him in the Q, I thought so.

The Q was moving slow, but steady. Me and my bro were indulged in miscellaneous discussions like the political scene in TN, whether or not the ruling DMK has any chance of coming back to power, the opposition and its alliance, fate of independent candidates, 49 O etc. The old gentleman in front of us was a silent spectator but made a few remarks here and there.

Finally, as we entered the Voting ballot, I noticed that along with the Voter id and booth slip, the old man was carrying his wife’s death certificate as well, I was puzzled. He turned to the Polling officer, handed his wife’s booth slip and said, "Sir, my wife is dead and here is her death certificate, somehow her name appears in the voters list, strike her name off and make sure that her Vote isn't misused”.

I stood amazed by the act of this old gentleman, it was my turn to cast my Vote. I am sure this would send the right message to people who consider election day as just another holiday.

Jai Hind

PM's meet with Editors - An ultimate embarrassment to the Nation

Prime Minister Manmohan Singh, in his interview with television editors, has clarified his stand on many important issues.

As any responsible citizen of this country, I too was anxious so as to what our PM has to say on the series of scams which have been making headlines.  I was happy for the fact that our PM has finally decided to break his silence once for all, but after following his interview (line by line), I wish, he remained silent.  Read on.

A quite a few questions were raised regarding the allocation of the 2G spectrum, well, quite expected, as it happens to be the biggest scam in the history of independent India.  The PM was asked “why Raja was appointed as the Telecom Minister for the 2'nd consecutive term, despite the fact that the PM himself had warned Raja in November 2007 to consider auction of the 2G spectrum, for which he didn't bother to respect”.  Extremely valid question indeed, but the PM's response was outlandish.

His response goes like this "I would like to mention that we are a coalition government.  In a coalition government, you can suggest your preferences but you have to go by what the leader of that particular coalition party ultimately insists.  And Mr. Raja was the choice of the DMK party.  I did not feel that I had the authority to object to Mr. Raja’s entry".  

The PM has made it explicit, that a coalition Govt had to run with compromises.  That essentially means, though the constitution of India says that it is the Prime Minister who decides on who gets into the Cabinet, in practice, it is the coalition party leaders who actually take the final call.  And the PM does not have the authority to intervene.  The PM has also said "Licenses was not a matter which got referred to me or to the Cabinet, that was the decision exclusively of the telecom minister Raja" and that, he absolutely had no say on that matter. WOW, I am impressed, Mr. PM.

The next question was "Would you concede the fact that there are a lot of corrupt people in your government and you are not able to act against and that led you to believe that enough is enough?"  Upon taking this question, the PM did not deny the existence of corrupt people in his government, rather he said "I think in a coalition government there is a coalition dharma and obliviously the things are not entirely the way I would like them to be" which means, the PM accepts the fact that there are a lot of corrupt, tainted people in his Govt, but he cannot do anything about it.  Well, Mr. PM, I thought that the Prime Minister of India is the Head of the Union (Federal) Government and the PM’s office holds the highest rank, thanks for having opened my eyes.  I think its high time we re-write our books on Indian Civics.

And here comes the best of it all, when asked about the revenue loss to the Govt on account of underpricing the 2G spectrum, the PM said "We subsidise the price of kerosene to an extent which is greater than many other subsidies, that imposes burden on our oil marketing companies, should we say then that because we give subsidy for kerosene sales under public distribution, that there is loss of revenue." WOW, WOW, WOW, Mr. PM, what an astounding comparison, I am dumbstruck, to be hearing those words from a Cambridge / Oxford educated, acclaimed Economist. 

Mr. Manmohan Singh, you have played a Karunanidhi by comparing the under pricing of 2G Spectrum with Govt subsidy on Fertilizer, Kerosene and Gas.  Now you are a perfect Congress politician Mr. PM.

He has categorically said that "there are serious corruption allegations, but I cannot do anything about it (as he feels he doesn’t have the authority to do so), but no matter what, I will continue as the Prime Minister.  This is the gist of the interview given by our honorable Prime Minister to the Television Editors.

Isn't it an ultimate embarrassment..??

Your thoughts and comments are invited.

Jai Hind.

Andhaadhi - My Emotions and Experience​..

The below post is all about my emotions and experience with Team “Andhaadhi“, well to know what “Andhaadhi” is all about, please follow the link  below.

http://hari-bala.blogspot.com/2011/02/andhaadhi-search-and-wait.html

Read this post when you are are relatively free.

WOW WOW WOW.. What a TEAM, what a sense of accomplishment, what a collective sense of responsibility, what sincerity and amount of dedication, what an amazing involvement, my goodness.  I still remember, it just stated from nowhere, it feels so great to the extent that I am falling short of words to express my state of mind.  I could just feel the rush of adrenalin when I look back the work we have been doing since we conceptualized "Andhaadhi".  The biggest take away from a personal standpoint is that, “if we are sincere in what we do today, eventually, tomorrow by design shall get better”.

Well, I have been getting mixed response since we released Andhaadhi, most of them being positive.  To be extremely frank, I am just indifferent, the feel of having been a part in itself makes me feel on top of the world.  Yet another learning happens to be, "When we do something for the sheer pleasure of doing it, the end result and response actually doesn't matter".

I, beyond doubt, believe that I have made a handful of friends for life.  Usually, I kind of build a wall around myself, till today my best friends, with whom I am actually myself (without a mask), with whom I am as comfortable as I am with myself are my high school buddies, which necessarily means that close to a decade I haven't let anyone to break into my wall.  Never imagined in my imaginable dreams that I could get so close to a bunch of few, I mean, I am just unable to assimilate.

How many sleepless nights with Aadi, Yesh and Thenga.. It just happened, it cannot get better guys, the genuine attitude and truthfulness in our expression is what in my opinion, drew us close.  It is a unique chemistry that we share as a group and with each other individually which is unexplainable.  There were times where we had strong views, on the endless list of topics we discussed, yet I could sense honest respect for the other person’s point of view, in-spite of the fact that we agreed to disagree.  Man, this just does not happen with anyone and everyone, I say, we were destined to meet, necessarily for a cause, which I (We) are yet to discover in full.

Aadi, yaen machan da nee, never thought Andhaadhi would drag us so close than ever before, I have always enjoyed your company, it has become an addiction I must say :P, but as said, not every addiction is objectionable.  There is absolutely nothing on earth that we hadn't discussed as yet, if you still feel that something escaped our radar, drop in right away :-).  Economics, Politics, Philosophy, Music, Movies, Girls, Relationships, Life, Love, Lust, Finance, Investments, Higher studies, Career, Cricket, Cooking, Eating, Bull shitting and damn what not.  Love you dude.  I am sure our relationship would travel places.  I am just myself when I am with you, I feel exceptionally comfortable while sharing my thoughts with you, I could speak to you as I would speak to myself :-), read it once more if you didn’t get. 

Yesh, you are such a casual guy man, I find you extremely sincere but never serious.  You just came close to my heart on the day when we had a brief chat at my terrace, on listening to what you had been through in life to be where you are today.  I have never seen you saying NO to any suggestion, you have the patience to listen to people which makes the other person feel so important which eventually increases his level of importance and commitment.  You are full of fun even otherwise; I could not hold myself back from laughing even now when I think of the late night walks with you and Aadi :D, Aadi, you know what I am saying right :D.  Yet another remarkable characteristic in you is that, you happen to be an extraordinary motivator, you can just get the motor running even when the batteries are completely dried :-), you never let us down.  You stood by my side to take full responsibility for the criticism and didn't hesitate to give complete credit for the appreciation, and such are the traits of an astounding leader I see in you.  Buddy, it was sheer pleasure, for having worked with someone like you, in your future projects, even if I have no role to play, just call me, without a thought I shall join you to do whatever I can :-).  

Karthick, well, if I have to explain Karthick in one word, I would call him a GENIUS, you are gifted with super-high intellect man.  Your intellect, coupled with the inquisitiveness to learn across fields, drives me nuts, you have an extreme eye for detail, and I will have to learn hell a lot of things from you right from Economics to Movies to philosophy and what not.  As you quite often say, there are a lot of factors which drag us close, a special mention to our interest in Economics, I was quite taken aback when I saw an Engineer speaking the language of an Economist and I was extremely excited for the fact that I have got someone to discuss, share, research in the field of Economics.  Well, not to mention, your poetic sense is something to be treasured and nurtured, there are a few lines which I would like to quote here which induced me to fall in love with your words.

பாவையின்  பேரெழிலே - எந்தன்

ஆவலை தூண்டியதால்

காதருகே காதலை சொல்லி

கன்னத்தில் முத்தம் இட்டேன்.

நாணத்தால் துளைக்கப்பட்டு  - வெட்கத்தை  உடுத்திக்  கொண்டாள்.

கனியோடு பால் கொண்டு வந்தவள்

உடலோடு உறைந்து என் உயிர் கொண்டு சென்றாள்.

Oh my goodness, what an amazing aesthetic sense you possess.  We coming together for Andhaathi, shared interest in economics & politics, geographical proximity, Temenos & Azure strategic partnership, I don’t feel all this could happen without a "Specific Mandate".  Miles to go before WE sleep :-) let me just repeat your words “we both, working together on Andhaadhi & Temenos and Azure working together on Banking... Something is in store for this partnership.. Let’s move forward”.

Any day, anything, just count me in.

Sriimathy, what an amazing girl you are, just loved your casual attitude, the manner in which you gelled with the team is just amazing, and I have absolutely nothing to complain.  Most of the girls are irritable, especially when surrounded by gang of guys, and a selected few would always want to be pampered (cry for attention), I have come across such instances not once, but many a times, but you proved to be different from the rest.  Though we hardly have any interest in common, though we have not been talking much, though we have been pulling our legs throughout ;-), though we really don't know each other much, we do share an excellent rapport and mutual respect.  Loved your calm, composed, good-natured attitude and not to mention, admired your flawless singing.  Unnoda kannathula anda kuzhi, avlo azhagu :-), myself and Adi used to discuss, oru ponnu epdi irrukanum nu oru payyan aasa paduvano, nee apdiye irrukae.  I hope and pray the almighty that you must get an excellent man in your life, who deserves you in true sense.

Well team, I know this is quite a long mail; by my conscience didn’t allow me to remove a single word.  Once again, I thank Yesh and Karthick for the once in a lifetime opportunity, I feel extremely proud and privileged for having been a part of this fabulous team and for having accepted me with all my limitations.

P.S - I am half asleep, please excuse me for mistakes if any, romba naal kazhichu, yen manasu vittu pesirkaen.  

Love you all.

With tons of Love,

Hari

"Andhaadhi​" - A Search and a Wait

Hi Friends,

 

I would like to share the link of our short film "Andhaadhi". Would like to have your honest reviews so that it will help us improve.

http://vimeo.com/19628645

Alternate Link

http://www.dailymotion.com/video/xgx3op_andhaadhi-a-search-and-a-wait_shortfilms

About the movie

Weekend Productions presents "Andhaadhi"

 
The title 'Andhaadhi' is inspired from Abirami Andhaadhi written by Abirami Bhattar.  Andhaadhi is a form of poem where the last word of a stanza is the same as the first word of the next stanza. Our protagonist's journey starts with a wait. This wait ends in a search. The search again ends in a wait. Will this wait again end in a search?

Please share the link with other like minded friends as well.

Just a thought..

அழியா ஆன்மாவை அம்மணம் செய்து,
அழியும் உடலுக்கு அலங்காரம் சேர்க்குமாம் பேய்கள்..!!

The euro area's debt crisis

The Euro Zone’s bail out  strategy to tackle it’s sovereign debt crisis is failing, indeed miserably.  A scheme was introduced in order to help the countries that otherwise cannot borrow at tolerable interest rates (due to high sovereign debt), well that did lower the risk but failed to eliminate the risk that the insolvent country may default for want of short term funds.  The only viable option that can visibly have a positive impact is to restructure the insolvent country’s national public debt.  As old debts are refinanced by issuing new treasury bonds (which is nothing but a result of the increased budget deficits), it will eventually result in increase in the share of such country’s debt held by official sources.

Now economists’ and noble laureates debate amongst themselves whether to restructure the debts of insolvent countries, if so, when? Sooner or later? The right indicator to determine whether  or not actually a debt burden is too heavy to borne is the public debt-to-GDP ratio. Most (so called) rich economies in the West which includes euro area’s most troubled (Greece, Ireland, Portugal, Spain) have large budget deficits which have been ever increasing, more so because it has been the model for their economic prosperity, which is tried, tested and practiced for decades. The larger question is, how huge the debt burden would be when their respective economies stabilize, say in 5 years time.

The Economist magazine has estimated the likely burden for the four most beleaguered euro-zone countries, taking into consideration assumptions about growth and interest rates. Because of the fact that all four countries suffer from lack of competitiveness, a recovery in real GDP in the face of fiscal austerity will probably require a drop in wages and prices. For that reason, it has been assumed that nominal GDP falls before recovering to its 2010 level.

(Source: The Economist)

Experts say that it would take five years of tax increases and spending cuts for each country to reach a primary budget surplus without taking into account their interest burden on public debt. 

In the above mentioned table, we can notice that Greece ends up with a debt-to-GDP ratio of 165% by 2015. Ireland’s projected burden is 125%, Portugal’s 100% and Spain’s 85%.  Only Japan which was driven by massive Govt spending (an explicit way to copy the West model which ultimately didn’t work) has a larger burden than Greece, but Japan is comfortably placed since it sits on huge pile of liquid assets and extremely healthy domestic savings, almost 90% of its public debt is held by domestic savers.  For a small country like that of Greece, a debt-to-GDP ratio of 165% is unbearable, amidst the fact that it’s domestic savings being negligible, well, the bubble can’t grow any longer.

Spain though looks comfortable, is a probable solvent. It’s projected debt burden is comparable to that of today’s Germany and France which are considered safe. On the other hand, Ireland and Portugal look as if they are comfortable, in the sense that a public debt in three figures might be tolerable at interest rates of 4% or so, but would be too costly to bear at today’s bond yields which is somewhere in between 9% to 11%.

If we look at the debt-to-GDP ratio of Greece (165%), we could comfortably conclude that it is better to restructure or write off debts which are unbearable, sooner than later. Greece is under compulsion to halve its debt burden to say 80% from current astronomical levels in order to enter the comfort zone.

To conclude, sovereign default by a rich country like that of Greece could be shocking but feasible. Questions like when and how they would write off or restructure to bring the debt levels to halve of what it is now (projected) remains unanswered. It is for the (so called) intellectuals and economists to devise and execute strategies accordingly, who invariably happen to be the “architects” (if I could call so) of this great economic soup.