Indian Economy: News and Discussion (Apr 1 2011)

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Ambar
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Ambar » 24 Nov 2011 23:51

vera_k wrote:
kmkraoind wrote:Even during 2008-2009 crisis Rupee stood at 49-50 range. Now its at 51 and still there are no significant FII outflows out of nation. Is this a pure rigging by big players, so that they can get all their black money with a decent profit?


With high inflation, the natural tendency for the rupee will be to depreciate 6-8% a year. In the presence of high inflation, this tendency can be countered if exports, FDI or FII investments grow fast enough. RBI might prefer the devaluation anyway, since it allows them to discourage the flow of hot money while encouraging exports and preserving the forward movement on economic reforms (i.e. no capital controls like in Brazil).



RBI need not "discourage" the flow of hot money, FIIs are already discouraged enough to pull money out of India. We have lost around 1.2-2.0 billion USD/month in cumulative FII inflow this year, 2011 is proving to be another 2008, the only difference being our situation is much worse than 2008. In service sector which now makes up nearly 65% of our economy,we have the highest wage inflation in Asia by a long margin. Spiraling public and private debt, un-curbed inflation, lackluster policies, gilts that have curves flipped..at this rate we'll soon go back to junk status while we are too busy harping about "civilization meltdown" in the west.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Singha » 25 Nov 2011 00:56

> It also decided to raise the cap on foreign investment in single-brand retailing to 100 per cent from 51 per cent,

this expected to facilitate entry of large stores who sell their own brand like ikea hopefully...

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Cosmo_R » 25 Nov 2011 01:45

Ambar wrote:......
RBI need not "discourage" the flow of hot money, FIIs are already discouraged enough to pull money out of India. We have lost around 1.2-2.0 billion USD/month in cumulative FII inflow this year, 2011 is proving to be another 2008, the only difference being our situation is much worse than 2008. In service sector which now makes up nearly 65% of our economy,we have the highest wage inflation in Asia by a long margin. Spiraling public and private debt, un-curbed inflation, lackluster policies, gilts that have curves flipped..at this rate we'll soon go back to junk status while we are too busy harping about "civilization meltdown" in the west.


Very true. Particularly when you read Vipul's post ^^^. We are now in the populist cycle—spending money not funded by taxes to buy votes. When you come across these facts:

Bad storage > Lack of refrigerated transport> Bad roads >40% spoilage> food inflation>food programs>budget deficits>higher rates>lower growth>more poverty>populist programs etc.

I'm starting to wonder based on the Euro meltdown whether this is not part of the great Mandala—democracy (or at least a lot people arguing in parliament), lack of governance/accountability do not ultimately lead to the 'benevolent dictatorship' (no beggars, trains run on time etc) in turn followed by yearning for 'freedom'.

Apart from the Swiss, I don't think anyone else has got it right more than 50% of the time. But then their major contribution to civilization has been the cuckoo clock.

If the PRC model survives, it may yet become another model.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby abhischekcc » 25 Nov 2011 02:14

Sonia's plan to ruin India is in full view now.

When NREGA had come, me and some other members had warned about the ill effects of spending money which does not lead to proportional increase in assets or economic activity, that it would lead to inflation.

Now, Sonia Maino's right to food bill is the next step. All of this crowds out money for private investment - the investment that actually creates jobs and growth.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Cosmo_R » 25 Nov 2011 03:56

abhischekcc wrote:Sonia's plan to ruin India is in full view now.

When NREGA had come, me and some other members had warned about the ill effects of spending money which does not lead to proportional increase in assets or economic activity, that it would lead to inflation.

Now, Sonia Maino's right to food bill is the next step. All of this crowds out money for private investment - the investment that actually creates jobs and growth.


SG's Italianate roots might be a clue. Silvio Berlusconi did something similar until the bond facisti drove in. After all it's not her money.

Her lack of understanding of economics and markets is up there with the commies. Her ilk equate FX reserves with cash on hand. India's FX reserves are not the same as PRC's which are merchandise trade balance driven. India's are mostly current account and services (remittance) driven, India runs a huge merchandise trade balance deficit that is unsustainable. The FX reserves are 'hot money'

The retail sector investment authorization is hopefully an indication that reality is sinking in.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Singha » 25 Nov 2011 08:55

not just SM its the NAC who collectively frame economic policy and fax the memo to MMS for execution.
I suspect she has no clue on how to run a country's economy (or even a shops balance sheet), given her modest academic credentials and lack of any real work admin experience and is basically led by some NAC members of 'high degrees'

you'd have to cut JLN and RG some slack. JLN learnt his trade in the freedom movement in concert with some of the best humans around, and RG whether by hook or crook atleast held down a responsible job of airline pilot.

RG's brother, IG, SM and her son are among the best examples of pampered political elites who become CEO & MD after passing 10th std :rotfl:

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby kmkraoind » 25 Nov 2011 09:07

NAC is filled with too smart jolawallahs and anti-Indian people. They want to utilize the scant precious economic reserves on uneconomical schemes like NREGA and food bill, thereby making not enough investment in infrastructure like roads, railways, schools and hospitals. The advantages are Gandhi clan raise slogans like "garibi hatao" for ever. It even discourages people to work hard and migration to industrial jobs, leaving in perpetual begging stage and looks for a messiah forever.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Theo_Fidel » 25 Nov 2011 09:18

I don't think it is right to say Sonia does not understand what the NAC cabal is selling to her. She wants to be in power and to hand over to her princeling and she is certain this is the only way. The complete disarray of opposition parties on these issues does not help.

The real problem is she does not want to go to the trouble of actually getting down to the village level and understanding the deep problems and attitudes that keep people disconnected and impoverished at that level. Freebies are popular in India and there is no way that one can stop these give away's. The question is what we can get in return. We could ask for quite a few vital things in education, health and treatment of women. This is the bit Sonia and her cabal ignore.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Pranay » 25 Nov 2011 20:33

http://timesofindia.indiatimes.com/busi ... 871095.cms

India's growth story is still "credible" and the move to open up the economy to global supermarket chains will help growth and control inflation, RBI governor Duvvuri Subbarao said on Friday. :roll:

"It's commendable that government has taken the initiative. Let's hope that it will improve the logistics chain and supply chain management in agriculture," Subbarao said in a speech in Chandigarh.

Late Thursday, the government approved 51 percent foreign direct investment in the supermarket sector, paving the entry of firms such as Wal-Mart, Tesco and Carrefour into one of the world's largest untapped markets.


I completely fail to see the economic logic in this argument as expounded above that "India's growth story is still "credible" and the move to open up the economy to global supermarket chains will help growth and control inflation, RBI governor Duvvuri Subbarao said on Friday."

The entry of Walmart or Tesco or Carrefour will streamline the logistic supply chain but that will be specific to those entities only. How will the larger economy benefit from such streamlined supply chains?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Hari Seldon » 25 Nov 2011 20:41

Until the egregious APMC act is in place, domestic initiatives to streamline agri supply chains, get leaner by eliminating middlemen, get farmers better remuneration etc cannot bear fruit.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Pranay » 25 Nov 2011 21:09

http://www.bbc.co.uk/news/world-asia-india-15885004

There has been uproar in India's parliament over the cabinet's decision to open up the retail market to global supermarket chains.

One key government ally, the Trinamool Congress, joined opposition parties in shouting slogans and unfurling banners.

The lower house had to be adjourned, and Trade Minister Anand Sharma instead held a press conference to spell out details of the policy.

He said the "India-specific" scheme would create tens of millions of jobs. :roll:

The cabinet's move allows 51% foreign direct ownership (FDI) of multi-brand retail stores, allowing groups like Tesco and Wal-Mart to open stores. Such operators currently can only sell wholesale in India and not directly to customers.

The policy is an executive decision and does not need parliament's approval. :roll:


Trinamool Congress cabinet member and Railway Minister Dinesh Trivedi said he had "registered his dissent" at the meeting on Thursday but "was overruled".

Finance Minister Pranab Mukherjee reportedly told him: "If you don't want [foreign direct ownership] in West Bengal, it's fine, but you can't prevent other states from getting it."

BJP member and former state chief minister Uma Bharti vowed a violent response to the move.

She said: "If Wal-Mart tries to open its mall anywhere, I will burn it myself."


Mr Sharma said the main concern at present was that because of the poor refrigeration and distribution network, 50% of fresh produce was lost before it could reach retail.

The proposal sets a minimum investment limit of $100m per chain - 50% to go on developing rural infrastructure and establishing a cold-chain system - and 50% on front-end retailing, or stores.

"We also mandated that 30% of entire sourcing by retailers will be from small and medium enterprises," he said.

The multi-brand retailers will be permitted only in cities with a population of one million or more.

Mr Sharma added: "The step which we have taken is an investment in the present and the future of this country."


A decision on the FDI issue had been pending for two years.

The cabinet also decided to raise the cap on foreign investment in single-brand retailing - such as Apple or Reebok - to 100%, from its current 51%.

Central bank chief, Duvvuri Subbarao, on Friday welcomed the cabinet's moves, saying they were important for securing growth and controlling inflation.


- "Tens of millions of jobs" - Another "political" assertions that needs to be challenged. What kinds of jobs is this minister talking about?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Vasu » 25 Nov 2011 21:24

something i wrote earlier today somewhere else:

There are some inherent constraints that even the entry of any player can't change. A bad road is a bad road for a foreign player and a domestic player, and for a foreign truck and an old Tata Truck with much less. The super duper supply chain logistics that these companies boast of in Europe or North America are backed by a strong infrastructure that India will probably not see for many many decades, if at all. So to expect those logistics operations being replicated here is naive and ignorance at best.

If the Government says that India needs open up the retail sector to foreign firms which have been smacking their lips in the most creepy way, then are we to assume that only the western retailers are capable of bringing in the best practices into the country? Are the best practices that we are talking about a protected trade secret and only in the hands of Walmart and Carrefour? Are the western companies the only ones capable of spending the money on setting up the back end logistics in the retail sector?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Pranay » 25 Nov 2011 21:30

http://www.bbc.co.uk/news/world-asia-india-15885011

India has taken another step to completely open up its $500bn retail market to global supermarket chains.

But the decision to allow 51% foreign ownership in multi-brand and 100% in single-brand retail has come with several riders.

They include a minimum investment of $100m by a chain over five years, and a commitment to purchase 30% of their goods from small and medium-sized firms.

Also, the supermarkets are to be located in only 37 Indian cities, with a population of over a million each.

Thursday's decision, therefore, implies that only a few international firms - maybe five or 10, including Wal-Mart, Metro, Tesco and Carrefour - would benefit from it.

Most of the other foreign players would be unable to take advantage of the new policy for several reasons.


Kishore Biyani, the head of India's Future Group, which owns several retail chains in India, predicts that the new moves may lead to additional inflows of $8bn over the next five years.

Others foreign groups are more optimistic, and feel the figure will be four times higher.

However, since the foreigners can open retail stores only in the big Indian cities, they will need to scale down their plans.

If one optimistically assumes that they will own 600 new stores over the next five years, their investments will be $6bn (at an average of $10m per store).

Bharti Wal-Mart, a joint venture, admits India is not likely to be flooded with foreign inflows.

The immediate deals may include buyouts of 51% stakes by foreign firms in existing Indian chains such as Bharti, Trent, Future Group and Pantaloons.

The real retail transformation - in the form of lower retail prices, higher remuneration to farmers and the decimation of middlemen - will possibly happen in five to 10 years
.


So Thursday's decision appears a deliberate half-measure to move in the right direction.

Although it partially seeks to silence critics who believe that the government is caught in some sort of a policy paralysis, it still does not translate into real reforms that will benefit farmers and consumers.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby svinayak » 26 Nov 2011 02:17

Indian elite should be smarter than this. They have no clue how to protect India and Indian interest.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby RamaY » 26 Nov 2011 02:27

^ they are leasing away their responsibilities as they are happy to live (like parasites) on the tax revenues.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Vipul » 26 Nov 2011 06:50

Govt seeks nod for additional spend of Rs 57,000 cr.

In the wake of the mounting subsidy burden, the finance ministry on Friday sought Parliament's nod to spend an additional Rs 56,848 crore in 2011-12, which may further widen the government's fiscal deficit. This would be in addition to the budgeted expenditure of Rs 12.5 lakh crore and an extra net spend of Rs 9,016 crore approved in the first batch of the supplementary grant.

In the second supplementary demand for grant tabled in the Lok Sabha, finance minister Pranab Mukherjee sought the approval of the House to pay Rs 30,000 crore as compensation for the first half of the year to oil marketing companies, which have been bleeding because of selling fuel at a price lower than that prevailing in the international market.

The second additional expenditure is towards fertilser subsidies of Rs 13,778 crore. The government has sought an additional amount of Rs 2,297 crore towards food subsidy.

While the gross additional spend is Rs 63,180 crore, the government plans to meet the requirement of Rs 6,330 crore through savings in various heads, leaving the net cash outgo at Rs 56,848 crore.

Leaving aside subsides from fuel, food and fertiliser, which comprised about 73 per cent of the gross additional expenditure, the ministry has tried to limit the demand only to a few necessary items.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Ambar » 26 Nov 2011 08:16

Why havent they thought of issuing fertilizer "bonds" the same way they issue "oil bonds" for OMCs? That way they can show the additional 12 billion$ as "investment" instead of expenditure, keep it off the books and go around telling media they are very serious about tackling deficit! :roll:

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Singha » 26 Nov 2011 09:10

in certain areas of big box retail (I am talking ultra size furniture like ikea or rather specialized ones like sports authority or Rei), only foreign players seem to be having the history and global sourcing to make it happen. even the biggest e-zone or croma pales before the size of a best buy.

take furniture. due to shortage of wood, native wood furniture is gone and is not coming back. you can get weak mangowood furniture at inflated prices. the rest is a motley collection of 'imported' chinese and malaysian kits. if I have to buy such particle board kits might as well do so in a nice env with proper customer service and choices like Ikea. the grey market kit players will be forced to drop the inflated prices they are charging for stuff thats inferior to even the ikea stuff.

likewise where do you get a world class range of sports gear across multiple sports? standalone sports shops do have the kit imported from here and there, with very little choice and inflated prices. try buying a head tennis racket or yonex badminton racket and you will know. even shuttlecocks and tennis balls are not really cheap.

thing is many of these stuff are technically feasible to make in india but end up being imported because nobody is there to drive volumes. if we have to pay dollar prices might as well pay rei or sports authority and atleast get 200 choices!

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby gakakkad » 26 Nov 2011 09:17

There seems to be a tacit approval on the the fdi issue from the BJP.. Mid sized retailers are a traditional BJP votebank.. So they ll make a lot of noise publicly .. But somehow the bill will get passed..

IMHO it ll have a positive impact ,probably not as much being as marketed , but surely nothing negative will happen ..

What about more concrete steps to improve supply chain ? Like getting the government and the useless middlemen out of the agricultural black-marketing and plundering logistics sector..

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby vina » 26 Nov 2011 10:26

Yawn.. "Linguistic Innovator" and contributor to Hindi 'Littrachaw" (eg.. Babar ke Aulaad!) Uma Bharati has now threatened to personally torch the first Wal-Mart that opens, consequences be damned.

Reminds me of the happenings some 20 years ago when the first KFC was opened @ Brigade Road in Bangalore,Kerala, amidst doomsday predictions and it was vandalized by nut case greens and militant Kannada orgs (Nanjundaswamy's org and supported by the 'ol Umble Farmer I think). Roll forward 20 years and see what has happened.

Frankly the RSS / Extreme Right luddites (a curious combo.. religiously and socially ultra conservative, but economically ultra marxist) need to stop belting out the tired old tunes from their scratched LP records and switch to something new.. As it is, the glug , glug one hears is the sound of the toilet flush getting opened, and if they dont jump tunes fast, it will become a big wooooooooshh and down they get flushed down into the detritus of history.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby vishvak » 26 Nov 2011 12:36

tweeter link: http://twitter.com/#!/Swamy39/status/140262237318291456

or round tripping of black money


by SSwamy when asked about fdi retail

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby member_20134 » 26 Nov 2011 13:42

Predictable and somewhat boring rants against the right wing not withstanding the real impact of FDI in retail is something which is extremely complicated to predict. At times even carefully constructed economic models too err by a long way. Small and medium size traders will definitely be affected negatively. The employment opportunities created will be for low skilled jobs. The real estate mafia will make a killing in big cities.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Abhijeet » 26 Nov 2011 14:24

The BJP is not right wing, at least not since they've been in the Opposition. Their opposition to retail FDI in this case is typically left wing if not commie.

Their modus operandi seems to be to oppose anything related to opening up the economy, even if it is directly contradictory to their own actions when they were in power.

Retail FDI is probably the most positive decision this government has taken during its second term.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Singha » 26 Nov 2011 14:35

imo there is little to no backward pressure of orders from the indian retail players like croma, ezone, big bazaar et al into indian manufacturing. they are happy to pickup whatever they need from wherever its cheapest. big bazaar makes a living peddling stuff made in shaanxi. so its not that indic retail players are doing anything beyond making profits and providing direct employment in their stores and logistical tail.

so will the new foreign owned retail players if any come.

if some of them get a good base here, might be willing to source more products for their worldwide chains from india.

if they go for big box stores on outskirts, will only serve youngsters willing to bus for miles and people with cars. the neighbourhood stores will not be impacted. I think they will only do that for a while because thats the model.....I dont see walmart opening 10,000 miniMarts in India because the cost structure of such tiny stores does not add up well .... subhiksha tried the rock bottom sdre approach and still failed...folks like ikea and sports authority or macy's can only operate by giving a vast choice in large stores...thats their hope of persuading customers who can drive a few extra miles.

so I dont see any jobs loss, just job growth in new operations both front and back end.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Upendra » 26 Nov 2011 14:41

IMF agent Manmohan strikes again. As directed by his NWO masters opens up retail sector to FDI to allow in the MNC's to begin their loot. In the short-term consumers will be happy to get goods at low prices until small scale businessmen in the retail sector are eliminated, then these MNC's will increase their prices to exhoribant levels to make a killing. Consumers who buy at these stores will be spied upon by these MNC's and their purchases tracked and saved under indiviual profiles. Warn your relatives friends against buying from these stores.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby harbans » 26 Nov 2011 15:01

As directed by his NWO masters opens up retail sector to FDI to allow in the MNC's to begin their loot. In the short-term consumers will be happy to get goods at low prices until small scale businessmen in the retail sector are eliminated, then these MNC's will increase their prices to exhoribant levels to make a killing.


I heard the same line of thought 20 years ago when the 1st stage reforms dismantled the license raj. So nothing new in that line of thought. Only i don't see anything negative but repetition of fear mongering that competition will kill Indian enterprise. That isn't going to happen..and it didn't 20 years ago.

While there might be initial dependence of existing global supply chains, in the long run, when economies of scale start developing. it would make sense localizing some parts of the global supply chain. Timber industries for example based out of China would be replaced by a timber industry locally producing the same articles. So logs for same instead of being exported to China and finished products to India, would be replaced by importing logs to India and finishing products and possibly even exporting into the global supply chain. This could happen for thousands of items..translating into millions of jobs. Developing organized volumes of sale is a first step, and global retail industry would bring in the skill sets to make that achievable.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Abhijeet » 26 Nov 2011 15:37

People who are opposed to retail FDI because it means that Indian businesses will be wiped out and the foreigners will run away with the loot should consider: there is tons of empirical evidence since 1991 on the effect of opening up the economy, and the higher growth that has resulted. It's not just a theoretical discussion any more. The arguments are a rehash of things we've heard every single time for every industry that has been opened to foreign competition.

Is there a single industry in which these dire predictions have actually come to pass?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Hari Seldon » 26 Nov 2011 15:48

I am also in support of retail FDI. IMHO, its a matter best left to states to sort out. States like Punjab will embark on this path right away. As also, I suspect smaller states like Goa and Sikkim, not to mention UTs. The laggard states will come round eventually once the benefits become crystal clear.

In the meantime, how about the big 2 national parties agree on internal liberalization first? On a pan-India FTA first? On removing trade barriers and restrictions some of which are hangovers from the raj? How about scrapping the egregious APMC act first and freeing the small farmer the morass that is gubmint mandi-raj? How about breaking up/reorganizing FCI and privatizing at least parts of its ops? And so on and on. Retail FDI isn't a panacea in these areas.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Tanaji » 26 Nov 2011 16:51

Eh, I thought the whole FDI thing was targetted to make the food supply chain more efficient. The way it is right now, it is criminally inefficient and anything can be better than the FCI godowns. WE absolutely need more efficient supply chains in the food sector that reduce wastage.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby vera_k » 27 Nov 2011 02:10

Singha wrote:in certain areas of big box retail (I am talking ultra size furniture like ikea or rather specialized ones like sports authority or Rei), only foreign players seem to be having the history and global sourcing to make it happen. even the biggest e-zone or croma pales before the size of a best buy.


In many categories, big box retail is on the way out (e.g. it is unlikely Best Buy or Walmart will survive competition from Amazon.com), so the government should move fast and get whatever money they can entice foreign players to put in. Best Buy itself is moving to shrink store sizes, but they likely aren't moving fast enough to survive.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Kakkaji » 27 Nov 2011 05:50

I think the Indian market is now large enough and varied enough where it can support retail in multiple formats. Foreign large retail, Indian large retail, Indian medium-sized retail, small kirana shops, can all survive, flourish, and serve the market.

I don't think small kirana shops will be driven out of market, or that foreign big box stores will be able to monopolize the market. Indian businessmen are quite smart and wily and quite capable of turning the table on Gora Sahibs.

On another note, when the Cong. Govt. came to power in 2004, the two big reforms that were on my wish list from them were:

1. Implementation of VAT, and
2. Opening up retail to FDI

Now that they have done both, I am happy. :)

These two reforms could only have been done by a Cong. Govt and not by a BJP Govt, since small traders are a core constituency of the BJP. It is similar to the situation where large-scale disinvestment was best started by BJP and not by Congress.

Now, on to labour law reforms.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Suraj » 27 Nov 2011 07:00

BJP's opposition is partly borne out of their small trader electoral base. Opposing while in the opposition is SOP anyway.

I'd really like it if the retail policy framework also required domestic procurement. There's nothing particularly great about the current domestic retail system considering that so many things at various chain stores are just sourced from PRC. Most, if not all, can be cost-effectively sourced in India if laws make it cost-effective for domestic manufacturers to create facilities to supply simple manufactured goods in bulk.

Is it autarkic ? Absolutely, but that's how PRC itself built its own manufacturing engine - by gaming the system long enough to build its capabilities, and then playing by the rules, sort of. Ultimately, the FDI rule change itself is just a step, not a goal in itself. It would be far more useful if DIPP/FinMin provided clearance based on amount of local sourcing: source more locally = can hold greater stake.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Kakkaji » 27 Nov 2011 07:13

Suraj wrote:BJP's opposition is partly borne out of their small trader electoral base. Opposing while in the opposition is SOP anyway.

I'd really like it if the retail policy framework also required domestic procurement. There's nothing particularly great about the current domestic retail system considering that so many things at various chain stores are just sourced from PRC. Most, if not all, can be cost-effectively sourced in India if laws make it cost-effective for domestic manufacturers to create facilities to supply simple manufactured goods in bulk.


Suraj-ji:

from one of the articles posted above, the Govt has imposed the following restrictions:

The proposal sets a minimum investment limit of $100m per chain - 50% to go on developing rural infrastructure and establishing a cold-chain system - and 50% on front-end retailing, or stores.

"We also mandated that 30% of entire sourcing by retailers will be from small and medium enterprises," he said.

The multi-brand retailers will be permitted only in cities with a population of one million or more.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby sukhish » 27 Nov 2011 08:28

it's easy to sit in the opposition and criticize the government, specially when you take the whole parliament for ransom. the way the opposition is behaving tells you how many qualified people and really there in the so called nationalist party. it's all about pandering
to their vote bank. they are already talking about not implementing the policy in BJP rules states. also the BJP ruled states don't want GST either. they just want to paralyse the parliament and show the people that congress is good for nothing and so should get into power next time, but in reality by doing this I don't think they even break their 116 mark, let alone getting close to 272.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby vera_k » 27 Nov 2011 08:57

So what is going on? Seems like another repeat of the N-deal no-test bickering where different interpretations are trotted out depending on who is being talked to.

Govt clarifies on 30% sourcing norm for foreign retailers

Government's clarification on Friday that multi-brand foreign retailers are not required to source 30% of their procurements from Indian small and medium enterprises has surprised some members of the Union Cabinet who approved the decision.


"That was the impression we all got when minister for micro, small and medium enterprises Virbhandra Singh asked about his demand to mandate the foreign retailers to do a 30% sourcing from small and medium enterprises. We could not have suspected otherwise since he is a minister in government of India," said the minister

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Upendra » 27 Nov 2011 09:18

vera_k wrote:So what is going on? Seems like another repeat of the N-deal no-test bickering where different interpretations are trotted out depending on who is being talked to.

Govt clarifies on 30% sourcing norm for foreign retailers

Government's clarification on Friday that multi-brand foreign retailers are not required to source 30% of their procurements from Indian small and medium enterprises has surprised some members of the Union Cabinet who approved the decision.


"That was the impression we all got when minister for micro, small and medium enterprises Virbhandra Singh asked about his demand to mandate the foreign retailers to do a 30% sourcing from small and medium enterprises. We could not have suspected otherwise since he is a minister in government of India," said the minister



Manmohan is a IMF agent, only interested in furthering his masters' interests. Indian small and medium businessmen are going to be bankrupted by his actions. Those who supported and blindly blamed opposition parties need to rethink their blind belief in manmohan. Take some time to analyse manmohan, you can see a clear plan to impose his master's plan of a southasian union and ultimately a one global state. So stop badmouthing and bickering opponents of FDI in retail and think.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby gakakkad » 27 Nov 2011 09:38

One word against FDI in retail (and that too a poorly framed fdi bill) and people start labelling BJP as a commie ..people are going gaga over congress introducing the bill.. Politically speaking , why should they even pretend siding with a congress gov't which is being banged from all directions ? Besides the fact that small sized traders are scared of them.. It is far easier to pretend convergence with the views of your electorate then try to get them change their POV..I ean why would BJP try and sell the idea of walmart not harming their electorate , at the time of elections ? Its easier to side with their electorate and score brownie points.

If BJP was re-elected in 2004 , walmarts would have already open in India by now..

People are talking of reforming FCI and repealing the APMC act.. What is the communist congress party doing ? Just the OPPOSITE ... THE FOOD SECURITY BILL ..Courtesy MOHHAMMAD BIN QUASIM KI AULADE , THE NAC Headed by Madamme Maino Contripooter to the Pingreji , URDU and Pashtoo LITRACHAW....

Its NOT surprising that the Congress is even MORE communist than marx himself ..or even the soviets.. they want to establish a caliphate after all..

Any way the Kerala congress and AP CONGRESS once burnt reliance super-stores ..Reliance is an Indian company.. So congress stand on Malls seem to be that its Ok for foregn companies to build them , but when reliance ,an Indian company opened them , they burnt their warehouse .

enjoy..

http://news.rediff.com/report/2010/jan/ ... andhra.htm

I am Sure most malls will come up in economically progressive states like Guj ...

Regarding the GST, congress is not at all serious regarding the bill.BJP rejected it because the bill was poorly framed (BJP ruled states are doing better economically , so they would end up paying more tax and get less proportion of revenue in return , which would be siphoned off to laggard states) .

Why do they want to table communal voilence bill before the GST ? And wasn't it NDA who initiated taxation reforms ? or fdi in insurance ? or disinvestment? its only because we have a paid media and a uneducated electorae that congis keep coming to power...

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Suraj » 27 Nov 2011 11:09

Kakkaji wrote:Suraj-ji:

from one of the articles posted above, the Govt has imposed the following restrictions:

The proposal sets a minimum investment limit of $100m per chain - 50% to go on developing rural infrastructure and establishing a cold-chain system - and 50% on front-end retailing, or stores.

"We also mandated that 30% of entire sourcing by retailers will be from small and medium enterprises," he said.

The multi-brand retailers will be permitted only in cities with a population of one million or more.

Yes, but this refers to just food procurement. I'm also referring to everything from fabrics to toys to even Deepavali diyas and Ganesh idols - these are imported in bulk from PRC by our current desi chain stores too. There's really no point in acquiescing to this business - for our own benefit we ought to be blocking such imports and instead providing incentives to SMEs who can supply them at equally competitive prices if they didn't have to face margin issues primarily due to the cost of doing business (poor infrastructure, inter-state commerce constraints, regulatory hurdles...). Wealth is created by incentivizing production of goods within our shores. To not consider this is to turn this industry into something like what's happened in the US - an entire supply chain geared to sell stuff made in PRC and elsewhere. We're capable of cost-effectively making practically everything that can be sold in these stores, and exporting production to storefronts of these retailers outside the country.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby harbans » 27 Nov 2011 11:24

We're capable of cost-effectively making practically everything that can be sold in these stores, and exporting production to storefronts of these retailers outside the country.


Indeed, that's why before i mentioned that initially many items could be imported from the global supply chains. But eventually as the savings in substitution to a local one become apparent that will happen. Presently the procurement is disorganized. Opening FDI in retail will help organizing the sector and the logical consequence of that would be local industries getting a slice of that pie. I wish this was done much earlier though.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Upendra » 27 Nov 2011 11:35

@ suraj and harbans, read the link posted by vera_k

manmohan lied to his cabinet on the 30% stipulation of procurement from Indian SME


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