Bharat Rakshak

"A person burnt by milk tries to cool down the lassi"
many Indians burnt by Britishers sees all the foreign investment or engagement as "BAD".

In a Securities and Exchange Commission filing Thursday, Wal-Mart (WMT, Fortune 500) disclosed a probe into whether its workers violated the U.S. Foreign Corrupt Practices Act that prohibits giving bribes to international officials. The retailer said the possible bribes pertained to such matters as obtaining permits and licenses, as well as to inspections.

Next to the motor car, nothing has so transformed the British environment over the past 40 years than the rise of the supermarket. The retail sector in the UK is controlled by four chains, with Tesco the dominant player. Between them, they sell 76 per cent of our food. When other, smaller supermarket chains are introduced to the equation, the proportion rises to 97 per cent.

Independent retailers of food have nearly gone extinct. Butchers, fishmongers, greengrocers and independent bakeries have seen a 90 per cent decline in their numbers since the 1950s. There are fewer than 4,000 greengrocers left in the whole of Britain. The small town where I live on the fringes of London now has no independent butcher. When I moved there in the 1970s, it had six. The big chains have moved beyond foodstuff, beverages and household goods into clothing, medicines, petrol, banking, newspapers, magazines and insurance. In doing so, they have become threats to small shops and service outlets of all kinds. In many areas, the only surviving small shops are run by people of Asian origin who, as well as having strong family support structures that allow them to compete with the supermarkets’ long hours and low costs, can supply the specialised needs of minority communities. The New Economics Foundation think-tank has described the decline of the independent retailer as “something equivalent to a mass extinction in nature”.

The author is former editor of the Independent on Sunday and New Statesman, and a columnist with New Statesman and the Guardian).

shyam wrote:Wal-Mart reveals probe of possible overseas bribes

In a Securities and Exchange Commission filing Thursday, Wal-Mart (WMT, Fortune 500) disclosed a probe into whether its workers violated the U.S. Foreign Corrupt Practices Act that prohibits giving bribes to international officials. The retailer said the possible bribes pertained to such matters as obtaining permits and licenses, as well as to inspections.

Did INC receive a cut of that?

The world of lobbyists
Devinder Sharma

The top 10 MNC retail companies eyeing the Indian market have reportedly sunk in several hundred crores of rupees.

The storm over the entry of big retail seems to have blown over for the time being. As the dust settles down, and parliament returns to its normal chores, the battleground shifts to the media. Suddenly newspapers are flooded with articles and interviews that decry the political ‘blackmail’ putting the controversial decision on hold. Screaming headlines and full page reports somehow gives an impression as if holding back the approval for FDI in retail is the ‘greatest blunder’ since Independence. India Inc. expresses its ‘displeasure’ calling it a set back for economic growth.

Well, hold your breath. The orchestrated media campaign, which may only be visible to a discerning eye, is actually the handiwork of what is called the corporate lobbyists. Sharp, aggressive and of course always carrying bags of money, they move in the corridors of power. They hobnob with ministers, politicians, economists, and media personalities, ‘educating’ them for instance on how and why India needs to invite big retail to tide over its unemployment and agrarian crisis. They plan diplomatic evenings, organise industry conclaves and summits, plan seminars and conferences, and also demarcate media strategies.

In the United States, corporate lobbying is legalised. In India, it operates undercover and under different names. But both perform the same job – influencing public policy and crucial economic decisions – and in turn undermine democracy. Crucial decisions in agribusiness, fertiliser, seed, farm machinery, animal husbandry, dairy, energy, science and technology, and retail – areas that affect country’s food security – are also influenced by corporate lobbying. Crores of rupees have been spent over the past few years by some of the big multinational corporations to seek an entry into India. What may appear to be economic decisions taken by the government often turn out to be the result of intense lobbying by foreign companies.

It is much worse in America. According to Transparency International, an average of Rs 1,234-crore are spent by US corporations for lobbying activities every month. In case you missed it, I said every month. Such heavy investment brings them rich returns.

Researching the US database for lobbying, and scanning the lobbying disclosure statements that the companies have made before the US Senate, I find almost each of the top 100 fortune companies investing heavily in lobbying, and this includes even IT giants like Intel, Yahoo, Google, Facebook, Microsoft and IBM. Agribusiness, pharmaceuticals, energy, aviation companies are on the top. Indian companies too are employing lobbyists for entering into America.

Cost-benefit analysis

To the question how does lobbying benefit the companies? The answer is provided by a research study conduced by University of Kansas. It pertains to tax concessions wrested by corporations. The report works out the cost-benefit analysis of lobbying expenditure, and interestingly concludes that 93 major corporations, including Hewlett-Packard, IBM, Pfizer among others, had spent Rs 1,456 crore on lobbying, which eventually won them tax breaks to the tune of a whopping Rs 3.2 lakh crore. At such a high rate of return, companies realise the importance of lobbyists.

No wonder, currently around 15,000 Brussels-based lobbyists (consultants, lawyers, associations, corporations, NGOs etc.) seek to influence the European Union’s legislative process. Wikipedia reports that some 2,600 special interest groups have permanent offices in Brussels. In America, lobbyists mainly target the US Senate, US House of Representative and the State legislatures. In 2011, there were 12,220 lobbyists registered.

This clearly tells us how corporate lobbying is writing the economic policies of the American and European governments. The economic decisions are in reality not based on what the people require, but how much the business houses can invest in influencing policy decisions.

Compared to this, Rs 52 crore that Wal-Mart acknowledged to have spent in India between 2007 and 2009 appear peanuts. But collectively the top 10 multinational retail companies eyeing the Indian market have reportedly sunk in several hundred crores in the past few years. According to media reports, the coffee shop giant Starbucks, had also been lobbying in India seeking 100 per cent FDI in single brand retail. As per a disclosure statement it made before the American Senate, the company had spent more than Rs 1 crore in the first 6 months of 2011 for ‘market opening initiatives in India.’

Not only Wal-Mart and Starbucks, a number of foreign companies are lobbying hard to find a foot-hold in the Indian market. These include financial services major Morgan Stanley, New York Life Insurance and Prudential Financial. The financial services companies have already gained with the approval granted to 100 per cent FDI in single-brand retail. In addition, technology companies Intel, chemical giant Dow Chemical, pharmaceutical major Pfizer, telecom companies AT&T, Alcatel-Lucent are also engaged in intense lobbying.

There are a number of other furniture brands like Ikea and garment retailers like GAP which would benefit from the decision to open up for single-brand retail.

In other words, crores of rupees are being spent by foreign companies to influence public policy and the decision making process. Not many of us realise that the debate we see on the television or the articles we see in support of the foreign companies are often supported with lobbying money. In fact, lobbying is also influencing academic research, which is a very sophisticated way of influencing public policies.

In the US, small booksellers were decimated in the last two decades of the 20th century by large book chains like Borders and Barnes and Noble. But these chains in turn are now threatened by Amazon, the giant internet book-seller. Amazon offers the lowest prices, and also offers second-hand books at steep discounts. Borders has gone bust and Barnes and Noble is desperately seeking a saviour.

Indians today are victims of the primitive “mandi system” which escalates food prices by 1:2:3:4, resulting in the world’s highest gap between the price a housewife pays and what the farmer receives. What a farmer sells for 1 is sold at the mandi for 2, which becomes 3 at the kirana store and 4 to the consumer. When you pay Rs 20 per kilo for tomatoes, the farmer gets only Rs 5. As tomatoes travel from the farm to the mandi to the bania, each middleman gets his cut. The price spread varies by commodity and season, but studies show that the gap is less in countries with modern retail. This is because large foreign retailers usually buy directly from farmers without middlemen. Thus, they can pay Rs 8-10 to farmers for the same tomatoes and sell them for Rs 15-17 to consumers, and still make a profit. Some middlemen will lose out but P Chengal Reddy, secretary-general of Consortium of Indian Farmers Associations says, "India has 60 crore farmers, 120 crore consumers and half a crore traders. Obviously, government should support farmers and consumers. FDI in retail will bring down inflation.”

It will also save food from rotting. Global retailers have perfected a cold distribution system. By investing in thousands of cold storages and air-conditioned trucks, they will reduce farm wastage, and bring a revolution in transport, warehousing, and logistics, as they have done in major countries like Argentina, Brazil, Chile, China, Indonesia, Malaysia, Russia, and Thailand, which have allowed 100% FDI in multi-brand retail since the 1990s.

The kirana lobby created an atmosphere of fear. The same fears were expressed during the 1991 reforms. If the government had given in then, India would not have lifted 200 million people out of poverty; not raised 300 million into the middle class and not made India the second fastest growing major economy.

NEW DELHI: The industry ministry is looking to allow foreign retailers a bigger play in their wholesale ventures after the government backtracked from opening the $450 billion supermarket sector.

The department of industrial policy and promotion (DIPP), a government department that frames policy on foreign direct investment (FDI), has proposed that only wholly owned subsidiaries be treated as group companies in the FDI policy.

This will allow the foreign retailers to sell more to organised multi-brand retailers with whom they have a tie-up.

At present, foreign retailers cannot have more than 25% of their sales coming from group companies, the definition of which is not clear in the policy.

The DIPP has proposed to treat only those entities as group companies in which the company has more than 51% stake, the official said. However, the definition will be finalised only after inter-ministerial consultations.

With FDI in retail on the backburner, the industry ministry is keen to incentivise wholesale cash-and-carry to attract investments in backend infrastructure and cold chains.

The government allows 100% FDI in wholesale cash-and-carry. After years of consultations it agreed to allow 51% FDI in multi-brand retail but backed down after facing stiff opposition from political parties, including allies, and traders.

A liberal definition of group company would have implications for wholesale cash-and-carry ventures such as Bharti Wal-Mart, Tata-Tesco and Future group-Carrefour.

Experts say the current framework imposes significant restrictions on conducting wholesale trading business. "This move will provide the much-needed clarity and promote FDI in the sector," said Punit Shah, partner, tax and regulatory services, KPMG.

Kakkaji wrote:FDI in retail: Relief for Walmarts, cap on group sales may go

NEW DELHI: The industry ministry is looking to allow foreign retailers a bigger play in their wholesale ventures after the government backtracked from opening the $450 billion supermarket sector.

The department of industrial policy and promotion (DIPP), a government department that frames policy on foreign direct investment (FDI), has proposed that only wholly owned subsidiaries be treated as group companies in the FDI policy.

harbans wrote:Swaminomics: A good insight by Swamy, makes complete sense.

In the US, small booksellers were decimated in the last two decades of the 20th century by large book chains like Borders and Barnes and Noble. But these chains in turn are now threatened by Amazon, the giant internet book-seller. Amazon offers the lowest prices, and also offers second-hand books at steep discounts. Borders has gone bust and Barnes and Noble is desperately seeking a saviour.

Online Shopping is real threat to Small Shopkeepers

harbans wrote:Gurcharan Das making some of the same points made here:

The price spread varies by commodity and season, but studies show that the gap is less in countries with modern retail.

harbans wrote:Gurcharan Das making some of the same points made here:

Indians today are victims of the primitive “mandi system” which escalates food prices by 1:2:3:4, resulting in the world’s highest gap between the price a housewife pays and what the farmer receives. What a farmer sells for 1 is sold at the mandi for 2, which becomes 3 at the kirana store and 4 to the consumer. When you pay Rs 20 per kilo for tomatoes, the farmer gets only Rs 5. As tomatoes travel from the farm to the mandi to the bania, each middleman gets his cut.

The price spread varies by commodity and season, but studies show that the gap is less in countries with modern retail. This is because large foreign retailers usually buy directly from farmers without middlemen. Thus, they can pay Rs 8-10 to farmers for the same tomatoes and sell them for Rs 15-17 to consumers, and still make a profit. Some middlemen will lose out but P Chengal Reddy, secretary-general of Consortium of Indian Farmers Associations says, "India has 60 crore farmers, 120 crore consumers and half a crore traders. Obviously, government should support farmers and consumers. FDI in retail will bring down inflation.”
It will also save food from rotting. Global retailers have perfected a cold distribution system. By investing in thousands of cold storages and air-conditioned trucks, they will reduce farm wastage, and bring a revolution in transport, warehousing, and logistics, as they have done in major countries like Argentina, Brazil, Chile, China, Indonesia, Malaysia, Russia, and Thailand, which have allowed 100% FDI in multi-brand retail since the 1990s.

Upendra wrote:
kirana stores dont sell books..... swami takes an example from britain and tries to fit it in indian context while subtly passing on accusations against the small retailers... swami should stop churning out paid news reports at such a fast rate.... everyone can see who he is batting for.... go back to singing praises of manmohan to get a padma bhushan

Lalmohan wrote:why have they not succeeded?

habal wrote:

Upendra wrote:
kirana stores dont sell books..... swami takes an example from britain and tries to fit it in indian context while subtly passing on accusations against the small retailers... swami should stop churning out paid news reports at such a fast rate.... everyone can see who he is batting for.... go back to singing praises of manmohan to get a padma bhushan

Why are so many people interested in selling India, this is the main question ? This seems to be the only Indian constant that hasn't changed over time. IIRC there is the Indian finance ministry which takes key decisions on monetary policy but all the senior babus who spend time in the finance ministry seem to exist only to get posted via deputation to WB or IMF. This is the one goal in their life. India be damned. Just look who in RBI or finance ministry isn't a lumiary of the WB or IMF. All the top guys are connected to these 2 shady organizations in some way or another or they are angling for some WB or IMF opportunity. Is it a great surprise then that journalists and sundry economists have caught on.

We have a whole sub-culture of elites where it's cool to sell-off their country for personal interest.

Now the question is whether Reliance be next in the line? For years all its formats are in pilot mode. It seems to be actually in an auto-pilot mode. In response to a story in Commodity Online (Why all Reliance companies doom?), Rick Boozell, who worked as a Retail Consultant, hired to help establish retail operation from inception, wrote that after he had the insiders look at Reliance, the company organization itself is the failure.

“When the Store Operations vertical is not at the center of a retail company, the venture is doomed. For two years, I tried to convey this, but the other "Powerful" vertical heads -EPC, D&L, HR, FMCG, Marketing, Reliance One, etc,. all dictated to the store operations team,” he further added.

The Store Operations vertical needs to care directly for the customer, listen to their daily needs and requests, and develop the personal relationships required for long-term business. This never existed due to the organizational structure of the company.

He further added. “I have never seen such a dysfunctional company structure, and at least 75% of all resources expended were battling internally, versus trying to take care of the customer. The truth is, retailing is a simple business, and India is aware of this, Reliance wanted to make it a grand business venture, where all the retail leaders sit in nice offices, looking at reports - while rarely even entering a store. Reliance really never did enter into the retailing business - at least not a retailing business that the rest of the world would recognize as a modern retailer.”

Rocketing onion prices are hogging policymakers’ attention as it has kept food inflation stubbornly high at over 15 per cent (for the week ended 8 January). Even big organised retailers such as Future Group’s Food Bazaar, Reliance Fresh and Aditya Birla Retail’s More are not equipped to offer the staple vegetable at much lower price than the neighbourhood vegetable vendors.

Most organised retailers are selling onions only a tad lower — at Rs 45-60 per kg, depending on the quality — than the market prices. The reason: retailers continue to source onions from the wholesale mandis rather than from farmers directly.

The retail chains work in a multi-layered format. Middlemen pick stock from the mandis at farm-gate price and then send it to aggregators, who then sell it to wholesalers and from there it shows up at organised retailers’ stores. Onion prices rose as high as Rs 75-80 per kg in December.

Industry executives argue that it is the shortage of cheap funds that is preventing organised retailers from offering competitive prices. “Modern trade allows retailers the ability to buy directly from farmers and pass on the benefits to the final customer through competitive pricing and promotions,” says Thomas Varghese, CEO of More, a brand of Aditya Birla Retail.

He says permitting more foreign direct investment (FDI) in the retail sector will give companies access to cheaper funds, which will allow them to invest in back-end infrastructure — aggregating the fresh produce, grading, packaging and storing in cold storage — required to source directly from farmers.

Investment in better handling and storage capabilities will help reduce wastage and, hence, shortage of articles such as onions. This bodes well for the industry in the long term considering a multitude of retailers will compete to attract customers, creating a natural hedge against any abrupt escalation in prices.

Analysts say that if companies are able to source fresh produce directly from farmers, they should be able to sell vegetables at just 10 per cent more than the farm-gate prices. Currently, the price increases by 100 per cent by the time it reaches the consumers.

However, experts reckon allowing more foreign investment is not the sole solution. “FDI by itself will not solve the problem. The government should pave the way for farmers to work with organised retailers,” says Pinakiranjan Mishra, national leader of consumer practice at global advisory firm Ernst & Young.

SBajwa wrote:"A person burnt by milk tries to cool down the lassi"
many Indians burnt by Britishers sees all the foreign investment or engagement as "BAD".

harbans wrote:Root causes for retail in this sector not flourishing are the following:

1. Lack of management expertize.
2. Farmers not being encouraged to be more involved with organized retail.
3. Lack of technological expertize.
4. Lack of access to cheaper funds
5. Lack of political will/ support, entrenched lobbies.
6. Lack of peer competition

harbans wrote:

He further added. “I have never seen such a dysfunctional company structure, and at least 75% of all resources expended were battling internally, versus trying to take care of the customer. The truth is, retailing is a simple business, and India is aware of this, Reliance wanted to make it a grand business venture, where all the retail leaders sit in nice offices, looking at reports - while rarely even entering a store. Reliance really never did enter into the retailing business - at least not a retailing business that the rest of the world would recognize as a modern retailer.”

http://www.commodityonline.com/news/sub ... 6-3-1.html

harbans wrote:But then what's common sense when nonsense is so readily available to spout. Let's fear monger nonsense than apply some simple common sense.

mahadevbhu wrote:

SBajwa wrote:"A person burnt by milk tries to cool down the lassi"
many Indians burnt by Britishers sees all the foreign investment or engagement as "BAD".

quoted for being the truth and nothing but the truth.

thats what got nehru going, on socialism.

South Korea's gdp per capita, like india's in 1950, was around 500 $ per person per year.

Imagine.............

Lalmohan wrote:but south korea's development has interesting lessons for india - particularly about focus on education and infrastructure...
they are however a much more disciplined society than us... that also makes a big difference

harbans wrote:Recap from the Bizarre to the hilarious here we go are the reasons here why FDI in retail is such a bad thing:

5. FDI will not bring cold fusion
6. Won't find the Higgs Boson.
7. Won't make my that thing 2 " longer

and so on..fear mongering being turned all the possible notches without reason or logic.

Most organised retailers are selling onions only a tad lower — at Rs 45-60 per kg, depending on the quality — than the market prices. The reason: retailers continue to source onions from the wholesale mandis rather than from farmers directly.

Why cant this be fixed without FDI?

But farmers could only sell at the government mandis till the Madhya Pradesh government changed regulations and allowed ITC to procure farm produce in 2004. This cut out middle men, and gave better service and prices to farmers. Little wonder that big farmers like Bishnoi migrated to ITC.

But now he is back at the government mandi, with 26 quintals of soybean. When Bishnoi drives in with his produce now, there are electronic weighing scales that cut down the time taken to measure grain as it comes in. Newly constructed sheds protect grain-filled trolleys from the weather and pests. The modern technology centre records all transactions and smart cards ensure that payments are smooth.

The biggest change from the competition between the mandi and the Choupals has been the shift of power away from traders to farmers.

An experiment in Madhya Pradesh shows farm procurement mandis can be as efficient as their private competitors

The government is now working to set up infrastructure needed for this, including warehouses and cold storage facilities, says Aggarwal.

common sense says read and understand the article you post

harbans wrote:

common sense says read and understand the article you post

Yes. Retailing is a 'Simple' business. Depends upon who says it.

Yes also sending a man into space is a Simple business. Depends upon who says it. Russians, Evil NASA or the Iranians or Timbuktans.

Yes a Heart Bypass surgery is a simple business today. Again depends who says it.

Yes flying a Modern Jetliner is a Simple business. Again depends on who says it.

harbans wrote: 1. Have deep pockets. Funds.
2. Have expertize on how to go about it.
3. Have Cold storage and warehousing skills and organizational capability.

FDI in that field brings all the above. It helps Indian Pvt players improve, move into partnerships, gain expertize.

All very simple indeed. If people like you can get rid of the Demons inside you.

harbans wrote:Lalmohan Ji, Upendra wants to say South Korea is the occupied country and North Korea is the free one really.

Korea was invaded and conquered and still under foreign military occupation with half the country divided between warring factions

harbans wrote:Upendra, have you ever been to South Korea? Have you heard of Companies like Samsung and Hyundai? Do you have a clue what sort of life indices people in the South have.