Biz and Eco

mcdonalds

By Kate Norquay:

From 18–22 I spent four years working at McDonalds. I worked a mix of part and full time over these years, always failing to find a ‘better’ job. I never advanced up the rungs, never was a manager, never achieved anything of significance in my time there.

Basically, I was the absolute stereotype of a deadbeat McDonald’s worker. Lazy, stupid, with no initiative.

Over the years, I saw this stereotype play out in a number of ways. The faces of my parents friends falling when I told them what I did. The snide remarks, ‘Do you still work at McDonalds?’, or ‘I could never work at a place like that.’ Encouragement from my friends, ‘Just don’t show up to work today!’ (because it’s not a real job).

mcdonalds
Image source: Wikipedia

And it played out in my own mind. I was a terrible worker, too slow, clumsy and resentful of my circumstances. I quietly decided that I was too good for McDonalds. I constantly justified myself, ‘It’s suuuuuch a shit job! But I need money hahaha.’ I was a bookish good student who enjoyed intellectual conversation. I wasn’t meant for this useless physical labour.

I didn’t improve. And what’s more I didn’t want to improve. Why should I try to be good at something that was beneath me?

But after a few years my attitude started to change.

I started to be proud of my job.

I asked myself, what is the difference between McDonalds and the entry level jobs other students have? Why is my job so much more pitiful than others?

Is it because I work for a big corporation? No, because otherwise jobs at the Warehouse or Hannahs would be just as embarrassing.

Or because the company is unethical? Glassons and JayJays use slave labour.

Maybe because I work in fast food? But a job at Burger Fuel isn’t quite as bad.

Because it’s not intellectual? No, jobs in retail and reception are ok.

And then I realised.

McDonalds is supposed to be a job for people who can’t do anything else. I noticed that majority of entry level jobs didn’t hire people who looked like the people I worked with.

At McDonalds there were people with disabilities, overweight people, people who weren’t conventionally attractive, people that couldn’t speak much English, young teenagers, and a lot of racial diversity. These people made up the backbone of the store. They were respected as some of our best workers.

Then I would look at a store like Glassons, or Whitcoulls or Starbucks and the majority of the time I would see people that looked like me. White, early twenties, reasonably attractive, slim, English speakers.

This was the bias that both me and the people around me were applying to my job. I meet the criteria for a ‘good’ job at a clothing store. People who come from good backgrounds aren’t supposed to end up in McDonalds alongside those who couldn’t do better if they tried.

If you’re a white girl in your early 20s you will be ridiculed for working at McDonalds. But I don’t think the same applies for disabled people, or middle-aged Pasifika women or immigrants. Their friends aren’t quietly snickering, ‘when are you going to get a real job?’ Because this is the job we expect them to have.

ronald mcdonalds
Image source: Wikia.com

McDonalds is gross and greasy. But my humiliation, and that of my friends and my family wasn’t because I made burgers. It was because I was supposed to be better than that. Supposed to be more intelligent, more hard working and more talented than the people I worked with. I deserved a ‘good’ job. I had an inflated sense of self that comes with being a person of privilege.

I realised this attitude was way more gross than shoveling fries. Because I am not better than a McDonalds worker.
Sure, maybe I have different skills. I have no muscles and I fluster under that kind of pressure. I’m always going to be better at desk jobs than labour jobs. But this is not because I’m more intelligent or more skilled or worth more than a great McDonalds employee.

There are different types of labour, and just because we treat the work done by marginalized people as worthless doesn’t mean it’s true.

I am not as hard working as my co-workers, who sometimes pull twenty hour shifts to make sure no customer has to miss out on their midnight hamburger.

I am not as smart as our manager-turned-engineer. He learned how to fix all the machines so we didn’t have to call a mechanic.

I am not as organised as those who predict and order the ingredients for thousands of customers a week, knowing that if they screw up, it’s not just an angry boss to deal with. Customers always wait in the wings, ready to scream, throw drinks and use racial slurs over a lack of ketchup. I’m not patient enough to deal with that.
These things are skills.

And if you think you are better than those people, because you work in retail or organise files in a reception, you are wrong.

For me my time at McDonalds was invaluable. Yeah, I never want to scoop fries or make burgers again, but I learnt something more important. I started to chip away at my arrogance. I challenged the ways I dehumanized people for their job. I stopped equating dislike for big shitty companies with dislike for their foot soldiers. I developed more empathy.

And if that is supposed to be an embarrassing blip in my resume, I really don’t get it.

This post was originally published here and has been republished with permission from the author.

REUTERS/Anindito Mukherjee

By Abhishek Jha:

The NCRB data on farmer suicides was contested when it was released earlier this year. Yet NCRB arrived at the estimate of a significant 63 of such suicides in UP in 2014. Bankruptcy or indebtness accounts for 20.6% of those suicides, despite NCRB’s conservative estimates. Such insurmountable debts have been arising due to the non-payment of dues by sugar mill owners to the farmers. Despite three huge loans extended by the Cabinet Committee on Economic Affairs (CCEA) since December 2013, specifically for the payment of arrears, the corporate sugar mill owners in Uttar Pradesh still owe arrears amounting to Rs. 2,760 crore to the farmers of the state. A recent report published by the Hindu based on a document of the Uttar Pradesh Cane Development Department has sought to quantify that amount owned by the various corporate mill owners.

The Loans

Courts have unequivocally ordered the state as well as banks and mill owners to put the right to life of the farmer before the right to business of the mill owners because of regular suicides committed by farmers under debt arising from non-payment of their arrears by the sugar mills. The three loans by the Centre included interest-free loans of Rs. 6,600 crore in December 2013, of Rs. 4,400 crore in June 2014, and of Rs. 6000 crore in June 2015. Other measures, for instance, an increase in remunerative prices for ethanol supplied for blending as well as an increment in the percentage of ethanol blended with petrol, were also taken. Since ethanol is produced by the sugar mills, these measures were supposed to help sugar mills earn more, so that they could pay the farmers irrespective of the trend in sugar prices. All such measures seem to have fallen short of meeting the farmers’ basic requirements.

REUTERS/Anindito Mukherjee
REUTERS/Anindito Mukherjee

The Dispute

Pending arrears despite these measures might appear strange as the interest-free loan packages (1,200 crore of the 6000 crore announced went to UP) were disbursed through banks and meant to be transferred straight to the farmers. In response to court orders in favour of the farmers, the UP Sugar Mills Association (UPSMA) has previously alleged that the huge arrears accumulate due to the differences in the Fair and Remunerative Price (FRP) set by the centre and the State Advised Price (SAP) fixed by states that can differ from state to state and the downward trend in market rate of sugar. FRP for 2013-2014, for instance, was Rs. 210 per quintal, while the SAP for UP was Rs. 280 per quintal. However, state authorities claim that the SAP cannot be lowered as it is calculated on the basis of the expense incurred by the farmer in production of sugarcane, meaning that the farmers would suffer losses and ultimately go bankrupt if they sold sugarcane at prices lower than their input cost. Also, a Down to Earth report from a year ago quotes the Rashtriya Kisan Mazdoor Sangathan (RKMS) as saying that the mills “Despite their so-called losses”, “have multiplied their units from 34 to 100 in the past 10 years. How can they be loss-making? They take money from banks, siphon it out to various plants and don’t give anything to farmers.”

What Does The Future Hold For The Farmer

The allegations of RKMS, if true, are characteristic examples of corporate groups shifting the burden of their own bad decisions on to state policy. The allegations, moreover, are not totally unfounded, as the corporate houses owing money to the farmers are not small mill owners but have business spread across various industries. The Bajaj Group alone owes Rs. 515.52 crore to the farmers. The Birla Group, the Mawana Group, and the Simbholi Group are some other top defaulters. The “high-handedness” of the governments and the courts that these groups seem to resent seems more like a pat on the back, given that the centre put a one year moratorium on the repayment of the loan given to the banks and that the groups were incentivised by the government to pay the farmers instead of being reprimanded for rising arrears.

Sugar stocks have, however, seen strong upward trends this month due to international shortage arising from drought conditions as well as more increase ethanol usage, a Business Standard report says. This may be a positive sign for the farmers if the mill owners use this trend to pay them back. Whether that will happen in the days to come depends on how willing the mills and the governments are to do so.

French President Francois Hollande (L) gestures next to French Foreign Minister Laurent Fabius as he delivers a speech during a France-Oceania summit ahead of the Climate Change conference at the Elysee Palace in Paris, France, November 26, 2015.  Paris will host the World Climate Change Conference 2015 (COP21) from November 30 to December 11.  REUTERS/Michel Euler/Pool - RTX1VX74

By Divya Sharma:

It is really hard to believe that when the whole world is struggling with the great climate change danger and gearing up for the Paris conference to sit together and brainstorm about how to tackle the growing danger of global warming; there are some big fossil energy giants among many of the sponsors of COP 21 in Paris. They will take part in this very important conference which will actually decide the fate of the world and will set forth the path to reduce fossils and use renewable energy. This news is actually heart-breaking and at the same time puts up a thousand concerns and doubts in the heart of green-lovers that whether our leaders are actually serious about climate change? It is absolutely unacceptable to see some of those big fossil giants becoming a part of the climate change conference. All this will be done in the presence of the problem generators themselves! I believe this is absolutely contradictory to the spirit of COP 21.

Why are our leaders silently accepting the presence of these companies if they are really serious about the climate change problem and want to protect their people from the growing danger of pollution?

Stakes Are High This Time

This time, at COP 21, the stakes are really high as the climate change danger has never been so big. The year 2015 has actually been the hottest year on record, and nothing else can describe the danger of global warming more than this statement. But, are our leaders actually serious? In the presence of fossil fuel companies, can we expect a serious strategy to fight climate change? The corporate interest must be kept aside of COP 21 if we want to seriously protect our world from the consequences of global warming.

REUTERS/Michel Euler/Pool
REUTERS/Michel Euler/Pool

I believe that these companies will actually push the talks into a false direction and will somehow find solutions to support their business which is facing some amount of downfall since the people are aware of the dangers of their products and business in general. Interestingly, ExxonMobil will also be a part of the talks. Recent investigations have revealed that ExxonMobil actually misguided and deceived the public about the dangers of climate change. It knew about the climate change problem since the 1970’s but chose to keep this important information hidden from the people. Now you can actually figure out why it is so much important to keep these fossil fuel giants out of the Paris talks.

Influence Of The Corporate On Climate Negotiations

It must be highlighted that the corporate has always tried to influence climate talks for their own concern and well being, to keep their fossil fuel business going. As it was seen in 2011, in the report released by the Polaris institute when multinational corporations, who were lobbyists, actually infiltrated the United Nations and tried to wrongly influence the climate negotiations. This in itself is such a big reason and fact to tell you why our leaders must do something about this.

Corporate sponsorship must be banned from such important climate events because these are actually hindering the progress of the climate talks and dragging it into a whole different direction which has got nothing to do with the climate problem’s solution. Hence, in order to have successful and meaningful COP 21 talks, it is important that we must let our government and leaders know that fossil sponsorship and climate negotiations can’t actually go together. There, in fact is a need to give out a strong message to the fossil fuel industry that it’s high time that they must pack their bags and move towards a renewable vision, especially if they wish to be associate with something like COP 21.

Image source: Twitter

By Radhakrishnan Puthenveetil:

Why is it easy for banks in India to take the youth for costly and risky rides particularly in the context of increased demands for home loans with one-sided loan agreements? The answers should be obvious: Banks in India are still unregulated and a law unto themselves; the youth who account for half of India’s population are poorly informed about many things, particularly matters involving money and finance, and do not have the time and patience to know these things, caught as they are in the fast pace of life in a world of fast-paced globalization.

Image source: Twitter
Image source: Twitter

The manner in which banks hoodwink customers to take home loans while, at the same time, creating provisions to escape responsibility for the mortgaged properties by forcing borrowers to go for insurance keeping in line with the policies of the banks, failing which banks themselves take policies and debit the premiums to the borrowers’ loan accounts is an alarmingly exploitative trend without any legal basis.

The most appalling aspect is home loan insurance. As this seems egregious, I will give the Canara Bank home loan agreement policy here as an illustration. The bank forces borrowers to sign loan agreements across the table without giving them copies in advance; thereby not allowing them to take informed decisions. The bank’s arbitrariness is writ large in clause 21 of its agreement form, which is excerpted below:

The borrower/s shall adequately insure the schedule property for the full market value against risk of fire, war, riots, civil commotion, strike, accident, risk and also such other purposes as may be prescribed by the law for the time being in force and as required by the Bank and keep the policy always current by duly and punctually paying the premia [sic!] from time to time and to assign the benefits in insurance policy thereof to the Bank. The Bank shall be entitled for all the benefits of all such policies.

The Borrower/s hereby agree/s and undertake/s to do everything to transfer and effectively vest in the Bank the benefits of all such policies. The Borrower/s further agree/s to indemnify the Bank against loss by reason of damage or destruction or loss to the schedule property from any cause whatsoever for reason of claim by third party in respect of the same.

The Bank is at liberty and is not bound to effect such insurance at the risk, responsibility and expenses of the Borrower/s with any Insurance Company only to the extent of the value of schedule property as estimated by the Bank and that in the event of insuring the schedule property, the Bank shall not be considered or deemed to be responsible or liable for non-admission or rejection of the claim wholly or in part whether the claim is made by the Bank or by the Borrower/s. It is expressly undertaken by the Borrower/s that he/she/they shall himself/herself/themselves of his/her/their own accord take all steps like initiation of filing claims/furnishing necessary information to the Bank/insurance Company without being informed of details of loss/damage for any reason whatsoever. In the event of rejection of claim either wholly or in part on account of loss/damage to the security, the Borrower/s shall be liable to repay to the Bank the entire outstanding liability without requiring the Bank to proceed in the first instance against the Insurance Company.

The clause excerpted above refers to “prescribed by the law”. A law is a piece of legislation brought into force, in the case of nationalized banks only by Parliament; but there is no law enacted as mentioned in this clause. Though the insurance documents are in the bank’s custody, there is no commitment in the agreement form that the bank will claim the insurance amount. The clause is arbitrary, evasive, one-sided, vague and whimsical.

More often than not the bank has its own insurance tie-up, which the borrowers may not know. The borrowers are not even apprised of the need for insurance. Without even getting the borrower’s consent, the bank takes insurance cover on its own and debits the amount to the borrower’s loan account. In doing so, it does not care for the established norms.

In the Do’s and Don’ts for property insurance, the Insurance Regulatory and Development Authority of India has stated on its website:

Don’t allow anyone else to fill your proposal form; and no kind of loan should be bundled with other products, insurance policy is a separate product.

The website of United India Insurance Company has mentioned: Fill the proposal form yourself and give complete and factual information. False or misleading information could lead to disputes at the time of a claim. Do not sign a blank proposal form or leave any portion unanswered.

Having taken all legal safeguards from the borrower such as title deed mortgage, collateral guarantee, and undertaking by the employer, where is the legal provision to have additional protection to the mortgage with insurance taken by the bank at the borrower’s cost? If the bank has passed on the responsibility of insurance claim to the borrower, what is the need for it to take the insurance policy and keep it with them? When the policy taken is in the bank’s custody how will the borrower make an insurance claim? How can the bank take an insurance policy on the property mortgaged, without the form being filled up and signed by the borrower? These questions remain unaddressed.

The banking ombudsman set up by the RBI is ineffective, and its weight is on the side of the banks. Aggrieved bank customers hardly get any justice or have any effective grievance redress mechanism. The media has extensively reported this and also the home loan, insurance, and bundling rackets. Can the RBI governor rein in the erring and egregious banks, and live up to what he said a month ago: “My name is Raghuram Rajan and I do what I do“?

women in the workplace pic

By Atif Khan:

Despite what you may have hear or believe, there are still many women and homosexual workers at companies who don’t get the same benefits as others in the industry get.

women in the workplace pic
Image source: WordPress

According to a survey conducted by Thomson Reuters Foundation and The Rockefeller Foundation, women in Turkey and India face some of the greatest workplace inequalities among the G20 nations but are least likely to speak out. The findings come at a time when tech companies are under scrutiny for their evident dearth in celebrating diversity at the workplace.

Celebration of diversity needs to be applauded and encouraged in a sensitive society like ours where segregation in terms of sex, religion, sexual orientation is viewed as a normal. Managing diversity indicates commitment of an organisation to recruit and retain employees from a different demographic background. There is a need to support women in achieving a good work and household life balance. Ericsson, a global name in technology, set an example in its Blue River Project. Ericsson aims to have one-third of its employees as women by 2020 by hiring more female candidates in fields dominated by men. Ericsson India, who were committed to the cause were encouraged to join the movement by signing the HeForShe pledge on the website.

‘SEWA’ a trade union which is an organisation of poor, self-employed women workers has done a remarkable job of wage fixation for the home based piece rate workers by taking action in the ILO and passing the minimum wage act. The mindset towards females in most cultures including ours is that she is the one who has to take care of the household even if she is working and men have nothing to do with what is happening inside the house. In the corporate arena, not only in India but across the globe, business is also discussed outside the four walls of the office where men have gathered for their recreation, and this system disallows women to be more inclusive in the ‘Men’s Club’.

According to the survey conducted by pollster Ipsos MORI, one in five Turkish women, and one in four Indian women perceive a lack of equal career opportunities as a major issue in the workplace. By celebrating diversity, we should encourage ideas that anyone can bring to the table, despite belonging to a different religion, gender or sexual orientation. The survey also revealed that only four in every ten women were confident that they earned the same as a man doing the same job.

Women need to feel empowered to act and be aware that change is possible and it is acceptable for speaking out in the workplace. There is a popular notion followed by some organisations to include women only in certain departments like human resource management or public relations. They are not included in core operations and there are only few female CEOs and Presidents of big companies.

We have to understand and dispel that primitive psyche that believes that Indian women are by default a bad negotiator for themselves, and have to work harder for getting their due. Only initiatives by organisations like encouraging diversity at the workplace and pay parity can bring some change to a working woman’s life.

Image source: Twitter

By Apoorv Shandilya:

Every single one of us fears to be judged and pushed beneath a great degree of shame and disagreement. The very most of the entire world’s population resorts to means like never facing an audience, for they hate the very concept of being judged and judging somebody who is just as him/her, as you are yourself. Looks like no one can hide any more from the wrath of the internet.

Image source: Twitter
Image source: Twitter

In our modern and diverse world where we can literally rate and review every thing that we can lay our eyes upon, from specific restaurants to a shade of an eye shadow, Julia Cordray has come up with an app that lets one review people and rate them on a rating scale of 5.

With an onset of the concept of rating stuff, a new population has arisen that does not go for a movie, buy a new phone, or even dine at an unknown restaurant before viewing a set of ratings and reviews written by complete strangers. Precisely these people will surely be the ones who will be referencing the Peeple app.

With a caption that says, ‘Character is destiny’, Peeple is an upcoming app that is supposed to revolutionize the world in a never before manner by allowing anybody who has a Facebook account and is 21 years or older to rate every single person in their contact list to the ratings from 1 to 5.

‘The Peeple app allows us to better choose who we hire, do business with, date, become our neighbours, room mates, landlords/tenants, and teach our children,’ runs the blurb of the app. ‘There are endless reasons as to why we would want this reference check for the people around us.’

According to the Washington Post, the company’s shares are valued at $7.6 million, and founders Cordray and McCullough are pitching for more investment.

Going into some of it’s specifications, there is a point about the app that I must highlight: To review somebody else who is not on the app, you can create a profile for them with their cell phone number; they’ll be notified via text that they have been added to Peeple, but won’t have an option to remove their profile from the app.

Apparently the reviews expire after a duration of an year, suggesting the idea behind people changing themselves for good.

Although users can report any write-ups they believe are inaccurate or violate Peeple’s terms and conditions, but they cannot delete reviews. If you do not join Peeple, and thus can’t contest those negative ratings, your profile shows only positive ones.

The very idea behind all of this to me seems grotesque for I do not find a single reason for an app like this to ever come in existence. Though the founders have defended the app by saying that their intention was to bring positivity and kindness to the world, the creation of apps like these provides people an opportunity to harass others, for no fault of their own. The negatives outweigh the positives of the app, and I firmly believe that judging a person doesn’t define who they are. It defines who we are.

BSNL

By Gangadhar S Patil, IndiaSpend.com:

Once India’s leading telecommunication giant and among its most profitable state-run companies, Bharat Sanchar Nigam Limited (BSNL) has posted a loss for the fifth straight financial year.

BSNL lost Rs 3,785 crore during 2014-15, according to provisional data released by the government. The accumulated loss of BSNL has now swelled to about Rs 36,000 crore ($6 billion), with the company making losses since 2009-10.


Source: Department of Public Enterprises
BSNL accounts for 35% of the Rs 20,000-crore loss shown by 71 PSUs in 2013-14. If BSNL’s losses can be stemmed, the Indian government will have more money to spend.

BSNL’s fortunes declined dramatically because its subscribers moved from landlines to mobile phones (as IndiaSpend reported earlier), and it spent increasing sums of money on salaries for its 2.38 lakh employees, Minister of Communications and Information Technology Ravi Shankar Prasad told Parliament in December 2014.

However, a closer look at the data and events in the telecom industry over the last decade reveals how government policies killed its golden goose. The decline in revenue was not foregone but a result of the government’s gradual whittling of promised subsidies, while keeping the company’s ‘social obligations’ intact.

Those obligations included expanding a rural landline network that recovered barely a tenth of its costs, compulsory purchase of 3G spectrum–or telecom bandwidth–and bureaucratic delays in buying equipment.

Despite repeated reminders over 10 days, BSNL did not respond to IndiaSpend’s questions, emailed to Chairman and Managing Director Anupam Shrivastava.

Let’s examine four reasons that led to BSNL’s decline:

1) Rural landline networks: Big push at big loss

After 2002, as the mobile-phone revolution spread, BSNL’s landline subscriber-base fell from 33.7 million in 2006-07 to 16 million in 2014-15, according to telecom ministry data compiled from the Parliament website.

Source: Rajya Sabha
In 2013-14, the landline division posted a loss of Rs 14,979 crore.

Source: Rajya Sabha
The government says subscribers giving up landlines was a major blow, and it was, but the expansion of a rural network that was already making losses was equally responsible.

On an average, BSNL was spending Rs 702 per line per month on rural landline services against a revenue of about Rs 78 per line per month, according to the 2008-09 audited accounts of BSNL.

BSNL was tasked with building, expanding and running the rural network at minimal tariffs as part of its social obligation, said P Abhimanyu, General Secretary of BSNL employees union. In 2003-04, the PSU reported a loss of about Rs 9,528 crore in the rural landline segment.

Of 593,601 inhabited villages in the country, according to Census 2001, BSNL had installed public telephones in 586, 000 of them by December 2014.

Since returns are low, private telecom operators ignore village landline networks, providing no more than 2% of connections in 2010.

Source: Annual Reports of BSNL
2) Withdrawal of subsidies after being pushed into ‘social obligations’

In view of the ‘immense rural and social obligations’, as the telecom policy of 1999 described it, the government promised to exempt BSNL from license fees and spectrum charges. The government reneged on that promise in 2006-07, according to this Economic Times report.

Between 2001-02 and 2003-04, BSNL was reimbursed licence fees and spectrum charges. That fell to 2/3rd and 1/3rd, before ending in 2006-07.

BSNL lost Rs 3000 crore every year since. More was to follow.


Source: Annual Reports of BSNL
To fund rural landline services, the Telecom Regulatory Authority of India (TRAI), in January 2003, imposed an ‘access deficit charges’ (ADC) on all operators to fund subsidies for existing rural telephones.

In 2003-04, the ADC subsidy was estimated at Rs 13,000 crore annually, most (around Rs 10,800 crore) for BSNL, which operated 95 per cent of India’s rural telephones. That year, TRAI reduced this amount to Rs 5,200 crore, paring it further to Rs 3,000 crore in 2006-07 and to Rs 2,000 crore in 2007-08.

Eventually, the government scrapped the subsidy in 2008, arguing that BSNL received financial assistance in various forms.

The ADC was temporary because it would not have been fair to ask private companies to fund it, said Mahesh Uppal, a Delhi-based telecom consultant. Instead, the government promised Rs 2,000 crore every year from the Universal Service Obligation (USO) fund, created by imposing a levy of 5% on the revenue all telecom operators. It did not last: Rs 1,250 crore from the USO fund for 2012-13 to BSNL is still pending.


Source: Rajya Sabha
BSNL had invested about Rs 25,000 crore in its rural network and before it could recover this money, the ADC was ‘arbitrarily withdrawn,’ said GL Jogi, a senior official with BSNL and General Secretary of Sanchar Nigam Executive Association.

Against a loss of almost Rs 10,000 crore a year to meet social obligations, the government paid no more than Rs 1,500 crore to BSNL from in 2011-12.

3) Compulsory purchase of 3G spectrum at government-mandated prices

In 2010, when private telecom companies purchased spectrum, they bid only for areas–or circles, in official parlance–that were expected to turn profits.

BSNL had no such choice.

The then telecom minister Kapil Sibal said BSNL was obliged to purchase pan-India broadband wireless access and 3G (third-generation) spectrum (excluding Delhi and Mumbai) for Rs 8,318 crore and Rs 10,187 crore respectively, according to this Business Standard report.

BSNL was allocated infeasible and cost-intensive spectrum in the higher frequency range (2.6GHz) against lower-frequency radio waves (2.3GHz) given to private players,” said Abhimanyu, a senior employee with BSNL. “Lower frequency means better services and less capital expense on infrastructure.”

The government has finally accepted concerns raised by BSNL and in September 2013 it agreed to refund broadband wireless access and spectrum money, according to this report in the Hindu.

Since BSNL was not allowed to bid, it was unfair to make the company buy expensive assets it could not use, said Uppal.

BSNL paid Rs 18,000 crore for broadband wireless access and 3G spectrum in 2010, while Bharti, Vodafone, Aircel and other operators paid between Rs 2,000 and 6,000 crore, reported The Economic Times.

That Rs 18,000 crore decimated BSNL’s cash reserves, from Rs 29,300 crore to Rs 1,700 crore, according to data presented in Parliament.

With low cash reserves and growing financial distress, BSNL’s operations faltered, and nearly 800,000 mobile subscribers switched to other operators; its market share declined from 16% to 10%.

Source: TRAI
4) How the government fiddled with tenders and orders

When BSNL’s fortunes were at a peak in 2006, its expansion plans were delayed by interference from the United Progressive Alliance government.

In 2006, a tender for 45.5 million mobile lines was delayed for more than six months; eventually, after a year, then telecom minister A Raja (arrested in February 2011 for the 2G Spectrum Scam), reduced the tender size to 14 million, according to this report.

Two years later, in 2008, another tender of 93.3 million mobile lines ran into controversy after Nokia Siemens got disqualified on technical grounds leaving only Ericsson in the fray, and it was cancelled in March 2010. Between 2005 and 2008, BSNL’s market share dropped from 38% to 25% after a delay in equipment purchases.

Source: TRAI

Does India Really Need BSNL?

India really does need BSNL, its employees argue.

BSNL forces private operators to reduce their prices, said Rakesh Sethi, General Secretary of All India BSNL officers’ association. “From free incoming calls, one-rupee one-India plan to the recently launched free-roaming scheme, BSNL has been leading the market,” said Sethi.

BSNL is also important to ensure e-governance projects reach rural India. “It is only BSNL that has reached most of the villages and continues to expand its network in rural areas,” said Jogi.

Most private companies have not taken mobile services to rural areas (each company is supposed to serve 21,600 tower sites in villages), Business Line reported.

BSNL also works in strategically important but likely unprofitable national projects, such as the National Optic Fibre Network, Network for Spectrum for defence and the Left Wing Extremist for areas dominated by India’s Maoist insurgency.

Should BSNL be privatised? “Instead of privatising it,” said Uppal, the telecom consultant, “the government should look for a strategic partnership with any private organisation with a proven track record.”

Patil is a New Delhi-based freelance journalist. He has worked with The Economic Times, DNA and The New Indian Express.

This article was originally published on IndiaSpend.com, a data-driven and public-interest journalism non-profit.

modi and zuckerberg photo digital india

By Anwesha Dutta and Bitopi Dutta:

Digital India has swept the imagination of the ‘modern’ Indian, along with the ‘development’ paradigm of invest (read ‘make’) in India under the present Bharatiya Janata Party (BJP) government. Surprisingly enough, this package, what our esteemed Prime Minister would term ‘governance’ of development, in terms of infrastructure, digital empowerment and supposed economic prosperity, is gaining mass popularity without any critical questioning or dissent from the majority of the Indians both living inside and outside of India. A lot has gone into the making of this imagination, which also includes the role of the media, vociferously advocating a ‘globalized and digitalized’ India, empowered enough to give a strong competition to the most advanced countries in the world.

PM-Narendra-Modi-visits-FB-headquarterWell, it all sounds absolutely fantastic, who would not want economic prosperity, advancement in technology and economic growth? However, we should start by asking some basic questions. Whose India are we talking about? What does empowerment mean to most Indians or let’s be specific,  the underbellies of the Indian boom- the Dalits, the adivasis (tribal population)? Who benefits out of this? Who are the main players of this politics of development? How ready are we as a nation to embrace Digital India at this point in history?

Now let us try to put this into perspective. It all dates back to when the East India Company first came to ‘invest’ in India, with the sole business motive that it would be mutually (at least we can give them a benefit of claim) advantageous for India and the East India Company. Sounds surprisingly similar to the present context of the politics of FDI in India, right? Well probably, that is where it all started; it remains a similar kind of politics although deceitfully garbed with a different banner of so-called international co-operation as part of India’s foreign policy. Coming back to the colonial era, the kings ruling over the princely states did not lose their rule at once, but slowly and surely as the East India Company proceeded with capturing the market, and then eventually spread its tentacles around to apprehend the existing political systems, and finally took over the society (we are talking about foreign goods, including textiles which led to the closing down of thousands of existing indigenous cotton and textile mills). What began with a language of co-operation, ended with India becoming a colony of the British, in no time. India could understand that language of control during the colonial era because, then, the authority exercised by the British crown was direct.

At present, however, in the age of the Digital India initiative with the loud slogans of ‘invest in India’, somewhere there lurks a similar danger. Today’s India seems blinded to the omnipresent cues of a politics of a similar nature, because the deal is now being sold under the banner of development, with a dream being painted of the possibility of India becoming a global superpower. This is taking India away from its reality to an imaginary farce, as neo-colonialism is seeping to take it in firmly within its grips and make it again its ‘beloved colony’, this time in the name of democracy and in the very nexus with the state.

Now let’s try to understand who gains from this politics and why would the government do it anyway, after all the government came to power with a promise to provide basic amenities including access to primary health care, education and sanitation to the poorest of the poor. (Un)fortunately, the story here is not very different from the story of the colonial era, where the zamindars or landlords supported the British. The difference is one of terminology, today we have the capitalist replacing the zamindar and the government trying to establish itself as the zamindar of the zamindars. On one hand, the imagery of the state ambitions huge infrastructure projects through rapid industrialization, but let us not forget that to set up factories we need land, so in reality what we have is the Land Acquisition Act of India that has till date successfully displaced close to 60 million people from their homes and customary lands without any compensation or resettlement and rehabilitation being a distant dream and yet again it is no surprise that almost 60% of the displaced are the tribals and Dalits of India – the most marginalized and alienated sections of our society. By now it is obvious that the infrastructures of imagination are usurped by the businessmen, the big and the small and the middle class.

Before we get carried away by the real issues (like farmer suicides, brutal rapes, khap panchayats, infant mortality, malnutrition, corruption, separatist movements in the Northeast and Jammu and Kashmir, poverty, AFSPA, etc), let’s hold our horses here, because according to our government and a majority of middle-class Indians, the issue with Digital India seems to begin and end with net neutrality. We do acknowledge the gravity of the issue surrounding net neutrality but what we are trying to get at is how on earth is Make in India and Digital India any solution to most of India’s problems leave aside the ambition of linking all villages with broadband connectivity?

Moving a step forward raises the question of internet monopoly. Again the story is similar and is about how big malls came to our doorsteps asserting they will sell us cheaper goods than the corner store or the grocery store down the road. We eventually stopped buying from our retail shops and started investing in the goods sold by these malls until most small-scale shops and retail stores were forced to shut down with our shifting preference for a giant, ‘friendly’ mall selling huge businesses off the corporations. And sooner than we thought, the market forces started controlling our likes, dislikes and even what we could buy or not thereby conveniently limiting our choices and controlling our needs.

We did not dissent, because we did not understand the politics of this market monopoly that happened under the carpet. Let’s take a look at the crowd that walk into these malls? Do they represent the ‘real’ people of India? It is an affirmative NO! We feel yet again a similar story goes for digital India. Beware for it’s not just a policy initiative but a conspiracy consisting of virtual hegemony for profit and a glance at our  corporate partners – Reliance, Facebook and everyone who has opposed net neutrality is suggestive of this. It too shall begin with lucrative offers and eventually Reliance and Facebook will decide what we see over the internet, how much we have to pay to buy which product (read website); turning the internet into a product, controlled and monopolized by big corporates to foster their economic  interest, and what corporations have done to India and other developing countries is well known. People rejoice that internet.org will provide free access to some websites via Facebook. Does it not sound similar to something like ‘give me your nature and I will give you an artificial garden, which will be a token representation of the nature that you will sell me; give me your freedom and I will present a farce of the same idea of freedom that you once really had!’

Well Mister Prime Minister, you have clearly failed to sell us ‘your’ dream of Digital India and Make in India. When we say ‘us’, we would like to include the voice of the voiceless which includes the adivasi woman in a rural village of Assam who has lost her home and her family to disease, the farmer who lost his crops and life to GM seeds and pesticides and many others who ‘make India’. You failed to sell us your digital un-freedom!

Image source: flickr.com

By YKA Staff:

Digital India, the mega project of PM Modi, has been in the news again ever since he declared that he would be attending a Q&A session at the Facebook headquarter with Mark Zuckerberg. The project has a lot of takers in the Sillicon Valley, and why not.

China, with its 64 crores plus internet users is on a lock down from the rest of the virtual world. After China, India has the highest number of internet users and that’s when only a nominal portion of the population has access to the internet.

The leaders of the digital world in the west, in their unconditional support for the campaign, are being foresighted. Not only are they creating customers, they’re also making sure that those customers stay loyal only to them. If Internet.org is to be taken as an example, people who use internet.org as first time users might not know about the internet beyond it.

This infographic will reveal the quantum of business that Asia Inc can give to the rest of the world.

 

Digital Landscape in Asia

Via Visually.

Image Source: Wikimedia Commons

By Sid Arora:

Unless you are a mountain-goat dwelling in the snowy peaks of the Himalayas, your life is probably in sync with e-commerce, and is being impacted by the start-up boom that is proliferating in India.

Entrepreneurs are now reaping rich dividends by moulding fresh ideas into bold business ventures, also known as start-ups. In the first quarter of 2015, investors poured in a whopping $1.7 billion into start-up companies in India. This is good news for entrepreneurs, job aspirants and for the nation’s economic prospects.

We know that this start-up ecosystem is being driven by urban hubs. Cities like Delhi, Mumbai and Pune are seeing start-ups in multiple fields, like travel, food, and e-retail mushrooming all about. But the one city that has quietly been spearheading this growth, is Bangalore.

Image Source: Wikimedia Commons
Image Source: Wikimedia Commons

The City Behind The Start-Up Ecology

Bangalore has had an interesting past few decades of modern history apart from its rich heritage, which provides the context as to why it is now a dream destination for business managers and entrepreneurs. Poised almost ideally between Mumbai and the rest of South India, this city was once more famous for its government-based industries like Hindustan Aeronautics Limited and B.H.E.L.

In the 90’s, India’s Garden City transitioned to become the national IT destination – and what a boom it was! It didn’t stop there. Today it’s technology, knowledge-based economy, and a growing influx of students and job-seekers, along with many accredited colleges offering engineering and MBA courses, has also given it the tag of an emerging educational hub.

A recent study showed that Bangalore is the 2nd fastest growing start-up ecosystem in the world. If you are part of one of the 1,700 startup companies that began their journey in Bangalore, you have been part of the achievement that ‘Namma Bengaluru’ can take pride in.

Ideal For Students And Entrepreneurs

Students come to Bangalore to pursue undergraduate, graduate and post-graduate professional courses in fields ranging from Arts, Commerce and Engineering, to Business Management, Medicine and Science. While students and professionals from cities like Hyderabad, Cochin, Salem, Mumbai and Pune embrace Bangalore throughout the year, it is a pleasant surprise to see many students from states like Meghalaya, Jammu and Kashmir and Uttar Pradesh also choosing to study and work here.

One reason for this is Bangalore’s popularity as a city with heavy IT presence in India. Multinational companies like Infosys and others have set up base here, and it makes sense for students and their parents to invest in IT-based education here. Interestingly, the attraction is not limited to students pursuing Bachelors in Science (B.Sc) or Bachelors in Engineering (B.E.) alone. The Master of Business Administration (MBA) is a course that has also seen a skyrocketing demand in Bangalore.

Today, growth of the IT industry is inextricably linked to business services and the start-up economy. Chances of landing a well-paying job or succeeding as an entrepreneur are high in an IT hub.

If you have a brilliant idea for a start-up, few things can give wings to it like a sound MBA education could. Young, talented entrepreneurs are already graduating, overflowing with talent and ready to make a fortune. Mandatory standards from bodies like UGC and AICTE have led many institutions to improve their facilities, faculty and courses. Reputed colleges like M.V.J., AIMS, NMIMS and many others offer PGDMs and MBA degrees to students in Bangalore. Aspirants are utilizing these degrees to achieve a head-start in their careers.

Further Advantages

Many other factors stand in favor of this city. It is is one of the better-connected metropolises and women perceive Bangalore to be one of the safer cities in the country. Bangalore also enjoys a moderate climate, in comparison to Delhi or Hyderabad, which definitely gives it an edge, when people consider long-term residence here, both for education and work.

The success of Bangalore as a rich ecosystem for thriving start-ups shows that innovation and diligence have been rewarded even in uncharted territory. With increasing options for education, the symbiotic growth of IT and business, a progressive outlook and a diverse cultural mix, Bangalore is as close as it gets to being a career base and launch-pad for students and entrepreneurs alike.

Thomas Piketty

By Thomas Piketty:

In the wake of a surprise re-election of Alexis Tsipras and Syriza, Thomas Piketty discusses the need for a more active approach from European leaders when it comes to the Greek question – and for a eurozone parliament to be established.

time for real proposals on greek debt
Time for some real proposals on Greek debt. Universitat Pompeu Fabra, CC BY-NC-ND

The Tsipras victory has come as a surprise to some. What has changed for Greece?

Normally, we would expect some stability in the coming years. But above all, Greece and Europe need to make up for lost time. Until now, Europe has obstinately refused to talk seriously about restructuring Greece’s debt. That was what caused the downfall of the last government.

Europe had in effect implied that it would reconsider the debt as soon as the Greeks managed to balance their budget with a small primary budget surplus – which meant Greece would have more revenues than public spending. But when the Greeks appealed for help in December 2014, Europe said “no“. That is what ultimately opened the path for Alexis Tsipras.

And the situation continued. Between January and July 2015, Europe refused to reopen talks. Now it’s September and the new support package that was discussed this summer has led to the further postponement of debt negotiations. If Europe insists on repayment, there will be fresh crises and the problem will not be resolved.

Why does the dialogue between Europe and Greece need to change?

Europe has other problems to tackle. There is the migrant crisis and the wider economic situation. Europe, Germany and France can’t exist in a permanent state of crisis. Europeans need to adjust their position. And for that to happen, France needs to have more courage – others too. Perhaps the elections in Spain at the end of this year will change things. All these elements can combine to influence majority politics in Europe when it comes to the Greek question.

Former Greek prime minister and leader of leftist Syriza party Alexis Tsipras waves to supporters after winning the general election in Athens, Greece, September 20, 2015. Greek voters returned Tsipras to power with a strong election victory on Sunday, ensuring the charismatic leftist remains Greece's dominant political figure despite caving in to European demands for a bailout he once opposed. REUTERS/Michalis Karagiannis - RTS21SE
Alexis Tsipras

What should Tsipras’s economic priorities be from now on?

Modernising the tax system is clearly the priority. It needs to be fairer and more efficient. But that can only really be done with Europe’s cooperation – and if Europe sets an example.

We have to remember that the biggest businesses in Europe often pay less tax than small- and medium-sized businesses. That’s because governments do deals that will lead to favourable conditions for their own national industry. That’s without even considering that the European Commission has a president who, as prime minister of Luxembourg, signed deals with multinational corporations that allowed them to pay just 1% to 2% tax.

Europe can’t just hand out advice without itself committing to fiscal transparency. That goes to the heart of the system – German and French banks are only too happy to handle the funds of rich Greeks.

What should French president François Hollande do about Greece?

This summer, François Hollande started to make suggestions about making the eurozone more democratic. In particular, he spoke about establishing a parliament for eurozone countries. But that’s still too timid and too vague. If he wants to do something to save his second term, and above all improve the governance of the eurozone, he needs to make more precise proposals.

I believe there would have been less austerity in Greece, and more solutions would have emerged if there had been public, democratic discussions in a eurozone parliament, populated with representatives from each national parliament.

The trouble is, the eurozone is currently governed as a technocracy. The heads of state meet behind closed doors. They send out incredible proposals in the middle of the night – like privatising 50 billion euros of Greek assets – while everyone knows it will be a veritable fire sale. As if the Greek economy could sell its assets under these conditions!

This happened without legal deliberation and without the motives behind the decision being interrogated. We need to put an end to this Europe and start again with a eurozone parliament that allows everyone’s motives to be made public. What is important now is that France – and all the countries that want to make progress – set out clear proposals to democratically restructure the eurozone.

Should we still fear a Grexit?

Yes. The risk is that in delaying discussions about restructuring the debt, we realise in one or two years that the terms of the bailout package will not be respected.

We want Greece to keep a huge primary budget surplus for 20 to 30 years, which will mean setting aside an enormous budget for repayments.

How do you justify that to young Greeks? It would be reasonable to say that until the Greek economy has been rebuilt, a reduced primary budget surplus, around the level of GDP, will have to do. That’s normal and not excessively punitive.

I worry that some people continue to bet on a Grexit, setting objectives that are impossible to meet so that when Greece fails, it can be pushed towards the exit. That is still a risk, which is why we need clarity and realistic objectives – and quickly.

Thomas Piketty is an Economist, Director of Studies at the EHESS and Professor at the School of Economics Paris/Paris School of Economics

This article was originally published here on The Conversation.

Beedi_factory_near_Nileshwaram,_Kerala,_India

By Charu Bahri, Indiaspend.com:

In January this year, the government asked for public opinion on tougher new laws to curb smoking: To raise the minimum smoking age to 21 from 18, and to ban the sale of single cigarettes, which account for 70% of nationwide cigarette sales.

People responded enthusiastically; 45,000 emails and 100,000 letters poured in to the health ministry, as Reuters reported earlier this month. What they said, however, is not known because the government hasn’t yet read the messages, according to a health ministry representative quoted in the story.

Like those messages, the World Health Organisation’s Report on the Global Tobacco Epidemic 2015 is largely ignored in India. Its single-line message: Raising tobacco taxes can help curb smoking.

Curbing smoking is very important to India for two reasons:

  • About one million Indians die from smoking-related causes every year, which are among the top three ways to die
  • Smoking also saps Indians of money; more money, it emerges, than it earns for the government.

Bidi-smoking-India

Indians aged 35 to 69 spent Rs 104,500 crore ($15.9 billion) in 2011 on diseases associated with tobacco–including cancer, respiratory diseases, tuberculosis and cardiovascular diseases. This figure is almost six times as much as central-excise tax collections from all tobacco products that year, according to the Government of India, WHO and the Public Health Foundation of India.

To put the health cost of tobacco in further perspective, it exceeded the combined annual state and central government expenditure on health care by 12% in 2011.

Taxes on cigarettes rise–not enough–but they do. Bidis are the problem

A 10% price increase on tobacco products could cut consumption between 2% and 8% in developing nations, according to the WHO. Tax hikes increase prices, which in turn lower demand and protect people from the ill effects of tobacco.

“Raising taxes is a win-win situation,” said Arun Thapa, Acting WHO Representative to India. It’s good for human health and for the country’s fiscal health.”

Over the last 19 years, taxes on cigarettes in India have risen 1606%. As the next part of this series will tell you, that isn’t quite enough, and the six-tier tax structure is so complex–based on stick lengths and filters–that companies manipulate it with relative ease to keep demand intact.

The biggest problem in curbing tobacco use lies with the influence wielded by those who make the humbler–but more damaging–cousin of cigarettes, the bidi.

Taxes on a pack of bidis are 7% of the retail price, less than a tenth of the WHO’s suggested level of 75%. A 20-stick pack of best-selling cigarettes is taxed around 60% of retail price.

Bidi smokers make up 61% of the nation’s 120 million smokers, according to the Global Adult Tobacco Survey (GATS) 2010. This is a conservative estimate. Some studies peg the numbers of bidi smokers higher, at 73%, even 85%.

Bidi smokers face a higher risk of developing potentially-fatal chronic obstructive pulmonary disease (COPD), among other illnesses, because tobacco is packed more loosely in bidis, requiring smokers to inhale more strongly.

But the bidi industry has consistently squeezed concessions from the government.

Million of jobs and livelihoods at stake, so taxes must stay low, argue bidi barons

Here are some concessions the government gives the bidi industry:

  • Handmade bidi units (98% of bidis are handmade ) producing less than two million sticks in a year are exempt from excise duty.
  • Bigger bidi makers pay a duty of 1.6 paise per handmade stick and 2.8 paise per machine-made bidi. The duty on cigarettes varies between Rs 1.28 and Rs 3.37 per stick.

Some eight million people work as bidi rollers nationwide, said a representative of the All India Bidi Industry Federation.

“Imposing taxes on bidis and introducing pictorial warnings on bidi packs would lower demand,” said Sudhir Sable, secretary, All India Bidi Industry Federation. “Any fall in production would jeopardise the jobs of bidi rollers. It would also adversely impact tobacco farmers, as well as the thousands of corner shops selling the product.”

Increasing taxes on bidi would invariably increase the illicit trade in bidis, leading to the proliferation of fake bidis, Sable argued. It would also deprive states and the central government of tax revenue.

These arguments do not wash, say experts.

No socio-economic case for low bidi taxes, contend experts

In 2013, the bidi industry contributed less than 3% to the government’s central excise collection from tobacco products, not surprising, given the low excise duty it pays.

A Public Health Foundation of India study says there is indeed scope for taxes on bidis to be increased.

“Doubling bidi excise would help cut consumption by 40% and increase tax revenue by 22%,” said Monika Arora, director, Health Promotion and Tobacco Control Initiatives, Public Health Foundation of India.

Essentially, the argument goes, higher tax rates would offset any loss of excise from fall in consumption. In the bargain, spending on “useful” goods and services will grow.

“Money not spent on bidis or cigarettes will not disappear from the economy,” said Prabhat Jha, founding director of the Centre for Global Health Research, University of Toronto. “It will be spent on other products which generate employment.”

Additional revenue could help the government meet the cost of transitioning bidi workers to other means of employment. The government has previously considered a cess on cigarettes to encourage farmers to switch from tobacco to other crops.

So, why not tax all segments of the tobacco-products industry, experts suggest, to fund a gradual transition? Bidi workers, among some of India’s most disadvantaged people, can only benefit.

Bidi workers: Among India’s worst paid workers and plagued by ill health

“The effect (of high taxes and low consumption) on bidi employment will take years,” said the University of Toronto’s Jha. “It does not mean current bidi rollers will lose their jobs. It means fewer people will take low paying bidi rolling jobs in the future.”

West Bengal, Maharashtra, Andhra Pradesh and Karnataka are among India’s top bidi-producing states. In West Bengal’s district Murshidabad, bidi rolling is pretty much the only livelihood.

Bidi workers in Murshidabad earn Rs. 100/- per 1,000 bidis. Those in Uttar Pradesh earn Rs. 90/- per 1,000 bidis. Bidi workers are among the lowest-paid ‘manufacturing’ employees in India, according to this 2014 study. They constitute 1% of all employment in India but collectively earn 0.1% of all wages.

“They earn minimum wages or ‘negotiated’ wages,” said Sable. ‘Negotiated’ means a lower wage than the minimum government-prescribed wage, for which Sable said the consent of the local government authority is always taken.

“Lower wages are negotiated because the cost of the bidi has to be kept low for the consumer and also ensure parity with wages in neighbouring states,” said Sable.

Collusion between local government authorities and the bidi industry–as Sable admits to–keeps bidi workers in penury, while tying their daily wage to punishing targets of about 1,000 bidis a day causes ill health, write Sunanda Sen and Byasdeb Dasgupta in their book “Unfreedom and Waged Work: Labour in India’s Manufacturing Industry.”

Most workers are given tobacco to roll at home. Protective measures such as masks and gloves are unheard of, and soon enough, they suffer the ill effects of exposure to tobacco flakes and dust.

“Ear, throat and lower respiratory tract infections are common among bidi workers,” said Arora. “So are cancer and tuberculosis.”

Bidi workers and rollers exposed to tobacco dust had a six-fold higher incidence of respiratory impairments, such as breathlessness and cough, reported a 2006 study in Murshidabad, West Bengal.

Many women workers suffer gynaecological problems and pregnancy complications. This should be a concern, as 90% of the workforce is female.

Transitioning bidi workers to other manufacturing jobs would be good for them. Raising taxes on bidis would be good for the country as a whole. The only people who might not benefit are the bidi company barons.

(Bahri is a freelance writer and editor based in Mount Abu, Rajasthan.)

This article was originally published on IndiaSpend.com, a data-driven and public-interest journalism non-profit.

stock market economy

By Sreekanth Narayan:

The People’s Bank of China (PBC) recently devalued Yuan to as low as 4% against the dollar, creating a ruckus in the global financial markets. Other eastern countries such as Vietnam have followed suit by devaluing their currency, as China accounts for a significant portion of their exports. Stock markets crashed world over, from the west to the east, as investors started pulling out of equities, shifting to safe havens like bonds and gold.

stock market economy

 

China, which accounts for 15% of the world economy, has been slowing down over the last three years and the government has been unable to boost domestic consumption. The Shanghai Composite Index has fallen 22% in the last four trading sessions causing world-wide panic, and gains worth $8 trillion have been erased from the global markets. The Chinese government is aggressively pursuing devaluation, rate cuts and tactics like allowing the $548 billion pension funds to invest in stocks to prop up the markets, albeit unsuccessfully. The media is also silent on the recent crash and all these incidents convey a single message – China is no more the growth story it once was. Debt fuelled spending has put the country in an irreparable state and short term recovery looks uncertain.

Ever since the market crash, intellectuals have been debating over whether this is a ‘Déjà vu’ of the 1997 Asian financial crisis. While that might certainly be an overstatement, one thing is aptly clear – the Indian economy is very much safeguarded by strong macroeconomic factors. With commodity prices falling and the RBI sitting atop a huge pile of Forex reserves of $355 billion, there is very less probability of a downturn in India. Volatility in the Bombay Stock Exchange Sensex, including the biggest fall of 5.94% on August 24th, is primarily due to over exposure of the markets to hot money from the Foreign Institutional Investors (FIIs). Retail investors and Domestic Institutional Investors (DIIs) are only a small part of the Indian stock markets. This dollar outflow has made the rupee fall to its lowest level since August 2013.

Both the Government and Raghuram Rajan, the RBI governor, have not intervened yet to pull the rupee back to 63-64 levels, which indicate confidence. Or does it? Is the government afraid that investors who are already vexed due to the retrospective Minimum Alternate Tax and the inability to push reforms in the Parliament, especially the GST (Goods and Services Tax) and Land Acquisition Bills, would further turn away from the Indian stock markets? Making press releases to merely calm the investors would not put the markets back on track. The disinvestment of 10% stake in Indian Oil Corporation (IOC) saw very less participation from retail investors. 90% of the stake was bought by LIC. And the IPOs such as Navkar Corp which are currently going on are oversubscribed by a mere 0.36 times, even on the final day. This shows how panicky the investors are at the moment.

So the main question is this – what could be done to cheer the investors? There is a widespread clamour for a rate cut of 50 bps or rather the investors are demanding a ‘Rajan Put’, a phrase coined after Alan Greenspan, former chairman of the federal reserve, kept cutting rates aggressively during 1997-2003, which in fact was responsible for creating various bubbles such as the dotcom bubble and the housing price bubble. The problem with the rate cut is that, though it might cheer the investors temporarily, the effects will not be felt immediately. The previous 75 bps rate cut has not fully translated to lower lending rates by the banks. The US 10-year treasury yields are at a 4 month low, and though the chances of a sudden Fed rate hike is currently off the table, it cannot be totally discarded from the picture. One has to appreciate Rajan for being very conservative vis-à-vis rate cuts. Though the inflation declined to 3.78% in July, the meteorological departments have been predicting a 10% monsoon deficit. Any further rate cuts should account for prospective rate hikes by the Fed this year and the volatility in food prices.

The onus lies on the government to usher in reforms. The three main areas of contention are land acquisition, GST and labour laws. With the monsoon session being totally unproductive, the NDA government is vouching for a special session to be held in September to pass these bills. An opposition that is hell bent on blocking all major reforms puts the burden of resolving the deadlock on the government, and it has to the handled in a well thought-out manner. Joint sessions are probably be only way these amendments could be passed, as the NDA government lacks a majority in the upper house. With the Bihar elections lurking around the corner, how the opposition could be handled to push these bills would be a real acid test for the government.

snapdeal

By Uzma Shamim:

In the contemporary world, everything is available at the click of a button or in the present context at the swipe of the screen. However, one still couldn’t sell or purchase medicinal drugs the virtual world. But now, witnessing the exponential growth of online availability, accessibility and popularity of products, proposals are in process to amend the Drugs and Cosmetics Act of 1940 to include the sale of drugs online in consultation with doctors, pharmacists and drug companies. This is in wake of the controversy involving Snapdeal selling prescription drugs online, which was brought to light in April, which is strictly prohibited under the current tenets of the law. This brought out the need for the Drug Controller General of India (DGCI) and the Food and Drug Administration (FDA) to bring out necessary guidelines regulating the online sale of drugs in India.

snapdeal

At the moment, online firms do not have the right to sell prescription drugs and, even the sale of Over the counter (OTC) drugs are to be done by licensed retailers only. Though Over the counter drugs could be sold online even without a prescription, the sale of Prescription drugs online is legally not allowed. However many online firms have found to be flouting these norms. Under the current proposal, online sale of drugs will be allowed after a thorough examination of prescriptions and pharmacy licenses. The sale of drugs other than OTC ones shall be more closely regulated. The government formed a sub-committee to address issues related to online pharmacies under the chairmanship of Maharashtra Food and Drug Administration (FDA) Commissioner Harshadeep Kamble. Majority of the members of the Subcommittee are in agreement to allow the sale of drugs with the required safeguards.

However this technological advancement has its own drawbacks. In the recent past, there have been scandals all over the world over the issue of online sale of drugs. The Interpol, recently initiated action against websites selling medicines in 114 countries which lead to the closure of 2400 sites.  The Maharashtra FDA had initiated action against the commercial giant, Snapdeal and the Gujarat FDA too had registered a case against some online pharmacies. Secondly, in such a set up even underage children who have easy access to the internet can avail medicines. There is also the issue of sale of drugs for wrongful consumption such as self-harming. However when we look at the positive side, this move can be a big step in making the online market very consumer friendly and comprehensive. The safeguards that would be in place would eliminate cases of faked prescriptions. Furthermore, this will also enable technology to carry forward the Rs.85, 000-crore pharmaceutical industry in India.

The DGCI maintains that there needs to be a regulatory framework in place to keep the online drug industry in its ambit, and that this is one of the best methods to keep a check on sale of illegal drugs. Besides the DGCI believes that this new arrangement wouldn’t harm the small regular retailers. In fact the aim is to accommodate the online sale system with the present one with maximum convenience for the consumer. In wake of the many controversies and scepticism about such a fundamental aspect of life, it will become essential to observe how the government makes the amendment fail-safe.

Image source: mumbaidabbawala.in

By Ankita Ghosh:

Some 5000 odd gentlemen, in worn-out trousers and worn-in commitment, go around Mumbai city and adjoining areas delivering home-cooked food to medium-to-low income group office-goers for more than 120 years, with marginal to zero fail. Mumbai Dabbawalas (Marathi for lunchbox-bearers) have become a hot-topic in management research that applaud their sharp sense of business and meticulous sense of navigation, smoothly riding into the most obscure alleys in the city.

Image source: mumbaidabbawala.in
Image source: mumbaidabbawala.in

Last Tuesday, the 28th of July, to expand their already thriving conventional marketing-strategy into the cyber-space, the Dabbawalas went online. Popular e-commerce company, Flipkart, was prompted to collaborate with them to improve in the area of delivery. The spokesperson of the association of dabbawalas said, “Earlier, new customers had to face difficulties in contacting us. They had to wait at railway stations to contact us or seek the help of their building watchmen for the purpose. Now, a dabbawala will be at their doorstep once they contact us online.”

Use of mobile communication devices has seen a sudden growth in India over the last decade, although a modest 15% of the mainland population are registered internet users. The internet is singlehandedly mastering/ manoeuvring a high-level democratic process, letting unheard communities, caught in ethnic conflicts, communicate. The Arab Spring saw a prolific use of web-communications in its fight against an authoritarian regime. Activists made use of online platforms to promote democratic temperament initially and democracy soon after. Involvement of international non-governmental, civil-society and non-state actors and their smart use of communications-technology have facilitated political-arbitration, peace-process and democracy.

This invariably brings us to the question of neutral access of information, available over the internet that has been gathering a lot of debate in the services sector, as well as amid the monstrous body of consumers that benefit from said services. The heat around internet neutrality had escalated in India sometime last year, telecommunications service-providers have even proposed additional charges on web-access based on client, content, mode, application and nature of information. Such discrimination, endangers the very democratic tradition that the internet had originally resolved to promote. Gross violation of the principles of neutral admittance of e-resources, in turn, curtail the basic tenet of freedom of expression, inherent in our Westphalian system of democracy, and has raised questions both among the political leadership and public domain.

From a micro-business venture like the Dabbawala services, operating within a bound geography of a city, venturing into the digital to widely accessed services operating transnationally, will be tossed into cataclysmic jeopardy, if the laws governing net-neutrality are allowed to deny the public of what is contractually theirs.

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By Shambhavi Saxena:

On Wednesday afternoon, the internet surprised me with some delightful and confusing puppy-related news. Cab company Uber, first launched in San Francisco and now running in 57 countries, has tied up with Dogspot, India’s top e-Commerce website for dog merchandise, for a one-afternoon-only opportunity – Uber Puppies. Uber customers could use their mobile apps to request a fifteen minute play-date, and even had the option of formalizing an adoption. And the best part – they were all desi dogs, or Indian breeds that are often neglected because desi dogs are difficult to place in homes because of the high demand for fancier breeds with beautiful coats and exotic names. Divya Divakaran, who leads social media and events at Dogspot.in said, “At the end of the day a dog is a dog, and they will love you equally. That people have started thinking along the lines of ‘all dogs should be given homes’ is a huge success for us.”

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The pups were requested at various places – residential areas in South Delhi, offices in Connaught Place and even Gurgaon. So was all this driving around okay for them? Divakaran responded to the questions raised by many about the welfare of the puppies: “We didn’t pick up puppies from the streets. Foster parents voluntarily let their pups participate, because they believed in the cause. Uber sent one SUV for each puppy and experienced long-time volunteers were handling them, to make sure they were not strained in any way. They had plenty of food and water, and we even had one vet on standby. They were groomed and we made sure they were well enough for the outing. Yes, many people had apprehensions about puppies being driven around like this, but they spent hardly ten minutes in the car, and were outside most of the time, very playful, very happy. Thanks to the guidance and leadership of Dogspot’s Founder and CEO, Mr Rana Atheya, everything went smoothly.”

The initiative is reminiscent of the Human Walking Program that was conducted only last year with office workers in Melbourne, Australia – shelter dogs came to the rescue of humans who were trapped in their cubicles all day. The program resulted in a 100% adoption rate, according to the organizers, The Lost Dogs Home. With Uber Puppies too, the focus is adoption. Dogspot has tie ups with a number of NGOs managing pet adoptions, explained Divya Divakaran, who leads social media and events. Through their online portal, they are able to collect information and requests, and connect pet-lovers to said NGOs. “You’ll be amazed to know, we got over thirty adoption interests that day,” she said, “and many more via Facebook and Twitter.”

With thirty or more prospective homes out here in the city, things are looking good for these pups. But there have been those who have expressed their concern about the cab company’s involvement. Referring to its “corporate culture of misogyny and recklessness”, The Observer’s Jack Smith IV wondered if “a couple of puppies could wash away all that bad blood.”

Was this just a stunt for good press? Pups aren’t concerned with the trifles of human business. They only want what are called “forever homes” in shelter parlance. Divakaran stressed that it was an effort to place desi dogs in committed, loving homes. In India, unhoused dogs are scavengers, risking their lives for inadequate food, often dying on the streets of starvation, dehydration, hypothermia, or end up as victims of mindless human violence. Indies are Pariah dogs, which have existed in Asia and North Africa for over 14,000 years, forming close relationships with human tribes, for a mutually beneficial system of hunting and protection. And yet today, they are treated as vermin.

Dogspot takes its adoption process very seriously. “We aren’t simply handing over puppies to people. We’ve sent out adoption forms to those who asked, and if all the requirements are fulfilled, then we will perform house-checks to make sure there is ample space for the puppies and that the people are genuine dog-lovers, before they can be adopted.”

This was the second time the program was carried out in India, the first time being in Pune. Uber partnered with organizations abroad as well, like the BARC Animal Shelter and Adoptions in Texas, USA this June, and the Montreal SPCA, the Ottawa Dog Rescue, and the Moosonee Puppy Rescue in Canada, as well as with Petsy in Mexico City. Business concerns aside, the issue of adoption is an important one. For one thing, adopting and sterilizing pets keeps these furries off the streets, manages populations, and actively seeks to end the dog-breeding industry. Having more such playdates in the future would only increase awareness about the welfare of shelter dogs, and we may just see more and more people opening their hearts and homes to them. Like they say: don’t shop, adopt!

For representational purpose only

By Shinjini Devbarman:

The Chinese stock market has been experiencing a sharp fall after a year of crazy zeniths. The drop made almost 500 companies halt their trading on Wednesday. China’s stock market has created $ 6.5 trillion in value over the last year, a growth that no other market has seen, ever. However, the experts see it as a “stock market bubble”, which can threaten to destabilize the economy. If the concerns of the economists are to be taken in account, the effects of this could be worse than Greek Crisis.

For representational purpose only
For representational purpose only

What is happening?
The two major stock exchanges of China, the Shanghai Composite Index and the Shenzhen Composite Index lost 32% and 40% of its value, respectively since last month. All in all, the Chinese stock market has lost more than $ 3.5 trillion in value. That is a huge amount, enough to pay Greece’s debt 20 times over and cause serious vertigo to the investors and companies.

Meanwhile, the Chinese government is trying everything it can to restore faith in the market. It has cut interest rates to a record low for starters. The China’s Securities Finance Corporation (CSF) announced on Wednesday that it will lend billions to big brokerage firms so they can buy more stocks, hence halting the price drop which had lead to the loss last month.

Even as the Chinese government has been pulling all measures to stabilize the market, the markets remain volatile.

Why is this happening?
Chinese stocks rose to unbelievable heights this year as novice investors started pouring all their savings into the market. The majority of these investors are not even high school graduates. Even farmers started investing their savings in the stock market. The growth in the stock market invited inexperienced investors to the $6.5 trillion market. Today individual investors make about 80% of China’s stock trading. The number of newly opened trading accounts has gone up to 2.8 million, all of them amateur investors.

The Chinese stock market boom does in no way reflect the real economy of the country. In reality, the Chinese economy has been growing at a very slow pace. The economy grew by only 7% in the first quarter which is disappointing considering the fact that Chinese economy had been growing at 10% for years in the 2000s.

The stock market boom was also fueled by debt as people have been buying stocks with borrowed money- a practice which is called ‘margin trading’. As the Chinese government has relaxed its limits on buying stocks from borrowed money, it fueled the market’s rise. People had bought $ 350 billion of stocks with borrowed money by the time the stock market reached its peak in June. If and when the stock market bubble bursts, the country will face a huge debt burden. Chinese market has been experiencing bigger market fluctuations than any other market except Greece.

Essentially the panic is caused by the fact that the boom in the stock market is not a result of a robust economy but because of government stimulus and investor frenzy. So the bubble is likely to crash.

What does this mean for India?
Given the fact that China is largely an independent market from the rest of the world, it doesn’t really matter much to India. Since all economies are essentially tied together, the Chinese stock market crisis will have some impact on the Indian market but if market experts are to be believed, India has the ability to withstand it. India is mainly a domestic demand driven economy so that means that even as global stocks fall, its effects on Indian market will be shallow.

Indian market experienced a drop as the entire Asian market did. The Chinese market drop triggered a 400 point drop in Sensex on Wednesday. Even then experts believe that India has the ability to bounce back.

As IMF announced that India as the fastest growing economy in the world with the growth rate at 7.5%, which is higher than China, experts believe that India is in a relatively better position.

china economic collapse

By Akhil Kumar:

While the world is anxiously following the dramatic developments in Greece as its exit from the Eurozone will have a huge impact on the global market, we are also faced with an impending meltdown of the world’s 2nd largest economy.

A report says that China’s market is 10X more important than Greece’s debt, as $3 trillion has ‘evaporated from the Chinese stock market in the last month,’ which is nothing compared to Greece’s $350 billion debt that has got the world anxious. So, should we be concerned? The same report also goes on to say that ‘the Chinese market is largely independent from the rest of the world. But as 1929 reminds, wild swings in markets can have severe economic and political consequences‘. This video explains what might have led to this crisis.

If you want to explore the issue in more depth, a report in The Washington Post titled ‘7 big questions about China’s astonishing stock market crash and what happens next‘ provides valuable insight.

To know more about what I think of this story, follow me on Twitter at @Akhil1490

Image credit: Mario Lolos

By Shinjini Devbarman:

There is a high chance that Greece will leave the Euro, as an overwhelming number of people have voted against a bailout deal from foreign creditors in a referendum yesterday. The referendum basically asked the people if they were in favour of continuing getting payments from the troika or the IMF, the European Union, and the European Central Bank, in exchange for budget cuts and increased taxes. The country has been facing an enormous debt crisis for years now, as the economic climate is in a very bad shape.

Image credit: Mario Lolos
Image credit: Mario Lolos

As more than 61% of people have voted ‘No’ against an international bailout package that would have just added to the already existing debt, the question is what happens next for Greece. The finance minister, Yanis Varoufakis has already resigned stating Sunday’s referendum would, “stay in history as a unique moment when a small European nation rose up against debt bondage”.

Given the country’s financial status, the future of the country and its place in the Eurozone has come under scrutiny. The result of the referendum doesn’t necessarily mean that the Greeks have said no to Euro, although a Greek exit from the Euro zone is imminent.

The poll results on the referendum are seen as a victory of democracy, especially since the Greek Prime Minister Alexis Tspiras had campaigned heavily against the austerity measures proposed by the troika. He tweeted Sunday night saying that, “Even in the most difficult circumstances, democracy can’t be blackmailed – it is a dominant value and the way forward”.

The austerity measures as proposed by the Euro zone leaders would have included bailout money and severe budget cuts and tax increase, which have already driven thousands of people to poverty. The Greeks have been suffering under austerity measures from international creditors for five years.

If there is a Greek exit, the country will have to leave the euro and go back to its former currency Drachma. The new currency would be worth a lot less than the euro. Although, experts believe that a low value currency would not be a completely bad idea as it would help the economy to grow again, as foreign investors would want to buy property and goods in Greek at a lower price.

Now that the referendum has resulted in a ‘No’ to the EU bailout package, the Greek government would have to negotiate with the creditors again. The Grexit (Greek Exit) would have a direct impact on the Euro zone. A Grexit will leave the European Central bank holding billions of dollars of Greek debt which will put the Eurozone countries vulnerable to masses of investors retreating to safer shores. It is already weighing on markets as global companies are witnessing a demand drop off on their products as European customers hold off on spending.

As for the Greek, an exit from the Euro zone will be painful but still better than a total collapse of the economy. As long as Greece remains dependent on the troika for financial support, the economy will not be able to pay back its outstanding debt, let alone flourish economically. If there is a Grexit, the entire Euro zone will need to be ready to deal with its weaker members.

indiaspendship

By Chaitanya Mallapur:

With India’s road and rail infrastructure in most high-traffic areas running at full capacity, the government plans to raise Rs 1 lakh crore ($15.6 billion) to develop ports and improve inland waterways.

The Sagarmala (necklace) plan, as it is called, envisages a series of ports and coastal and inland-shipping routes that will not just move cargo but also reduce India’s carbon footprint and save energy.

indiaspendship

Coastal shipping is the cheapest and least polluting mode of transport, 63% cheaper than road and 38% cheaper than rail: Rs 0.55 per tonne-km versus Rs 0.90 for rail and over Rs 1.50 for road, according to the estimates by the erstwhile Planning Commission.

The project aims to develop ports and make them drivers of economic activity by linking them to road, rail, inland and coastal waterways.

But first: Improve India’s ponderous ports

India’s port efficiency is low and work moves slowly, compared to leading international ports.

India has 12 major ports and 200 minor ports. Ports in India carry 95% of India’s total trade in volume and 68% by value.

Coastal shipping in India transports just 7% of domestic cargo. Compare that with 42% in Japan and 20% in China.

India’s sea-borne traffic is 950 million tonnes with a total coastline of 7,500 km compared with China’s 9 billion tonnes with a coastline of 15,000 km.

Another important drawback for coastal shipping is the slow turn-around time, the time a ship spends entering the port, loading, unloading, and departing.

The average turn-around time for India, as of April-November 2014, was reported to be 2.1 days (50 hours).

Singapore port, recognised as one of the best in Asia and globally, turns around ships in less than 12 hours. In Hong Kong port, container ships are turned around within 10 hours.

A two-day wait for a coastal container ship increases costs in India by close to 10% for short voyages.


Roads transport 57% of India’s domestic cargo and railways 30%.

India’s inland water-transport is also poorly developed.

Of 14,500 km of navigable inland waterways, only 5,200 km (36%) of major rivers and 485 km (3%) of canals can handle mechanised vessels. Only 0.5% of India’s cargo traffic is handled by inland water-transport, compared to China at 8.7%, the US at 8.3% and Europe at 7%, according to this KPMG report.

Ports start to get a leg up

An agreement was signed recently for a satellite port in Dahanu between Jawaharlal Nehru Port Trust (JNPT) and the Maharashtra Maritime Board. The port is expected to reduce the traffic at Jawaharlal Nehru Port.

Similarly, the central government is planning six ports including the Rs 12,000-crore deep-water Sagar port in West Bengal, Colachel in Tamil Nadu, the Rs 6,000-crore Vadhavan port in Maharashtra and the Rs 1,200-crore Haldia dock 2.

The capacity of all major ports was 800.52 million tonnes (MT) as on March 31, 2014, and cargo traffic was 555.54 MT.

Kandla with more than 87 MT in cargo traffic in 2013-14 was India’s busiest port. Its average turn-around time was 2.9 days (69.6 hours). Building ports as part of the Sagarmala plan will, clearly, not be enough.

This article was originally published on IndiaSpend. (Mallapur is a policy analyst with IndiaSpend.)

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Image Credit: IndiaSpend.com

By Devanik Saha:

Retail e-commerce sales in India are expected to reach $17.5 billion (Rs 105,120 crore) by 2018, from $5.3 billion (Rs 31,800 crore) in 2014, according to data analysed by eMarketer, a digital-research firm, but only two of 10 internet users in India shop online.

India’s e-commerce market is intensely competitive, with US giant Amazon establishing its presence in India in 2013 and Alibaba, the Chinese giant, planning to start selling by August this year. Flipkart, India’s largest e-commerce firm, recently raised $550 million (Rs 3,300 crore) at a valuation of $15 billion (Rs 90,000 crore).

Despite having the third-largest internet user base in the world with 200 million users at the end of 2014, India does not feature in the top ten e-commerce markets in the world, according to an eMarketer report. The reasons centre on low Internet reach, slow internet speeds outside the metropolitan cities and poor customer services.

India’s e-commerce sales in 2014 were $5.3 billion (Rs 31,800 crore), 1/80th the size of China’s $426.26 billion (Rs 2,557,760 crore) and 1/58th the size of the US’ $305.6 billion (Rs 1,833,900 crore).

If you look at Japan, China and US, e-commerce became popular as early as 2002-2003. It has taken them about 12-13 years to reach where they have reached. E-commerce really took off in India only in 2012-13. It will take India also that much time to reach there,” Rajnish (he uses only one name), a technology expert, said.

China: Number 1 in e-commerce with skyrocketing growth ahead

China and the US accounted for more than 55% of global internet retail sales in 2014. China’s growth over the next five years will widen the gap between the two countries.

China will likely exceed $1 trillion (Rs 6,000,000 crore) in retail ecommerce sales by 2018, accounting for more than 40% of the total worldwide.

Globally, retail sales reached $22.492 trillion (Rs 134,952,000 crore) in 2014 but retail e-commerce sales stood at $1.316 trillion (Rs 7,896,000 crore, 5.9% of overall retail sales).

E-commerce sales are expected to increase 89% to $2.489 trillion (Rs 14,934,000 crore, 8.8% of overall retail sales) in 2018.

Digital-buyer penetration—a measure of digital reach—is a major factor in determining the success of retail e-commerce sales. India’s digital-buyer penetration was quite low at 24.4% in 2014 as compared to the global average of 41.6%.

The UK leads the world with 88% penetration. Ironically, China with 55.2% and US with 74.4% penetration do not feature in the top five.

Indian e-commerce has a long way to go

E-commerce in India still has a lot of friction,” Rajnish said. “Till that is solved, it will be hard for penetration to go beyond 30%. For example, India has very low credit-card penetration and the cash-on-delivery (COD) model is why Flipkart really took off.”

People above 35 are not very comfortable using their debit card online. PayTm and others solve this problem but there is a lot of friction. “I use PayTm for Uber and it is still a process that has friction. ​In US, the return policy is very generous. I bought a coat from Amazon in the Bay area; it ended up being the wrong size. My experience of changing to the correct size was very seamless. When I bought a down jacket in Bangalore, and it ended up being the wrong size, getting the right size was really a painful experience,” said Rajnish.

That view is echoed by Paritosh Sharma, an advisor to tech startups and an entrepreneur with PayUMoney, a digital-payment platform.

Digital buying has an attached expectation to it. I place the order and it should appear in front of me over the next two or three days. In many cases this does not happen. Also, in a lot of cases (especially in tier-2 and tier-3 cities) in India, if you get a product that is not of the exact quality that you ordered, returning it is a major problem. Most people, hence, prefer what’s available in a physical retail store,” Sharma said.

There are two more reasons for low online sales, said Sharma.

First, the internet infrastructure in India is poor. If one steps outside city limits, you automatically are shifted from 3G to an Edge (a lower-speed) connection, deterring buyers.

Second, lack of good service and support. While most Indian e-commerce companies are sprucing up their support via phone and digital media, it’s quite haphazard. Most companies still lack processes to ensure customer satisfaction and trust.

Notes:
1) Retail e-commerce sales includes products and services ordered via any internet device; excludes travel and event tickets.
2) Digital buyers are internet users (ages 14+) who have made at least one purchase, including mobile, online and tablet purchases during the calendar year.
3) Dollar-Rupee exchange rate used: $1=Rs 60

This article was originally published on IndiaSpend.

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modi

By Bishal Paul

On 26th May last year, the Narendra Modi led National Democratic Alliance stormed to power backed by a massive mandate and popular voter sentiment. One year and counting, has the chest thumping rhetoric of the supreme leader yielded to any substantial results, or is the marketing blitzkrieg continuing to dominate the larger political space? Intentions may be motivated by personal bias but facts and numbers never lie.

modi

The Number Game

Let’s then start with economy which they keep harping about all the time. During the elections and even post that, the Modi led government had always maintained that the last government mismanaged the economy and that they would put it back on track. One year later, the situation is rather interesting. In the recent budget session of the Parliament, the Union Finance Minister Shri Arun Jaitely informed us that the country’s GDP is growing by 7.4% this fiscal. However what is interesting in this is the fact that in order to achieve this high growth rate, the government changed the very process of how the GDP was earlier calculated. The move was so sudden that even the Chief Economic Advisor Arvind Subramanian expressed surprise, “I am puzzled by the GDP growth numbers and, consequently, all the constituent elements that went into constructing it.” So if we go by the latest method of calculation, then the growth rate under the UPA in the last year of its government was a healthy 6.9% and not the projected 5.4%. This government has therefore added a growth of 0.5% to the GDP.

Rupee Vs Dollar

When it comes to the value of rupee vis-a-vis the dollar, I would just like to echo honourable PM Modi, who in 2013 said that if trends continue, then the rupee will cross the age of the then Finance Minister, who was 68. Fast forward to 2015, the situation hasn’t changed much, the rupee has crossed not only the age of FM Jaitely (62), but also that of PM Modi who is 64 now. Coming to black money, the BJP President Amit Shah has already publicly called the bringing back of black money and the “15 lakh in every citizen’s account“, an election ‘jhumla’. They’ve been boasting about the dip in inflation but will never tell you that the drop in the international crude prices have contributed significantly to it. After all, why not take credit for something when it’s given to you on a platter. However, despite the heavy fall in the international crude oil prices, the government hasn’t passed on the benefit to the consumer and our petrol prices remain highly disproportionate and the highest in South Asia. Remember those messages we used to get during the UPA days comparing oil prices with neighbouring countries? Well, all you need to do is just google it and you’ll be surprised to know that it is cheaper to buy petrol from Pakistan and even a small country like Bhutan.

Fall In The Production Sector

As of April 2015, production growth in the eight core sectors in fiscal year 2014-15 was at 3.5%, which was lower than the 4.2% growth posted in the previous fiscal year, according to figures released by the Commerce & Industry Ministry. A sharp drop in the production of steel, cement and refinery products resulted in a 0.1% fall in the growth of the eight core industries in March, to its lowest rate in 17 months. The eight core sectors are coal, crude oil, natural gas, refinery products, fertiliser, electricity, steel, and cement, and account for 38% of the overall Index of Industrial Production. Industry representatives are concerned that the fall in production in the core sectors indicate a slowdown in economic activity. Similarly when it comes to taxation, the government has increased the service tax up to 14%. So every time you go out for dinner or to watch a movie from June onwards, be ready to bear the brunt of the government’s latest tax policy.

Setbacks To Agricultural Sector

The government has particularly shown lack of sensitivity towards the farming community which contributes close to 17% of our GDP and employs about 49% of our population. Agriculture and irrigation are one of the worst hit as the Rashtriya Krishi Vikas Yojana has seen a reduction in funds to the tune of Rs 7,426.50 crore. Apart from the massive cuts in several agricultural policies as mentioned above, they’ve brought in several amendments to the Land Acquisition Bill which snatches the rights of the farmers by removing crucial clauses such as the consent clause and the social impact assessment clause. Data shared by their own Ministries reveal that only about 8% of developmental projects are stalled due to land acquisition issues. But yet the government in its arrogance and ignoring the protests held across the country by farmers, re-promulgated the ordinance for the third time as they were unable to pass it in the Parliament. As a result, agriculture growth has gone down from 4.7% to 1.1% in the current fiscal year. Farmer suicides have risen by 40% to 1,306, from May 20, 2014 to May 24, 2015

Farmers in rain-fed areas are going to be paid a meagre Rs 2,750 per acre and Rs 5,465 per acre in assured irrigation areas. However, even then, there are conditions. Norms say that compensation will be limited to farmers having a maximum 4.9 acres of land. This means that more than half the farmers will not be eligible for compensation. A circular by the disaster management division of the Union Home Ministry on April 8 asked Chief Secretaries to compensate farmers from the State Disaster Relief Fund (SDRF) and get it reimbursed from the national fund. But, there’s a ‘jhumla‘ here too: this assistance will only be for the first disaster in a financial year. “In case the state faces another severe disaster during the same year, no adjustment will be made while releasing National Disaster Relief Fund (NDRF) assistance,” the circular said. And as the government continues to resort to such cheap political theatrics, the farmers suffer.

One can do extensive marketing or tweak the numbers to show a very rosy picture, but if the foundation of a structure itself is weak, it can’t sustain itself for long. It’s time the government realises that people are restless for change and intent only can’t serve the purpose.

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