Walmart – the US$ 500 billion retail giant has acquired 77% stake in Flipkart – the leading Indian brand in e-commerce segment – with an investment of US$ 16 billion. The balance 23% will be with minority investors including Alphabet [a subsidiary of global internet giant Google] which will invest US$ 1.5 billion. Walmart is not new to the Indian market. It came to India initially in 2007 in the ‘wholesale cash and carry’ business viz. sale to wholesalers and other bulk buyers [including institutional agencies] under a joint venture [JV] arrangement with Bharti Retail. This was under the then FDI [foreign direct investment] policy which allowed foreign investor 51% stake in this business. In 2012, the then government under...
More No comments
Blog
Electrifying 40 million households – challenges ahead
In his address from the ramparts of the historic Red Fort on August 15, 2015, prime minister, N Modi had declared that his government will provide electricity to all the 18,000 villages [all located in inaccessible and the most difficult part of India] – that remained unconnected even 68 years after independence. Modi promised to complete this job within 1000 days. True to his commitment, the government accomplished the mission with the last of these villages in Leisang [Manipur] having got the electricity on April 28, 2018 nearly two weeks ahead of the target. A village is considered electrified if it has the basic electrical infrastructure and 10 percent of its households and public places including schools, local administrative offices...
More No comments
80 million jobs in 4 years – Modi has kept promise
As Modi – government completes four years of its term in this month, it is time to take stock of its performance particularly, on the jobs front which has been at the centre-stage of criticism by opposition parties all along and will be a major plank of campaigning in the run up to the next general elections in 2019. During his speeches in 2014, prime minister, Modi had promised job generation by a mammoth 20 million every year. The electorates especially, the unemployed youth were overwhelmed and accordingly gave him an absolute majority to run the country. Now, when we look back, there is a perception that he has not lived up to this promise; critics go that far to...
More No comments
What prompts e-commerce players burn cash?
In the current times, the consumers of a variety of items from FMCG to electronics to consumer durable etc are having a hey day with access to these at substantially low price from e-commerce platform. Several products are available at a discount as high as 50% [or even higher] over the maximum retail price [MRP]. Juxtaposed with the fact that the requested item is delivered right at the doorsteps of the consumer makes the buy from the platform all the more attractive. But, there is a darker side to it. A close look at the very dynamics of how such heavy discounts are given would show it up. At the very outset, it is important to understand that MRP is...
More No comments
Oil price puzzle – has government run out of options?
Reportedly, the three public sector undertakings [PSUs] in the downstream oil segment viz. Indian Oil Corporation [IOCL], Hindustan Petroleum Corporation Limited [HPCL] and Bharat Petroleum Corporation Limited [BPCL] were directed not to give effect to hike in price of petrol and diesel by Rs 1 a liter each that had become necessary due to increase in the international price of these products. The prices of these products were decontrolled, petrol in June 2010 and diesel in November 2014 and since then, the oil PSUs set their prices on the basis of movement in their international price [using import parity price and export parity price in the 90:10 ratio]. Whereas, up to May 31, 2017, these were revised fortnightly, from June...
More No comments
Assuring MSP – MAS hugely negative for centre and state budgets
Stung by depressed price realization by farmers much below the minimum support price [MSP] and impending general elections next year, Modi – government announced in the Union Budget for 2018-19 that henceforth, they will be assured MSP which is at least 1.5 times the cost of production. Mere assurance of a remunerative price is of no use unless the farmer is able to sell his entire produce at this price. Keen to ensure that this happens, the government asked NITI Aayog to come up with suggestions. The latter prescribed three alternatives viz. market assurance scheme [MAS]; deficiency payments and incentives to private sector to buy farmers produce at MSP. Under MAS, agencies of the state buy the produce directly from...
More No comments
Don’t kill Aadhaar at the altar of privacy
The Comptroller and Auditor General [CAG] has exposed diversion of subsidized food meant for poor households under the National Food Security Act [NFSA] in Delhi – using fraudulent means such as fake ration cards, fake mobile numbers etc – causing loss of over Rs 7000 crore to the exchequer. This is one among several such scams resulting in massive leakage from Rs 145,000 crore being the food subsidy spent by the union government annually. Likewise, there are monumental leakages from other welfare schemes such as fertilizer subsidy, LPG subsidy, MGNREGA [Mahatma Gandhi National Rural Employment Guarantee Act], education subsidy, pension, power subsidy etc. In other areas such as real estate, a handful of persons appropriate public land in prime locations...
More No comments
GST/Demonetization/IBC – the trio behind inclusive growth
While, presenting the budget for 2017-18, the finance minister, Arun Jaitely had fixed a target of Rs 9.8 lakh crore for collection of direct tax. Against this, the government has already touched Rs 9.95 lakh crore and is expected to reach Rs 10 lakh crore by the time figures for the last few days of March, 2018 get confirmed. Under the Goods and Services Tax [GST] rolled out on July 1, 2017, out of total collection of Rs 7.20 lakh crore till February, 2018, centre’s share is Rs 4.60 lakh crore which is Rs 16,000 crore higher than the target [Rs 4.44 lakh crore]. This is despite the fact that various tax evasion and safety measures such as electronic-way [e-way]...
More No comments
IPR protection – why India ranks poorly?
According to the annual report prepared by the Global Innovation Policy Centre [GIPC] of the US Chambers of Commerce, India has increased its score in the International Intellectual Property [IIP] Index, from 25 per cent [8.75 out of 35] in the 5th edition of the Index to 30 per cent [12.03 out of 40] in the 6th edition. India now ranks 44th among 50 nations up from 43rd out of 45 countries last year. The report analyses the intellectual property [IP] climate in 50 world economies based on 40 unique indicators that benchmark activity critical to innovation development surrounding patent, trademark, copyright, and trade secrets protection. The improvement in the score reflects positive reform efforts on patentability of computer-implemented inventions [in July...
More No comments
Salvaging failed banks – don’t punish depositors
The unsustainable high NPAs [non-performing assets] of banks – most of these with public sector banks [PSBs] – have caused massive erosion in their capital. This in turn, has forced the government to come out with massive infusion of fresh capital to bail them out. But, this has led to serious concern about the impact it will have on the center’s balance sheet and its fiscal consolidation efforts. No wonder, international financing agencies such as International Monetary Fund [IMF] and World Bank as also rating agencies have flagged ballooning NPAs as major area that could mar the prospects of India embarking on a high growth trajectory [notwithstanding fundamental reforms such as demonetization and GST implemented by Modi – government]. The...
More No comments