In the contentious Ram Janam Bhoomi – Babri Masjid case which involves the ownership of the ‘disputed structure’ in Ayodhya [Uttar Pradesh], the Allahabad High Court [AHC] in 2010 had held that the dispute structure/site was actually the birth place of Lord Ram – the God widely worshipped by the Hindu community. A bunch of petitions were filed in the Supreme Court [SC] challenging the order. Since then, the matter has been pending in SC for close to a decade now. Prior to 2010, the issue had been lingering for over six decades involving judicial proceedings at various levels. The protracted delay in resolution of the dispute has prompted Hindu organizations viz. Rashtriya Swayamsevak Sangh [RSS], Vishwa Hindu Parishad [VHP] ...
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Category: Regulatory environment
Free up FDI in Indian retail
Amidst reports of millions of retailers facing heat from the e-commerce majors such as Amazon, Walmart/Flipkart etc, the announcement by Reliance Industries Limited [RIL], chairman, Mukesh Ambani – at the Vibrant Gujarat Summit on January 18, 2019 to make a foray into e-commerce business on a mega scale involving its 3 million merchants [besides its own 7,500 retail stores, 350 million customers and 215 million Jio subscribers] should bring cheer to them all. In a first step towards launching its e-commerce portal, it will sell over a million PoS [point of sale] machines in Gujarat alone as it targets 1.2 million small retailers through e-commerce play. Available at a refundable security deposit of Rs 3,000/-, these machines would help them...
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Quota in jobs – go for economic criteria only
The decision of the Modi – government to give 10% reservation to ‘economically weaker section’ [EWS] of the society in educational institutions and government jobs [a constitutional amendment bill in this regard was passed on January 8/9, 2019] prima facie looks politically motivated. This is because the decision was taken towards the fag end of its term and impending general elections in April/May, 2019. Indeed, the 124th constitutional amendment bill was presented for consideration and passage by Lok Sabha [LS] in its last sitting on January 8, 2019. Further, the session of Rajya Sabha [upper house] was extended by a day to ensure its passage. The political significance of the decision can also be gauged from the fact that in...
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Unshackle public sector banks
Banking is an inherently hugely profitable business. To get a sense, all that one needs to do is to look at the hundreds of thousand crore that a bank gets in savings account on which it pays a meager 3.5%-4% interest and earns a minimum of 10% by lending. Even on the funds it garners by way of term deposits [6.25%-7.5% depending on period], there is room for making good money. Yet, Indian banks especially public sector banks [PSBs] have posted huge losses in recent years leading to corresponding erosion in their capital and resultant impairment in their capacity to continue with lending. 11 out of a total of 21 PSBs were even put under Prompt Corrective Action [PCA] framework...
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FDI in retail: The way forward
Only a 100 per cent FDI can create good market dynamics that can address concerns of predatory pricing and market dominance Retailers’ associations have complained to the Government against e-commerce majors such as Amazon and Flipkart giving deep discounts on sales on their platform which is detrimental to the ubiquitous ‘mom-and-pop’ stores. They also apprehend that once the latter is decimated, the former will start exploiting the consumers in the long-run by charging exorbitant prices. Domestic companies in organised retail (or the so-called ‘brick and mortar’ segment) viz Reliance Retail Limited (RRL) and Futures Group among others, too, are facing the heat from these e-commerce giants. They are not against MNCs per se but their grudge is mainly due to...
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Market-place – who is burning cash?
Amidst continuing uncertainties of the policy environment for foreign direct investment [FDI] in multi-brand retail [MBR], a flurry of concerns have been raised by stakeholders especially with regard to the role of MNCs such as Amazon/Flipkart which have increased their presence in India particularly in the e-commerce space. The retailers associations [those representing the ‘mom-and-pop’ stores] have complained that they are indulging in predatory pricing – a euphemism for selling at rates substantially below cost of production/purchase and distribution – and funding the resultant loss from the dollars brought in from their global parent. This will not only threaten the survival of the street corner shops but even hit the consumers in the long-run as having captured a major slice of...
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Amazon, Flipkart flouting FDI norms. Really, ED?!
During hearing on a public interest litigation in Delhi high court on October 31, the Enforcement Directorate (ED) said it is investigating alleged violation of the Foreign Exchange Management Act (FEMA) against Amazon and Flipkart. The charge is that these companies have violated the extant norms for foreign direct investment (FDI) guidelines as contained in Press Note (PN) 3 (2016-17). The PN 3 allows 100% FDI in the ‘marketplace’ model for e-commerce. An entity working on this model offers a platform to sellers and buyers to conduct transactions. It acts as a facilitator by offering them services such as booking orders, raising invoices, arranging deliveries, collecting payments, etc. It can’t own stocks and can’t sell directly to the consumer. The...
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Amazon/Flipkart flouting FDI norms – really!
During hearing on a public interest litigation [PIL] in Delhi High Court [DHC], on October 31, 2018, the Enforcement Directorate [ED] informed that it is investigating alleged violation of the Foreign Exchange Management Act [FEMA] against foreign majors such as Amazon and Flipkart. The specific charge is that these companies have violated the extant norms for foreign direct investment [FDI] guidelines as contained in Press Note [PN] 3 [2016-17]. The PN 3 allows 100% FDI in the ‘market-place’ model for e-commerce. An entity working on this model offers a platform to sellers and buyers to conduct transactions. It acts as a facilitator by offering them services such as booking order, raising invoice, arranging delivery, collecting payments, handling rejections etc. It...
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Reining in subsidies – controls must go
If, there is any political dispensation that has carried out administrative reforms in the true sense of the term, it is the present NDA – government led by Narendra Modi. He has delivered governance whose hallmark is ‘transparency’ and ‘honesty’. These traits have glided him towards a policy driven state, maximum focus on e-governance, minimizing use of discretion and elimination of physical interface. The results are there for all to see in terms of efficient delivery of services and reaching financial assistance and subsidies in full to the beneficiaries by leveraging technology especially direct benefit transfer [DBT]. This has also saved tens of thousands crore every year. That money is being re-deployed for building roads, highways, rails, ports, hospitals, schools...
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Minority shareholders – judiciary endorses oppression by brute majority
Cyrus Mistry – scion of the Shapoorji Pallonji Group [SPG] which holds 18.4% shares of Tata Sons Limited [TSL], holding company of the Tata Group – was elevated to the position of Chairman, TSL in 2012 [after serving several years as director on its board] with full support of Tata Trusts that has majority ownership of TSL at 66%. Mistry continued at helm for 4 years even as his performance was commended by the promoters as well as independent directors of all leading group companies viz. Tata Motors Ltd [TML], Tata Steel Ltd [TSL], Tata Consultancy Services [TCS], Tata Power Ltd [TPL], India Hotels Co. [IHC], Tata Chemicals Ltd [TCL] etc. Yet, he was removed in a meeting of TSL...
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