Sunday, November 27, 2011


26 Nov 2011


NEW DELHI: Four 'Babalog' ministers of state (MoS) held a quiet meeting on the FDI in retail trade Thursday evening around the same time their seniors were engaged in a bitter fight over the proposal in a Cabinet meeting here.

They decided to send an urgent note to Rahul Gandhi to explain the political fallout of the Cabinet's decision to go for 51 per cent FDI in multi-brand retail trade and how the opposition will use it to hilt to confuse the rural voters in the Uttar Pradesh elections, impacting the Congress prospects.

The four MoS --Jitin Prasada, Jitender Singh, Sachin Pilot and RPN Singh -- are worried that they all come from the rural constituencies and will have to face ire of the farmers to be hit by the decision despite the government's claim that it will help them.

One of them rang up a former union commerce secretary to give a perspective to them on pros and cons of the FDI in retail. The retired bureaucrat is now penning draft of the letter the four junior ministers will be handing over to Rahul early next week.




        The sudden decision of the Government of India to open up Foreign Direct Investment (FDI) up to 51 percent in multi brand retailing and 100 percent for single brand retailing has come as a rude shock to the thunder struck millions of traditional retail vendors in the country. While  Parliament is in session, this move of the Government of India to announce such a major policy decision affecting millions of people outside the Parliament without even consulting the State Governments is unprecedented and indicates the  overweening arrogance of the UPA Government. The FDI policy in the retail sector is a sensitive issue and it was strongly opposed by various trade bodies even when the Committee appointed to study this issue made field visits.  But, by making this sudden announcement ignoring the sentiments of the people, the Central Government has stirred the proverbial Hornet’s Nest.   
The purported intention of the Government of India seems to be to bring more foreign investment into the country to improve  market efficiency and bring down double digit inflation prevailing in the country, mainly due to the series of policy blunders made by the Congress led UPA Government at the Centre. Does our Nation lack such resources or the technology to deal with such problems? The Central Government should realize that constraints on farm products, on the supply side, which is one of the contributory factors to food inflation cannot be addressed through the FDI route, but only by squarely addressing the infrastructural constraints through appropriate policy support.
        The world over, whenever local Governments opened up the retail sector, local prices went up sky high instead of curbing the price level. There are many countries whose experience shows just the reverse, as the price mark up by such MNCs is much higher than what is being charged by the small vendors.  Further, such invasion of MNCs leads to monoplolisation of the market, exploiting both farmers and producers on the one side and the consumers on the other side as, once the traditional system of retail is broken, it cannot be rebuilt, if the MNCs adopt a predatory pricing policy. In most such countries, the unorganised retail sector, which provided livelihood to millions of traditional retail vendors, has been completely destroyed, as the organized Multi National Companies swamped the retail markets.  For instance, in the U.K., it is reported that 3 retail chains now control 65 percent of the entire retail market. Similarly, in a country like Thailand, over 30 percent of the local shops were forced to close and pull down their shutters within 10 years of the entry of Foreign retailers.  In India reports suggest that 90% of the total retail business is in the unorganized sector wherein 40 million people depend on unorganised retail for their employment and livelihood. While the Government of India talks about creation of 10 million jobs in the next 3 years, this will lead to 40 million people being uprooted and thrown out from their business.  Most of these people are not well educated and will remain unemployed for ever.  When we talk about the creation of employment opportunities, these retail vendors in the country who depend on this business for their livelihood will be rendered destitute and will be driven to the streets. Therefore, I strongly feel that this decision of the Government of India is a wrong decision, taken under pressure from a few retail giants, who are starved for capital infusion for their future survival.
        The announcement of the Government of India has come as a thunderbolt and shocked millions of small vendors who have been completely taken off guard.  Their fear that this move will completely throttle small retailers and distributors is not unfounded. As this will affect the livelihood of millions of small departmental store owners and completely destroy the unorganized retail sector within the next couple of years, I strongly oppose this move of the Government of India to open up the retail trade to Foreign Direct Investment. Though the policy guidelines are yet to be released by the Government of India, any amount of safeguards will not be any use in protecting the interests of the domestic sector.  Therefore, I demand that this ill advised move of the Government of India should be reversed as it will not serve to bring down inflation or improve market efficiency. Rather, the domestic manufacturing and services sectors will take a serious hit and the retail trade will be completely taken over by the MNC dominated big retail giants which is not good for our country. Therefore, I am constrained to state that my Government will not allow the multi brand global players as permitted under the new policy to set up their hyper markets in Tamil Nadu.


Wednesday, November 23, 2011


23 Nov 2011


By R Rajagopalan

 The Lok Sabha secretariat relented on Wednesday and restored the media's facility of basic papers like the list of business and question papers that was abruptly stopped on the opening day of winter session on the ground that everything is now available on the net.

The decision was reviewed after journalists protested on Tuesday at the hindrance to their professional work of proper coverage of the House if they do not get hard copy of documents to refer when in the Press Gallery and are supposed to check on the Internet on return to office. 

Sources said the secretariat realised the media's handicap from the new paperless policy since they are not allowed to bring their laptops or Ipads in the Press Gallery alike the members of Parliament who have been given the gadget to facilitate the technological shift from the stakes of paper to the new electronic era.


Tuesday, November 22, 2011

Media is victim of paperless zeal of Lok Sabha

22 Nov 2011


By R Rajagopalan/Jal Khambata

NEW DELHI: Journalists covering the Lok Sabha had to bear the brunt of its zeal for going electronic with a new paperless regime on Tuesday when they arrived for the coverage of the month-long winter session of Parliament.

They were totally crippled by the sudden denial of Parliamentary papers like the list of business and question papers they always used to get as they enter the Press Gallery to keep track of the proceedings and that too without notice.

A group of aggrieved journalists barged into the office of the Secretary-General of the Lok Sabha during an adjournment of the House to convey their professional handicap in providing objective coverage of the House without the papers. They told him how they would be left to guessing the proceedings that take place during the noise and din without the agenda to check what is going on and that may result in misreporting.

Even the public relations department of the Lok Sabha was surprised by the paperless regime thrust on the media, without making any alternate arrangements for access of the information required when in the Press Gallery covering the proceedings. It could do little than to rush an internal note to review the decision not to give any papers to the media.

The new regime is aimed at minimising the huge consumption of paper and ultimately eliminate use of paper totally by putting everything on the Internet. 

The MPs are not complaining since they have been provided free either an Apple iPad or Android-based Samsung Galaxy Tab, with a connection from the Parliament hub, to check documents even while in the House and so much so that they can even watch proceedings going on in the other House without moving from their seat. Also, the staff is ready to rush the paper documents on demand from any MP.

The media, however, does not have such a facility. What to say of allowing iPad or laptop in the Press gallery, journalists are not allowed to even take inside their mobile phones, particularly the smart phone on which they can check the necessary agenda and question papers to pursue the proceedings effectively. Moreover, the mobile jammer are installed in the Press Gallery that will not allow any Internet connection even if the rules are relaxed and journalists allowed to take along their equipment for surfing.

Also, a majority of journalists covering the Lok Sabha are still not that computer savvy to work with the help of the net, besides others handicapped by slow Internet connections in their offices. There are a score of journalists working for the language dailies who still write in long hand and have no knowledge of computers. They cried that it is a sort of censure, binding them out as they have no way to get the papers without any computers.

The only silver-lining on the day of despair, though not much since the House just could not function because of pandemonium, for journalists was that they did get the answerbooks of the questions as also the statements made by two ministers, Pranab Mukherjee and Dinesh Trivedi since they are circulated by the staff of the Press Information Bureau (PIB) who do not come under the diktats of the Lok Sabha secretariat.

Not available, however, were four reports of the standing committee on home tabled in the House on Tuesday by its member Navin Jindal, including a report on The Enemy Property (Amendment & Validation) Second Bill, 2010.    


Friday, November 18, 2011

MK Alagiri red flag on Urea Decontrol-wages war with Pranab Mukherjee

18 Nov 2011                 



From R Rajagopalan

NEW DELHI: A turf war has intensified between Finance Minister Pranab Mukherjee and Chemicals and Fertiliser Minister M K Alagiri on the decontrol of all fertiliser prices. Mukherjee wants to reduce his subsidy bill. Alagiri has, however, sought the Prime Minister's intervention to scuttle an imminent decontrol of urea as he worried taht it will badly hit the small and marginal farmers.

He has pointed out in a letter to the Prime Minister that the new policy of a partial decontrol of some fertilisers since April 1 last year rather shot up its subsidy bill and their prices doubled without giving more choices to the farmers as envisaged in the policy despite his strong protests.

Mukherjee, as chairman of the Group of Ministers (GoMs) on fertilisers, has been shooting down repeated pleas of Alagiri since February last year on the nutrient based subsidy (NBS) policy that was implemented from April 1 last year. Alagiri had feverishly fought for postponing the policy by at least one year or let Department of Fertilisers implement it in phases.

Sharing the concern over the burgeoning fertiliser subsidy, Alagiri has been taking the stand that any direct cut in the subsidy budget is no solution. Instead, he suggested to enter into long term contracts at reasonable rates and establish joint ventures in the resource-rich countries to source fertilisers.

In a terse note to the Prime Minister, Alagiri has opposed the next move to decontrol urea that was left out from the 2010 policy enforced on the phosphatic and potassic fertilisers known as NPK, pointing out the disaster of allowing the manufacturers and importers, instead of the government, fix the MRP (Maximum Retail Price) of these fertilisers.

He points out that his prophesy in his two letters last year to the finance minister on February 3 and 13 has come true as the fertiliser prices are shooting up and "subsidy bill of the government in NPK sector is also growing incessantly." He is worried that after introduction of the NBS policy, the MRP of fertilisers has rather doubled "which is going against the interest of the farmers as well as food security of the country."

Alagiri had also protested in his February 13 letter last year to Mukherjee to desist from any direct cut in the fertiliser subsidy budget as it would "definitely result in scarcity of fertilisers, which would not only cause farmers' riots but also in reduced overall food grains production." His concern was that "any direct cut in fertiliser subsidy would result in multifold increase in subsidy on imports of food grains."

Mukherjee has, however, remained adamant that the policy has been carefully worked out, keeping in mind all these factors, and hence no scope for any revision. In his letter on February 12, 2010, he also rejected Alagiri's plea in his letter of February 3 that year not to hike the urea price by 10 per cent, pointing out that its MRP has remained unchanged since the year 2002, leading to its excessive use detrimental to the health of the soil as "an unduly low MRP insulates the user from market realities, resulting in unrealistic demand for the product."

In his separate letters dated August 3 this year to both the Prime Minister and Mukherjee, Alagiri has warned that any decontrol of urea "may have significant impact on the availability of urea at affordable prices in different parts of the country and aggravate the situation with respect to small and marginal farmers" as it is the most sensitive and widely used fertiliser in the country.

He has taken a firm stand that "for next 2-3 years any suggestion of implementing Nutrient Based Subsidy (NBS) regime in heterogeneous urea industry alongwith proposals regarding decontrol of MRP and decanalisation of urea imports is not desirable."

Alagiri points out how impractical the government was to decontrol the prices of NPK fertilisers from April 1 last year, wanting a written assurance from the fertiliser industry to maintain current price line. The Department of Fertiliser did work on getting such assurance, but there was hardly any credible assurance from the industry.

The fertiliser minister says it was impractical for the industry to give such a written assurance, "given the highly volatile nature of prices of fertilisers in the international markets and the fertilisers proposed to be covered in the 2010 NBS are mainly dependent on imports up to 90 per cent." There have also been instances when the price rise has been three to four times in international market over a period of six months, he points out.

Moreover, he said the government can not bind the existing players in the industry as the NPK fertilisers fell under decontrolled category and these are also on OGL (open general licence) which means any new entity can import and sell these fertilisers to farmers and claim the concession and subsidy envisaged in the NBS.