DO WE NEED FDI IN RETAIL?

                

Given the debate that’s raging over opening the retail sector to foreign direct investment, here are the arguments in favour and against it.

      FOR:

1.      Huge investments in the retail sector will see gainful employment opportunities in agro-processing, sorting, marketing, logistics management and front end retail.

2.      At least 10 million jobs will be created in the next three years in the retail sectors.

3.      FDI in retail will help farmers secure remunerative prices by eliminating exploitative middlemen.

4.      Foreign retail majors will ensure supply chain efficiencies.

5.      Policy mandates a minimum investment of $100 million with at least half the amount.

6.      This will have a salutary impact on food inflation from efficiencies in supply chain. This is also because food, which perishes due to inadequate infrastructure, will not be wasted.

7.      Sourcing of a minimum of 30% from Indian micro and small industry is mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation.

8.      A strong legal framework in the form of the Competition Commission is available to deal with any anti-competitive practices, including predatory pricing.

9.      There has been impressive growth in retail and wholesale trade after China approved 100% FDI in retail. Thailand has experienced tremendous growth in the agro-processing industry.

10.  In Indonesia, even after several years of emergence of supermarkets, 90% of fresh food and 70% of all food is still controlled by traditional retailers.

11.  In any case, organized retail through Indian corporates is permissible. Experience of the last decade shows small retailers have flourished in harmony with large outlet

AGAINST:

1.      Move will lead to large-scale job losses. International experience shows supermarkets invariably displace small retailers. Small retail has virtually been wiped out in developed markets like the US and in Europe. South East Asian countries had to impose stringent zoning and licensing regulations to restrict growth of supermarkets after small retailers were getting displaced. India has the highest shopping density in the world with 11 shops per 1,000 people. It has 1.2 crore shops employing over 4 crore people; 95% of these are small shops run by self-employed people.

2.      Global retail giants will resort to predatory pricing to create monopoly/oligopoly. This can result in essentials, including food supplies, being controlled by foreign organizations.

3.      Fragmented markets give larger options to consumers. Consolidated markets make the consumer captive. Allowing foreign players with deep pockets leads to consolidation. International retail does not create additional markets, it merely displaces existing markets.

4.      Jobs in the manufacturing sector will be lost because structured international retail makes purchases internationally and not from domestic sources. This has been the experience of most countries which have allowed FDI in retail.

5.      Argument that only foreign players can create the supply chain for farm produce is bogus. International retail players have no role in building roads or generating power. They are only required to create storage facilities and cold chains. This could be done by governments in India.

6.      Comparison between India and China is misplaced. China is predominantly a manufacturing economy. It’s the largest supplier to Wal-Mart and other international majors. It obviously cannot say no to these chains opening stores in China when it is global supplier to them. India in contrast will lose both manufacturing and services jobs.

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IIFT ASPIRANTS-Note!!

      ADVANTAGES OF AN

 INTERNATIONAL CAREER

1.     Generous expatriate package

2.     Bonus plans and share options

3.     Employment ‘insurance policy’

4.     Global tax and financial coaching support

5.     Excellent medical care and support

6.     Strong expatriate network

7.     Educational assistance for children

8.     Rest and relaxation travel funds

9.     Strong communication links via internal newsletters and international job adverts

10.                        Management development courses

11.                        Cultural briefings

12.                        Family support

13.                        Strong succession planning for the top 300 managers

14.                        Career counseling and management

15.                        Special courses at Cable & Wireless College

16.                        HR support from six months before the assignment ends

17.                        Redeployment ‘grace period’ of 12 weeks

18.                        HR contact throughout redeployment

19.                        Availability of external counselors.

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IIFT ASPIRANTS-CHECK OUT!!

ATTRIBUTES REQUIRED OF AN
INTERNATIONAL MANAGER

SENSITIVITY TO DIFFERENT CULTURES:

1.      Open approach to other cultures

2.      Cultural awareness and sensitivity

3.      Interest in international business

ADAPTABILITY TO NEW SITUATIONS:

1.      Ability to cope with unstructured and ambiguous situations

2.      Flexibility in thinking

3.      Communication and relationship skills

4.      Language skills and aptitude for learning new languages

PEOPLE ORIENTATION:

1.      Empathic behavior

2.      Interpersonal sensitivity and listening skills

3.      Assertiveness

4.      Ability to work in international teams

5.      Negotiation skills

6.      Leadership style

STRESS RESISTANCE:

1.      Self-confidence

2.      Effective coping style

SELF-RELIANCE

1.      Ability to make decisions and to operate independently.

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INDUSTRY POLICY UPDATES – NOVEMBER 2011

              A performance update  of different industrial sectors in India and expectations. Keep a watch on the winter Parliamentary sessions, to know more!!

1.   AVIATION

POLICY: Allow foreign airlines to pick up stakes in India’s airlines.(Industry expectation)

STATUS: The industry ministry has proposed allowing foreign airlines to own up to 26% in domestic airlines but aviation ministry wants foreign ownership to be capped at 24%. A cabinet note was circulated for inter-ministerial consultations in the second week of November.

2.    BANKING

POLICY: Legislate the Banking Laws (Amendment) bill to empower the Reserve Bank of India to supersede banks’ boards and align the voting rights of foreign shareholders in banks to their equity holdings.(Industry Expectation)

STATUS: The government introduced the bill in the Lok Sabha in March 2011, but the standing committee on finance is yet to submit report.

3.    DIRECT TAXATION

POLICY: Introduce the direct taxes code to overhaul archaic income tax laws, which among other things will alter slabs, remove exemptions. (Expectations)

STATUS: Bill introduced in Lok Sabha in 2010; Standing Committee on finance yet to submit report.

4.    INDIRECT TAXATION

POLICY: Introduce a uniform goods and services tax that will dramatically alter the indirect tax structure to make it more efficient. (Expectations)

STATUS: Constitution Amendment Bill introduced in Lok Sabha in March 2011; Standing Committee on finance yet to submit report, consensus eludes state governments.

5.    INSURANCE

POLICY: Raise the limit for foreign direct investment in the insurance sector to 49% from 26%.(Expectation)

STATUS: The government introduced the amendment bill in the Rajya Sabha in 2008, but the standing committee on finance is yet to submit its report.

6.    LAND ACQUISITION

POLICY: Unveil a clearly defined policy on land acquisition. (Expectation)

STATUS: The government has unveiled a draft bill for public debate and is expected to introduce it in Parliament in the winter session.

7.    PENSION FUNDS

POLICY: Legislate the Pension Fund Regulatory and Development Authority bill to pave the way for giving millions of people social security by investing long-term household savings.

STATUS: The government introduced the bill in the Lok Sabha in March.The standing committee on finance has submitted its report to Parliament and the cabinet has recently approved  some of its recommendations, such as 26% foreign direct investment. The government is to introduce the amended bill in Parliament’s winter session.

8.    RETAIL

POLICY: Allow foreign direct investment in multi-brand retail outlets. (A development that is being closely watched by International players in Retail)

STATUS: The industry ministry and secretaries’ panel have proposed allowing foreign firms to hold up to 51% in multi-brand retail, with conditions. The cabinet note was circulated for inter-ministerial consultations in the second week of November.

9.    EMPLOYMENT

POLICY: Unveil a comprehensive national manufacturing policy with the hope of creating 100 million jobs over the next 15 years.

STATUS: Last month, the cabinet approved the policy, which sets the ground for the creating of mega-industrial cities. The first seven of these cities will come up along the proposed 1483-km long Delhi-Mumbai Industrial Corridor.

10.           TELECOM

POLICY: Draft a wide-ranging national telecom policy.( Expectation)

STATUS: Last month, the telecom ministry unveiled the draft policy, which proposes to do away with roaming charges, treat the entire nation as one telecom zone, set the ground for a market-oriented regime for scandal-hit spectrum allocation and provisions for telecom firms to exist.

11.           MINING

POLICY: Legislate a Mines and Minerals (Development and Regulation) bill defining the obligations of mining companies for displaced people. (Expectation)

STATUS: In September, the cabinet approved this bill, which says how much profit and royalty companies must share with project-affected people. The government is expected to introduce the bill in Parliament in the winter session.

12.           CORPORATE TAKEOVERS

POLICY: Introduce a new takeover code aimed at overhauling India’s corporate acquisition regime. (Expectation)

STATUS: In July, the Securities and Exchange Board of India announced a new takeover code, increasing the threshold for an open offer to 25% from 15% and the mandatory offer requirement to 26% from 2011

13.           MICRO FINANCE

POLICY: Set up a regulatory regime for micro-finance institutions in the wake of a spate of suicides linked to alleged coercive methods adopted by certain firms to recover loans. (Expectation)

STATUS: In July, the government unveiled a draft Microfinance Institutions Bill that recommends granting the Reserve Bank of India sweeping powers to regulate these firms. The government is expected to introduce the bill in Parliament in the winter session.

14.           FUEL

POLICY: Free the pricing of petroleum products from political and bureaucratic interference. (Expected)

STATUS: In June last year, the government allowed oil companies the freedom to fix retail prices of petrol based on crude oil prices movements. But the government still controls the prices of diesel, kerosene and LPG.

15.           BANKING

POLICY:  Grant licenses to new private sector banks. (Expected)

STATUS:  In August, the Reserve Bank of India unveiled draft license guidelines for new private banks, including that they must have a minimum net worth of Rs. 500 crore.

16.           INTEREST RATES

POLICY: Deregulate the savings bank rate and raise the rates on government administered savings scheme. (Expected)

SAVINGS: Last month, the Reserve Bank of India allowed banks to fix their savings interest rates. Some banks have already raised this rate to 6% from the earlier central bank-determined rate of 4%. Last week, the government raised interest rates on a range of popular post-office saving schemes, including the public provident fund and national savings certificates.

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Times of India, August 30, 2005

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Writing Winning Essays, Indian Express Nov 21, 2007

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CAT - a test of logic and reasoning (Hindi)

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Producing a CAT Topper - Pavneet Singh Jan 09, 2009

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"Actions Speak Louder than words" Times of Chandigarh Aug 30, 2005

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TEN STEPS TO REDUCE SPEECH ANXIETY

1.    KNOW THE ROOM.

                                                                                                                                 2. KNOW THE AUDIENCE.

3. KNOW YOUR MATERIAL.

4. LEARN TO RELAX.

5. VISUALISE YOURSELF SPEAKING.

6. REALISE PEOPLE WANT YOU TO SUCEED.

7. DON’T APLOGISE FOR BEING NERVOUS.

8. CONCENTRATE ON YOUR MESSAGE.

9. TURN NERVOUSNESS INTO POSITIVE ENERGY.

10. GAIN EXPERIENCE.

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                DO  YOU  REALLY  DIG  YOUR  JOB?

1.      Do you look forward to going to your office as you start your day?

2.      Are you willingly to put in extra hours at the workplace, if required?

3.      Does your job offer you the scope to realise all your dreams and aspirations?

4.      Do you find your job interesting, meaningful or one that gives you a sense of accomplishment?

5.      Do you feel your job is a logical extension of yourself?

6.      Would you like your son or daughter to follow your footsteps?

7.      Do you feel your work offers you enough career advancement opportunities?

8.      Are you able to reconcile your personal goals to the organization’s goals?

9.      Do you feel your job taps the full range and capacity of your skills and talents?

10. Do you feel valued and accepted by your colleagues?

11. Does your job allow you to take independent decisions?

12. Are you happy with the number of hours you are asked to put into your job?

13. When you are calling it a day, do you generally feel happy with the world?

14. Supposing someone offers you a higher salary, would you still prefer your old job?

15. Do you really care about the fate of your organisation?

16. Do you feel yourself to be central part of the organisation?

17. Are you able to cope with job stress?

18. Do you find your work creative?

19. Do you find your work environment non-threatening?

20. Does your job give you ample scope to accomplish all your targets?

21. Are you able to enhance your capacities to the fullest?

22. Does your job impact other people’s lives positively?

23. Do you often get feedback on your performance?

24. Are you happy with the quality of your supervisors?

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GETTING MARRIED?

MAKE SURE YOU HAVE BEEN THROUGH THESE CLASSES SPECIALLY FOR MEN!

New evening classes for men! All are welcome. Open to men only! Classes starting this month !!

Note: Due to the complexities and level of difficulty of their contents, each course will accept a maximum of eight participants each.

Topic 1: How to fill ice-cube trays?

               Step by step with slide presentation.

Topic 2: Toilet paper rolls: do they grow on the holders?

                Round-table discussion.

Topic 3: Differences between the laundry basket and the floor.

                Pictures and explanatory graphics.

Topic 4: The after-dinner dishes and silverware: can they levitate and fly into the kitchen sink?

                Examples on the video.

Topic 5: Loss of identity: losing the remote to your significant other.

               Helpline and support groups.

Topic 6: Learning how to find things, starting with looking in the right place instead of turning the house

                upside down while screaming.

                Open Forum. 

Topic 7: Health watch: bringing her flowers is not harmful to your health.

                Graphics and audio tape.

Topic 8: Real men ask for directions when lost.

                Real-life testimonials.

Topic 9: Is it genetically impossible to sit quietly as she parallel parks?

                Driving simulation.

Topic 10: Learning to live: basic differences between mother and wife.

                  Online class and role playing.

Topic 11: How to be the ideal shopping companion.

                  Relaxation exercises, meditation and breathing techniques.                               

               

Ha Haa………………………..We’re in Business!!

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THE REFORM JUGGERNAUT

INDIA – 2020

LAST 20 & NEXT 20 YEARS

So what explains India’s growth over the last decade?

Since no economic reforms occurred, and the international environment was a net negative, we have to go back to pre – 2002 for an explanation :-

1.          LESSONS LEARNT, AND TAUGHT

Looking back at those developments it seems that management of capital flows is favoured more than capital controls as the debate rages in the world now.

2.         END OF MAI BAAP SARKAR

Once we decide to privatize, one part of the govt’s powers go; allow units to shut down, and another power goes; free up petroleum prices. This is why it is so important to hurry up with the second stage of economic reforms.

3.         THE CHALLENGES OF URBANISATION

Without improving the conditions of living in our cities, we cannot expect them to act as engines of growth delivering 8-9 percent GDP growth and to expand opportunities of employment. Conscious decisions have to be taken to promote densification. Innovative and transparent ways have to be found to plan our cities vertically as well, by varying the floor- space index within a framework. States that benefited from JNNURM were those in which urban local bodies were financially strong, where state governments provided an enabling environment by carrying out reforms.

4.          RISE OF CIVIL SOCIETY

While non-government organisations were organisations outside government, ‘civil society’ was a pleasantly coined antithesis to government. Liberalisation did bring affluence to some people. Growth rates began to rise. However, the poor found themselves fighting as much for survival as before. The cycle of droughts in Rajasthan continued. With the failure of the India shining campaign to give the BJP a second term, came an acknowledgement of the assertion of popular will against continuing poverty and the reform- driven model of development.

5.          THE TAXING REFORMS

In the last few decades, we have come a huge distance, yet we lag behind several emerging economies. So how far have we come since 1991? However, the pace has been slow, yet once the changes are made in India, they tend to stick a bit longer, unlike in Latin America where reforms can often get undone as governments change.

6.          END OF SINGLE-PARTY RULE

The highest rates of economic growth and economic liberalizations policies in India have happened under coalition governments. The question is: Have we seen the end of single-party rule in the last 20 years? Is this trend likely to continue in the near future?                                                                                       The answer is : Yes, coalitions are here to stay for the foreseeable future.

    

7. CONSUMING CLASSES

We have not fully grasped how gigantic the consumption machine that is being created is. We are not prepared from the supply side for its steady acceleration as incomes increase and consumption is visible. One billion people with an aspiration to consume more are those, with no social security, mostly self-employed, struggling with poor infrastructure, child-obsessed, with few avenues of entertainment.

8. THE MANDAL AFTERMATH

The odd consequence of reservation has been that we now can talk only of power sharing, not of discrimination. Over the last decade or so, as the economy gathered steam, as state finances allowed states to do much more, the fulcrum of politics seemed to shift away from the identity politics mandal had unleashed.

9. THE MEGA MIDDLE CLASS

Perhaps the biggest revolution independent India has seen is the rise of the Great Indian Middle Class comprising of 31.4 million households or 160 million persons.

 10. THE MACHINE THAT RUSTS

 After 20 years of fiscal reforms, the need of the hour is to introduce a set of manufacturing-specific reforms. We need to have much greater transparency and simplicity in the way our factories function. In Thailand or China, the number of inspections that are carried out is a fraction of what it is in India.

11. THE INDIAN MOBILE REVOLUTION

A fundamental shift is already underway with ‘bytes’ replacing ‘minutes’ and ‘data’ emerging as the new star in the telecom space. The “Telecom Effect” has had a multiplier impact on the economy. According to GSM Association and Deloitte, the long term GDP growth rate increases by 1.2pc with every10pc increase in mobile phone penetration.

12.   IT REBOOTING .

There are hundreds of thousands of workers in India’s IT industry who now have more than 10 years of experience, and lets not forget we have the largest population of young people in the world. Thus, we should now focus on being paid for our brains (IPs), not just for our sweat (services).

13  MBA AS PROTAGONIST.

In the 70s, every producer, technician and star would prefer his relative to join his business to an MBA professional. Now on screen a man with money was no longer a villain, but a successful man. The hero could eye an engaged heroine who would run away with the hero in her bridal outfit at the last minute.

14. MEDIA EXPLOSION .

For those who remember the days of black & white TVs with one channel and the grand single-screen cinemas, the choices available in all media today are astonishing. A liberalized foreign investment regime and other regulatory initiatives are leading to a conducive business environment for Indian M&E. FDI is permitted in almost all segments.

15.   RIDING GLOBALISATION .

The big questions now are not around whether to go global, but how to maximize value from globalization. Indian businesses that are expanding globally must be as prepared as they are ambitious, with robust domestic business platforms to aid financial stability during expansion, and a unique business model.

 16.  THE NEW RETAIL TALE .

E-commerce will have the potential to cause much massive disruption for traditional as well as modern retail. A bigger revolution in Indian retail is likely to emerge in the next 10 years on account of e-commerce that may well render the entire debate on modern retail and FDI somewhat irrelevant.

17.  THE NEW AGE LEADER.

The volatility in industry leadership had increased sharply after 1990. The probability that an industry leader will remain a leader after 5 years had nearly halved in this period. One common theme runs through them, and differentiates them from those they replaced in the leadership stakes. IT is the quality of their leader – the huge aspirations, and risk taking abilities to back their dreams.

18.        THE ART OF GIVING .

Our accelerating pace of economic development over the past two decades is seeing the lag-effect rise in giving as well. The experience over the past decade also shows that Indians are still quite ‘tactical’ in their giving. It is known to all that the biggest bang for the buck will come from improved governance and delivery in our public institutions.

 19. INDIA EVERYWHERE.

The ‘product’ that was India kept evolving, improving and earning worldwide respect and recognition as a country of choice and preference. It was 15 years after 1991, and the start of the reforms, that CII launched a major, high profile, high-visibility presentation in davos called ‘India Everywhere’, an industry-led initiative, supported by government.

                                                                                                               Edited by:

                                                                                                              Ms Shilpa

 

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