Tuesday, September 18, 2012

FDI in retail in India

Last few days I have been hearing a big hue and cry about India allowing FDI (foreign direct investment) into retail sector. I don’t think it is worth the hype it is given. Here are my reasons as to why

  • The biggest fears is like companies like Walmart will take over mom and pops stores.When ever I visited Walmart or similar retail stores here in US, the first thing that amazes me is the size of these damn things. In India we can build a multi story complex housing 30 to 40 stores in the size of 1 Walmart. So, if Walmart were to truly open in India, I doubt if they can be located in prime locations in the heart of the city.
  • One big thing I miss in US is the ability to try out new products for everything from cookies to soaps and are sold in in bulk. Growing up in India that was not the case.
  • The mom and pop stores have established a customer base to themselves, there are advantages to buying from these stores on a regular basis, Like free home delivery, credit for the purchases and so on. I am sure the foreign retailers won’t offer such things anyway.
  • The arrival of Mcdonalds and other Pizza-Burger places back in 2000 or so were considered a threat to the local fast food chains. I didn’t see that happen either. From what I can see the Pizza-Burger places seem to have found a balance with the local fast food places and have found a way to co-exist peacefully.
  • One more example from my early child hood days were the introduction of Hopcoms (neighborhood stores selling veggies and fruits only) in Karnataka, if I remember right, they are government sponsored and I still don’t see them having eliminated the street vegetable vendors in any part of the Karnataka state. Another such example is the Janata Bazaar.
  • On the other hand, I see the foreign retailers with their huge supply chain as a plus point. They can probably figure out a way around the incidents where the farmers were dumping tomatoes on the streets for the lack of better market. I personally doubt this though, it might go the other way completely.
  • Last but not the least, I prefer my neighborhood Iyengar Bakery’s fresh bread and cake any day anytime over the stale and frozen ones from big retails. 

Friday, September 07, 2012

Republican platform analyzed - my 2 cents

Why do I get the feeling that Republicans this time are running on a very weak platform. I think I know and here it is

  • Their energy policy unveiled by Mitt Romney, only talks about drilling and more drilling and oil and more oil. What about natural gas?, what about renewable sources? or for that matter Nuclear energy?. For me the focus is too narrow and drilling more and more is not the only solution.
  • They talk doing the economy more good but don’t highlight what they would be doing differently then what it is right now, lower taxes and reduced borrowing costs, do you have anything else to offer?
  • Reduced government spending by cutting more welfare programs and schools but increase in military spending is it?, because last I checked the latest 3 wars were started by republican presidents (father and son duo).
  • I am sick and tired of the abortion debate and I am also sick of what is considered forced pregnancy vs other forms. I wonder what part of government spending does this account for. Why not let states choose what they want to implement and be done with it.
  • Their platform of “we built it” and  rallying around for a whole day in the convention sounds like “Joe the plumber” deal from last elections. Grow up guys, context or no context of what the president said, one can only flourish when there is a stable government, good infrastructure and security in the society. If all it took was hard work to be prosperous then why not invest in countries like Sudan or Somalia?
  • The health care reform, this is one thing I am not sure. But again, I heard the owner of Papa Johns Pizza said it would cost him an average of $0.14/pizza to implement health care. Will I as a customer notice a $0.14 increase in my pizza cost?
  • Immigration policy is one other area, where I do not have a clear opinion towards one way or the other.  

Thursday, September 06, 2012

India and the reservation policies

Reservation or Affirmative action for the lower caste (specially SC/ST) has been there since the time of independence and what started off as a 10-15 year policy has extended and became bigger and bigger as the years gone by.

It was hard growing up with these policies and was the hardest to endure when we were in 12th grade. Students who were with us (our good friends), whose parents had the same or higher education than ours and who were to an extent more affluent than us and lastly in terms of grades scored equal to us managed to get into much better colleges and branches than us. Why, because they had the reserved quota.

Coming out of the professional colleges, we knew the public sector had its reservations and bureaucracy, hence most of us were interested in the private sector where the field was open to play. But some of my friends wanted to try their hand in the Indian administrative services for they believed once you are in, then the promotions and all are based on your seniority and performance. I have huge respects for those guys.

The latest is the amendment by the congress seems to undermine this and want to inject caste as the basis for promotions also. The reason being there is less representation of the lower caste people in the upper echelons of the government and that needs to be fixed.

This I think is ridiculous, here is why. Last I heard India was still a democracy and the upper most echelons of the government is the elected representatives, we definitely have reservations there. Coming to the secretaries and joint secretaries, who are responsible to advice our some what dumb and some times illiterate elected representatives, shouldn’t they be the smartest of the smartest in the country and not based upon caste or creed or color. Up to what level does an IAS or IPS need to carry the identity of his caste?, from the day he joined the service till he retires?, if that is the case then where does the society free from caste creed and color stand. Reminds me of the quote from George Orwell’s Animal Farm, “All are equal but some are more equal than others”

What next, the esteemed Indian cricket team will have reservations and the next time we send a contestant to the world wide beauty pageant we will have reservations there also?