Saturday, 8 February 2014

Simple Math of FDI in Retail - numbers - is there falsehood or half-truths?

1. Claim that FDI in Retail will increase jobs.
1a. If that is true, then more people will have to take a cut of the Retail Pie. So, is that good for everyone in retail business? Won't they all have to take a cut in pay for the same 'consumption levels'?

1b. The presence of foreign brands will then have to increase the consumption - that is the only way to add jobs and also keep salary levels of retail business (if not increase the prosperity of those in this business). How will the presence of FDI suddenly increase consumption? Will people magically have more money to spend?

2. So why are they not talking about loss of many other jobs?
2a. More jobs have to be lost in order for the same consumption to support the new jobs, and also the profits that the foreigners are coming in, to take out. Isn't that true?

2b. So, if foreigners pump in money, they need to take out profits, that is over and above what is paid to the new jobs and people in retail business. So, if consumption is same wouldn't it reduce the income levels & also cause job losses?

3. FDI will increase efficiency and reduce costs to consumers.
3a. So, if cost to consumer is reduced, then that means less total money for the jobs, isn't it? Same consumption level means more loss of jobs & lower incomes.

3b. If cost is reduced and more jobs are made, then consumption has to be at phenomenal levels to really make it true - simple maths, isn't it?

In Summary:We the consumers in our infinite wisdom and selfishness should sacrifice the many jobs in retail, increase our spending much more and kill many jobs, so that we can get capital as well as send more profits to a foreign country.

NOTE: This has not taken into consideration other complicated points like taking our resources, making things with our people, causing environmental problems here (as we are at fault to not enforce these things) and take a profit out of our own spending!

Thursday, 23 January 2014

No longer nuts about coconuts? Rupees 3000 per 100 ml soon...


About a year or two ago there was a sudden jump in price of Tender Coconut (from usual Rs. 10 to Rs. 25). I wondered why and how this happened. Now, I think there could be a long drawn man-made problem here within India. Here are some seemingly disparate points that may be leading to this and lead to worse things in future...

1. Systematic brainwashing of Indians that the oils we use are causing health problems - including coconut oil, sesame oil and groundnut oil.
2. Pushing oils based on what the foreigners can grow in their areas - like Sunflower & Olives.
3. Pushing "seemingly" better methods for maintaining hair. They are pushing chemicals, sprays, gels, etc.
4. Naturally a reduction in demand for Coconut oil.
5. Next step reduction in demand for Coconut.

Intentionally killed - right adjacent to really good coconut farms near the National Highways, Tamilnadu



6. Real-estate demand going higher and higher in value as it is pushed up due to a variety of factors - black-money, Foreign investment in real-estate, more NRIs investing in Indian real-estate bubble.
7. Agriculturists turning to intentionally destroying coconut farms to convert them for commercial purposes - schools, colleges, big community housing, or just cut into plots & sell by projecting more growth in real estate prices.
8. Even though laws are supposed to be in place for prevention of such mis-use of agricultural lands, there are enough people hand-in-glove (plus using loop-holes of demonstrating dying trees) to make these commercial switches.
9. Demand for tender coconut has not reduced much, even though demand for the oil has reduced a lot. Hence price for tender coconut has shot up a lot.


Closer view of the farm
What is expected in future? As I saw on my visit to Kodaikanal by road - along many places in the drive up and down, including river delta areas - more coconut farms are being let to rot, or intentionally killed for other uses.

It is going to make coconut oil (I still feel it is good when used in appropriate ways and in moderation - as was done 30-40 years ago or earlier) as well as tender coconut costly in coming years.

We should not be surprised if someone announces in 2025 "Coconut oil from Africa is best balm for wounds, hair, etc. Please buy at Rs. 3000 per 100ml" OR if another company patents coconut and its properties in America / Europe while anyway importing it from Central America / Africa!

Sunday, 1 September 2013

Roadmap to loot from NRIs

Here are some seemingly disconnected points and events.
  1. NRIs are looking to invest in Indian real estate as a good financial savings instrument which has usually increased in value on continuous basis - ever-booming commodity.
  2. Acres of land being converted from agricultural fields into colonies for residences - independent villas and apartment complexes.
  3. NRIs who have settled abroad, some of whom have even taken up the citizenship of their country of residence, do not give any roots for their children in India. That is, the children do not like to live in India and have built a hate for the various issues in this country.
  4. Politicians or people with political / bureaucratic connections are able to push through processes to facilitate real estate business to boom.
  5. With global economic conditions being volatile the constantly increasing value of real-estate in India, backed by knowledge of recent booms in the same, entice NRIs to invest in 2nd, 3rd or 4th houses, which are then let out on rent. Sometimes they are under-lock-and-key when they do not get reliable tenants.
  6. Indian real-estate market has now increased supply by very high numbers, causing sudden dearth of demand and crisis for the big-players who had invested heavily in big colony projects. Read in a Facebook post from a real-estate magazine that about 50,000 units are yet to be sold around Chennai and it is supposed to be the least among al cities (not verified this information).
  7. Rupee now being devalued at a very fast pace, encouraging further NRI investment into real-estate. Will the NRI fall for this low-hanging fruit?
  8. Sometimes the colonies and complexes are in low-lands near the rivers! We see time and again that floods affect thousands of people who have built in wrong places.
Flooded "plots" somewhere near river Cauvery (or Kollidam) - Muthu Nagar (Pearl suburb)
Now, are there any connections here? Or, will there be future connections between some of these points?
  • We hear so much news of how houses in India, which belongs to NRIs or children of NRIs (who were born citizens of the country of their residence), are exploited by various local parties in India.
  • Sometimes the NRIs have to jump through hoops to try and get back their property, and in some situations stretching court-cases to many years.
  • Now, if the 2nd/3rd generation of the NRIs are not going to return to India, then what happens to the property? Who is going to finally benefit from such hard-earned money invested into the real-estate in India?
Somehow it is a foreboding feeling that the political class in cohorts with bureaucrats and big real-estate businessmen will milk the NRIs to the maximum possible and then later be able to take over the property as well, knowing that the next generation(s) of such people with different long term plans will be easy targets of such operations.

I guess we can take refuge in the classical Krishna's sayings: What did you bring here, for you to lose it?

Jai Hind

Thursday, 29 August 2013

Food Super-security Bill

Hello friends,

In India, we have many institutions that provide free food for the poor / needy at various levels. Many-many religious institutions - Hindu, Sikh, Buddhist, Jain, Christian, Muslim and many others - provide food for the needy on a daily basis. There are institutions that feed 1000s every day all over the country. I think this is very good philanthropic work that is happening all over India, well diversified and is completely decentralized.

And then we have the mid-day meal scheme for school children. This is available in many states of India, which encourages children of the poor or needy to go through their education, even if the free education is not enticing enough for such families.

Some basic questions come up on recent events.

1. Now, where is the need to come up with a Food Security Bill? I do agree that we may not have free food distribution in small villages and some rural areas, but is that reason enough to come up with a gargantuan plan?

2. Who really gets the "add"vantage? Are the bureaucrats and politicians (and their henchmen who are spread far and wide) the main people to benefit?

3. How is this going to improve the security of the poor / needy, compared to their current status? Or rather, what is the improvement in % figures that we expect to see in really needy folks getting the security? Don't many of them already benefit from philanthropic activities, which need not be touched when it is working?

3. What should be done by the various institutions to adapt to the change proposed - should Annadhanams and Free meal plans of all private / NGO institutions be dropped? Or will they complement each other? If so, what is the advantage of the Food security bill to be added to the existing processes?

5. Will the noon-meal scheme complement the FSB? Or will it come within FSB now? Or will they all run in parallel (for the different controllers to control; and exploit)?

6. PDS has been successfully going on in many states. How does that get affected by this FSB? Will they continue together? Does one supersede the other?

7. In light of other existing systems, is this really a "Food Super-security bill" (if at all; for the needy)?

And then there are many more questions at the simple level, leave alone organization, planning, execution, etc. It will be interesting to hear further opinion on these basic questions we have.

Jai Hind