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Will Inflation Turn in Gamble in Fortune by Farmers

I was going through an article published in Sunday Economic Times [May 01, 2011 to be precise] which was titled “Will inflation turn out to be a game-changer in India?”

It was nicely crafted and argued article by T K Arun, and all the arguments look relatively on rational side, but I have my apprehensions, which may be dubbed as irrational or idiotic.  But I feel like sharing.  The below is article I am talking about.

Will inflation turn out to be a game-changer in India?

If the RBI decides its foremost task is to stamp out inflation, never mind if it flattens the growth rate also in the process, that would be change we don’t want. However, inflation can also drastically change the rural landscape, boosting farm output and delivering millions out of poverty-provided the right policy initiatives are forthcoming.

Inflation is driven by, even if not confined to, food, particularly superior food: vegetables, egg, meat, milk, fish and lentils, vegetables and protein, in other words. Nor is this confined to India. Over the past 10 years, the least developed countries as a group have grown at an average rate of 7% a year. All of them witness a spurt in the demand for food. And for a variety of reasons ranging from prolonged drought to excessive rains, supplies have been disrupted, raising food prices across the board. Of course, the huge expansion in liquidity unleashed by the US and other developed countries, pumping speculative capital into all commodity markets, adding a thick layer of froth to the real pressures pushing prices upwards, plays its role as well. The net result: Thomas Malthus, who made the dire but fortunately erroneous forecast that the human race would proliferate faster than food production can grow, is back in fashion.

Beating Malthus is fait accompli. People not only have proliferated with abandon but also enjoy ever-improving standards of living, instead of straining hollow eyes into a darkening future of dwindling food supplies. However, beating Malthus promises to rise as a fresh challenge, an enormously profitable one. India has varied agroclimatic regions, capable of producing a great variety of crops. The challenge is to harness the potential and boost India’s farm output to feed not just a burgeoning India but also the rest of the world. It looks daunting but is, in fact, eminently doable.

Agricultural economist Ashok Gulati reports that the largest boost to farm income comes from investment in rural roads compared to other forms of agri-related investment. This offers a key insight that our policymaking obsession with the technical means of raising yields has ignored: farm production, too, is determined by the market. If you provide farmers easier access to markets for farm inputs and output, they would make use of that access to raise output and incomes. If the best seeds and fertiliser boost production in an interior village which cannot evacuate the surplus harvest to a market outside, the only result of the surplus would be to depress local prices and farmers’ incomes. On the other hand, if farmers can take their produce to buyers outside, their income would amplify.

A primitive system of state-mandated monopoly denies Indian farmers the freedom of choice in whom they sell to. The Agricultural Produce Marketing Committee Act must be scrapped. An organised, efficient supply chain must link farmers with urban consumers. This is what organised retail would do, if it is allowed to. Amul achieved this in the case of milk. New farmers companies or cooperatives should now be catalysed to accomplish this for other produce.

Observation of and by Blogger:

Please do not get surprised as reality is rarely known. People know, what I will call as a sucessfull propaganda, turning in Fad, leading to creation of a Mirage which looks like a Panacea to a very long [nearly seeming to be perpetual] Problematic Issue.

These days every body keeps talking about what ever he/ she feels will sell, without any consideration on its merit. Be it Organic Farming, Growing Jatropa for Bio fuel, Setting up of private mandies or scrapping of APMC Act.

Would someone like to comment on the situation that forced a Nation’s Goverment and its legislatures to formulate, pass and implement APMC Act, that today every one says should be scraped.

Inplace of just talking of implementing what the columnist T K Arun has argued in his article “Will Inflation Turn Out to be A Game Changer in India”; I would like to take my audiences a step ahead and deliberate on one of such models.

On the same lines as mentioned in paragraph above lets have some discussion on a very popular model — Acclaimed by Corporates as a Great Success Story. I do not think that every individuals who talks about it and considers it as a success has gone deeper in search of reality. So here it starts:

E – Choupal of ITC

Widely acclaimed as an ICT success story, it typifies the complete corporatization of the social enterprise model.

An initiative seeking to become the Wal-Mart of rural India, e-Choupal is a gateway to an expanding spectrum of  commodities leaving farms and also selling to rural India urban oriented goods and services like FMCG, consumer durables and insurance services (Gurumurthy, 2009; Prahalad, 2006).

Based on a business model providing connectivity and services to a closed network of farmers through an entrepreneur whose role, interestingly, is projected by ITC as a “public office”, e-Choupal exemplifies the win-win problematique (Gurumurthy, 2009; Prahalad, 2006).

However a closer study of the model, from a development perspective, unpacking the socio-politics of the e-Choupal ecosystem, indicates a monopolistic control over the entire local agriculture ecology by a transnational corporation through the use of a captive ICT infrastructure, with minimal regulation and competition.

The e-Choupal hubs serve as sales outlets for agriculture and other products and services. Cutting off alternative systems, local middlemen and government services, e-Choupal locks in a large number of farmers into its network.

While the project has resulted in some increase in rural agricultural incomes through privatization driven efficiency improvements in the supply chain, e-Choupal underscores ‘trickle-down’ and individual enterprise at the village levels (Gurumurthy, 2009; Prahalad, 2006).

The average village shopkeeper/entrepreneur is bound to get affected as local demand for goods and services shifts to ITC and Choupal sagars. Needless to mention livelihood of traders/middlemen whose livelihood has been squelched through this model.

Further, the ‘DNA’ profile of the farmers acquired during the registration of e-Choupals has allowed ITC to determine and understand their buying behavior very closely.

This has allowed targeting, positioning and delivering goods and services to match their needs and wants continuously, succinctly called Customer Relationship Management (CRM) in marketing parlance.

This makes them more vulnerable to a shift from the present more or less sustainable existence to materialistic consumerism. Little awareness of their (farmer’s) rights may not guarantee total protection of the database and its unethical usage. This is where the government is expected to protect its citizens from such transactions.

However, the government has been changing slowly but surely towards a free market economy.

[The blogger, here is not arguing against or in favour of India moving towards a market economy. The above discussed issue has to do with not only business but ethics, morale, privacy, awareness and many other social issues.]

The information above has been picked from a Research Paper Titled E – Choupal – Hope or Hype. The Same can be accessed by Clicking here. ]

The Rest of the article continues……

Farmers require investment in infrastructure, not subsidy. Politics must shed its love for doling out subsidy and invest massively in harnessing water, roads, power and scientific storage of farm produce.

Policy must change, too, in allowing farmers access to global markets. The short-term distress this creates would be more than removed by the rise in incomes and employment that would result.

Farming would cease to be a punishment and become the biggest fighter against poverty. Inflation is indeed a horse that India’s beggars could ride their way out of poverty

Always Yours — As Usual — Saurabh Singh

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Action Against Vice Chancellors…..कुलपतियों पर कार्यवाही…… [जितना तुम्हारा सच है उतना ही कहो — फैज]

कुलपतियों पर कार्यवाही…… [जितना तुम्हारा सच है उतना ही कहो फैज]

वर्तमान परिवेश में सम्भवतः ‘मर्यादा’ शब्द निरर्थक हो गया है I ऐसा प्रतीत होता है कि भारतीय गणतंत्र के नागरिकों, व्यक्तियों, समूहों, संस्थानों आदि के लिए ‘स्वतंत्रता’ शब्द के पृथक – पृथक अर्थ हैं I भारतीय संविधान में ‘अभिव्यक्ति की स्वतंत्रता’ को अत्यधिक महत्वपूर्ण मानते हुए प्रत्येक व्यक्ति को यह  मौलिक अधिकार के रूप में प्रदत्त की गयी है I इसी क्रम में समाचार तथा सूचना के श्रोतों को भारतीय प्रजातांत्रिक सरकार ने अभिव्यक्ति की स्वतंत्रता प्रदान की है I परन्तु ‘ स्वतंत्रता’ शब्द के भाव एवं अर्थ को समझने व् आत्मसात करने हेतु ‘विवेक’ का उपस्थित होना अनिवार्य है I संभवतः समाचार माध्यमों ने इस शब्द का अर्थ ‘प्रतिबन्ध रहित’ अथवा ‘अनियंत्रित’  होने के रूप में ग्रहण किया है I यह स्थिति स्वयं में विस्फोटक है I यदि इस स्वतंत्रता को इस अर्थ में लेते हुए व्यावसायिक लाभ हेतु प्रयुक्त किया जाता है, तो वह न केवल इस शब्द, अपितु सम्पूर्ण प्रजातंत्र की अवमानना होगी I यदि इसका प्रयोग एक साधारण सूचना को व्यावसायिक लाभ हेतु ज्वलंत एवं गंभीर समस्या के रूप में प्रस्तुत करने हेतु किया जाता है, तथा इससे सामाजिक, नैतिक तथा राजस्व की क्षति होने कि आशंका हो, तो यह एक दुष्कर्म होगा तथा विधि एवं न्याय संगत कदापि नहीं होगा I

शीर्षक में वर्णित विषय के सन्दर्भ में माननीय न्यायाधीश महोदय द्वारा एक प्रार्थी की याचिका पर विचार करने के उपरांत एक प्राथिमिकी दर्ज करने के आदेश दिए गए थे, न कि गोविंद बल्लभ पंत कृषि एवं प्रौद्योगिकी विश्वविद्यालय में करोड़ों के घोटाले के आरोप को सत्य करार दिया गया था I  समाचार पत्र में इस तथ्य का कहीं भी वर्णन नहीं था कि न्यायाधीश महोदय का यह आदेश किन तथ्यों, परिस्थितियों, साक्ष्यों आदि पर आधारित था I ऐसे बहुतेरे प्रकरण ‘दैनिक जागरण’ के ऊपर भी न्यायालयों में लंबित होंगे I परन्तु समाचार पत्र ने असाधारण भाषा कौशल प्रस्तुत करते हुए इस समाचार को, जो संभवतः पृष्ट तृतीय लायक भी नहीं था, को  मुख्य पृष्ठ पर इस प्रकार मुद्रित किया जैसे वास्तविकता में करोड़ों का घोटाला हो गया हो और न्यायालय ने अपना निर्णय व्यक्त कर दिया हो I

पृथक पहलू से देखने पर प्रतीत होता है कि समाचार पत्र ने स्वयं को सर्वसक्तिमान मानते हुए न्यायालय की भूमिका निभा दी तथा न्यायालय एवं न्यायाधीश महोदयों के अस्तित्व को चुनौती दे दी I किसी भी व्यक्ति, समूह, संस्था इत्यादि को इस तथ्य का आभास होना आवश्यक है कि, वह जितना शक्तिशाली होता जाता है, समाज की उससे उसके मर्यादित होने की अपेक्षाएं उतनी ही बढती जाती है, तथा स्वयं उसकी जिम्मेदारी भी बढती जाती है I

इस प्रकार एक साधारण सूचना को असाधारण रूप से प्रस्तुत कर, समाचार पत्र ने केवल कुछ व्यक्तियों की छवि को ही मलीन नहीं किया, अपितु गोविन्द बल्लभ पन्त कृषि एवं प्रोद्योगिक विश्व विद्यालय, जो अपनी उपलब्धियों के लिए विश्व विख्यात है, तथा इस स्थान को प्राप्त करने में अपना योगदान प्रदान करने वाले सभी शिक्षकों, शोध शास्त्रीयों, तथा कृषि की नयी विधियों तथा तकनीकियों के कृषकों में प्रचार – प्रसार को अपना लक्ष्य मानाने वाले सभी व्यक्तियों की अवमानना की है I

इस मान हानि को व्यावसायिक मुद्रा के माध्यम में व्यक्त कर पाना संभव नहीं है, परन्तु आशा है कि समाचार पत्र को कुछ सौ भारतीय मुद्राओं का लाभ अवश्य अर्जित हो गया होगा I संभावना प्रबल है कि इससे समाचार पत्र समूह को सीमित राजनीतिक तथा परोक्ष (प्रचार मुद्रा से आय)  आर्थिक लाभ अर्जित हुआ हो I वैसे वर्तमान में समाचार माध्यम समाज को दिशा देने के स्थान पर समाज का मनोरंजन करने के स्रोत बन गए हैं I

अगले मनोरंजक अंक की प्रतीक्षा में ….. एक समाचार पाठक

संपर्क स्रोत

नाम : सौरभ सिंह

इ मेल : saurabhsingh@consultant.com; saurabh@aavesh.org

 

Always Yours — As Usual — Saurabh Singh

My Journey on Path of E-Commerce: A Recollection

The effort here is not to deliberate on the History of Computers and or Internet, but since it turns out to be a brief but vital component of total deliberations if any is being made on providing or seeking or exchanging any product, service, information etc. using Internet as a medium.  Instead of starting the sentence “long long ago….”, like in many other field, here story starts with the set words “In very recent past….” .

The deregulation of Internet and it’s use for Commerce is recent as just four decades. Today it would not be wrong if one makes an inference that it happens to be largest market place. It has also succeeded in turning itself near to indispensable and a good number of people can not imagine their daily life in its absence. As a tool of exchanging information and thought, it has even left behind the devices like telephone, fax, mobile telephony etc. by miles. Even we have the examples, though of very recent nature, that few less popular national government, when faced by some kind of event which was called by media as uprising, made internet their first target to breakdown the communication flow taking place in citizens. The case of “EGYPT” and “LIBYA” are a burning and recent example of this.

Initially there was some sense of fear amongst the people who were stakeholders in business. These stakeholder can never alone be the Business Men, they also included the beside established business houses, the Entrepreneurs,  students of business, the academic and scholarly community dealing with issues related to the domain of business, the customers around whom business revolves, and certainly a few more individuals who comprise those who thought it to be fad and expected it to die an immature death.

Here, the stage is ripe for sharing few anecdotes especially Indian to give a practical understanding of how these developments moved from nearly nowhere to everywhere. Prior to starting on it, Helpman and Trajtenberg (1998) were of the opinion that “In any given era there typically exist a handful of technologies that play a far reaching role in widely fostering technical change and thereby bringing about sustained and pervasive productivity gains.” On the similar lines Norman (1999) said that “The goal is to move from current situation of complexity and frustration to one where technology serves human needs invisibly, unobtrusively: the human centered and customer centered way.”

Now coming to Anecdotes:

1. It was perhaps Year 2000 or 2001, when I happened to give entrance examination for pursuing Ph. D. Program at Indian Institute of Information Technology & Management, Gwalior, when it was still functioning in old building. Till then I was not aware that I would be lucky enough to make my career in academics, scholarly and research work, and also in transfer of technology to masses, though I wanted to do it.

They used to conduct a written test followed by interview for admitting research scholars. Luckily or otherwise, I cleared the written test to qualify for next stage, that was personal interview. There I was interested in pursuing my research in E- Commerce. That was also a time when an e-Commerce initiative with the help of internet initiated by Shoppers’ Stop had met a debacle. All through the interview while I was trying my best to convince them that e-Commerce was the very near future, the interview board was interested in making me believe that penetration of computer required for that would never happen in India and they topped their argument by quoting the example of debacle of Shoppers’ Stop. Besides it the board also wanted to convince me on importance of bandwidth and its importance for e-Commerce, suggesting me to work on it, as it was a must for success of the concept I was arguing, but then I was least interested as it was a work for a Technical Degree Holder and not my cup of tea with MBA preceded by ZBC. Ultimately we could not land on a common platform and it could be said that they rejected me or I myself worked to get rejected.

Nearly the same got repeated at NITIE Pawai Mumbai same year. I would elaborate on it next time when I get chance to further elaborate on it. Its late night and I plan to close writing at this moment. hope spelling mistakes if any would be pardoned.

 

Always Yours — As Usual —- Saurabh Singh

 

 

Budget 2011- 12 under Scanner

Already having presented the facts prior to budget, as to what I as a country man expected in the budget to be presented on February 28, 2011, and following the same by publishing salient features in the budget, probably now it’s time to comment upon it. It’s not due to the reasons that it required so much of time for analysis, but is just due to waiting for the dust to settle down, so as to get a clear glimpse of the events.

Having said and done all the things earlier, now I can say that ‘budget or no budget’, things would have remained more or less the same.  The fundamental feature of budget lacks any focus or any strategy of any kind (Chandrasekhar, 2011). Even on the crucial issue like that of ‘financial inclusion’, only lip service has been paid, rather it could be blamed to be biased more towards ‘financial consolidation’.

Expenditure as a ratio to GDP as proposed in Budget

Plan Expenditure when compared with that of 2009 – 10 rose from 4.6 per cent to 5.0 per cent in 2010 – 11 and has been budget to come down to 4.9 per cent in 2011 – 12. On the other hand non – plan expenditure in the same period has come down from 11 per cent to 10.4 per cent and projected in budget to carry on the downward trend and reach a figure of 9.1 per cent.

Reality: Decrease will automatically be forced to be much larger

This is being said due to the reasons that non tax revenue in FY 2010 – 11 which stood at Rs. 2, 20, 148 crore had received a contribution of the tune of Rs. 72,000 Crore from sale of 3G and wireless broadband spectrum. Deducting this amount, the non tax revenue of FY 2010 – 11 will rest at Rs. 1, 25, 435 crore only.

Discussion:

In presence of such a crystal clear scenario, which clearly projects fall in aggregate revenue [due to fall in non – tax revenue], how come the budget expects to see it rising to Rs. 7, 89, 892 crore in 2011 – 12 against Rs. 7, 83,833 crore in 2010 – 11.

Even this partial increase fails to directly point towards a source from where it will accrue. Though, it seems to be, projected out of an increase in tax revenue collection. This is being said as projected tax revenue collection stands at Rs. 6, 64, 457 crore in 2011 – 12 against Rs. 5, 63, 685 crore in 2010 – 11.

While a glimpse of budget exposes that while union finance minister proposes to raise additional revenue of RS. 11, 300 crore from increase in indirect taxes, he is giving away Rs. 11, 500 crore in way of direct tax relief. These figures expose a negative contribution of Rs. 200 crore in aggregate tax revenue.

This discussion is being stopped at moment simply after discussing a single issue. There are more issues like inflation towards which this budget seems to be contributing positively, Increasing credit supply to agriculture but reducing public investment in agriculture etc. are many other important issues that require discussion.

 

Note: I am now not writing it as part one or two as my experience says that before I could think of discussing next part of story, some new event important in nature gets born.

Always Yours—As Usual— Saurabh Singh

”Kayani feared condemning Guv murder may endanger army unity”

Pakistan”s army chief Ashfaq Parvez Kayani, who had “declined” to publicly condemn the January killing of Punjab Governor Salmaan Taseer, had told Western envoys that there were “too many soldiers” in the ranks who “sympathised” with the assassin, a noted author has claimed.

Punjab's Slain Governor Salmaan TaaseerFor its part, the army has so far failed to express regret on either Minority Affairs Minister Shahbaz Bhatti”s murder or Taseer”s, Lahore-based author Ahmed Rashid, also a senior journalist, wrote in ”The New York Review of Books”. Both Bhatti, the only Christian member of the Pakistani Cabinet, and Taseer were killed for opposing the controversial blasphemy law.

Kayani “declined to publicly condemn Taseer”s death or even to issue a public condolence to his family. He told Western ambassadors in January in Islamabad that there were too many soldiers in the ranks who sympathise with the killer,” Rashid wrote.

Photo of Pak Army ChiefThe army chief showed the envoys “a scrapbook of photographs of Taseer”s killer being hailed as a hero by fellow police officers. Any public statement, he hinted, could endanger the army”s unity,” Rashid said.

Behind this silence lies “something more sinister,” he wrote. “For decades the army and the ISI have controlled the extremist groups, arming and training them in exchange for their continuing to serve as proxy forces in Afghanistan and Kashmir. But in recent years, the army has lost control of them and they are striking targets of their own.”

“Yet the army has refused to help crack down on its rogue proteges despite the fact that extremists have increasingly attacked the army and the ISI itself,” Rashid said.

This is all the more ominous in view of the resources the military commands: half a million men, another half a million reserves, 110 nuclear arms, according to US media estimates, and one of the largest intelligence agencies in the world, the ISI, which has an estimated 100,000 employees, he noted.

“If the army has now surrendered any willingness to take on the extremists, the political establishment had already given up long ago,” Rashid wrote.

President Asif Ali Zardari, the husband of slain PPP leader Benazir Bhutto, is no stranger to extremism himself and his populist base has traditionally voted for the party”s “anti-mullah, anti-army and pro-people policies,” he said.

“Unfortunately those principles were abandoned by a series of corrupt and ineffectual leaders, and the PPP today is not even a shadow of what it once was,” he said, while noting that Zardari has also “backtracked” on foreign policy goals such as improving relations with India and Afghanistan.

Pak-army-Parvez with next in Command Kiyaani

“The security agencies have unleashed Lashkar-e-Taiba (LeT) — the largest and most feared extremist group in Pakistan, which was behind the 2008 Mumbai attacks — on to the streets of Lahore,” Rashid said.

“Right now Pakistan is becoming a place where there is an army without a country,”  wrote Rashid.

Always Yours — As Usual — Saurabh Singh

Source:http://news.in.msn.com/international/article.aspx?cp-documentid=4994774

Union Budget 2011: The Wish List

Budget-2011-12Pranab Mukherjee ready to Present BudgetGovernments come and go. But their visions outlined in the annual fiscal planning (the Union Budget) have a long lasting impact on the economy. The Budget of 1992 was one such document. It was a threshold that set India on a superior economic growth path. The first Union Budget of the current decade also comes to meet several challenges. It should not just counter risks within and outside the economy. But it needs to also fortify India’s position amongst global heavyweights.

Consequently in the Budget 2011-12, emphasis should be on maintaining and even accelerating the pace of growth and employment. The ensuing budget is expected to take note of the current scenario and announce policies and reforms to support and form a suitable base for the economy to continue to grow at 8%+ levels. In general one can feel that the budget would be skewed towards investment rather than consumption. Agriculture & related activities would continue to be the focus area as inflation and food Agricultural-Sectorsecurity is high on the government agenda. Government would allocate higher amounts towards infrastructure (logistics, rural infrastructure and water management), education and technology to give a multiplier effect to the economy to sustain high GDP growth in the coming years.

The Union Budget 2011-12 might be a key from a policy stand point and may provide incremental direction to markets. There is an inherent value in India economy given the growth story and favorable demographics, but catalysts are required at macro level to deleverage the underlying value.

India was among the few countries in the world to implement a broad-based counter-cyclic policy package to respond to the negative fallout of the global slowdown. These policy actions has helped Indian Economy to clock a growth of 8.6% in FY11 (advance estimates). While rising strongly in the world economic order, India faces the most critical challenge of crossing the ‘double digit growth barrier’. Current macroeconomic challenges are manifold

1. Controlling inflation, including that for essential commodities,

2. Maintaining fiscal deficit amongst rising oil prices,

3. Absence of one-time revenues such as 3G, WiMax license fees,

4. Allocation & channelising investment in Infrastructure,

5. Domestic financial sector liquidity management with large government borrowing can potentially be a dampener for private investments,

6. Reducing current account deficit from current elevated levels,

7. Over and above, handling corruption issues.

The upcoming elections in some of the major states may prompt the government to continue to take some populist measures

Normal Expectations, on few Specific Fronts, from Upcoming Budget  are Deliberated Here Under

Higher short term capital gains tax for FIIs:

The volatility in Indian stock markets over the past six to nine months can to a large extent be attributed to fickle mindedness of the FIIs. Loose monetary policies in developed markets have not helped either. Hence, a stricter policy to curb short term capital gains earned with the hot money is in order. While the DTC has proposed to tax all FIIs, the current budget should lay a foundation for the same by hiking the taxes on short term gains.

Incentivise low income housing: Housing Sector

The construction sector is unlikely to have a very peaceful fiscal ahead. Low bank funding and high interest rates could stall projects and build up inventory in the sector. Allowing higher fiscal incentives on low income housing loans could address the problem of high cost for the houses as well as offer a solution to builders to increase sales.

Incentivise long term investment in equities:

Institutional investors such as insurance companies, PFs and mutual funds should be offered fiscal incentives on their schemes wherein investments are locked in domestic equities for 5 years and above. This could help draw more retail savings into equities for a longer term.

Money INR

Pool in private sector funds for infrastructure investments:

Floating SPVs that can pool in private funds for meeting the 12th and 13th Five year plan targets may be an ideal way to meet the funding gap. Especially given that the contribution from the private sector is seen going up from 30% in the Eleventh 5-Year Plan to 50% in the Twelfth Plan.

Decontrol of Urea Prices:

Where as Government seems to be planning to raise Urea Prices by 2 to 5 per cent in 2011 – 2012. De-canalization of Urea imports is also expected once it comes under Neutrient Based Scheme Regime. Perhaps the fertilizer industry expects Rs 50000 Crore in cash for Financial Year 2012 by way of subsidies. It would not be a great surprise if import and export restriction on Urea trade are lifted.

Deepen India’s corporate debt market:

Developing a vibrant corporate debt market is paramount to serving the long term funding needs of corporates. The Budget should initiate policies in this direction so that retail participation in corporate debt issuances becomes easier and more transparent . The debt papers also need to be rated to suit investors’ risk profiles.

Rejig subsidies and off balance sheet items:

An increase of 245%! This is exactly how much the cost of major subsidies has gone up in India in the last five years. And mind you, this does not even include oil. In CAGR terms, it amounts to a huge 28%. When one considers India’s nominal GDP growth rate of 14%-15%,Pair of the Budget Scissors it quickly becomes clear that such a growth in subsidy is not sustainable at all. Fortunately, the Government seems to have woken up to this fact. Hence, rather than trying to increase subsidies further, it is now looking to reduce pilferage in the system. As a big step towards the same, it has set up a task force to create a way to directly transfer cash to the ultimate beneficiaries of various subsidy schemes. We believe in addition to reducing indirect subsidies, investing more in warehouses and logistics could help keep the food prices in India under control to an extent.

Image

Always Yours — As Usual — Saurabh Singh

THE JASMINE REVOLUTION — Part – I

At times, few events, though not very often noticed, normally not even thought worth being covered by national media, but when the acts happen to be of SUPREME SACRIFICE or same order, change course of not alone history but geography too. The attempt is not to dub an act of self immolation as an act of bravery, and normally hundreds of cases of self immolation and attempts of self immolation get reported in media every year, besides lot many which even fail to find space in news media in nearly all the corners of the world which without fuelling in a minor change in governance.

The name “Mohamed Bouazizi” is not a famous or well known name even today, and thus indirectly gives an impression that history in due course of time may even forget to contain any record of this name for reference of future generations. The act of self immolation by this Tunisian Street Vendor to protest against the corruption is an apt example of helplessness being faced by common men, irrespective of him being a citizen, subject, at mercy of any dictator, fascist or Junta or probably any other form of Structure of Governance.

Strange are ways things are destined, much beyond human vision and imagination, it seems if  21st Century were a Century of Convergence of Scale for nearly every sphere of human related activities. A Century standing witness to Convergence of Communication Technology and Tools, Convergence of Economies of Nations, Convergence of Trade, Convergence of Financial Governance, and perhaps even Convergence of Revolutions against Governance Structures across various nations and probably the list continue…s, neither can it be covered in this deliberation nor will it be attempted.

Till a couple of months back, the individual of the day was busy in himself thinking that all the problems could happen and will happen with others only, aptly defined selfish by Adam Smith and the league, was thinking of governance all around the globe being cool, calm and pleasant except the places messed up by United States of America. Perhaps still the individuals will remain individuals and will rarely form a society or nation; as people aware of history know very well that even the phenomenon or concept of nation is a gift of as recent as nineteenth century.

Connecting back, it was morning of December 17, 2010 when Mohamed Bouazizi, a 26 years old street vendor of Tunisia immolated himself protesting against corruption, an event of the magnitude often not even noticed by world media, the Arab World has not remained the same as it was till hours before of this act on the same day. It has left whole geo-political area simmering and inhabitants rumbling.  It has initiated a chain reaction.

The chain reaction, that has already made twenty three years old rule of Zine El Abidine Ben Ali, (in power since 1987) now a chapter in history of Tunisia. It did not stop here itself. It perhaps turned a torchbearer for other nations of geopolitical area often called as Gulf (British call it as Middle East), or as the author calls it, the Middle West. It did not stop at Tunisia. The next link in chain turned out to be Egypt. In Egypt, the war hero of Egypt Israel War of 1973 that made Egypt a power centre in Middle West and one time air force officer Hosni Mubarak was shown door after his thirty year rule. To world it may look a silent transition made success by people of Egypt but sources say that at least 300 people lost their life and another 3000 suffered injuries. Reality about real causalities is not known due to initial crack down on media and still no real transition to any new form of governance taking place. It is probably still another Hosni Mubarak just individual may differ, as no real transition to any form of governance has taken place, but junta in control.

“The phenomenon being deliberated, as on date, has come to be known as SIDI BOUZID REVOLT in Arab World and as JASMINE REVOLUTION elsewhere.”

Similar turmoil, protests against governments in place, in numerous other nations of gulf is being seen and also the ruthlessness and lack of human emotions with which they are being suppressed and retaliated by various governments in place. It is the same story today in Algeria, Bahrain, Jordan, Libya and Yemen.

Always Yours — As Usual — Saurabh Singh

Egypt: Now without Hosni Mubarak in Control of Affairs– For Other Nations a Caveat Issued Against Facebook and Likes…..

A Brief Introduction to Hosni Mubarak & His Journey

Hosni Mubarak has ruled the country Egypt for 30 years, which by far is the most powerful in the Arab world. It all started on October 6, 1981. Egypt was shaken when its President Anwar Sadat was assassinated by right-wing Arab groups during a military parade before the world’s eyes. Mubarak, who was then the vice president, was wounded in the attack. Terrified he stood there and by the time stunned security police began firing back, killing two of the assassins, Sadat was already dying. Hosni Mubarak at World Economic Forum

Mubarak was a natural successor. He took control of the government on October 14, 1981 and has held it, by various means, ever since. While this is looked at as his first appearance on the global stage, one cannot overlook the crucial role he played in 1973.

He is still credited with winning the war that changed the course of Arab Israeli relations in October 1973, when he was Air Chief, under Sadat’s presidency. The victory over Israel brought him personal glory too.

Mubarak with son of Slain President Sadat

In April 1975, Mubarak was appointed as the vice president of the Egyptian republic and he loyally served Sadat’s policies. He became a popular representative of the President and had numerous meetings with foreign leaders.  Mubarak’s political significance as vice president can be seen from the fact that at a conversation held on June 23, 1975 between Egypt Foreign Minister Fahmy and United States Ambassador Hermann Eilts, Fahmy said to Eilts that “Mubarak is, for the time being at least, likely to be a regular participant in all sensitive meetings”. He advised the ambassador not to antagonise Mubarak, as he was Sadat’s personal choice.

Mubarak may be considered largely unpopular today, but as President, he allied with the West and an anchor of stability in the Middle East. Taking over as President, he moved quickly to crush an Islamic uprising and jailed over 2,500 members of militant Islamic groups engaging in violence. Mubarak retained most of Sadat’s foreign and domestic policies, and Sadat’s close ties to the United States. All the Arab states but three had criticised Egypt for the treaty with Israel, so Mubarak tried to rebuild relations with Jordan, Iraq, Saudi Arabia, and Palestine Liberation Organisation leader Yasir Arafat. It was Mubarak who encouraged Arafat to compromise and recognise Israel’s right to exist.Hosni Mubarak - the war Hero of 1973 Egypt Israel War

Throughout the 1980s Mubarak increased the production of affordable housing, clothing, furniture, and medicine. He also kept a close eye on his officials, firing ministers at the first hint of wrong-doing and fining members of Parliament for unnecessary absences. Egypt’s heavy dependence on US aid and her hopes for US pressure on Israel for a Palestinian settlement continued under Mubarak. He improved relations with the former Soviet Union. In 1987, Mubarak won election to a second six-year term. In 1989, eight years after Sadat’s assassination, Egypt was re-admitted as a full member the Arab League. Its membership was suspended after Sadat’s peace treaty with Israel, but Mubarak rebuilt the bridges.

Mubarak was angered over the 1990 Iraqi invasion of Kuwait. When the US was hunting for a military alliance to force Iraq out of Kuwait, Egypt’s President joined without hesitation. After the war, his reward was that America, the Arab states of the Persian Gulf, and Europe forgave Egypt around $14 billion of debt. He won America’s support and Egypt enjoyed massive amounts of military and economic aid over the last three decades.

The Wave of Change

However, as years went by Mubarak became more authoritarian. He throttled meaningful political evolution and curbed the freedom of expression. Plots to assassinate Mubarak had surfaced in 1992, 1993, and 1995 and he is known to have survived six assasination attempts. But Mubarak continued his tough stance. His crackdown led to charges against his government of torture, threats to the press, and other human rights abuses

Political corruption in the Mubarak administration rose dramatically. Such corruption has led to the imprisonment of political figures and young activists without trials, illegal undocumented hidden detention facilities and rejecting universities, mosques, newspapers staff members based on political inclination.
And all of this worsened in 2005. After increased domestic and international pressure for democratic reform in Egypt, Mubarak asked the largely rubber stamp Parliament on February 26, 2005 to amend the constitution to allow multi-candidate presidential elections by September 2005.

On July 28, 2005, Mubarak announced his candidacy, as he had been widely expected to do. The election which was scheduled for September 7, 2005 was widely seen as heavily rigged.
Anguish against Hosni Mubarak
Votes were bought for Mubarak in poor suburbs and rural areas. It was also reported that thousands of illegal votes were allowed for Mubarak from citizens who were not registered to vote. On September 8, 2005, Ayman Nour, a dissident and candidate for the El-Ghad Party, contested the election results, and demanded a repeat of the election. In a move widely seen as political persecution, Nour was convicted of forgery and sentenced to five years on December 24, 2005.

Even the Muslim Brotherhood, which has a wide cadre base in Egypt, fielded candidates as independents due to their illegality as a political party. They won 88 seats to form the largest opposition bloc, but only after the arrests of hundreds of Brotherhood members. A constitutional amendment adopted by the National Democratic Party-dominated Parliament has made it virtually impossible for independents like former IAEA chief Mohamed El-Baradei to run for president.

Soon after, Mubarak appointed his son Gamal as the general secretary of the ruling NDP, a move that convinced many of his unwillingness to let go of power.

As Mubarak tried to tighten his grip over Egypt, anti-government protests strengthened in 2005 giving rise to the Kifaya (enough) movement, the unofficial moniker of the Egyptian Movement for Change.

It first came to public attention in the summer of 2004, and achieved a much greater profile during the 2005 constitutional referendum and presidential election campaigns. Since then it has opposed Mubarak’s presidency and over the years the voices have only grown louder.Now the final outcome this gradual but sure approach is in open — Mubarak Stepped Down.

Role of Social Media

In one of my earlier posts posted on this blog dated February 04, 2011, I wrote an article with title as mentioned below, but found rare buyers of the concept. Probably now its no more a secret and known to all. I did not emphasize much thereafter on role of social media because one of my teacher taught me a lession that can mentioned as  “People can believe only on the things, creations and thoughts and other things of the same kind, only to the extent if they are capable of even imagining such phenomenon in their wildest dreams. Else they will laugh at you and will say the things that you may not love to listen. Let them be mature, but do not kill your vision just for the reasons that other are suffering from vision myopia.”

THE FACE BOOK IS WORKING TO GET CHANGE IN GOVERNMENT OF A NATION: YES, I MEAN IT– IT’s EGYPT –Saurabh Singh

Adding to the dicussion further I would like to state what’s even more interesting  and that is the role played by Social Media tools like the use of Twitter, Facebook, and YouTube to speed the process of protests in Egypt. There has been some backlash about the use of social media, with some pundits calling it a “Facebook Revolution,” as if without Facebook this wouldn’t be happening.

The revolt still would have happened, even if the Social Media tools were not there. but their presence added fuel to fire of revolution. Today’s era of real-time communication made the “words of the January 25 protests” spread more quickly and gained momentum that would have been hard to achieve without the social networks.Role of Social Media

But it also leads oneto wonder…is the use of the Internet, and social media, a human right?

The best testimony about social media’s role in these events has to be the efforts of the Tunisian and Egyptian governments to thwart or completely cut off the Internet. The chart published on Mashable, the Internet became a critical communications point leading up to the events of the past few days. It’s no wonder that the autocratic Mubarek regime sought to protect its own power by cutting the Internet.

Internet Traffic Chart

It should be noted that the protests have significantly escalated since the proverbial kill switch was hit on the Egyptian Internet. So at best social’s role can only be painted as a catalyst, and not the ultimate factor.

Leaving the discussion on Role of Social Media to Political Pundits.. will follow If find their or comments from my audiences on the topic.

Post Mubarak Situation in Egypt : A State of Uncertain Transition

Some have termed the departure of Egyptian President Hosni Mubarak from office on Friday as a resignation. Some others have called it waiving the office or powers of the president. The Egyptian constitution provides for both contingencies.

When a president resigns, the constitution requires that he should address his letter of resignation to the president (speaker) of the parliament. When he stops exercising the powers of the president, he addresses his letter to the vice-president.

Article 82 provides for this interesting contingency of the president leaving office without formally resigning. It says: “If on account of any temporary obstacle the president of the republic is unable to carry out his functions, he shall delegate his powers to a vice-president.”

Mubarak, while leaving office much to the jubilation of the protesters, did not inform the president of the parliament and submit a formal letter of resignation as required under the constitution.

Celebrations in Egypt as Announcement of Mubarak Leaving the office comesNor did he ask Vice-President Omar Suleiman to take over. Instead, he asked the Supreme Council of the Armed Forces to take over. It is a coup without seeming to be a coup.

One can go on analysing the circumstances of Mubarak’s departure. Whatever be the circumstances, Mubarak is gone from office for ever. It is time to discuss what next. Egypt is now in a state of transition under the leadership of the Supreme Council of the Armed Forces, which consists of the following:

Field Marshal Mohamed Hussein Tantawi, who has been the minister of defense and commander-in-chief of the Egyptian Armed Forces since 1991.

He has been a field marshal since 1989. After the protests broke out on January 25, Mubarak promoted him as deputy prime minister and asked him to continue to hold the defence portfolio.

He visited the Tahrir Square on February 4 and met the troops deployed there as well as the protesters. He is the chairman of the Supreme Council.

Air Marshal Reda Mahmoud Hafez Mohamed, the chief of the air force since March 20, 2008.

Lieutenant General Sami Hafez Anan, chief of staff of the army.

Lt Gen Abd El Aziz Seif-Eldeen, commander of air defense.

Vice Admiral Mohab Mamish, chief of navy.

Is Lt Gen Omar Suleiman, the vice-president, who made the televised announcement regarding Mubarak leaving office after handing over his powers, a member of the Supreme Council? The position is not clear.

Al Jazeera says he is. Others do not say so. However, since he is only a lieutenant general and since the Supreme Council is headed by a field marshal, it stands to reason that Suleiman may have to work under the orders of the Supreme Council and not vice versa.

What next? The present constitution has become untenable since the post-Mubarak transitional arrangements are not in accordance with the constitution.

This gives rise to the possibility that the Supreme Council may suspend the constitution and dissolve the parliament. Mohamed El Baradei has said that Egypt will now have a provisional constitution.

What will be the duration of the transitional arrangements? Till September when the election of a new president is due or for a longer period?

The political elements, who participated in the protest movement, are already saying that it may not be possible for the Supreme Council to restore political and economic normalcy before September and, hence, according to them, it should be for a longer period.

El Baradei has been quoted by the BBC as stating as follows: “What I have been proposing is a transitional period of one year. We will have a provisional constitution. We’ll have a transitional government, hopefully a presidential council, including a person from the army and a couple of civilians.”

“The main idea is that the army and the Egyptian people will work together in a systematic way for a year to reach the point where we can hold a genuine free and fair election, a parliamentary election and a presidential election. I think the people of Egypt, who have been suppressed for at least 30 years, are ready to wait for a year as they see things are going in the right direction,” Baradei said.

The younger non-political elements, who played a leading role in the revolution, have not clearly indicated their view on this subject apart from expressing their trust in the army.

Wael Ghonim, the Egyptian Google executive, who is credited with rallying many young people behind El Baradei, has tweeted to his followers as follows: “The military statement is great. I trust our Egyptian army”.

The armed forces’ statement to which he had referred said the Supreme Council would lift the country’s emergency law but only “as soon as current circumstances end”.

It also said, “Armed forces make a commitment to caring for the people’s legitimate demands, and to seeking to follow their implementation within the time frames with full precision and resolution, until the complete transfer of power, and the achievement of the democratic free society which the people aspire to”.

It pledged not to prosecute ‘the honest men who called for an end to corruption and for reform.’

While it spoke of time-frames for the transition, it refrained from specifying those time-frames. If Ghonim comes out ultimately in support of El Baradei’s call for a longer transition, will other youth leaders support him?

Who will be in any transitional government or council that may be constituted? Everybody wants that it should be a civilian council possibly headed by El Baradei and including a representative of the armed forces.

It is not yet clear whether the Supreme Council would accept a transitional council of which the Muslim Brotherhood is a member.

The MB has been supportive of El Baradei till now. He has been advocating a role for the MB in the transitional set-up, but the MB has said it does not want any role. The youth leaders are not opposed to it. The Supreme Council has not yet spelt out its views.

Always Yours —- As Usual — Saurabh Singh

What’s even more interesting to me, though, is the use of Twitter, Facebook, and YouTube to speed the process of protests in Egypt. There has been some backlash about the use of social media, with some pundits calling it a “Facebook Revolution,” as if without Facebook this wouldn’t be happening.

Let’s be real. The revolt still would have happened. But in this day of real-time communication, word of the January 25 protests spread more quickly and gained momentum that would have been hard to achieve without the social networks.

I’m reminded of the Malcolm Gladwell piece that ran in The New Yorker in early October last year. In it, he describes 1960s North Carolina where a Woolworth’s wouldn’t serve black students. The story goes that the protest to not allow blacks to sit at the bar, but instead stand at the snack counter, began with four students and, the next day, grew to 27.

During the following days, the sit-ins eventually grew to 600 people and more than five colleges taking part. Soon 70,000 students were involved and thousands were arrested and even thousands more were radicalized.

He says, ‘These events in the early sixties became a civil-rights war that engulfed the South for the rest of the decade—and it happened without e-mail, texting, Facebook, or Twitter.”

While I disagree with the rest of his view on the use of social media in today’s w0rld, he eventually gets to the point that we are not in the middle of a digital revolution. And, whether you use the tools or not, you have to agree that the revolt in Egypt would have happened without social media. The use of the tools just speeds the process.

But it also leads us to wonder…is the use of the Internet, and social media, a human right?

GOVERNMENT & ADMINISTRATION BOTH ARE HAND IN GLOVES WITH THEIR SINISTER OBJECTIVE IN PROMOTING SLUMS

The evictions that were done for the beautification of Delhi Prior to Common Wealth Games have had a lasting impact on people’s lives, who were there occupying the place as slums and living there for a good number of years.

The blogger is not supporter of Slums, but if they have cropped up, then  that a very first lapse of Government in meeting its developmental agenda on one hand, and people who are provided duty of taking care of the issue of encroachment of such nature.

The blogger wants to learn that have the jobs, funds, pensions and other benefits that were being provided to such employees have ceased to exist or government wants a bigger proof of their inefficiency.

On the other had if something is illegal, under what laws the legalized electricity and water connections, ration cards, voter identity cards and an identity card were provided to inhabitants there.

IT CAN BE VERY SAFELY CONCLUDED THAT GOVERNMENTS AND ADMINISTRATION BOTH ARE HAND IN GLOVES WITH THEIR SINISTER OBJECTIVE & ARE PROMOTING SLUMS TO CROP UP AT THE PLACES WHERE PRICES OF LAND ARE EXPECTED TO ESCALATE OR CAN GET ANY OF THREE FACTORS AS MENTIONED AHEAD TO ENJOY; THE FACTORS BEING MONEY, LAND, & SEX.

 

“Gyarah din ke khel ke liye woh aaye,dhoom mahcaye aur humein phas ke chale gaye,” (They came for the games for 11 days, had their fun and left, leving us trapped in the middle of nowhere). 26-year-old Zora is angry as she says this. She is one of the estimated 200,000 people who were forcefully evicted from slums in the National Capital Region as a part of beautifying the capital in preparation for the Commonwealth Games 2010.

Anoop - One of Residents of JJ Colony, Valmiki Nagar


Zora, who is married and stays at her in-laws house, keeps coming back to what once used to be her paternal house in Indira Gandhi Camp II in Sewa Nagar in South Delhi, for she does not have parents, but has two younger sisters and a brother. Her two sisters live in a plastic tent, which is often targetted by miscreants at night. “Each night I go back home after visiting my sisters, I go with a fear. I kiss them on their forehead daily, not knowing what awaits them in the night. They have a plastic sheet as a door and it is well known in the area that there are two women in the tent, with just a 11-year-old boy for protection,” Zora said.

 

Zora - One of Slum Dwellers at a Meeting

The slum, which has been housing migrants from Madhya Pradesh for the last twenty years, was razed, without any notice in January 2009. The slum cluster consisted of approximately 300 homes, with legal water supply and electricity connections.

 


We were granted ration cards, voter identity cards and an identity card, which makes us eligible for rehabilitation. When Sheila ji (Delhi CM Sheila Dikshit) came to our basti asking for votes, she had assured us that our colony would be legalized. Instead, it was razed. I was cooking food when they came with the bulldozers. They did not even give me the time to collect valuables or even identity cards from my jhuggi,” says 35-year-old Kamla, a single mother, who has two children.

Kamla -- Another one of Them

“And all this for what? That parking lot remains empty today. There are no events in those stadiums today. The foreigners have gone,” chips in Anoop, a resident of JJ Valmiki camp near Thyagaraj stadium.

The men and women were speaking at the launch of a report titled “Forced evictions and Commonwealth Games” prepared by NGO Housing and Land Rights network. The HLRN had undertaken a fact finding mission across 19 sites in Delhi, where the government forcefully evicted colonies while preparing the capital for Commonwealth Games.

“Basic human rights have been violated during these evictions. Most of the evictions happened during extreme weather conditions, during festivals or prior to school examinations. Atleast three instances of deaths and several other cases of injuries have been reported during these evictions. The affected families have not been compensated or rehabilitated, forcing them to continue a life which lacks security and violates the basic right to live with dignity. The most alarming violation is the violation of human rights of women. Young women are vulnerable to sexual abuse and violence resulting from exposure to insecure and inadequate living conditions,” says Shivani Chaudhry, associate director of HLRN.

In addition to women facing problems like harassment, lack of security and lack of space for personal hygiene, another direct consequence of a mass scale eviction like the one that took place in Delhi since 2004, was violation of rights of children.

Raman - Who used to Manage one of the Schools
Many children were forced to drop out of schools, as atleast three schools Deepshika Primary School (sector 52, Gurgaon), Pragati Wheel School (Yamuna  Banks) and Viklang Basti Informal school were razed for preparations. Many of these children were forced to take up jobs to supplement family incomes.

Sher Singh, who was in class VI of the privately-run Pragati Wheel School on the Yamuna Banks (opposite Commonwealth Games Village), recounts how the government bulldozers razed the school while they were inside studying.

“They came and asked all of us to leave. We pleaded with them not to do it, but they told us they had to do it for security reasons. Since then, I have not been able to get admission in any school,” says Sher Singh.


Raman Khanna, who runs the school, said, “We reopened the school last month. I am running a school with no roof. I have to, as the families of the boys and girls who used to study there, requested me repeatedly to. As long as the rainy season does not start, it will be okay, I think. There were about 180 students with us before evictions and now we have about 90. I am running the school literally by paying a daily bribe to beat policemen.”


Former Chief Justice of the Delhi High Court, Justice AP Shah, who released the report, told rediff.com, “In 2009, a night shelter had been razed. I had initiated a suo moto case against the MCD regarding the demolition of the night shelter and ordered the MCD immediately to restore the Pusa Roundabout night shelter. Till date this order has not been followed. The government hid behind a technicality, as they so often do. In addition, not even a single notice has been sent to any of the officials connected with such mass scale demolitions. And I am also surprised that the National Human Rights Commission has been silent on the issue for so long.”

On suggestions given by Justice Shah, the HLRN has decided to submit the report to the NHRC and file a PIL in the Delhi High Court.

Miloon Kothari, the executive director of HLRN said, “We have enough evidence. We will also submit the report to the UN as well. If there is international pressure, the government will budge. The tragic violations of basic human rights should not go unpunished like this.”

 

Always Yours — As Usual —- Saurabh Singh

A CASE OF OPEN ACQUIRE OFFER – JUSTIFY PAYMENT OF NON COMPETE FEE, SEBI TELLS E. LAND

Saurabh Singh

JUSTIFY PAYMENT OF NON COMPETE FEE, SEBI TELLS E. LAND

The Securities & Exchange Board of India, or SEBI, has told a South Korea’s $7-billion textile chain E. Land, which in process of acquiring Mudra Life Style by an open offer, to justify the payment of a non-compete fee of 25% to the promoters of Mumbai-based Mudra Lifestyle.

INTRODUCTION OF STAKEHOLDERS

E. LAND TEXTILE CHAIN OF SOUTH KOREAN ORIGIN

E. Land is a South Korean $ 7 Billion Textile Chain. The textile house is in midst of the process of taking over Mudra Lifestyle. E.Land Group (is a South Korean conglomerate headquartered in Chanjeon-dong Mapo-gu Seoul, Korea. It started as a 6 sqm small clothing shop on a fashion street in front of Ewha University in Sinchon in 1980. E.Land Group became a USD 7 billion group of companies, creating the phrase “Myth of 6 sqm (hangul)”. E.Land Group now takes part in retail malls, restaurants, hotels and construction businesses as well as its cornerstone, fashion apparel business. It has operations worldwide through its subsidiary E-Land World, including China, Hong Kong, Vietnam, the United States and Europe. History In the 1980s, E. Land Group revolutionized the retail channel by pioneering new markets using a franchising system. Franchising system is one of the most profitable forms of retail distribution due to its low initial investment requirement when opening new stores. Its first ever brand was called “England”, which later changed to “E-Land” due to restrictions on trademark registration. During the Asian financial crisis of 1997, E. Land Group successfully carried out several corporate reform initiatives, including corporate restructuring, overhaul of its finances and transformation of its management system. As a result, E. Land Group became the 37th largest corporation in Korea (excluding SOE’s) with assets totaling over 2 billion USD as of the end of 2005. E. Land Group transformed Korean apparel retailing, which was historically divided into high-priced department stores and low-priced traditional markets, by creating a new medium-priced market using street shops. This market has now grown to over USD 20 billion in 2006. E. Land Group currently takes part in fashion apparel, hyper-mart retail, fashion outlet malls, department stores, hotels and restaurant businesses. Vertical Integration It currently focuses on vertical integration of production and distribution of consumer goods that include apparel, groceries and house wares. Products are sold through two different channels, namely, approximately 5,000 franchise stores and E. Land Group owned stores consisting of 25 premium fashion discount stores, two department stores and 32 discount stores. The strength of E.Land Group lies in its ability to generate synergies between its fashion and retail businesses, and this strategy being implemented through a business portfolio that includes infant wear, children’s wear, women’s wear, sportswear and underwear and a multitude of channels such as outlets, department stores and super supermarkets. Retail E. Land Group is currently the second largest retailer in Korea based on number of stores as of September 2006 (Source: Korea Rating). The Group’s current retail business comprises Homever, Kims Club, NC Department Store, NewCore Outlet and 2001 Outlet. 2001 Outlet In 1994, E.Land Group introduced the first outlet in Korean market by opening the first store of 2001 Outlet. It took a form of mullti story outlet stores with groceries, houseware and apparel. NC Department Store & NewCore Outlet In 2003, E.Land Group purchased a 75% stake in NewCore, a department store operating in 25 different locations in Korea. Following the acquisition, NewCore was transformed to and operated as two department stores and 15 fashion premium outlets. Homever (ex. Carrefour) In April 2006, E. Land Group acquired the entire South Korean operations of Carrefour which operated 32 discount stores. Carrefour Korea, despite its global presence and experiences overseas, struggled to understand the local Korean culture. Carrefour was rebranded to Homever by E. Land Group after the acquisition. The acquisition moved E. Land Group from 6th to 2nd largest discount/outlet operators with respect to total number of stores. Using experiences accumulated from prior operations of 2001 Outlet and NewCore Outlet, E. Land Group successfully integrated its winning strategy to revive the stores after the acquisition. During 2007, E-Land received media attention regarding new Korean non-regular protection laws. E-land laid off more than 900 non-regular female cashiers at its affiliate retailers, Homever and New Core, just before the law went into effect on July 1 2007. The group, instead, outsourced their jobs to workers from temporary agencies. The new law requires a company to grant its non-regular employees regular status after they have worked with the company for two years. On 14 May 2008, the British retail group Tesco, which already operated in Korea, agreed to purchase 36 hypermarkets with a combination of food and non-food products from E-Land for $1.9 billion (976 million pounds) in its biggest single acquisition, making Tesco the second largest retailer in the country. The majority of the E-Land stores formerly belonged to French retailer Carrefour before 2006 and most of the stores will be converted to Tesco Homeplus outlets. Tesco’s South Korean discount store chain, Home Plus, currently has 66 outlets.

MUDRA LIFESTYLE BUSINESS

Mudra Group started its operations in 1986 and is in the textile industry having facilities for fabrics & garments manufacturing, processing, design development and sampling etc. It manufactures fabrics and garments for domestic and export market. The brand MUDRA has built a strong goodwill for itself in the domestic market and commands a premium. It’s gradually moving towards garment manufacturing mainly in the designer shirts and ladies wear segments to capitalize on the huge opportunity unleashed by the removal of quotas.

MUDRA LIFESTYLES’ PRODUCT PORTFOLIO CONSISTS OF: • Finished fabric • Processing • Garments  Mens Wear :Shirts  Ladies Wear : Tops, Skirts  Kids Wear PROMOTERS: Mr. Murarilal Agarwal, aged 49 years, Chairman and Managing Director, is a commerce graduate. He is the founder of the MUDRA group and has over 25 years experience in various facets of the textile industry. Shri Agarwal, as Executive Chairman, overlooks the entire working and affairs of the company’s management. Mr. Ravindra Agarwal, aged 46 years, Joint Managing Director, has done his M.A. (Gold Medalist) from Mumbai University. He has experience of over 18 years in the textile industry. He heads the Finance and Marketing Functions of the company. He is supported by a team of experienced professionals. Mr. Vishwambharlal Bhoot, aged 65 years, is a matriculate and has experience of over 38 years in the textile industry. He controls the company’s administration and accounting functions. He is supported by a team of experienced professionals.

THE BOARD COMPRISES THE FOLLOWING DIRECTORS:

S. No. Name Designation 1 Mr. Murarilal Agarwal Chairman and Managing Director 2 Mr. Ravindra Agarwal Joint Managing Director 3 Mr. Vishwambharlal K. Bhoot Executive Director 4 Dr. Surendra Ambalal Dave Independent Director 5 Mr. Subhash Chandra Bhargava Independent Director 6 Mr. S. P. Pandian Independent Director

SECURITIES AND EXCHANGE BOARD OF INDIA SECURITIES & EXCHANGE BOARD OF INDIA (frequently abbreviated SEBI) is the regulator for the securities market in India. It was formed officially by the Government of India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmadabad. ORGANIZATION STRUCTURE: Chandrasekhar Bhaskar Bhave is the sixth chairman of the Securities Market Regulator. Prior to taking charge as Chairman SEBI, he had been the chairman of NSDL (National Securities Depository Limited) ushering in paperless securities. Prior to his stint at NSDL, he had served SEBI as a Senior Executive Director. He is a former Indian Administrative Service officer of the 1975 batch…

THE BOARD COMPRISES

Name Designation As per C B Bhave Chairman SEBI CHAIRMAN (S.4(1)(a) of the SEBI Act,1992) KP Krishnan Joint Secretary, Ministry of Finance Member (S.4(1)(b) of the SEBI Act, 1992) Anurag Goel Secretary, Ministry of Corporate Affairs Member (S.4(1)(b) of the SEBI Act, 1992) Dr G Mohan Gopal Director, National Judicial Academy, Bhopal Member (S.4(1)(d) of the SEBI Act, 1992) MS Sahoo Whole Time Member, SEBI Member (S.4(1)(d) of the SEBI Act, 1992) Dr KM Abraham Whole Time Member, SEBI Member (S.4(1)(d) of the SEBI Act, 1992) Mohandas Pai Director, Infosys Member (S.4(1)(d) of the SEBI Act, 1992) Prashant Saran Whole Time Member, SEBI Member (S.4(1)(d) of the SEBI Act, 1992)

FUNCTIONS AND RESPONSIBILITIES SEBI

SEBI has to be responsive to the needs of three groups, which constitute the market: 1. The issuers of securities 2. The investors 3. The market intermediaries SEBI has three functions rolled into one body quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeals process to create accountability. There is a Securities Appellate Tribunal [SAT] which is a three-member tribunal and is presently headed by a former Chief Justice of a High court – Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court. SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless rolling settlement on T+2 basis). SEBI has been active in setting up the regulations as required under law.

MUDRA LIFESTYLE: STOCK PROCES AS ON JANUARY 28, 2010

BSE : Jan 28, 17:30 Open Price 57.00 Volume 351495 High Price 59.00 52 Wk High 62.80 Low Price 53.00 52 Wk Low 33.50 Prev. Close 57.65 Open Price 58.00 Volume 293989 High Price 58.00 52 Wk High 59.95 Low Price 53.85 52 Wk Low 28.05 Prev. Close 57.50 NSE: Jan 28, 17:30

THE SITUATION

In a first-of-its-kind deal in the local textile sector, the South Korean fashion and garment conglomerate had agreed to and is in the process of acquiring the promoter’s stake in Mudra Lifestyle and also take management control. The Korean firm has already acquired a 25% stake in the company and appointed directors on its board. It has also unveiled an open offer to buy 20% equity from shareholders at Rs 60 per share. It would pay Rs 75 a share to the company’s promoters for a controlling stake. The differential pricing to the promoters is on account of a non-compete fee. An acquirer can pay a seller non-compete fee of up to 25% of the price offered to shareholders in an open offer. Anything more than 25% has to be included in the open offer price. According to officials in investment banks, SEBI has asked SBI Caps, which is managing the open offer, to justify a higher or differential price in the form of non-compete fee to the promoters. “The regulator is still examining the submission. The company had filed for an open offer approval in October. Payment of non-compete fee is increasingly turning out to be a contentious issue with the market regulator vetting several such cases. This may also have to do with the recent recommendation of a committee on takeovers, which said non-compete fees should be done away with as according to it promoters were the sole beneficiaries. “SEBI is hostile towards non-compete fee as it is looking at reforming this aspect of companies’ takeover. More often than not it short-changes minority shareholders. While SEBI allows this to go up to 25%, under the Indian Contract Act it is invalid. However, the Securities Appellate Tribunal has said that if the law allows it, then it is justified. Merchant Banker to the ISSUE: SBI Caps or SBI Capital Markets Legal Arm of Merchant Banker: Amarchand Mangaldas Usual Time Taken by SEBI to settle Such Cases: One Month Time being Consumed by SEBI in this Case: It has already been nearly four months since the Company had filed for an open offer approval in October 2010 ISSUES INVOLVE 1. SEBI is hostile towards non – compete fee. 2. While SEBI allows it to go up to 25 per cent, in case of Indian Contract Act it is invalid. 3. Securities Appellate Tribunal says that if law allows, then it justified. But in majority of case ‘it is control premium’ that is paid in disguise of ‘non – compete fee’.

VIEW OF AN ECONOMIC LAW PRACTIONER

SEBI does not have much jurisdiction to decide whether the fee is justified, if it is not above the prescribed limits.

DEAD FISH IN THE POND

There is an old saying regarding a dead fish in the pond. In same manner or on the similar lines one of recent and matching issue was of acquiring of Mysore Cements. In this case SEBI had asked the acquirers not to pay differential prices to promoters at the expense of other Share Holders. The Regulator was of the view that payment of non – compete fee was not justified in this case as company was classified as a sick company.

 

E. LAND GROUP OWNS IN EXCESS OF 60 BRANDS IN KOREA

Casual • Brenntano • Underwood • Hunt • R.Athletic • Teenie Weenie • Who.A.U • Shane Jeans • So Basic • There’s • Coin • C.o.a.x • Prich • G-Star Deco & Netishion (Women’s) • Deco • Ana Capri • Telegraph • XIX • Dia • EnC • 96 New York • A6 Women, kids, underwear and accessories • E-Land Junior • Underwood School • Ohoo • Little Brenn • Roem Girls • The Day Girl • Cocorita • Usall • New Golden • Hunt Kids • Caps • Vianni Kids • Cheek • Entetee • Celden • Hunt Innerwear • The Day Underwear • Eblin • Petit Lin • Body Pop • Roem • The Day • 2Me • Teresia • Fiorucci • Clovis • Lloyd • Clue • Vianni • Eco Mart • Paw in Paw • OIX • Vicman • OIX Milano • NIX21 • Marie Claire • OST • Beall Eland also operate the following global brands under license • Berghaus • Ellesse Source: http://en.wikipedia.org/wiki/E-Land accessed on Jan 29, 2011 at 1237 Hours IST.

TERMS DEFINED NON –

COMPETE FEE

This fee is a differential price being paid to promoters over and above the price being paid to ordinary shareholders.

TRADITION & REASON BEHIND NON COMPETE FEE

This fee is paid by the acquirer to ensure that the former promoters of the company do not compete directly in same line of business for specified time period.

ACCEPTED AMOUNT

An acquirer can pay seller a Non – Compete Fee of up to 25 per cent of the price being offered to share holders in the Open Offer of Acquisition. Anything more than 25 per cent has got to be included in the open offer.

 

ALWAYS YOURS — AS USUAL — SAURABH SINGH

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