Foreign Direct Investment-The Big Fish

Corruption-The word which was rocking India a quarter before. Won’t there be an another news for this quarter which would put many of the politicians into baffling situation and also the growth of the nation???? Yes it is here!!!!The FDI-Retail which was down to the roots of the Parliaments where political parties showcasing their political insights making it not even to function for the past two weeks .Before coming to the Political side of the issue let me tell you a few facts about FDI. The so called Foreign Investment policy which way long back when East India company entered India for Trade before Independence followed by which we had a lot of investments from Japan and UK(Most dominant investor in India) after the second world war. one must remember the fact that Industrial Policy in 1965(where foreign traders to venture with collaboration in India) and the FDI policy reviews are based on time and political regimes to bring out the partial liberalization in Indian Economy.
Way back to early 1990’s let me tell you an astonishing fact, which helped The Indian Economy to take a turn faced by a severe Balance of payment crisis. How many of them knows that today’s Prime minister in the early nineties who was a finance Minister of India Dr. Singh with the help of World Bank and IMF introduced the macro – economic stabilization and structural program which opened the doors to FDI inflows and adopted a more liberal foreign policy putting an end to License Raj system???It was the time when there was a marked increase in Petroleum prices because of the gulf war. The crippling external debts were debilitating the economy. The nation was left with an amount of foreign exchange reserves which can finance only its three weeks of imports. Inflation reached at its highest level of 13%.Foreign reserves of the country stood high. Even there was a continued political uncertainty in the country during that period(Dr.Narasimha Rao’s Period).India’s credit rating fell in the international market for both short- term and long-term borrowing. It was a mere Economic collapse.

The nation-today Is no where far away from the economic derailment which it faced in the 1991.The FDI-Retail in India where Dr.singh Government move came with a 51% FDI in Multi-brand retail and 100% in single brand retail. We were all aware of global players in Retail Industry like US-walmart,French player-Tesco, IKEA-Swedish giant in furniture retail where they have been provided with 51% FDI by the government, while the remaining 49% of products they sell can be from the domestic players of which 15% limit is for Non-Brand Agro-products likes fruits and vegetables, which is currently being adopted by Indian retail giants like spencers,reliance,more,etc.In terms of Economy, FDI-retail will ease out Inflation which is peaking at the rate of 9.36%,will give out employment opportunities to millions of people. Farmers will get benefitted directly instead of local players making a double cost while selling it to the customers making a big deal in between. I can bet you on that issue even I experienced the price tag of 25kg of rice which I buy in a city is thrice the amount that I can get it from Rice-Mill at a Village. Am not saying that the middle-players should not exist which is the major concern for the Trimmonal congress as well as DMK and many more parties who are all in powers and not as well in their concerned states, instead look at the rate at which we are going to be benefitted!!!The GDP growth which has a sole 14% effect on the Retail industry,wont it be a major success In terms of economy liberalization and achievement???Instead if we are going to take the fact that Middle men are going to suffer in the Indian market which is an utmost concern against the FDI-retail am proud to say that China outraged us in the same issue for which we are against FDI-Retail. Yes!!!Even in most places of china today there are super markets and local players who outraged walmart and so many Foreign Brands, the Local players trends and the style have outplayed global retailers like walmart.I happened to hear that in some parts of villages in china farmers directly come and sell Agro-based goods to local people for which there is an urge among the consumers.

One must also look at the fact that government is setting up the Retail players and those players have decided to put their shops in places where there are more than 1.1 million people. The move will give out a better growth for the nation, direct employment and indirect employment, consumers will be having their products which can be of much quality improved and also at cheaper rates. The opposition government must look at the fact that there will be a better economic insight for the nation and its growth and it’s not the gratification by which they are going to be benefitted as it turns out to be a mere drudgery.

It's Time For India and China

China's emergence as a world economic power follows years of expansion, with growth of 9% or more the norm.It is a major exporter and may now be the world's fourth largest economy having overtaken Italy and possibly the UK and France.India has also seen dramatic growth of more than 7% a year and is the recipient of much foreign investment .Still US remains the largest economy in real terms. But on a measure based on purchasing power, China could overtake the US by 2020.There was not much difference in the economy between India and China’s performance roughly until 1980, when the per ca-pita incomes were also similar. Over the last quarter century, both instituted economic reforms and the growth accelerated. China embraced globalization and trade enthusiastically, welcoming FDI with no inhibitions, and gradually gaining control of world markets for low-tech labour-intensive manufactures. While reforms in India are supposed to have been initiated in 1991, the doctrinaire socialist policy had begun to be diluted in the second innings of Indira Gandhi .The process of liberalization continued under her son Rajiv Gandhi and more dramatically after 1991 while the growth rate doubled from the previous Hindu rate, but still lagged that of China. The result has been that starting with more or less the same per capita incomes 25 years back, Chinese incomes today are double that of India's as a result not only of faster GDP growth, but also of a lower population increase, good with the one-child policy. One in three people worldwide lives in either China, the largest communist country, or India, the largest democracy. For the moment, China remains the most populous nation,with 1.3 billion inhabitants, followed by India, which is home to 1.1 billion.But India's higher fertility rate means the gap is narrowing and the UN expects it to overtake China before 2030.

Those of us who suffer from China-envy – the debilitating feeling that the Chinese are ahead of us in everything they do, should think about this starting from stringent rules in daily life from traffic bans to one-child policy,the average Chinese trusts her government even less than Indian trusts.Is that possible, after CWG, Adarsh and A. Raja and Dhayanidhi maran? It is.About some months ago, there were fears that radiation from Fukushima could leak into seawater, and eventually salt. This sent thousands to Chinese rushing to grocery stores. They cleaned out entire shops of all the packaged salt in store. This triggered fears of a salt shortage in coastal China.The government insisted the fears were baseless, as indeed they proved to be, but people took their neighbours’ whispers more seriously than the word from Beijing.Something even more serious is happening from last week. Folks across China have cleared shop shelves of soaps, detergents and shampoo. For the last week or so, media has said that the four companies that dominate this business, including Unilever and P&G and two Chinese entities, will hike prices of soaps and shampoos between 5% and 15%.None of these four companies has actually hiked rates, nor spoken about the timing of price hikes. Beijing insists that interest rate hikes and other measures will soon cool prices. Nevertheless, people have panicked.Yes, inflation is high in China, but India has also gone through a period of gut-wrenching price spikes. Yet, we do not see crowds stampeding through vegetable markets, or cleaning out store shelves before the things gets costlier. An Article about Chinese newspapers says that, In newsrooms, it used to be said that you couldn’t trust news out of China till Beijing denied it. Today, most Chinese seem to believe this. They don’t trust their government and if the mandarins say something, they’re betting that exactly the opposite is true.Here, it’s different. To most things , the Indian responds with a cynical shrug. The exception is the government calendar of dry days, which are vital and many in a year. That, we treat with all the seriousness it deserves.

Corruption-A Billion Dollar Industry

The spate of scandals in the recent times has taken us back ,where India has slipped three places in the global ranking of most corrupted countries from 84th to 87th.UPA in the second term had promised to tackle out inflation,recession, turbulance in fuel, naxalism etc but in spite of that UPA has reached greater heights in "corruption“,the only advancement and growth they have seen in the second term. Allocating of unified access service licenses of 2G spectrum was the bigger playground for them where they have reached their target of highest figures of 1.76 lakh crore before completion of successful second year in the second term. Former union telecom minster. A. Raja being the Night watchman has evaded norms and sold out 120 unique licenses at a throw-away price which were already pegged at 2001.There was no other bigger scam than this in India. Next was the commonwealth games corruption which we could call it literally as a loot under lime light!!!!Payment to non-existent parties, will-full delay in execution of contracts,over inflated price and bungling in purchase of equipments through tendering and misappropriation of funds, all these were the sources of money into their pocket. Even the SBI and SBP banks paid 90 crores to the DDA,which was the bank guarantee paid on behalf of the contractor Emaar were also into their pockets. With 2G and CWG at the top spot others scams behind these were,IPL scam which involved corruption by the business tycoons and the big-pocket industrialists in the selection of players and franchise.satyam scam,Telgi scam,Bofor Scam,Hawala scam were it is all the list of scandals in india just not ending and becoming grave by every decade. The government says that it lying 20km of road a day and planning to develop infrastructure which can all be done with the help of public-private partnership, where again it comes as a no-brainer that political parties attract from big-pocket industrialists. A report says that 58% of corruptions are built by industrialists and politicians, with the cost of corruption to the country alone exceeding 250,000 every year. The result is being that the government has no time to workout with the nation where the inflation has touched 11.53 today with increase in fuel prices and food inflation touching 18.32 in the starting of the year 2011.It is a spate that poor people are being affected. It is the middlemen who play out a bigger role in corruption, not a single common man’s bribe. So let us hope that we should have an entire reformation in every field of politics and in the place of industrialists to make eliminate corruption from our Nation.