The Government backs down on FDI – a flawed approach
The Congress has done it again. For many months now, the Government has been publicly criticized for not taking any initiatives, for causing a paralysis that is slowing the process for reform in the country and combined with the harsh interest rates being set by the RBI (in order to try and fight inflation, without taking any measures on the supply side front), slowly bringing the rate of growth in the economy down. Recent reports speak of reduction in growth rates of industrial production, along with an outflow of money as major Indian businesses invest abroad in light of a reduced level of confidence in the Indian economy. This is combined with a higher level of revenue and decreased tax receipts which are causing Pranab Mukherjee to increase deficit levels and run out of money for the various welfare schemes that the Congress believes is necessary for its survival.
No Government can continue like this for very long, and when combined with the reduced public confidence following the agitation over the Lokpal Bill, the Government has to show it is dedicated to growth; and for this, some steps of reform are needed to be advocated. So, the Government decided to show that it is focused on reform and not stuck on any paralysis, and thus came the Cabinet decision to allow FDI in multi-brand retail to 51%, effectively allowing the major international retailers to come into the country. This is a decision that has been contested for a long time, since the fear of letting large retailers such as Walmart into the country is that they will be so powerful that they will put the local retailers out of business, and there are a large number of retailers and people dependent on them, which in turn means that there is a political cost.
Read more…
Categories: Accountable, Alliance, Allies, BJP, Coalition, Congress, Controversy, Development, Growth, India, Parliament, Policy, Politics, Retailer Tags: BJP, Congress, Failure, FDI, Governance, Government, India, Manmohan Singh, Opposition, Policy, Reform, Rollback
Consumer: The deceit of discount offers outside stores
I wonder how many times people would have noticed things like this. It was just yesterday that I went to 2 different stores – one of them had advertised for a Flat 50% discount (this was a store called Fab Creations in the Cross River Mall in East Delhi), and the other store was the Reebok store in the same mall. The Reebok store had a similar offer, with the different being that the offer was described as ‘Upto 50% off’.
First, we went to the clothes stores, there was no problem whatsoever, the clothes were indeed available at 50% off as a flat rate of discount, and the store was full of people willing to buy (and the people purchasing were not cribbing about the rate having been inflated earlier, a tactic that stores such as Cantabil, Priknit, and Kouton seem to have adopted (I wrote about this earlier – Priknit had jackets at 80% off, but the jacket that would normally have cost Rs. 1500 was priced at Rs. 5000 plus and I walked out in disgust at the horrible anti-consumer attitude of the store owners)). People were satisfied at the purchases, with the price and quality seeming right.
Consumer: Fraud by apparel companies
Nowadays, there are a number of shops (primarily in the area of apparel and clothing) that seek to attract customers through offering huge discounts. So you have brands such as Priknit offering 80% sale on their jackets, Cantabil offering 80% discount on all clothes, Pepe Jeans branding a sale logo of Buy 2, get 2 free, Kouton’s offering 50% + 50% and so on. I have been shopping in many of these, and realize that there is a huge amount of anti-consumer intent behind many of these. A lot of the numbers are inflated, and actual good quality is scarce. So let’s take some specific examples, and see what goes on:
- Pepe Jeans: The store had this huge sales sign outside proclaiming that if you buy 2, then you get 2 free (and of course they had the ‘*’, means that some conditions will apply). However, if you thought that this was a great bargain for getting 2 Pepe jeans, then think again. The offer was only for Pepe T-shirts, something that they forgot to put in the huge sign.
