FDI in retail

The Indian government's recent move to allow upto 51% FDI(Foreign Direct Investment) in retail has been received heavy criticism. For the beginner, this 51% investment means that foreign supermarkets like Wal-Mart, Carrefour and Tesco can now set shop in Indian shores. The essence of the opposition voice is the arguement that allowing foreign players will result eventually in the destruction of the very fabric of India's traditional retail setup,affecting crores of small time traders. It is a fact that almost 98% of India's retail business in unorganised. Allowing players with deep pockets from offshore will drive owners of local 'kiranas' out of their means of livelihood. But the government argues that such sweeping statements are greatly exaggerated and that allowing FDI will infact result in the farmers' getting a fair price for their produce by elimination of middlemen and also will result in more employment.

In this background, I post the following article on TESCO,the UK retail giant. It traces the path of TESCO into the Asian Markets(Thailand) and the tectonic shifts caused in the demography of Thailand's retail subsequently.

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TESCO
(A Corporate Profile)

By Corporate Watch UK

Completed September 2004

‘Our market share of UK retailing is 12.5% – that leaves 87.5% to go after’ – Terry Leahy, Tesco Chief Executive, quoted in Management Today

‘Tesco will just sail away. It will become unreachable, and the Competition Commission has perpetrated that. The only thing that could bring Tesco down is its management, and they do not make mistakes’ – Carlos Criado-Perez, former chief executive of Safeway Plc
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Summary

Tesco, Britain’s biggest and most profitable supermarket chain, is the darling of the City. But behind the fascia of the ‘under one roof’ out-of-town Tesco Extra, or the friendly high street Tesco Metro, lies a ruthless billion pound operation.

In recent years, Tesco and its major supermarket rivals have faced criticism for abusing their monopoly positions and contributing to some of the major social and environmental problems plaguing society today.

These include exploiting small farmers in the UK and worldwide and hastening their replacement with industrial monoculture plantations where wages are low and labour rights are minimal; undercutting almost every other retailer and hence turning our town centres into boarded-up ghost towns; co-operating with climate criminals, Esso; as well as numerous other corporate crimes.

This profile was updated in 2004 as a reflection of Tesco’s continued meteoric rise over the last few years, with all the attendant social and environmental impacts.
Market share and importance:

‘No matter how fast we grew Sainsbury’s were always in front of us. But slowly but surely we managed to grind them down and grind them out.’ – Tim Mason, Tesco marketing director.

In 1995 Tesco overtook Sainsbury’s as the UK’s largest supermarket. In 2001 Tesco occupied 15.6% of the UK grocery retail market and was the market leader by 6%. Tesco’s enormous share is still growing: by September 2004, it had increased to a massive 28%, around 12% more than its nearest market rival, Asda. Some would argue that if we were to include Tesco’s share of the convenience store market (bizarrely considered a seperate sector by UK competition authorities) in this figure, Tesco could be said to control 34% of the grocery market.

Considering how concentrated and cut-throat the ‘supermarket’ market is, this is quite an achievement. In the UK, Asda’s only real shot at catching up with Tesco would have come from a merger with Safeway, which was disallowed by the competition authorities 2003. However, Asda’s parent company, Wal-Mart, the world’s largest company, with global sales of $256bn in 2003, is still eight times bigger than Tesco. At present the only threat to Tesco’s ever-increasing market share would come if the Competition authorities stepped in to enforce monopoly legislation which defines a ‘classic monopoly’ as 25% of market share in a given sector. Since they have already carried out an investigation into the power of supermarkets in the lifetime of the Blair government, it seems unlikely that the Competition authorities will step in to stop Tesco’s obvious and increasing anti-competitive position. On the contrary, they are just letting Tesco grow and grow.

In September 2004, after Morrisons bought Safeway, Tesco was permitted to buy 10 of the 52 Safeway stores that Morrisons were obliged to sell by the competition authorities as part of their acquisition. Tesco is equally impressive when considering its share of the total retail market. In its interim statement of results (August 2003), Tesco claimed ‘our share of the total retail market is just 12.3% and there is a lot left to go for.’ Already, ‘just 12.3%’ means that almost one pound in every eight spent in the UK is spent in Tesco.

Tesco’s favoured measure of growth is ‘like for like’ growth – sales growth on existing shopfloor space – which excludes growth from extra shopfloor space in new or extended stores. Even by this restricted measure sales grew 8.3% in the year to September 2004. Tesco profits have increased every year but one since 1987. In April 2004, Tesco announced profits of £1.6bn for the financial year ending on 28 February; £4.4m profit a day, 17.6% higher than the previous year. As a comparison, in 2003 Tesco made as much profit as M&S, Sainsbury, Next and WH Smith combined. Analysts are now forecasting Tesco pre-tax profits for 2005 will be above the £2bn mark, five times that of Sainsbury.

Tesco is Europe’s second largest supermarket after the French firm Carrefour, and according to Mintel market research in 2004, Tesco is closing the gap. It is the fourth largest supermarket in the world. Tesco operates 2,318 stores in 12 countries around the world and employs 326,000 people, 237,000 of them in Britain where it is the largest private employer.

According to Terry Leahy, Tesco is market leader in 6 out of the 12 countries that it operates in, with its largest store, not in Bristol or Birmingham, but in Budapest. It operates 1,878 stores in the UK, 261 stores in Europe and 179 stores across Asia, and plans to open 184 stores worldwide over the next year. In the UK, there are 83 Tesco Extra stores; 447 Tesco superstores; 161 Tesco Metro stores; 277 Tesco Express stores and 910 recently-acquired T&S stores still to be converted (see ‘Moving in on the convenience (“c-store”) sector’, below.

A study carried out for the Sunday Times by research group CACI revealed that Tesco has almost total control of the food market in 108 of Britain’s postal areas – 7.4% of the country. This includes Epping in Essex, Penarth in South Glamorgan and Buckingham. In a further 104 areas, it accounts for more than half of grocery spending. Competition law states that a corporation should not account for more than a quarter of the UK market nationally, but this study showed 325 areas where Tesco exceeds this limit. The populations in Buckingham, Bicester and Brackley can now choose from ‘Tesco, Tesco or Tesco’ as a result of the chain’s recent acquisition of the One Stop chain of convenience stores.

At the end of 2003, Tesco was voted most admired company and its chief executive, Sir Terry Leahy was voted most admired leader by Management Today. The most impressive aspect of Tesco’s triumph was the ‘margin of victory’ in both categories. Tesco also came top in other categories, ‘Quality of Management’, ‘Quality of Goods & Services’, ‘Ability to Attract, Develop & Maintain Top Talent’, ‘Value as a Long-Term Investment’, ‘Quality of Marketing’ and ‘Use of Corporate Assets’. Only in the rankings for ‘Community and Environmental Responsibility’ did it fall outside the top 10.
International strategy

In most countries Tesco’s preferred tactic seems to be to buy an existing retail chain, or a significant share of one, and turn it into a Tesco subsidiary. Then it can begin the usual tactics undercutting local traders, aggressively competitive pricing, selling petrol, launching loyalty card schemes, 24 hour opening and so on.

Tesco has favoured large hypermarkets for its international stores, since in most countries it is easier to get planning permission for these than it is in the UK. The hypermarkets have an emphasis on non-food items: 55% of the sales area in a typical Asian hypermarket and 50% in a European one. Tesco is also opening petrol stations in Hungary, Ireland and Thailand. Rather than expanding into other West European countries, Tesco is focusing on ex- Soviet countries and South East Asia.

According to David Hughes, professor of agribusiness and food marketing at the Centre for Food Chain Research at Imperial College in London, supermarkets from rich countries feel obliged to do this because, ‘…they’ve got nowhere else to go. Their domestic markets are saturated, so they are looking for countries with large populations, high population growth, per capita GDP edging toward consumer levels, high income growth, and low supermarket presence. Countries with all five of these characteristics are a good bet, and companies rush to get there before everyone else.’

Asia

ThailandMalaysia

The arrival of Tesco and the other major international supermarkets means that retail patterns are rapidly changing in the developing world.

Tom Reardon, professor of international development and agribusiness/food industry at Michigan State University, argues that ‘this retail revolution poses serious risks for developing country farmers who have traditionally supplied the local street markets.’

A survey from the International Food Policy Research Institute suggests that farmers in Asia are having a hard time getting used to the procurement systems supermarkets set up. Rather than growing their produce and taking it straight to a market, they have to deal with a new chain of middlemen such as procurement officers, wholesalers and so on. They also have to deal with supermarkets’ standards of uniformity in shape and size, meaning that a lot of produce is rejected.

‘The small farmer will not be the one making the decision about what to grow. That’s a fundamental change for farmers,’ explains Jean Kinsey, co-director of the University of Minnesota Retail Food Industry Center.

Once the food has been grown, and if the supermarket chooses to accept it, farmers can also have trouble with transporting it. Payment is then often delayed for up to 60 days after the product has been delivered, too long for many people to wait. The system is set up so that supermarkets only have to deal with a small number of large and often mono-cultural farms, a fundamental change from the way food has traditionally been produced which means that a lot of small farmers who are used to producing a variety of crops will have to either make radical changes to their practices or go out of business.

The Malaysian and Thai governments are clearly concerned about Tesco’s power and are making attempts at curbing it. Tesco’s entry into both Thailand and Malaysia seems to have prompted a new wave of legislation aimed at reducing the power of foreign supermarkets and big business. However, Asian governments may feel they are treading a fine line between on the one hand encouraging foreign investment and boosting their country’s economy, and, on the other, letting multinational chains take over at the expense of local traders. But then they don’t always have a choice, since they risk WTO action if they take measures to restrict the power of the multinationals.

For example, the Thai government in November 2002 withdrew plans to legislate against foreign-owned supermarkets – who now control more than half the Thai market – by restricting their opening hours ‘because it feared retaliation under international trade rules’. The Thai Prime Minister, Thaksin Shinawatra, told a meeting of small shopkeepers, ‘We already have existing laws that can be modified and enforced quickly, which won’t be viewed as a trade discrimination practice. Why don’t we use them?…From now on, there won’t be a new law, just let it rest.’ However, Deputy Commerce Minister Wattana Muangsuk said that Thai policy would continue to use planning legislation to favour Thai traders.

In only seven years, Tesco has reached annual sales of £2.8bn in Asia. It has a total of 179 stores, covering 9.5 million square feet, and plans to open another 65 in the coming year.46

Thailand

‘Industry onlookers expect Tesco to use Thailand as a launch pad for a large-scale Asian expansion.’

Tesco first moved into Thailand in 1998 by buying a large stake in the Thai-owned Lotus chain of convenience stores. Thailand was the first south-east Asian country into which Tesco moved on a large scale, and by the end of 2002, Tesco had already captured 31% of the Thai market. Tesco now has 64 stores in Thailand, 47 of which are hypermarkets, and plans to open another 57 stores in 2004/5. These will include 40 Tesco Lotus Express stores which will be attached to Exxon Mobil petrol stations. During 2004, Tesco also plans to buy the remaining stake in Tesco Lotus.

When it entered the Thai market, Tesco was keen to point out that it would be sourcing produce locally, employing local people, and generally benefiting the local economy – ‘the company is committed to helping its local suppliers access local and international markets, and sell to multinational retailers, by helping them improve their quality and service standards’. However, today, it is embroiled in accusations of unfair trading practices and conflicts with local businesses:

Sourcing locally

Tesco was very vocal about its intentions to source products locally. This sounds good, but it is hard to believe Thai farmers can keep working on a human scale when trying to supply produce for 47 hypermarkets. Even where Thai products are being used, they are still likely to have been intensively farmed at the expense of small farmers, traditional farming methods and the environment. The use of centralised distribution centres also means that even if a product is produced locally, it has probably been on an epic journey before it reaches the supermarket.

Exploiting suppliers

Sourcing local produce does not mean treating local suppliers any better. In July 2002 Tesco Lotus was taken to court along with several other international retail chains including Carrefour, and found guilty of charging slotting fees to carry manufacturers’ products, charging entry fees to suppliers, advertising fees and product display fees, and displaying own-brand products next to similar branded products.

Benefiting the local economy

It is impossible for Tesco to honestly claim to benefit the local economy. It may be increasing the general traffic of money in the area where it sets up new stores – i.e. creating a culture of wanting to buy more things and encouraging people to spend more money on things they would probably not otherwise even want – but a tiny percentage of this money stays with local people, even those who have been promoted to store manager. The vast majority of profit goes towards making the corporation – and the directors and shareholders – even richer.

In the words of Boonyoong Vimuttayon, a Bangkok grocery store owner whose sales have declined by more than half since a Tesco Lotus store opened on his street four years ago: ‘The foreigners get richer and richer, while we get poorer all the time.’

Tesco is very proud of its price reductions in South East Asia -
‘Just as in the UK and Europe we carry out price campaigns to deliver unbeatable value for our customers’ –
www.tesco.com.

However, it seems to be starting a war – of prices, opening hours, and so on – that local retailers cannot possibly compete in. It is worth remembering that from Tesco’s point of view, the only serious rivals are other international companies, namely Carrefour and WalMart, and local ones who suffer as a result are merely ‘collateral damage’.

GM food dumping

According to a report from Greenpeace Southeast Asia, in 2003 a high percentage of GM soya was found in a Tesco Lotus own-brand Chinese Sausage which was not labelled as containing any GM product. The article points to Thailand’s weak labelling laws as the problem, but surely if Tesco was as committed to organic agriculture as they like to claim, there wouldn’t be GM soya in its products in the first place? It seems unlikely that Tesco would even consider taking such a risk in its UK stores, where GM is firmly on the agenda as a consumer issue.

A Greenpeace campaigner said:’The loopholes in the labelling law allow multinational companies to dump GM soya into Thailand. It is time to make this law stricter to protect consumers and give them a genuine right to know.’

The same article says that Tesco Lotus is on Greenpeace’s blacklist of businesses because of their use of GM soya and lack of labelling. Greenpeace South-East Asia continues to campaign against the use of poorer countries as ‘GM guinea pigs’.

Malaysia

Tesco has had a presence in Malaysia since 2002, and now has five stores and two more planned for 2005.57

New legislation just for Tesco

Despite having been in Malaysia for a relatively short time, and having few stores, Tesco’s presence has been controversial and a catalyst for the implementation of stricter trading laws. As of January 2004, there is a five-year freeze on the building of any new hypermarkets in Malysia’s three major cities Kuala Lumpur, Penang and Johor Bahru.

The article reporting this mentions Tesco and Carrefour specifically as foreign chains who will be affected by the ruling.

In 2003 the government ruled that plans for new hypermarkets must be submitted two years in advance and socio-economic impact studies carried out. There are also new ‘zoning rules’ which say that there can only be one hypermarket for every 350,000 people.

However, curbing Tesco’s power may prove to be difficult. In March 2004, Tesco decided to continue opening its Puchong store 24 hours a day despite having been told not to do so by the Ministry of Domestic Trade and Consumer Affairs who cited the negative effect it would have on other retailers in the area.

Local food?

When it first began moving into Malaysia in 2002, Tesco was anxious to make assurances that it would ‘work closely with local suppliers to source many own-label products locally’. However, the same article states that these products will eventually be exported to Tesco stores in other countries, so it doesn’t really come into the category of local scale production. It is very hard to imagine how such a large company, with such an emphasis on hypermarkets in so many parts of the world, can ever realistically say it is going to source products for its stores locally.

The ‘Tesco’ approach

The final plank in Tesco’s strategy is the ‘Tesco’ approach – ‘To create value for our customers, to earn their lifetime loyalty’.

Its two values are:

‘No-one tries harder than we do for customers’ ‘

‘We treat people the way we like to be treated’.

These values are, however, rather selectively applied to customers and shareholders rather than farmers and smaller competitors.

Over the 80 years since its inception, Tesco has responded to and taken advantage of major changes in lifestyle patterns, and this is key to its ongoing success. Changes have included more women entering the workplace; greater disposable incomes; fewer cooked family meals, the advent of the weekly shop, made easier by the rise in car usage; and Britain’s cheap food policy adopted after the Second World War.

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So we see that the assurances of  local procurement and development of local economy is not all that real if the Malaysia and Thailand experience is anything to go by. A national debate on this critical issue is in order! I wonder what made the government to hurry up with this policy decision in times of political uncertainties, without evolving a national consensus. More to it than meets the eye??

A must read article by Swamy

A recent article written by the maverick Subramaniam Swamy on DNA news.



The terrorist blast in Mumbai on July 13, 2011, requires decisive soul-searching by the Hindus of India. Hindus cannot accept to be killed in this halal fashion, continuously bleeding every day till the nation finally collapses. Terrorism I define here as the illegal use of force to overawe the civilian population to make it do or not do an act against its will and well-being.

Islamic terrorism is India’s number one problem of national security. About this there will be no doubt after 2012. By that year, I expect a Taliban takeover in Pakistan and the Americans to flee Afghanistan. Then, Islam will confront Hinduism to “complete unfinished business”. Already the successor to Osama bin Laden as al-Qaeda leader has declared that India is the priority target for that terrorist organisation and not the USA.

Fanatic Muslims consider Hindu-dominated India “an unfinished chapter of Islamic conquests”. All other countries conquered by Islam 100% converted to Islam within two decades of the Islamic invasion. Undivided India in 1947 was 75% Hindu even after 800 years of brutal Islamic rule. That is jarring for the fanatics.

In one sense, I do not blame the Muslim fanatics for targeting Hindus. I blame Hindus who have taken their individuality permitted in Sanatan Dharma to the extreme. Millions of Hindus can assemble without state patronage for the Kumbh Mela, completely self-organised, but they all leave for home oblivious of the targeting of Hindus in Kashmir, Mau, Melvisharam and Malappuram and do not lift their little finger to help organise Hindus. If half the Hindus voted together, rising above caste and language, a genuine Hindu party would have a two-thirds majority in Parliament and the assemblies.

The first lesson to be learnt from the recent history of Islamic terrorism against India and for tackling terrorism in India is that the Hindu is the target and that Muslims of India are being programmed by a slow reactive process to become radical and thus slide into suicide against Hindus. It is to undermine the Hindu psyche and create the fear of civil war that terror attacks are organised.

Hindus must collectively respond as Hindus against the terrorist and not feel individually isolated or, worse, be complacent because he or she is not personally affected. If one Hindu dies merely because he or she was a Hindu, then a bit of every Hindu also dies. This is an essential mental attitude, a necessary part of a virat (committed) Hindu.

We need a collective mindset as Hindus to stand against the Islamic terrorist. The Muslims of India can join us if they genuinely feel for the Hindu. That they do I will not believe unless they acknowledge with pride that though they may be Muslims, their ancestors were Hindus. If any Muslim acknowledges his or her Hindu legacy, then we Hindus can accept him or her as a part of the Brihad Hindu Samaj (greater Hindu society) which is Hindustan. India that is Bharat that is Hindustan is a nation of Hindus and others whose ancestors were Hindus. Others, who refuse to acknowledge this, or those foreigners who become Indian citizens by registration, can remain in India but should not have voting rights (which means they cannot be elected representatives).

Any policy to combat terrorism must begin with requiring each and every Hindu becoming a virat Hindu. For this, one must have a Hindu mindset that recognises that there is vyaktigat charitra (personal character) and rashtriya charitra (national character). For example, Manmohan Singh has high personal character, but by being a rubber stamp of a semi-literate Sonia Gandhi and waffling on all national issues, he has proved that he has no rashtriya charitra.

The second lesson for combating terrorism is that we must never capitulate or concede any demand, as we did in 1989 (freeing five terrorists in exchange for Mufti Mohammed Sayeed’s daughter Rubaiya) and in 1999, freeing three terrorists after the hijack of Indian Airlines flight IC-814.

The third lesson is that whatever and however small the terrorist incident, the nation must retaliate massively. For example, when the Ayodhya temple was sought to be attacked, we should have retaliated by re-building the Ram temple at the site.

According to bleeding heart liberals, terrorists are born or bred because of illiteracy, poverty, oppression, and discrimination. They argue that instead of eliminating them, the root cause of these four disabilities in society should be removed. This is rubbish. Osama bin laden was a billionaire. In the failed Times Square episode, failed terrorist Shahzad was from a highly placed family in Pakistan and had an MBA from a reputed US university.

It is also a ridiculous idea that terrorists cannot be deterred because they are irrational and willing to die. Terrorist masterminds have political goals and a method in their madness. An effective strategy to deter terrorism is to defeat those political goals and to rubbish them by counter-terrorist action.Thus, I advocate the following strategy to negate the political goals of Islamic terrorism in India.

Goal 1: Overawe India on Kashmir.
Strategy: Remove Article 370 and resettle ex-servicemen in the valley. Create Panun Kashmir for the Hindu Pandit community. Look for or create an opportunity to take over PoK. If Pakistan continues to back terrorists, assist the Baluchis and Sindhis to get their independence.

Goal 2: Blast temples, kill Hindu devotees.
Strategy: Remove the masjid in Kashi Vishwanath temple and the 300 masjids at other temple sites.

Goal 3: Turn India into Darul Islam.
Strategy: Implement the uniform civil code, make learning of Sanskrit and singing of Vande Mataram mandatory, and declare India a Hindu Rashtra in which non-Hindus can vote only if they proudly acknowledge that their ancestors were Hindus. Rename India Hindustan as a nation of Hindus and those whose ancestors were Hindus.

Goal 4: Change India’s demography by illegal immigration, conversion, and refusal to adopt family planning.
Strategy: Enact a national law prohibiting conversion from Hinduism to any other religion. Re-conversion will not be banned. Declare that caste is not based on birth but on code or discipline. Welcome non-Hindus to re-convert to the caste of their choice provided they adhere to the code of discipline. Annex land from Bangladesh in proportion to the illegal migrants from that country staying in India. At present, the northern third from Sylhet to Khulna can be annexed to re-settle illegal migrants.

Goal 5: Denigrate Hinduism through vulgar writings and preaching in mosques, madrassas, and churches to create loss of self-respect amongst Hindus and make them fit for capitulation.
Strategy: Propagate the development of a Hindu mindset.

India can solve its terrorist problem within five years by such a deterrent strategy, but for that we have to learn the four lessons outlined above, and have a Hindu mindset to take bold, risky, and hard decisions to defend the nation. If the Jews could be transformed from lambs walking meekly to the gas chambers to fiery lions in just 10 years, it should not be difficult for Hindus in much better circumstances (after all we are 83% of India), to do so in five years.

Guru Gobind Singh showed us how just five fearless persons under spiritual guidance can transform a society. Even if half the Hindu voters are persuaded to collectively vote as Hindus, and for a party sincerely committed to a Hindu agenda, then we can forge an instrument for change. And that is the bottom line in the strategy to deter terrorism in a democratic Hindustan at this moment of truth.

Behold the new star of tinsel town

This new kid needs little introduction to India. Why,for a billion people he is God-incarnate on a cricket field. But these billions are left deluded after the star has claimed that he's an actor and not a cricketer by profession. Don't believe? Check this out:


In order to save tax of around Rs 2 crore on income derived from doing TV commercials, Tendulkar told the Income Tax tribunal that acting, not cricket, is his profession. The tribunal accepted that he is an artist on the grounds that "he has to use his own skills, imagination and creativity in the commercials".
Tendulkar was levied an income tax of Rs 2,08,59,707 on the income of Rs 5,92,31,211 that he earned from ESPN Star Sports, PepsiCo and Visa in foreign currency during 2001-02 and 2004-05. He had challenged the order of the Commissioner of Income Tax-Appeal (CIT-A), to pay up. In an order on May 20, the tribunal ruled that Tendulkar could claim deduction in tax on his income from modelling as he is an artist.

Tendulkar had claimed deduction of tax under Section 80RR of the Income Tax Act. The section states that a person can claim tax deduction if he is a playwright, artist, musician, actor or sportsman and the income for which deduction is claimed is derived by him in the exercise of his profession.


So all these years he was an actor who was playing for the national cricket team just as a hobby? Can anyone get more cheap? All these years having earned himself a clean image as a honest,down to earth man this act has put him to shame,and it is amazing that our so called neutral media has not highlighted this issue! I personally am a great admirer of the man and the role he plays in inspiring millions of youngsters across the country. I opine that probably his tax consultants are to blame.In trying to save a few extra crores of tax for their client, they've inadvertently sold off his credibility and clean image.

Know your Country-II

After going underground for the past so many months, I'm back. In this intervening period,our country has been engulfed by, well, what seems like a resurgence wave,a wave against corruption in public life.

The 2-G scam which was the subject of the last article,has become a monster,with various skeletons relating to it falling from the Congress cupboard every other day. Political big-wigs and top corporate honchos have been sent to jail. As the case proceeds in court,we can expect the juggernaut to roll and many more names coming out.

One thing , that we as responsible citizens, must realise is that the 2-G is not just restricted to the people who have been jailed now.It's simply too big a fish for people like A.Raja to have convincingly handled all alone! There are bigger people behind this and they must be identified. Any fairly intelligent citzen can work this out. Is it even possible that a minister,that too,from a regional ally could have gone right against the PMs own letter saying that spectrum pricing has been questionable. Raja in response sent a letter to Dr.Manmohan Singh asking him,in effect,to stay out of the issue!! How can anyone do it so blatantly unless one had a strong backing?!

Who,at the moment,in India is stronger than the PM?? Well,no prizes for guessing. One need look no further than the TWO Gs of Indian politics- Sonia G and Rahul G. Sonia is not even her real name and sse is not an Indian citizen. Read this illuminating series of articles by Dr.Subramanium Swamy to know the real Sonia.

http://www.janataparty.org/sonia.html

more to come...

Know your country-I

We,the people of India have been witness to an endless array of scams in the past few months-2G,Adarsh,et al... The media has been having a field day running talk shows,opinion polls and even running a Tiger Campaign in the midst of all this hullaballo. We believe what we're fed by the media as news. But, is it necessarily the truth??


A few scapegoats have been conveniently blamed for the big scams(Raja,Radia,etc.)... But who's really behind these lootings??

THE 2G:

Pls read this illuminating article by Gurumurthy for a true picture of the scam and its many intricacies that can very well form the plot of the next-big box office thriller!




It is a disgusting story. Let us begin it in lighter vein. ‘2G’ seems a highly popular name today. Type ‘2G’ in Google search, you will get 55.3 million results in 0.12 seconds! In Google terms, ‘2G’ is 29 times more popular than Shah Rukh Khan; 17 times as popular as Rajnikanth. It is equally as infamous, being the largest scam ever — Rs1.76 lakh crore loot. About something so famous, and at once infamous, the whole nation is asking Manmohan Singh one question: Mr Prime Minister what do you know about ‘2G’? Even as the PM is totally silent, here comes an SMS to all cell phones. ‘The PM finally breaks his silence and says: “The only ‘2G’ I know are: ‘SoniaG and RahulG’.’ Laughing? Here is something to cry about.

On November 24, 2010, ‘SoniaG’ certified, “Manmohan Singh is more than 100 per cent honest”. The next day, she proclaimed her ‘zero tolerance’ to corruption. What a tragedy? Certificate of probity from Sonia to Singh! Could anything be more humiliating? For, only five years ago, Manmohan Singh had saved her from the Bofors scam by calling back the red corner notice against her Italian friend Ottavio Quattrocchi (Q), recipient of a third of the pay-off from Bofors. Here is that shameful story in brief. Sten Lindstorm, who was the head of the National Investigation Bureau, equal to the CBI here, had probed the Bofors pay-off in Sweden. He told Outlook (April 6, 1998) that Sonia must explain how the companies owned by Q got fat payoffs from Bofors; what was her nexus with Q; who introduced him to Bofors. Lindstorm said that Q got Bofors payoffs was confirmed. Six years later on April 8, 2004, he wrote that Sonia must be questioned on the scam, asserting, “I know what I am saying”.

The diary of Martin Ardbo, managing director of Bofors and the bribe giver, had mentioned his meeting with “Gandhi Trust lawyer”. Finally Q, who came to India long back virtually as Sonia’s baggage from Italy, behaved exactly like a thief when proof against him emerged; he slipped away from India in 1993, thanks to P V Narasimha Rao yielding to pressure from Sonia. In 1999, Sonia defended Q, pleaded he was innocent; she alleged that the NDA government was hounding him. Ten years later Singh chided his own government for harassing Q. Sonia protected the corrupt Q; Singh allowed him to escape prosecution. And Sonia, a suspect in Bofors bribery, is now the president of the Congress, and chairperson of the National Advisory Council. She condescends to certify Singh’s honesty and shamelessly proclaims that she is zero tolerant to corruption. Isn’t it a double tragedy?

Tsunami of scams

A tsunami of scams in quick succession in recent months has swamped the public domain. First of course is the ‘Raja of Scams’, the 2G Spectrum sale involving a loot of Rs 1,76,000 crore; second, how intriguingly the prime minister, now certified by the Bofors scam suspect as ‘Mr Clean’, silently first and openly later, allowed the scamsters to loot that national asset; third, how the ‘Mr. Clean’ PM sat on Subramanian Swamy’s plea to prosecute A Raja for the scam and is now hiding in legalisms to escape the blame for the delay; fourth, the transcript of the tele-conversation of the high profile PR executive Niira Radia, in which not just the politicians, but many media stars and business magnates stand naked in public for different things, including for having lobbied to make Raja telecom minister; fifth, the Commonwealth Games fraud involving Rs 8,000 crore; sixth, the Adarsh housing scam involving some Rs 600 crore. The gross value of the three loots touches almost Rs1.85 lakh crore, equal to 18.5 per cent of the national budget. Here is a sideshow, the Yeddyurappa scam. Compared to the dacoits who have looted almost Rs1.85 lakh crore, Yeddyurappa, like a frightened pickpocket who when caught, has returned the purse — the land permits — he had picked. Yet, his corruption, though petty in comparison, does make the BJP guilty of moral deficit; he has helped the Rs1.85 lakh crore-loot-accused Congress to accuse the BJP.

Fraudulent policy

The first four items relate to the 2G Scam. The Comptroller and Auditor General (CAG) estimates the 2G loot at between `67,000 crore and `1,76,000 crore. That the public lost heavily by the 2G Spectrum loot was evident on day one. Spectrum is the electromagnetic wave through which the wireless calls, SMSes and data travel from one phone or computer to another. Fraud inhered in the very policy to make spectrum available in 2008 at the price set for it in 2001.

What does selling the spectrum in 2008 at 2001 prices mean?

It is not just the inflation difference for eight years. It is like selling land in 2008 in a city (that has also grown 100 times since) at 2001 land prices. In 2008 alone the real estate stock prices rose, believe it, by 20 times. The only reason that Raja cited for this throwaway pricing was that, in 2003, the NDA government did it at 2001 prices. Look at the comparative facts, then and now. In 2003, only five out of 1,000 Indians owned a phone, globally among the lowest; the total telephone owners were 13 million; and telecom companies, in dead losses till 2006, needed support. But, between 2003 and 2008, the picture changed dramatically. The phone owning population grew by 14 times; telephone owners per thousand population by more than four and half times; telecom revenue by almost four times; telcos stock index by 4.4 times; market capitalisation of telcos by several times. The number of total cell owners was 3 million in 2001; 13 million in 2003, 180 million in 2000; now it is 688 million, 53 times more than in 2003; phone owners per thousand population rose from 3.6 in 2001 to 5 in 2003, and to over 22 in 2008; now it is over 58; Telcos’ revenue rose from Rs 48,000 crore in 2003 to 1,69,000 crore in 2008.

These data mean that the profit earning potential of spectrum was several times more in 2008, as compared to 2001. Again, the Indian mobile phone sector grew even faster after 2008. Since 2004 it was, even now it is, the fastest growing one in the world. It now adds every month 20 million phone connections; this is seven times the total all India connections of just 3 million in 2001. There is huge prosperity ahead too. The mobile phone subscriber base is expected to go up to 993 million by 2013. It needs no seer to say that selling licences in 2008 at 2001 prices was like selling gold in 2008, which will become diamond in 2013, at coal prices in 2001.

PM objects, acquiesces, defends

In September 2007, Raja announced policy to sell new mobile licences/spectrum at 2001 prices. On September 24, he announced that the cut-off date for new applications would be October 1; 575 applications were received by October 1. But a week later, on November 2, Raja stipulated that the applications received after September 25 would not be considered; that is retrospectively the cut-off date was advanced to September 25. Then, after 100 days, suddenly, at 2.30 pm on January 10, Raja announced that those who had filed their applications before September 25, could depute their representatives by 3.30 pm, that is, within 45 minutes, to collect the response and before the day ended, pay for spectrum on First Come First Served (FCFS) basis. There were skirmishes at the DoT office on January 10 to be first in the queue. This process disqualified 454 of the total of 575 applications. But, the chosen ones knew what would happen on January 10. The CAG report says, “13 applicants were ready with DDs drawn on dates prior to the notification itself” — a clear proof that they had prior information.

As the deal began to stink even earlier, in November 2007 the PM, though a month after September 24, objected to the Raja model and asked him to be transparent. Raja responded to him, within hours, insisting that he was only going by the policy (of the previous government) in force. The PM took one whole month and on January 3, 2008, he, quite intriguingly, just ‘acknowledged’ Raja’s letter — virtually giving a go-ahead to Raja. On January 10, Raja completed his fraudulent mission. But the story doesn’t end.

Finally, 15 months later, on May 24, 2010, the PM admitted that Raja had told him that he was only following the policy laid down previously — virtually approving the fraud. It needs no seer to say that to say the loot was no secret affair. It was daylight robbery; as transparent as the PM had wanted it to be. Not just Raja, the PM also must be questioned on why he objected first; why he fell into silence later; why he acquiesced subsequently and why he defended it finally.

Stench out in three ways

The stench of the scam began leaking out in three different ways. First, even before the licences were issued in January 2008, one of the aspirants for all India licence, STel Limited, made an offer to Raja in November 2007 to pay Rs13,621 crore for the licence which Raja was selling at Rs1,658 crore — that is almost nine times the 2001 price. When its offer was rejected, STel moved the Delhi High Court, which allowed its petition. Then Raja’s ministry appealed to the Supreme Court. At that point, under threats, STel owners backed off from the case. But they had set the benchmark. On the basis of STel’s offer the CAG has estimated the loss to the public at Rs 67,300 crore.

Second, two of the new players — Unitech and Swan — who got licences on FCFS basis, sold off a major chunk of shares in their companies at values which were many times the amount they had paid for the licences. Unitech, which had paid a licence fee of Rs1,658 crore, sold 67 per cent of its licence for Rs 6,120 crore; this meant that the full licence value was Rs 9,100 crore. Swan, which had paid Rs 1,537 crore, sold 44.7 per cent of the licence at Rs 3,217 crore; it meant that its licence value was Rs 7,192 crore. STel, which got small licences by paying Rs 25 crore, sold 5.61 per cent of its licence for Rs 238.5 crore; it meant that the value of its licences was Rs 4,251 crore. On the basis of these sales of licences the CAG has calculated the loss at between Rs 57,600 and 69,300 crore.

Third, on the basis of the value realised by the government by auctioning of the licences/spectrum for 3G telephony, the CAG has computed the loss in the sale of 2G licences at 2001 rates, without bidding process, at Rs1,76,645 crore. It is the CAG report that has made the stench unbearable. It came just before the Parliament Winter Session was to open. The opposition got a full toss to hit, which it promptly did. The Parliament has become dysfunctional.

What, who made PM U-turn?

The 2G loot took place in the open, to the view of all including ‘Mr Clean’ Singh and zero-corruption-tolerant Sonia. When CBI raided Raja’s ministry on October 28, 2009, and there were demands that Raja resign, he retorted, “why should I resign? I had done everything in consultation with the PM”.

The PM did not deny that statement. But, months later, on May 24, 2010, the PM said that Raja had “discussed” the issue with him. Any difference between Raja asserting that he had “consulted” the PM and the PM admitting that Raja “discussed” with him? The story is self-evident. The PM’s objection in November 2007 turned into no-objection in January 2008 and finally became his approval in May 2010. But, now, with the CAG exposing the fraud, the PM’s lips remain zipped despite demands from everyone including the Supreme Court that he speaks. Why? Here is a compelling hypothesis.

Between November 2007 and January 2008, someone must have hinted to the PM not to meddle with Raja. There is no other way PM’s November objection could become a meek non-objection in January. Who except Sonia Gandhi could turn the PM’s strong objection into a meek non-objection? And who else could make the PM defend Raja in May 2010. Assume this, then everything falls in place; otherwise nothing is explainable.

Raja, Radia, media

But a parallel development also made the stench difficult to contain. The story here is both spicy and serious. The income tax department had legally tapped the telephone lines of Niira Radia, Delhi’s most enterprising PR executive, who holds the honourable Tata group, on the one hand and the fearsome RIL group on the other. Her nine telephones were tapped for about 180 days from August 20, 2008 and again from May 11, 2009 to July 11, 2009. On the request of the CBI, which began to probe the scam in October 2009, the IT department provided, on November 20, 2009, not the whole, but a small part of the recordings. This in itself has forced many politicians, businessmen and media stars run for cover.

There are 5,400 telephonic conversations involving Niira Radia reportedly recorded; available on the Internet are a mere 102, of which only 23 have been transcribed and printed. So one can estimate the bombs still hidden.

According to the IT department’s brief to the CBI, the transcripts reveal stunning facts like: one, Niira Radia was very close to Raja and was involved in getting 2G licences for three operators, namely, Unitech, Swan, and Datacom; two, Raja himself has equity stakes in the licences he has issued; three, Radia and Kanimozhi worked through Vir Sanghvi and Barkha Dutt, two famed journalists, for negotiating to get Raja in as telecom minister after the elections in 2009; four, Radia was also close to the auditor of Rajathi Ammal, (Karunanidhi’s second wife and Kanimozhi’s mother); five, Radia was also involved in advising on the resale of the licences by Swan and Unitech; and so on. It is a shameful account whose full details are not out yet.

The legally recorded phone conversations indicate that it was Radia who first confirmed to Raja on May 24, 2009 that his name has been cleared for the telecom ministry. Go to http://www.outlookindia.com/article.aspx?268064, and click for the tapes, you can hear Raja asking Radia: “My case is clear, yes?” and Radia replying: “Yours is clear, yeah. Your case was cleared last night only.” The tapes, running to over a hundred, of which only a small part is out in the open, are said to be both juicy and sensational. For instance Radia narrates to Vir Sanghvi on May 23, 2009, at past 10.26 pm about how Dayanidhi Maran was exerting pressure through Karunanidhi’s kin Stalin, Dayalu Ammal and Selvi to get into the Cabinet, and tells, “I believe that Maran has given about 600 crores to Dayalu, Stalin’s mother”. Interesting — and disturbing — isn’t it to hear particularly about sale of ministerial positions within the political family for hundreds of crores? Space constraints cut the shameful long story short for now; more on it later.

The loot is too huge for Raja. The main beneficiaries are obviously hiding behind him. Raja could never have defied the PM on the strength of the DMK alone. The DMK could never have ditched the UPA on this issue. The fear that the DMK would walk out of UPA could not be the reason for the PM to acquiesce. The fraudulent venture must have had the backing of someone more powerful than the PM. That only explains Raja’s defiance of the PM; and the PM acquiescence first and finally his defence of the deal itself.

QED: The PM has now lost the remaining sheen as ‘Mr Clean’. The condescending certificate of honesty from Sonia, who he had saved from the Bofors case, is his ultimate humiliation.

ekam- Catch us if you can!!

It was heartening to read that 7 people were finally convicted(ah,finally!!) for the Bhopal Gas Tragedy. The court proceedings were swiftly carried out in the very short time span of just 26 years and all the guilty rapped in their knuckles as punishment. All 7 were sent out on bail that very evening so that they are free to plot more such disasters.

Just as a recap,almost 35000 people were killed when poisonous Methyl Isocyanate gas leaked from the Union Carbide factory on Dec.2-3 1984. As Stalin once said- a single death is a tragedy,a million deaths is a statistic.So it is, 35000 is just another number. No sooner did the tragedy occur,than the authorities decided that those responsible should go scot-free. After all, the UC was an American company.And,Americans are never wrong. Tremendous political will-power was displayed in not pressing charges against the guilty.

We Indians believe in karma or the cosmic order.35,000 dead??Oh!!that's sad....but what is in our hands? what can we do? Its divine will.So,we let it go. But,the grim echo of the tragedy can still be felt in Bhopal. Children are still-born or born with congenital defects.

Investigators were sent to investigate the causes and the resultant damage(need i mention that it was just an eye wash, an investigation just for filing a report saying investigation was done,almost a joke). There still exists an atmosphere of secrecy around this whole affair(The mysterious affair at bhopal-might make a good title for a poirot novel!!). People continue to suffer. Indeed, a job well done!!

Zeroth post

Hello world

I'm sridhar.Blogging has been something that i always wanted to do,but never took enough pains to.I've attempted it before but needless to say, my previous blog has become a fossil,languishing in some remote server in an unknown country. So,this is my second attempt.Hope at least i continue to post for quite some time this time around. This blog will have no subject in particular. I hope to write on whatever that grabs my infinitesimally small attention span. The title says it all i guess, randomness,confusion and indeterminism. So,that is that. I guess I've done enough justice to my zeroth post by writing seven lines(thats a new record!!last time i wrote only two). Rest is next.