Saturday, December 3, 2011
Corruption and development
Corrosive corruption
Dec 2nd 2011, 16:59 source The Economist
A correlation between corruption and development
THE use of public office for private gain benefits a powerful few while imposing costs on large swathes of society. Transparency International's annual Corruption Perceptions Index, published on December 1st, measures the perceived levels of public-sector graft by aggregating independent surveys from across the globe. Just five non-OECD countries make the top 25: Singapore, Hong Kong, Barbados, Bahamas and Qatar. The bottom is formed mainly of failed states, poor African countries and nations that either were once communist (Turkmenistan) or are still run along similar lines (Venezuela, Cuba). Comparing the corruption index with the UN's Human Development Index (a measure combining health, wealth and education), demonstrates an interesting connection. When the corruption index is between approximately 2.0 and 4.0 there appears to be little relationship with the human development index, but as it rises beyond 4.0 a stronger connection can be seen. Outliers include small but well-run poorer countries such as Bhutan and Cape Verde, while Greece and Italy stand out among the richer countries.
Corrosive corruption
Dec 2nd 2011, 16:59 source The Economist
A correlation between corruption and development
THE use of public office for private gain benefits a powerful few while imposing costs on large swathes of society. Transparency International's annual Corruption Perceptions Index, published on December 1st, measures the perceived levels of public-sector graft by aggregating independent surveys from across the globe. Just five non-OECD countries make the top 25: Singapore, Hong Kong, Barbados, Bahamas and Qatar. The bottom is formed mainly of failed states, poor African countries and nations that either were once communist (Turkmenistan) or are still run along similar lines (Venezuela, Cuba). Comparing the corruption index with the UN's Human Development Index (a measure combining health, wealth and education), demonstrates an interesting connection. When the corruption index is between approximately 2.0 and 4.0 there appears to be little relationship with the human development index, but as it rises beyond 4.0 a stronger connection can be seen. Outliers include small but well-run poorer countries such as Bhutan and Cape Verde, while Greece and Italy stand out among the richer countries.
Friday, December 2, 2011
Border Trade thru Nathu La Closes for the 6th season
EXPORTS OVER NATHULA ADD UP TO NEARLY A CRORE IN OCTOBER ALONE; IMPORTS STILL OFFICIALLY ‘NIL’
source:sikkimnow
GANGTOK, 30 Nov: The sixth season of Indo-China border trade through the 14,000 feet high Nathula mountain pass came to a close today with the final day of trading marking the traditional annual bonhomie among traders of both countries. While trading too took place, the day was marked with exchange of gifts among the traders and get-togethers between relatives otherwise separated by the border. There was also a cultural programme organized at Sherathang, the trade mart on the Sikkim side, by Indian traders along with food and drinks.
Apart from traders, also present were government officials, especially from the line departments which are “ever” engaged in the seemingly never ending process of trade mart construction and upgradation at Sherathang.
As is usually the case, the last few weeks of border trade usually see a jump in the number of traders crossing over from both sides. It was no different this time either with the closing days witnessing a near doubling of trading activity. For the past few days, the number of traders from Tibet crossing over has been hovering around the 150 mark while the average of the past few months was around 80.
The volume of trade also sees in increase in the concluding days with traders from both sides working hard at accumulating as many items of trade as possible to last them the few months before trade reopens next season.
While the official balance of trade is heavily tilted in favour of the Indian traders, it would not be an exaggeration to state that with the figures of trade of unlisted items brought in by Chinese traders the border trade would be heavily in favour of the Chinese traders. However, Customs officials only keep tab of the official list goods and their statistics, and the figures they have, reveal that import of goods from China throughout 2011 has been ‘Nil’.
The official figures for import items is zero, which is to say that absolutely nothing has been imported this season, while exports to Tibetan Autonomous Region have been steadily increasing from Rs. 12 lakh in May to a maximum of Rs. 48 lakh for the August.
Exports dipped in September to Rs. 42 lakh as a result of the earthquake and the blockade of the route to Tsomgo and Nathula. The month of October again saw heightened trade with its imminent closure with almost a crore rupees worth of exports recorded.
The actual figure of exports for the month of October is Rs. 94,62,225.
Figures for the month of November are being computed.
A bulk of the export from Sikkim is of vegetable oil (dalda), which, during the month of September, was worth Rs. 20.22 lakh. Next are copper items, canned foods, blankets, textiles and tea. Cigarettes are also a favoured item of export.
In October the export of vegetable oil to Tibet more than doubled with the Customs recording Rs. 54.35 lakhs worth of Dalda being exported. This was followed by copper items at Rs. 11.43 lakh and utensils at Rs. 6.51 lakhs.
Other items of export include textiles - close to Rs. 2 lakh worth of which were exported in October; Blankets worth 2.44 lakh and tea at Rs. 3.39 lakh.
While officially there are no imports, this has sort of become a kind of joke as Chinese traders are openly seen selling blankets, shoes, jackets, quilts, thermos flasks, beer etc. Not only that Gangtok and other towns are flooded with these items which are sold at almost triple the price at Sherathang.
As far as infrastructure at the trade mart at Sherathang is concerned there has hardly been any improvement. While line departments are informed to have visited today this has become a routine affair. There are several facilities proposed for development and one such even has its completion date given as 30 November but there is nothing to be seen above the foundation level.
This is, incidentally, the sixth season of border trade between the two countries. And while that may be so, there has been absolutely no change in the list of items of trade for the past 6 years. Officials at the Industries Department inform that the center decided to continue with the existing list of items for border trade due to the lack of infrastructure and the unsuitable road conditions. The Border Roads Organisation has been engaged in road widening and double-laning works along the Sherathang route for the past 2 years.
It was also informed that the Joint Secretary, Ministry of Commerce and Industries, had visited Sikkim in the month of July to study the existing road conditions along the border trade route and also the infrastructure existing at the trade mart at Sherathang. The objective of the visit to see the feasibility of changing the status of trade but as the infrastructure and double laning of the road had not been completed nothing could be decided. Subsequently, there has been no direction from the Ministry and so the border trade continues with the present listed items
source:sikkimnow
GANGTOK, 30 Nov: The sixth season of Indo-China border trade through the 14,000 feet high Nathula mountain pass came to a close today with the final day of trading marking the traditional annual bonhomie among traders of both countries. While trading too took place, the day was marked with exchange of gifts among the traders and get-togethers between relatives otherwise separated by the border. There was also a cultural programme organized at Sherathang, the trade mart on the Sikkim side, by Indian traders along with food and drinks.
Apart from traders, also present were government officials, especially from the line departments which are “ever” engaged in the seemingly never ending process of trade mart construction and upgradation at Sherathang.
As is usually the case, the last few weeks of border trade usually see a jump in the number of traders crossing over from both sides. It was no different this time either with the closing days witnessing a near doubling of trading activity. For the past few days, the number of traders from Tibet crossing over has been hovering around the 150 mark while the average of the past few months was around 80.
The volume of trade also sees in increase in the concluding days with traders from both sides working hard at accumulating as many items of trade as possible to last them the few months before trade reopens next season.
While the official balance of trade is heavily tilted in favour of the Indian traders, it would not be an exaggeration to state that with the figures of trade of unlisted items brought in by Chinese traders the border trade would be heavily in favour of the Chinese traders. However, Customs officials only keep tab of the official list goods and their statistics, and the figures they have, reveal that import of goods from China throughout 2011 has been ‘Nil’.
The official figures for import items is zero, which is to say that absolutely nothing has been imported this season, while exports to Tibetan Autonomous Region have been steadily increasing from Rs. 12 lakh in May to a maximum of Rs. 48 lakh for the August.
Exports dipped in September to Rs. 42 lakh as a result of the earthquake and the blockade of the route to Tsomgo and Nathula. The month of October again saw heightened trade with its imminent closure with almost a crore rupees worth of exports recorded.
The actual figure of exports for the month of October is Rs. 94,62,225.
Figures for the month of November are being computed.
A bulk of the export from Sikkim is of vegetable oil (dalda), which, during the month of September, was worth Rs. 20.22 lakh. Next are copper items, canned foods, blankets, textiles and tea. Cigarettes are also a favoured item of export.
In October the export of vegetable oil to Tibet more than doubled with the Customs recording Rs. 54.35 lakhs worth of Dalda being exported. This was followed by copper items at Rs. 11.43 lakh and utensils at Rs. 6.51 lakhs.
Other items of export include textiles - close to Rs. 2 lakh worth of which were exported in October; Blankets worth 2.44 lakh and tea at Rs. 3.39 lakh.
While officially there are no imports, this has sort of become a kind of joke as Chinese traders are openly seen selling blankets, shoes, jackets, quilts, thermos flasks, beer etc. Not only that Gangtok and other towns are flooded with these items which are sold at almost triple the price at Sherathang.
As far as infrastructure at the trade mart at Sherathang is concerned there has hardly been any improvement. While line departments are informed to have visited today this has become a routine affair. There are several facilities proposed for development and one such even has its completion date given as 30 November but there is nothing to be seen above the foundation level.
This is, incidentally, the sixth season of border trade between the two countries. And while that may be so, there has been absolutely no change in the list of items of trade for the past 6 years. Officials at the Industries Department inform that the center decided to continue with the existing list of items for border trade due to the lack of infrastructure and the unsuitable road conditions. The Border Roads Organisation has been engaged in road widening and double-laning works along the Sherathang route for the past 2 years.
It was also informed that the Joint Secretary, Ministry of Commerce and Industries, had visited Sikkim in the month of July to study the existing road conditions along the border trade route and also the infrastructure existing at the trade mart at Sherathang. The objective of the visit to see the feasibility of changing the status of trade but as the infrastructure and double laning of the road had not been completed nothing could be decided. Subsequently, there has been no direction from the Ministry and so the border trade continues with the present listed items
Aerosport training institute soon be established in Mizoram
Aizawl: December 1, 2011
An Aero-sport Training Institute would soon be established in Mizoram for promotion of adventure tourism and aero-sport, said in an official statement.
Inaugurating the first Paragliding Festival and Spot Landing Competition at Serchhip on December 29, 2011, Mizoram tourism secretary B Sairengpuii said, “Adventure sports would be given emphasis to boost tourism and also to meet the sporting aspirations of the youth in the state.”
The Paragliding Festival and Spot Landing Competition was attended by 38 sportspersons including 18 from Nepal, 10 from Sikkim, six from Mizoram, two from Himachal Pradesh and one each from Sweden and Maharashtra, the statement said.
The competitors jumped with parachutes from Chuanhnuai gorge near Serchhip town and landed at Zawlpui valley near Keitum village.
PTI
Aizawl: December 1, 2011
An Aero-sport Training Institute would soon be established in Mizoram for promotion of adventure tourism and aero-sport, said in an official statement.
Inaugurating the first Paragliding Festival and Spot Landing Competition at Serchhip on December 29, 2011, Mizoram tourism secretary B Sairengpuii said, “Adventure sports would be given emphasis to boost tourism and also to meet the sporting aspirations of the youth in the state.”
The Paragliding Festival and Spot Landing Competition was attended by 38 sportspersons including 18 from Nepal, 10 from Sikkim, six from Mizoram, two from Himachal Pradesh and one each from Sweden and Maharashtra, the statement said.
The competitors jumped with parachutes from Chuanhnuai gorge near Serchhip town and landed at Zawlpui valley near Keitum village.
PTI
Sikkim submits memorandum demanding Rs 7,400 crore from Centre
Gangtok, Dec 1 (PTI) Sikkim needs an estimated Rs 7,400 crore from the Centre for long term rebuilding of the state after the devastating earthquake hit the state on September 18,official sources said here today. Sikkim Government has submitted a memorandum on November 28 to the Union Ministry of Home Affairs (MHA) demanding an estimated Rs 7,400 crore for long term rebuilding of the state after the earthquake, the sources said. The memorandum was submitted to the MHA after 17 state government departments submitted Detailed Project Reports (DPRs) on rebuilding works to be undertaken by them, they said. Earlier the Sikkim government had sought Rs 2,811.99 crore from the Centre after the earthquake. Meanwhile, Official sources here said so far the state government has received only Rs 50 crore as Central assistance, provided when Home Minister, P Chidambaram, visited Sikkim in late September. Apart from this, the state, as part of its annual allotment, had Rs 24 crore in its State Disaster Response Fund (SDRF).
Gangtok, Dec 1 (PTI) Sikkim needs an estimated Rs 7,400 crore from the Centre for long term rebuilding of the state after the devastating earthquake hit the state on September 18,official sources said here today. Sikkim Government has submitted a memorandum on November 28 to the Union Ministry of Home Affairs (MHA) demanding an estimated Rs 7,400 crore for long term rebuilding of the state after the earthquake, the sources said. The memorandum was submitted to the MHA after 17 state government departments submitted Detailed Project Reports (DPRs) on rebuilding works to be undertaken by them, they said. Earlier the Sikkim government had sought Rs 2,811.99 crore from the Centre after the earthquake. Meanwhile, Official sources here said so far the state government has received only Rs 50 crore as Central assistance, provided when Home Minister, P Chidambaram, visited Sikkim in late September. Apart from this, the state, as part of its annual allotment, had Rs 24 crore in its State Disaster Response Fund (SDRF).
Thursday, December 1, 2011
Sikkim declared disaster affected state
PTI
Gangtok, Nov 30 :PTI: Sikkim has been officially declared as a 'Disaster Affected State' by the government to avail soft loans and other facilities from banks, official sources said today. It was also to source funds from international funding agencies such as the Asian Development Bank and the World Bank, the sources said. Banks and international agencies had been approached by the state government for rebuilding efforts following the large-scale damages to infrastructure during the earthquake of September 18, they said. This is a requirement stipulated as per the Reserve Bank of India guidelines. The notification was issued on November 21, the sources said.
PTI
Gangtok, Nov 30 :PTI: Sikkim has been officially declared as a 'Disaster Affected State' by the government to avail soft loans and other facilities from banks, official sources said today. It was also to source funds from international funding agencies such as the Asian Development Bank and the World Bank, the sources said. Banks and international agencies had been approached by the state government for rebuilding efforts following the large-scale damages to infrastructure during the earthquake of September 18, they said. This is a requirement stipulated as per the Reserve Bank of India guidelines. The notification was issued on November 21, the sources said.
Skill Development Programme on Screen Printing held in Sikkim
Gangtok: November 30, 2011
There is need to exploit vast potential in development of Farm and Non Farm Sector in Sikkim and Skill Development initiative of NABARD is playing an important role in providing employment opportunities. This was stated by Om Prakash Assistant General Manager NABARD, Sikkim while inaugurating Skill Development Programme on Screen Printing at Gangtok.
The programme was organized by Sikkim Consultancy Centre, Gangtok for the development of the youth. He also said that Skill Development Initiatives (SDI) are basically aimed at persons in rural areas looking for wage employment or livelihood opportunities both through group or individual activities. SDI also envisages
development, upgrading or diversifying the existing skills of the trainees.
Support of established businessmen could also be solicited for training of candidates in the existing units. The support of Rural Financial Institutions which have close relationship with trade and industry could be effective and useful. The duration of these SDI ranged from 2 weeks to above 6 weeks depending upon the type of activity.
Activities like Handloom products, Floriculture, Beekeeping, Carpet Weaving, Food processing, Jute Handicrafts, Food & Beverages, Front Office Operations, Beauticians, Cultivation of Medicinal Plants, Tailoring & readymade garments are being supported by NABARD in Sikkim State.
While highlighting the eligibility under the programme he said that members/family members of credit or economic activity groups, individuals associated with farm / non-farm activities including service sector, artisans, unemployed youths, unskilled/ semiskilled labourers are eligible for support under the initiative.
Specific target groups such as ex-servicemen, retired/disabled soldiers and war widows and disadvantaged groups such as rag pickers, prisoners released from Jails could be supported. This is, however, only an indicative list.
Various types of institutions like Rural Financial Institutions, Civil Society Organizations, Local Self Governing Bodies such as PRI, Training Institutions, Master craftsmen/women, Business Associations (which can provide on-the-job training with the existing units) and semi government organisations are eligible for support under SDI. Although SDI aims at providing the technical skill, a broad based entrepreneurship component including aspects relating to Personality Development and business awareness etc. which lead to confidence building of the trainee may be included.
The programme coordinator of SICON, S Bhutia said that during the three week programme starting from 29 November 2011 to 19 December 2011, 21 participants will be trained and efforts would be made to ensure employment of the participants of the programme
source:sikkim mall
Gangtok: November 30, 2011
There is need to exploit vast potential in development of Farm and Non Farm Sector in Sikkim and Skill Development initiative of NABARD is playing an important role in providing employment opportunities. This was stated by Om Prakash Assistant General Manager NABARD, Sikkim while inaugurating Skill Development Programme on Screen Printing at Gangtok.
The programme was organized by Sikkim Consultancy Centre, Gangtok for the development of the youth. He also said that Skill Development Initiatives (SDI) are basically aimed at persons in rural areas looking for wage employment or livelihood opportunities both through group or individual activities. SDI also envisages
development, upgrading or diversifying the existing skills of the trainees.
Support of established businessmen could also be solicited for training of candidates in the existing units. The support of Rural Financial Institutions which have close relationship with trade and industry could be effective and useful. The duration of these SDI ranged from 2 weeks to above 6 weeks depending upon the type of activity.
Activities like Handloom products, Floriculture, Beekeeping, Carpet Weaving, Food processing, Jute Handicrafts, Food & Beverages, Front Office Operations, Beauticians, Cultivation of Medicinal Plants, Tailoring & readymade garments are being supported by NABARD in Sikkim State.
While highlighting the eligibility under the programme he said that members/family members of credit or economic activity groups, individuals associated with farm / non-farm activities including service sector, artisans, unemployed youths, unskilled/ semiskilled labourers are eligible for support under the initiative.
Specific target groups such as ex-servicemen, retired/disabled soldiers and war widows and disadvantaged groups such as rag pickers, prisoners released from Jails could be supported. This is, however, only an indicative list.
Various types of institutions like Rural Financial Institutions, Civil Society Organizations, Local Self Governing Bodies such as PRI, Training Institutions, Master craftsmen/women, Business Associations (which can provide on-the-job training with the existing units) and semi government organisations are eligible for support under SDI. Although SDI aims at providing the technical skill, a broad based entrepreneurship component including aspects relating to Personality Development and business awareness etc. which lead to confidence building of the trainee may be included.
The programme coordinator of SICON, S Bhutia said that during the three week programme starting from 29 November 2011 to 19 December 2011, 21 participants will be trained and efforts would be made to ensure employment of the participants of the programme
source:sikkim mall
Wednesday, November 30, 2011
Reasons to be wary of retail giants
by Sukhpal Singh
source:The hindubusinessline
Due to the sheer size and buying power of foreign supermarkets, producer prices may be depressed.
The global experience shows retail giants squeeze both small farmers and consumers.
Foreign direct investment (FDI) in retail has been permitted up to 51 per cent, and the FDI limit for single-brand retail has been increased to 100 per cent. The power of the State governments to decide on FDI in retail in their States has also been taken away. In this context, it is important to understand the implications of FDI in food retail for various stakeholders.
FARMERS NOT BENEFITED
The operations of domestic fresh food supermarkets in India haven't made any difference to the producer's share, other than lowering the marketing cost of producers, as supermarkets have collection centres in producing areas, unlike the Agricultural Produce Market Committee (APMC) markets (mandis) which are in distant cities.
But, these supermarkets buy only ‘A' grade produce, that too, on open market (APMC) price-based prices, and only a part of the farmers' output — those who end up going to the APMC mandi to dispose of the remaining/rejected produce. The chains procure from ‘contact' (not contract) farmers without any commitment to buy regularly, as they don't want to share the risk of the growers.
Thus, the involvement of supermarket chains with producers is low and there is no supply-chain efficiency, as many of them have already wound up, for example, in Gujarat. The clamour regarding small landholder benefit in high value crops (read fruits and vegetables) due to supermarket linkage is exaggerated, as these crops account for only 2 per cent of gross cropped area, and the direct linkage is either absent or pretty low. This isn't likely to change even with FDI in retail.
Further, due to the sheer size and buying power of foreign supermarkets, the producer prices may be depressed. There have been a large number of supermarket malpractices across the globe which include: payment and discounts from suppliers for promotions/opening of new stores; rebate from producers as a percentage of their supermarket sales; minus margins whereby suppliers aren't allowed to supply at prices higher than the competitor price; delayed payments; lowering prices at the last minute when supplier has no alternative; changing quantity/quality standards without notice; removing suppliers from their list without good reason; charging high interest on credit, using tough contracts and penalties for failing to supply.It is shocking that no restrictions have been put in place to protect the primary producer or smallholder interest when 86 per cent farmers are small or marginal. The supermarkets are known to prefer large suppliers of farm produce.
JOB LOSSES
The supermarket expansion also leads to employment loss in the value chain. As compared with 18 jobs created by a street vendor, 10 by a traditional retailer and eight by a shop vendor in Vietnam, a supermarket such as Big C needed just four persons for the volume of produce handled.
Metro Cash & Carry employed 1.2 workers per tonne of tomatoes sold in Vietnam, compared with 2.9 persons employed by a traditional wholesale channel for the quantity sold. The spread of supermarkets led to 14 per cent reduction in the share of ‘mom and pop' stores in Thailand within four years of FDI permission. In India, 33-60 per cent of the traditional fruit and vegetable retailers reported 15-30 per cent decline in footfalls, 10-30 per cent decline in sales and 20-30 per cent decline in incomes across cities of Bangalore, Ahmedabad and Chandigarh, the largest impact being in Bangalore, which is one of the most supermarket-penetrated cities in India.
INTERNATIONAL EXPERIENCE
The evidence from Latin American (Mexico, Nicaragua, Argentina), African (Kenya, Madagascar) and Asian countries (Thailand, Vietnam, India) shows that the supermarket prices for fruits and vegetables and some other basic foods were higher than those in traditional markets. Also, lower procurement prices by procuring directly from farmers needn't lead to lower consumer prices in supermarket chains.
Low-income households may face higher food prices because of reasons of distance from supermarkets, and higher prices charged by supermarkets in low-income areas. Supermarkets would lead to concentration of market power, with upstream suppliers facing buyer power in terms of lower prices and consumers (buyers) facing higher prices due to lower competition, besides traditional retailers suffering a decline in their business.
POLICY ISSUES
The biggest fear in India is that there may not be adequate institutions and effective governance mechanisms to monitor the operations of the global retailers.
If the monitoring of wholesale ‘cash n carry' stores so far is any indication, there is no regulation and the norms are flouted openly at the store level by the existing players. They are found to do retail sales in the garb of wholesale as the size of a single purchase (minimum ticket size) is just Rs 500 or Rs 1000, which doesn't seem to be governed by any regulation.
Given the global and the Indian experiences of supermarkets so far, it was important to slow down food supermarket expansion by mechanisms like zoning, business licenses, and trading restrictions. Further, there is a need to limit the buying power of the supermarkets by strengthening the competition laws, like the legal protection given to subcontracting industries in Japan in their relations with large firms.
These provisions are monitored by the Fair Trade Commission. If contract or ‘contact' farming is only another name for subcontracting, then it is only logical to extend such legal provisions with necessary modifications to farming contracts.
(The author is Professor, Institute of Economic Growth (IEG), Delhi.)
by Sukhpal Singh
source:The hindubusinessline
Due to the sheer size and buying power of foreign supermarkets, producer prices may be depressed.
The global experience shows retail giants squeeze both small farmers and consumers.
Foreign direct investment (FDI) in retail has been permitted up to 51 per cent, and the FDI limit for single-brand retail has been increased to 100 per cent. The power of the State governments to decide on FDI in retail in their States has also been taken away. In this context, it is important to understand the implications of FDI in food retail for various stakeholders.
FARMERS NOT BENEFITED
The operations of domestic fresh food supermarkets in India haven't made any difference to the producer's share, other than lowering the marketing cost of producers, as supermarkets have collection centres in producing areas, unlike the Agricultural Produce Market Committee (APMC) markets (mandis) which are in distant cities.
But, these supermarkets buy only ‘A' grade produce, that too, on open market (APMC) price-based prices, and only a part of the farmers' output — those who end up going to the APMC mandi to dispose of the remaining/rejected produce. The chains procure from ‘contact' (not contract) farmers without any commitment to buy regularly, as they don't want to share the risk of the growers.
Thus, the involvement of supermarket chains with producers is low and there is no supply-chain efficiency, as many of them have already wound up, for example, in Gujarat. The clamour regarding small landholder benefit in high value crops (read fruits and vegetables) due to supermarket linkage is exaggerated, as these crops account for only 2 per cent of gross cropped area, and the direct linkage is either absent or pretty low. This isn't likely to change even with FDI in retail.
Further, due to the sheer size and buying power of foreign supermarkets, the producer prices may be depressed. There have been a large number of supermarket malpractices across the globe which include: payment and discounts from suppliers for promotions/opening of new stores; rebate from producers as a percentage of their supermarket sales; minus margins whereby suppliers aren't allowed to supply at prices higher than the competitor price; delayed payments; lowering prices at the last minute when supplier has no alternative; changing quantity/quality standards without notice; removing suppliers from their list without good reason; charging high interest on credit, using tough contracts and penalties for failing to supply.It is shocking that no restrictions have been put in place to protect the primary producer or smallholder interest when 86 per cent farmers are small or marginal. The supermarkets are known to prefer large suppliers of farm produce.
JOB LOSSES
The supermarket expansion also leads to employment loss in the value chain. As compared with 18 jobs created by a street vendor, 10 by a traditional retailer and eight by a shop vendor in Vietnam, a supermarket such as Big C needed just four persons for the volume of produce handled.
Metro Cash & Carry employed 1.2 workers per tonne of tomatoes sold in Vietnam, compared with 2.9 persons employed by a traditional wholesale channel for the quantity sold. The spread of supermarkets led to 14 per cent reduction in the share of ‘mom and pop' stores in Thailand within four years of FDI permission. In India, 33-60 per cent of the traditional fruit and vegetable retailers reported 15-30 per cent decline in footfalls, 10-30 per cent decline in sales and 20-30 per cent decline in incomes across cities of Bangalore, Ahmedabad and Chandigarh, the largest impact being in Bangalore, which is one of the most supermarket-penetrated cities in India.
INTERNATIONAL EXPERIENCE
The evidence from Latin American (Mexico, Nicaragua, Argentina), African (Kenya, Madagascar) and Asian countries (Thailand, Vietnam, India) shows that the supermarket prices for fruits and vegetables and some other basic foods were higher than those in traditional markets. Also, lower procurement prices by procuring directly from farmers needn't lead to lower consumer prices in supermarket chains.
Low-income households may face higher food prices because of reasons of distance from supermarkets, and higher prices charged by supermarkets in low-income areas. Supermarkets would lead to concentration of market power, with upstream suppliers facing buyer power in terms of lower prices and consumers (buyers) facing higher prices due to lower competition, besides traditional retailers suffering a decline in their business.
POLICY ISSUES
The biggest fear in India is that there may not be adequate institutions and effective governance mechanisms to monitor the operations of the global retailers.
If the monitoring of wholesale ‘cash n carry' stores so far is any indication, there is no regulation and the norms are flouted openly at the store level by the existing players. They are found to do retail sales in the garb of wholesale as the size of a single purchase (minimum ticket size) is just Rs 500 or Rs 1000, which doesn't seem to be governed by any regulation.
Given the global and the Indian experiences of supermarkets so far, it was important to slow down food supermarket expansion by mechanisms like zoning, business licenses, and trading restrictions. Further, there is a need to limit the buying power of the supermarkets by strengthening the competition laws, like the legal protection given to subcontracting industries in Japan in their relations with large firms.
These provisions are monitored by the Fair Trade Commission. If contract or ‘contact' farming is only another name for subcontracting, then it is only logical to extend such legal provisions with necessary modifications to farming contracts.
(The author is Professor, Institute of Economic Growth (IEG), Delhi.)
New Delhi, Nov. 29:
Coal shortage is beginning to reflect in the spot electricity rates, which have risen steadily to an average of around Rs 5 per unit in the Southern region and close to Rs 4 per unit in the rest of the country.
Tuesday's peak electricity rates on the IEX — the country's largest power exchange — were recorded at Rs 9 in the South and close to Rs 6 in the other parts of the country, as coal supplies to the sector, manifested in terms of the fuel stocks at key coal-fired stations, are slipping again after a mild recovery in the middle of last month.
Tuesday, November 29, 2011
Doctor-Patient Ratio in the Country
As per information furnished by Medical Council of India (MCI), the total number of doctors registered (allopathic) in the country till 31st July, 2011, is 8,56,065 out of which approximately six lac are presently active practitioners. The current doctor-population ratio has been worked out to be approximately 1:2000.
A large number of steps have been taken to address shortage of doctors, specialists and faculty in the country:
1. The norms for setting up of a medical college in terms of requirement for land, faculty, staff, bed/ bed strength and other infrastructure have been relaxed.
2. Teacher-student ratio has been relaxed to increase the seats at Postgraduate level.
3. DNB qualifications have been recognized for appointment to various faculty posts in medical colleges.
4. Maximum intake capacity at MBBS level has been increased from 150 to 250.
5. Maximum age for appointment of faculty has been enhanced from 65 to 70 years.
6. 46 new medical colleges have been set up between 2009-11.
7. Under the scheme of `Strengthening and Upgradation of State Government Medical Colleges`, financial support to State medical colleges is being provided to increase postgraduate seats in various disciplines or start new postgraduate medical courses.
This information was laid by Union Minister of Health and Family Welfare Shri Ghulam Nabi Azad in Rajya Sabha today.
As per information furnished by Medical Council of India (MCI), the total number of doctors registered (allopathic) in the country till 31st July, 2011, is 8,56,065 out of which approximately six lac are presently active practitioners. The current doctor-population ratio has been worked out to be approximately 1:2000.
A large number of steps have been taken to address shortage of doctors, specialists and faculty in the country:
1. The norms for setting up of a medical college in terms of requirement for land, faculty, staff, bed/ bed strength and other infrastructure have been relaxed.
2. Teacher-student ratio has been relaxed to increase the seats at Postgraduate level.
3. DNB qualifications have been recognized for appointment to various faculty posts in medical colleges.
4. Maximum intake capacity at MBBS level has been increased from 150 to 250.
5. Maximum age for appointment of faculty has been enhanced from 65 to 70 years.
6. 46 new medical colleges have been set up between 2009-11.
7. Under the scheme of `Strengthening and Upgradation of State Government Medical Colleges`, financial support to State medical colleges is being provided to increase postgraduate seats in various disciplines or start new postgraduate medical courses.
This information was laid by Union Minister of Health and Family Welfare Shri Ghulam Nabi Azad in Rajya Sabha today.
We need national health cover
India perhaps needs a health system similar to the UK's National Health Service. Price control does not address the needs of the poor, who would do better with free medicine.
by P T Jyothi Data
Is it time for a national health security net, possibly on the lines of the United Kingdom's National Health Service? The poser from a senior Government official handling healthcare, to three journalists, came as they discussed the recently unveiled draft National Pharmaceutical Policy.
Sitting in a chamber, a corridor-walk away from another mega-meeting where pharmaceutical industry representatives debated challenges facing them — the Government official admitted: access is the key to improving healthcare across the country.
More than half the country's people are not covered by modern medicine and yet the country claims to be a medicine shop to the world, he said. The draft pharmaceutical policy does attempt to walk the tight-rope between keeping medicines affordable, while facilitating growth in the pharma industry. Despite this, does the draft drug policy achieve what it sets out to do? Or is it time for some innovative thinking to dramatically improve the delivery of healthcare on the ground?
Not all-encompassing
For a policy that seeks to make medicines affordable, the Government-run Jan Aushadhi stores (that sell less expensive unbranded medicines) just about finds a mention. And same is the fate with health insurance or public-private partnerships.
Drug-makers, domestic and multinational, concur that the Government needs to sit across the table and work-out sourcing and manufacturing partnerships. Medicines can be got at better prices from the drug-makers, and this can be distributed at lower prices or even free by the Government through its programmes or retail chains.
The industry would have no reason to complain, as it is guaranteed steady volumes. In fact, this is the rationale on which the Clinton or Bill Gates Foundations source from Indian drug-makers to supply across the world.
Making a similar point, healthcare consultant Mr Ranga Iyer says, the draft drug policy is “not all-encompassing”. Formerly heading multinational drug-maker Wyeth, besides the Organisation of Pharmaceutical Producers of India (a platform largely for overseas drug companies), he wonders who the draft pharmaceutical policy actually addresses.
The absolute bottom of the pyramid does not benefit from it as they cannot afford medicine at any cost and need free supplies from the Government. People from the economically-lower background need medicines at reduced prices, from a public distribution system. The Government has Jan Aushadhi shops, but there is but a brief mention of it in the draft policy. And at the top of the pyramid, the ultra-rich does not really get affected by fluctuating medicine prices. So the draft policy really targets about 150 million odd people in the mid-strata, he says.
While pricing cannot be ignored – it is not the only worry. The draft drug policy recommends that all 348 drugs mentioned in the National List of Essential Medicines be brought under price control. It further suggests that combinations of medicines with these drugs mentioned in the List also be brought under price control. And the ceiling price on medicines be fixed at the weighted average of the top three players in a particular dosage of a single ingredient medicine.
This again is tricky. It could result in a downward revision of prices of a top brand, and a possible upward price revision of lower brands. So a cancer medicine costing Rs 1 lakh could see a downward revision — especially if the average of the drug's price were taken with two generically similar medicines, priced at say Rs 10,000. But this also gives a less known generically-similar brand more head room to increase prices.
Trade Margins
Another key factor not taken into account by the draft policy are margins forked out by drug-makers to the trade. It is 16 per cent and 8 per cent to the retailer and wholesaler respectively, on price controlled drugs and at least 30 per cent in non-price controlled drugs, with 20 per cent going to the retailer.
Ask Government and industry on why they do not address the margins that, in fact, affect the price the consumer pays on a medicine - and both pass the buck to the other.
Dr Devi Shetty, Founder of Narayana Hrudayalaya hospital, has a different take on tackling prices. Drawing an alarming picture of the doctor, nurse and para-medical staff shortages that India faces — he says, medicine prices will come down only when more doctors prescribe medicines, driving up volumes. No amount of money will help, if you do not have the manpower to prescribe medicines or deliver healthcare, especially in rural areas, he says.
Price needs to be tackled through a combination of better sourcing, distribution and competition. Even at less than one rupee, iron capsules did not reach those who needed it, points out Mr Iyer, recounting his Wyeth experience.
Responding to concerns whether medicine prices would see an increase, following recent buy-outs of local drug operations by foreign companies, he adds: “We should stop seeing the East India Company in everything.”
Patented drugs, critical and essential drugs or just regular medicines — the way forward is through partnerships with drug-makers. Not just to source finished medicines that can be distributed through fair-price or public distribution systems, but also technology. Government can get ailing public sector drug companies to source technology from private drug-makers to make essential drugs for local consumption.
Health insurance
And significantly, healthcare will indeed receive a shot in the arm if the country brings in a national health cover — where young people pay during their productive years to get their healthcare expenses taken care of by the State, at a later date. A system effective in developed countries.
It is time the Government mandated that people put aside about 2 per cent of their salaries towards health insurance, agrees Mr Iyer.
However, Dr Shetty observes, just getting tax-payers to pitch in for health-insurance is a flawed system. The health insurance net should be across the board and participatory. Everyone should pay an amount towards getting coverage when they require it, he says, citing the successful Yashaswini Health Insurance Scheme in Karnataka.
It should not be a donor-driven scheme, but a self-funding scheme, he says, pointing out awareness and participation was important for the success of health insurance. “We have 750 million people who are willing to pay Rs 150 per month to speak on a mobile phone,” he says, adding that getting a nominal payment towards health insurance should not be difficult.
The Government should merely play the role of an intermediary and re-insurer, he says. “We produce the largest number of doctors and nurses…the most number of USFDA (United States Food and Drug Administration)-approved plants (outside the US). We have everything going for us. We just need to connect the dots,” he says.
And with the Government and industry, for a change, being on the same page — national healthcare cover to address access and affordability seems to be an idea whose time has come
source;hindubusinessline
by P T Jyothi Data
Is it time for a national health security net, possibly on the lines of the United Kingdom's National Health Service? The poser from a senior Government official handling healthcare, to three journalists, came as they discussed the recently unveiled draft National Pharmaceutical Policy.
Sitting in a chamber, a corridor-walk away from another mega-meeting where pharmaceutical industry representatives debated challenges facing them — the Government official admitted: access is the key to improving healthcare across the country.
More than half the country's people are not covered by modern medicine and yet the country claims to be a medicine shop to the world, he said. The draft pharmaceutical policy does attempt to walk the tight-rope between keeping medicines affordable, while facilitating growth in the pharma industry. Despite this, does the draft drug policy achieve what it sets out to do? Or is it time for some innovative thinking to dramatically improve the delivery of healthcare on the ground?
Not all-encompassing
For a policy that seeks to make medicines affordable, the Government-run Jan Aushadhi stores (that sell less expensive unbranded medicines) just about finds a mention. And same is the fate with health insurance or public-private partnerships.
Drug-makers, domestic and multinational, concur that the Government needs to sit across the table and work-out sourcing and manufacturing partnerships. Medicines can be got at better prices from the drug-makers, and this can be distributed at lower prices or even free by the Government through its programmes or retail chains.
The industry would have no reason to complain, as it is guaranteed steady volumes. In fact, this is the rationale on which the Clinton or Bill Gates Foundations source from Indian drug-makers to supply across the world.
Making a similar point, healthcare consultant Mr Ranga Iyer says, the draft drug policy is “not all-encompassing”. Formerly heading multinational drug-maker Wyeth, besides the Organisation of Pharmaceutical Producers of India (a platform largely for overseas drug companies), he wonders who the draft pharmaceutical policy actually addresses.
The absolute bottom of the pyramid does not benefit from it as they cannot afford medicine at any cost and need free supplies from the Government. People from the economically-lower background need medicines at reduced prices, from a public distribution system. The Government has Jan Aushadhi shops, but there is but a brief mention of it in the draft policy. And at the top of the pyramid, the ultra-rich does not really get affected by fluctuating medicine prices. So the draft policy really targets about 150 million odd people in the mid-strata, he says.
While pricing cannot be ignored – it is not the only worry. The draft drug policy recommends that all 348 drugs mentioned in the National List of Essential Medicines be brought under price control. It further suggests that combinations of medicines with these drugs mentioned in the List also be brought under price control. And the ceiling price on medicines be fixed at the weighted average of the top three players in a particular dosage of a single ingredient medicine.
This again is tricky. It could result in a downward revision of prices of a top brand, and a possible upward price revision of lower brands. So a cancer medicine costing Rs 1 lakh could see a downward revision — especially if the average of the drug's price were taken with two generically similar medicines, priced at say Rs 10,000. But this also gives a less known generically-similar brand more head room to increase prices.
Trade Margins
Another key factor not taken into account by the draft policy are margins forked out by drug-makers to the trade. It is 16 per cent and 8 per cent to the retailer and wholesaler respectively, on price controlled drugs and at least 30 per cent in non-price controlled drugs, with 20 per cent going to the retailer.
Ask Government and industry on why they do not address the margins that, in fact, affect the price the consumer pays on a medicine - and both pass the buck to the other.
Dr Devi Shetty, Founder of Narayana Hrudayalaya hospital, has a different take on tackling prices. Drawing an alarming picture of the doctor, nurse and para-medical staff shortages that India faces — he says, medicine prices will come down only when more doctors prescribe medicines, driving up volumes. No amount of money will help, if you do not have the manpower to prescribe medicines or deliver healthcare, especially in rural areas, he says.
Price needs to be tackled through a combination of better sourcing, distribution and competition. Even at less than one rupee, iron capsules did not reach those who needed it, points out Mr Iyer, recounting his Wyeth experience.
Responding to concerns whether medicine prices would see an increase, following recent buy-outs of local drug operations by foreign companies, he adds: “We should stop seeing the East India Company in everything.”
Patented drugs, critical and essential drugs or just regular medicines — the way forward is through partnerships with drug-makers. Not just to source finished medicines that can be distributed through fair-price or public distribution systems, but also technology. Government can get ailing public sector drug companies to source technology from private drug-makers to make essential drugs for local consumption.
Health insurance
And significantly, healthcare will indeed receive a shot in the arm if the country brings in a national health cover — where young people pay during their productive years to get their healthcare expenses taken care of by the State, at a later date. A system effective in developed countries.
It is time the Government mandated that people put aside about 2 per cent of their salaries towards health insurance, agrees Mr Iyer.
However, Dr Shetty observes, just getting tax-payers to pitch in for health-insurance is a flawed system. The health insurance net should be across the board and participatory. Everyone should pay an amount towards getting coverage when they require it, he says, citing the successful Yashaswini Health Insurance Scheme in Karnataka.
It should not be a donor-driven scheme, but a self-funding scheme, he says, pointing out awareness and participation was important for the success of health insurance. “We have 750 million people who are willing to pay Rs 150 per month to speak on a mobile phone,” he says, adding that getting a nominal payment towards health insurance should not be difficult.
The Government should merely play the role of an intermediary and re-insurer, he says. “We produce the largest number of doctors and nurses…the most number of USFDA (United States Food and Drug Administration)-approved plants (outside the US). We have everything going for us. We just need to connect the dots,” he says.
And with the Government and industry, for a change, being on the same page — national healthcare cover to address access and affordability seems to be an idea whose time has come
source;hindubusinessline
Permanent and Temporary Workers
According to the survey conducted by National Sample Survey Office during 2009-10 and the information collected under the Employment Market Information Programme of the Ministry of Labour and Employment, the total number of workers in organised and unorganised sectors was 2.87 crore and 43.7 crore respectively, in 2009-10. Information on permanent and temporary workers in the country is not maintained separately.
The details of average daily earnings (in Rs.) of the workers are as follows as per Labour Bureau Report, 2007-08 on Average Daily Earnings:
All India - 186.86
Public Sector - 398.67
Joint Sector - 377.76
Private Sector - 182.11
In order to have a uniform wage structure and to reduce the disparity in minimum wages across the country, concept of National Floor Level Minimum Wage was mooted on the basis of the recommendations of the National Commission on Rural Labour (NCRL) in 1991. On the basis of increase in the Consumer Price Index, the Central Government has recently revised the National Floor Level Minimum Wages to Rs.115/- per day with effect from 01.04.2011.
This information was given by the Minister of Labour and Employment Shri Mallikarjun Kharge in reply in reply to a written question in the Lok Sabha today.
According to the survey conducted by National Sample Survey Office during 2009-10 and the information collected under the Employment Market Information Programme of the Ministry of Labour and Employment, the total number of workers in organised and unorganised sectors was 2.87 crore and 43.7 crore respectively, in 2009-10. Information on permanent and temporary workers in the country is not maintained separately.
The details of average daily earnings (in Rs.) of the workers are as follows as per Labour Bureau Report, 2007-08 on Average Daily Earnings:
All India - 186.86
Public Sector - 398.67
Joint Sector - 377.76
Private Sector - 182.11
In order to have a uniform wage structure and to reduce the disparity in minimum wages across the country, concept of National Floor Level Minimum Wage was mooted on the basis of the recommendations of the National Commission on Rural Labour (NCRL) in 1991. On the basis of increase in the Consumer Price Index, the Central Government has recently revised the National Floor Level Minimum Wages to Rs.115/- per day with effect from 01.04.2011.
This information was given by the Minister of Labour and Employment Shri Mallikarjun Kharge in reply in reply to a written question in the Lok Sabha today.
THE OECD, a rich-country think-tank, issued its latest round of economic projections for its member countries and other important emerging markets on November 28th. Its baseline scenario involves a mild recession in Europe and a slowdown across the rest of the rich world. Euro-area GDP growth is expected to fall from 1.6% this year to 0.2% in 2012. Meanwhile America's economy is expected to register a healthier 2%. Taken as a whole, the 34 countries that make up the OECD account for around two-thirds of global GDP, but the OECD expects its members to contribute just 28% to quarterly world GDP growth on average between 2012 and 2013.
source:The Economist
Monday, November 28, 2011
Insecure China
Insecure China
''India cannot give in to unreasonable pressure.''
India did well not to succumb to Chinese pressure over the holding of the global Buddhist congregation in Delhi this week and over the presence of the Dalai Lama at the conference, even though the high-level border talks between national security advisor Shivshankar Menon and China’s special representative Dai Bingguo, which were to be held at the same time, had to be postponed.
The two events were separate and had nothing to do with each other. The congregation, which is being held to mark 2,600 years of enlightenment of the Buddha, is mainly a private event, though the government has supported some side events associated with it. Therefore India could not have conceded Beijing’s demand for cancellation of the conference, though the President and Prime Minister, who were to take part in the conference chose to stay away. The congregation is a major event for Buddhist monks and scholars from all over the world and had been scheduled long ago. India also could not have prevented the Dalai Lama from participating in it because it is a religious event and had nothing political about it.
The Dalai Lama has studiously avoided any political activity in India, and India has taken care to ensure that the actions of neither the spiritual leader nor his supporters violated the terms set down long ago.
It has always been India’s position that the Dalai Lama is a guest and it would not place any restrictions on his activities as a religious and spiritual leader. China has been obsessively sensitive to the Tibetan leader, probably because it feels insecure about its presence in Tibet where even recently monks had protested against denial and violation of human rights. In the circumstances the best solution was to postpone the border talks, which might now be held in December.
There have been other recent irritants in relations, like China’s objection to Indian companies’ role in hydrocarbon exploration in the disputed South China Sea and New Delhi’s unhappiness over China’s activities in Pakistan-occupied Kashmir.
This is unfortunate. But there is no need for India to give in to any pressure and concede any unreasonable demand made by Beijing. China may want to assert its power and strength in its neighbourhood and in the global arena. India also has its own interests to protect and promote. An unequal and weak relationship will not help India to reach a fair and satisfactory resolution of its disputes with China.
source:Deccan herald
''India cannot give in to unreasonable pressure.''
India did well not to succumb to Chinese pressure over the holding of the global Buddhist congregation in Delhi this week and over the presence of the Dalai Lama at the conference, even though the high-level border talks between national security advisor Shivshankar Menon and China’s special representative Dai Bingguo, which were to be held at the same time, had to be postponed.
The two events were separate and had nothing to do with each other. The congregation, which is being held to mark 2,600 years of enlightenment of the Buddha, is mainly a private event, though the government has supported some side events associated with it. Therefore India could not have conceded Beijing’s demand for cancellation of the conference, though the President and Prime Minister, who were to take part in the conference chose to stay away. The congregation is a major event for Buddhist monks and scholars from all over the world and had been scheduled long ago. India also could not have prevented the Dalai Lama from participating in it because it is a religious event and had nothing political about it.
The Dalai Lama has studiously avoided any political activity in India, and India has taken care to ensure that the actions of neither the spiritual leader nor his supporters violated the terms set down long ago.
It has always been India’s position that the Dalai Lama is a guest and it would not place any restrictions on his activities as a religious and spiritual leader. China has been obsessively sensitive to the Tibetan leader, probably because it feels insecure about its presence in Tibet where even recently monks had protested against denial and violation of human rights. In the circumstances the best solution was to postpone the border talks, which might now be held in December.
There have been other recent irritants in relations, like China’s objection to Indian companies’ role in hydrocarbon exploration in the disputed South China Sea and New Delhi’s unhappiness over China’s activities in Pakistan-occupied Kashmir.
This is unfortunate. But there is no need for India to give in to any pressure and concede any unreasonable demand made by Beijing. China may want to assert its power and strength in its neighbourhood and in the global arena. India also has its own interests to protect and promote. An unequal and weak relationship will not help India to reach a fair and satisfactory resolution of its disputes with China.
source:Deccan herald
Sunday, November 27, 2011
Bear phases in the Indian market
source: hindubusinessline
A look at the corrective phases in Indian market in the past decade and what caused them.
Sensex has lost 676 points in last five trading sessions resulting in loss of Rs 1.25 lakh crore for investors. The stocks of BHEL, Hindalco Industries, ICICI Bank, Larsen & Toubro and Tata Steel are at 52-week lows now. But, this is not the first time the bears have come out on a prowl.
The Indian stock market has been through many corrective phases before and the stock exchange archives even report instances of Sensex closing on a down-circuit freeze by falling up to 10 per cent in a day! May 17, 2004, May 22, 2006 and October 17, 2007 will always be remembered as dark days in Indian stock market history, for the markets did the unimaginable by hitting the 10 per cent lower circuit.
We take a look at the corrective phases in Indian market since 2000, when they happened and what caused it. Lessons from history perhaps bring back hopes that the current phase shall too pass by.
2000: dot-com bubble
The frenzied buying in tech stocks saw equity markets across the globe peak out in the year 2000.
Any company with a business plan in internet technology received venture capital funding effortlessly and got a free-door entry to the capital markets with investors willing to bet on them at any price.
The climax however came sooner than expected. The tech-heavy US Index NASDAQ crashed in April 2000 as technology companies were caught in a cash crunch situation. The problems in the US echoed in India too.
Technology companies back home were beaten up badly on concerns that they will not be able to keep up with the growth expectations, as the US, their key export market, had run into troubles.
From a high of 6,150 in February-2000, Sensex dropped to 3,943 in May-2000. In the same period, the BSE IT index fell by 71 per cent. Other sectors such as- auto, capital goods, healthcare and metal were sparred with losses of 20-40 per cent.
DSQ Software, one of the heavily traded tech stocks then was among the ones to be worst hit (the stock has been suspended and it doesn't trade in the exchanges now).
2004: political Uncertainty
The correction that started in February 2000 ended in September 2001 with Sensex touching a low of 2,600.
Post that, Sensex started edging up steadily till it took a halt in April 2004 (at 5,926) when political uncertainty in the country brought troubles for the market.
With the BJP government's defeat in Central elections, the UPA led by Congress came to power in 2004.
But, with the decision of who will sit in the Prime Minister's chair itself hanging in air for many days, there were doubts about the coalition-led UPA government's ability in addressing economic woes of the country.
Foreign institutional investors pulled out money from India stocks and the markets went into a sharp correction.
On May 17, trading was halted twice in Sensex with the index dropping more than 10 per cent (Sensex fell 842 points intraday and closed 565 points lower for the day) and hitting down-circuit.
Stocks in engineering, infrastructure and capital goods space that are largely dependant on government spending faced investor wrath. Crompton Greaves, Engineers India, SAIL were among the worst performers on May 17 falling over 20 per cent.
2006: DTAA worries
As the new government settled in the centre Sensex began its uphill journey. On May 10, 2006, Sensex touched a new high of 12,612.
But after that celebrations didn't last. In the global markets, metal prices faced correction on slowdown in Chinese demand.
This set in a panic in equity markets across globe and FIIs started pulling out cash from Indian equities too.
Meanwhile, the pressure on the ruling government from the Left Parties to rethink levying long-term capital gains tax on equity investments and scratching the double taxation avoidance agreement (DTAA) with Mauritius also started to weigh on investor sentiments.
On May 22, the Sensex fell 1,111 points intraday and hit down circuit. The consumer durables and metal stocks were the worst hit.
The BSE Metal index was down 7 per cent for the day; Hindustan Zinc dropped 20 per cent.
Large-caps such as Reliance Industries (dropped 5 per cent to Rs 466), ICICI Bank (fell less than one per cent) and Bajaj Auto (dropped 2.5 per cent) contained losses.
2007and 2008: Regulatory action
The markets which were moving at a steady pace hit a block in 2007 when SEBI proposed to curb participatory notes.
On October 17, 2007 Sensex hit a down-circuit by dropping over 1,700 points in minutes of opening of trade as FIIs pressed the ‘sell' button in panic. But this phase too passed and the markets rallied to cut 20K mark by end October, 2007.
And from here the index edged up to 21K in January 2008. But that was the end of the good times, as the rest of year was only a nightmare for investors. The row of bankruptcy filing by US' big mortgage banks on sub-prime losses shocked the whole world.
Global equity indices faced sharp corrections. The Indian benchmark Sensex plunged, drifting lower and lower every month; the index hit a low of 8160 in March 2009.
From the lows of March-2009, Sensex recovered to touch 21K again in November 2010.
But it was not long before the index lost its gains to negative news developments. Doubts over the recovery in the US, continuing pain in the debt-ridden Europe, falling rupee, put together have managed to turn the tide. Last Friday, Sensex closed at 15695.
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