Exclusive -Loopholes in FDI Multi-brand Retail Policy and China Connection

Exclusive -Loopholes in  FDI Multi-brand Retail  Policy and China Connection

Indian government under pressure from rich class has decided to allow 51%
Foreign direct Investment in multi brand.

Facts about Government Policy FDI in Multi-Brand Retail

1)  
FDI in multi brand retail will be allowed up to 51% foreign equity through the government approval route, subject to adequate safeguards for domestic stakeholders.

2)  
The policy rollout will cover only cities with a population of more than 1 million(As per 2011 census, there are only 53 such cities whereas there are 7935 towns and cities in India)

3)  
The policy mandates a minimum investment $ 100 million with at least half the amount to be invested in back end infrastructure, including cold chains, refrigeration, and transportation, packing, sorting, and processing. This is expected to considerably reduce the post-harvest losses and bring remunerative prices to farmers.

4)  
Sourcing of a minimum of 30% from Indian micro and small industry having capital investment of not more than $ 1 million has been made mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology up gradation and income generation. The note also points out that the government will have the first right to procurement of agricultural products.

5)  
India has a federal structure of government . The FDI policy is an enabling framework and it remains the prerogative of the states to adopt it. On ground implementation of policy will clearly be within the parameters of state laws and regulations.

Now understanding loopholes and Connection China.

1-
FDI in Multi-brand 100% is also good for India.

Now to bring FDI in India Big companies will need permission of a politician.

This is like license Raj,  Pay me 100 Billion Rupees otherwise I will not pass the  FDI file or will not give sanction.

Pay the donation to my political party otherwise I will not pass your FDI file.

In India political parties accept the donations and they are not liable to give the name of the donor if the donation is below Rs.20,000.

So Political parties will give 10 million coupons to big company and company will pay 10,000 or 20,000 for each donation coupon and no one will ever know how much donation was paid by the company.

A perfect loophole to do corruption legally.
Supreme court of India needs to take this matter and should order the lawmakers politicians to accept donations only through cheque with PAN number.

Point No. 1 = subject to adequate safeguards for domestic stakeholders

This is also another loophole to do corruption, I will ban your import of vegetable on the name of domestic stakeholders,
If you do not want ban , keep paying me and my political party and give top ranking jobs to my friends and my family members in your company.

Point no.2  =  Only 53 Cities

There is no need of above clause.
It is simple Just think
do you think in village where there is no electricity, no road and no customer any big company will open there big shop in a village

Not possible , Any businessperson or business company will prefer to open the big shop in big cities where they will make money.

Point No. 3 = minimum investment $ 100 million and 50% to be invested in back end infrastructure, including cold chains, refrigeration, and transportation, packing, sorting, and processing.

Understand the loophole the above clause is also not required.

One example –

In Mumbai city I want to open ice cream making factory and I want to invest 100 Million.

Do you think because of fear of law I will start my own cold storage or because of the need of my product.

In cold storage etc. as per my reading already FDI is allowed but no one is interested in that.

Point no. 4 - Sourcing of a minimum of 30% from Indian micro and small industry having capital investment of not more than $ 1 million
The note also points out that the government will have the first right to procurement of agricultural products.

Read point no. 4 carefully Government is silent about 70%
So this also gives lot of choice to do corruption.

Example –
Year 2014 = Food Production Rice or Sugarcane  breaks all record and same happens in china also.
Indian Rate for 1 kg rice or sugarcane is  = Rs.10 and on the other hand China rate is Rs.4
Now big company says to politician I will donate money to you and your party
Please allow me to buy rice and sugarcane from China ,
You as a politician say to your government to buy all rice and sugarcane from Indian farmers.

After that what will happen ,
big company will make more money and politician will make more money
and farmer will commit suicide.

Currently everyone knows that China is the No. 1 supplier of world.

Today everyone knows that  economy is not good in any country, which has reduced the purchasing power of American citizens.

When American citizens buy fewer products , china companies need to find another market.
Few weeks’ back media reported that Chinese warehouses  are getting filled with not sold products.

Indian government law, policy  on FDI does not mention anything about 70%  sourcing market,
thus Big companies will buy products from China, and they will sell the products in India.

This will help Chinese economy to rise and Indian farmers and small industry units will suffer.

As per media reports more than 70% products sold in Wal-Mart are made in China.

Point No. 5 –
India has a federal structure of government .
The FDI policy is an enabling framework and it remains the prerogative of the states to adopt it.
On ground implementation of policy will clearly be within the parameters of state laws and regulations.

Loophole –

There is no compulsion on state government , if state chief minister wants he can allow rich companies to open their big shop in any city , small or big is not important.
Who will stop them from this?

enabling framework and it remains the prerogative of the states to adopt it

The above lines clearly show and prove  that chief minister of state is allowed to amend and introduce any new law and policy regarding FDI in his state.

Today suppose Party A rules on state M.
Party A makes rules regarding FDI but in next elections party A loses elections
and Party B comes into power and political party B cancels all the rules
what will happen.?
more litigation and more losses to state government

Suppose Party C signs the contract that if next government cancels the laws government of India will pay  Rs. 10 Billion to the company
what will happen?

Thus 100% FDI is good for India
but Indian laws,
Indian Politicians,
Indian Judiciary,
and Sleeping Indian citizens does not deserve FDI in India.

So say no to FDI or demand change in policy which will benefit Indian citizens as well as Indian farmers.

Reality views by sm –

Monday, September 24, 2012

Tags – FDI Multi-Brand Retail