Posted on July 9, 2009 by Pavan Gupta
American retail giant Wal-Mart has traveled a long road from Bentonville, Arkansas to Amritsar, Punjab. Wal-Mart’s entry this week into the Indian retail market is extremely significant for both. India has a fractured retail distribution system and Wal-Mart is a pioneer in developing the concept of supply-chain management. At this point Wal-Mart is not allowed to open any retail outlets but has set up a wholesale store instead in the city of Amritsar. Even this modest entry is subject to not using the Wal-Mart brand name, instead a hybrid “BestPrice Modern Wholesale” was all that was permitted!
The Amritsar store is a joint venture between Wal-Mart and Bharti Enterprises. The Arkansas retailer plans to open 10 more outlets in India in the next couple of years. The total retail market in India is currently estimated between $350 billion to $400 billion that might grow to an estimated $1 trillion by 2020. According to Financial Times, Britain’s Marks and Spencer and Tesco have also concluded alliances with local Indian partners. It is a matter of time before other global retailers like Target join the fray. China and India offer the largest retail market on the planet!
India’s restrictive commercial laws prohibit most foreign companies from setting up shop to compete with domestic retailers. One of the reasons for that could be the legendary procurement practices of Wal-Mart known for squeezing efficiencies and profits out of suppliers and supply chains. This could drive the marginal farmers to virtual destitution. The other could be the obvious monopoly over the supply chain. These are valid reasons for any government to be skeptical of this new paradigm. There are equally compelling reasons in favor of such operations to minimize the wastage in the Indian agriculture sector including the horticulture.
Indian horticulture (fruits & vegetables) contributes 30% to the total Indian agricultural GDP of $360 billion. In other words non-grain crops in India produce a whopping $120 billion (70% of Pakistan’s entire GDP) in the total of $1.2 trillion Gross Domestic Product of India. Out of this $120 billion horticulture crop of India, 30% is wasted in the market supply chain. This translates to crop wastage of approximately $30 billion every year. This happens because of poor transport, insufficient warehousing and no significant refrigeration facilities. If Wal-Mart could reduce this wastage by even a small percentage, the entry of this American retail giant would be a boon to the Indian small and marginal farmers! The opponents must THINK about it!
Filed under: Corporate India, Indo-US relations | Tagged: Amritsar, Amritsar Punjab, Arkansas, Arkansas retailer, Arkansas to Amritsar, Bentonville, BestPrice Modern Wholesale, Bharti Enterprises, China, Financial Times, fractured retail distribution system, Gross Domestic Product of India, Indian agricultural GDP of $360 billion, Indian horticulture, Indian partners, Indian retail market, Marks and Spencer, retail outlets, supply-chain management, Target, Tesco, Wal-Mart | Leave a Comment »
Posted on July 8, 2009 by Pavan Gupta
New York State Republican Congressman Peter King has a problem with too much media coverage of Michael Jackson. Peter King also feels that there are too many unsung heroes like our soldiers, firemen, policemen and ofcourse Ronald Reagan. In his opinion the idolization of Michael Jackson has gone too far despite the fact that MJ was a world-wide phenomenon, bigger than Ronald Reagan, Bill Clinton and Barack Obama put together. Does the dim-witted congressman understand that? I guess not! Peter King called Jackson a pervert and pedophile, with zero evidence to back his statement. Michael Jackson was acquitted of all such accusations by a jury, but then the rule of law applies only to the white people in this country! What a crock, this congressman needs to go and find himself a new bimbo like honorable Republican Governor Mark Sanford of South Carolina or Nevada Senator John Ensign did. Republicans have some nerve! They need to hide behind a ‘Burka”.
Filed under: American | Tagged: Barack Obama, Bill Clinton, Burka, Michael Jackson, Nevada Senator John Ensign, New York State Republican Congressman Peter King, Peter King, Republican Governor Mark Sanford, Ronald Reagan | 1 Comment »
Posted on July 7, 2009 by Pavan Gupta
Barack Obama? He is a classical liberal who grew up moralizing complex problems and dreaming of a perfect world. The United States of America considers itself the only remaining superpower in the world and yet is unable to find a solution to any global problem. The current trip of President Obama to Russia is a perfect example of such naiveté. He believes that a bilateral arms agreement between the United States and Russia would lead to some form of global disarmament! This kind of utopian goal was possible during 1980s and not beyond that. The reason for such a dilemma arises from the contradiction between “American Exceptionalism” and multinational consensus. Americans have to choose between the two and at this point they have a very long way to go. No American leader is tall enough, including President Barack Obama to teach this country the value of knowledge of much older civilizations. America has a lot to learn from this world and not the other way around. American arrogance bothers every single country in this world, including Russia.
Filed under: American, International | Tagged: American arrogance, American exceptionalism, Americans, Barack Obama, classical liberal, New World Order, only remaining superpower, President Barack Obama, President Obama, Russia, United States of America | Leave a Comment »
Posted on July 6, 2009 by Pavan Gupta
Since when has Dalal Street become the adult in the family? The 869 points drop in Sensex index at the Bombay Stock Exchange today was childish and without merit. The fiscal deficit of 6.8 percent of GDP is high but not higher than other major economies of the world. Finance Minister Pranab Mukherjee has made it clear that it is a short term measure to consolidate the rural demand which has come to the rescue of Indian economy. Dalal Street (The Wall Street of India) has very little credibility these days as it clearly failed the investor confidence during the last 18 months. The flight of foreign capital was not large enough to justify the drop in Sensex from the high of 21,000 points plus to the low of 7,000 points plus at its worst. Corporate India failed the Indian people as the captains of our economic future. Now let Bharat take care of India since it has a much larger footprint and the recovery might be more sustainable. Dalal Street needs to learn a lesson or two!
Filed under: Indian Economy, Indian Politics | Tagged: Bharat, Bombay Stock Exchange, Corporate India, Dalal Street, federal budget, Finance Minister Pranab Mukherjee, fiscal deficit of 6.8 percent, Indian Economy, Sensex, The Wall Street of India | Leave a Comment »
Posted on July 5, 2009 by Pavan Gupta
What are these indicators and how ordinary people perceive them? Increase in demand and production are considered leading economic indicators while employment is generally considered a lagging economic indicator. This is an established measure and I do not have any dispute on that account. What I would like to add is that consumer confidence is probably a far more credible indicator of an economic recovery and vice versa. It is the lack of public confidence in the government that should send alarm bells to the financial markets. The media or the so-called fourth estate has an obligation towards their audiences to warn them of the national mood. A good example of a leading economic indicator is the stock market. A stock market provides an up-to-date data and is a direct reflection of a country’s economy. Here in the United States of America the media failed to articulate a narrative to warn the people of an impending crisis. The electronic media is so polarized between left and right, liberal and conservatives, that they ignore the reason of their very existence. We don’t really care if George W Bush was a devil and that Barack Obama is a saint. What we care about is the future of this economy and the well being of the people.
Filed under: American, International | Tagged: Barack Obama, consumer confidence, George W Bush, Increase in demand and production, leading and lagging economic indicators, United States of America | Leave a Comment »
