Jul 7, 2013

Getting all of India to buy the FDI idea in retail

 


The recent proposal to do away with stringent riders if foreign direct investment is below the majority stake was spurred by the marked diffidence on the part of global retail giants to invest more in India.
Last year, the Government allowed 51 per cent FDI in multi-brand retail, subject to prior approval and fulfilment of strict conditions. While the move was announced with fanfare, investors were not as enthused. Apart from further rationalisation of FDI norms, other important issues need to be ironed out to encourage investors and fuel growth in the sector.

Central Sector Regulator

A typical feature of retail business models is the plethora of statutory approvals to commence operations and open outlets — consent for operating diesel generator sets, fire no objection certificate, trade licence, registration of warehouse, Food Safety and Standards Authority of India (FSSAI) licence, and so on.
In addition there are business-specific licences such as agricultural produce market committee licence, licence for sale and storage of dairy products and insecticides, and authorisation to play copyrighted music, besides approvals from local municipal authorities.
The lack of a central agency for single-window clearance adds to the challenge. Chasing multiple government agencies invariably results in project delays and cost overruns.
A central sector regulator may not be a panacea for all the problems, but it could significantly alleviate the pain involved. International anti-corruption legislations — namely, the Foreign Corrupt Practices Act, and the UK Bribery Act — have deterrent provisions with extra-territorial reach. Some leading global brands are under the scanner for corruption which, apart from severe penal consequences, could erode brand value.
Single-window clearance could, to a large extent, tackle corruption.

Getting A nod from States

Currently, States can implement this policy, and this discretionary power entails an element of uncertainty — the States can impose additional conditions. As of now, only 11 States have conveyed their approval, which means a significant part of the country is still out of bounds. This could be a dampener for global companies seeking a pan-India footprint. While the Government has issued clarifications on numerous issues, others still need to be addressed — such as sourcing restrictions amongst ‘group companies’, requirement of 30 per cent sourcing from small industries and so on, as they could impact business plans and strategies.

Keep it simple

The underlying objective of any regulatory regime is to simplify and encourage compliance. Regulatory transgressions can happen due to ignorance about the statutory approvals required. An easily accessible inventory of statutory approvals could make life easier for law-abiding corporate citizens. In mature jurisdictions, this practice is already in vogue, as it encourages compliance and promotes transparency and fair play.
The retail sector has immense potential, and foreign participation is necessary to provide impetus to growth. A simplified approach, with the right kind of controls, is the need of the hour. The administrative machinery should produce results — and, more importantly, be perceived as an enabler and not a bottleneck for growth.
The Government has moved in a positive direction and sent out the right signals for creating a conducive environment. It now needs to give a decisive push.
Harpreet Singh is Executive Director, and Pankaj Tewari is Senior Manager, Risk Advisory Services, PwC India

DINAMALAR NEWS


அரசின் தடையை மீறிபுகையிலை விற்பனை

பனமரத்துப்பட்டி: தமிழக அரசின் தடை உத்தரவை மீறி, வாரச்சந்தையில் புகையிலை விற்பனை அமோகமாக நடக்கிறது.தமிழக அரசு, மே, 23ம் தேதி முதல், போதை வஸ்துகள் விற்பனைக்கு தடை விதித்தது. அரசின் தடை உத்தரவை மீறி, போதை பொருட்களை பதுக்கி வைத்து, விற்பனை செய்வேர் மீது அதிகாரிகள் நடவடிக்கை எடுத்து வருகின்றனர்.நகரப்பகுதியில் பான்பராக், குட்கா, பான்மசாலா, ஹான்ஸ் உள்ளிட்டவைகளை இளைஞர்கள் அதிக அளவில் பயன்படுத்தி வருகின்றனர். அதே போல், கிராம பகுதியில் உள்ள முதியவர்கள், பெண்கள் புகையிலையை வெற்றிலை பாக்குடன் சேர்த்து பயன்படுத்துகின்றனர்.புகையிலை பயன்படுத்துபவர்களுக்கு வாய், முகம், தொண்டை ஆகிய பகுதியில், புற்றுநோய் பாதிப்பு, நரம்பு மண்டலம் பாதிப்பு உண்டாகிறது.பனமரத்துப்பட்டி, மல்லூர், நாழிக்கல்பட்டி, குள்ளப்பநாயக்கனூர் வார சந்தைகளில் புகையிலை அமோகமாக விற்பனை செய்யப்படுகிறது. மல்லூர், பனமரத்துப்பட்டியில் வெற்றிலை, பாக்கு விற்பனை செய்வோர் புகையிலை சேர்த்து, மளிகை கடை, பீடா கடைகளுக்கு மொத்தமாக விற்பனை செய்கின்றனர்.அரசின் தடை உத்தரவை மீறி, கடைகளில் புகையிலை விற்பனை செய்வதை கட்டுப்படுத்தாமல், உணவு பாதுகாப்பு துறை அதிகாரிகள் அலட்சியம் காட்டுகின்றனர்.

Small tea growers’ body seeks awareness campaign

Kolkata, July 5
The Confederation of Indian Small Tea Growers Associations, the apex body of small tea growers’ associations, has urged the Tea Board to organise workshops to make small tea growers aware of the issues such as maximum residue level (MRL) and food and safety standards which have become critically important for tea producers.
In an appeal , B.G. Chakraborty, President, Cista, has urged M.G.V.K. Bhanu, Chairman, Tea Board, to launch on a pilot basis the awareness campaigns for small growers in Assam, North Bengal and Niligirs in partnership with the Tea Research Association and Food Safety & Standards Authority of India.
Currently, the majority of small growers, being devoid of any scientific knowledge of cultivation, are greatly influenced by the local agro-chemical dealers in regard to the use of pesticides.
This has to be abandoned in favour of adoption of proper agriculture practices to produce good quality tea with proper use of chemicals, Chakraborty emphasises.

HC issues notice to Centre over tobacco ban PIL

The Odisha High Court on Friday issued notice to the Central Government in response to an amended PIL seeking prohibition in manufacture, sale and marketing of smokeless tobacco products like gutkha, zarda, pan masala, khaini and gudakhu which contain nicotine that causes cancer.
A Division Bench of the High Court comprising Justices Pradeep K Mohanty and SK Mishra ordered issue of notices to the Union Government when the petitioner, Centre for Legal Aid to Poor (CLAP) filed an amended petition as was allowed last week. The Union Government has been asked to file counters within four weeks, and the matter would come up for further adjudication after that, informed the petitioner’s lawyer Janmenjaya Katakia.
It may be mentioned that the Odisha Government in January this year had issued a notification banning manufacture, sale and consumption of gutkha pursuant to a notification issued by the Government of India in August 2012 as per the Food Safety and Standards (Prohibition and Restriction on Sales) Act of 2006.
Challenging the notification, the CLAP had moved the HC alleging that the notification is ambiguous and not comprehensive; as a result, it did not yield any result.
Responding to the notice of the HC, the State Government informed that the notification was issued in pursuant to the Government of India notification.
The State Government also informed that it has no problem in issuing another notification banning manufacture, sale consumption of other forms of chewing tobacco, if the Union Government amends its notification. Accordingly, the High Court allowed the petitioner to amend its petition arraying the Union Government as an opposite party.

Gutkha Ban - HC Notice to Centre

The Orissa High Court on Friday issued a notice to the Centre on extending the ban on gutkha and pan masala containing tobacco or nicotine to zarda and other forms of chewing tobacco.

The division bench of Justice PK Mohanty and Justice SK Mishra, while accepting an amended petition filed by Bikash Das of Committee for Legal aid to Poor (CLAP) and MD Imran Ali making the Union Government a party in the case, has directed it to file an affidavit within four weeks.

The petitioners submitted that when most of the items were covered under the Food Safety and Standard Act, 2006, only products like gutkha and pan masala containing tobacco and nicotine as ingredients have been banned leaving out zarda and chewing tobacco.

Therefore, the doubt is created and taking advantage of the flaw in Act, the ban is not being enforced in letter and spirit, they alleged.

Staff crunch hits inspection of eateries

The Greater Hyderabad Municipal Corporation (GHMC) authorities appear to have been turning a blind eye towards the quality of food items being served at various hotels, restaurants and other eateries in the city.

The GHMC is finding it tough to identify and address the safety hazards in various eating establishments due to lack of staff.

The Greater Hyderabad, with a population of nearly 80 lakh, has around 18,000 big, medium, small hotels and restaurants with valid trade licenses. Another 10,000 eating establishments are being run without valid trade licenses in all 18 GHMC circles. However the GHMC has only four food safety officers (Food Inspectors) working in its limits to monitor these establishments.
In the last three years, the GHMC has managed to take action against only 234 eating establishments by just penalising them with meager amounts. The total penalties collected since 2010 is Rs 23,400 only.
Lack of regular monitoring and surprise raids is encouraging a majority of medium and small hotels, restaurants in the city to serve adulterated food items, risking the health of the customers.
Dead cockroaches, houseflies and other insects in the food items are a common sight thanks to the unhygienic conditions maintained at the eateries.
Speaking to the Express, GHMC officials said that the main role of food safety officers is to frequently inspect all the food establishments for licenses, manufacturing, handling, selling of an food article within the areas under their purview.
The food inspectors should also procure food samples and send it for analysis if necessary. Thet should ensure that the sample of food is being manufactured, stocked and sold in accordance to the provisions being by the regulations set by the government.
The officials concerned should also investigate into complaints received from the consumers. The GHMC is finding it tough to identify and address the safety hazards in various eating establishments due to lack of staff.
In 2010, about 45 cases were booked and a penalty of `4,500 was collected. As many as 54 cases were registered in 2011 and a fine of `5,400 was charged and in 2012, the food inspectors registered 135 cases with a penalty of `13,500. There is no data of cases of available for this current year.
The GHMC officials say that each circle should have at least one food inspector to check the quality of food and maintenance in the hotels.