We need to contain subsidies, money doesn't grow on trees, Manmohan Singh says

September 21, 2012

Dr.Manmohan-singh

New Delhi, September 21: Justifying the recent decisions on FDI and diesel price hike, Prime Minister Manmohan Singh on Friday said the time has come for "hard decisions" and asked the countrymen not to be misled by those trying to confuse them by spreading fear like in 1991.

In a rare televised address to the nation, he insisted that the concerns over allowing FDI in retail were "baseless" as there is enough scope for big and small retailers to grow.

Noting that fears had been created in 1991 when he as finance minister had initiated economic reforms, Singh said those behind the scare "did not succeed then" and "they will not succeed now".

He justified the hike in diesel price and cap of six cylinders on subsidized LPG, saying these were required in the difficult economic situation and to avoid increase in fiscal deficit that would lead to steep rise in cost of essential commodities.

"No government likes to impose burdens on the common man ... At the same time, it is the responsibility of the government to defend the national interest, and protect the long term future of our people ..." Singh said.

"We have much to do to protect the interests of our nation and we must do it now. At times, we need to say 'no' to the easy option and say 'yes' to the more difficult one. This happens to be one such occasion. The time has come for hard decisions," he said, adding, "for this, I need your trust, your understanding and your cooperation."

He recalled that the last time the nation faced this problem was in 1991. "Nobody was willing to lend us even small amounts of money then. We came out of that crisis by taking strong, resolute steps. You can see the positive results of those steps," he said. "We are not in that situation today, but we must act before people lose confidence in our economy," Singh said.

Underlining that the government was at a "point where we can reverse the slowdown in our growth", he said, "We need a revival in investor confidence domestically and globally. The decisions we have taken recently are necessary for this purpose".

He made the 15-minute address to the nation in Hindi and English against the backdrop of uproar over the recent decisions to allow FDI in multi-brand retail, Rs 5 increase in diesel price and cap on subsidized LPG cylinders.

A tough-talking Prime Minister said, "money doesn't grow on trees. If we had not acted, it would have meant a higher fiscal deficit."

He told the nation that he would do "everything necessary" to put the country back on the path of high and inclusive growth.

"But I need your support. Please do not be misled by those who want to confuse you by spreading fear and false information," Singh appealed to the countrymen, adding he had full faith in their wisdom.

"As Prime Minister of this great country, I appeal to each one of you to strengthen my hands so that we can take our country forward and build a better and more prosperous future for ourselves and for the generations to come," he said.

Contending that his government has been voted to office twice to protect the interests of the 'aam admi', the Prime Minister said, "we must ensure that the economy grows rapidly" which would generate enough productive jobs for the youth of our country. "Rapid growth is also necessary to raise the revenues we need to finance our programmes in education, health care, housing and rural employment," he said.

While justifying the hard decisions of the government, Singh referred to the "great difficulty" being encountered by the world economy with even the US and Europe struggling to deal with an economic slowdown and financial crisis. Even China is slowing down, he said.

"We too have been affected, though I believe we have been able to limit the effect of the global crisis," Singh said.

Recalling that in the past eight years the economy has grown at a record annual rate of 8.2 per cent, the Prime Minister said the government has ensured that poverty has declined much faster, agriculture has grown faster, and rural consumption per person has also grown faster.

"We need to do more, and we will do more. But to achieve inclusiveness we need more growth. And, we must avoid high fiscal deficits which cause a loss of confidence in our economy," Singh said. Referring to the crisis witnessed in 1991, he said, "I would be failing in my duty as Prime Minister of this great country if I did not take strong preventive action."

He said he was determined to see that India is not pushed into a situation like the one encountered by Europe where many countries are not able to pay their bills, have to cut wages or pensions and are looking to others for help. "But I can succeed only if I can persuade you to understand why we had to act," Singh underlined.

Referring to the decision to allow foreign investment in retail trade, he said, "Some think it will hurt small traders. This is not true."

He noted that organised, modern retailing is already present in the country and growing, with all major cities having large retail chains.

Talking specifically about Delhi, Singh said it has many new shopping centres but has also seen a three-fold increase in small shops in recent years.

"In a growing economy, there is enough space for big and small to grow. The fear that small retailers will be wiped out is completely baseless," Singh asserted.

He said the opening of organised retail to foreign investment will benefit farmers.

"According to the regulations we have introduced, those who bring FDI have to invest 50 per cent of their money in building new warehouses, cold-storages, and modern transport systems.

"This will help to ensure that a third of our fruits and vegetables, which at present are wasted because of storage and transit losses, actually reach the consumer. Wastage will go down; prices paid to farmers will go up; and prices paid by consumers will go down," he said.

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Agencies
August 3,2020

Rajouri, Aug 3: Ashfaq Mehmood Choudhary, a 17-year-old boy from Chattyear of Jammu and Kashmir's Rajouri district, has developed a file-sharing app 'Dodo Drop' which would enable users to share audios, videos, images, and texts between two devices without Internet access.

While speaking to media persons, Ashfaq Mehmood said that the 'Dodo Drop' application is an alternative to the Chinese 'SHAREit' app. "The Indian government has banned several Chinese apps due to data breaching, and among those apps was SHAREit which was used for sharing files.

Users faced a lot of problems due to the ban, and so I decided to make this file-sharing app. With 'Dodo Drop', users can share audios, videos, images, and even texts," he said.

Ashfaq said that it took him four weeks to develop the application, and it was launched on August 1 this year. The 'Dodo Drop' application has a transfer rate of up to 480 mbps, which is faster than the SHAREit app and is "quite easy" to use.

"Users can transfer data comprising photos, videos, audios, apps, texts, etc. between two devices with no Internet access. The transfers are fully encrypted and secure," he added.

"Our Prime Minister has always asserted the need for decreasing the dependency on foreign products and apps and to focus on the development of India-based apps. I tried to be part of the initiative of 'Aatmanirbhar Bharat' by developing an India-based file-sharing app. I want to develop global-standard apps for India," he added.

"We support and cooperate with him. He generates his own income by working on some projects and utilises it. We will continue to support him," said Parvez Ahmed Choudhary, Ashfaq's father.

In July, the Ministry of Electronics and Information Technology (MEITY) banned 47 apps, which were variants and cloned copies of the 59 apps banned earlier in June. These banned clones included SHAREit Lite, Tiktok Lite, Helo Lite, BIGO LIVE Lite, and VFY Lite.

The 59 apps had been banned by the Centre in June in view of the information available that they were engaged in activities which were "prejudicial to sovereignty and integrity and defence" of the country.

Almost all the apps banned had some preferential Chinese interest and the majority had parent Chinese companies.

The ban came amid border tensions with China in the Eastern Ladakh region.

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Agencies
February 6,2020

Mumbai, Feb 6: The Reserve Bank of India, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth.

The central bank retained GDP growth at 5 per cent for 2019-20 and pegged it at 6 per cent for the next fiscal.

"Economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo,” the Monetary Policy Committee (MPC) said.

The six-member committee voted unanimously to hold rates, but also said that there is “policy space available for further action”.

Between February and October 2019, the RBI had reduced repo rate by 135 basis points.

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News Network
March 16,2020

Mar 16: An investigation into Coffee Day Enterprises Ltd., initiated by its board after the death of founder V.G. Siddhartha, is likely to conclude that at least Rs 2,000 crore is missing from its accounts, according to people familiar with the matter.

The months-long probe following the suicide of Siddhartha in July examined the financial transactions of India’s largest coffee chain and its dealings with dozens of private companies owned by the entrepreneur. The draft report, running more than a hundred pages, points to thousands of rupees that have gone missing, said the people, asking not to be named because the details aren’t public. It also details hundreds of transactions between the founder’s listed and personal businesses that were not conducted at arm’s length, they said.

Though the report is in its final stages, the precise details could change before its release, expected as early as this week, the people said. The missing funds could total more than Rs 2500 crore, one person said.

“The investigation report is still a work in progress, and not finalized,” a spokesman for the company said. “The board of directors and the company are unaware of its content at this point of time. Hence it would be premature to speculate on the investigation findings.”

The priority for management and Siddhartha’s family “is to keep the business running in a challenging environment and meet all stakeholder commitments, including 30,000 jobs associated with the group,” the spokesman added.

The disappearance of the 59-year-old founder last year stunned India’s business community. He had last been seen telling his driver he was going for an evening walk along a bridge in southern India; his body was found by local fishermen two days later. A letter delivered to Coffee Day’s board and employees, which appeared to be signed by Siddhartha, described massive debts and complained of pressure from lenders and tax authorities. It claimed he bore sole responsibility for the company’s financial transactions.

The probe began about a month later when the company brought in Ashok Kumar Malhotra, a retired senior official from India’s federal enforcement agency, to investigate. A senior lawyer practicing in India’s top court is assisting, the company said in a regulatory filing at the time.

The publicly traded Coffee Day was supposed to be India’s answer to Starbucks Corp. More than 1,500 of its Café Coffee Day outlets blanketed cities and highways, with affordable options for the country’s aspiring middle classes. The chain’s tagline: “A lot can happen over coffee.”

But the empire has been battered since the founder’s death. Its shares plummeted about 90% and its market value dropped to about $80 million. Trading was suspended in February.

India’s regulators are tracking the situation and may use the company’s final report as part of a deeper dive into its internal affairs, the people said. Coffee Day showed about Rs 2400 crore in cash and cash equivalents on its balance sheet as of March 2019, the most recent figures the company has issued.

After the death of Siddhartha however, the company faced a severe liquidity crunch and had “zero cash in the bank,” according to one of the people. It struggled with day-to-day expenses and paying salaries has been a strain, the person said.

The draft report details personal guarantees by Siddhartha for loans taken by Coffee Day, and his unsecured loans at high interest rates from local money lenders, the people said. It also probes Coffee Day’s defaults to coffee growers and other vendors, they said.

A related issue is that coffee estates owned by Siddhartha and several employees had been used as collateral for bank loans. The report found that valuations for properties were inflated to get the loans, one person said.

Investigators have examined several theories about what happened to the company’s money, including whether Coffee Day was manipulating its finances to show cash and profit and whether Siddhartha was taking cash out of the listed company to pay off a large investor to whom he had guaranteed a return, the person said. From the filings of his listed and private companies, the entrepreneur’s loans had totaled more than Rs 10,000 crore, and he had been squeezed by borrowing to repay interest on earlier loans, the person said.

In the letter purportedly from Siddhartha, the entrepreneur said he had tried his best but failed as an entrepreneur. “I am solely responsible for all mistakes,” the letter read. “Every financial transaction is my responsibility. My team, auditors and senior management are totally unaware of all my transactions. The law should hold me and only me accountable, as I have withheld this information from everybody including my family.”

As the report nears release, Coffee Day is finalizing a deal with Blackstone Group Inc. for real estate assets. A large tranche of the payment is due in about a week, one person said.

Coffee Day said it is working to reduce its debt load by divesting non-core enterprises.

“The aim is to save employment and preserve this iconic Indian brand,” the spokesman said.

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