Jottings: Advantage Dattatreya
Earlier, the government had to roll back a Jaitley proposal to tax EPF withdrawals after pressure from the labour ministry and trade unions
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In recent months, the labour ministry has repeatedly locked horns with the finance ministry over issues related to the Employees Providend Fund (EPF). And won too. In the latest episode, Labour and Employment Minister Bandaru Dattatreya forced Finance Minister Arun Jaitley to back down over proposed reduction in interest rate on EPF contributions. The CBT headed by the labour minister had mooted a rate of interest of 8.80 per cent whereas Jaitley proposed a rate of 8.70 per cent.
Earlier, the government had to roll back a Jaitley proposal to tax EPF withdrawals after pressure from the labour ministry and trade unions. It seems the faceoff between the two ministries is far from over. Now, Dattatreya is said to be opposed to the finance ministry’s decision to not pay depositors of EPF and small saving schemes funds that have been unclaimed for seven years. As in the earlier instances, the prime minister has been alerted and the trade unions are rallying behind the labour minister. It’s anybody’s guess who will win this round!
— Suman Jha
Time To Cut Delays
it takes anywhere between 10 and 15 years for our armed forces to get the delivery of ‘crucial for national security’ hardware. The latest Defence Procurement Policy (DPP) that came into effect on April 1 seeks to correct this anomaly by introducing changes to speed up the procurement process. However, experts point out that since the defence ministry is the sole procurer of weapons, linking the new DPP to the ‘Make in India’ programme may not be a wise move. “No global OEM is keen to transfer its latest defence technology to India. Most would want India to remain a perpetual importer,” says Amber Dubey, head, Aerospace and Defence, KPMG. There could be merit in such a thought. After all, which DPP was referred to in the now infamous AgustaWestland helicopter scam? The how, when and who of this scam continue to be a subject of debate and investigations even as politicians squabble over who should investigate it?
— Ashish Sinha
Game Of Valuations
last june, Flipkart made headlines when it raised $700 million from Tiger Global Management and other investors at a valuation of $15 billion. In less than 11 months, the e-commerce giant has seen a markdown in valuation twice over — first, by Morgan Stanley in March and recently by two small mutual fund investors at Flipkart. The venture capital (VC) fraternity too believes Flipkart’s current valuation to be anywhere between $8.8 billion and $10.5 billion. So what does this mean for Flipkart and the e-commerce sector as a whole? While the dip in valuation impacts Flipkart directly, the sector is likely to come under a cloud as the lofty valuations associated with it are likely to be looked at with suspicion by every investor now. Or will the sector just continue to attract eye-popping valuations as in the past? Only time will tell.
— Paramita Chatterjee
Making Mumbai ‘Manhattan’
Builders are notorious for naming and using brands that are foreign sounding and ‘hip’ to make their properties more saleable. For instance, Mumbai builder Lodha Developers is marketing what was once the Wadala Truck Terminal in Mumbai’s port zone as New Cuffe Parade. The original Cuffe Parade is an upscale area in south Mumbai. Another Mumbai builder, the Rustomjees, has named an old Government Colony it is redeveloping in the western suburb of Andheri as Upper Juhu to identify with the neighbouring film star enclave of Juhu where the likes of Amitabh Bachchan live. This kind of ‘snooty’ renaming is not new. In the 1990s when the mill areas of Parel first opened up for commercial development, some advertising agencies began to unilaterally use the name of Upper Worli to distance themselves from working class Parel. Fortunately, the postal department, which refused to recognise these non-existent addresses, put paid to the re-branding gambit, and Parel survives. In the new wave of builder-led branding, it is now the sons-of-the-soil parties like the Shiv Sena that have taken objection and written to the Maharashtra chief minister threatening to take to the streets if this renaming ‘fraud’ is not stopped!
— Gurbir Singh
Shoot The Messenger
All over the world, governments and tech companies are facing off on the issue of access to private interaction on email and messengers. In the US, Apple and the FBI have just ended a long battle over access to an iPhone. In Brazil, WhatsApp is blocked again by a judge’s order because apparently the company isn’t complying with orders to assist the police there in a drug investigation. In India too, ever since the messenger began to encrypt messages which can’t be broken into, access to government in the name of security and law and order is off limits. WhatsApp is apparently using a level of encryption that is beyond legal limits in India and seeing that, a certain Sudhir Yadav from Gurugram has petitioned the Supreme Court to ban WhatsApp in India. Unlikely to work, but an interesting example of the narrow view taken to solve problems which have nothing to do with technology.
— Mala Bhargava
No Need For New Laws
If the ad is smart but the product turns out to be a dud, who all is responsible? A law-in-the-making says the hot celebrity in the ad is as much to blame for duping consumers as the company which owns the brand. A parliamentary panel has suggested that celebrities be held accountable for the brands they endorse, especially if an advertisement in which they feature is found to be misleading. A parliamentary standing committee on food, consumer affairs and public distribution tabled a report on the Consumer Protection Bill 2015 in Parliament, suggesting stringent provisions to regulate celebrity endorsements. Existing laws however already address the issue. The Companies Act, 2013 states that “Any person who makes a promise or forecast that is false shall be punishable with jail of six months, extending up to 10 years.” The Food Safety and Standards Act, 2006 too has stringent provisions. The new law creates a bigger deterrent by increasing the jail term and penalty several-fold. But why put the provision in the Consumer Protection Bill? Why can’t we have a new law that gives the Advertising Standard Council of India more statutory powers to haul up both advertisers as well as celebrity endorsers?
— Monica Behura