Jottings: Discount War
Future Group recently announced its plan to launch a discount scheme on the first eight days of every month at its retail arm Big Bazaar
Photo Credit : Umesh Goswami
It had to happen; when was the issue. After repeated warnings over mis-selling to customers, Mint Road has come down hard on banks and said it will impose stiff penalties. S.S. Mundra, Deputy Governor, Reserve Bank of India, put it bluntly: “The Right to Suitability enshrined in our Charter of Customer Rights has been totally ignored or rather knowingly violated for reasons best known to banks. We are seized of this issue and may be constrained to take strict actions including imposition of heavy penalties, if the banking industry continues to follow such unethical and unacceptable practices of mis-selling of third-party products.” Another point highlighted was “money muling” where idle accounts are used for receiving and transferring large funds with the account holder in the dark. It’s a clear failure on the part of banks. Ominous is Mundra’s observation: “Newly opened accounts under the PMJDY could be very vulnerable to such sharp practices.” Is anybody listening?
— Raghu Mohan
Future Group recently announced its plan to launch a discount scheme on the first eight days of every month at its retail arm Big Bazaar. Although Kishore Biyani, group CEO of Future Group, denied the scheme had anything to do with the competition with e-tailers or on-demand groceries, apparently, a price war is on between physical grocery stores and on-demand ones. The on-demand stores are battling the rising supply chain and delivery costs while physical stores are fast losing out to the convenience of online. While price will continue to be critical for both on-demand and offline models, the key will be quality and convenience. The quality of products becomes paramount in case of groceries where consumers’ health is at stake.
— Ayushman Baruah
Elephant On The Charge
The Indian elephant has begun to trot again, even as the Chinese dragon and global economy show signs of fatigue. India’s gross domestic product (GDP) grew 7.6 per cent in 2015-16, buoyed by a 7.9 per cent growth in the fourth quarter, up from 7.2 per cent in the corresponding quarter last year. The rise in the value of goods and services got a boost from a slight increase in farm production and a considerable jump in the output of refineries, power plants as well as cement, steel and fertiliser industries. The real elixir perhaps, was the overriding optimism that prevails in the economy that prompted the 7.4 per cent rise in private final consumption expenditure (PFCE), to revive domestic demand. India is obviously spinning on its own momentum, defying a global slowdown — which sadly will still hit earnings from exports, tourism and some service industries.
— Madhimita Chakraborty
Of all Prime Minister Modi’s talents, none is as visible as social media savvy. By no means young, he nevertheless seems to have been born in the age of the social web. Second only to US President Barrack Obama on Twitter and Facebook, Narendra Modi seems to have an innate understanding of the power of social media which even though is only inclusive of some segments of the Indian population, is still deep in its influence — particularly as it influences some of its most active participants, the media. Some of Modi’s posts, as shown by recent Facebook data, are staggeringly popular, specifically those showing the human side of the PM, wheeling his mother in her chair to see the gardens at his residence. Modi’s ministers have long forgotten their derision of social media and also now have large followings. If posts from the Prime Minister and his ministers were instant and relevant during times of trouble and controversy however, there is no telling how much further the popularity of their social accounts would soar, undoubtedly past that of the American president’s.
— Mala Bhargava
After the recent episodes of valuation downgrades, India’s fledgling startup ecosystem has something to cheer about. The government is considering a proposal to increase the income tax exemption period for startups to seven years from the current three, which had come in for sharp criticism. The commerce ministry is said to have taken it up with the Ministry of Finance. If through, the move will certainly give a much-needed respite to businesses that have come up in the last 3-4 years and raised capital from the investor fraternity. Today, the biggest worry of startups is how to get enough margins, how to be price competitive and how to keep customer acquisition costs low. The proposed extension will give them a breather as it will leave them with funds to expand operations, generate employment and hire quality talent. Indeed, expecting startups to break even in three years was a bit too much!
— Paramita Chatterjee
In The Fast Lane
After years of talk, high-speed trains may finally become a reality in India. The Indian Railways recently conducted the trial of Spain’s Talgo coaches between Bareilly and Moradabad in Uttar Pradesh, a distance of 90 km. The nine-coach Talgo train was pulled by a 4,500 horse power diesel engine, and covered the distance in 70 minutes running at 110-115 km per hour. The Talgo coaches are much lighter and 30 per cent more energy efficient than the existing Indian Railways coaches. After a series of trials, the Talgo coaches will be tested on the Rajdhani track between Palwal and Mathura at speeds of up to 180 km. Timing trials will follow the current phase of testing. Talgo reckons the Delhi-Mumbai journey can be completed in 12 hours compared to 17 hours it takes now by Rajdhani. Successive railway ministers belonging to different political parties have over the years talked about the feasibility of introducing high-speed trains on aging Indian tracks. But all that talk remained just that — talk. Much like the issues of maintaining cleanliness across railway stations and handling passenger complaints. With Talgo, at least a beginning has been made!
— Ashish Sinha