General Affairs
Chennai Floods: Tamil Nadu Government to Operate Mobile Vegetable Shops
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CHENNAI: With prices of vegetables touching the dark rainy clouds in Chennai, the Tamil Nadu government today announced operation of 11 mobile vegetable shops in 32 localities.
In a statement issued, the state government said owing to the heavy rains vegetable supplies have come down, resulting in their prices going up.
In order to reach vegetables to the common man and also bring down the prices, 11 mobile vegetable shops would be operated in 32 localities in Chennai, the government said.
The mobile shops would be operated in Saidapet, Anna Nagar, T. Nagar, Nungambakkam, Teynampet, Mylapore, Kodambakkam, Royapettah, Gopalapuram, Tondaiarpet and other localities.
The government on Friday had announced that people could travel free of cost in the city buses between December 5-8.
Meanwhile, fear of fuel shortage has resulted in long queues at petrol stations across the city.
A worker at a petrol station in South Chennai told IANS that fresh supplies were expected in two days.
He also said they had to clean the underground fuel tanks as flood water had entered them.
CHENNAI: With prices of vegetables touching the dark rainy clouds in Chennai, the Tamil Nadu government today announced operation of 11 mobile vegetable shops in 32 localities.In a statement issued, the state government said owing to the heavy rains vegetable supplies have come down, resulting in their prices going up.
In order to reach vegetables to the common man and also bring down the prices, 11 mobile vegetable shops would be operated in 32 localities in Chennai, the government said.
The mobile shops would be operated in Saidapet, Anna Nagar, T. Nagar, Nungambakkam, Teynampet, Mylapore, Kodambakkam, Royapettah, Gopalapuram, Tondaiarpet and other localities.
The government on Friday had announced that people could travel free of cost in the city buses between December 5-8.
Meanwhile, fear of fuel shortage has resulted in long queues at petrol stations across the city.
A worker at a petrol station in South Chennai told IANS that fresh supplies were expected in two days.
He also said they had to clean the underground fuel tanks as flood water had entered them.
Manmohan Singh Slams Modi Government, Says Economy Facing Fragile Recovery
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NEW DELHI: Former prime minister Manmohan Singh today slammed the policies of the Narendra Modi government, saying economy faces fragile recovery, there was inadequate job creation and uncertainty ahead for public enterprises.
Addressing the 31st plenary session of Indian National Trade Union Congress (INTUC) in New Delhi, he said there was dissatisfaction among workers over "anti-labour and unimaginative economic policies of the NDA government".
"The trade union movement has to be aware that at present Indian economy faces a fragile recovery and inadequate expansion of employment opportunities. Public enterprises face an uncertain future," he said, adding employment-oriented programmes such as Mahatma Gandhi National Rural Employment Guarantee Act face reduced allocations.
"In the name of structural labour reforms, efforts are being made to reduce the scope for secure industrial jobs in favour of contract labour and hire and fire approach. It is generally agreed that we need at least 500 million skilled workers by 2022. The actual pace on the ground is only a fraction of this target," he said.
Mr Manmohan Singh said industrial strife, strikes and lockouts were not the best means to resolve unrest.
"We must enlarge the available space for resolving industrial problems through peaceful dialogue involving all the stake holders of the tripartite process - namely workers, industry and government."
He said Congress has always believed that trade union movement is an integral part of social democracy and every encouragement ought to be provided to promote collective bargaining to secure for labour a just and fair share of development's benefits, but the movement has to take into account fast-changing social and economic conditions and make an objective assessment of the present regime's economic and social policies and their implications for the working classes.
Noting that removing poverty was a major task before the country and requires a high rate of economic growth and a rapid increase in employment opportunities, Mr Manmohan Singh said there was a broad consensus that India's economy needs to grow at an annual rate of about eight per cent and there should be productive new job opportunities for 10-12 million people every year.
He said the trade union movement can play a very important role in ensuring that the growth process is both inclusive as well as environmentally sustainable and INTUC's agenda of job creation, respect for labour standards and rights at work responds well to these imperatives.
"This visionary agenda rightly focuses on providing productive job opportunities to young workers, ensure zero gender discrimination, and expanding the frontiers of social security focusing on health, education and housing and guarantee of freedom of association and collective bargaining," he said.
He called on INTUC to expand its coverage to cover more workers in the unorganised sectors such as agriculture and construction and pay particular attention to needs of women workers. INTUC, which came into existence in 1947, must also play a more important role in programmes relating to workers education and skill development, he added.
Addressing the 31st plenary session of Indian National Trade Union Congress (INTUC) in New Delhi, he said there was dissatisfaction among workers over "anti-labour and unimaginative economic policies of the NDA government".
"The trade union movement has to be aware that at present Indian economy faces a fragile recovery and inadequate expansion of employment opportunities. Public enterprises face an uncertain future," he said, adding employment-oriented programmes such as Mahatma Gandhi National Rural Employment Guarantee Act face reduced allocations.
"In the name of structural labour reforms, efforts are being made to reduce the scope for secure industrial jobs in favour of contract labour and hire and fire approach. It is generally agreed that we need at least 500 million skilled workers by 2022. The actual pace on the ground is only a fraction of this target," he said.
Mr Manmohan Singh said industrial strife, strikes and lockouts were not the best means to resolve unrest.
"We must enlarge the available space for resolving industrial problems through peaceful dialogue involving all the stake holders of the tripartite process - namely workers, industry and government."
He said Congress has always believed that trade union movement is an integral part of social democracy and every encouragement ought to be provided to promote collective bargaining to secure for labour a just and fair share of development's benefits, but the movement has to take into account fast-changing social and economic conditions and make an objective assessment of the present regime's economic and social policies and their implications for the working classes.
Noting that removing poverty was a major task before the country and requires a high rate of economic growth and a rapid increase in employment opportunities, Mr Manmohan Singh said there was a broad consensus that India's economy needs to grow at an annual rate of about eight per cent and there should be productive new job opportunities for 10-12 million people every year.
He said the trade union movement can play a very important role in ensuring that the growth process is both inclusive as well as environmentally sustainable and INTUC's agenda of job creation, respect for labour standards and rights at work responds well to these imperatives.
"This visionary agenda rightly focuses on providing productive job opportunities to young workers, ensure zero gender discrimination, and expanding the frontiers of social security focusing on health, education and housing and guarantee of freedom of association and collective bargaining," he said.
He called on INTUC to expand its coverage to cover more workers in the unorganised sectors such as agriculture and construction and pay particular attention to needs of women workers. INTUC, which came into existence in 1947, must also play a more important role in programmes relating to workers education and skill development, he added.
'Modi Government Deliberately Weakening Labour Laws', Says Rahul Gandhi
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NEW DELHI: Congress vice-president Rahul Gandhi today launched a scathing attack on Prime Minister Narendra Modi, accusing him of making deliberate attempts to weaken labour-related laws which was creating dissatisfaction among the workers.
Alleging that PM Modi has launched a "big assault" on the workers, a combative Rahul Gandhi said he would fight their battle.
"We will fight for the cause of the workers and stand with them and would not retreat an inch. We will fight BJP, Modi and RSS," he said while addressing the trade union wing of the Congress.
Mr Gandhi said although he agreed with the Prime Minister's idea of turning India into a global manufacturing centre to make it more competitive than China, the unanimity ends there.
This, he alleged, was because the Prime Minister considers Indian worker as "dishonest, shirker and one who could be made to work only by wielding the stick".
He said that is why the labour laws were being diluted, so that the workers come to his knees. "If you look at the new laws being made in Gujarat, Rajasthan and Haryana, you will see that PM Modi has started a big assault on workers," he said.
He also alleged that the Prime Minister feels that there was a need to weaken the labour laws and "discipline" the workers so that they could be forced to work. PM Modi feels that with a 'hire and fire' policy and weakening of unions, the workers will be made to work, Mr Gandhi said.
"I do not agree that our worker is either shirker or indisciplined... Our worker is scared. He is scared of his future, the future of his children. The worker is scared whether the job he has today will be there tomorrow. Will the factory gate open for him tomorrow," the Congress leader said.
Insisting that the government should become "judge" between the labourers and the industry and "not advocate" of industry, he told the Prime Minister that if he is able to remove fear from the mind of the workers then India would be able to surpass China in no time.
Addressing the gathering, former Prime Minister Manmohan Singh said the "dissatisfaction" of workers with the "anti-labour and unimaginative" economic policies of the NDA government was obvious from the one day general strike observed in the country on September 2.
Mr Gandhi's attack on the Modi dispensation came after Indian National Trade Union Congress (INTUC) chief G Sanjeeva Reddy accused the government of launching an "assault" on interests of the labourers in various ways.
Mr Reddy alleged that the government was not recognising INTUC as the largest trade union organisation in the country with 3.31 crore members despite "submission of all documents for verification".
Mr Gandhi said "PM Modi had attempted to acquire lands of farmers by promulgating the land ordinance thrice but Congress MPs resisted and ensured that it was not done."
He alleged that "now the Prime Minister's attempt is to break the safety net for workers which was built over decades by the Congress when it was in power."
Claiming that whoever was advising the Prime Minister on labour matters was "wrongly advising" him, Mr Gandhi said the workers would take India to greater heights if their "pain" is removed.
Taking a dig at the Prime Minister, the Congress vice-president said "these are days of Twitter and selfies and PM Modi has a penchant for using new words and phrases."
He assured the Indian National Trade Union Congress (INTUC) leadership that he would accommodate their representatives in Lok Sabha, Rajya Sabha and state assemblies as also in the ministries so that the issues of labour get their due attention.
Former Prime Minister Manmohan Singh said that in the name of structural labour reforms, attempts are being made to reduce the scope for secure industrial jobs in favour of contract labour and 'hire and fire' approach.
"It is generally agreed that we need at least 500 million skilled workers by 2022. The actual pace on the ground is only a fraction of this target," he said.
At the same time, he said that industrial strife, strikes and lockouts are "not the best means" to resolve unrest. "We must enlarge the available space for resolving industrial problems through peaceful dialogue involving all the stake holders of the tripartite process - namely workers, industry and government."
He said the trade union movement has to be made aware that at present Indian economy faces a fragile recovery and inadequate expansion of employment opportunities and public enterprises face an uncertain future.
NEW DELHI: Congress vice-president Rahul Gandhi today launched a scathing attack on Prime Minister Narendra Modi, accusing him of making deliberate attempts to weaken labour-related laws which was creating dissatisfaction among the workers.Alleging that PM Modi has launched a "big assault" on the workers, a combative Rahul Gandhi said he would fight their battle.
"We will fight for the cause of the workers and stand with them and would not retreat an inch. We will fight BJP, Modi and RSS," he said while addressing the trade union wing of the Congress.
Mr Gandhi said although he agreed with the Prime Minister's idea of turning India into a global manufacturing centre to make it more competitive than China, the unanimity ends there.
This, he alleged, was because the Prime Minister considers Indian worker as "dishonest, shirker and one who could be made to work only by wielding the stick".
He said that is why the labour laws were being diluted, so that the workers come to his knees. "If you look at the new laws being made in Gujarat, Rajasthan and Haryana, you will see that PM Modi has started a big assault on workers," he said.
He also alleged that the Prime Minister feels that there was a need to weaken the labour laws and "discipline" the workers so that they could be forced to work. PM Modi feels that with a 'hire and fire' policy and weakening of unions, the workers will be made to work, Mr Gandhi said.
"I do not agree that our worker is either shirker or indisciplined... Our worker is scared. He is scared of his future, the future of his children. The worker is scared whether the job he has today will be there tomorrow. Will the factory gate open for him tomorrow," the Congress leader said.
Insisting that the government should become "judge" between the labourers and the industry and "not advocate" of industry, he told the Prime Minister that if he is able to remove fear from the mind of the workers then India would be able to surpass China in no time.
Addressing the gathering, former Prime Minister Manmohan Singh said the "dissatisfaction" of workers with the "anti-labour and unimaginative" economic policies of the NDA government was obvious from the one day general strike observed in the country on September 2.
Mr Gandhi's attack on the Modi dispensation came after Indian National Trade Union Congress (INTUC) chief G Sanjeeva Reddy accused the government of launching an "assault" on interests of the labourers in various ways.
Mr Reddy alleged that the government was not recognising INTUC as the largest trade union organisation in the country with 3.31 crore members despite "submission of all documents for verification".
Mr Gandhi said "PM Modi had attempted to acquire lands of farmers by promulgating the land ordinance thrice but Congress MPs resisted and ensured that it was not done."
He alleged that "now the Prime Minister's attempt is to break the safety net for workers which was built over decades by the Congress when it was in power."
Claiming that whoever was advising the Prime Minister on labour matters was "wrongly advising" him, Mr Gandhi said the workers would take India to greater heights if their "pain" is removed.
Taking a dig at the Prime Minister, the Congress vice-president said "these are days of Twitter and selfies and PM Modi has a penchant for using new words and phrases."
He assured the Indian National Trade Union Congress (INTUC) leadership that he would accommodate their representatives in Lok Sabha, Rajya Sabha and state assemblies as also in the ministries so that the issues of labour get their due attention.
Former Prime Minister Manmohan Singh said that in the name of structural labour reforms, attempts are being made to reduce the scope for secure industrial jobs in favour of contract labour and 'hire and fire' approach.
"It is generally agreed that we need at least 500 million skilled workers by 2022. The actual pace on the ground is only a fraction of this target," he said.
At the same time, he said that industrial strife, strikes and lockouts are "not the best means" to resolve unrest. "We must enlarge the available space for resolving industrial problems through peaceful dialogue involving all the stake holders of the tripartite process - namely workers, industry and government."
He said the trade union movement has to be made aware that at present Indian economy faces a fragile recovery and inadequate expansion of employment opportunities and public enterprises face an uncertain future.
2 Blasts In Guwahati's Fancy Bazaar, 2 Injured
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GUWAHATI: At least two people have been injured in twin explosions in Guwahati's Fancy Bazaar area in Assam.
The area, in the heart of Guwahati, is a trading hub popular with Hindi-speaking communities.
The near simultaneous blasts assume significance as it comes before elections next year.
Early reports suggest the explosives may have been kept in a garbage dump near a temple.
GUWAHATI: At least two people have been injured in twin explosions in Guwahati's Fancy Bazaar area in Assam.The area, in the heart of Guwahati, is a trading hub popular with Hindi-speaking communities.
The near simultaneous blasts assume significance as it comes before elections next year.
Early reports suggest the explosives may have been kept in a garbage dump near a temple.
Farooq Abdullah Hopes for Resumption of Indo-Pak Dialogue
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SRINAGAR: Former Jammu and Kashmir chief minister Farooq Abdullah today hoped that the proposed visit of External Affairs Minister Sushma Swaraj to Pakistan will help in improving relations, lead to resumption of dialogue process and resolution of all outstanding issues between the two countries.
"We hope that Sushma Swaraj's visit to Pakistan will improve the relations between the two countries and also in carrying forward the dialogue process so that all issues between them can be resolved," he told reporters in Srinagar after paying tributes to his father and National Conference founder Sheikh Mohammad Abdullah on his 110th birth anniversary.
Mr Abdullah, who was commenting on media reports about Ms Swaraj's visit, also welcomed the meeting between Prime Minister Narendra Modi and his Pakistan counterpart Nawaz Sharif in Paris last week.
"We do not know what they talked about but let us hope that they find some way of resolving this (Jammu and Kashmir) issue," the NC leader said addressing the party supporters at Mr Sheikh Abdullah's mausoleum on the banks of Dal Lake.
Mr Abdullah addressed the party workers in Kashmiri, refusing a request by media persons to speak in English or Urdu. "This is our mother tongue and we should promote it," he said to a loud applause from the party workers.
He reiterated his earlier statement that neither India nor Pakistan had the capability to annexe the territory of Jammu and Kashmir in each other's control. "Both have atom (nuclear) bombs. Are we going to drop these bombs on each other and get wiped out?" he asked.
Supporting the status quo, he said the two countries should grant greater autonomy to their respective regions of Kashmir and make the Line of Control irrelevant by allowing free travel and trade between the two sides of the state.
SRINAGAR: Former Jammu and Kashmir chief minister Farooq Abdullah today hoped that the proposed visit of External Affairs Minister Sushma Swaraj to Pakistan will help in improving relations, lead to resumption of dialogue process and resolution of all outstanding issues between the two countries."We hope that Sushma Swaraj's visit to Pakistan will improve the relations between the two countries and also in carrying forward the dialogue process so that all issues between them can be resolved," he told reporters in Srinagar after paying tributes to his father and National Conference founder Sheikh Mohammad Abdullah on his 110th birth anniversary.
Mr Abdullah, who was commenting on media reports about Ms Swaraj's visit, also welcomed the meeting between Prime Minister Narendra Modi and his Pakistan counterpart Nawaz Sharif in Paris last week.
"We do not know what they talked about but let us hope that they find some way of resolving this (Jammu and Kashmir) issue," the NC leader said addressing the party supporters at Mr Sheikh Abdullah's mausoleum on the banks of Dal Lake.
Mr Abdullah addressed the party workers in Kashmiri, refusing a request by media persons to speak in English or Urdu. "This is our mother tongue and we should promote it," he said to a loud applause from the party workers.
He reiterated his earlier statement that neither India nor Pakistan had the capability to annexe the territory of Jammu and Kashmir in each other's control. "Both have atom (nuclear) bombs. Are we going to drop these bombs on each other and get wiped out?" he asked.
Supporting the status quo, he said the two countries should grant greater autonomy to their respective regions of Kashmir and make the Line of Control irrelevant by allowing free travel and trade between the two sides of the state.
Business Affairs
Chennai rains, GST impasse sinks equity markets
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An imminent US rate hike, coupled with negative macro-economic data and slow progress in evolving political consensus to pass a key economic legislation in parliament depressed the domestic markets during the just concluded weekly trade.
Both the bellwether indices of the Indian equity markets ended in the red after two consecutive weeks of gains.
The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), declined by 490.09 points or 1.87 percent to 25,638.11 points from its previous weekly close at 26,128.20 points.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) receded during the weekly trade ended December 4. It ended lower by 160.8 points or 2.02 percent to 7,781.90 points.
Lack of progress towards the GST (goods and services tax) bill in the parliament had investors disappointed, elaborated Vaibhav Agarwal, vice president and research head with Angel Broking.
"Lack of progress towards the GST resulted in some volatility in the absence of any other major triggers," Agarwal told IANS.
The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline, as just parliamentary approval is not sufficient enough for the pan-India indirect tax regime.
The bill has cleared the Lok Sabha and is now with the Rajya Sabha, where the Congress and other parties have demanded a series of amendments.
Apart from the GST, sentiments were depressed as volumes thinned following incessant rains and flooding in Chennai that impacted automobile and information technology (IT) industries which are located there.
"The flooding in Chennai has had a negative impact on sentiments due to the presence of large automobile and IT clusters' in the area, whose operations were disturbed due to the flooding," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
The city and its nearby industrial areas are hubs for automobile and IT industries and house operations of companies like TVS Motors, Infosys, TCS and Cognizant Technology.
Furthermore, the rains and flooding that followed is expected to adversely impact output of automobile companies during December.
Besides Chennai floods, hawkish comments from the US Federal Reserves' (US Fed) Chairperson Janet Yellen and a meagre stimulus package from the European Central Bank (ECB) through its bond buying program had investors spooked.
"US Fed Chairman Yellen's speech indicating a certain hike in its meet during mid of the current month and status quo policy of ECB created havoc for the Indian benchmarks during the week," Gaurav Jain, director of Hem Securities said.
On Wednesday, Yellen had said that she is looking forward to a US interest rate hike which will be seen as a testament to the country's economic recovery.
On the other hand, the ECB cut its deposit rate by 10 basis points against markets' expectation of a 20 basis points reduction.
In addition, the ECB extended its bond-buying program till at least March-17 2016. However, it did not increase the limit of the stimulus measure.
Besides global factors, negative macro economic data and consistent selling by FPIs (foreign portfolio investors) affected rupee's strength and investors appetite to chase prices.
"The FPIs have been on a selling spree since March. They are constantly selling to reallocate funds they have invested in the Indian equity which is increasingly being viewed as over valued," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.
"The selling pressure by the FPIs is also dragging the rupee value lower."
However, on a weekly basis, the rupee gained six paise at 66.70 to a US dollar (December 4) from its previous close of 66.76 (November 27). However, it had dipped to a 27-month low of 67.01 on Friday.
The value of rupee has been dented due to selling spree in the Indian debt and equity markets by foreign funds ahead of the US Fed's imminent rate hike decision slated for December.
The National Securities Depository Limited (NSDL) figures showed that the FPIs sold Rs 3,362.77 crore or $503.32 million in equity and debt markets from November 30 to December 4.
The data with stock exchanges showed that the FPIs sold stocks worth Rs 3,447.17 crore in the period under review ended December 4.
The FPIs have taken out Rs 23,352 crore during the period August-September. In November, the foreign investors have off-loaded stocks worth around Rs.9,000 crore.
Whereas, during the just concluded weekly trade, the domestic institutional investors (DIIs) bought stocks worth Rs 2,308.29 crore.
An imminent US rate hike, coupled with negative macro-economic data and slow progress in evolving political consensus to pass a key economic legislation in parliament depressed the domestic markets during the just concluded weekly trade.
Both the bellwether indices of the Indian equity markets ended in the red after two consecutive weeks of gains.
The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), declined by 490.09 points or 1.87 percent to 25,638.11 points from its previous weekly close at 26,128.20 points.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) receded during the weekly trade ended December 4. It ended lower by 160.8 points or 2.02 percent to 7,781.90 points.
Lack of progress towards the GST (goods and services tax) bill in the parliament had investors disappointed, elaborated Vaibhav Agarwal, vice president and research head with Angel Broking.
"Lack of progress towards the GST resulted in some volatility in the absence of any other major triggers," Agarwal told IANS.
The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline, as just parliamentary approval is not sufficient enough for the pan-India indirect tax regime.
The bill has cleared the Lok Sabha and is now with the Rajya Sabha, where the Congress and other parties have demanded a series of amendments.
Apart from the GST, sentiments were depressed as volumes thinned following incessant rains and flooding in Chennai that impacted automobile and information technology (IT) industries which are located there.
"The flooding in Chennai has had a negative impact on sentiments due to the presence of large automobile and IT clusters' in the area, whose operations were disturbed due to the flooding," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
The city and its nearby industrial areas are hubs for automobile and IT industries and house operations of companies like TVS Motors, Infosys, TCS and Cognizant Technology.
Furthermore, the rains and flooding that followed is expected to adversely impact output of automobile companies during December.
Besides Chennai floods, hawkish comments from the US Federal Reserves' (US Fed) Chairperson Janet Yellen and a meagre stimulus package from the European Central Bank (ECB) through its bond buying program had investors spooked.
"US Fed Chairman Yellen's speech indicating a certain hike in its meet during mid of the current month and status quo policy of ECB created havoc for the Indian benchmarks during the week," Gaurav Jain, director of Hem Securities said.
On Wednesday, Yellen had said that she is looking forward to a US interest rate hike which will be seen as a testament to the country's economic recovery.
On the other hand, the ECB cut its deposit rate by 10 basis points against markets' expectation of a 20 basis points reduction.
In addition, the ECB extended its bond-buying program till at least March-17 2016. However, it did not increase the limit of the stimulus measure.
Besides global factors, negative macro economic data and consistent selling by FPIs (foreign portfolio investors) affected rupee's strength and investors appetite to chase prices.
"The FPIs have been on a selling spree since March. They are constantly selling to reallocate funds they have invested in the Indian equity which is increasingly being viewed as over valued," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.
"The selling pressure by the FPIs is also dragging the rupee value lower."
However, on a weekly basis, the rupee gained six paise at 66.70 to a US dollar (December 4) from its previous close of 66.76 (November 27). However, it had dipped to a 27-month low of 67.01 on Friday.
The value of rupee has been dented due to selling spree in the Indian debt and equity markets by foreign funds ahead of the US Fed's imminent rate hike decision slated for December.
The National Securities Depository Limited (NSDL) figures showed that the FPIs sold Rs 3,362.77 crore or $503.32 million in equity and debt markets from November 30 to December 4.
The data with stock exchanges showed that the FPIs sold stocks worth Rs 3,447.17 crore in the period under review ended December 4.
The FPIs have taken out Rs 23,352 crore during the period August-September. In November, the foreign investors have off-loaded stocks worth around Rs.9,000 crore.
Whereas, during the just concluded weekly trade, the domestic institutional investors (DIIs) bought stocks worth Rs 2,308.29 crore.
Reliance Jio set to replicate the success of China Mobile
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Reliance Jio (RJio ), the 4G venture of Mukesh Ambani' s Reliance Industries, looks to copy the success of China Mobile as the countdown begins for the launch of the service at the end of this financial year. "We are now building another Reliance in the consumer space. Data will be the new oil for RIL ," says an executive close to Ambani.
At the end of 2014, China Mobile's customer base reached 807 million, representing a growth of 5.1 per cent from the previous year, of which 4G customers accounted for 90 million. Its voice services revenue went down by 13.1 per cent, while data services revenue shot up by 22.3 per cent. In addition, the revenue from mobile data traffic went up by 42.9 per cent. RJio is eyeing such growth in India.
"You need to have roads, cars and destinations for reaching out to people. Similarly, in the telecom space, road means infrastructure, cars are devices and the destinations are common - communication. We have the best technology and advanced infrastructure. Jio is like a mall. In that ecosystem, partners will come together and build solutions in healthcare, education, money, entertainment and cloud," says the RIL executive.
Romal Shetty, Partner and Head, Telecom Services at KPMG in India, says that for China Mobile, LTE deployment was more an upgrade of existing 3G networks than deployment of new network technology. "One of the key reasons was that China Mobile was operating its 3G networks on Time Domain Duplexing (TDD) schemes. The LTE deployments were also TD-LTE. The main rivals of China Mobile (China Unicom and China Telecom) had the challenge of deploying TD-LTE networks while their 3G networks were predominantly Frequency Domain Duplexing (FDD) based. This advantage enabled China Mobile to provide extensive LTE coverage in shorter time frames as opposed to the competition."
Rahul Agarwal, Senior Consultant, Information & Communication Technologies Practice at Frost & Sullivan says that China Mobile's success can be attributed to the fact that it has been able to provide an enhanced user experience to its subscribers on the TD-LTE network. "Speed achieved by TD-LTE is much higher than what China Mobile achieved on its TD-SCDMA network and this has been critical for engineering the turnaround. China Mobile has experienced a surge in its TD-LTE subscriber base and looks good to continue doing well," he says.
RJio bought the TD-LTE spectrum in 2010 and will be happy to replicate the success of China Mobile in India, says Agarwal. "The initial concerns are that, as compared to Frequency Division Long Term Evolution (FD-LTE), the device ecosystem for TD-LTE is not very developed and that only a small fraction of LTE devices launched by vendors globally support this technology (TD-LTE), which may no longer be relevant. Also RJio intends to launch cheap devices to ensure that this concern is taken care of," he adds.
In 2014, China Mobile promoted the transformation from voice-centric to data-centric operations. The average handset data traffic per 4G user in a month reached 780 MB. The 4G network has gradually become the major data carrying network in China. For the network, the group cumulatively deployed 720,000 4G base stations, which cover a population of more than one billion, leading to continuous nationwide coverage in almost all cities and counties as well as data hotspot coverage in developed rural towns and villages. RJio will put up 75,000 towers during the time of launch to cover around the same population, in addition to the 2,50,000 route km of optical fibre that it has laid. It plans to double the optical fibre footprint in next three years to cover its total licensed area.
China Mobile launched a series of 4G featured services including lossless music, high definition videos and high-speed games, and found out new business models such as data traffic sharing and corporate-sponsored data traffic. In addition to the networks, Ambani has drawn up a strategy for content and applications, also unlike other players. Before the end of the year, the fashion and lifestyle formats of Reliance Retail will roll out its e-commerce initiative in sync with Jio's business. Reliance's e-commerce initiative in grocery, reliancefreshdirect.com, would be scaled up to serve new markets. 'Jio Chat' will integrate chat, voice, video calling, conferencing, file sharing and photo sharing.
Another, 'Jio Drive' will bring cloud capabilities to smart phones. Using this application, anyone can store, sync and share any content between devices. Jio team buys the rights of most of the new movies to instantly available on their mobile platform. 'Jio Play', 'Jio Beats' and 'Jio Mags' are the other planned offerings. Jio has operationalised nearly half a million square feet of its own next-generation cloud data centres. It plans to have an end-to-end initial capacity to serve in excess of 100 million wireless broadband and 20 million Fibre-to-the-Home customers.
"Jio's capacity created is more than the 4G network capacity in the US. We are trying to change the life of the individual," says the RIL executive. Unlike 2G, the new telecom war will not be about network, but also about devices and content. Airtel has tied up with vendors such as Xiaomi and Lenovo for low-end devices, and Apple and Micromax for high-end devices. It has deals signed with music and movie content providers. RJio is in talks with 28 mobile and tablet manufacturers, including Apple, Samsung and Micromax. It may also sell self-branded compatible devices.
Reliance Jio (RJio ), the 4G venture of Mukesh Ambani' s Reliance Industries, looks to copy the success of China Mobile as the countdown begins for the launch of the service at the end of this financial year. "We are now building another Reliance in the consumer space. Data will be the new oil for RIL ," says an executive close to Ambani.
At the end of 2014, China Mobile's customer base reached 807 million, representing a growth of 5.1 per cent from the previous year, of which 4G customers accounted for 90 million. Its voice services revenue went down by 13.1 per cent, while data services revenue shot up by 22.3 per cent. In addition, the revenue from mobile data traffic went up by 42.9 per cent. RJio is eyeing such growth in India.
"You need to have roads, cars and destinations for reaching out to people. Similarly, in the telecom space, road means infrastructure, cars are devices and the destinations are common - communication. We have the best technology and advanced infrastructure. Jio is like a mall. In that ecosystem, partners will come together and build solutions in healthcare, education, money, entertainment and cloud," says the RIL executive.
Romal Shetty, Partner and Head, Telecom Services at KPMG in India, says that for China Mobile, LTE deployment was more an upgrade of existing 3G networks than deployment of new network technology. "One of the key reasons was that China Mobile was operating its 3G networks on Time Domain Duplexing (TDD) schemes. The LTE deployments were also TD-LTE. The main rivals of China Mobile (China Unicom and China Telecom) had the challenge of deploying TD-LTE networks while their 3G networks were predominantly Frequency Domain Duplexing (FDD) based. This advantage enabled China Mobile to provide extensive LTE coverage in shorter time frames as opposed to the competition."
Rahul Agarwal, Senior Consultant, Information & Communication Technologies Practice at Frost & Sullivan says that China Mobile's success can be attributed to the fact that it has been able to provide an enhanced user experience to its subscribers on the TD-LTE network. "Speed achieved by TD-LTE is much higher than what China Mobile achieved on its TD-SCDMA network and this has been critical for engineering the turnaround. China Mobile has experienced a surge in its TD-LTE subscriber base and looks good to continue doing well," he says.
RJio bought the TD-LTE spectrum in 2010 and will be happy to replicate the success of China Mobile in India, says Agarwal. "The initial concerns are that, as compared to Frequency Division Long Term Evolution (FD-LTE), the device ecosystem for TD-LTE is not very developed and that only a small fraction of LTE devices launched by vendors globally support this technology (TD-LTE), which may no longer be relevant. Also RJio intends to launch cheap devices to ensure that this concern is taken care of," he adds.
In 2014, China Mobile promoted the transformation from voice-centric to data-centric operations. The average handset data traffic per 4G user in a month reached 780 MB. The 4G network has gradually become the major data carrying network in China. For the network, the group cumulatively deployed 720,000 4G base stations, which cover a population of more than one billion, leading to continuous nationwide coverage in almost all cities and counties as well as data hotspot coverage in developed rural towns and villages. RJio will put up 75,000 towers during the time of launch to cover around the same population, in addition to the 2,50,000 route km of optical fibre that it has laid. It plans to double the optical fibre footprint in next three years to cover its total licensed area.
China Mobile launched a series of 4G featured services including lossless music, high definition videos and high-speed games, and found out new business models such as data traffic sharing and corporate-sponsored data traffic. In addition to the networks, Ambani has drawn up a strategy for content and applications, also unlike other players. Before the end of the year, the fashion and lifestyle formats of Reliance Retail will roll out its e-commerce initiative in sync with Jio's business. Reliance's e-commerce initiative in grocery, reliancefreshdirect.com, would be scaled up to serve new markets. 'Jio Chat' will integrate chat, voice, video calling, conferencing, file sharing and photo sharing.
Another, 'Jio Drive' will bring cloud capabilities to smart phones. Using this application, anyone can store, sync and share any content between devices. Jio team buys the rights of most of the new movies to instantly available on their mobile platform. 'Jio Play', 'Jio Beats' and 'Jio Mags' are the other planned offerings. Jio has operationalised nearly half a million square feet of its own next-generation cloud data centres. It plans to have an end-to-end initial capacity to serve in excess of 100 million wireless broadband and 20 million Fibre-to-the-Home customers.
"Jio's capacity created is more than the 4G network capacity in the US. We are trying to change the life of the individual," says the RIL executive. Unlike 2G, the new telecom war will not be about network, but also about devices and content. Airtel has tied up with vendors such as Xiaomi and Lenovo for low-end devices, and Apple and Micromax for high-end devices. It has deals signed with music and movie content providers. RJio is in talks with 28 mobile and tablet manufacturers, including Apple, Samsung and Micromax. It may also sell self-branded compatible devices.
GST logjam: Arvind Subramanian-led panel suggests dropping 1% additional tax
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In recommendations aimed at breaking the GST logjam, a panel headed by Chief Economic Advisor Arvind Subramanian on Friday suggested dropping additional one per cent tax on inter-state sales over and above the Goods and Services Tax (GST) rate .
The panel, however, did not favour putting the rate of GST , which seeks to replace all indirect taxes including excise duty, service tax and sales tax, in the Constitutional Amendment Bill.
It has suggested a revenue neutral rate for GST of 15-15.5 per cent and a standard rate of 17-18 per cent.
The main opposition party Congress, which had blocked the GST Bill in the Rajya Sabha in the last session of Parliament, has been demanding a simple GST and scrapping of the proposed levy of one per cent additional tax on goods. The party has also been demanding that the rate be part of the Constitution Amendment Bill.
The panel, with a mandate to suggest a revenue-neutral rate for GST, has favoured no additional tax on inter-state sales, including one per cent proposed in the GST Bill.
It also suggested inclusion of alcohol and petroleum products in GST, as is being demanded by the Congress.
The recommendations seem to suggest a middle-path approach in the deadlock between the Congress and the government, which didn't want the GST rate to be part of the bill as it would require two-third majority approval of Parliament for any change in future rates for any product.
The government wants the GST Bill to be approved in the current session of Parliament to meet the April 1, 2016, rollout deadline.
"The government will study the report of the CEA-led committee on revenue neutral rate for GST and take a view on it," Revenue Secretary Hasmukh Adhia said.
The panel submitted its report to Finance Minister Arun Jaitley on Friday, which outlines the scope of the ambitious tax reform that aims to create a unified national market.
"The country has a historic opportunity with GST. It will strengthen the country's tax institutions, get rid of barriers within states and create a common market," Subramanian told reporters after submitting the report.
Speaking to reporters on the sidelines of a panel discussion organised by NITI Aayog, Minister of State for Finance Jayant Sinha said the set of numbers in the CEA report will go to the GST Council and then important policy decisions will have to be made on some of these parameters.
Asked if the government will start fresh talks with the Congress, Sinha said: "We are always in discussion and consultations with our colleagues. We are hoping very much that early next week, we will able to continue our discussion and consultations."
The panel analysed three different methods to calculate the crucial revenue-neutral rate-the rate at which there will be no loss to state and central governments.
While it suggested a range of 15-15.5 per cent for the revenue-neutral rate, the standard rate at which most products are likely to be taxed was recommended at 17-18 per cent.
"This was a technical exercise and we took into account methods using direct taxes, indirect taxes and an approach suggested by NIPFP," he said.
It also provided a range for the GST rate for various products and services, from 12 per cent to 40 per cent-the higher rate being applicable for select products such as luxury cars or tobacco products.
The panel excluded real estate, electricity and alcohol and petroleum products while calculating the tax rate as some states have expressed reservations against giving up tax control on the lucrative items, but the CEA panel suggested these be brought under the GST ambit soon.
In recommendations aimed at breaking the GST logjam, a panel headed by Chief Economic Advisor Arvind Subramanian on Friday suggested dropping additional one per cent tax on inter-state sales over and above the Goods and Services Tax (GST) rate .
The panel, however, did not favour putting the rate of GST , which seeks to replace all indirect taxes including excise duty, service tax and sales tax, in the Constitutional Amendment Bill.
It has suggested a revenue neutral rate for GST of 15-15.5 per cent and a standard rate of 17-18 per cent.
The main opposition party Congress, which had blocked the GST Bill in the Rajya Sabha in the last session of Parliament, has been demanding a simple GST and scrapping of the proposed levy of one per cent additional tax on goods. The party has also been demanding that the rate be part of the Constitution Amendment Bill.
The panel, with a mandate to suggest a revenue-neutral rate for GST, has favoured no additional tax on inter-state sales, including one per cent proposed in the GST Bill.
It also suggested inclusion of alcohol and petroleum products in GST, as is being demanded by the Congress.
The recommendations seem to suggest a middle-path approach in the deadlock between the Congress and the government, which didn't want the GST rate to be part of the bill as it would require two-third majority approval of Parliament for any change in future rates for any product.
The government wants the GST Bill to be approved in the current session of Parliament to meet the April 1, 2016, rollout deadline.
"The government will study the report of the CEA-led committee on revenue neutral rate for GST and take a view on it," Revenue Secretary Hasmukh Adhia said.
The panel submitted its report to Finance Minister Arun Jaitley on Friday, which outlines the scope of the ambitious tax reform that aims to create a unified national market.
"The country has a historic opportunity with GST. It will strengthen the country's tax institutions, get rid of barriers within states and create a common market," Subramanian told reporters after submitting the report.
Speaking to reporters on the sidelines of a panel discussion organised by NITI Aayog, Minister of State for Finance Jayant Sinha said the set of numbers in the CEA report will go to the GST Council and then important policy decisions will have to be made on some of these parameters.
Asked if the government will start fresh talks with the Congress, Sinha said: "We are always in discussion and consultations with our colleagues. We are hoping very much that early next week, we will able to continue our discussion and consultations."
The panel analysed three different methods to calculate the crucial revenue-neutral rate-the rate at which there will be no loss to state and central governments.
While it suggested a range of 15-15.5 per cent for the revenue-neutral rate, the standard rate at which most products are likely to be taxed was recommended at 17-18 per cent.
"This was a technical exercise and we took into account methods using direct taxes, indirect taxes and an approach suggested by NIPFP," he said.
It also provided a range for the GST rate for various products and services, from 12 per cent to 40 per cent-the higher rate being applicable for select products such as luxury cars or tobacco products.
The panel excluded real estate, electricity and alcohol and petroleum products while calculating the tax rate as some states have expressed reservations against giving up tax control on the lucrative items, but the CEA panel suggested these be brought under the GST ambit soon.
Maggi noodles returns to shop shelves. But getting its mojo back could be a long haul.
-
Lijiye, mooh Maggi kijiye." With these words, a variation of the traditional Indian exhortation to partake of sweets on auspicious occasions, Suresh Narayanan, Managing Director, Nestle India, welcomed guests at the re-launch of Maggi noodles on Dhanteras day, November 9. Commercial sale began three days later, on November 12, with Maggi noodles hitting a limited number of outlets in 100 cities and towns across the country. The same day, in a tie-up with Nestle India, e-commerce giant Snapdeal held a flash sale of the product that settled any doubts about whether its enforced absence from shop shelves for over five months had impacted its popularity. Within five minutes, 60,000 Maggi noodles 'kits' - each kit containing 12 packets - were sold out. Snapdeal held a second flash sale on November 16 - which was just as successful.
Nestle's troubles, however, are not yet entirely over. Maggi noodles disappeared from the market following a nationwide ban on it imposed by the Food Safety and Standards Authority of India (FSSAI) on June 5. The ban came after a number of laboratories to which Maggi noodles samples were sent for testing found unduly high levels of lead in them - in one case 17.2 parts per million (ppm) against the permissible level of 2.5 ppm - as well as the presence of monosodium glutamate, even though the packaging claimed there was none. Nestle challenged the ban in the Bombay High Court, which, on August 5, ruled decisively in its favour, maintaining that the FSSAI had been unable to substantiate its charges against the product and that its order was "arbitrary, unjust and violative of Article 14 of the Constitution". It permitted Nestle to restart selling once old as well as fresh Maggi noodles samples had been tested by laboratories certified by the National Accreditation Board for Testing and Calibration Laboratories (NABL).
Nestle accordingly submitted such samples of all the nine variants of Maggi noodles and all of them passed the safety tests. But the FSSAI has now approached the Supreme Court challenging the High Court order on several counts, but primarily maintaining that Maggi noodles samples chosen at random by an independent body should have been tested in laboratories, and not those provided by Nestle. "It was like asking a person under suspicion for a crime to provide evidence against himself," says an FSSAI official. But, with Supreme Court hearings yet to start, Nestle has not deviated from its roll-out plans.
The instant noodles market in India amounted to Rs 5,300 crore in 2014, according to Euromonitor, with Maggi, the market leader, having 63 per cent market share. Its temporary disappearance was thus bound to have major repercussions. Nestle India, to whose revenue Maggi contributed around 26 per cent, certainly suffered, recording a net loss of 3.29 per cent or Rs 64.4 crore in its April to June quarter (its first ever loss in 15 years) and a shrunken profit of Rs 124.2 crore in the July to September quarter, down by over 60 per cent from the same quarter a year ago when it was Rs 311.29 crore. It had to destroy around 300,000 tonnes of noodles following the ban, taking a hit of around Rs 320 crore.
But the entire instant food and beverages industry also suffered, since it was quality concerns that sparked the ban. According to a recent report by IMRB Kantar Worldpanel, the overall food and beverages segment in India grew only four per cent in the July to September quarter, compared to nine per cent in the same quarter a year ago, while ready-to-eat foods fell by nine per cent in the same quarter, against a five per cent growth a year ago. "The Maggi controversy has had collateral negative impact across the entire fast moving foods industry," says N. Chandramouli, CEO of brands research company Trust Research Advisory (TRA).
Not surprisingly, a number of rivals have sought to fill the vacuum created by Maggi's disappearance with extensive advertising campaigns to push their own products. Following the Maggi controversy, the FSSAI directed other noodles makers as well to get samples tested all over again. ITC, which makes the second biggest instant noodles brand Sunfeast Yippee!, got 800 samples examined at NABL and FSSAI approved laboratories in India, as well as at international ones in Italy, Singapore and Japan, and having received a clean chit, marketed the results widely. "The noodles category had been impacted, and we felt it imperative to clear the air of confusion and reinstate consumer trust," says V.L. Rajesh, who heads the foods business at ITC. "We thus embarked on communicating in an open and transparent manner with a reassurance campaign."
Indo-Nissin Foods' Top Ramen brand initially went the Maggi way and withdrew from the market, after a couple of its samples were also found to possess high levels of lead, and approval was held back by the FSSAI. But it was re-launched in September, accompanied by full-page print ads proclaiming: "Two things are synonymous with us - noodles and trust." Hindustan Unilever, which produces the Knorr brand of noodles, has tied up with online retailers to improve sales. Most curious, however, is the case of Patanjali noodles, a new product launched by the Baba Ramdev backed Patanjali Ayurved Ltd. While the manufacturer claims these atta noodles are much healthier than the maida ones made by rivals and flaunts an FSSAI clearance licence number on its packaging, the FSSAI has maintained that the product was never submitted for testing and, hence, its sale is illegal. Ashish Bahuguna, Chairperson, FSSAI, has directed his officers to take appropriate action. Meanwhile, Nestle India has taken a number of steps towards damage control. Even before the favourable High Court verdict, it replaced its then MD in India, Etienne Bennet, with Suresh Narayanan, the first Indian to hold the position in 16 years. Nestle spokespersons insist that Narayanan's choice has nothing to do with his nationality - and indeed he has an impressive record of growing Nestle's business in Singapore, despite the 2008 global financial crisis, and thereafter in Egypt, despite the political upheaval there - but that can hardly be taken at face value. With his extensive Indian experience - Narayanan joined Nestle in India and was moved overseas for the first time only in 2003 - he was able to reach out much more easily to stakeholders and reassure them. "The love for our traditional Maggi Masala Noodles has been immense," he told Business Today. "I respect that and am determined to deliver on that."
To keep a tighter check on quality in future, Nestle also seems to have decided to manufacture all its Maggi noodles in house. In end-September, it terminated a 12-year-old contract with its sole third party producer, Kolkata-based SAJ Food Products. Production of Maggi noodles has begun at three of its five facilities - Nanjangud (Karnataka), Moga (Punjab) and Bicholim (Goa). Simultaneously, a high-powered advertising campaign to announce the return of Maggi noodles is being turned on. Even while the product was off the shelves, Nestle kept Maggi alive in customers' memories with a number of ads bearing twee taglines: 'We miss you too' and 'Kab wapas aaogey' (When will you return). The thrust in the new ads will be: "Your Maggi is safe, has always been". While Publicis India, which handled the Maggi account for Nestle, will continue to do so, McCann Erickson India, headed by the high profile Prasoon Joshi, has also been roped in.
Apart from the Supreme Court worry, Nestle has also to deal with the fact that, apart from the FSSAI, seven state governments - Uttarakhand, Himachal Pradesh, Bihar, Orissa, Manipur, Nagaland and Tripura - had separately banned Maggi noodles, and these bans are still in force. It is due to this that two Maggi production units, at Pantnagar in Uttarakhand and Tahliwal in Himachal Pradesh, have yet to restart functioning. The company also faces a class action suit for Rs 640 crore filed against it by the Ministry for Consumer Affairs in the National Consumer Disputes Redressal Commission, charging it with unfair trade practices, false labelling and putting out misleading ads.
The response to Maggi noodles' return is no doubt heartening for Nestle. Yet, the TRA's 2015 report on India's Most Attractive Brands, based on research across 16 cities between June and August - when Maggi noodles had disappeared from shop shelves - shows Maggi's overall attractiveness ranking having fallen from 44th in 2013 to100th in 2015, a 56-rank drop. In the fast moving foods category, Maggi was in first place in 2013, but is now second, yielding to MTR Foods. "My feeling is that Maggi may not be able to stem this fall simply with some clever advertising," says Chandramouli.
Abheek Singhi, Partner at Boston Consulting Group, feels the packaged fast foods industry was in any case slowing down in keeping with falling consumer demand all over. "Players are trying to create excitement through innovations and usage occasions, and specifically in the food category, trying to provide reassurance about safety - not only functionally, but also at an emotional level," he says. But will it work? "Anyone who thinks Maggi will emerge without much damage is living in a fool's paradise," says Chandramouli.
Suresh Narayanan, MD, Nestle India.
"OUR PRODUCTS HAVE BEEN, AND WILL ALWAYS BE, SAFE FOR CONSUMERS"
On August 1, at the height of the Maggi crisis, Suresh Narayanan, head of Nestle's Philippines operations, was shifted to India to take charge. Edited excerpts from an interview:
Q. What are your re-launch plans for Maggi noodles?
A. Rebuilding consumer trust and reassuring them of the quality and safety of our products will be the focus. The impact of the Maggi noodles issue is not restricted to Nestle only. It has had a much larger impact bringing the entire supply-chain mechanism to a standstill. I need to look at that.
For Nestle, quality is trust. Our products have been and will always be safe for consumers. As we re-launch, I would like to reiterate that the reason consumers choose Nestle is quality. I would also like to emphasise Nestle's bonds of consumer relationship and friendship extending to millions of Indian consumers over 100 years. I am completely committed to the idea and the dream of 'Make in India'.
Q. What are your marketing and advertising plans to revive the sale of Maggi?
A. Nurturing a relationship over long years requires you to stay true to values through thick and thin, and never take things for granted. I am proud that Nestle has lived up to the world's best quality standards and will continue to make sure that only the best of our products reach our consumers every day. This is the message that I wish to drive through our marketing and advertising campaigns.
Q. Are you looking at innovative options for Maggi and your other brands?
A. The mandate currently is to bring back Maggi noodles to all our consumers. While I will be looking into innovative options, it is a fact that the love for our traditional Maggi Masala Noodles has been immense, and I respect that affinity which our consumers have. I am determined to deliver on that.
Lijiye, mooh Maggi kijiye." With these words, a variation of the traditional Indian exhortation to partake of sweets on auspicious occasions, Suresh Narayanan, Managing Director, Nestle India, welcomed guests at the re-launch of Maggi noodles on Dhanteras day, November 9. Commercial sale began three days later, on November 12, with Maggi noodles hitting a limited number of outlets in 100 cities and towns across the country. The same day, in a tie-up with Nestle India, e-commerce giant Snapdeal held a flash sale of the product that settled any doubts about whether its enforced absence from shop shelves for over five months had impacted its popularity. Within five minutes, 60,000 Maggi noodles 'kits' - each kit containing 12 packets - were sold out. Snapdeal held a second flash sale on November 16 - which was just as successful.
Nestle's troubles, however, are not yet entirely over. Maggi noodles disappeared from the market following a nationwide ban on it imposed by the Food Safety and Standards Authority of India (FSSAI) on June 5. The ban came after a number of laboratories to which Maggi noodles samples were sent for testing found unduly high levels of lead in them - in one case 17.2 parts per million (ppm) against the permissible level of 2.5 ppm - as well as the presence of monosodium glutamate, even though the packaging claimed there was none. Nestle challenged the ban in the Bombay High Court, which, on August 5, ruled decisively in its favour, maintaining that the FSSAI had been unable to substantiate its charges against the product and that its order was "arbitrary, unjust and violative of Article 14 of the Constitution". It permitted Nestle to restart selling once old as well as fresh Maggi noodles samples had been tested by laboratories certified by the National Accreditation Board for Testing and Calibration Laboratories (NABL).
Nestle accordingly submitted such samples of all the nine variants of Maggi noodles and all of them passed the safety tests. But the FSSAI has now approached the Supreme Court challenging the High Court order on several counts, but primarily maintaining that Maggi noodles samples chosen at random by an independent body should have been tested in laboratories, and not those provided by Nestle. "It was like asking a person under suspicion for a crime to provide evidence against himself," says an FSSAI official. But, with Supreme Court hearings yet to start, Nestle has not deviated from its roll-out plans.
The instant noodles market in India amounted to Rs 5,300 crore in 2014, according to Euromonitor, with Maggi, the market leader, having 63 per cent market share. Its temporary disappearance was thus bound to have major repercussions. Nestle India, to whose revenue Maggi contributed around 26 per cent, certainly suffered, recording a net loss of 3.29 per cent or Rs 64.4 crore in its April to June quarter (its first ever loss in 15 years) and a shrunken profit of Rs 124.2 crore in the July to September quarter, down by over 60 per cent from the same quarter a year ago when it was Rs 311.29 crore. It had to destroy around 300,000 tonnes of noodles following the ban, taking a hit of around Rs 320 crore.
But the entire instant food and beverages industry also suffered, since it was quality concerns that sparked the ban. According to a recent report by IMRB Kantar Worldpanel, the overall food and beverages segment in India grew only four per cent in the July to September quarter, compared to nine per cent in the same quarter a year ago, while ready-to-eat foods fell by nine per cent in the same quarter, against a five per cent growth a year ago. "The Maggi controversy has had collateral negative impact across the entire fast moving foods industry," says N. Chandramouli, CEO of brands research company Trust Research Advisory (TRA).
Not surprisingly, a number of rivals have sought to fill the vacuum created by Maggi's disappearance with extensive advertising campaigns to push their own products. Following the Maggi controversy, the FSSAI directed other noodles makers as well to get samples tested all over again. ITC, which makes the second biggest instant noodles brand Sunfeast Yippee!, got 800 samples examined at NABL and FSSAI approved laboratories in India, as well as at international ones in Italy, Singapore and Japan, and having received a clean chit, marketed the results widely. "The noodles category had been impacted, and we felt it imperative to clear the air of confusion and reinstate consumer trust," says V.L. Rajesh, who heads the foods business at ITC. "We thus embarked on communicating in an open and transparent manner with a reassurance campaign."
Indo-Nissin Foods' Top Ramen brand initially went the Maggi way and withdrew from the market, after a couple of its samples were also found to possess high levels of lead, and approval was held back by the FSSAI. But it was re-launched in September, accompanied by full-page print ads proclaiming: "Two things are synonymous with us - noodles and trust." Hindustan Unilever, which produces the Knorr brand of noodles, has tied up with online retailers to improve sales. Most curious, however, is the case of Patanjali noodles, a new product launched by the Baba Ramdev backed Patanjali Ayurved Ltd. While the manufacturer claims these atta noodles are much healthier than the maida ones made by rivals and flaunts an FSSAI clearance licence number on its packaging, the FSSAI has maintained that the product was never submitted for testing and, hence, its sale is illegal. Ashish Bahuguna, Chairperson, FSSAI, has directed his officers to take appropriate action. Meanwhile, Nestle India has taken a number of steps towards damage control. Even before the favourable High Court verdict, it replaced its then MD in India, Etienne Bennet, with Suresh Narayanan, the first Indian to hold the position in 16 years. Nestle spokespersons insist that Narayanan's choice has nothing to do with his nationality - and indeed he has an impressive record of growing Nestle's business in Singapore, despite the 2008 global financial crisis, and thereafter in Egypt, despite the political upheaval there - but that can hardly be taken at face value. With his extensive Indian experience - Narayanan joined Nestle in India and was moved overseas for the first time only in 2003 - he was able to reach out much more easily to stakeholders and reassure them. "The love for our traditional Maggi Masala Noodles has been immense," he told Business Today. "I respect that and am determined to deliver on that."
To keep a tighter check on quality in future, Nestle also seems to have decided to manufacture all its Maggi noodles in house. In end-September, it terminated a 12-year-old contract with its sole third party producer, Kolkata-based SAJ Food Products. Production of Maggi noodles has begun at three of its five facilities - Nanjangud (Karnataka), Moga (Punjab) and Bicholim (Goa). Simultaneously, a high-powered advertising campaign to announce the return of Maggi noodles is being turned on. Even while the product was off the shelves, Nestle kept Maggi alive in customers' memories with a number of ads bearing twee taglines: 'We miss you too' and 'Kab wapas aaogey' (When will you return). The thrust in the new ads will be: "Your Maggi is safe, has always been". While Publicis India, which handled the Maggi account for Nestle, will continue to do so, McCann Erickson India, headed by the high profile Prasoon Joshi, has also been roped in.
Apart from the Supreme Court worry, Nestle has also to deal with the fact that, apart from the FSSAI, seven state governments - Uttarakhand, Himachal Pradesh, Bihar, Orissa, Manipur, Nagaland and Tripura - had separately banned Maggi noodles, and these bans are still in force. It is due to this that two Maggi production units, at Pantnagar in Uttarakhand and Tahliwal in Himachal Pradesh, have yet to restart functioning. The company also faces a class action suit for Rs 640 crore filed against it by the Ministry for Consumer Affairs in the National Consumer Disputes Redressal Commission, charging it with unfair trade practices, false labelling and putting out misleading ads.
The response to Maggi noodles' return is no doubt heartening for Nestle. Yet, the TRA's 2015 report on India's Most Attractive Brands, based on research across 16 cities between June and August - when Maggi noodles had disappeared from shop shelves - shows Maggi's overall attractiveness ranking having fallen from 44th in 2013 to100th in 2015, a 56-rank drop. In the fast moving foods category, Maggi was in first place in 2013, but is now second, yielding to MTR Foods. "My feeling is that Maggi may not be able to stem this fall simply with some clever advertising," says Chandramouli.
Abheek Singhi, Partner at Boston Consulting Group, feels the packaged fast foods industry was in any case slowing down in keeping with falling consumer demand all over. "Players are trying to create excitement through innovations and usage occasions, and specifically in the food category, trying to provide reassurance about safety - not only functionally, but also at an emotional level," he says. But will it work? "Anyone who thinks Maggi will emerge without much damage is living in a fool's paradise," says Chandramouli.
Suresh Narayanan, MD, Nestle India.
"OUR PRODUCTS HAVE BEEN, AND WILL ALWAYS BE, SAFE FOR CONSUMERS"
On August 1, at the height of the Maggi crisis, Suresh Narayanan, head of Nestle's Philippines operations, was shifted to India to take charge. Edited excerpts from an interview:
Q. What are your re-launch plans for Maggi noodles?
A. Rebuilding consumer trust and reassuring them of the quality and safety of our products will be the focus. The impact of the Maggi noodles issue is not restricted to Nestle only. It has had a much larger impact bringing the entire supply-chain mechanism to a standstill. I need to look at that.
For Nestle, quality is trust. Our products have been and will always be safe for consumers. As we re-launch, I would like to reiterate that the reason consumers choose Nestle is quality. I would also like to emphasise Nestle's bonds of consumer relationship and friendship extending to millions of Indian consumers over 100 years. I am completely committed to the idea and the dream of 'Make in India'.
Q. What are your marketing and advertising plans to revive the sale of Maggi?
A. Nurturing a relationship over long years requires you to stay true to values through thick and thin, and never take things for granted. I am proud that Nestle has lived up to the world's best quality standards and will continue to make sure that only the best of our products reach our consumers every day. This is the message that I wish to drive through our marketing and advertising campaigns.
Q. Are you looking at innovative options for Maggi and your other brands?
A. The mandate currently is to bring back Maggi noodles to all our consumers. While I will be looking into innovative options, it is a fact that the love for our traditional Maggi Masala Noodles has been immense, and I respect that affinity which our consumers have. I am determined to deliver on that.
LONG ON INDIA
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Indian equities have been exceedingly volatile recently. In the past four months, the bulls have been jittery and the bears have clearly had the upper hand. The benchmark BSE Sensex, the barometer for the Indian stock market, has tumbled eight per cent in the July to November period. The positive cues have all been ignored - India overtaking China to emerge as the fastest growing major economy, inflation being reined in and the central bank changing its monetary policy stance and paring rates to support growth. Indeed, foreign institutional investors (FIIs), the lifeline of the Indian equity market, have turned net sellers and pulled out $3.5 billion in the past four months.
So, why has the market lost steam? Experts point out that Dalal Street is concerned about the likelihood of the US Federal Reserve finally raising rates. This could lead to an outflow of FII funds from the emerging markets into the US. Corporate earnings in India have also disappointed investors, both domestic and global. Indeed, the July to September period was the fourth quarter in a row that Sensex companies have recorded negative sales growth. Then, the inability of the Modi government to push through crucial reforms in Parliament has also added to the gloom.
But, it's important not to have a myopic view of India and the Indian markets. India is not an isolated market and isn't decoupled from other countries. Yes, India has corrected but it is not alone. The global commodity crash has taken its toll on emerging markets. In fact, barring Hungary (up 30 per cent) and Russia (up 17 per cent), all country indices in the MSCI Emerging Market Index have been down between 3 to 60 per cent in 2015. The reason is the near synchronous massive outflow of funds by global investors from emerging markets. The MSCI index is designed to measure equity market performance in global emerging markets and is tracked by most FIIs.
Stock market analysts say that in the last five months global emerging funds have sold off $60 billion worth of equities, which exceeds the prior record annual outflow of $39 billion in 2008. "This year emerging markets witnessed a massive outflow of nearly $80 billion," says Avinash Gupta, Managing Director, Head of India Equity Sales at Merrill Lynch.
But, to put things in perspective, despite the massive FII outflows from emerging markets, India is still going strong. In fact, India appears to have weathered the current commodity crisis well. It shows how resilient the domestic equity market has become since the global financial crisis (GFC) in 2008. This is evident from a closer look at the facts. In 2015, so far, the Indian equity market is down 6 per cent. FII flows in the period have been positive with a net inflow of close to $4 billion in Indian equities. This, at a time, when most global emerging funds have seen net outflows from investors to the tune of $80 billion. This is in contrast to 2008 when, in the wake of the GFC, FIIs pulled out $12 billion from the Indian equity market and the BSE Sensex slumped over 50 per cent. Then, the emerging funds had seen a sell-off of $39 billion. (See India on Strong Footing.)
This clearly indicates that FIIs are still positive on India and Indian equities compared to other emerging nations. This is largely because peers such as Brazil, China and Russia are faced with slowing economic growth and are also bogged down with pressing domestic issues.
The other positive for India has been the greater participation of domestic funds. The mutual funds in 2015 have played a pivotal role in the Indian equities market. In 2015, so far, domestic mutual funds have invested close to $8.8 billion in equities, compared to $2.9 billion during the GFC in 2008. This has largely to do with the greater flows into domestic funds this year. Investors have pulled money out of underperforming assets such as real estate and gold and turned to equities. This has helped in restricting the fall in the Sensex. "Indian market may be expensive, but it's well-placed to take advantage of the imbalance in the world given its demographic profile and its appealing domestic economy," says Mark Matthews, Head of Research at Julius Baer, a Swiss bank that operates wealth management services in India. Geoffrey Dennis, Managing Director, Head of Global Emerging Markets Strategy at UBS Investment Bank, adds: "India is very well owned. Despite the recent sell-off, FIIs exposure to India is 50 per cent more than the country weightages in MSCI Emerging Market Index."
So, despite the current turmoil in the market, FIIs still appear to be long on India and are hoping that the country will continue to deliver high economic growth.
Indian equities have been exceedingly volatile recently. In the past four months, the bulls have been jittery and the bears have clearly had the upper hand. The benchmark BSE Sensex, the barometer for the Indian stock market, has tumbled eight per cent in the July to November period. The positive cues have all been ignored - India overtaking China to emerge as the fastest growing major economy, inflation being reined in and the central bank changing its monetary policy stance and paring rates to support growth. Indeed, foreign institutional investors (FIIs), the lifeline of the Indian equity market, have turned net sellers and pulled out $3.5 billion in the past four months.
So, why has the market lost steam? Experts point out that Dalal Street is concerned about the likelihood of the US Federal Reserve finally raising rates. This could lead to an outflow of FII funds from the emerging markets into the US. Corporate earnings in India have also disappointed investors, both domestic and global. Indeed, the July to September period was the fourth quarter in a row that Sensex companies have recorded negative sales growth. Then, the inability of the Modi government to push through crucial reforms in Parliament has also added to the gloom.
But, it's important not to have a myopic view of India and the Indian markets. India is not an isolated market and isn't decoupled from other countries. Yes, India has corrected but it is not alone. The global commodity crash has taken its toll on emerging markets. In fact, barring Hungary (up 30 per cent) and Russia (up 17 per cent), all country indices in the MSCI Emerging Market Index have been down between 3 to 60 per cent in 2015. The reason is the near synchronous massive outflow of funds by global investors from emerging markets. The MSCI index is designed to measure equity market performance in global emerging markets and is tracked by most FIIs.
But, to put things in perspective, despite the massive FII outflows from emerging markets, India is still going strong. In fact, India appears to have weathered the current commodity crisis well. It shows how resilient the domestic equity market has become since the global financial crisis (GFC) in 2008. This is evident from a closer look at the facts. In 2015, so far, the Indian equity market is down 6 per cent. FII flows in the period have been positive with a net inflow of close to $4 billion in Indian equities. This, at a time, when most global emerging funds have seen net outflows from investors to the tune of $80 billion. This is in contrast to 2008 when, in the wake of the GFC, FIIs pulled out $12 billion from the Indian equity market and the BSE Sensex slumped over 50 per cent. Then, the emerging funds had seen a sell-off of $39 billion. (See India on Strong Footing.)
This clearly indicates that FIIs are still positive on India and Indian equities compared to other emerging nations. This is largely because peers such as Brazil, China and Russia are faced with slowing economic growth and are also bogged down with pressing domestic issues.
The other positive for India has been the greater participation of domestic funds. The mutual funds in 2015 have played a pivotal role in the Indian equities market. In 2015, so far, domestic mutual funds have invested close to $8.8 billion in equities, compared to $2.9 billion during the GFC in 2008. This has largely to do with the greater flows into domestic funds this year. Investors have pulled money out of underperforming assets such as real estate and gold and turned to equities. This has helped in restricting the fall in the Sensex. "Indian market may be expensive, but it's well-placed to take advantage of the imbalance in the world given its demographic profile and its appealing domestic economy," says Mark Matthews, Head of Research at Julius Baer, a Swiss bank that operates wealth management services in India. Geoffrey Dennis, Managing Director, Head of Global Emerging Markets Strategy at UBS Investment Bank, adds: "India is very well owned. Despite the recent sell-off, FIIs exposure to India is 50 per cent more than the country weightages in MSCI Emerging Market Index."
So, despite the current turmoil in the market, FIIs still appear to be long on India and are hoping that the country will continue to deliver high economic growth.
General Awareness
2015 Edition of FIFA World Ranking
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As per latest list released by FIFA World Rankings, Belgiumretained their top position after grabbing it for the first time and World Cup 2014 runners-up Argentina moved up a spot to the second, displacing leading world champions Germany from the spot who dropped to fourth position.
- Way down in 25th place are France, host of Euro 2016 and British bookies joint favourites with Germany to win the tournament. The bookies make Belgium fifth favourite to win the summer event.
Top 10 Rank
Rankings Team Points 1 Belgium 1494 2 Argentina 1455 3 Spain 1370 4 Germany 1347 5 Chile 1273 6 Brazil 1251 7 Portugal 1219 8 Colombia 1211 9 England 1106 10 Austria 1091
- India jumped six places to the 166th spot in the global football rankings in the list released by FIFA. India were 172nd in last month’s rankings after losing five consecutive 2018 World Cup qualifying matches.
- Chile were the biggest climbers among the top 10 teams, rising four places to emerge fifth. Both England and Austria climbed up one notch to take ninth and 10th place respectively.
- This is the first time that Belgium, Chile and Austria have reached such heights on the global football ladder.
Teams who improved most:
Chad, Cyprus, Sao Tome e Principe and Turkmenistan
About FIFA(International Federation of Football Association):
FIFA founded in 1904 is responsible for the organisation of football’s major international tournaments, particularly the World Cup which started in 1930 and the Women’s World Cup which began in 1991.
- HQ: Zurich, Switzerland
As per latest list released by FIFA World Rankings, Belgiumretained their top position after grabbing it for the first time and World Cup 2014 runners-up Argentina moved up a spot to the second, displacing leading world champions Germany from the spot who dropped to fourth position.
- Way down in 25th place are France, host of Euro 2016 and British bookies joint favourites with Germany to win the tournament. The bookies make Belgium fifth favourite to win the summer event.
Top 10 Rank
| Rankings | Team | Points |
| 1 | Belgium | 1494 |
| 2 | Argentina | 1455 |
| 3 | Spain | 1370 |
| 4 | Germany | 1347 |
| 5 | Chile | 1273 |
| 6 | Brazil | 1251 |
| 7 | Portugal | 1219 |
| 8 | Colombia | 1211 |
| 9 | England | 1106 |
| 10 | Austria | 1091 |
- India jumped six places to the 166th spot in the global football rankings in the list released by FIFA. India were 172nd in last month’s rankings after losing five consecutive 2018 World Cup qualifying matches.
- Chile were the biggest climbers among the top 10 teams, rising four places to emerge fifth. Both England and Austria climbed up one notch to take ninth and 10th place respectively.
- This is the first time that Belgium, Chile and Austria have reached such heights on the global football ladder.
Teams who improved most:
Chad, Cyprus, Sao Tome e Principe and Turkmenistan
About FIFA(International Federation of Football Association):
FIFA founded in 1904 is responsible for the organisation of football’s major international tournaments, particularly the World Cup which started in 1930 and the Women’s World Cup which began in 1991.
- HQ: Zurich, Switzerland
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