Food Inflation

CII suggests a 10 Point Actionable Agenda to Curb Food Inflation:

The Confederation of India Industry (CII) is concerned about the current situation the country is facing with regard to “Rising Food Prices” again in a short time span of one year.   The brunt of the same is being felt across India and across all sections of society. In fact the food inflation stood at a higher peak of 19.9% over the same period last year when the failure of monsoon affected prices of cereals and pulses. However its recurrence now even in a good Monsoon year shows the prevalence of a deeper structural problem in the way we are managing our Food security

CII said that the Food inflation for the week ended January 1, 2011 is reported to be 16.91%.  The price of onions was a major contributor which continued to push food inflation as prices went up by 70.7% while the individual items such as egg, meat and fish became costly by 16.7%, milk by 13.2% and fruits by 17.7% annually.

Fortunately, price of pulses declined by 14.84%, wheat by 4.87%, potatoes by 1.67% and cereals by 0.12% on an annual basis. This is in contrast to the situation last year as when these commodities were the major contributors to the food inflation.   CII has been working very closely with the Ministry of Agriculture and the Planning Commission in suggesting ways for tackling inflation with regard to the food items.

However, this year with the exception of onions, there was adequate production of other vegetables, fruits and milk. The issue of wastage due to lack of cold storage and other infrastructure issues have worsened the existing inflation. The country has enough wheat, rice and sugar, but the issue is in tackling the perishables like vegetables, fruits and milk.

the CII’s 10 Point Measures – both short term and long term to tackle the inflating prices ;

1.In Short Term, Lower import duty, especially on fruit & vegetables and allow imports: Looking at the rising prices of fruit and vegetables, the Government should react fast on lowering the existing tariffs (hovering around 30% to 50%) and allow import of these commodities.

2.State Governments should take stern enforcement measures to curb hoarding and speculations.

3.The Government should invite and Incentivise private sector (both domestic and foreign), cooperatives and NGOs to come up with business models that directly link the growers with processors and retailers.

4.In Medium to Long Term, all the fruits, vegetables and other perishables including fisheries having very short shelf-life should be fully exempted from the provisions of the APMC Act. Processors and organized retailers should be incentivised to procure directly from the farmer groups (growers’ companies or cooperatives) for building infrastructure in rural areas for aggregating the fresh produce, cleaning it, grading, packaging, and storing in cold storages before bringing it for retail distribution. This will create not only employment in rural areas but also build much needed infrastructure.

5. The Centre should also encourage the States to help build this infrastructure, especially cold storages, to save on wastages which will boost supply side and help in price moderation.

6.The Government should move towards a unified national market and allow free movement of fresh produce across the country without any taxes whatsoever.

7.Most importantly, it is time to usher in market reforms by compressing the value chain of Agri-commodities. The model of creating a marketing platform at the village level needs to be promoted where the buyers will come to the producer groups directly rather than farmers going outside to sell their produce.

8.Investments in organized retail (both domestic can foreign) to shore up the entire supply chain and ensure good prices to farmers as well as consumers.

9. Strong and urgent focus is needed to enhance farm productivity by way of adequate inputs usage and by extension for enhancement of the supply side to meet the growing demand on a sustainable basis.

10. A special agreement should be signed between India and the neighbouring countries – for import – export of perishables.  This will be a confidence building measure and will ease demand supply challenges of similar commodities between India and the neighbouring countries.

2011-2013:media trends & bets

2011-2013: Top 10 Digital media trends & bets

Internet in India is on the threshold of inflection. In this scenario what will be the big trends & bets over next 3 years? List of my Top 10 is given below.

1. Mobile broadband: With close to INR 70,000 crore having been paid by the Telecom companies to the government for the 3G licenses, we should see a surge in number of users connecting to the internet through their mobile phone which will be aided by the fact that almost all modern mobile handsets have the capability to access the internet.
2. Continued interest in Social Media: The stats released by Com-score for December 2010 revealed that more than 33 million Internet users in India visited social networking sites, representing 84 percent of the total Internet audience. This was a growth of 43% over a 12 month period whilst the Total audience grew only by 13%.
3. Decline in standalone email & instant messaging usage: The email & instant messaging applications of the social media platforms undergoing a huge improvement and matching the features & functionalities of the stand alone services. As users get more hooked onto the Social media platforms like Facebok & Orkut, the users will start using the instant messaging & email services built into these platforms to interact with others more and this will gradually reduce & replace the usage of standalone email & instant messaging services
4. Surge in eCommerce: Barring Travel, that too Air & Railway tickets, India has not witnessed significant numbers in other ecommerce verticals. Foreseen non travel e-commerce taking off in a big way over next 3 years spurred by verticals like Deal-a-day, Books, Gifting, Luxury retail etc.
5. Explosion of Digital advertising spends in India: Digital advertising in India to constitute at least 7% (up from under 3% as of now) of total ad spends over next 3 years. The growth will also get spurred by mobile advertising & DTH advertising. There will be continued dominance of performance metrics based pricing.
6. Demand for relevant Audiences: There will a demand from advertisers for delivery of audiences vis-à-vis delivery of traffic. There will be emergence of more options for targeting users on behavior, demographic & contextual relevancy including location based advertising.
7. Rich media consumption: With higher speed of internet access, users will start consuming more rich media content.
8. Mobile internet: Users will access internet through various devices (ala iPads etc.) and not only through smartphones or desktops/laptops. With this there will also be an explosion in usage of mobile applications.
9. Mobile payments & mCommerce: Mobile payments & M-Commerce should take off over next 3 years in a major way.
10. Innovations & Entrepreneurship: We should see a Silicon Valley kind of environment in India over next 3 years with lot of entrepreneurial ideas & innovations happening.

Indian IT: headway in china

Indian IT firms seek to make headway in China              In the backdrop of Chinese premier Wen Jiabao's recent visit to India to beef up economic ties, software companies like TCS and Wipro are "ramping up" efforts to win business in the last Communist bastion, according to a Chinese media report. Tata Consultancy Services Ltd (TCS), India's largest information technology services company by sales, is leading the effort to expand the presence of the Indian IT industry in China, state-run China Daily reported. However, cracking the Chinese market may not be an easy job, the report said. Chinese companies are still used to the traditional global brands. They have not yet seen Indian IT companies. So it is also a question of brand-building for Our Companies. Unlike their Western counterparts, large Chinese companies usually have their own IT department, and outsourcing is hardly yet a phenomenon that China witnesses. But when they start doing it and focus on their core business, then the Indian companies can bring value to China's domestic outsourcing market. With the trade deficit between the two countries expected to widen with record bilateral trade worth $60 billion in 2010, India has been pressing China to give market access for IT, pharmaceuticals, agro-products and engineering services, as they are presumed to have good scope to grow in Chinese markets. In recent years, TCS has emerged as the largest Indian software company, servicing large Chinese state-run companies. It has established a noticeable presence in China's banking industry. Four major Chinese banks, including Bank of China and Hua Xia Bank, use TCS's core banking system, the China Daily report said. TCS needs to further increase its presence in China and added the company is very keen on expanding into the sectors of government, insurance, healthcare and manufacturing. TCS currently hires more than 170,000 people in 40 countries around the world, but it only has 1,200 people in China. The company plans to increase its workforce in China to 5,000 people in the next three years.