Friday, September 29, 2006

Beware!...SEZs Ahead!!!

Ahead in time, that is!

SEZs (or Special Economic Zones) is an interesting - and frightening - phenomenon happening in India....

....and an apt example of "secession of the successful"... to quote: "those who are successful tend to retreat into a totally private world. They use private electricity. They attend private schools and colleges. They live in private colonies, manned by private security guards. They socialise at private clubs, use only private transport and thus they cease to have any stake at all in the ‘public realm’ or in the public world. In our country, of course, even the public realm is often ‘privatised’."

Here is a primer for the late-comers - and for those who may be concerned:

  • SEZs are considered to be "foreign territories" as far as trade, tarriffs and duties are considered. They can source raw material and capital goods without paying any duty or license... and they have free complete access to domestic markets. Incidentally, if you buy material from an SEZ, then You will be paying the import duty.

  • There is also no bar on developers (e.g., an Ambani, or Tatas, or DLF, or Mahindras or Sahara, etc.) not to shift their existing facilities inside the SEZs.

  • Only 35% of the land needs to be used for the core purpose... rest can be used for real estate, shopping malls, multiplexes, residential and commercial property, etc. (The Ministry of Commerce has the option to reduce this 35% to 25%, as according to its wisdom)

  • Labour laws are not applicable within SEZs, and the projects in SEZs are exempt from environmental impact assessment.

  • 100% of profits from FDI in manufactuing can be repatriated freely.

  • 100% tax exemption on exports for first 5 years, and 50% for the next. The SEZ developers get 10 years of tax holiday.

  • The investments going into developing these SEZs are estimated to be Rs 100,000 crores, and the loss to the exchequer will be around Rs 90,000 crore.

  • About the job-creation promise, one will have to wait and see. The past record of the EPZs was that they all together created just 100,000 jobs (and till 1998 they had generated around Rs 4700 crores in Forex at the cost of around Rs 7500 crores as forgone customs duties)

    The only "redeeming" feature of this modern day avatar of "robber barron" scheme is that the cost to the exchequer for all this will be coming from the tax-payers' pocket (i.e, from those who can afford to pay tax in India - i.e., about 5-10% of its population)...

    ...and so for the first time, the middle-class urban India - and not just those unwary victims of development for "the larger good" - will also get an opportunity (and taste) of contributing to the "economic development"/GDP-growth/FDIs as compared to China, etc. - or whatever feeds their self-worth) - of the country...

  • Tuesday, September 26, 2006

    India in Numbers

    NOTE: 1 crore = 10mn; 1 lac = 0.1mn; $1 = about Rs.45

  • India is world's 2nd largest exporter of rice, and world's 5th largest exporter of wheat

  • Over past 5 years, on average 15,000 farmers have committed suicide every year (i.e., 4-5/day) due to poverty and indebtness. An Indian farmer household has an average debt of Rs 12,585 - 82% farmer households in Andhra Pradesh, 74.5% in Tamil Nadu, 65.4% in Punjab, 61.1% in Karnataka, 54.8% in Maharashtra, etc. live in debt.

  • India is world's 2nd largest fruit and vegetables producer, and the largest producer of milk

  • One third of India’s population goes hungry to bed everyday.

  • India is world’s largest producer of tea accounting for 30% of global produce, and 25% of spices produced globally.

  • 1/3rd of world’s population without adequate water-supply lives in India.

  • Agriculture accounts for 14-15% of country's exports

  • 600mn Indians depend on agriculture for subsistence. 60% of farmers are small/medium farmers with holdings of up to 0.4 hectare plot. The average farm holding in India is 1.4 hectare, and only 15% farmers have plots larger than 10 hectare. Of the 455mn acre cultivable land, less than 5mn is with rural poor.

  • India is world’s largest producer of mica, 3rd largest producer of coal & lignite, 2nd largest producer of cement.

  • India has around 400-410mn employable workforce, of which about 377mn are employed. Only 7% of India's employed work in "organised" sector.

  • 44% of India’s workforce is illiterate, and 23% has education up to primary level. More than 90% rural workforce, and more than 80% of urban workforce has no “marketable” skill (e.g, typing, brick-laying, fishing, driving, basket-making, carpentry, tailoring, etc.).

  • India is among the 3 countries (US and Japan being the other two), who have built its own indigenous 4th generation super computer.

  • 80% of India’s public health problems are due to water-borne diseases; 1 in 4 persons dying from a water-borne disease is an Indian.

  • India is among the 6 countries worldwide, who have developed its own space technology (23 satellite in orbit and 14 geo-stationary satellites). It has not only launched its own satellite, but also for countries like Germany, Korea and Belgium. ISRO/Antrix Corp.'s clientele include the European Commission (for agriculture and forestry), Japan (volcanic activity), US (telephone network mapping, rail alignments, Wal-Mart, airlines) and Thailand (information). Its images are distributed by Space Imaging Inc and Euromap.

  • The official definition of poverty in India is: a monthly income of less than Rs.329(or $7)/month (rural) and Rs.457(or $10)/month (urban); 33.6% (rural) and 28.5% (urban) of Indian population - i.e., around 280mn Indians - lives below poverty line. Of India’s poor, 40% are landless labours, 45% small/marginal farmers, and 7.5% rural artisans.

  • India has one of the world’s largest technically qualified manpower, comprising of 15mn doctors, engineers and scientists. There are about 30mn graduates, post-graduates and doctorates in India.

  • India has around 0.6mn primary schools – out of which around 60% have a single teacher (for class I-V), 59% have no drinking water, and 85% have no toilets. As for teaching aids, 26% have no blackboard, 59% have no access to maps and charts, and 77% have no library.

  • India is world’s largest producer of sponge iron.

  • India hosts 1/3rd of world’s leprosy patients

  • India's real estate investment market is estimated to be $50bn, and is predicted to grow to $180bn by 2020. During last 4 years, the average return on investment has been of around 50%.

  • India is estimated to have 50mn DIDs (Development-Induced-Displaced "oustees") - excluding the displaced landless labours, fishermen, and the rural artisans, who are not counted for compensation and rehabilitation.

  • There are close to 0.8mn HNWIs ("high net worth individuals") in India, whose net worth is more than $1mn. The number of HNWIs in India is growing twice the global rate, and their cumulative liquid wealth is moe than $200bn.

  • Between 1951-90, 26mn were DIDs due to development of dams and canals, mining, new industries, etc.; According to Govt of India, in 1995, 75% of them were still “awaiting rehabilitation”. 40% of DIDs are tribal who constitute 8% of India’s population.

  • Indian pharmaceutical industry ranks 4th in the world in terms of volumes, and 13th in terms of value. Indian Pharma industry has the highest number of plants approved by US FDA outside US. Indian drug companies also topped the drug filing with FDA, accounting for 20% of all drugs coming into US market.

  • For a country with 3/4th of population in villages, India has 20% hospital beds in villages.

  • India is world's largest center for diamond cutting and polishing. 9 out of 10 diamonds sold anywhere in the world pass through India.

  • In rural India (comprising of 3/4th of population), only 7.3% have a monthly income of more than Rs.775/month; In urban India, only 7.8% earn of more than Rs.1500/month. Only 15% of India’s 190mn households have an family income of more than Rs.2.5 lacs/ annum; only 4% of India’s population earns more than Rs.4 lacs/annum.

  • Moser Baer is the world's 3rd largest optical media manufacturer and lowest cost manufacturer of CD-recorders. It supplies to 7 of the world's top 10 CD-R manufacturers.

  • About 0.5mn people in India die from TB every year

  • Bharat Forge is world's 2nd largest maker of forged vehicle component, and has the world's largest single-location facilility of 1.2 lkh tonnes/annum. Its client list includes Toyota, Honda, Volvo, Cummins, Daimler Chrysler. Exports account for 3/4 of its earnings.

  • 1.5mn infants die from diarrhoea in India every year – i.e., 1 out of every 4 infants worldwide. 68/1,000 Indian babies die before their first birthday.

  • Hero Honda is the world's largest manufacturer of motorcycles (annual production 1.7mn)

  • There are about 3crore legal cases pending in Indian courts, and there is a shortage of about 3,000 judges.

  • Asian Paints has production facilities in 22 countries spread across five continents. Acquisition of Berger International gave it access to 11 countries; it also acquired SCIB Chemical SAE in Egypt. Asian Paints is the market leader in 11 of the 22 countries in which it is present, including India.

  • About 285-290mn Indians live in urban India. Of these, 21% live in slums, and 60% work in unorganised sector without any social security.

  • Hindustan Inks has the world’s largest single stream, fully integrated ink plant, of 1 lakh tonnes per annum capacity, at Vapi, Gujarat. It has a manufacturing plant and a 100 per cent subsidiary in the US. It has another 100 per cent subsidiary in Austria.

  • About 66% of India’s 640,000 villages have a population of less than 1,000 – and without connectivity to the rest of the world; only 2.3% have a population of more than 5,000.

  • Essel Propack is the world’s largest laminated tube manufacturer. It has a manufacturing presence in 11 countries including China, a global manufacturing share of 25 per cent, and caters to all of P&G’s laminated tube requirements in the US, and 40 per cent of Unilever’s.

  • For every 100 girls enrolled in rural India, only 40 reach class IV, 9 reach class IX and only 1 reaches class XII.

  • Ajanta is the world's largest clocks manufacturer, which exports to more than 60 countries.

    India, as the cliché goes, is a land of contrasts!

  • Saturday, September 23, 2006

    Alternative Perspective is 4-Year Old

    I guess in this ever-shifting world - and a somewhat not-so-routine personal life - to sustain an effort for 4 years, does call for taking a note...

    I just realised that today (Sept 23rd) happens to be the 4th anniversary of the Alternative Perspective... And so, please allow me to reminiscence a bit...

    Though, Alternative Perspective is now a blog, but it had actually started as a weekly (and sometime fortnightly) "Newsletter" in Sept 2002; each issue came with 5-6 items, and posted to the Alternative Perspective yahoogroup...
    The past issues of the Newsletter are archived here

    However, 2 years and 50 issues later (the 50th issue came on its 2nd anniversary - Sept 23rd, 2004), I started finding that 'creating' an issue of the Newsletter was becoming a drag. Besides taking time, it was also not allowing me to synthesize my own understanding of issues. In the last few issues of the AltP Newsletter I tried to do that by making them 'theme-based', but it was not very satisfying....

    ...After all, the raisen daitre of Alternative Perspective was my attempt (and need) to understand and make sense of social/political/economic issues. Even before starting the AltP Newsletter, I had started keying some articles (as an attempt to 'sense-making' of a turbulent chaotic world) on my website, e.g.,

  • it all began
  • Anatomy of Collateral Damage
  • Why You Can't Buy Mauritanian Camel Cheese in Europe

    Meanwhile blogs were becoming common, and I had already created this blog in March 2003. So, the Newsletter merged with the blog, and AlternativePerspective became a blog (it is still connected to the yahoogroup, and each posting gets posted to its 400-odd members.

    Personally, this 4-year old venture has been quite a learning and growing-up experience for me, and it has remained one central and unifying personal platform (or graffitti board;0).

    The fact that there is also a readership has made it worthwhile and made this into something more than just solipsistic musings. So thanks to you all, who read these scribblings, visit the blog, leave comments, get connected, share insights and stories...

    In the meanwhile, life has moved on, and my interests have also widened... The latest love-affair is with Social Entrepreneurship (and therefore, a new course & a new parallel blog;)...

  • Saturday, September 16, 2006

    Some News is not "Newsworthy"...

    When "news" becomes a "story" - as it has increasingly become these days - then has to follow a predictable course.

    A good story has a story-line, and its unfolding must fit into the "plot". If some facts, do not support the story-line, then they need to be ignored or underplayed.

    And therefore, some news does not remain "newsworthy".

    Here are some examples:

    IAEA Protests "Erroneous" U.S. Report on Iran
    VIENNA (Reuters) Thu Sep 14, 5:51 AM ET:
    U.N. inspectors have protested to the U.S. government and a Congressional committee about a report on Iran's nuclear work, calling parts of it "outrageous and dishonest," according to a letter obtained by Reuters... The letter recalled clashes between the IAEA and the Bush administration before the 2003 Iraq war over findings cited by Washington about Iraqi weapons of mass destruction that proved false, and underlined continued tensions over Iran's dossier.

    US Paid Anti-Cuba Journalists
    BBC, Friday, 8 September 2006:
    At least 10 Florida-based journalists were paid by the US government to contribute to anti-Cuba propaganda broadcasts, the Miami Herald says... Three writers have been sacked by the Miami Herald newspaper group for an alleged conflict of interest...
    ...Mr Cao has now admitted being paid by the US government, the Herald reports... "There is nothing suspect in this," he said. "I would do it for free. But the regulations don't allow it. I charge symbolically, below market prices."

    US Moves to Scuttle Arab Plan for International Peace Conference
    Sep. 14, 2006 21:55:
    The US is trying to block attempts by Arab countries to turn the UN Security Council into a key player in the Israeli-Palestinian conflict during the upcoming General Assembly opening next week.

    In discussions among Israeli and US officials over the past few days, it was agreed that the US will use its diplomatic power to sideline the Arab League initiative, which intends to use the Security Council as the main vehicle for convening an international peace conference to deal with the conflict.

    When Rockets and Phosphorous Cluster
    Haaretz: Fri., September 15, 2006 Elul 22, 5766
    "In Lebanon, we covered entire villages with cluster bombs, what we did there was crazy and monstrous," testifies a commander in the Israel Defense Forces' MLRS (Multiple Launch Rocket System) unit. Quoting his battalion commander, he said the IDF fired some 1,800 cluster rockets on Lebanon during the war and they contained over 1.2 million cluster bombs. The IDF also used cluster shells fired by 155 mm artillery cannons, so the number of cluster bombs fired on Lebanon is even higher. At the same time, soldiers in the artillery corps testified that the IDF used phosphorous shells, which many experts say is prohibited by international law.... The commander asserted that there was massive use of MLRS rockets despite the fact that they are known to be very inaccurate - the rockets' deviation from the target reaches to around 1,200 meters - and that a substantial percentage do not explode and become mines... The percentage of duds among the rockets fired by the U.S. army in Iraq reached 30 percent and the United Nations' land mine removal team in Lebanon claims that the percentage of duds among the rockets fired by the IDF reaches some 40 percent.... According to the commander, in order to compensate for the rockets' imprecision, the order was to "flood" the area with them....

    Former Soviet Republics Give Up Nukes; US Objects
    September 14, 2006
    The Bush administration is objecting to a groundbreaking treaty that set up a nuclear weapon-free zone in Central Asia.

    Under the treaty signed Friday, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Turkmenistan committed themselves not to produce, buy, or allow the deployment of nuclear weapons on their soil.

    But the United States, along with Britain and France, refused to attend the signing ceremony in the Kazakh capital... "The reason that many of us suspect the U.S. is opposed to this is more fundamental," the independent Arms Control Association's Daryl G. Kimball told OneWorld. "This is a very strategic region. The U.S. is reticent to give up the option of deploying nuclear weapons in this region in the future."

    Sunday, September 10, 2006

    On the eve of 9/11: Reality is weirder than... er, reality

    I recall an old joke about a news in newspaper. It read:

    "As our readers know, we always bring you the news before the other newspaper. Yesterday, for instance, we were to first to report that the President of the country was found to have links with an underworld don. Today, we are the first newspaper to tell you that that news was wrong."

    And so, last week - after more than 3 years of ravaging a country, and after getting as many US soldiers killed in Iraq, as were killed in the 9/11 WTC attack (not to mention the uncounted tens of thousands of Iraqis), the US Senate Intelligence announced that there was no link between Al-Qaida and Saddam Hussein, and that "Saddam Hussein rejected overtures from al-Qaida and believed Islamic extremists were a threat to his regime...."

    Thanks! that is really revealing finding... Very intriguing too!!!... since:

  • more than 2 years back, in June 2004, even the Sept 11 commission had reached the same conclusion. As BBC had reported then: "The US national commission examining the 11 September 2001 attacks has found no "credible evidence" that Iraq helped al-Qaeda militants carry them out."

  • In fact, a month before Iraq invasion, in Feb 2003, bin Laden had called Saddam Hussein an "infidel" and had called on Iaqis to rise up and overthrow the "socialist" dictator (ironically, the same appeal was also made by GW Bush!!)

  • MSNBC had covered Osama bin Laden's taped message: "At the same time, the message also called on Iraqis to rise up and oust Iraqi President Saddam Hussein, who is a secular leader.".... Of course, the channel soon scrubbed out it in favour of the Ministry of Truth!!!


  • "War on Terror", "9/11", "Osama bin Laden", "Democratisation of Middle-East", etc., have lost their "brand value"... And so a new term has got added to US foreign policy - "Islamofascism". An article in Newsweek reports:
    "Last fall White House aides were grappling with a seemingly simple question that had eluded them for years: what should the president, in his many speeches on the war on terror, call the enemy? They were searching for a single clean phrase that could both define the foe and reassure Americans who were confused by a conflict that had grown much bigger than Osama bin Laden. But the answer was anything but simple. Some academics preferred the term "Islamism," but the aides thought that sounded too much as if America were fighting the entire religion. Another option: jihadism. But to many Muslims, it's a positive word that doesn't necessarily evoke bloodshed. Some preferred the conservative buzzword "Islamofascism," which was catchy and tied neatly into Bush's historical view of the struggle."

  • Last week, GW Bush acknowledged that "One of the hardest parts of my job is to connect Iraq to the war on terror"

  • ...and also acknowledged that CIA prisons exist across the globe. According to one news report:
    "President Bush finally confirmed that we have been running secret CIA prisons abroad since 2001, where detainees have been routinely tortured... Two of those tortured souls were the sole source for Secretary of State Colin Powell's 2003 statements before the United Nations on Iraq's connection with al-Qaida and Iraq's possession of WMDs. Both men have since recanted those statements. One was obtained when the CIA was doing a "mock burial" - i.e., burying him alive!"

    Now, just in case, all this reminds you of a certain country in western Europe in 1930s-40s... of course, not!!... we are now living in civilised times, with a UN and an international community to safeguard against revival of those barbaric acts...

    Reality, after all, cannot be weirder than reality.... or can it be?