FDI in Retail

The big question being asked now a days, FDI in retail is good or bad. I really don't know so I decided to verify the argument of pro-FDI groups that there are lots of inefficiencies in the supply chain and that's why we need FDI. So I looked at the prices of certain vegetable items on 26-November-2011 in one of the Karnataka Mandis and compared it with the prices that I paid on the same day with one of the retailers. The chart on the right shows the price markup that I was subjected to the price between one of the Karnataka mandis to what the retailer charged me. As we can see that in most cases the markup is upwards of 50%, much closer to 100% with highest markup being 400%.
This is the case with vegetables which are perishable goods and have to be sold by the end of the day, one would assume that the prices of these goods would have least markup.
For people who want to verify, here is the data that I compiled and used.

	Store Price	One of the Karnataka Mandi
Tur Dal	89.9	39.25
Onion	18	11.5
Brinjal	30.49
Capsicum	36.9	20
Potato	16.5	13.8
Tomato	15.9	14
Bottle Gourd	35	7

So, there is definite markup, in many cases it does sound un-reasonable but whether bringing FDI in retail really solves this problem, I am not so sure. Anti-FDI people claim that MNCs are just for profit and they may squeeze everybody. So looks like complicated issue but in my experience, additional competition has always helped customer.

India's tryst with deflation

So the inflation numbers reported for this week stand at -1.61%. Technically that is deflation. I hope now my home loan rate would come down.

More signs of recession

Lately as you move around, you see more and more signs of recession and when a top MNC can't afford to pay even for signages, you know that cost cutting is in full force.



Just so that people don't think I am making this up, here is the photo with more context.

Professor's strategy to fight terror

I generally don't like most of the articles that are written on Pakistan's role in mumbai terror strikes and how we should deal with them. Here are two articles written by Prof. R. Vaidyanathan of Indian Institute of Management, Bangalore which I like. These seem to be practical steps that we can take.

• 12 steps to shock-and-awe Pakistan's economy


• 8 things India Inc, govt must do against Pakistan

I like these articles because they don't try to hide the fact that Pakistan is responsible for all these, no not the non-state actors but Pakistan establishment. I don't think we should really oblivious to the fact that non-state actors exist within a state because a state lets them exist and so it has to take full responsibility for it.
Anyway, if you are looking for some bright ideas on how to fight terror using instrument of business, I would suggest go ahead and read these articles.

Iceland is all but bankrupt

So the financial crisis 2008 has finally taken its toll on iceland. The country seems to have gone bankrupt.

"Iceland is bankrupt," said Arsaell Valfells, a professor at the University of Iceland. "The Icelandic krona is history. The IMF has to come and rescue us."

The world is getting scarier day by day.