There are of course lots of ways that companies make money. Especially real estate companies. One that I find particularly galling is the method of selling brochures and `application kits’ for buying flats. One cannot find out any details about the internal plans of the buildings without paying a substantial sum. It seems more an more information is withheld by each new builder.
Take the case of Shapoorji Pallonji, who have advertised for 1BHK and 3BHK apartments in their project Shukhobrishti. The 1BHK is meant for families in the Low Income Group (LIG), with monthly gross family income under 15000, while the 3BHK is meant for families in something called MIG-U, meaning presumably Middle Income Group-Upper, with monthly gross family income below 40000.
You need to register and pay for an application kit online, only then you get to know if you are eligible to apply for a flat there. And the Rs. 750/- that you have paid for it is non-refundable, so even if you cannot apply, you are stuck with an application kit which no one else may fill in. Surely the above information is not some deep secret which could not be put up on the main website?
I have been quiet for a while — the silence is entirely self-imposed. It is not that I can find nothing to write about, in fact quite the opposite — there is way too much to write about at the moment, from the claims of `evidence for the Higgs particle’ that appeared right after my previous post, to the far-out loony political drama being played out by the Mamata government. But even today I am not writing a post, only an excuse for not writing posts. Perhaps I will write something once things settle down a bit more and I can say something cogently and briefly without losing either my composure or the plot.
Update on my previous post:
We are currently processing applications, batch wise, with 30th June, 2011 and 30th September, 2011 as application cut-off dates. And, we hope to be able to complete the process by the close of the year.
It is bad manners to pick on typos, but I wish the UGC, being the highest body overseeing our Universities, could be more careful about typing albeit or remember that wise (adverb) is combined with the preceding noun to make one word.
But of course, the bigger problem here is that they haven’t finished making a short list for the applications made before 30th June, 2011. And it’s already December, they have another set of applications made before 30th September, and will have a third set by 31st December. At this rate, how are they going to call people for interviews, how will they make the selection, and when will they appoint/place the selected candidates?
And will they manage to send the salaries in time? They are known to be quite notorious about sending the money for research fellowships — the JRFs and SRFs have to wait several months before their money starts coming in. Will the universities pay the faculty in advance, in anticipation of the money to be remitted by UGC?
From an academic point of view the programme is poorly thought out, as I mentioned elsewhere. If the administration is worse, as it seems to be, this will turn into a grand joke like so many other grand plans of the higher education department (who cannot even correctly spell the name of their ministry).
The Parliament is at a standstill over allowing Foreign Direct Investment (FDI) in the retail business in India. The government, particularly Man Mohan Singh, his close associate Montek Singh Ahluwahlia and to some extent Pranab Mukherjee have been adamant in their support of the decision to allow FDI in retail. Kaushik Basu, the chief economic advisor to the government has been speaking out in support as well.
I don’t have major objections to their arguments that the entry of big retailers will probably bring down prices for the consumer, and push up prices for farmers, although it is not clear if such things will continue to happen if in the end there are only a few major players, constituting a cartel. There is also some merit in the claim that the bigger retail chains will be able to pay their workers better than the small shops can.
But I think the arguments against allowing FDI in retail are much stronger. I agree with with the opposition argument that the small trader will be wiped out if big retail becomes bigger. This is what happened in the US during the latter part of the twentieth century, and to a great extent in the UK. These countries no longer have small corner shops serving the neighbourhood. Many small shops have been replaced by `superstores’ — the big giants of retail which carry just about everything under one roof, and even small ice cream shops or diners have been taken over or replaced by national chains. The death of small shops, and the related loss of jobs, which cannot be compensated by the jobs in big retail, may be more important to the health of the economy in the longer term than `reforms’. Small business also sources local production; small bookstores and music stores are more likely to carry stuff from local publication houses. The big bookstore chains currently in Calcutta — Starmark and Crossword — carry almost exclusively titles in English, one small section of Bengali books is not remotely representative of what is actually available.
The other objection, not mentioned by the political parties in this debate, concerns revenue. Businesses based in India, both big and small, pay their taxes to India and spend their profits in India. Foreign businesses will send a large portion of their profits abroad, and because of `tax treaties’ will not pay any tax in India (and negligible amounts in Mauritius or other island nations through which they will operate). So India will get little or nothing from their profits. Of course, both are true for all foreign companies operating in India, and the peculiar reading of these tax treaties has been causing a major loss of revenue for the country. There can be an argument that the loss on both of these counts can be compensated by the investment made by these companies, and in fact the investment in infrastructure justifies the treaties and the legislation which allow the loss. But in the case of retail, there is no infrastructure that benefits from the FDI — procurement is not a manufacturing process, the infrastructure of big retail is not different in character from that of small retail, and in fact does not scale with turnover — warehousing does, outlets do not. So as far as revenue is concerned, FDI is likely to cause only loss, and if we remember that infrastructure is usually the biggest beneficiary of revenue, we see that FDI in retail will not contribute to improvements on that front, either directly or indirectly.
Political parties do not wish to bring this line of argument into the discussions, probably because they all benefit from backdoor contributions from businesses based abroad (but not necessarily owned by non-Indians) which take advantage of the tax treaties to move their money to Mauritius and other places.
All in all, FDI in retail is a bad idea — it may mean short term gains for some people, notably the administration and ruling parties which will grant licenses, the big businessmen who will make things smooth from the superstores to move in, and the media, which will gain a lot more in advertisements — they receive almost nothing from the small businesses. But in the long run, multinational superstores will destroy the Indian middle class, which is mostly supported by small businesses.
I have been meaning to write this since I saw the excerpt from Lubos Motl’s post in Peter Woit’s blog, but for reasons pointed out in an earlier post, I was unable to connect to blogspot.com and read Motl’s post in full. I did manage to read the post today, but (apart from a confusion between 10^(10^100) and the headquarters of Google, Inc.) what interested me was already in that quote:
I think that all the people are being bullied into not criticizing the junk written by other people who are employees of the academic system, especially if the latter are politically correct activists. And be sure, some of the authors of this nonsense are at the top of it.
I would guess, from the experience of occasionally reading his posts, that by `politically correct activists’, Motl means people whose political beliefs are left of center, support liberal positions including feminist and climate-control positions. Thus he seems to suggest that if physicists who are politically on the left write junk, most of their colleagues are `bullied into’ silence.
I would be very surprised if people like Witten, Strominger, Polchinski or Sen (to name a few) could be `bullied into’ silence. And on the flip side, I would consider myself as much on the political left in my beliefs as any leading physicist, and there has been no shortage of criticism of my work even if it was not `junk’. A likelier explanation is that political beliefs are not very important in the criticism or the lack of it.