The decision to fix pension entitlement of Rs1,000 under the EPFS-95 scheme will immediately benefit around 28 lakh pensioners who at present are receiving less than this amount
The Employees’ Provident Fund Organisation (EPFO) said it would start implementing its much awaited Rs1,000 minimum monthly pension and Rs15,000 higher wage ceiling social security schemes from 1 September 2014.
The government’s decision to fix pension entitlement of Rs1,000 under the Employees’ Pension Scheme 1995 (EPFS-95) will immediately benefit 28 lakh pensioners who get less than this amount at present.
The move to enhance the minimum wage ceiling for becoming a subscriber of EPFO to Rs15,000 per month is expected to bring about 50 lakh additional formal sector workers under the ambit of the PF body.
The government has also enhanced the maximum sum assured under Employees’ Deposit Linked Insurance (EDLI) Scheme to Rs3 lakh. The maximum sum assured under the EDLI works out to be Rs3.6 lakh including 20% ad hoc benefit over the prescribed amount under the notification.
This means that in case an EPFO subscriber dies, his family will be entitled to maximum sum assured of Rs3.6 lakh instead of existing Rs1.56 lakh.
The decision to provide the entitlement under EPS-95 was taken by the Union Cabinet in its meeting held on 28th February. However, it could not be implemented as the model code of conduct came into force after the general election dates were announced on 5th March.
The decision will immediately benefit about 28 lakh pensioners, including 5 lakh widows. In all, there are 44 lakh pensioners under the EPFO scheme.
The Competition Commission penalised 14 carmakers for restricting sale of genuine spare parts only through their authorised dealers. But what about mobile, TV, fridge, washing machine, oven and laptop makers which are doing the same?
Last week's ruling by the Competition Commission of India (CCI) about carmakers abusing their dominant position is surely an eye opener, coming from for the so-called global players, who apply different practices in India. Although the CCI slapped a penalty of Rs2,545 crore on 14 carmakers, the question is will the Commission take suo moto action against similar practices in the electronic and white goods market as well?
Take for example, Panasonic. I am required to contact authorised service centre of Panasonic every time, including for replacing a small part like a fuse in my fridge because it is simply not available in the open market. Same goes for the 'legendary' Apple. You simply cannot buy any 'genuine' Apple accessory or spare part to replace something that has stopped working properly. In addition, the quality of these so-called 'authentic' spares and accessories warrant a special article. Ask any iPhone or Mac-book user and s/he will tell how the wires and cables start wearing off even with a normal usage or even with delicate handling. In addition, these can’t be replaced with ordinary cables. You need to buy expensive Apple cables only.
Same is the case with Sony. You will not find a single spare part from Sony in the open market. Even your next door repair guy would tell you to give your Sony brand TV or mobile to the 'authorised service centre' as they only have “genuine” or “original” spare parts. All these 'authorised service centres' do not sell any 'genuine' or 'original' spares or parts to local technician or repairer, who they consider outsider. They even refuse to sell genuine spares or parts directly to the customer and often insist on sending their own technician to fix it for a hefty fee.
The majority of these companies refuse to supply genuine spare parts and technological equipment for providing maintenance and repair services in the open market and in the hands of the independent repairers.
What troubles customers more is the typical working time or shifts of these authorised service centres. Majority of them are open during office hours only and have weekly off on Sundays. So, in case you need to repair your device, you either have to bunk or take a leave from your office. On the other hand, the local repair guy is available as per your convenience. He even offers to pick up the device from your home, unlike the authorised service centres, which plainly ask you to visit their place with the device.
Another important point, (as mentioned by the CCI in its ruling) is cost. All the spares and parts sold by the company's authorised service centre are costlier compared with similar quality products (if available) in the open market. Take for example, a battery for your mobile. Let's say,you want to replace the battery for your Samsung mobile. There are two options. Either you buy it from an authorised service centre at whatever price they quote or search online or offline and buy the same or similar quality product at much lower rates. Another example is the cover for mobile phones. You can buy a similar type of cover from any roadside stall or vendor, which is three times cheaper than that of the authorised dealer or showroom. Normally, covers for almost all the mobiles need replacement after 12 months. So if you are getting similar quality cover for less money, why not buy it from your next door mobile shop or street seller. Also, remember covers for most of the mobile phones are sold at Rs100-200 by roadside vendors. Not to forget your option to bargain with the vendor.
Now, let's see what the CCI has said in its order. It said, “...the Commission’s primary objective is to correct the distortions in the aftermarket, to provide corrective measures to make the market more competitive, to eradicate practices having foreclosure effects and to put an end to the present anti-competitive conduct of the parties. The aim of the Commission is to provide more freedom to original equipment suppliers (OESs) in sale of spare parts, and more choice to consumers and independent repairers. The Commission considers it necessary to (i) enable the consumers to have access to spare parts and also be free to choose between independent repairers and authorized dealers and (ii) enable the independent repairers participate in the aftermarket and provide services in a competitive manner and to have access to essential inputs such as spare parts and other technical information for this purpose, as part of a more competitive eco-system, which is equally fair to the Ops (carmakers) and their authorized network also.”
“...the anti-competitive conduct of the opposite parties (carmakers) has restricted the expansion of spare parts and independent repairers segment of the economy to its full potential, at the cost of the consumers, service providers and dealers. It is also noted that despite the fact that most attractive markets for the automobile manufacturers and some OPs (carmakers) have made consumer-friendly commitments in other jurisdictions like Europe, they have failed to adopt similar practices in India which would have gone a long way in significantly diluting their present anti-competitive conduct. This makes their conduct even more deplorable," the Commission said.
Why the CCI took such a strong and laudable step to highlight the 'malpractices' by carmakers? The reason can be found in the report submitted by the director general (DG) of CCI who investigated the matter.
While determining the relevant product markets, the DG took into account the technical difference between the various primary market products, which leaves the customers with limited choice in complimentary products or services compatible with the primary product. This in the opinion of the DG implies that once the primary product has been purchased, consumer choice is confined to the aftermarket products or services which are compatible with that primary product. Hence, consumers are to a greater or lesser extent ‘locked’ into certain aftermarket suppliers.
After investigating whether a consumer could switch to the spare parts produced by another original equipment manufacturer (OEM), the DG concluded that, based upon the submissions of the OEMs, most of the spare parts other than a few generic spare parts like tyres, batteries were manufactured specifically for the respective models of the cars. Moreover, even within the models of the same OEMs interchangeability of spare parts was limited. Hence substitutability of spare parts across OEMs is drastically diminished, the report said.
The DG further found that for spare parts that are manufactured in-house by the OEMs there is almost nil interchangeability and for those body parts that are procured from local OESs and other overseas suppliers, there is limited substitutability. In this context, the DG noted that the practice of the OEMs to consider only those spare parts as genuine, which are purchased from the OEMs or the OESs specified by them and which bear the OEMs logo or trademark that further diminishes the possibility of a consumer, including the authorized dealer, purchasing spares from sources other than the OEMs or their specified vendors.
It was also observed that, the OEMs also impose adverse implications on validity of warranties in using parts sourced from other channels. Based upon the above facts, the DG concluded that it is impossible for a consumer to switch to spare parts manufactured by another producer (OEM) as interchangeability between the spare parts manufactured by different OEMs is almost nil.
While checking the possibility of consumers to switch to another primary product (to avoid a price increase on the spare parts market), the DG concluded that due to high switching costs and the fact that post-registration the residual value of a new car is lower than the price of a pre-registration new car, the owner of a car may only shift to another product in the primary market after incurring substantial financial loss. Thus, in the opinion of the DG, a purchaser of a product in the primary market is to a great extent locked in with the primary product and the feasibility of switching to another primary product to avoid a price increase in the secondary market of spare parts or repair services is limited.
In his report, the DG concluded that the spare parts market for each brand of cars (each OEMs), comprising of vehicle body parts (manufactured by each OEMs, spare parts sourced from the local OESs or overseas suppliers), specialised tools, diagnostic tools, technical manuals for the aftermarket service formed a distinct relevant product market as defined under section 2(t) of the Act.
Isn't this a common practice with most of the manufacturers, especially those who sell consumer products? Can the Competition Commission take note of such malpractices rampant in electronics market and aftermarket services?
SBI is offering uniform interest rate of 10.15% on home loans irrespective of the loan amount
State Bank of India (SBI), the country's largest lender said, it has decided to offer uniform interest rate on home loans from 26 August 2014, irrespective of the loan amount. As per the new structure, interest rate for SBI home loan would be 10.15% notwithstanding the credit amount. Woman borrowers would continue to get special benefit of 0.05% or five basis points lower interest rate on home loans.
Here are the revised interest rate from SBI for women and other borrowers...
Last year, the state-run lender, while reducing its interest rates for home loans, had rolled out a separate interest rate structure for woman borrowers, that was 0.05% lower than its normal rates.