Citizens' Issues
FDA wants Gutka owners to pay for seized goods destruction

Maharashtra FDA has decided to recover or ask Gutkha manufacturers from whom the goods have been seized to incur expenses of destroying the stocks

Thane: Having seized banned Gutka of over Rs4 crore, the Food and Drug Administration (FDA), which is now faced with the uphill task of destroying the stock, lying at its office in Thane has decided to recover expenses in this regard from concerned parties, whose goods have been impounded, reports PTI.

 

The FDA office near ESIS Hospital premises in Wagle Industrial Estate has already become a virtual godown to all seized goods with no room to move around.

 

An FDA official, who is also in-charge of the drive carried out since last four months said that the Konkan division which has the distinction of topping the list of seizures in Maharashtra has a stock of around five tonnes of gutka.

 

He could not however classify the Gutka and supari-mix stock which the department has seized.

 

According to sources, the department will incur expenses of Rs26.50 per kg for the destruction of the seized Gutka.

 

Hence the destruction of the five tonnes of the seized Gutka will cost the department around Rs13.25 lakh. Add transportation cost to it and the expenditure will go high, they said.

 

According to officials, FDA has identified a facility at Devnar which is approved by the Maharashtra Pollution Control Board (MPCB) for destruction of the seized goods. But now it has decided to recover or ask the concerned parties from whom the goods have been seized to incur these expenses.

 

However, it is not clear whether the parties have agreed to take up these expenses.

 

Meanwhile the FDA has written to the civic corporations here seeking their nod to dispose of the seized goods in their dumping yard which needs to be done in the presence of senior FDA officials.

 

However none of the civic corporations have responded yet.

 

Moreover land fill is not permitted as Gutka plastic/polythene cover is a banned item for land fill and will give rise to environmental issues.

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Buying stocks? Pay attention to trends in women’s interests and habits

The rise of women and women empowerment has big ramifications on the economic future of India and developing markets. Marico, SKS Microfinance and TTK Prestige are stocks influenced by women

Did you know that 64% of all purchases are influenced by women, and this is particularly in developing economies such as India? Did you know that a whopping $4.3 trillion is earned by women in the US? This is expected to increase by $5 trillion in the future, and the number is expected to grow bigger. Such is their importance of women in decision-making in households. According to Boston Consulting Group, one billion women now participate in the workforce globally and they now control 50% of the wealth in the US. Globally as many women attend university as men as more females take up education to empower themselves. In a new thematic report, Espirito Santo Securities has highlighted the importance of women and, within the context of women empowerment and importance in society and life, the investment avenues where women are influential.
 

Some of the key sectors where women play an important role are food, apparel, financial services, healthcare, consumer durables, telecom services and real estate. We will be focusing only on Indian aspects of the report as well as the three companies mentioned where women have a key role—Marico, SKS Microfinance and TTK Prestige.
 

In India, there have been several rapid strides in women empowerment. While emerging markets are yet to catch up with developed countries, the emergence of women, over here, as a new force to reckon with will have wide-reaching ramifications. The next few decades will be important as more women contribute to the workforce and economy. This will change industries and the economic landscape significantly over the next few decades and catch up with developed countries such as Norway and US.
 

In fact, some of the top business leaders in the Indian workforce today are women. The CEO of ICICI Bank is Chanda Kochhar.  The CEO of Axis Bank is Shikha Sharma. Naina Lal Kidwai is the group general manager and country head of HSBC India, part of the global banking juggernaut—HSBC. Indra Nooyi is currently the head of PepsiCo, one of the world’s largest soft-drinks conglomerates. Kalpana Morparia is the CEO of JP Morgan India. And these are not small companies by any means—they are big if not huge. And there are more, not just in business but in other spheres of life as well—political, social and even sports—everywhere. Their profile is rapidly increasing and has implications not just from societal point of view but also economic standpoint.
 

What has been the driver of this remarkable empowerment in India? The key drivers of have been improvement in wealth, lower fertility, higher education, access to information and technology, according to Espirito Santo.  
 

Economic liberalisation meant more television channels and newspapers. As more women tune to cable TV, they come to know about the world view and cultures in different parts of the country. In fact, in India, “informal education”, among the rural folks, has been a powerful tool for the women’s empowerment. According to Robert Jensen and Emily Oster, cable TV may lead to changes in attitudes towards women, even without targeted interventions.
 

The other key factors for women empowerment has been health and education. It has been established that women outlive men and better health and lower fertility rates meant more women entering the global workforce. Despite endemic marriages at young age, especially in rural India, women have been able to delay motherhood. The awareness of sexual practices and family planning amongst many families has been instrumental in lowering fertility rates. According to Espirito Santo, “In 2011, Emerging Market Women (EMW) were still getting ‘married’ significantly earlier: 47% of 20-24 year old Indian women were already married/in union before the age of 18. Despite this, women have been able to delay motherhood. This was the key catalyst for women to start joining the workforce.”
 

One of the most heartening aspects of the report has been increased optimism for women and their daughters’ place in the future. More believed that the future generation holds bright. A 2011 report by Nielsen, according to Espirito Santo, reports that roughly “77% of the women in emerging economies believe that the future will be brighter for their daughters and wanted to share more responsibilities in life decisions”. This is a markedly huge shift in optimism and empowerment in women over the years. Much of it has been helped by education and technologies.
 

Consider the following graphs. Women are not only key decision makers, but also understand the power of education in empowering daughters for the future. As you can see, more than half of the women in the survey wanted to spend money towards education—far more than developed countries. Secondly, the role of technology has made nearly everything accessible to them for improving their lives—particularly the television. Television has exposed them to newer cultures and way of life, and also exposed them to role models and such.

Within the context of women empowerment, which companies are influenced by women? Espirito Santo has come up with three companies, namely Marico, TTK Prestige and SKS Microfinance as companies where women play a key role in their profitability.
 

TTK Prestige

We had put a write-up on Espirito Santo’s forecast on TTK Prestige earlier. Check here (http://www.moneylife.in/article/ttk-prestige-to-much-pressure-to-perform/29031.html) to see what they have to say about the company’s future prospects. According to the company, it is reported that an astounding 90% of its buyers are women! Since our report, it has downgraded the fair value to Rs3,000 and put it as neutral but remains bullish over the long term.
 

Marico

Marico is a fast-moving consumer good company, and owner of the flagship brand—Parachute Oil. According to Espirito Santo, Marico is a good pick because, “more Indian women entering the workforce and increasing their discretionary spending power, they are increasingly buying aspirational beauty products. Married working women are also looking for meals that reduce their workload and offer nutritional alternatives, like oats for breakfast and branded edible oil.” However, the brokerage is neutral on the company, with fair value at Rs214.49.
 

SKS Microfinance

The company had been in the limelight throughout much of last year, mostly for all the wrong reasons, particularly politicking amongst the brass. However, Espirito Santo feels that it is past all that now. It said, “The last six months the company has not only left the Andhra crisis behind it, but has also raised Rs.263 crore of capital, which should be enough to take care of its capital requirement for the next couple of years.” It lends micro-loans to the poor, mostly through self-help groups (SHGs) who are largely constituted by women. With the Reserve Bank of India (RBI) initiative to step in and regulate the sector, the industry can expect better numbers. Espirito Santo believes it is a BUY and with fair value being Rs143.87.

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Election Commission for probe into Vedanta donations to Congress, BJP

An investigation by the EC found that both, Congress and BJP received about Rs5 crore each from Sterlite Industries and Sesa Goa group, which prima facie violates RP Act and FERA

 
New Delhi: The Election Commission (EC) has come across instances of suspected violations of the Foreign Contribution Regulation Act (FERA) by Congress and the Bharatiya Janata Party (BJP) in their acceptance of donations from subsidiaries of multi-national company Vedanta group, reports PTI.
 
An investigation by the EC, carried out with the help of the Income Tax (I-T) department, has found that both the parties had received about Rs5 crore each from two subsidiaries of the Vedanta group-- Sterlite Industries and the Sesa Goa group.
 
The donation, prima facie, violates section 29 B of the Representation of the People Act which states that "no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of Section 2 of the Foreign Contribution (Regulation) Act, 1976," official sources said.
 
The entire transaction, the EC has said in its complaint to the Home Ministry, should be investigated and probed under the FCRA as they have been made by the firms, which are part of the UK-based group, that makes them a "foreign source".
 
Vedanta Resources, according to its annual report of 2011-12, had paid $5.69 million (about Rs28 crore) to political parties in India in last three years.
 
Without disclosing the identity of the beneficiaries, billionaire Anil Agarwal-promoted Vedanta has stated on the report that it paid $2.01 million to political parties during 2011-12.
 
While there were no no comments available from BJP, Congress sources denied it had received any "foreign" donation. The sources said Congress had received from Sterlite Industries a donation of Rs5 crore in 2009.
 
When contacted, a Vedanta spokesperson said "We would like to confirm that all political donations made by Sterlite Industries India Ltd ( SIIL) and Sesa Goa Ltd (Sesa) in specific years, were strictly in accordance with the provisions of Section 293A of the Indian Companies Act, 1956 after taking due approval of the respective Board of Directors and Audit committees and full disclosures have been made as per law."
 
The EC has found violations in these two instances and hence has asked the ministry of Home Affairs to take action as it is the nodal ministry in-charge of enforcing the FCRA in the country, official sources said.
 
The FCRA states that it has been formulated "to ensure that the foreign contribution and foreign hospitality is not utilised to affect or influence electoral politics, public servants, judges and other people working in the important areas of national life like journalists, printers and publishers of newspapers among others."
 
The Association of Democratic Reforms (ADR), an NGO in the field of promoting good electoral practices, had reported publicly that "Sterlite Industries, a subsidiary of the Vedanta Group, has donated Rs6 Crores to Congress during FY05 and FY10 while the Madras Aluminium Co Ltd, also a subsidiary of the Vedanta Group had contributed Rs3.5 Crores to BJP."
 
Vedanta said that as regards Foreign Contribution (Regulations) Act, 1976 ("FCRA") and 2010 is concerned, the company believed that the provisions of FCRA do not get attracted to these contributions as they are not "foreign contributions" at all.
 
Therefore, the question of alleged violations of the provisions of FCRA does not arise. The political donations made by SIIL and Sesa as above have been made from P and L accounts of respective entities with full disclosures after complying with law as applicable, the company said.
 
"We have been legally advised that the FCRA provisions are not attracted in the background of present facts, to Indian companies incorporated as such and duly listed on domestic stock exchanges."
 

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