Former bureaucrat EAS Sarma learns that the land was regularised by the state revenue department despite the Lokayukta report which asked the revenue secretary to immediately take action on the matter
EAS Sarma, former power and finance secretary to Union government, has written to the Andhra Pradesh government, asking for permission to prosecute a minister and a bureaucrat who have allegedly sanctioned a building project in the coastal regulation zone (CRZ). Mr Sarma has asked the Andhra Pradesh Pollution Control Board (APPCB) authorities to cancel the government order and to take the guilty to task.
“I understand that the developer in this case, Clover Associates, has approached APPCB/ State Level Environment Appraisal Committee (SLEAC) for clearance for the illegal building complex. I request you not to consider the application for CRZ clearance as the land in question belonged to the government and is appropriated by the developer through fraudulent documentation. It is akin to the infamous Adarsh Housing Society scam of Mumbai in which the Maharashtra chief minister had to step down,” Mr Sarma wrote.
Citing a Lokayukta order, Mr Sarma has pointed out that the government has been warned about the inaction of the state principal secretary at the revenue department against taking action on the regularisation of two 2,700+sq mt plots in the CRZ area.
The Lokayukta report said, “The joint collector found that certain lands declared as surplus and vested with the government were fenced. On verification, it was found that the said lands were regularised by the revenue department relying upon the only document i.e., unattested photocopy of municipal tax passbook and it was referred to municipal commissioner, Greater Vishakha Municipal Corporation (GVMC) for authentication. On perusal of the connected records, he found that the said pass book; said to be issued in favour of Kasi Naga Kanaka Brahmam; was fake and fabricated and the remittance entries did not pertain to the abovesaid assessments.” Mr Venkatapathy Raju was the other person involved with Clover Associates in the scam.
The report also says that the director general of the anti-corruption bureau recommended initiating departmental action against P Yerraiah, a special officer who gave the NOC for sale of the surplus land in question. However, the revenue department dropped all charges against the officer and the builders, and instead, issued another order regularising the surplus land in favour of Mr Raju and Mr Brahmam. The matter was unsuccessfully contested in the high court by the authorities. However, no further action was taken against the builders, despite the Lokayukta report, which asked the revenue secretary to immediately take action on the matter.
Mr Sarma says that documents of correspondence available show that the senior officers of the revenue department, the state revenue minister and a Union minister and their kin were granted posh apartments for the regularisation. “The site in question falls within CRZ and since the value of the building property (Rs50 crore) exceeds the prescribed limit of the powers of the state government, prior clearance from the Union ministry of environment & forests (MOEF) should have been taken. The construction activity undertaken has therefore been illegal on that ground alone,” he said.
Mr Sarma wrote in his letter, “I hope APPCB and State Level Expert Appraisal Committee (SLEAC) will exercise prudence in not allowing to the application here, as the land on which the building stands has been occupied irregularly, through dubious means. In case APPCB fails to accede I will be constrained to proceed against you before the court of law in due course. I am marking a copy of this letter to the office of the CM, chief secretary and MOEF to forewarn the state and central governments on how the building developer has bought time from the local authorities to get further approvals on the basis of misrepresentation and suppression of the facts.”
According to industry experts, it is a game-changing decision for the Rs29.5 lakh crore retail market, which is dominated by neighbourhood stores
According to industry experts, foreign direct investment (FDI) in multi-brand retail can be a game changer, in making Indian agriculture more competitive by addressing infrastructural constraints and reducing losses across the value chain. "The limited experience of retail sales by private sector has shown that not only does the consumer stand to benefit by availability of good quality agricultural produce, but also that farmers have greatly benefited due to an assured market and extension support. Modern retailers procure in bulk and thrive on reducing the inefficiencies in the supply chain bringing down the cost substantially for the consumers and getting a better deal for the farmer," said Rakesh Bharti Mittal, vice chairman and managing director, Bharti Enterprises Ltd.
This is a signal from the United Progressive Alliance's (UPA) intention to move forward with major key reforms as the union cabinet decided to permit 51% FDI in multi-brand retail and also to remove the 51% cap on FDI in single brand retailers. According to experts, this move would benefit large retailers like Pantaloon, Bharti Retail as well as consumer, who can expect prices to come down by 10-15% in large format stores. Retail giants will play a significant role in improving supply and distribution systems in the country with economies of scale, superior expertise and trained staff, feel the experts.
B Muthuraman, president, Confederation of Indian Industry (CII), said, "The introduction of FDI in multi-brand retail would benefit the consumers, producers (farmers) and small and medium enterprises (SMEs) and generate significant employment. This would open up enormous opportunities in India for expansion of organized Retail and allow substantial investment in backend infrastructure like cold chains, warehousing and logistics."
According to a retail report authored by Boston Consulting Group (BCG) and CII, current size of organized retail in India stands at close to $28 billion or 6%–7% of total retail market. The total retail market is estimated to grow to $1,250 billion by 2020, of which 21% would be organized. With added capital investments from key overseas players, the sector would have the potential to significantly impact the Indian economy, the report said.
In the past, Indian retailers like Pantaloon, have indicated an interest in partnering with global retailers. Currently, international retailers are already present in India through their cash and carry model (selling to other retailers and business establishments), where 100% FDI is allowed. Wal-Mart runs its cash and carry business in partnership with Bharti Retail, Tesco runs its cash and carry business in partnership with Trent, owned by the Tata Group.
The decision will be a game-changer for the estimated $590 billion (Rs29.50 lakh crore) retail market dominated by neighbourhood stores. Owners of brands like Adidas, Gucci, Hermes, LVMH and Costa Coffee can have full ownership of business in India.
In the wake of apprehensions that the decision would affect farmers and kirana shops, the government has added tough riders on the entry of multi-national companies in 53 cities with population of over 10 lakh. The big retailers would bring in minimum investment of $100 million, of which half should be in the back-end infrastructure like cold chains, processing and packaging. These players would have to source at least 30% of manufactured and processed products from small-scale units.
As per the BCG-CII study, farmers in India today receive a relatively small share of the end consumer price. As an example for tomatoes, farmers in India earn only 30% of consumer price while in more developed markets, this is in the 50%–70% range.
Govind Shrikhande, customer care associate and managing director, Shoppers Stop, said, "According to me this should not impact the small retailers as globally it has been proven that modern retail and self organized- mom and pop stores can co-exist in a growing economy."
In spite of favourable responses from the industry, the existing small traders are apprehensive of being pushed out of business by the retail giants. Nearly one million traders in Kerala will down shutters on 29 November 2011 to protest against the decision to allow 51% FDI in the multi-brand retail sector.
Allaying the fears of small players, Raj Jain, chief executive and MD of Bharti Walmart, said, "Organized retail and kiranas can very easily co-exist, as they do in both developed and developing economies around the world. In fact, our wholesale cash-and-carry stores 'best price modern wholesale' allows literally thousands of kiranas to flourish through access to quality, low-priced merchandise and produce, business training and much more."
Harsh Mariwala, president, Federation of Indian Chambers of Commerce and Industry (FICCI), said this is just the first step. He said, "Seeds have been sown but the fruits will be seen only if other policy initiatives are implemented immediately like adoption of Model APMC Act by all the states, and timely implementation of GST."
Confederation of All India Traders (CAIT), however, criticised the move terming it as ‘unfortunate’ and will prove to be much detrimental to Indian economy and trade. “The decision smacks of the unflinching love of the government towards the domestic corporates and MNCs. It can be termed as a bailout package for the domestic corporate houses,” CAIT secretary general Praveen Khandelwal said.
There are a host of global brands, including Adidas, Reebok, Gucci, LVMH, Hermes, Zara, Mango, Jimmy Choo, Salvatore Ferragamo, Jimmy Choo, Hamleys (toys), Marks & Spencer, OVS and Benetton, in India.
According to FICCI estimates, the Indian retail market is estimated to be around $600 billion, with the organised sector accounting for about 5%.