Companies & Sectors
Inordinate delays may precipitate a crisis in sugar industry
The state government has sought interest free loans, restructuring of financing for sugar mills and providing interest-free bridge loans from the sugar development fund
 
The Cabinet Committee on Economic Affairs (CCEA) has announced the FRP (fair remunerative price) of sugar at Rs230 per quintal, as against Rs220, for 2015-16 sugar season and is linked to a basic recovery rate of 9.5%.  Further, "this shall be subject to a premium of Rs242 per quintal for every 0.1 percentage point increase in recovery above that level".
 
Devendra Fadnavis, Chief Minister of Maharashtra, met Ram Vilas Paswan, Minister of Consumer Affairs Food and Public Distribution, in New Delhi, and reiterated the plight of the Sugar Industry, seeking his assistance in the (a) extension of subsidy for raw sugar exports and (b) hike in the import duty structure from 25% to 40%, to help the cash starved mills to clear arrears to farmers and recover slowly from the glut situation in the country.  It may be recalled that the export subsidy on raw sugar ended in September for the export of 4 million tonnes.
 
The state government has also sought interest-free loans, restructuring of financing for sugar mills and providing interest free bridge loans from the Sugar Development Fund.
On the top of these, the industry would like the creation of a buffer stock of say 5 million tonnes of sugar at the factory level in the state and increase the mandatory ethanol blending with petrol from current 5% to 10%.  In reality, however, the blending is less than 3%.
 
In the meantime, the state government in Maharashtra has issued notices to more than 120 mills to pay the FRP at Rs264 per tonne but the mills have been saying that they are unable to do so due to "bearish market conditions and the glut in international market!" Therefore, the government of Maharashtra has decided to waive sugarcane purchase tax worth Rs875 crore!
 
At present, the country has a carryover stock of over 7 million tonnes of sugar and the national output is around 32 million tonnes against the estimated consumption pattern of about 24 million tonnes. A large part of the surplus can be exported, if a subsidy of about Rs4,000 per tonne is given! Fadnavis, it appears, has spoken to the Finance Minister also on this issue.
 
In the case of Tamil Nadu, the South Indian Sugar Mills Association (SISMA) has stated the sugar industry was in deep trouble due to mounting surplus stocks, unprecedented loss and exhaustion of bank limits.
 
SISMA wants the State Government to abolish VAT (of 5%) and pay the differential price of Rs300 per tonne as subsidy to farmers and revise the electricity tariff for co-generation of power in line with other states'  tariff.  Also, sugar dealers do not want to buy from Tamil Nadu due to this 5% Vat as their cost becomes higher than, for example, Karnataka or Maharashtra!  Periyasamy, President of SISMA has stated that the power tariff for co-generation is lowest in Tamil Nadu at Rs3.15 per unit for old units and Rs3.76 for new units.  In UP, Maharashtra and MP, it is Rs6 per unit, and he claims that they are losing heavily on this account also!
 
In the case of UP, according to UPSMA (UP Sugar Mills Association), the mills in the state are not in a position to pay even the Fair and Remunerative price (FRP), given the low demand, sliding of price of the commodity with the ex-factory price going down to Rs2,750 from Rs3,000 in November, per quintal!
 
The industry has complained that they have become less competitive than Karnataka and Maharashtra where a rationalised cane pricing policy on the basis of Rangarajan committee recommended formula has been implemented!
 
As for Andhra Pradesh, the farmers have demanded a price of Rs3,500 per tonne for 8.5% recovery for the current season and the Federation of Sugarcane Growers have requested the government to pass on the purchase tax benefit of Rs60 per tonne, like in the past. They have demanded that factories should bear the cost of harvesting and transport as factories in some states do!
 
Finally, the Indian Sugar Mills Association (ISMA) has stated that "due to delays in the announcement of continuation of an incentive for production and export of raw sugar, sugar mills are not in a position to plan sugar production."  ISMA also says that at least 1.5 to 2 million tonnes of sugar needs to be exported for which incentives should be announced immediately.
 
It would appear from all these conditions prevailing in the four states mentioned above, that Minister Ram Vilas Paswan has been following what the Prime Minister Narendra Modi stated, while addressing his Cabinet colleagues, that government is trapped in ABCD culture, where, A means to "avoid", B to 'by-pass", C to "confuse" and D to "delay" in dealing with the sugar industry.  He needs to take the ROAD culture, where R stands for Responsibility, O for Ownership, A for Accountability and D for Discipline!
 
Paswan can no longer delay the announcement of export subsidy for raw sugar, or in stopping sugar imports or increasing the import duty from 25% to 40% to prevent the sugar industry. CCEA must also reconsider the recommendations made by the Rangarajan committee for the sake of the Industry, without delay.
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

User

Book Review of 'The Small Big'
One more in the global glut of books on how to influence people
 
Steve Martin, Noah Goldstein and Robert Cialdini—the co-authors of The Small Big-Small Changes that Spark Big Influence—have more than 50 tips on how to convince others. The highly anecdotal, smartly written 260 pages of the book are divided into 53 readable chapters, one pointer per chapter. 
 
Hoteliers, doctors, sales-persons, managers, policy-makers, charities, retailers, teachers, parents—just about everyone stands to benefit from the book. The threesome has managed to tell us what to do and, more importantly, how to do it without being didactic. 
 
How to get citizens to pay taxes, patients to keep their appointments, find the right pricing, or clinch that dream job? Well, the solution can be as simple as addressing mails that seek to extract a commitment or making a presentation that highlights your future potential and not just past achievements. 
 
If ever that Rs1,999.99 price tag has bothered you, you know where to look for the answer. And it seems Ron Johnson, a former senior vice-president at Apple, got himself fired as the CEO of JC Penny by rounding off those .99 price tags for whole integers. 
 
To set apart these titbits that can get you to influence others, experiments in behavioural science, economics and social psychology have been pressed in evidence. Yet, the trio has steered clear from being pedagogic. Instances from everyday life, longest running television shows, advertisements that tanked, sermons that worked miracles in shoring up donations, bids that were laughably pricey, make for an easy and useful reading. 
 
The easy listening show sounds jarring (page 125) with the words “In this information-saturated world where so many claim to be an expert, how do we know who to follow?” Perhaps, the use of ‘who’ instead of whom is an error. If not, then, like so many other rules, thanks to our American friends, the use of whom is slated to be shelved. 
 
It’s a small price for a whole new vocabulary in the science of persuasion that one learns: reciprocity, peak-end experience, escalation commitment, commitment and consistency, astroturfing, etc.
 
Thus, we find out that astroturfing, besides being fake grass used in sports, is the practice of launching fictitious reviews as part of a grassroots campaign. We also discover that, in some countries, such conduct is punishable. The example is from Taiwan and extracted from the book: 
 
“In October 2013, the Fair Trade Commission of Taiwan fined the Samsung Corporation 10 million New Taiwan dollars (around US$ 350,000) for allegedly paying people to post review and comments on social media and websites attacking the products of Samsung’s long time rival HTC and at the same time praising its own.” 
 
Hope someone in Delhi is reading this and giving us genuine ‘likes’. A book that’s full of solutions does not need much publicity. But, the authors go a step further and demonstrate the flip side of their suggestions and the proper dosage of their antidotes. 
 
Your product may have 10 different and highly laudable attributes; but, in your advertisements, you are well advised to limit yourself to the best three; mentioning anything more may distract rather than attract readers. My husband’s generation used to call it the ‘KISS RULE’: ‘Keep it simple, stupid!’
 
For a brief moment, the book does appear to be old wise men’s tales, dovetailed American style. However, sometimes, even old tales need retelling; pun intended. In case you are at the airport on your way to negotiate a deal, now, you know which book to buy. Seal the deal, at Rs399, not Rs400! 

User

COMMENTS

Kiran Aggarwal

2 years ago

Hope someone in Delhi is reading this and giving us genuine ‘likes’

What does this line mean in this article ?
Any relevance to book review?

REPLY

Kiran Aggarwal

In Reply to Kiran Aggarwal 2 years ago

I reside in Delhi Divya !!!

Just 3 Products to Save Taxes & Earn High Tax-free Returns
A plethora of products can help you save tax. But you need just three, if you are focused on...
Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)