Citizens' Issues
Now, even official merchandise for the Commonwealth Games is under a cloud

Merchandising items like T-shirts, mugs, coins and perfumes were supposed to be in stores by July. However, these items have yet to see the light of day.  

The upcoming Commonwealth Games (CWG) to be held in New Delhi seems to be mired in many controversies. Allegations are flying thick and fast on stadia not being constructed on time, equipment being hired for astronomical rates and huge amounts of money being siphoned to shell companies in the UK.

Now it appears that the Organising Committee (OC) of the CWG has been dragging its feet on releasing the official merchandise for the sporting event.  

If you were looking for metal coins with CWG logos, or T-shirts with the mascot Shera, or for that matter even a branded CWG mug, you will be in for a surprise. Merchandising sponsor Premier Brands has been informed to put these items in deep freeze till 6th August. Obviously, this could severely dent the revenues that the organisers hope to make from these merchandising items, which normally sell like hot cakes before any big-ticket sporting event.

Moneylife spoke to an official from Premier Brands, who informed us that it has been informed by the OC to delay its merchandising launch to 6th August. "They (the OC) have said that they are not satisfied with the merchandising products and asked us to launch the product from 6th August," an official from Premier Brands admitted, preferring anonymity.

The first phase of sales of merchandising items was to begin from the second week of July, with sales vans and a store at the OC headquarters being the points of purchase.

The OC could have raked it in from the sale of official merchandise. Just as an example, even in a non-soccer playing nation like the US, sales of official FIFA World Cup merchandise crossed $35 million.  

A CWG official told Moneylife that the merchandise would be ready in stores only by 6th August. However, he was not willing to answer any other queries. Lalit Bhanot, CWG's official spokesperson, was not so forthcoming. At first, he said that our call was not audible. When we called again, his phone was switched off.

Early marketing of these merchandising items would have created the much-needed hype and awareness which the CWG sorely needs.

In fact, piracy has been rampant, thanks to the apathy on the part of the OC. Several merchants were selling unofficial branded products with the mascot printed on them. In July, the OC released an advertisement affirming its copyright over the CWG logo and threatened legal action against those found selling its merchandise.

There are various brand properties related to the games that can be leveraged by an official licensee - the 'Delhi 2010' logo, the 2010 CWG mascot (Shera), games based on the event, pictograms, other signature elements and the CWG 'Team India' logo.

This is but one of the many controversies which are threatening to derail the games. The report from the Central Vigilance Commission (CVC) has cast a long shadow on the OC - the anti-corruption watchdog has pointed out the poor quality of construction material and grant of work to disqualified agencies in several CWG projects.

Allegations are also being made by a few sections of the media that the OC allegedly awarded a contract to a British company without following proper procedures, a charge that is being denied by the organising authorities.

On top of all this, a number of athletes have said that they would rather stay away from the CWG. The list includes stalwarts like Jamaican sprinters Usain Bolt, Shelly Ann Fraser and Asafa Powell; tennis aces Lleyton Hewitt (Australia) and Andy Murray (Britain) and British cyclist Chris Hoy.

So will the show go on? One can only wait and hope.


CRISIL says FDI in retail may reduce fruit and vegetable wastages

The ratings agency said the policy to allow FDI in retail is likely to stimulate a flow of investments from organised retailers and logistics companies for establishing quality supply-chain infrastructure for fresh fruits and vegetables.

Ratings agency CRISIL said allowing foreign direct investments (FDI) in multi-brand retail has the potential to reduce the prices of perishable food produce such as fruits and vegetables in India over the long term. About 30% of India's total production of fruits and vegetables is wasted every year due to inadequate cold storage and transport facilities.

"Liberalisation of the retail-FDI policy will help increase organised retail penetration and a likely increase in the sales volumes of fruits and vegetables through modern store formats will encourage large retailers and logistics companies to invest in cold storage and transport facilities," said Sridhar C, head, CRISIL Research.

The ratings agency said the policy to allow FDI in retail is likely to stimulate a flow of investments from organised retailers and logistics companies for establishing quality supply-chain infrastructure for fresh fruits and vegetables. An efficient supply chain will enable large retailers to source vegetable and fruit produce directly from agricultural cooperatives, lowering annual wastages, about Rs630 billion in 2009-10, and reducing commissions of trade intermediaries. This, in turn, will improve realisations to farmers, reduce consumer prices of fruits and vegetables, and increase operating margins of large retailers, CRISIL said.

According to a study by CRISIL, almost 50% of the annual wastages can be prevented if fruit and vegetable retailers have access to specialised cold-storage facilities and refrigerated trucks. Further, large retailers will be able to save on commissions, amounting to 10%-15% of the retail selling price of fruits and vegetables, to trade intermediaries such as commission agents and wholesalers, if they are able to source the produce directly from agricultural cooperatives.  

"The wastage in the supply chain and the commission to trade intermediaries inflate the final price paid by Indian consumers for fruits and vegetables. Indian consumers pay nearly 2-2.5 times the price paid to a farmer as compared to 1-1.5 times in developed markets where the penetration of organised retail is much higher," says Nagarajan Narasimhan, director, CRISIL Research.

According to CRISIL estimates, Rs650 billion will need to be invested over the medium term to build the supply-chain infrastructure for fruits and vegetables. This estimate takes into account the number of cold storage facilities and refrigerated trucks that would be required for handling India's production of fruits and vegetables. The fruit and vegetable segment has so far not attracted adequate investments since organised retailers account for less than 1 per cent of the total sales of fruits and vegetables in India, the ratings agency added.


Moneylife Foundation conducts seminar for senior citizens

Mumbai, 31 July 2010: On a rainy Saturday afternoon, Moneylife Foundation welcomed over 40 enthusiastic persons to its first workshop, especially customised to the needs of senior citizens. This session took note of how senior citizens are coping in the post-liberalisation economy where their costs have soared so much that their savings have been eaten up by inflation. It touched on issues such as wills, insurance and reverse mortgage products that help those who are 'asset rich' but have a meagre income stream.
Sucheta Dalal (Managing Editor, Moneylife magazine) spoke on 'Safety, Security and Financial Independence for Seniors'. 
Debashis Basu (Editor & Publisher, Moneylife magazine) looked at safe investment opportunities, spoke on how to avoid financial mistakes and focussed on the reverse mortgage product in some detail. As always, he advised people to consider index funds as a safer way to participate in the markets and benefit from growth.

Mr Basu also explained the reverse mortgage product in great detail. There was a comparison between the product that was introduced in 2007 and the current one in 2009. The current product has two options. The first option will give more monthly income, but there is no return of purchase price. The second option will give less monthly income, but will return purchase price. The first option is apt for singles who do not want to leave any assets to anyone after death. The second option is apt for couples who want return of purchase price to legal heirs. The 2007 product gave out the least monthly income and hence was unpopular. The 2009 product is a much better one, because it has three-way collaboration between the life insurance sector, the banking sector and the housing finance market. The main drawback is that the monthly income is still taxable. There were a lot of questions from the audience on this topic, as it is a new as well as an interesting concept. 
Seniors who attended the session also had the benefit of inputs from two key resource persons - Mr Nagesh Kini (Activist and Chartered Accountant who has audited insurance companies) and Mr Jayesh Desai (Partner of law firm Singhi & Company) - who participated in a very lively discussion on insurance products and the rules governing wills and transmission of assets.
India has nearly 100 million senior citizens but a very limited vision when it comes to senior citizens' issues; policies for senior citizens are announced but not implemented. And, even as they struggle to cope with soaring costs, senior citizens are often financially exploited - most often by family and people they trust - and they struggle to enhance income. A US study shows that 1 out of 5 senior citizens is the target of financial scams. 
Ms Dalal warned seniors against investing in unregulated schemes or falling for chain and pyramid marketing schemes. She also spoke about the variety of Internet frauds that ensnare people, especially those who are unaware about how the Internet is prone to abuse. Ms Dalal also explained the difference between retirement communities versus old age homes, since the former are fast becoming an attractive option, with great facilities for seniors who are financially comfortable.

She also pointed out that senior citizens must use their experience and skills to consider a second job either as a source of revenue or as contribution to society. It was pointed out that many organisations were happy to offer flexible timings to seniors to benefit from their expertise.

Another issue that came up for discussion was the steep 500% hike in insurance premium by Reliance General. One audience member had purchased a Reliance policy for his parents three years back. It was becoming difficult to change the insurance company because the insured parents were now over 65 years old, hence it was difficult to get a new policy. There was also a discussion on insurers taking away cashless facilities from certain hospitals.
Disha Counselling will be offering free financial advice (not investment advice) at the Moneylife Knowledge Centre every Wednesday and Friday from 2pm to 5:30pm after 11 August 2010. We urge senior citizens and others to take advantage of the same.

The Moneylife Foundation is also coming out with a White Paper on issues concerning senior citizens. During the latest event, all those who attended were requested to read the draft and give their feedback.

Saturday afternoon was surely well worth for everyone who came to the seminar hosted by Moneylife Foundation.



Sailesh Mishra

6 years ago

Excellent effort for welfare and benefit of our Elderly

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