New Delhi: India's rice production in the 2010-11 crop year will be better than last year, despite deficient rainfall in West Bengal, Jharkhand and Bihar, reports PTI quoting agriculture minister Sharad Pawar.
The minister, however, said that production could be lower than his initial expectation of 100 million tonnes.
"This year, monsoon has been good. Because of deficient rain in West Bengal, Bihar and Jharkhand, the production of paddy may not be that good as initially I was expecting.
However, whatever report we have got from states, the production of paddy will be better than last year," he said at a seminar on the rabi crop season here.
According to a presentation by Agriculture Commissioner Gurbachchan Singh, West Bengal received 16% less rainfall than normal between 1st June and 8th September, while Bihar and Jharkhand got 25% and 48% less rainfall, respectively, than normal, he said.
India's rice production declined to 89.13 million tonnes in the 2009-10 crop year from a record 99.18 million tonnes in the previous year on account of a severe drought in 2009 that hit almost half of the country.
In a related development, agriculture minister Sharad Pawar said the government will provide Rs500 crore to drought-hit West Bengal, Bihar and Jharkhand for extending a subsidy on diesel farmers use to power their water pump-sets.
"Every farmer will get Rs500 per hectare as diesel subsidy," Mr Pawar said at a conference on the rabi crop season here, adding that the decision was taken by the government yesterday at a high-level meeting.
West Bengal has declared that 11 of its districts are drought-hit, while Bihar has given a similar status to 28 out of 38 districts. All 24 of Jharkhand's districts have also been declared as drought-hit.
Kids educating adults on financial products makes for very poor advertising
Tata Mutual Fund has launched a scheme called Systematic Investment Plan (SIP). I am not sure how the scheme pans out for the investor, for that the editors of Moneylife are the experts. What I do understand is that it's being sold like a fast-moving consumer product to first-time investors, and that's why they have positioned it as an 'investment ka pehla kadam'. Anyway, we shall discuss the communication they have launched to promote the scheme.
The ad film features a kiddie birthday party. The dad gatecrashes the party, and the kanjoos fellow gifts a lowly piggy bank to his birthday boy son. If this is what he can come up with for his ladla's birthday present, am quite sure his missus has filed for divorce, perhaps that's why she's not to be seen in the commercial, but I digress.
Naturally, the brat is pissed off (surely he was expecting an iPad!). And he, along with his fellow partying brats, creates a scene. And the entire gang mocks the daddy for being such a clod. And the bachchas get together and educate the man. That if he is so bothered about saving money, then he must go for an investment in Tata SIP. And then he's painfully explained the scheme.
Nothing great about the commercial, but kids educating an adult on a mutual fund scheme is a cute thought and should generate some minor laughs. And this gimmick may make the ad stand out a bit. But here's the big problem: A new scheme of investment, especially for first-timers, is a very serious matter. Potential investors would be very wary of these schemes and would demand answers to a hundred serious questions. And this is certainly no laughing matter. In fact, a mockery in this situation would drive them away even further.
And while it may be cute, I have an issue with a kid making fun of his daddy. That too in the company of other kids. This only encourages crass behaviour in the young gen, and god knows this problem already exists in the 'Hep New India'. In fact, I can already visualise bachchas, after watching the commercial, scoffing at their parents on myriad issues.
Net-net: Poor advertising. The role reversal trick is done to death. And kids educating adults in this category is a disastrous situation. And yes, the route spoils the kids even more than they already are. Back to the drawing board, people. And if you have children, wish you some peace and dignity at home.
Admitting that the credit crisis has tarnished the image of the credit rating industry, Mr Dogra allays concerns of ‘grade shopping’ in India and explains why his company will never fall prey to such practices
In the credit rating industry, there are a number of allegations of ‘grade shopping’ by companies, wherein clients try to negotiate with rating firms on higher grades. Rating agencies in the West have been severely criticised for compromising on quality of ratings in a bid to generate business and keep clients happy.
The very business model of a rating firm is such that it involves an inherent conflict of interest. The ‘issuer pays’ model, which is followed by most rating firms, involves the client paying the rating firm for having its security rated.
But DR Dogra, managing director and CEO of Indian credit rating firm CARE Ratings points out that while he can negotiate on fees with the client, he can never negotiate on the rating. “Had rating shopping been possible, I would have gone to clients of CRISIL and ICRA and negotiated lower fees and offered higher ratings than them. So why are we not doing this? After all, we are all commercial companies and so are interested in our bottom-line,” said Mr Dogra.
The longevity of the credit rating agency does not depend on the number of clients we rate, explained Mr Dogra, “It depends on the investors’ confidence in us. Lenders have belief in my ratings and so they push their clients to come to us for having their security rated. But if they don’t trust us, why will they do that? We can negotiate on fees but we can never negotiate on ratings.”
However, Mr Dogra admitted that clients are often unhappy with the ratings assigned to them and that many clients move on to other firms in search of higher ratings. “When we assign a rating of 1 or 2, clients oppose. The reason is that their fees depend on the amount they raise. Sometimes, a lower rating means that the issue does not materialise. If the issue happens, they get their fees. If it doesn’t, they don’t get their fees. So, they are concerned.”
Credit rating agencies have come in for a lot of stick in the aftermath of the credit crisis that left the global financial services industry virtually in shambles. Within a span of roughly two years, the nearly century-old aura of trust and credibility surrounding rating giants like Standard and Poor’s and Moody’s almost went up in smoke. While these rating agencies were, willingly or unwillingly, party to spreading the toxic papers that brought ruin to the debt markets, Mr Dogra feels that not the entire criticism against credit rating agencies is accurate.
Speaking to Moneylife on the sidelines of the 4th Annual CFO India Strategy summit, Mr Dogra said, “There is a big hue and cry around this issue. A lot of criticism has been levelled against this industry. Despite having an unblemished record of more than 80-90 years, two years of this subprime issue has somewhat tarnished the image of these rating firms. Certainly, what happened in the last two-three years is not desirable.”
But Mr Dogra does not agree with all the accusations. “I don’t think that the entire criticism of rating agencies is correct. Some of them were indeed party to the reckless pushing of these subprime loans by investment banks. The assumptions these agencies made have gone haywire because of the peculiar volatility which the real-estate market experienced in those days. Fortunately, we don’t have such problems here in India.”
CARE Ratings is also unique in its approach towards ratings. It has an external rating committee which assigns the grade to any issue, unlike other rating agencies in India which have moved on to the practice of having their in-house management team do the grade assignment. CARE’s external rating committee is headed by YH Malegam, a respected figure in the industry.