Smaller companies bearing brunt of economic slowdown: RBI data

The aggregate net profit margin of the corporate sector was impacted by “poor performance of smaller companies,”  an RBI analysis of data said

Mumbai: Smaller companies are mainly bearing the brunt of economic slowdown, having recorded overall losses in the first half of the current fiscal, a Reserve Bank of India data analysis revealed, reports PTI.


On the other hand, larger corporates have performed better during the April-September 2012-13 which witnessed moderation in economic growth to 5.4% from 7.3% in the year ago period.


“Smaller companies (with sales up to Rs100 crore) incurred losses in H1 of 2012-13, though larger companies recorded a higher rise in net profits,” RBI said in its analysis based on the performance of 2,832 listed non-government non-financial companies.


The aggregate net profit margin of the corporate sector, the analysis said, was impacted by “poor performance of smaller companies”.


On an average, the companies have a recorded a rise in net profit of 4.3% during the first half of the current fiscal, which for 2,832 companies is estimated at Rs 91,800 crore.


The slowdown has been mainly on account of deeper moderation in sales figures of the manufacturing and non-IT services sectors.


The companies in the Information Technology (IT), however, performed better than peers in other segments.


The net profit margin of the IT sector, RBI said, was above 17% in first half as compared to 5.7% for manufacturing and 4.9% for non-IT services sector.


Companies in sectors such as mining and quarrying, electric machinery, petroleum refinery, power generation and supply and real estate, have suffered losses during the period.


On the other hand, the sectors which performed better include food and beverages; textiles; paper products; cement; whole sale and retail trade; radio, television and communications equipment.


The analysis also revealed that the interest cost for the corporate sector shot up by as much as 24%, while increase in sales and expenditure worked out to be 12.3% and 13.6%, respectively.


As regards financial sector companies, the RBI analysis based on performance of 390 companies showed that there was a jump of 27.3% in net profit, mainly because of rise in income from operations.


It said that while their income went up by 27.4%, expenditure increased by only 18.9%.


Meanwhile, industrial output measured on IIP during the April-September period of this fiscal was 0.1%, down from 5.1% year-on-year.


American financial watchdog launches investigation into Herbalife

The Securities Exchange Commission is reportedly investigating Herbalife for being a pyramid scheme, spurred by the allegations of William Ackman of Pershing Square Capital

Ever since William Ackman blew the lid on Herbalife’s business model, Wall Street has been furiously whether or not the company is running a pyramid scheme. The comprehensive evidence gathered by Ackman, if true, is irrefutable and damning. According to Ronald D Orol of Marketwatch, unnamed sources have revealed that it has led Securities Exchange Commission (SEC), the American financial watchdog, to launch an investigation against Herbalife.


Sadly, multi-level marketing (MLM) schemes, though pervasive in India, continue to operate unhindered. Many innocent Indians have been lured haplessly and have lost a lot of money. Moneylife has been lobbying hard for stringent regulations and banning of MLM schemes. We had also covered the Herbalife episode in three parts. You can access Part I, Part II and Part III.


Robert FitzPatrick, an expert in examining and revealing deception and fraud in bogus home-based businesses, feels that if the SEC indicts Herbalife, it could be a game-changer as far as regulation is concerned. According to Pyramid Scheme Alert newsletter, a non-partisan, non-profit, all-volunteer consumer education group run by Robert Fitzpatrick, “Whatever this heated controversy brings forth, finally there is a real focus on and investigation of what previously was kept in the dark. Those who had dared to raise questions were personally vilified or sued by MLM lawyers or even harassed by government regulators. The MLM industry is one of the largest influence-buyers and lobbyists in Washington.” His book “False Profits” is the first one to critically examine the MLM industry.


Nearly two years ago, Moneylife had written to the Prime Minister’s Office (PMO), seeking intervention in the SpeakAsia MLM scheme to protect consumers. No response has been received yet and a Right to Information (RTI) query has been filed to seek whether the PMO has indeed taken any follow up measures.


Click here to see what we had written to the PMO office nearly two years back.


Clearly, there’s a conflict and confusion even on Wall Street. Interestingly, this whole Herbalife episode in America has now become a battle of wits between hedge funds. Bill Ackman has shorted the stock while, on the other end, Dan Loeb, whose hedge fund Third Point owns 8.9 million shares of Herbalife and feels it is worth more than $55, and has gone long. On the other hand, Ackman thinks it is worth zero. Herbalife is trading at $39.95 at time of writing this piece. Herbalife is due to present their rebuttal to Ackman’s presentation on 10 January in an investor conference. 


Will American regulators do anything? The final outcome of this saga and whether consumers will be protected is anyone’s guess. One only can hope that SEC will take some action.




4 years ago

Modicare, Dxn, K-Link office raided by Kerala Police:


4 years ago

Thank you for providing exposure to this topic. The Herbalife/Ackman battle is one of the most significant takedown attempts of a major company, and anyone who wants to know more can simply go through The 330 slide presentation is very detailed.

On a related note, I hope it will force readers to compare the case of Herbalife to some of the MLM schemes that are propagating in India. You have done well to uncover Qnet, another fraudulent pyramid scheme but it's disheartening to see how many have fallen for it.

As a lawyer friend told me a few days ago, the history of scams is full of cases where the glib and the dishonest feed on the unwise and intellectually weak. It's the unfortunate truth, and at the end, the darwinian economic view is that the victims probably never deserved to keep their money after all!

That aside, i must commend your Foundation and the very important work it is involved in.

Public Interest Exclusive
The dark side of UID-1: Weaving a web of worries around U, I and Destiny of the nation

By creating a lucrative database under UID, we are creating incentives for the wrong interests—from hackers to enemy nations. The world has studied, debated and moved on from the idea of unified personal ID. Indians should not allow ourselves to be the guinea pigs of some thoughtless “thought leaders”

“The public distribution system would have zero leaks.”

“Terrorists would be identified even if they are like needles hidden in a haystack.”


These are two big-ticket promises that originally sold Aadhaar to the common man. Many signed up for a seemingly harmless 12-digit number and believed the promise that Aadhaar would help solve two of the biggest curses on Mother India—corruption and terrorism. So all ye patriots, you ain’t one till you have one—Aadhaar card.

For those pressed for time and money, UID is free and it came to your doorstep. You are a techie? Oh, how can you be away from the best thing to happen to the country? Nandan Nilekani drives it and he sure knows it all, man. You can build apps on the Aadhaar platform. C’mon, let us join hands. If the entrepreneurial among the literate and urban middle-class were wooed thus, the biggies had their own reasons to cheer. After all, the multi-billion dollar unique experiment for the world has all sorts of tech companies salivating for a share of the pie. Some more resistance thus taken away by getting some more to join the bandwagon.


Different things were promised to different people and at different times. It was said in the initial days that Aadhaar is not mandatory to buy gas cylinders or for any civic activity. It was optional. The situation today is such that even to get married one may need Aadhaar card. (Keep your UID cards ready to get married, buy house). The Delhi government is thinking of making Aadhaar card mandatory for all government work

(  But it is still not enough. So, next to follow—cash to your accounts through UID, gas cylinder discounts only through UID, and more. Now this is where it hurts the most. The Aam aadmi cares for nothing as much as his shrinking wallet. No Aadhaar, no gas cylinder subsidy. Sign up or pay more!

Cash to accounts will get the poor to have their Aadhaar ID. Gas subsidy refunds, shaadi and dream home would get middle-class to sign up. What more? Divorce or kids or treatment in hospitals ONLY through Aadhaar? What is the law on such boundaries on the usage of Aadhaar, if there is such law? Sorry. No such law. The tipping point achieved, nothing stops the UIDAI (Unique Identification Authority of India) from getting every resident under its scanner. Literally.

In whose hands is your personal data today?

PAN card links all your credit card, banking, income tax returns, house and other cash or immovable assets data.

Mobile number can track you down to your location. It can reveal your network of friends and expose your affiliations to activists or NGOs. It is not too difficult to get tower level data and call records for any number in India. Just requires a suitable price to the right person and a pen-drive.

Your Facebook and twitter data is at a click for regulators. Recent policy changes by both social networking giants mean they would reveal anything at drop of a hat to government agencies. If not government, all such personal data is already released to commercial entities at a price. By the way, India ranks right on top, only after US, in government surveillance over internet, indicated by number of requests seeking data from Google. India's requests for web content removal, user details rise: Google

Emails? Again, as L’affaire Patraeus showed, that be you ever so high, you would never be secure—given your digital footprint, even if mails were unsent and merely saved as drafts on a common shared account. (what-terrorist-trick-did-petraeus-and-his-mistress-use-to-cover-email-tracks) Anything on the servers of the world is within reach of a snooping government.

CCTV cameras track your every moment in every mall, toll plazas on highways, public places. CCTV feed is stored for years now, given the near-zero cost of storage these days. Every other residential society today has CCTV cameras everywhere except your bedroom (and who knows?), from elevators to corridors to gyms and halls.

Your office has RFID and other ID detecting systems that track all your movements.

Your credit card company has all information on your travel, purchases, hospital payments, fine dining, personal habits like pubbing and more.

Combine and contrast all the above with Wikileaks, RTI, social media, open data movement, data liberation, big data, high processing power and low data storage cost, etc, on the other side where citizens too have more access to establishment data. And that is not liked by the mighty. And hence the increased urge to get back at the citizens.

Enter the Big Daddy of all IDs of the citizens—Aadhaar.

Moneylife is conducting a seminar on “Why UID/Aadhaar is a medicine worse than disease”, with no cost to you, in Mumbai, on 12 January 2013. Register now! For details on registration and the event, please click here.

Why should you worry?

If you attended any Aadhaar presentations or speaker sessions, they do not tire themselves of stating that Aadhaar is fully secure technology, has validation checks, safe storage of records, secure biometrics that have 99.99% accuracy, etc. And then, their convincing arguments go further—Aadhaar is only a number, with your name, biometrics id and bare minimum information like address and the like. “We do nothing more at UIDAI than just validate your identity to the querying department of the government like PDS agencies. UIDAI would not store any of your data other than this.”

And the UIDAI is right. But it is also being economical with truth.

A number by itself is like a dot. A dot has no weight, volume, length, area. But what they do not tell is that these dots get connected to form a web. This web of worries is around you. Worried? Let me share few examples of things to follow. Before that, what is the state of affairs on other identification methods you have today? The same Indian ‘system’ will handle Aadhaar too. Let us see how safe your ID today is with the powers that control and use/misuse your ID.

Aadhaar has the potential to link all that you have by way of multiple IDs today. Reach of Aadhaar through this web the centre of whose universe is Aadhaar itself as the master-index key to your full personal database that includes but is not limited to all that we just saw above in this section. Aadhaar links mobile, credit card, PAN number, employment, property, assets, address, family and through a two-step link all else like social media, travel data, health history and the rest. It has potential to track your entire school history and possibly then your grades and what remarks your class teacher wrote when you were in kindergarten and how many times you tweeted from a fake id as a teenager. Read this cbse-schools-get-uid-registration-noc-for-now

NATGRID (National Intelligence Grid) proposes to link 21 databases and is a privacy nightmare. Telecom networks would be linked real-time and would be obligated to provide all subscriber information as feed to it. PAN, visa, passports, driving licenses, banking system, etc, all link up to it. UID enables it. What next? DNA profiling? Would that get us rid of all corruption and terrorism? Seriousness of the government’s stated goals to end corruption and terrorism/crime as its motive, if true, would have shown up in other areas like Jan Lokpal bill or police reforms, but we observe opposite stance there. Reality is UID is the state’s intent to control the subjects, and terrorism and corruption are convincing arguments to make people give up resistance. But they are just arguments, not practical steps in the direction.

It does not matter to all of us if Aadhaar is made most secure or that it is a harmless dot. What worries is that in whose hands the web of connected dots that nets all personal information by using Aadhaar would be. It is the government and therein lies the worry. If the government builds in all laws and institutes systems and processes to implement them to secure safety of personal data, it may be acceptable to have Aadhaar. Such laws and processes would mean custodians, authorizing agencies for access, agencies with legislative powers are all distinct with iron walls. If the CBI or police or courts can authorize drawal of any data based on the Information Technology Act provisions as it is today, one would like all these agencies themselves to be free of possibilities of misuse, and incapable of being influenced. Any local politician can get your information through these agencies and any wealthy citizen can pay his way to get this information given the weak IT Act implementation. Credibility of all these, except redeeming few in judiciary, is abysmal. And abuse of personal information easy and rampant. In proposed NIAI bill, an authorized joint secretary can order release of information collected under national security clause.

Whistle-blower on IIT-JEE irregularities, Prof Rajiv Kumar alleges his personal cellphone data is illegally taken over by IIT authorities, Ratan Tata complained of selective leakage of Radia tapes data, Facebook posts and twitter tweets led to arrests of citizens repeatedly, Pranab Mukherjee’s office had bugging controversy, CBI joint director VV Lakshminarayana's call data record (CDR) was leaked. It is all happening surreptitiously taking advantage of loopholes in the IT Act.

One may also note that such data is selectively leaked, obtained through the back-door, selectively used, not shared publicly but lands up at media houses, allegations made without showing proof, etc—all to undermine political opponents and not just target terrorists or end corruption. It is a global phenomenon and Wikileaks is full of proof of all levels and classes of public figures from all nations indulging in such information abuse. The IT Act in India may have safeguards in making illegal any securing of your personal data but if your telephone call and location data is suddenly with all media houses, whom do you complain against? And who would have such access to your private information so easily? Government with Aadhaar. We need to just jog our memory on misuse of state powers through back door, on all recent challengers to governmental corruption in previous paragraph.

Moneylife recently published a 9-part series on how and why Aadhaar is a bane more than a benefit. To read the complete analysis, click here.


(Sandeep Khurana is an independent consultant and researcher. Views expressed are personal. He can be reached at his twitter Id @IQnEQ.)




4 years ago

Lakh crore spent on UID card
I have none
MY family has none
Ration card ;i do not have; too much corruption
Voter id card;post 60 i am not enumerated or my family;needs too much follow up.
CENSUS records of our family done twice;This is the only dept that works.CENSUS dept is british gift

Ashok Kalbag

4 years ago

Today PAN, Passport, & Credit Card numbers can be used to collate most of the information of the financially significant part of the population. Aadhar is essentially for those who have not been able to get the benefits government provides due to lack of ID of the individual.
Have the Aadhar protestors not acquired most of the existing identities and prospered, but want to deny similar benefits to those who cannot get them?
Which system cannot be abused by a determined individual? Does it imply no system be introduced for the greater good?


Sandeep Khurana

In Reply to Ashok Kalbag 4 years ago

You have a point in saying that even now govt is misusing its discretionary powers and access to information on public. It selectively targets and gets information against activists and politicial opponents- be it Radia tapes and Tata, or Anna's army records or tapping phones etc. That does not justify obvious increase in such power and potential after UID.

However, it is not agreeable to suggest that some unknown protesters you refer to made it big in life because they have PAN, passport and credit cards. On the contrary, tax evaders are loathe to hold credit card and PAN

Also, not true is the statement that benefits will be denied to poor. Subsidy distribution can be done through election I-cards too and enough economists have said about failure of Aadhaar to secure PDS. Why link all information of an individual in hands of govt? Law must have safeguards it does not have now.

As for abuse by determined individual, we act to minimize such opportunities not maximize through creating an attractive database of interest to terrorists, enemies, marketers, politicians and wait for ticking time bomb to explode. Bring in division of power and authority over use of Aadhaar, build safeguards, make it voluntary like in US SSN etc- than just accept everything govt does without murmur.

Ashok Kalbag

In Reply to Sandeep Khurana 4 years ago

Aadhar does not entitle you to any benefit. It is only a means to authenticate the individual.

Benefits to poor are lost as they have no means to authenticate themselves in the absence of any documentation. Hence the denial to poor.

Election I Cards need other documentary evidence for issue and no means to authenticate the holder as a unique individual. Fakes and duplicates are known to exist rampantly.
"Bring in division of power and authority over use of Aadhaar, build safeguards, make it voluntary like in US SSN"
That is exactly my point! It is voluntary, like US SSN (try opening a bank account in US without SSN!)
UID does not have any database other than the biometric data and address for correspondence, etc. The data of different agencies who rely on UID is only for authentication of the individual, to eliminate fakes, and duplicates. Hence the data is distributed with the various agencies who need to maintain it.
UID does not give any data, it only authenticates the biometric data submitted with the claimant in just a Yes or No to the query.
Any one who wants to collate the data of persons of influence can do so in the existing system without recourse to UID (with PAN, Passport, etc.).
Persons with only UID, and no other ID such as PAN, Passport, etc., are already on the margins of society and can only be exploited by diverting benefits accruing to them. Hence the benefit of UID to ensure they get benefits from the government directly.
If there is a better means, it is yet to be considered for acceptance.

Sandeep Khurana

In Reply to Ashok Kalbag 4 years ago

On election cards- if what you say is true, then you should be agitated. If it is not good to distribute subsidy, it is not good to elect government. Why not secure that than create more IDs.

SSN is voluntary in US "by law". Await article part 2 for details.

You have missed the point I make at very beginning of the article on UID being just a harmless dot. There is more to dots that can connect to be a web.

240p FLV

In Reply to Ashok Kalbag 4 years ago

Aadhar is essentially for those who have not been able to get the benefits government provides due to lack of ID of the individual.

Ok. So, why should you Aadhar be MANDATORY IN PRATICE for YOU & ME?

Ashok Kalbag

In Reply to 240p FLV 4 years ago

Aadhar is voluntary (see
Who has asked you for Aadhar number to state MANDATORY IN PRATICE?

Sucheta Dalal

In Reply to Ashok Kalbag 4 years ago

Mr Kalbag.. you are obviously not reading the newspaper. Otherwise you would be aware that municipal unions are protesting against the drive to make it mandatory by withholding salaries.

Also check what is happening at elite clubs etc.
Better still, if you are in Mumbai, do attend the talk tomorrow at the Yacht club. See details at the top left of our home page!

Akshay Iyer

4 years ago

Insightful article Mr. Khurana! It is indeed scary to believe that life can imitate art to this extent. This is very similar to what George Orwell wrote in
"1984" when he envisioned "Big Brother". I believe we're gradually getting there. Unfortunately, we are not even realizing the implications of having an Aadhaar card.


Sandeep Khurana

In Reply to Akshay Iyer 4 years ago

Dear Akshay,
Your clairvoyance has me impressed. I have also mentioned of threat of becoming an Orwellian state in part 2 of the article that follows soon.

Ubaldo C DSouza

In Reply to Akshay Iyer 4 years ago

It is not that we are not realising the implications of the AAdhar card. Do we have a choice when the card is being progressively and increasingly made mandatory at every step of the way?

Sandeep Khurana

In Reply to Ubaldo C DSouza 4 years ago

You are right. Even today, TOI news says "Sheila Dikshit for Aadhaar numbers into university degrees, birth certificates". Please read part 2 of this article (to be published) for some answers to your query. Needless to say, public awareness and support is first step.

Ubaldo C DSouza

4 years ago

Moneylife, Tehelka and Insight (CERC) are currently the best things on the Indian media scene.

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



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)