Status quo on foreign equity in multi-brand retailing: Jaitley

The question to Jaitley was posed against the backdrop of the commerce minister's deliberations last week with key stakeholders on the issue of whether or not India should allow foreign direct investment its e-commerce space


Finance Minister Arun Jaitley on Friday said the decision taken by the previous United Progressive Alliance (UPA) government to allow 51 percent foreign equity in the country's multi-brand retail trade industry continues even as his party's views were well known.
"The views of my party on the policy and the views of my government on the same has been known to everyone for a long time. However, the official position right now is: The earlier policy, which was legislated and implemented by the previous government, still stands," Jaitley said.
"This is the current official position. I've not read exctly what she (Commerce Minister Nirmala Sitharaman) has said. But the views are concurrent with that of the party and our government," the finance minister told a press conference here to mark one year of his government.
The question to Jaitley was posed against the backdrop of the commerce minister's deliberations last week with key stakeholders on the issue of whether or not India should allow foreign direct investment its e-commerce space.
"We are not taking any position this way or that way from the ministry. We have heard everybody. In fact, this is not going to be sufficient," Sitharaman had said after the meeting, adding: "I will need to hold more meetings with everyone -- individual operators and associations."
This made it clear that the government had not taken any position on the matter.
In January 2012, the UPA government approved 100 percent foreign equity in single-brand retail stores but with a caveat that they source 30 percent of their goods from India. Following that, in December the same year, it allowed up to 51 percent foreign equity in multi-brand retailing.
Yet, despite these norms in placee, actual permissions to the global retail chains have not been given thus far, as Jaitley and Sitharaman's Bharatiya Janata Party (BJP) has been opposed to any form of foreign equity in the multi-brand commerce, fearing displacement of mom-and-pop shops.


Delhi is India's mall capital, but their success limited: Study

There are around 255 operational malls in the top seven cities of India including Delhi, Mumbai, Pune, Bangalore, Kolkata, Chennai and Hyderabad


With 95 operational malls in an around Delhi, the National Capital Region has emerged as the mall capital of India but only 12 of them are successful as people used its air-conditioned confines not just for shopping but often only to escape the heat, says a study.
There are around 255 operational malls in the top seven cities of India including Delhi, Mumbai, Pune, Bangalore, Kolkata, Chennai and Hyderabad. Among them Delhi is seen as the best bet to host successful, large malls, despite the low success ration, says realty services major JLL India.
Mumbai, on the other hand, fares better with 10-15 successful malls out of the total of 35-46 malls that are operational, followed by Bengaluru with seven successful ones out of the 34 that are functional and Kolkata that has six successes out of 15 that are in operation.
"No other city comes close to the number of operational malls found in Delhi-NCR. It is mainly because of the huge population of the city, coupled with the spending culture and the weather conditions over here," Pankaj Renjhen, managing director for retail with JLL India, told IANS.
Primarily, the success rates of malls vary, usually depending on factors like design and layout, brand positioning, location and how well they cater to the needs of their target segments.
In the case of Delhi, the JLL study is positive on its mall culture, despite the relatively low success rate. "It is also evident that the city of Delhi has better potential in terms of well-performing large-sized malls," it said, adding just four shut down and one became office space.
"In Delhi NCR the propensity to spend is higher. Also the city is exposed to long period of heat, which prevents people from shopping in the high streets. They look for more comfortable options like malls," Mohit Bahl, partner, KPMG in India, told IANS.
He said the retail industry in India was in an evolution process, with 85-90 percent of it being in the unorganised space. "Retailers are still looking for good quality real estate. The spot of the real estate is very important as a lot depends on the catchment area," Bahl added.
The JLL study graded malls according to their average vacancy levels and rentals. While rentals are high in malls with vacancy levels of 10 percent or less and low in those with 20-30 percent vacancy levels, they are poor in malls with average vacancy levels of 30 percent or more.
Some of the more successful shopping malls in the NCR, like Select City Walk in Saket, Ambience Malls in NH-8 and Vasant Kunj, the DLF malls in Saket and Vasant Kunj, the Pacific Mall in West Delhi and MGF Metropolitan Mall in Gurgaon, employ professional tenant management teams, it said.
These teams then decide on the brands to be leased spaces in these malls. They also evaluate the placement of different brand retail stores, revenue targets to decide continuation of lease agreements, branding, and promotions and customer outreach events in the atrium.
The first mall off the blocks was Ansal Plaza in south Delhi, which became operational in 2000.
"NCR's ubiquitous position has made it India's Mall Capital. It is the sheer size of the city and vast catchment area that matters much. The NCR has also flourished because of its suburbs," said Shashank Jain, partner, transaction services, PricewaterhouseCoopers.
"People from semi-urban and suburban areas also visit malls in Delhi-NCR," Jain told IANS.
The JLL study said locational accessibility was among critical aspects contributing to a mall's success. On the other hand, apart from an existing high-street culture in an area, other reasons for failure could be the lack of a proper design and layout, and brand placement.


Govt waiting for security clearance on CIC shortlist
Meanwhile, leading RTI activists have demanded making public, the names of the selected candidates; making the selection process time bound and appointing the senior most Information Commissioner, as the CIC, in the interim
In the continuing procrastination in the appointment of the Chief Central Information Commissioner (CCIC), the Additional Solicitor General told the Delhi High Court on 21st May that candidates have been shortlisted for the post, including those for Information Commissioners (ICs) but the government is awaiting clearance from vigilance and Intelligence Bureau. This was a sequel to the Delhi High Court directing the government to hasten the process of these appointments. The post of CCIC is vacant since 22 August 2014.
While the Delhi High Court has reserved the order on Thursday, several leading RTI activists have intervened in the petition have demanded making the entire process transparent by making public, the names of the selected candidates; making the selection process, time bound and; appointing the senior most Information Commissioner, as the CIC, in the interim period. The original petition was filed by Commodore Lokesh Batra, Subhash Chandra Agrawal and RK Jain. They were represented by noted lawyer Prashant Bhushan.
RTI activists Anjali Bhardwaj, Nikhil Dey and Amrita Johri filed an intervention on similar demands as the original petitioners, stating that the objective was to ensure smooth functioning of the Commission. In a press statement issued on Thursday, they stated, “the intervention was filed with the prayer that the powers of the Chief be vested in the senior most Information Commissioner pending the appointment of the Chief Information Commissioner, to ensure that the Commission functions smoothly in the interim. Further, the intervention sought the Court’s directions to ensure that a transparent method be adopted to select the ICs and also ensure that all records of deliberations related to the appointment process be made public as per the provisions of the RTI Act.”
Following issues have been reiterated in the intervention:
The functioning of the Central Information Commission has been severely impaired for the last nine months, as it has been functioning without a Chief. The previous Chief retired on 22 August 2014 and till date the government has not appointed a successor. In the absence of the Chief, no person has been designated to perform the functions of the Chief including the administrative powers and the powers to delegate work between the different information commissioners. As a result, critical public authorities allocated to the Chief’s bench including Prime Minister’s Office (PMO), Cabinet Secretariat, Ministries of Power, Steel, Defence, HRD, President’s Secretariat, Parliament, Comptroller and Auditor General (CAG), Supreme Court, All High Courts and Election Commission (ECI) have not been re-allocated to any Information Commissioner. The Commission has not disposed any appeals, complaints related to these public authorities ever since the post of the Chief fell vacant. This implies that for over nine months, critical authorities like the PMO have been effectively outside the ambit of the RTI law. The pendency before the Chief’s bench has doubled since the time the Chief retired in August 2014 and currently more than 15,000 appeals and complaints are pending before the bench of the Chief Information Commissioner
The financial powers delegated to the Chief Information Commissioner were first transferred to the Secretary (Personnel), Department of Personnel and Training (DoPT) and then to the Secretary, CIC, in March 2015 despite the Secretary, CIC highlighting in a communication that such transfer would be in violation of Section 12(4) of the RTI Act. In the intervention, the activists have sought that all powers of the Chief including the administrative, financial and power to delegate work be vested in the senior most commissioner in the interim to overcome the current problems plaguing the Commission. Further, allowing the work to be re-allocated among existing commissioners is critical to ensure that people can exercise  their fundamental right to access information from the public authorities currently allocated to the Chief' bench.
Information obtained under the RTI Act has revealed that the government has adopted a completely non-transparent and arbitrary process for appointing information commissioners including the Chief. In response to an RTI application seeking copies of the minutes of the meetings of the search committee set up to short-list candidates for appointment of the Chief, the government stated that “Minutes of meetings have not been recorded in the file”. Further, they even refused to divulge the names of people who attended the search committee meetings, stating “Since minutes have not been recorded in the file, undersigned is not aware as to who attended those meetings.” In another RTI application, the government admitted that no guidelines or criteria has been defined on the basis of which the search committee is short-listing candidates to send to the selection committee. As the search committee is functioning without a legal mandate and in the absence of records of its deliberation, it will be impossible to know how candidates were short listed, the activists have sought the court's intervention to ensure that the search committee is not allowed to arbitrarily weed out applicants and send a circumscribed list to the selection committee. 
Further, the interveners have also sought that all records of deliberations, including the criteria and basis of decision-making, related to short-listing and selection of Chief Information Commissioner and other Information Commissioners be properly recorded and made available to citizens in consonance with the provisions of the RTI Act. The lack of transparency in the appointment process will irrevocably impact the credibility of the CIC and also raises suspicions that the process might be subject to undue political influence.
Is the process of appointments really transparent?
As per the DoPT, the “search committee”, which is shortlisting the candidates for CIC and IC posts, can have its own modalities and is not bound by any rules to justify whether the candidate it selects it are transparent or not.
Commodore Lokesh Batra had proposed to Cabinet Secretary Cabinet Secretary Ajit Sheth of making the appointments of CIC and ICs transparent, suggesting the following:
(a) Number of Posts to be filled in case of ICs.
(b) The Methodology / Procedure/ Steps for the Selection Process.
 (c)  The ‘Criterion’ for shortlisting names of candidates (for inclusion of 02 names per panel) by the Search Committee, before placing them before the High-powered Selection Committee for final recommendation to the President.
(d) Details of Member of the Search/Screening Committee constituted under the Chairmanship of Cabinet Secretary.
(e) Measures taken to ensure candidates recommended by any person other than search committee are not considered by the Selection Committee.

To this, the DoPT has replied to the Cabinet Secretary thus (Batra procured this under RTI Act):

“The process of selection of IC/CIC is much more transparent than provided in the Act. Files relating to appointment are uploaded on the Website after selection process is over.
As regards, Criterion for shortlisting of candidates by the Search Committee, it is a high powered committee’ which cannot be guided by certain (fixed) rules to empanel persons of eminence belonging to varied fields.
“Search Committee” can always have its own modalities to justify a person who fits the role of guardian of transparency.

So far as issue of consideration by ‘Selection Committee’ of a person other than recommended by Search Committee, no such case has taken place so far. The apprehension of Mr. Batra is unfounded.

No action is required to be taken on the suggestions made by Mr. Batra.”

(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)



Lokesh Batra

2 years ago

In my proposal to the Cabinet Secretary, Shri Ajit Seth for making the appointments of CIC and ICs transparent, the point (c)should read :

"The ‘Criterion’ for shortlisting names of candidates (for inclusion of 03 names per panel) by the Search Committee, before placing them before the High-powered Selection Committee for final recommendation to the President."

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