Citizens' Issues
The pushback against junk food gains momentum

The demand for junk food has to come down so that the demand for refined sugar also comes down 


Here are some unrelated issues in the food and agriculture business. Please join the dots. 
First, the Delhi High Court has delivered a judgement on the issue of junk food being sold in and around schools. The salient features are -
• Most common junk foods that are high in fat, salt and sugar such as chips, fried foods, sugar sweetened carbonated beverages, sugar sweetened non-carbonated beverages, ready-to-eat noodles, pizzas, burgers, potato fries and confectionery items should be restricted in schools and 50 meters nearby.
• Advertisement and promotion of such foods targeted at children is to be regulated through a framework that includes all types of media, celebrity endorsements and promotional activities.
• A canteen policy should be implemented based on colour coding. Green category foods -- the healthy food options -- should constitute about 80 per cent of available foods. Red category of select most common junk foods that are high in fat, salt and sugar should not be sold or served in schools. Suggested, healthy menu options should include fruit salad, fruits, paneer / vegetable cutlets, khandvi, poha, uthappam, upma, idlis and kathi rolls, low fat milk shakes with seasonal fruits and no added sugar, fresh fruit juice and smoothies with fruits, fresh lime soda, badam milk, lassi etc.
• The FSSAI (Food Safety and Standards Authority of India) should fix limits of unhealthy ingredients such as transfats to 5% at the earliest.  
• Schools should promote nutrition education and awareness for children. A well-structured curriculum on balanced diet and its health impacts should be introduced.
• Labelling regulations must be strengthened by the FSSAI to enable complete and transparent information on the amount of fat, salt and sugar with reference to recommended daily allowed limits.  
Second, the sugar industry is once again apparently in the doldrums and seeking handouts from the taxpayer. In the bargain, farmers have not been paid for the last 2 or even 3 years and have therefore, in some cases shifted to cash crops of shorter growth cycles, also because of rapid and drastic climate change. One of the largest customers for the refined sugar industry is the junk food industry, be it carbonated sweetened colas and other soft drinks, bakery products or even simple buns and pizza bases-and they do not like this shift away from sugarcane  by the farmers.
This junk food industry is by default, therefore, demanding that the taxpayer subsidise its insatiable appetite for sugar. While the incentive to grow more useful seasonal cash crops, vegetables and lentils is either removed or farmers are simply not allowed to grow and sell them further. You have to understand the economies and pressures of rural India to appreciate this - where poor farmers or large land-holders alike are forced to grow sugarcane and sell it only to the sugar mills in their areas. 
Sugarcane is a strange crop-traditionally associated with slavery. Mainly because it does not provide anything of value to the people growing it other than cash in lumpsum. That cash in lumpsum is not happening and landowners are rapidly, therefore, becoming enslaved and dispossessed of their own lands because of debt. Meanwhile, they are economically weakened and unable to resist the demand to grow even more sugarcane.
Sugarcane farming is where the term "indentured labour", a polite word for bonded labour or slavery, was coined.
General Sales Tax to permit free and easy movement of fresh produce between States is still not in position. Meanwhile, small but very important indicators like the delayed or even non-arrival of butterflies because of the unseasonal heavy rains in India this year have caused major worry on subjects as diverse as the spread of swine-flu to lack of pollination.
In turn, the cost of seasonal vegetables and other cash crops is likely to go shooting through the roof, as farmers are stuck between growing more sugar-cane in the hope that previous debts will be cleared and growing more vegetables as well as cash crops including fast-growing lentils to meet the demand.
This is going to impact your and my home budgets in a way that we cannot even begin to imagine right now.
One part of the solution lies in our hands as responsible citizens as well as in the larger interest of our own health. The rampaging demand for junk food of all sorts - from colas to fast foods to other unhealthy consumption - has to come down so that the demand for refined sugar also comes down.
The High Court judgement addresses one part. Making young people aware is the bigger part.
Just like there was a "Say no to fire-crackers" movement, we need to start working on a "Say no to Junk Food" movement and awareness programme aimed at young people. The Delhi High Court judgement is already covering the schools. We now need to also cover the weekends and holidays.
Expecting the junk food industry to voluntarily scale down consumption on weekends and holidays is like a pipe dream, not likely to happen, in fact heavy resistance can be expected. The only way to do it is by ourselves.
People are encouraged to get this message across to the purveyors of junk food by
whatever legitimate means available at their disposal. Start today! 



Suketu Shah

2 years ago

Wonderful piece.Sugar and glutene do incredible damage.


2 years ago

Wow great article. I have the habit of eating junk food. It effected my health. So i leaved eating junk food from last 6months. Now my health is better. I request you to dont eat junk food that sell in road sides. Thank you


Ralph Rau

2 years ago

The fundamentalists have kicked the beef eaters where it hurts -in the stomach.

Instead of banning beef the nation would be much healthier if a complete ban OR high taxes were imposed on all sugary drinks whether or not carbonated.

The carbonated drink manufacturers argue that they are providing hygienically packed beverages an important defense against water borne diseases. This is a challenge.

Narendra Doshi

2 years ago

Excellent article to be noted without fail. Already, we are late.
Think twice on what you are eating TODAY. Do not be surprised if you have unwelcome health disorder visitors knocking ay your door later, in 5/10/15/20 years.

Are fund houses using direct plans to benefit themselves?

By short-changing existing direct investors and those with invalid distributor codes, fund houses are benefitting from the unpaid distributor commissions


Small mutual fund distributors are questioning the practice of mutual fund houses in charging expense ratio. The first issue being that fund houses are charging the full expense ratio on the asset under management (AUM) of those mutual fund folios (accounts) without an AMFI Registration Number (ARN) or an invalid ARN, bought before 1 January 2013. This, they say, is not ethical. The second issue they highlight is that certain fund houses charge an extremely low expense ratio for direct plans in order to attract high net-worth individuals (HNIs).
Direct plans were introduced from 1 January 2013. These plans omit distributor expenses and commissions; hence, the applicable expense ratio is lower than that of the regular plan. Those accounts without a valid distributor code (also known as lapsed-code account) which were opened prior to the introduction of the direct plan continue to be charged the full expense ratio even though the distributor commissions are not being paid out for such accounts. Commissions are paid out to the distributor only if the ARN code is valid.
Chilukuri KRL Rao, a small distributor from Hyderabad, drew our attention to this practice of mutual funds. “As the advisor code is lapsed and as the client is not receiving any advice, is it fair on the client to be charged this extra expense ratio?,” he asks.
“In lapsed code AUM, the brokerage is happily unpaid, while the client is fully charged,” writes Raghuramam, another distributor from Hyderabad, on a forum published on The distributor’s “basic remuneration is held back, all the while, they are charging to the clients,” he states further.
At the same time it is interesting to note that UTI Mutual Fund, according to a report published here, categorises the lapsed-code AUM under direct. Moneylife sent an email to them to confirm this, but we did not receive a reply till the time of publishing this article. UTI’s lapsed AUM of approximately Rs8,000 crore is categorised as direct AUM.
Sam Koshy, a distributor from Kollam writes that the lapsed code AUM may be in upwards of Rs1 lakh Crore in the entire industry. He further raises some pertinent questions—
“1. If UTI is showing the lapsed code AUM as direct (and charging less to the clients) why aren’t other fund houses doing the same?
2. The remaining fund houses are obviously charging full expense ratio on lapsed code AUM. Is it fair on the client?
3. Won’t it be better if commissions under such lapsed/invalid code AUMs are written back to scheme to eliminate the conflict of interest?
4. If there was only trail of 1% since the inception of the industry would these IFAs let their codes lapse and would they have left the industry?”
“We believe there is no common accounting standard in arriving at the direct plan expense ratio across the industry. No fund house ever disclosed any such standard on its website until now. What gives strength to our belief that accounting in the industry is shady is the fact that UTI MF is showing lapsed code AUM under Direct but probably a majority if not all of the remaining fund houses are not doing the same,” says Rao
Rao further highlights the gap in expense ratio between direct plans and regular plans as an issue. “In the case of Franklin Templeton Mutual Fund where in the gap between direct and regular is as high as 2.0% or more, the gap in percentage terms of the expense ratio is even higher i.e. 83.33%,” he says referring to the data available here.
The SEBI’s ‘Master Circular for Mutual Funds’ states that “direct plans shall have a lower expense ratio excluding distribution expenses, commission, etc.” Rao mentions that “No fund house ever disclosed any such standard on its website until now. Lack of accounting transparency is being used to attract HNIs at the cost of small investors and in the process advisors and the industry are also being harmed.” The regular plans are being charged a higher expense ratio to compensate the low cost of the direct plan.

The regulator has a history of coming up with half-baked ideas. In August 2009, when SEBI banned entry load, the worst affected were the small distributors. With their commissions taking a hit many such distributors went out of business. Prior to the launch of direct plans, these distributors feared that their existing high net worth clients would shift to the direct route and would result in a loss of revenue for them. This is what’s happening according to Rao, especially to the huge gap in expense ratio. 




2 years ago

Very true indeed! I had invested in HDFC MF, RELIANCE MF,BSL directly, a large chunk of my investments are in "regular scheme", no distributors and the margins are pocketed by AMCs. If I were to switch now, any early redemption may attract penalising exit load, double whammy for no fault of mine!

Sam Koshy, KOLLAM

2 years ago

The effort to limit trail commissions as indicated by cafemutual and to continue with upfront commissions is what is all wrong with brokerage structures and the attitude which lead to the exodus of thousands of IFAs. The more the number of IFAs left the better is the ability to pay upfront commissions to bigger distributors(commissions saved from lapsed code AUM). As long as there is no prescribed minimum trail commission by SEBI and as long as the benefit of lapsed code, invalid code, no code AUM keep accruing to fund houses, IFA codes will keep on lapsing. Lapsed code AUM should be transferred to direct and a minimum trail commission should be prescribed by the regulators to save IFAs.

Salija B

2 years ago

Like to know the truth. Who can give us the real picture? i doubt the companies are hiding the biggest scam India has seen. Hope SEBI will look into this more seriously.

Binu Varghese

2 years ago

Mr Rao said it clearly,as he is explaining things very simply, thanks for Mr Sam Koshy for those important questions which anyone has genuine doubts. I think Sebi is the authority for take a corrective action.

Sambhu Potti

2 years ago

very important questions. we want to know the truth.

Benzi Thomas

2 years ago

Central Budget proposed to merge schemes. Now companies can merge old direct option assets, lapsed code assets &new direct plan assets into a single direct plan. Nothing prevents SEBI in suggesting the AMCs to merge the above three.


2 years ago

Instead of banning upfront commissions that are detrimental to client interest, it seems fund houses are trying to limit trail commissions where there is no conflict of interest at all !

The following link indicates the state of affairs ,

Minimum trail should be prescribed by the regulator so that attempts to lapse codes by paying lower trail commissions are checkmated.

Fund houses pocketing higher expense ratio on lapsed code AUM or on AUM without any code is unfair on the clients too.

The only way to safe guard small and honest distributors and investors too is to ban upfront commissions and by transferring AUM without any code to Direct share class.

Amalaraj Marian

2 years ago

Absolutely correct this grey area and many such grey areas exists in the accounting system of the AMCs. If these loop holes are not addressed to correctly by SEBI soon then the industry will again end up with tail spin.
One very pertinent area being on which account are the office and personnel expenses charged to by these AMCs?
The more deeper one thinks about these the merkier is the outcome resulting into a question are this AMCs ending up milking all concerned!!!!

Ramesh Bhat

2 years ago

Solutions all these problems

IFA committee is to be created (North,South,East and West) by SEBI and understand the ground reality from the force which is working in field before coming out with any regulation.

- Ramesh Bhat an IFA from Chennai


2 years ago

It is unfair to charge Regular expense ratio on Lapsed code Aum. No point to charge higher expenses, when there is no advice and service. It is neither fair to the clients, nor to the distributors who work hard to bring in the AUM if the commissions of lapsed codes go to fund houses. Industry insiders are saying lapsed code AUM may be upward 1 lakh crore. It seems fund houses are trying to benefiting from lapsed code Aum. Lapsed code AUM should be transferred to Direct.


2 years ago

Small distributors who went out of business . . .ought to thank their stars. Because AMCs wouldn't let them die whereas SEBI wouldn't let them survive

For these small distributors, getting driven out of MF distribution business may have come as a blessing in disguise, especially, when you see the plight of those small MF distributors who chose to continue.

Vaibhav Dhoka

2 years ago

In this game only fund houses are getting richer.SEBI should direct AMC's to put this lapsed AUM in special united fund and use this to give insurance to IFAs.


2 years ago

I am an ifa fund houses charging the maximum fees permissible by sebi. But as an ifa for my old assets i am receiving meagre 20 basis points from amc.My assets are approximately more than 7 to 10 years old.I am not indulging in churning to closede endede NFOS.But as per recent budget i have to bear 14 percent service tax plus cess.My cost of serving also increses because of inflation.I strongly need moneylife help to take up with the regulator and amfi and finance ministry this issue.Amc are cheating the ifas like me.

Nanda Patel

2 years ago

At the same time it is interesting to note that UTI Mutual Fund, according to a report published here,

the link does not work



Jason M

In Reply to Nanda Patel 2 years ago

Yes, there seems to be an error with the website. No of their articles are getting displayed.

Here is the relevant quote from UTI MF in the report - "The data which is shown under Direct Plan AUM on UTI website also includes data which pertains to historical AUM of invalid ARNs and wrong ARNs which exists prior to introduction of Direct Plan."

Centre offers CBI probe into Karnataka IAS officer's death
The central government is ready for a CBI inquiry into the death of Karnataka IAS officer D.K. Ravi if the state government wants, Home Minister Rajnath Singh said on Thursday.
Making an intervention during zero hour in the Lok Sabha, Rajnath Singh said a delegation of parliament members met him and demanded that a CBI inquiry be initiated into the incident.
"Some senior IAS officers have also raised this demand," he said.
The home minister said: "I have spoken with the Karnataka chief minister and he has said he will send a detailed report within a couple of days".
"If the state government wants (CBI probe), then as soon as I get a representation from them, we will be ready for a CBI inquiry".
D.K. Ravi, a 36-year-old additional commissioner in the state commercial tax department, was found dead on March 16 at his official apartment. His wife found him hanging from a ceiling fan.
The issue was raised in the Lok Sabha on Thursday by BJP member Prahlad Joshi, who is from Karnataka.
Joshi said: "We met Rajnath Singh to apprise him of the situation and how people are been treated there (Karnataka)".
"I demand a CBI inquiry," he said, adding that the parents of the officer are also demanding it.
"The CID works under home minister of Karnataka against whom fingers are being raised," Joshi said.
Joshi's comments led to a protest by Congress members in the house. Amid the uproar, Speaker Sumitra Mahajan adjourned the house briefly for 15 minutes.


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