With one of the longest coastlines in the world,
However, here’s another bunch of statistics. Approximately 20% of the world's merchant navy personnel worldwide are of Indian nationality and origin, and to all perceptions as well as unspoken truths, over half the world's tonnage is managed by Indians located all over the world. Traditional seafaring countries like
The Certificate of Competency (CoC) earned by seafarers after multiple exams and training, issued by the Indian Government, is granted equivalency by other countries, including the developed countries, because it is recognised as one of the toughest regimes existing to acquire the privilege of sailing on board ships, worldwide. A side effect of this is that almost 75% of all candidates studying for the CoC in
So what ails Indian flag shipping, why don't the numbers add up, why is Indian surface transport by water so neglected and behind times? Why can't we have more Indian flagships, so that along with seafarers, it is also our ships that sail across the seas, dominating like our Indian seafarers do?
The answer, as always, lies in the petty and short-sighted way governance treats all forms of transport as short-term revenue generating tools, and not long-term nation building efforts. The attitude down the line with the variety of entities which control shipping in India is the same as the attitude one sees in transport offices, the place where you and I go for our driving licences which are issued—or better still, not issued—unless motivated.
That sea cargo is without doubt the most efficient way to transport goods is another given and simultaneously in India a reason for its neglect—once the ports are built and the ships are bought, there is no need to build roads or railway lines, acquire land or operate toll stations and marshalling yards. All you need to do is get the ships out and on to the seas, freedom of transit on which is guaranteed by historical conventions and modern day laws, and get a move on. On a per tonne per kilometre basis, it is cheaper to send anything over a truck or wagon load by sea from Gujarat to the east coast of India, and at a four-five day transit time, probably as fast too—and that is a fact already being recognised wherever possible. But the obstacles faced by coastal shipping are so immense, that even the best and strongest of contenders have often backed out, giving way to the entrenched road lobbies.
Putting everything else aside, that is also the single biggest reason why water-borne cargo and passenger movements by inland waterways have been put on the back-burner in post-1947 India, except in selective areas like Kerala and West Bengal. Governance and those in authority cannot make money by holding up vessels and cargo or passengers once on the rivers, as easily as they can do on roads, so it simply does not work for those who have made a fine art out of this method of generating incomes, without caring about consequences, and Bihar is a fine example of how a State self-destructs after river-borne trade is destroyed.
This is the true reason why surface transport by water, inland or coastal, has been such a flop in post-Independence
But that's a fact of life. Undivided pre-Independence
The manpower is there, the need is there, tonnage and ships have never been cheaper worldwide, and the reasons are all there. But who wants it? An Indian friend who owns and operates a leading foreign flag shipping company from one of the oldest and finest maritime nations in the world found out, when for reasons of patriotism, he tried to re-flag some of his ships to the Indian flag. Amongst other things, powerful entities in India who were capable of investing "hot money" in millions of dollars, made it very clear that it would be beneficial to all concerned if he continued running foreign flag ships, with ownership hidden in places like the Isle of Man, British Virgin Islands, Delaware, Luxembourg and similar places—instead of under the Indian flag, because the source of money would be easily traced.
In addition, and this is the really troublesome part—the whole concept and execution of owning and operating a ship under the Indian flag to work on the Indian coast is stacked against any such effort. More on this aspect soon.
The day after Moneylife exposed how the Association of Mutual Funds in India (AMFI) was dilly-dallying for over five months on whether trail commission would continue to be paid to the old distributor even after a customer has walked away, the fund lobby has decided to ask for a new vote on the issue. All chiefs of asset management companies got an email on Tuesday afternoon asking them to vote on three questions—whether the trail commission of a departing customer: a. should be paid to the old distributor; b. should be paid to the new distributor; c: should not be paid at all. Funds are supposed to vote a simple yes/no to each of the three questions.
It may be recalled that yesterday we had reported on the fact that there is continuing confusion about who gets the trail commission in a mutual fund transaction, where a client has moved away from one distributor to another. The confusion persists to this day, due to the inability of the fund lobby, AMFI, to implement the decision, by vote of hand, of its own members not to pay trail commission to the old distributor.
About five months ago, AMFI formed a committee with representatives from ICICI Prudential and Birla Sun Life to decide on who should be getting the trail commission. The committee argued that that the original trail should be there for life even if the client has shifted. There were major objections to this idea. In principle, trail commission is paid for maintenance of an account, not for acquisition. For acquisition of clients, fund companies were paying upfront commissions. If a distributor was not maintaining the account, there was no reason for him to get paid anymore.
The decision was debated and put to a hand of vote. It appeared that 11 funds voted in favour of the committee’s flawed decision while 17 were against. However, till date, this has not been implemented. Later, there was a lot of pressure on CEOs who voted for trail commission termination, to take back their vote.
Today’s email asks the funds to vote again on the idea. When Moneylife asked one of the CEOs why should AMFI ask its members to vote again on something that was roundly defeated, one of the CEOs replied, “It’s all a farce. I am not sure what AMFI wants to achieve and whether it will be implemented this time.” What is also a mystery is why are some funds so keen to keep paying commissions to the old distributor, which not only seems illogical but patently anti-investor. It is the investors’ money that is being paid out and it’s unjust to pay his money to a distributor he has decided to walk away from. However, this is precisely what some large funds are supporting
The Sensex closed at 16,692 as it gained 91 points from the previous day’s close, while the Nifty closed at 4,986, up 33 points on the back of strong global markets.
Reliance Industries Ltd (RIL) said today that it had made a gas discovery in one of its exploration blocks in the Krishna-Godavari basin off the country's eastern coast. RIL holds a 90% interest in the block, which covers an area of 3,288 sq km, and Hardy Exploration and Production (
Mahindra & Mahindra Financial Services jumped 2%, after the company said that Franklin Templeton Mutual Fund had hiked its stake in the company.
Sun TV Network rose 1%, after the company said that it will restructure its distribution business.
Golden Tobacco remained flat after the company’s board approved developing its property at Vile Parle, a Mumbai suburb.
Valiant Communications Ltd has formed a 100% wholly-owned subsidiary, Valiant Communications FZE, in the
Aban Offshore Ltd’s wholly-owned subsidiary, Sinvest AS, has redeemed bonds having a principal amount aggregating to Norwegian kroner 1 billion (equivalent to Rs800 crore) along with accrued interest, on the due date of 22 December 2009. The stock was up 4%.
As per reports, corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in the corporate sector in the third quarter (October-December) of the current fiscal, pointing to a firm broad-based economic recovery. Corporate advance tax payments for the quarter were up 44% to Rs48,300 crore against a 3.7% decline in the April-June quarter and a 14.7% increase in the July-September quarter.
During the day, the deputy head of the planning commission Montek Singh Ahluwalia said that the sharp surge in food prices reflects the impact of the drought and inefficient distribution, which could not be addressed by monetary policy. He said that while the increase in food prices was to some extent expected, it remained a concern. Food prices rose an annual 20% in early December—but they should decline in January 2010 as the stock situation is relatively stable. He further added that problems such as this cannot be tackled by blunt instruments like monetary policy.
“Price increase at the retail level is much more than the increase at the wholesale level which is because of dysfunctionality in the distribution system and the ministry is looking into it. But whenever required, we should import,” Mr Singh said.
Finance secretary Ashok Chawla announced that the government is likely to offer cash instead of bonds to State-run oil firms for compensating them for selling fuel at lower than market prices, as per media reports. However, no decision has been taken on the compensation amount.
During the day, Asia’s key benchmark indices in
On Monday, 21 December 2009, the Dow Jones Industrial Average was up 85 points while the S&P 500 and the Nasdaq Composite were up 12 points and 26 points respectively after a Bill to overhaul the
Meanwhile, rating agency Moody’s cut Greece’s debt to ‘A2’ from ‘A1’ over soaring deficits, becoming the third major rating agency to downgrade the highly-indebted country’s rating this month. Moody’s has kept
The Confederation of British Industry raised its 2010 economic growth forecast and said that the Bank of England may pause its bond-purchase plan in February 2010. Meanwhile, policy-makers have pledged to print £200 billion of new money to stoke spending and shake off
In premarket trading, the Dow was trading 43 points higher.