23-08-2024 (Important News Clippings)
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Date: 23-08-24
Price Of Intervention
Regulators can look at pricing. But be careful of creating market disruption.
TOI Editorials
Commerce minister Piyush Goyal’s criticism of multinational e-commerce players for “predatory pricing”, which he argued damages mom-and-pop players and small retailers, revives an old debate in this country. It’s true e-commerce giants have been accused of such tactics even in developed economies. But underlying this issue is a more fundamental one. Market economies are governed by demand and supply and pricing is best left to the interplay of those forces. And govts and regulators must be very cautious about intervening in pricing mechanisms. Global and local experience suggests that price controls can lead to shortages, inferior product quality and illegal markets. Price interventions may have good intentions but they often result in bad outcomes, as a World Bank paper said.
Markets need free play | There are also several benefits of a market mechanism to consider here. For instance, the e-commerce boom has not just been a boon for consumers but also helped with formalisation and digitisation of economy and generated more than, by one estimate, 15mn jobs. In the telecom sector, it’s the entry of an Indian behemoth with aggressive pricing in 2016 that led to a fall in tariffs and data revolution in India. The sector, which has seen tariffs rise again, is also proof that beating competition with such a strategy has its limits. Fact is no company can indefinitely keep suffering losses to gain market share.
Regulate but with caution | Besides, what’s the line that separates competitive pricing from predatory or over pricing? We need very sound and efficient regulatory systems to make such distinctions and balance market sanctity with ensuring a sector doesn’t turn into a monopoly. There will certainly be cases where regulators need to step in. Take for instance, the issue of surge pricing by taxi aggregators. There must be a ceiling on what passengers shell out in rush hour. But such interventions must be kept to a minimum. Concern for investment, growth, and job creation is also why formulation of India’s e-commerce policy has seen long delays. Create no major market disruption, must be the mantra.
Date: 23-08-24
Consumer India’s Amma Jaans
Large e-commerce platforms haven’t played out in India quite like in the West. Here, they have empowered both small consumers and small suppliers. This is an inclusive growth story.
Rama Bijapurkar, [ The writer is a consumer behaviour analyst. ]
● First, consumers’ well-being is central to many of the rules. They prohibit ‘unfair trade practices’ or ‘abuse of dominance’ or mergers or price cartels or any behaviour that destroys competitors, weakens competition and creates monopolies – all of which, as we know from pre-1991, are really bad for consumers. Such protection of consumers and competition is, of course, welcome. Plus, such rules apply to everyone, regardless of corporate nationality.
● Second, antitrust issues pitting regulators against big business platforms have been increasing the world over, with big businesses accused of exploiting their power and hurting vendors and consumers. The US Federal Trade Commission and 17 US states have filed a lawsuit against Amazon’s conduct, where it is accused of abusing its dominant position, to keep prices high and quality low, limit competition and depress innovation.
● Third, the opposite has happened in India. Indeed, before deciding how to deal with Amazon, we need to assess what its entry has done for consumers, small suppliers and the future of competition in India. Like everything else in our country, there are many truths and perspectives, all true and valid, which need to be weighed carefully, rather than blindly following the West.
Why Indian consumers embraced Amazon | With Amazon, Consumer India has got, and embraced, access to huge variety (of goods made in India alongside imports), lower prices, ease of buying, and service like never before. Earlier, you could not return even a defective item, leave alone something you didn’t like.
● No, Consumer India is not being forced to buy pasta or hot pants instead of sambar powder or saris – it is being given the courtesy of choice. Varieties of packaged cow dung are available if you are ritually inclined and black rice at your doorstep if you are a homesick, young, shop girl from Meghalaya in Bengaluru.
● Modest-income consumers love the status-blind service that e-commerce gives. Live in a slum and you get the same speed of delivery, price discounts and ability to return as if you live in a big condo. Humans discriminate, digital platforms don’t.
● A WhatsApp University joke sums up Consumer India’s relationship with Amazon – the husband asks the wife to buy X, Y and Z and each time she says “Amma Jaan se pooch.” Annoyed, he asks, “Why bring my mother into everything?” It turns out she means, “Amazon”.
● Amazon prices have disciplined many a high street, small electronics shop to reduce prices the same way Nrega forced many a rural employer to raise wages – by providing price discovery and benchmarks.
How Indian kiranas stood up to Amazon | What of competitors getting decimated and Amazon becoming the last man standing? One argument is that when we have seen predatory pricing in other categories like telecom, we have been sanguine. But beyond this, there is more solid and nuanced evidence of market dynamics to consider.
● Small shops will continue to do well because Consumer India’s behaviour is never “either-or” but is “and”. Consumer India searches in small physical shops and buys on Amazon (many of the small garment shops, by the way, neither have a trial room nor do they allow returns) or researches thoroughly on Amazon and buys from the neighbourhood store to ensure easy, related services.
● Kirana won effortlessly over physical modern retail by providing personalised value, and India has the largest number of vibrant small shops in the world. Quick commerce of Dunzo and Zepto disrupts kiranas for grocery and pantry far more than Amazon.
● And finally, what will see the demise of the bigger town kirana stores are newer settlements like Gurgaon or Powai, with no room for the shops, and gen next who don’t want to sit in the shop 24×7, without which the business model does not work.
New economy, magic bullet | The most compelling argument encouraging marketplace platforms is that they are perfect for the structure of demand India has – platforms aggregate small businesses and create a virtual marketplace and provide a host of services that small businesses individually cannot afford and provide more buyers than if located in a small alleyway somewhere.
India’s mega consumption story is best described as Lilliput Land – lots and lots of small consumers earning and spending a little bit each that adds up to a lot, served by millions of small suppliers oozing innovation and agility and customer intimacy but lacking in access to the market and to resources of all kinds. Most big companies, including most multinationals, do not serve the mass market small consumer because they cannot make the profit they target and offer the performance consumers want at the price they can afford.
At last, we have found the magic bullet in the new economy – which e-marketplaces are a part of. They aggregate existing small suppliers and small buyers and yoke them together digitally and it’s a win-win for all.
India’s Lilliput Consumers and Suppliers have given many a MNC Gulliver a run for their money. Amazon will not destroy Indias ‘small’. In fact, it will enhance them. Complaining small shops will shape up and serve consumers better, or themselves form alternative platforms. The platform marketplace comprising the small is the future of India’s mega consumption story. A thousand flowers will bloom and coexist – if only we allow it to happen.
eCommerce Paste Can’t Go Back in Tube
But concern for retailers, consumers is real.
ET Editorials
Piyush Goyal has reiterated the old alarm among politicians over the ‘unbridled’ rise of ecommerce. Like paste out of a tube, it can’t be put back in, especially in an emerging market with an overwhelmingly informal retail sector. The employment argument remains powerful, though, in an economy that doesn’t create enough factory jobs to absorb surplus farm labour. Typically, this has been soaked up by a creaky retailing industry. eCommerce brings in efficiencies that create jobs, but not on a scale to offset the physical retailers it displaces. The latter also leverage advanced ecommerce logistics to improve market access, but again, not to a degree that yields gains in market share.
Lawmakers wade into this market asymmetry with good intentions. These concerns target consumer protection and predatory pricing. Regulations designed to protect privacy and discourage deep discounting can slow down the growth of ecommerce. Yet, ecommerce derives its higher productivity from data on consumption behaviour and large investments in logistics. Neither would be available to the small retailer unless ecommerce platforms provide it to them. This consideration governs the regulatory reflex. Besides, ecommerce offers a sophisticated bridge to export markets for small enterprises and excessive regulation could work against national interest.
Global rules have favoured the growth of digital commerce through tax exemptions. These are now being reexamined from a revenue-forgone perspective. Regulating this aspect of international ecommerce can cut both ways for economies trying to increase their share of manufacturing and services exports. The objective of regulation should be to encourage a bigger migration to ecommerce while keeping a tight vigil on concentration. Indian ecommerce policy has been proactive, and Goyal is articulating some of its more serious concerns over unregulated growth. These concerns must be heeded in one of the biggest available markets for ecommerce. Policy must co-evolve along with ecommerce to restrict the downside effects on consumers and retailers.
स्वर्णिम भारत में युवाओं को हुनरमंद बनाना होगा
संपादकीय
Date: 23-08-24
बिखरते पड़ोसी देशों के बीच इकलौते खड़े रह गए हैं हम
मनोज जोशी, ( विदेशी मामलों के जानकार )
आज जब भारत अपने चारों ओर देखता होगा तो अपने आपको इस समूचे क्षेत्र में स्थिरता और आर्थिक विकास का इकलौता द्वीप पाता होगा।
हमारे पड़ोस में हुए घटनाक्रमों ने क्षेत्रीय नीति में बड़ा शून्य उत्पन्न कर दिया है। अगर बांग्लादेश के परिप्रेक्ष्य में बात करें तो आप निश्चिंत हो सकते हैं कि नई दिल्ली इस समूचे घटनाक्रम से हैरान थी और उसने इस नतीजे की कतई उम्मीद नहीं की थी। किसी को दूर-दूर तक भनक नहीं थी कि शेख हसीना को अपना राजपाट छोड़कर भागना पड़ेगा। यह इतना अप्रत्याशित था कि भारत ने हसीना की सरकार गिरने के काफी समय बाद तक कोई बयान जारी नहीं किया। हसीना के नई दिल्ली पहुंचने के एक दिन बाद लोकसभा में बोलते हुए विदेश मंत्री एस. जयशंकर ने कहा कि भारत ने उन्हें संयम बरतने की सलाह दी थी और आग्रह किया था कि बातचीत के जरिए स्थिति को शांत किया जाए, लेकिन प्रदर्शनकारियों के ढाका में एकत्र होने के बाद हसीना ने भारत आने की अनुमति मांगी। इसके बाद प्रधानमंत्री मोदी ने नोबेल विजेता मोहम्मद यूनुस के नेतृत्व वाली बांग्लादेश की अंतरिम सरकार को बधाई संदेश भी भेजा और उनसे हिंदुओं और अन्य अल्पसंख्यकों की सुरक्षा सुनिश्चित करने का आह्वान किया।
शेख हसीना 2009 में महिलाओं और युवाओं के उत्साही समर्थन के साथ सत्ता में आई थीं। लेकिन अपनी राजनीतिक पूंजी को बर्बाद करने में उन्हें 15 साल लगे। उनके नेतृत्व में बांग्लादेश ने 11 साल तक वास्तविक प्रति व्यक्ति आय में 5% से अधिक की आर्थिक वृद्धि की थी। बांग्लादेश चीन के बाद दूसरा सबसे बड़ा कपड़ा निर्यातक बन गया था। लेकिन अब लग रहा है कि इसका एक बड़ा हिस्सा जॉबलेस-ग्रोथ का था। 2022 के आंकड़ों के अनुसार, बांग्लादेश के 15 से 24 वर्ष के 30 प्रतिशत युवा बेरोजगार हैं। आर्थिक विकास पर सरकार के फोकस से सामाजिक विकास हुआ था, लेकिन इसके साथ ही देश में लोकतांत्रिक स्वतंत्रता भी धीरे-धीरे कम होती चली गई। जनवरी 2024 के चुनाव सबसे ज्यादा विवादास्पद थे और विपक्ष ने उनका बहिष्कार किया था।
सिर्फ दो साल पहले ही, बांग्लादेश जैसी स्थिति के कारण शक्तिशाली राजपक्षे परिवार श्रीलंका से पलायन कर गया था। पड़ोसी म्यांमार में भी हालात स्थिर नहीं हैं और पाकिस्तान जैसे-तैसे अपना अस्तित्व कायम रखे हुए है। बांग्लादेश का घटनाक्रम भारत के लिए बहुत नकारात्मक साबित होगा। इसका एक कारण यह है कि नई दिल्ली ने अवामी लीग सरकार के साथ घनिष्ठ संबंध बनाने का निर्णय लिया था, जबकि हमारे पश्चिमी मित्रों ने इसके विरुद्ध विनम्र चेतावनियां दी थीं। अमेरिका और ब्रिटेन ने साफ कहा था कि जनवरी में वहां पर हुए चुनाव स्वतंत्र और निष्पक्ष नहीं थे। बांग्लादेश को अमेरिका द्वारा प्रायोजित लोकतंत्र शिखर सम्मेलन से भी बाहर रखा गया था।
चिंता का सबब जमात-ए-इस्लामी भी है। इस संगठन पर लगा प्रतिबंध अब हटने के आसार हैं और यह पाकिस्तान की आईएसआई की मदद से भारत के खिलाफ अपने जहरीले अभियान को अंजाम देने के लिए स्वतंत्र हो जाएगा। वहां के मुख्य विपक्षी दल बांग्लादेश नेशनल पार्टी (बीएनपी) का कहना है कि उसे भारत से कोई समस्या नहीं है। मीडिया से बात करते हुए संगठन के वरिष्ठ नेताओं ने कहा कि भारत बांग्लादेश के लिए महत्वपूर्ण है। वरिष्ठ बीएनपी नेता खांडेकर मुशर्रफ हुसैन ने पीटीआई को बताया कि बांग्लादेश को दोनों देशों के बीच संबंधों में एक नया अध्याय शुरू होने की उम्मीद है। पार्टी के उपाध्यक्ष अब्दुल अवल मिंटू ने कहा कि बांग्लादेश भारत को एक दोस्त के रूप में देखता है। लेकिन अंतरिम सरकार द्वारा विदेश नीति की देखरेख के लिए पूर्व विदेश सचिव तौहीद हुसैन की नियुक्ति नई दिल्ली में खतरे की घंटी बजा सकती है।
समस्या यह है कि बांग्लादेश के हिंसक और राजनीतिक उथल-पुथल से भरे इतिहास को देखते हुए अब वहां पर स्थिति को स्थिर करने के लिए असाधारण प्रयास करने होंगे। भारत को ऐसी परिस्थितियों से उत्पन्न होने वाली कठिनाइयों के लिए तैयार रहना होगा, जिन्हें ढाका की सरकारों के लिए नियंत्रित करना मुश्किल हो सकता है। बांग्लादेश भारत के पांच राज्यों की सीमा से लगा हुआ है और पहले भी वहां अलगाववादियों और आतंकवादियों को समर्थन मिलता रहा है। अगर नई दिल्ली ने शेख हसीना को भरपूर समर्थन दिया था तो इसका कारण यह भी था कि उन्होंने इन तत्वों को रोकने के लिए भारत को भरपूर समर्थन दिया था।