SSB Group Discussion and Individual lecturette- Practice set 02

Foreign Direct Investment should it be allowed in the retails sector in India?

First of all let us know what the meaning of FDI is.

Foreign Direct Investment – it means, letting a foreign country to invest in India in a business in which they carry out- purchase – manufacture and sell the goods internationally.

Recently the cabinet took a decision to allow 51 % FDI in Multi-brand retail.

They have identified about 53 cities with population not less than 100 lakh to be made use by these companies.  India is the 4^th largest economy in the world in terms of Personal Purchasing Power. India is a preferred destination for FDI, during 2000-10, the country attracted $178 billion as FDI

Today, we witnessed that a turnover of 1 billion Rupees was possible with in just 10 hours of commencement of sale over the internet by Flipkart .com.

Points For the subject:-

1.       This will bring modern technology to the country.

2.       It will improve rural infrastructure.

3.       It would help build infrastructure and create a competitive market.

4.       Reduce wastage of agricultural Produce.

5.       Enable our farmers to get better prices for their crops.

6.       The customers get high quality food and a reasonable rate.

7.       Pick and choose, monopoly is reduced.

8.       Farmers can sell directly to large organized players and shorten the chain from form to consumers.

9.       Government stands to gain by getting additional taxes by selling.

10.   Opening of retail can be seen as a solution for food inflation, which has been a confounding policy maker.

11.   Cold storage and better infrastructure would reduce loss of agricultural and perishable goods to a great extent.  

Points against the FDI:-

a)      Our interest rates are as high as 14 to 16% , how can a trader take loan and compete with the economies which have a 4% interest rate?

b)      Our rules and regulations are not very flexible, and time consuming, this will be a negative factor for our own players.

c)       Our own people do not get 24 hours electricity, where as it has to be given to FDI at the cost of cutting it down to domestic operators.

d)      What about the middlemen who have survived in the chain of demand and supply?

e)      Small investors will get knocked out and will be forces to work for big companies.

f)       The big companies will employ less people with more skills, and hence in india people with less skills, in terms of education, technology will lose out. More unemployment will be the end result.

g)      People may not get the local goods but would be forced to buy the same at a higher price.

h)      Storage of food using chemicals causes damage to health in the long run.

i)        Look at what has happened to NOKIA company that was set up in Madras, the company was purchased by an international giant, and closed it. The people lost their jobs.

j)        Agricultural land has already shrunk, which will directly increase global warming due to deforestation as well as less produce.

k)      On line order would become more popular, some of the players tend to supply sub standard goods and then the consumer has to get into legal hassles.

l)        It will indirectly make the consumer buy unwanted items merely out of curiosity and vanity.          

m)    In order to compete in the market, a lot of free bees would be introduced by the foreign players and wipe out the local dealers.

n)      Advertisement will lure the people to spend more. And the cost of advertisement will be borne by the consumer.

o)      What is the guarantee that the FDI will not close down after making a profit?

p)      A business man will think only of his gain and not the welfare of the people of the country in which he sets up his shop.

q)      He will look for cheaper labour in order to maximize his profit or in other words use less but more skilled labour to produce more at a less cost, and increase unemployment.

r)       Everyone knows that cococola, is used as insecticide then a health drink this is a gift of FDI         

s)     Caffeine, Sugar and Aspartame: These products are invariably present within the sweetened soft drinks. Coca Cola and Pepsi have been under lawsuits in some of the developed countries against using Aspartame which causes several diseases. Children should be strictly restricted from consuming products with Aspartame. Furthermore, caffeine and sugar are very addictive leading to another set of diseases like diabetes and a life-long habit of inducing caffeine in the body.

t)      Kidney Failures: The sweet sugar is definitely not the reason for a failing kidney but the artificial sweeteners are. Hence consuming Diet versions of Coca Cola or Pepsi have proved to produce more impairment than the sweet versions.

u)     Metabolism Level Decreases: A glass of warm water can speed up you metabolic rate but may taste awful after a workout session. A can of Coke can surely be tasty but it really decreases the metabolism and helps in destroying the fat burning enzymes in no time. Thus a can of either Diet Coke or simple Coca Cola after a rigorous workout or busy day is strictly not advisable.

v)     Obesity and Diabetes: Obesity was never a major problem when Coca Cola or similar products were not introduced. But with an advent of these products, a major portion of the population is turning obese which includes children and teenagers. Obesity is the root of diseases that affect heart, lungs, and kidney. Researches have also been proving that obesity may be a cause to trigger cancer cells. Similarly, patients with diabetes must never touch beverages like Coke or Pepsi since it increases level of sugar in blood by twofold. Non-diabetic persons should avoid these drinks in order to keep diabetes away.

w)    Teeth and Bone Damage: The pH level of Coke or Pepsi is 3.2 which are quite high. This pH level decides the acidic nature of a liquid. Hence these beverages are acidic in nature and can dissolve bones and enamels very quickly.

x)     Reproduction problems: A research has shown that the cans of Coke or Pepsi are coated with such chemicals that may lead to reproduction problems with regular consumption.

Indra Krishnamurthy Nooyi

CEO of PepsiCo in 2011, Nooyi earned a total compensation of $17 million which included a base salary of $1.6 million, a cash bonus of $2.5 million, pension value and deferred compensation was $3 million.^[19]

Whose health she has played on?

Dear aspirant,

In a group discussion how to put forth your points is a systematic and logical ways is more important than just mumbling about it.

Communicative skill is more important.

Facts and figures increases the chance of winning in GD  

In a debate it is always a person who is more forceful in putting across the point and countering it with latest facts and figures steal the show.  

Hence be more knowledge and more effective.

All the best

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