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Levelling the Grain Mountain

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Levelling the Grain Mountain 8 ISSUES AND INSIGHTS MUMBAI | THURSDAY 14 NOVEMBER 2019 > India business was on the brink of col- waiver of penalty and tax in relation to > lapse. Chief executive Nick Read told the the AGR order by the Supreme Court. In CHINESE WHISPERS If Vodafone quits India... media in London after the company’s that case, Vodafone might have decided half-yearly results that Vodafone’s India to call a spade a spade and walk out of unit could be headed for liquidation India, which was not too long ago the Updating Twitter profile ...India’s loss might be much bigger in terms of the dent in the unless it got relief from the government most promising telecom market. overall business sentiment in terms of waiver in taxes and penalties. The second reason could be a ploy “If you don’t get the remedies being sug- or a last-ditch effort by the telco to con- Vodafone Idea, the venture in which the In a statement issued on October 31, the gested, the situation is critical,” he said vince the government to act quickly UK operator holds 45 per cent stake, had second largest telecom company in the in no unclear terms. And then to reiterate and decisively. to pay around $4 billion (more than world said, “Vodafone is aware of the the point, he said, “if you’re not a going While Vodafone, which has been ~28,000 crore) in licence fee and spec- unfounded and baseless rumours circu- concern, you’re moving into a liquida- among the biggest source of foreign trum usage dues to the government. lating in some of the Indian media that tion scenario — can’t get any clearer than direct investment, would lose out on its From there on, the sequence of we have decided to exit the market. We that.” While writing down the book value current 300 million plus subscriber base events is intriguing. would like to categorically state that this of its India operations, Vodafone has and the promise of growth if it were to A day after the court judgment, on is not true and is malicious.’’ squarely put the blame on “unsupportive exit the country, India’s loss might per- October 25, Vodafone Idea said in an The same day, the India business- regulation” and “excessive taxation”. The haps be much bigger in terms of overall Former Maharashtra chief minister exchange filing that the verdict had Vodafone Idea-made a filing to the “negative Supreme Court decision” had business sentiment. Devendra Fadnavis on Tuesday changed NOT FOR PROFIT “financial implications and represents a Bombay Stock Exchange (BSE), which of course, pushed it to the brink. The government so far has not taken his Twitter bio to “Maharashtra’s Sevak” significant event with respect to the com- had sought clarifications from the com- Although it’s rare and tough for a any pro-active step to set things in order (Maharashtra’s servant). As chief minister, NIVEDITA MOOKERJI pany”. It also said the company would pany on media reports suggesting it may global chief executive to announce that in the telecom sector, bruised by Fadnavis often used his Twitter handle engage with the Department of Telecom exit India as losses mount. “As regards a business had gone bad, it’s striking to extremely low tariff because of compe- @Dev_Fadnavis for official seeking relief, including a waiver of inter- exit of India operations by Vodafone find a multinational as big as Vodafone tition. At a time when the government communication. The BJP leader had he last week of October, with all est and penalties. group is concerned, we wish to inform change its position on exit and is calling out predatory pricing by foreign changed his Twitter bio from “Chief the festivity around, was hardly By this time, speculation around you that the company is not aware about bankruptcy within days. So, what hap- e-commerce companies to help Indian Minister of Maharashtra” to “caretaking T pleasant for the telecom sector. Vodafone’s likely exit from India were anything on the subject as it pertains to pened between October 31 and retail businesses, it’s time to take notice chief minister” last week when the BJP The Supreme Court verdict on October making headlines. Soon, TV channels Vodafone group and hence cannot com- November 12, to drive Vodafone to of the telecom sector tariffs without get- announced that it was in no position to 24 upholding the government definition and news agencies were also flashing ment on the same,” Vodafone Idea told make a public statement that its India ting into the nationalities of the compa- form the government. He quit on of adjusted gross revenue or AGR had hit that Vodafone Idea, with around $14 bil- BSE. On the issue of debt recast, days may be numbered unless the gov- nies. Also, rather than whiling away time November 8 after the Bharatiya Janata all telcos, except Reliance Jio. But, for lion net debt, was in talks with banks for Vodafone Idea dismissed it as incorrect. ernment offered substantial relief? on recommendations by a committee of Party failed to work out a power-sharing the UK communications major a debt recast and could be headed to the In less than two weeks, precisely on There could be only two reasons for secretaries, the government must take a deal with the Shiv Sena, its ally. Fadnavis, Vodafone, already in the midst of mount- bankruptcy court. The Newbury November 12, the British conglomerate this desperate war cry. One could be that call at the highest level at the earliest, 49, is the first chief minister of ing losses in its India unit, it looked like (Berkshire)-headquartered conglomer- stunned the world by negating its own the UK telco sensed the government treating Vodafone’s exit call with all the Maharashtra after Vasantrao Naik to an endgame. The top court order meant ate responded strongly to douse the fire. statement of October 31, stating that its might not offer any big relief in terms of seriousness that it deserves. complete a full term. Jharkhand war hots up Sukhdeo Bhagat former Jharkhand Levelling the grain mountain Congress chief who switched to the Bharatiya Janata Party (BJP) recently, filed his nomination from the Lohardaga Foodgrain stocks are burgeoning but the options to reduce them are limited Assembly (reserved for Scheduled Tribes) seat on Wednesday. Bhagat, who is a sitting MLA from Lohardaga, is pitted SANJEEB MUKHERJEE wheat and rice a farmer brings to the 35 kg per month, while each identified against Rameshwar Oraon, a former mandi within a stipulated time and individual under the PHH category Indian Police Service officer who is few days ago, local papers in based on a pre-determined quality gets 3 kg of rice and 2 kg of wheat a currently chief of the Congress’ Haryana published reports of parameter. month. The rates for both AAY and Jharkhand unit. Oraon had succeeded A paddy farmers being turned CACP and the beleaguered FCI PHH have been unchanged at ~3 per Ajoy Kumar, who quit the Congress in away from mandis because government blames this open-ended procurement kg for rice and ~2 per kg for wheat since the aftermath of the Lok Sabha polls and agencies had stopped procurement say- for mounting foodgrain stocks, which, 2013, when the National Food Security joined the Aam Aadmi Party. Bhagat, ing quotas had been reached. Mandis as on October 1, 2019, stood at an esti- Act was enacted. along with three other Congress in Karnal, Panipat and Yamunagar all mated 64.23 million tonnes, more than Export wheat and rice from the legislators, joined the BJP last month. reportedly downed their shutters for six double the required buffer and strategic Central pool: This has long been con- The BJP has given the party ticket to all days, causing a long line-up of trucks reserve norms. sidered the key to liquidating the grain four from their current seats. The five- and tractor-trolleys. It was only after the “Against a requirement of around mountain. Unrestricted wheat exports phase election to the 81-member newly-formed Manohar Lal govern- 50-56 million tonnes of foodgrain to have been allowed under Open General Jharkhand Assembly will conclude on ment clarified that no decision to stop run the National Food Security Act Licence (OGL) since 2012. But India has December 20 and counting will be held procurement had been taken that the (NFSA) and other welfare schemes, the rarely managed to make any serious on December 23. Haryana mandis re- Centre ends up buying attempt to dent global wheat markets opened. almost 80 million tonnes of because constant increases in MSP The incident highlights wheat and rice. There has to Savings Funds (NSSF) by the end of that PROBLEM OF PLENTY have priced out Indian wheat. again the challenges the be a mismatch somewhere, financial year, totalling over ~319,000 Stiff competition from Australia and Being cautious Foodgrain stock (mn tonne) Centre and state govern- which is showing up,” a crore. At the start of the current fiscal, Ukraine is another key reason for the Samajwadi Party (SP) President Akhilesh ments face when it comes senior FCI official said. this figure was ~191,000 crore. In short, Oct 1, 2015 52.07 poor performance of Indian wheat Yadav has never given up an opportunity to ending the open-ended Given that India’s food- FCI is incurring crippling debt to create Oct 1, 2016 35.8 exports. Making things worse, global to attack the Yogi Adityanath government procurement of wheat and grain stocks have reached extra food stocks that the country Oct 1, 2017 42.17 prices, too, dropped from about $350 on various issues, especially cases of rice by Food Corporation of TAKE unmanageable levels — the doesn’t really need.
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