By M H Ahssan



Subhiksha is India's largest retail chain -- or some would prefer to say "it was." Over the past few months, the network of neighborhood discount shops has been coming apart at the seams. Most of the outlets are now closed. The company -- Subhiksha Trading Services -- has been unable to pay salaries and statutory dues for the past few months. With the unpaid security agency staff also not reporting for work, many of the stores have been vandalized. "The properties have become vulnerable targets," founder and managing director R. Subramanian told The Financial Express. The vandals, he said, could include "disgruntled vendors, employees, anti-social elements taking advantage of the situation, and even owners of the real estate" rented by the retail chain.



Subhiksha -- which means "prosperity" in Sanskrit -- is coming apart in other ways, too. In fast-moving developments, one of the investors -- private equity company ICICI Ventures -- has asked the government to step in and order an independent audit of the company's accounts. Another investor -- the high-profile Wipro chairman Azim Premji's personal investment firm, PremjiInvest -- has approached the Madras High Court to stop the proposed reverse merger between Subhiksha and Blue Green Constructions & Investments, a listed company Subramanian had acquired last year. Subramanian's objective was to get listed through the back door after the plan for an initial public offering fell through because of adverse market conditions. ICICI Ventures holds a 23% stake in Subhiksha and PremjiInvest another 10%, which was sold to it by ICICI Ventures last year for around US$50 million. In addition, the Employees Provident Fund Office recently said that Subramanian will be held personally responsible for non-payment of statutory dues to the staff.



Previously, Subramanian was the poster child of India's retail revolution. Others, like the Future Group's Kishore Biyani (who started Big Bazaar, Food Bazaar and Pantaloon) may have made a bigger splash. But Biyani had a business background; Subramanian's father was a Reserve Bank of India official and Subramanian was a first-generation entrepreneur, a product of liberalization and India's answer to Wal-Mart's Sam Walton. "Subhiksha was a value-focused retailer born at a time when organized retailing was only for the elite," said Subramanian in an email to India Knowledge@Wharton. "From 150 stores in September 2006, all of which were in Tamil Nadu [a state in South India], the company grew rapidly to over 1,600 stores [across the country] by September 2008."



The big question: Is Subhiksha shutting down? "We are in pain but we are not shutting down," Subramanian wrote. "We had expanded rapidly; most of the growth was debt-led. The company had planned to raise equity during 2008 and was close to doing so in September when calamity hit the global markets. The company's lenders, while supportive, were also unable to extend further lines unless the equity was raised. The banks were not lending to each other, forget about lending to us.... It became a chicken-and-egg story with the company running out of cash by October. We were making money up to September, so the business is viable; it's just that the balance sheet was not.... Money is like blood. If the blood flow stops, the entire brain stops working."



Subramanian acknowledges that employees, landlords and vendors have not been paid. "It's not because we do not want to pay; it's because we can't pay." Is the Indian retail story over for now? "In a market like this, there will be pain," Subramanian wrote. "However, people with long-term interest in retail and a sane cost structure will survive and thrive. Subhiksha will be there, too."



Lack of Demand

Subhiksha, of course, is not alone in facing a recent reverse. The woes of India's organized retail sector -- or "modern trade," as it is called -- have many causes and casualties. Even well-financed companies or those that have wealthy backers are feeling the heat.



"Lack of demand is the major problem," says Mathew Joseph, senior consultant with Delhi-based think-tank the Indian Council for Research on International Economic Relations (ICRIER). "Real estate prices are falling, and organized retail would like to wait until the bottom is reached. Finance is also difficult to come by in the context of falling demand and low profitability as banks are becoming risk averse." Gibson Vedamani, director of the Retailers Association of India (RAI), adds: "Like everyone else, the business groups in modern retail have been hit by the global recession by way of a credit squeeze [and a lack of] funding and working capital. The slump in real estate has been a big issue. Those who had big expansion plans had [acquired] real estate earlier at much higher prices. They are now re-looking at their expansion plans and renegotiating the rates."



One example is Reliance Fresh, backed by Mukesh Ambani, the world's wealthiest Indian and chairman of Reliance Industries. Ambani considers retail the next big thing both for his group and the country. Reliance Retail, a subsidiary of Reliance Industries, launched its first store in November 2006 through its convenience store format, Reliance Fresh. At the end of the last fiscal year (March 2008), the group had 590 stores across 13 states. (It is close to 1,000 now.) This includes other formats such as Reliance Digital, Reliance Mart (hypermarkets), Reliance Trends (apparel), Reliance Footprints (footwear), Reliance Jewels (jewelry), Reliance Timeout (books, music and other lifestyle products), Reliance Autozone (auto accessories and service) and Reliance Wellness (health and wellness).



There were problems from day one. Vegetable sellers stoned Reliance shops in Ranchi, Jharkhand, claiming their businesses would be killed. There was a dawn-to-dusk shutdown of all major markets in Bhubaneswar, Orissa. In West Bengal, Reliance Retail ceased operations after widespread protests. In Uttar Pradesh, the government ordered the closure of the chain following eruptions of violence and the ransacking of some outlets. In Mumbai, traders, farmers and shopkeepers moved into the streets, bringing the city to a near standstill. They were protesting not just against Reliance, but organized retail as a whole. "This is a do-or-die battle for us. Either they go, or the small traders and farmers perish," says Dharmendra Kumar, director of India FDI Watch, an organization that seeks to prevent Foreign Direct Investment (FDI) in the retail sector in India. Kumar says his mandate is to prevent multinationals like Wal-Mart, Tesco and Carrefour from entering the Indian market. As they are not yet in India -- or are present in very restrictive formats -- companies like Reliance Retail have become the substitute targets.



Much of this battle took place in 2007. Today, organized retail is downsizing by itself. Reliance has reassessed its plans and closed some stores; it is in consolidation mode. According to the Future Group's Biyani, growth has moderated. "While urban consumers have the ability to spend, we believe their confidence level has been low leading to disproportionate savings levels," says a report by equity research firm Enam Securities. "Weak same-store sales have cast doubts on the retail consumption story." According to The Economic Times: "Almost all retailers, listed and unlisted, are putting off or curtailing large-scale expansion plans announced earlier."



Yet just a short while ago, the kirana (mom-and-pop) stores seemed to be fighting a losing battle. Groups like FDI Watch, along with the media and politicians, rose to the defense of the huge farmer-trader-shopkeeper segment.



The Future of Kiranas

But there are many who believe that both large and small retailers can thrive. According to Arvind K. Singhal, chairman of retail consulting firm Technopak Advisors: "The battle, if any, was being fought only by politicians and the media. In India, the kiranas will coexist with modern retail for many decades to come." Adds S. Ramesh Kumar, professor of marketing at the Indian Institute of Management Bangalore (IIMB), who has recently done a study on the retailing sector: "Kirana shops, which number around 15 million to 20 million, are part of Indian shopping culture. They are spread throughout the length and breadth of the country and cannot be completely displaced by modern retail formats in the foreseeable future."



The future of the kiranas caused so much concern that the Union Commerce Ministry appointed ICRIER to do a special study to find out the impact of modern trade on these small outlets. The ICRIER report, released in the middle of last year, found that it was "a positive sum game in which both unorganized and organized retail [could] not only coexist but also grow substantially in size." The study found that:



The total retail business in India would grow at 13% annually, from US$322 billion in 2006-07 to US$590 billion in 2011-12.



The unorganized retail sector would grow at about 10% per year, with sales rising from US$309 billion in 2006-07 to US$496 billion in 2011-12.



Organized retail, which now constitutes a small 4% of the total retail sector, is likely to grow at a much faster pace of 45% to 50% per year and quadruple its share in total retail trade to 16% by 2011-12.



Joseph, who led the ICRIER research team, says that some numbers have had to be whittled down since the report was published. "There is a general slowdown in the economy due to the global crisis and that is expected to affect the growth of organized retail in the country," he says. "We had assumed a GDP growth of 8% to 10% during 2007-12 in the report. This is now impossible, at least for the current year 2008-09 and the coming year. Organized retail cannot therefore grow at 45% to 50% as we envisaged."



ICRIER was not alone in painting a rosy picture for organized retail. A November 2005 PricewaterhouseCoopers (PwC) study in tandem with the Confederation of Indian Industry (CII) said that one of the largest marketplaces for modern trade -- India -- was about to open up. "To reach its potential, the Indian retail sector requires significant capital, technology and best practices to bridge the existing productivity gap and achieve scale in operations, which are critical to the sector's success. One of the key steps towards facilitating the development of the retail sector and in accelerating its growth would be to allow foreign direct investment." Titled "The Rising Elephant," the report concluded that the organized sector share would account for 9% to 10% by 2010. Increased employment, efficiency in agriculture and increased exports through sourcing from India were the three most significant benefits of modern trade, the study said.



Another PwC-CII report, released in December 2008, said that the real beneficiaries of organized retail will be "the government, consumers, unorganized trade participants and producer-farmers." Mom-and-pop stores could become part of the system, benefiting everybody. Only about 100,000 "mid-category" stores would take a hit in the medium term.



Yet another report in September 2008 was titled, "The Great Indian Bazaar: Organized Retail Comes of Age in India." The study, by consulting firm McKinsey, said that by 2015 India was likely to be a US$450 billion retail market. Organized retail would grow from 5% to 14%-18% by 2015. The report made two other important points. First, "mom-and-pop stores will continue to remain relevant across large and small towns." Second, "retail in India can be profitable, but not with cut-and-paste global formats." The four mantras for success included innovative "local" formats; customer-backed merchandise platforms; an efficient supply chain; and an empowered front-end sales team, said McKinsey.



A Welcome Shift

Are these strategies and projections destined for the dustbin as India joins the global slowdown? The experts say no. "This is a passing phase but it could last for another year," Singhal of Technopak says. Adds Vedamani of RAI: "This is a temporary phase when many adverse forces are working together and organizations are therefore becoming very cautious. The boom in retail will surely return."



Many see this as a welcome shift to neutral gear, because Indian retail had been growing so quickly. "This calendar year will see companies consolidating their operations rather than looking at expansion," says Vedamani of RAI. "In the earlier retail rush, they were too busy to get their act together. They are now looking at putting their processes in place and getting their houses in order for when the market picks up."



Joseph of ICRIER notes that the slowdown has given the mom-and-pop shops some breathing space, too. "They now have more time to adjust and compete with organized retail," he says. "There are several cases of traditional retailers modernizing and successfully competing with organized retailing. We believe in the co-existence of both big and small retailers in the country, as each one has its own comparative advantages vis-à-vis consumers."



"The situation here is very different from the one in the U.S.," says Kishan Bhat, engagement manager at Zinnov Consulting, a Bangalore-based management consulting firm. "India is a market where everyone can coexist. The culture of kirana stores in a country like ours can never become obsolete. It is deeply rooted in the system and definitely has an edge over the organized sector in terms of convenience and personalized customer experience. The kirana stores today are also adapting to the growing competition from the organized sector. We do foresee them eventually organizing their way of business."



Bhat sees a mutual learning process which will benefit both eventually. "The organized retailers are also learning from the kirana stores and trying to provide a better customer connection," he says. "Besides this, both formats are implementing the best practices of each other. Hence, the two formats will definitely coexist as long as customers are the winners."



"Small retailers in India have inherent advantages," says the PwC-CII "Rising Elephant" report. "They are located next to the consumer, making it convenient for top-up purchase. They know them well, some even by name. They give credit too -- which no large retailer does. Their fixed costs are so low that their breakeven point is as low as 46% of sales."



Finding a Model

Kumar of IIMB says there are opportunities now that may look more attractive for organized retailers. "Segmenting consumers on price sensitivity and lifestyles along with multiple retail formats holds the key for a retail chain in the Indian context," he says. "Organized retail, instead of competing with the unorganized sector using price cuts on branded offerings and short-term sales promotions, should get into private labels that provide good quality at relatively lower prices as compared to established brands. The economic slowdown is probably the ideal time for such retailers to launch these private labels. Private labels with limited merchandise will be an effective approach to target the middle-class consumers who shop almost every day as a part of their culture. Besides, since most residential areas have kirana shops, it is unlikely that consumers will drive long distances for their regular shopping cycles."



"Modern retail is a less-than-20-years-old phenomenon in India," says Singhal of Technopak. "It has attracted a diverse set of entrepreneurs and business organizations, and each one is trying to find out and develop its own unique business model. Some of these models are fundamentally flawed; in some cases the execution is flawed. However, overall, the growth of modern retail in India has been very steady and there is increasing width and depth [in terms of product categories, formats, etc.]. Modern retail trade in India is still in an evolutionary phase and will be in this phase for at least three-five more years before the winning formats and the winners stand out. Then, there will a consolidation and growth phase led by these winners."



Will the winners be Indian companies or MNC majors? There are no easy answers. "India's landscape is fundamentally unique," says Singhal of Technopak. One can't transport Western models and expect them to automatically succeed, he notes. For instance, infrastructure is in very bad shape. During the initial euphoria of the retail boom, several companies imported retail professionals from the West, who came armed with just-in-time and other cost-saving techniques. They realized, to their dismay, that none of this would work in a country where it could take days for a truck to traverse a few hundred miles, he adds.



"The large players usually try to gain on economies of scale and lure customers by reducing the margins," says Bhat of Zinnov. "This would [require] elimination of middlemen and brokers along with established logistics and infrastructure support. However, in the current scenario, lack of infrastructure and inefficient logistics services have dampened the growth of organized retail while providing continued shelter to the middlemen. As a result, organized retailers have not been able to provide higher value. On the contrary, unorganized retailers leverage the inefficiencies of the system and encourage consumers to drive a hard bargain, which enables a win-win situation for both."



One example of the potential pitfalls is the Piramal Group, which opened an upmarket outlet in downtown Mumbai, the first of a planned chain. It proved to be a tourist attraction for visitors to a nearby religious shrine. Most visitors came to look, but not to buy. The company tried to insist that all who came to the mall should possess a mobile phone or a credit card to gain entry, but the idea was quickly withdrawn after a public outcry against discrimination. (The mall closed down shortly thereafter.)



These are problems that no amount of multinational expertise or FDI can likely address. "FDI is not so relevant in the current context, but technology can certainly help retailers understand their customers better," says Vedamani of RAI. Bhat of Zinnov disagrees. "The entry of foreign multinationals would make the market more competitive," he says. "Indian consumers will definitely benefit." But money or new technology will not help, he adds, "unless customers become the utmost priority."



"FDI in retail is extremely relevant," says Singhal of Technopak. "As India's consumption basket changes, new retail businesses have to be started to take care of emerging consumer needs. For this, both capital and know-how [in sourcing, distribution, etc.] is needed. From a consumers' perspective, they also need more choice in terms of retail options, and FDI can give them access to more choice of formats and value propositions." Adds Joseph of ICRIER: "Inexplicable restrictions on FDI investments in the sector are preventing even Indian retailers from raising global capital."



Early in February, the government announced major changes in its FDI policy through two "Press Notes." The ban on FDI in multi-brand retailing such as supermarkets seems about to expire, but "the 10 pages of unintelligible officialese" leave many unanswered questions, according to The Financial Times. There have been no clarifications as political parties prepare themselves for the coming general elections. Subramanian of Subhiksha is certain he will be there when the MNCs arrive. The problems for both organized Indian retail and his own venture will pass. "After all, challenges make boys into men," he says.

Special Report: Why Chhattisgarh State Ration Shops Are Turning Away People Without 'JDY Bank Account'?

This is probably part of the national push to replace food rations with cash transfers. In the first week of January in Chhattisgarh, many people who went to government ration shops to collect their month supply of food grains were turned away because they did not have bank accounts.

It is usually the poor who do not have bank accounts. So, for a couple of weeks, it was those in the greatest need of subsidised grains who went without them.

Special Report: The Myth Of The 'Muslim Population' Bomb

If the Hindutva brigade is to be believed, India will become a Muslim majority country by 2035. INNLIVE sifts through available data to set the record straight.

Will Muslims outnumber Hindus by 2035 and become the majority in India? Several search results on Google warn how the Muslim population in the country will expand to 92.5 crore, while Hindus will shrink to 90.2 crore by 2035. By 2040, Hindu festivals will no longer be celebrated. 

Wanted: A ‘Paid News’ Declaration From News Organisations

Last week’s page one declaration by the Hindustan Times that it does not indulge in ‘paid news’ of any kind was arguably the best piece of news on the front page of that edition.

The statement by editor-in-chief Sanjoy Narayan (HT brings you real news, not ‘paid news’, 2 February) served to clarify the newspaper’s stand on the unethical ‘paid news’ phenomenon that has swept and soiled large, prominent sections of the Indian media. Perhaps the statement would not have come had The Hindu not mentioned HT in a 29 January report stating that the Press Council of India had held HT and other newspapers guilty of ‘paid news’ during the Bihar assembly polls of 2010.

While submitting an explanation on the unbiased reportage during the Bihar assembly polls, the editor declared categorically: “We did not, and do not, believe in paid news.” His statement began by saying: “Hindustan Times does not believe in ‘paid news’. Our news is news got by the hard work of our network of journalists across the country. Our advertisers pay us to advertise on our pages. The two-news and paid-for advertisements are distinct. When our advertisers want to run an advertorial, we insist that it be labeled clearly as such for all to see.”

Such a detailed clarification is a rarity and holds high value for readers today given an environment where ‘paid news’ has virtually become the norm.

‘Paid news’ is the practice where an advertiser or influential persons such as politicians, industrialists, film stars and other celebrities pay special rates to influence the wording, placement and display of the news item relating to them. This is done without telling the reader that the news item they are reading has been sponsored by the client. So in effect, the readers are being fed with advertising copy and not a news copy written by journalists who are duty-bound by their professional ethics to write copy freely and fearlessly.

‘Paid news’ quickly emerged as a mainstream operation in Indian media because of the blind faith that readers have on the news columns. What appears as news is held sacrosanct by the readers and this is where the media marketing departments smelt an opportunity to sell space. Advertisers and celebrities had always wanted to influence the news pages in their favour and ‘paid news’ offered them a legitimate opportunity to do so.

The enormous business generated through ‘paid news’ at the time of elections is too well known to be repeated in detail. Although the Press Council of India appointed a sub-committee to undertake a fact-finding exercise and condemned the practice; and although a clutch of newspapers are embroiled in a ‘paid news’ case in the Bombay High Court relating to former Maharashtra chief minister Ashok Chavan’s 2009 election campaign, paid news has become an accepted reality in many news establishments. There is no sense of shame about it.

However, its effect on unsuspecting readers can be disastrous. Take for example a number of doctors running specialty clinics who have been getting themselves and their businesses featured glowingly in newspaper columns. The unsuspecting reader is not aware that he is reading a sponsored piece. Thus, an 86-year old gentleman with vision in one eye reads a glowing report about a laser eye treatment, complete with contact details, and thinks that the newspaper has verified the claims made. Although news supplements such as Pune Times (or Bombay Times, for that matter) run a disclosure below the masthead which reads—”Advertorial, Entertainment Promotional Feature”— this is not grasped adequately by readers. The possibility that the laser eye treatment report could well be advertising and promotional copy does not strike most readers.

The same thing happens with educational institutions when they promise the moon through their ‘paid news’ write-ups, only to be discovered by students and their parents after they’ve paid the fees and felt cheated.

Recently, when a senior journalist and a group of journalism students visited Rahimatpur- a semi-urban taluka town in Satara district, a local politician there had just one appeal: “Sir, do something about ‘paid news’. There are a dozen odd newspapers in this taluka and all they do is collect money and play up profiles of politicians. A completely misleading picture is put before the readers…”. How different are many of our big newspapers, whether in the English or the regional press?

Thus, while there is an urban chaos in most of our cities, especially those on a growth trajectory, news establishments are hesitant to expose irregularities by the builders’ lobby because they are among their biggest advertisers. This has been happening in every other advertising segment where “protection money” is demanded for suppressing reports just as money is demanded for running a glowing report.

The Rs 100 crore Zee TV–Jindal case alleging an extortion bid by a media house to suppress negative reports is being battled in the courts and touches upon all of these points.

In such an environment, when a newspaper asserts through a front-page declaration that it does not indulge in ‘paid news’, it ought to be taken note of.

The Press Council of India needs to do more in the interest of promoting industry standards and good journalistic practices in India. The PCI chairman, Justice Markandey Katju has been proactive on the issue and needs to publish at least a biennial report on the state of paid news in India. This issue needs to be kept on the boil till it is resolved.

Focus: Sexual Violence And Culture Of Impunity In Kashmir

By Ayesha Pervez (Guest Writer)

KASHMIR REPORT The present discourse addressing the culture of impunity regarding sexual violence by security forces in Kashmir suffers from a structural limitation - its fixation on the Armed Forces (Special Powers) Act, 1990, and the institution that this law protects. 

The experiences and fate of many cases of sexual violence, where survivors have attempted to access the justice system, suggest a more complex structure of violence and impunity; AFSPA is only a small cog in this giant machinery of institutionalised repression.

What followed the public interest litigation (PIL) in the ­Jammu and Kashmir (J&K) High Court in April last year, demanding the reopening of and reinvestigation into the infamous Kunan-Poshpora “mass rape” case, is a déjà vu of sorts for Kashmiris, for it echoes a familiar series of responses which the survivors of sexual violence from the villages of Kunan and Poshpora had witnessed in 1991 – that investigation process had been handled with much callousness and inherent ­biases. 

Failure To Prove Zakir Naik's 'Terror Links' Has Left Police Looking Foolish

By SAHIL JOSHI | INNLIVE

The Islamic televangelist wanted to play a victim of media campaign against him as he knew that this would earn him more followers.

Islamic televangelist Zakir Naik has become a headache for the investigating agencies. Because the police simply don't know how to pin him down.

It has been a week and the Mumbai Police is yet to submit its report on the investigation ordered by Maharashtra chief minister Devendra Fadnavis after the media went all-out against Naik for his allegedly inspiring the terrorists who attacked a Dhaka cafe earlier this month.

Special Report: EXTRA COVER FOR VIPs IN AP

By M H Ahssan & Swati Reddy

Some key state leaders order new bullet proof cars even as the exchequer coughs up crores on their security.

About a week ago, when the nation was glued to the television for latest updates on the Mumbai terror strikes, a few showroom-fresh vehicles were speeding to Jalandhar on a security mission of another kind. These vehicles, all Tata Safaris, covered 1,800 kms in three days landing at a fabricating unit for bullet proofing, sent all the way up north by key ministers here.

Sources indicate that the vehicles were sent by both the ruling party as well as the opposition for their leaders to Laggar Industries Ltd. in Jalandhar, a private outfit that specialises in bullet proofing of cars. While confirming the arrival of cars to HNN, the director of Laggar Industries said that they were sent on a “private order’’ from the “political section’’ but declined to give the names. He, however, did say that this was the first order the 20-year-old company had received from Andhra Pradesh and that the SUVs were brand new and had landed in Jalandhar three days ago.

Bullet proofing of vehicles comprises a complete overhaul of the cars with their glasses removed and replaced with bullet proof ones, grenade proofing of the roof and the floor and may even involve the change in upholstery. In addition, even tyres can be bullet proofed if the client so wishes. “The cost of armouring vehicles ranges between Rs 5.5 lakh (for an ambassador) and around Rs 8 lakh for a Safari,’’ says a director with Laggar. This is in addition to the cost of the vehicle, which in the case of an SUV is around Rs Rs 9 lakh. Bullet proofing of tyres costs Rs 2.5 to Rs 3.5 lakh, he says.

This development has political observers aghast who wonder whether politicians need more security than they already have. The state is currently giving six ministers Z+ security and another six a Z cover. As many as 51 leaders\ministers are being given a Y security cover and seven have been given X. The chief security officers of the ministers, however, said that more information on the “protectees’’ could not be divulged due to security reasons.

However, it is clear that these new vehicles are in addition to the existing fleet of bullet proof cars our main political leaders have. The convoys of key leaders such as chief minister Y S Rajasekhara Reddy and TDP supremo N Chandrababu Naidu have bullet proof cars and one jammer (which neutralises any frequency so that remote controlled explosive devices cannot be triggered). This is in addition to the posse of personnel deployed for our politicians’ security.

Take for instance, the security of Chandrababu Naidu. With a Z+ security cover, Naidu has a convoy of eight vehicles, including, a jammer and two bullet proof cars. There are 10 personnel from the state police and another six National Security Guard commandos, that are with him roundthe- clock. Four members of his escort team carry AK 47s. Naidu is the only leader in the state with NSG security (after his security was scaled down prompting him to write to the centre pointing out how he faced extremist threat).

Unlike Naidu’s convoy of ambassadors, Y S Rajasekhara Reddy moves around in Tata Safaris. His convoy consists of five identical safaris, three of which are bulletand mine-proof. Then there are more nonbullet proof cars for other officials. “What you see on the road is only 50 per cent of the CM’s security,’’ says a police official.

Senior police officials overseeing the security of ministers say the security blanket on these VIPs is completely justified. They say they depute personnel based on the threat perception report, which is made after extensive consultations with various branches of the force who give an idea as to how vulnerable the leader is. “Besides, in AP we have to protect them against double threats— one of naxals and the other of terrorists— so they really need the cover,’’ says a cop. He goes on to say, “An attack on a political leader can make people feel more vulnerable as they would fear for their safety when that of a VIP could not be ensured.’’ Really?

Rs 200 CR SPENT ON VIP SECURITY IN AP
Here is some number crunching to deduce how much does the security of our leaders cost the exchequer. The safety of political leaders and other VIPs in the state is the responsibility of the state police. According to senior officials, there are 1,000 VIPs in Andhra Pradesh being provided protection by around 6,000 armed personnel. Estimating the average salary of the deployed personnel at around Rs 15,000 each, the per annum figure is about Rs 108 crore. Add to that the expense of bullet proof cars, jammers and fuel, not to mention the arms, high security gadgets installed in offices and residences of senior ministers and the cost of securing leaders could easily touch Rs 150 to Rs 200 crore, an official estimates.

After all, each bullet proof vehicle fabricated by the car maker costs anywhere between Rs 10 lakh to Rs 30 lakh depending on the car model, with ambassadors costing the least also because they have to be armoured locally as Hindustan Motors doesn’t fabricate armoured vehicles. Other vehicles such as Scorpio, Qualis and Sumo are also armoured by the manufacturers, their cost ranging from Rs 20 to Rs 22 lakh. Jammers cost Rs 75 lakh and above, depending on the jammer’s frequency.

A senior cop says that salaries of the deployed personnel is the main expense in the security arrangement. In addition, the per annum fuel expenditure is around Rs 11 crore on various VIP vehicles.

While the deployment ranges from one constable to two gunmen to complete convoys depending on how vulnerable a target the VIP is, it does sap the force with senior IPS officers ruing they are tired of meeting demands of various small time politicians forever seeking heightened security measures for them.

GUNMEN carry babies, baggage
The state’s 90,000 strong police force diverts 6,000 of its armed personnel to safeguard our various leaders. These gun toting officers, however, on many occasions drop arms to do more important work for their bosses such as carry their luggage and even their children. Senior cops admit that gunmen are very often misused by leaders who use them to run errands when not using them as nannies for their babies. “Gunmen are often used to drop and pick children from school,’’ says a senior official, adding that in many cases ministers insist on a particular gunman citing his familiarity with the medicines the leader takes. “Leaders often want a particular gunman because they know he wouldn’t mind carrying their luggage,’’ says a senior intelligence official.

While the gunmen are supposed to be in their uniforms, senior cops say they are allowed to be in safaris as it is “rather embarrassing cradling babies in khaki’’. Cops say that the 24-hour duty of gunmen to escort the leader also comprises taking the family out for shopping. Most gunmen comply with the orders, but in some cases they have also lodged police complaints against their political bosses alleging harassment.

Sources say that stories of gunmen being misused are dime a dozen. “They are status symbols for these leaders. And they don’t use them all the time, asking them (the gunmen) to leave if they are meeting some ‘important’ people where some transaction has to take place,’’ says a cop.

Most senior cops say they are wary of these gunmen being used as collection agents for the politicians they are serving. “They (the gunmen) in turn become power centres and that is why we try to rotate their duties but this is very often resisted by the political leaders,’’ says an official. In fact, in one case when a district SP took action against a political leader’s gunman who was entering polling booths, the SP was booted out. “Some gunmen think they are above the law as they are associated with ministers. They do not come for parades and fail to report when asked to by district cops,’’ says an official.

“We try to train them and orient them in a way that they do their job professionally. But in many cases, they (gunmen) also develop vested interests. At the end of it, the gunman’s integrity depends on his boss. If the boss is good, he is good,’’ an official observes.

THE POLITICS OF SECURITY
In what was seen as a media gimmick, a newly sworn in Y S Rajasekhara Reddy in 2004 asked for the removal of all security gadgets and even the metal detectors from AP Bhavan. He said that all officials should be able to move around freely. Predictably, the free style didn’t last too long with the security getting beefed up in two months time

Uttar Pradesh Chief Minister Mayawati has in attendance an army of at least 350 policemen and an assortment of 34 vehicles. She claimed there was a conspiracy to eliminate her and even asked her officials to study the stringent Israeli security apparatus

Nearly 35 personnel drawn from the Special Branch, Bihar Military Police and Patna district police and six vehicles, including a bullet-proof car, were at RJD President Lalu Prasad Yadavs beck and call until November last year when it was withdrawn. The Bihar Special Security Group Act was passed during the RJD rule in 2000 under which security was to be provided to chief minister, members of his immediate family, including wife and children and former chief ministers for at least five years from the day they demitted office. The security cover could be extended by the government through fresh notifications. The extended term lapsed in September last year and the government decided against granting any fresh extension. But as railway union minister, the former Bihar CM enjoys Z+ security

ORDER ORDER
The Delhi High Court on Wednesday expressed its unhappiness at the deployment of a number of security personnel to protect VIPs and sought a reply from the government. Hearing a petition, a division bench headed by Chief Justice Ajit Prakash Shah and Justice S. Muralidhar refrained from passing any further order but asked the government to file a compliance report on its earlier orders on this matter by Feb 4

The Allahabad high court in May 2006, taking cognizance of a TOI write up on security covers for petty politicians and other ineligible persons, sought the number of persons who were involved in criminal cases and were provided with security, and the shortfall in number of police personnel required for manning police stations and for other duties. The court directed the district level committee or the SSPs/SPs to mention reasons in their orders for providing security

Following Delhi High Court’s instructions in 1998, the Delhi police had then started pruning the security of VVIPs. The Delhi HC had pulled up the state government for diverting a big chunk of the city police force to VIP duties and ensuring that the criminals had a field day.

NEGLECTING INDIAN FORESTS - 1 : 'MISSING TIMBER FOR WOOD'

INN will run a special series of reporting from different forests across the country on neglected and dis-functional forests. INN reports the actual findings. This is the first story of this series.

As the demand-supply gap for timber widens in India, it is time to exploit the potential of private plantations and government-managed forests in a sustainable manner.

For the past five years, Rambharos Kamedia, a farmer in Madhya Pradesh, has been receiving a lot of attention. A dense teak forest he raised on his farm near Satwas village in Devas district is visited by the who’s who of the forestry circle. The state government projects it as one of the success stories of its much acclaimed Lok Vaniki scheme. Kamedia, however, is no more amused. Rather, he feels cheated.

Special Report: How The 'Rajya Sabha TV' Is Looting Public Money And Floating Norms In Recruitment & Operations?

Is Rajya Sabha TV (RSTV) degenerating into a white elephant that is being fed and maintained with little or no use, and that too at the tax-payer’s expense.

Supposed to represent the voice of the Upper House and corresponding maturity, RSTV raised a lot of hopes when it was launched four years back. However, much of the promise stands belied as amateurism seems to have had an upper hand over professionalism as far as the privileged channel is concerned.

Focus: Mango, The 'King Of Fruit' Is Now In Indian Markets

By Dabu Sadaf | INNLIVE

SPECIAL REPORT Summer in India for foodies is synonymous with the mango season. In our country, each state boasts of different varieties of mangoes, all hailed as delicacies. Some are meant to be eaten ripe, while others are best eaten when they're green and raw.

While this season starts as early as the last weeks of March, it is only around the last week of April that the many varieties make their entry in the fruit bazaars across the country. This season lasts up to the end of June. In certain areas, it lasts up to the first week of August.

Officials On Toes As 'India' Beckons Footloose Dignitaries

By M H Ahssan | INNLIVE

SPECIAL REPORT If you want to see the real India, get out of Delhi. This touristy cliché is being imbibed by an increasing number of foreign VVIPs arriving in the capital. And has caused much anxiety in the Ministry of External Affairs, keeping officials on their toes to ensure there are no last-minute glitches or faux pas when a foreign visitor goes to the state capitals.

For the next two months, while the rest of the government machinery will be in full swing for the elections, the MEA’s protocol division will have a lean season as the last foreign visitors leave Delhi on Friday. With more time on hand, about 60-70 officials from all state governments will gather at the MEA’s headquarters at Jawaharlal Nehru Bhawan for a quick three-day course on protocol matters next week.

Focus: Pay, Pension, Perks Woes Of Veteran Indian Soldiers

By Raghu Nandan | INNLIVE

SPECIAL REPORT Defence personnel are at a great disadvantage in respect of pay, pension and medical benefits compared with civilian government servants. 

Over the past five years, ex-servicemen have been agitating against the injustice meted out to them by the Central government. They have lost faith in the Department of Ex-Servicemen Welfare (DESW), created specifically to take care of their welfare. Ex-servicemen have won 90 per cent of the cases filed in the Armed Forces Tribunals and the Supreme Court against the government, but the government has appealed in all the cases through the DESW.

Special Report: Brain Behind Modi's 'Chai Pe Charcha', Coins 'Nashte Pe Charcha' For His Rivals

On April 8, when Prime Minister Narendra Modi was busy launching Pradhan Mantri MUDRA Yojana in New Delhi, a few kilometres away his chief strategist and blue-eyed boy Prashant Kishor was busy in a presentation. 

The power-point presentation 'Citizen's Alliance' was for Modi's key opponent Nitish Kumar's election campaign for the upcoming Bihar assembly elections. The state is slated to go for polls in September-October this year.

Many 'Saudis' Working On 'Jobs' In Other Gulf Countries

By Fauzia Arshi / Jeddah

Saudis are now working in other Gulf Cooperation Council (GCC) countries particularly Kuwait. In contrast, very few GCC citizens work in the Kingdom. In 2012, a total of 4,854 Saudis worked in GCC countries, 2,825 if them in Kuwait, according to a report from the General Organization for Social Insurance (GOSI).

The report said that 3,191 Saudis worked in the public sector in GCC countries, with 1,663 in the private sector. Kuwait had 1,169 Saudis working in their private sector. According to the report, there were 210 Saudis working in the United Arab Emirates (UAE), 12 in Qatar, 23 in Bahrain and 10 in Oman.

Maoists Appear Divided Over Tactics During Elections 2014

By Chandan Rai (Guest Writer)

The outlawed CPI (Maoist) appears, which has given a call for boycotting the 16 th Lok Sabha polls, appear to be divided regarding their tactics vis-à-vis the largest democratic exercise worldwide.

If the recent activities of the banned Left Wing Extremist outfit CPI (Maoist) are any indications, they seem to be split over their modus operandi during the 16th Lok Sabha elections. While they have given a poll boycott call in a number of their pocket areas in Bihar, Jharkhand, Odisha, Maharashtra, Chhattisgarh, and Madhya Pradesh, the Red rebels have decided to urge the people to opt for the NOTA (none of the above) option in various areas.

Exclusive: Medical Audit Reveals Multi-Crore Scam In AIIMS

By Dr.Rashmi Sanyal | INNLIVE

INVESTIGATION Premier healthcare institute All India Institute of Medical Sciences  (AIIMS) has landed in a controversy over embezzlement of funds to the tune of  400 crore, including refunds worth 53.68 crore for poor patients.

The revelation came after an internal wing of the Health Ministry conducted an audit of AIIMS's records from the last five years.

Special Report: Indians Prioritizing 'Food Security' Bill

By Dr. Mohammad Manzoor Alam (Guest writer)

Earlier this month the Union cabinet approved the National Food Security Ordinance. It was a bold and timely decision as proper legislation is time-consuming and hunger cannot wait. The National Food Security Bill, 2011 is yet to be passed by Parliament, although it has already been scrutinised by a Standing Committee. Considering the committee’s views amendments to the Bill have been introduced in Parliament.

Method of delivering food security, identification of beneficiaries and the financial implications have been issues of debate.

Ravi Shastri: The man who changed India's fortunes in England!

SPECIAL REPORT: Days after Suresh Raina hailed Ravi Shastri's role as Team Director, Indian batsman Shikhar Dhawan has said that the former captain instilled confidence in the side after the Test debacle.

Relieved after coming good with the bat following a string of poor scores in the Test series and then in the second and third ODIs, Dhawan thanked the support staff of the team and singled out Shastri for giving the team confidence.

Pak’s ISI Got 600mn To Accomplish ‘Special Assignment'

INN News Desk

The Inter-Services Intelligence agency was provided Rs 600 million to accomplish a ‘special assignment’ on the directive of the Pakistani prime minister, according to budget documents tabled in parliament. The sum was released to the Director General of the ISI under the head of “Supplementary Demands for Grants and Appropriations 2012-13″. Budget documents tabled in parliament showed that the Finance Division released Rs 600 million to the ISI chief for the special assignment.

The Shocking US Marketplace For 'Free' Adopted Children

By Sarah Williams / INN Bureau

Born in October 2000 – this handsome boy ‘Rick’ was placed from India a year ago and is obedient and eager to please. This is just one example of a post on an online bulletin board, like a Yahoo group, that allows parents with an adopted child they no longer want to just pass him on to complete strangers without so much as a background check. A horrifying investigation by INN has uncovered this network that flouted pretty much every adoption safety regulation you could name, yet flourished unchecked under the noses of authorities on Facebook, Yahoo and other groups.