Friday, December 13, 2013

Be Indian, Buy Indian

          The products made by companies can be of 3 types: Zero-tech items, Intermediate-tech items, and Hi-tech items. In 1970s, Muraarji Desai’s government listed out 840 items as zero-tech items. Zero-tech items means, they do not need complicated technology to produce and can be made in small-scale industries in every town. For example, making tooth paste, tooth powder, soaps, detergents, shampoos, face creams, pen, pencil, tomato sauce, chips, salt, packing chilly powder, atta, purified water, carbonated water (soda, pepsi, coca-cola), making liquids with fruit flavors (fruity, slice)… like this 840 items are zero-tech items in India. In this document, I’m mainly concentrating on zero-tech items and the industries, which produce and/or market zero-tech items.

Making zero-tech items is not a difficult job and can be done in small-scale industries in every town with sufficient quality maintenance. The public consumes them in large quantities, as they are FMCG (Fast Moving Consumer Goods). Muraarji Desai’s government reserved these zero-tech items for Indian small-scale industries and hence no foreign multinational company should produce and/or market these items in India. Their intention was to let these be produced by Indian small-scale industries and decentralize this income among thousands of small industries instead of a few large industries of foreign nationals. Industry minister, George Fernandes canceled the licence of coca-cola company in India. They also sent IBM (International Business Machines) and ICL (International Computers Ltd.) out of India. They were about to send Hindustan Lever out, but the government changed and next rulers didn’t continue this. Hindustan Lever Ltd is Holland Company with its original name, UniLever. It’s the company, which produces and markets maximum zero-tech products in India. Its turnover in 2002-03 in India is “11 thousand 800 crore” rupees. This company’s growth rate has decreased in 2001, might be because of few people started rejecting foreign company products and going for Indian alternatives.

Even with the new governments after Muraarji Desai’s, the rate of new multinationals getting into zero-tech segment in India was low. In 1991, finance minister Man Mohan Singh (P.V. Narasimha Rao’s government), started a new mantra in the name of reforms, Globalization and Liberalization. Under this name, 80-90% of the foreign multinationals, which entered India, started making zero-tech items. Today 75% of the Indian market is filled with foreign branded items . Because of this, every year thousands of crores of rupees go out of India in the form of profit and to normalize this deficit, our government takes loan from outside. These days it has started to take loan to pay the yearly interest! This has made more than 5 lakh small-scale industries to shutdown and made more than 8 crore people unemployed.

While inviting foreign multinational companies, our leaders give some reasons:Foreign multinationals invest “initial capital” in the country. They bring “higher technology” into the country. They make “quality products” . They create “employment” . They introduce “competition” in the market. They increase “export”



Let us see how much they hold good.

1. Foreign multinationals invest “initial capital” in the country:
According to a statement given in the parliament, after the globalisation-liberalisation, the MoU. (Memorandum of Understanding) signed for investment in India by foreign multinationals in the period July 1991 to November 1997 is Rs. 94500 crores. This figure is just what they promise and what we see in newspapers. But the “Actual-Inflow” is Rs 19400 crores. This means only 20% of the MoU signed has invested. It’s for the period of 5 and half years. So, about Rs 3500 crores per year has been invested. Does this make a significant percentage in a country whose yearly budget is over 2 and half lakh crores of rupees and domestic savings is over 2 lakh crores of rupees in a year? Even in that actual inflow, major portion is “Capital-Money”. This is the one, which is put in share-market. This hot money doesn’t help in increasing production or employment opportunities. Reserve Bank statistics says that in this period of 5 and half years Rs 34240 crores has flown out of India in the form of profit by these foreign multinationals (note that actual inflow was Rs 19400 crores ).

These multinational companies take more money each year in the form of profit than their initial investment. Hindustan Lever (UniLever, Holland) invested Rs 24 lakh in 1933. Its profit in 1995-96 is Rs 240 crores. It means it takes thousand times of its initial investment every year. For 70 years, guess how many thousand times of 24 lakh it has taken out. Colgate Palmolive (U.S.A.) invested Rs 1.5 lakh in 1936. Its profit in 1996 is Rs 77 crores. Bata India Ltd. invested Rs70 lakh in 1931. Seebagaayiga (Switzerland) invested Rs 48 lakh. PepsiCo from USA has invested Rs 40 crore after Globalization in 1991. Its profit in 1996 is Rs 240 crore. USA’s Coca-cola, Johnson & Johnson, Germany’s Hakest, Bayer, German remedies, England’s Horlicks, SmithKline Beechem – like that there are over 5000 foreign multinational companies in India. They take thousands of times of their initial investment, every year. East India Company was doing the same thing. When we got independence, Jawaharlal Nehru should have sent all the foreign multinationals out of India. But none of them except East India Company was sent out!  

While inviting foreign multinational companies, our leaders give some reasons:Foreign multinationals invest “initial capital” in the country. They bring “higher technology” into the country. They make “quality products” . They create “employment” . They introduce “competition” in the market. They increase “export” .

Let us see how much they hold good.

1. Foreign multinationals bring “higher technology” into the country:
2. They make “quality products”:
No foreign multinationals bring the recent technology to India. Zero-tech, means where there is minimum technology required, is the area in which more than 90% of the foreign multinationals are working on. They are making and/or selling alu chips (Ruffles), tomato chatni (Maggie), packaged drinking water (Aquafina, Kinley), carbonated water (Pepsi, coke), salt and atta in the name of Annapurna, masalas, tooth paste (Colgate, Pepsodent, ColseUp), soaps (Rexona, Lifebuoy, Ayush, Camay, Johnson & Johnson, Lux), detergents (Rin, Wheel, Surf, Arial) – all these can be made in every village! When there were attempts to bring hi-tech items, they sent us back empty handed. In 1980s, Indian PM Rajeev Gandhi asked American president Ronald Reagan to give Supercomputer and Cryogenic engine (core part of the rocket). They refused to give. Then he asked Russians. They said ‘yes’ for Cryogenic engine. But Ronald Reagan scared Russian company of marking it as blacklisted. Russians rejected the agreement. Then, Rajeev Gandhi asked CSIR scientists to make them. Only after that, its sister concern C-DAC made Supercomputer called PARAM-10000 and DRDO made cryogenic engine, which is used in the recent rocket launches by ISRO.

If we see the technologies came to India, majority of them are redundant and rejected technologies in the developed world. Union Carbide of “Bhopal gas tragedy” fame and like companies made our land, water and air polluted. Hundreds of chemicals companies along the Gujarat and Maharashtra coastal belt made that region a hell. Today, technology is a weapon. Nobody gives the current technology to anybody. Everybody has to develop their own technology. It’s wisely said, “Technology is local, while Science is global” . Semiconductor theory is Science, which is everybody knows. But, manufacturing of microchip is the technology. If India has to manufacture microchip (core part of any Personal/Embedded Computer), somebody of India has to start. Otherwise we won’t see personal computers available at 7-8 thousand rupees, which should be the actual cost in India. Note that Indians can manufacture at cheaper costs. That’s how software industries are bagging money.

A friend of mine said, “Indian tooth pastes like Meswak, Neem, Babool, Promise are no good; foreign tooth pates such as Colgate, Close-up, Pepsodent are okay”. Then I asked him, “What’s so special in Colgate and all?” He said, “don’t be so ignorant, you wont get sour taste and you get good lather which cleans the teeth”. After gathering some information I came to know about some facts. To get good lather, they mix Sodium Laurel Sulphate (SLS), and Sodium Saccharine to get good taste. These two chemicals don’t help in cleaning teeth or mouth. On the other hand SLS is harmful to skin and the development of eyes. And the good taste makes the kids to swallow it. Swallowing these toothpastes is highly harmful. On Colgate pack in USA, there will be a warning, “Warning: Keep out of reach of children below six years of age. In case of accidental ingestion seek professional assistance or contact poison control center immediately”. It also contains a suggestion, which says that give only pea sized paste to kids. But here they don’t display any warning message on pack. The advertisements show the usage of paste all along the bristles.

These huge companies make everyone believe what they say by rigorous advertisements. These are 100% idiocity. Everybody laugh at the advertisements, but buy the same as that brand name comes out of your memory when go for purchasing. It’s irony that the educated class is the most influenced by these meaningless ads. I have seen many kids enjoy watching ads and they feel good when you bring those products home. I don’t want to say much on Pepsi and Coca-cola as you might have heard about them a lot. They are just carbonated water (mixed with Carbon-dioxide). Give up these dangerous things. Be natural, have fruit juices, flavored milks, tender coconuts, butter milk, lassi and plain water instead of these "soft" drinks. Many of us are so ignorant that they believe foreign companies always make good things.
 

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