Archive for November, 2011

Government support to private business

Tuesday, November 29th, 2011 November 29th, 2011 Tarun Chaturvedi

The recent controversy with respect to the government bailout package for Kingfisher Airlines brought to light some interesting issues in the public domain. The main argument against the sanction of a bailout package was that Kingfisher was a private enterprise and public money (i.e. taxpayer’s contribution) should not be utilised for the purposes of bailing out a private enterprise. Rahul Bajaj chipped in with his usual one liner saying that private enterprise is all about risk and reward – the government cannot insulate a private entrepreneur from the risk of failure.

Once an official denial came regarding the bailout package, it seems all has become quiet on that front. Unfortunately the controversy did not last enough to stir a debate on the larger question regarding the theory of the extent of government support to private business which still remains unanswered.

Merely arguing that the bailout package should be denied because Kingfisher is an enterprise run by the private entrepreneur does not muster support in the true economic sense. The argument looks even more devoid of economic logic when we contrast this with the government decision to hand  (repeatedly) bailout packages to Air India (the latest being discussed is for about 30 thousand crores). Even in the countries where capitalism is considered as a religion, during periods of economic crisis, government bailout packages for private enterprise is very common. The US bailout packages for the banks in 2008 and the current European rescue plan are examples in this direction. Hence to feel that a private enterprise should and can never get a government bailout package is not correct.

Governments need to ascertain the exact reasons which plague the enterprise which have resulted in the current situation and they also need to ascertain the fallout of the failure of the private enterprise on the economy as a whole before deciding upon the need for a bailout. In fact, empirical evidence of such government interventions has shown that the cause is not that important as is the effect of the failure.

Today there is no debate as to why the banks in the US reached a situation where the government had to pump in billions of dollars to keep them in business. The analysis of the causes of the failure can only decide the nature of the bailout package. In India the concept of bailout packages is very common - maybe not in the form of a direct cash bail out but camouflaged in the form of fiscal incentives like tax concessions etc. In the former there is the application of the tax collected while in the later the collections are reduced at source.

As the economies across the globe come to grips with reduced growth rates, the question of the extent of government support to private business will raise its ugly head again and again. Merely denying Kingfisher a bailout package is not an answer, what is needed today specially in our country is a full-fledged national debate on the issue.

The Charge of the Slap Brigade

Saturday, November 26th, 2011 November 26th, 2011 Jyoti MukulJyoti Mukul

How many times have you decided to hit somebody? Let’s confess, howsoever cool, calm, nonviolent and amiable you maybe—a tight slap is something that you may have wanted to give someone some time in your life. And here, I am not talking about the occasional spanking that parents resort to. After all, that’s something even if you may not have done to your children, your parents would have done it to you.

A tight slap is something that is flying all over these days, it seems. If it was a shoe for the home minister some time back, it a slap for the agriculture minister this time. If that is not enough, we have had instances of people hitting accused in court premises. So, is it that we are having a slap brigade that is hitting out frequently at someone or the other all the time? Perhaps, the slap brigade is doing this because it feels very strongly about something. Losing their balance, they just want to create an impact, both literally on the one who is slapped, and figuratively on those who wanted to do exactly the same but did not dare do it. And then, there is an unwanted pouring of comments and observations judging the act which in itself may not have been a product of well thought of action.

Who are these people who dare to slap—are they of unsound mind or are they some kind of conscious citizens? Maybe a mix of both, or maybe just attention seekers who fly off the handle on smallest pretext. Yet, such acts may not mean anything much except a moment of embarrassment for the one who is on the receiving end or a good visual for television channels who want to flash it over and over again.

There are also those who proclaim to be Gandhian but like to read the Gandhian philosophy upside down. Gandhi told us to offer your other cheek when hit by somebody but Anna Hazare wants another slap to follow. If it’s case of a misplaced Gandhism in the case of Hazare, there is certainly also a case for keeping the charged slap brigade in a check by having leaders who are taller than their seats of power.

FDI?!

Friday, November 25th, 2011 November 25th, 2011 Praveen Bose

The Cabinet decision to allow FDI in multi-brand retailing may have caused dismay among many across the country. There is no dearth of people who are critical of the central government’s move.

An HR head, who’s a good friend, from an organised Indian retail player was all happy and gay today. I thought she would be feeling a little anxious now that there may be too many players trying to take away her human resources who she spent so much training and that she may have to find freshers who will again have to be trained at a great cost of time and money.

No, she was not pretending to be delighted over the decision of the central government. She was happy that now there would be many more jobs offering big fat salaries in the retail sector. She’s also not worried about retaining her staff.

“Yessssss daarllinnnggg. It means big…, big fat salaries are on their way. I have to bide my time to make the most of it. I wonder how long I may need to wait,” was her rhetoric to my query: “Are you not worried?”

I was sure she must be losing sleep over losing people at the stores who are well-trained. She probably would have to recruit people, and train them. And, this I believed, should be worrying her. Alas!

Perhaps I need to change the way I think. I must train myself to look at the tumbler being half full or rather three quarters full rather than look at it as three quarters empty when it may be half empty.

Will the market force Germany into making a decision?

Thursday, November 24th, 2011 November 24th, 2011 Rajiv Shastri

In yesterday’s post, I explained why it would be difficult for Germany to support any euro rescue effort that transfers risk from the peripheral nations to itself. Eurobonds are one such solution. And while eurobonds allow the peripheral nations to access cheaper funds, they will increase financing cost for Germany and France. Till yesterday, Germany was unwilling to commit itself to a position on Eurobonds. Today, the markets signalled that Germany needs to decide.

Germany was able to sell just over 60% of a scheduled government bond issue of €6 billion at an average yield of 1.98%. Secondary market yields on German sovereign debt rose in the aftermath of this issue to 2.09%. This reduced attraction to German sovereign debt could well be fuelled by the possibility that if Germany were to agree to the eurobond solution, it would borrow at higher rates as explained yesterday. While the credit quality of Eurobonds will be inferior to Germany’s due to contamination by other Euro nations, they would be treated in a similar manner for risk weight and other risk management purposes. In this scenario, buying German Bunds now would deprive market participants of additional yield that may be available in the coming days.

Logically, participants would wait for a German decision either way, resulting in reduced demand for existing and fresh German sovereign debt. Yesterday’s failed sale of German Bunds seems to suggest that this has come to pass. For Germany, this is a grim reminder that even though it believes the decision deserves serious deliberations and time, time is a luxury it may not have.

20 Years Hence

Wednesday, November 23rd, 2011 November 23rd, 2011 Praveen Bose

It’s been over 20 years since Professor HRR conducted his last class for the academic year when I was in the first year of my college life. The Physics professor had the ability to draw students’ interest so much that he was like the Pied Piper of Hamlin.  He had the knack of drawing the students into the subject.

For me his classes were no less than a concert that enthralled me for the whole one hour, even if it was a class at 2 pm, just after lunch. It was immersion for me, in the software parlance. Many of us would sit there in the concert hall (classroom), watching him, listening to him and trying to grab each note… rather each word he uttered.

I had never had a science teacher like him all through school. I was probably blessed to have Prof. HRR who taught what he loved to teach and always hoped his students will turn out to be those who will remain curious and have questions in their minds, always.
Ah, but if you asked him too many questions, you would get a whole list of journals and books to read so that the scientific temper is awakened. So, many who had questions, felt it was better to keep quiet and forget the questions if any in their minds. After all, studies are for just the marks, and not for gaining knowledge through ‘Scientific American’ or any other journal he could suggest. The guides were a strict ‘no-no’. “They do not allow you to think.”
The condition of most science teachers and students reminds me of the Hero Honda ad: ‘Fill it, shut it and forget it’. In case of the professor it was definitely ‘hear it, digest it and think (over) it’. Or, you get lost in the race to becoming the richest man in the world (in money terms!) with curiosity being laid to rest at the altar of mammon and the baton of the race being passed on from generation to generation.

The Euro - is there a way forward?

Wednesday, November 23rd, 2011 November 23rd, 2011 Rajiv Shastri

The Eurozone’s travails have been occupying centre stage for virtually all markets around the world for some time now. Despite the passage of time, involvement of some of the best financial brains in the world and apparent willingness on the part of Germany & France, a solution seems to be not only elusive but increasingly impossible from a realistic standpoint. As data about the finances of countries that comprise the core of the Eurozone emerge, reasons for the impossible problem facing the Eurozone become apparent.

However, the most important factor that one needs to bear in mind when analysing these, is the status of all countries in the currency union. While all these countries seem to have a currency that they can call a ‘domestic currency’, it differs from normal domestic currency in one critical aspect.

None of the participant nations in the currency union can create their currency at will, like other counties with a domestic currency can. The US for example, can create any quantity of the US dollar that it wishes to, based solely on its domestic requirements, without any restrictions from other countries. Japan can do the same, as can India and all other countries that have their own domestic currency. In the Eurozone, countries can create fresh Euros through the ECB, which can either agree or disagree based on its judgement of the requirements of the Eurozone as a whole. Therefore, factors other than the nations own economy influence this decision meaningfully, robbing these countries of the freedom others enjoy. And it is this freedom, the ability to create money at will, that distinguishes sovereign debt from all others. Put simply, while all other borrowers have to earn the money required to repay their debts, a sovereign nation borrowing in its own currency (which is completely in its control) can, in the absence of earnings, simply create the money required to repay its debts. Participants in the Eurozone do not have this ability. As a consequence, their ability to repay debt is completely dependent on their ability to earn the money required.

It is in this context, that the finances of each nation participating in the Euro become critical. Ignoring Greece for the moment, since it is already in technical default and funded by the ECB and the EFSF, it is equally instructive to analyse the others.

Italy, with a Debt/GDP ratio of 120.5%, has a primary surplus of 3.1% of GDP. This implies that if its average cost of borrowing exceeds 2.57% p.a., its primary surplus will be insufficient to cover interest cost. This would force it to borrow to pay interest which would result in a fiscal deficit and in the absence of economic growth, an increased Debt/GDP ratio. With an existing average cost of just over 4.1% and a fiscal deficit of 4.6% of GDP in 2010, it was agreed that Italy would embark on an austerity program that would allow it to achieve fiscal balance by 2014. This was before recent events that sent market yields on Italian government debt soaring to their Euro era highs of 7%.

With 26% of outstanding Italian debt due for maturity in 2012 which will need to be refinanced at an interest rate 3% higher than the existing average, a lot more austerity will be required to achieve fiscal balance and stabilise the Debt/GDP ratio. When seen along with the possibility that such austerity may cause the economy to shrink, it seems increasingly unlikely that Italy would find its way out of the woods in the near future.

Spain, with a Debt/GDP ratio of 72% of GDP may seem to be in a better position. However, it already has a primary deficit of 3.5% of GDP at a time when it needs a surplus of 2.5% of GDP to stabilise its Debt/GDP ratio (at the existing average cost of borrowing of 3.5%). Also, market yields on Spanish debt have also risen to near 7% levels, which would result in higher refinancing costs for the 16% of its total debt maturing in the next year. To make matters worse, its existing economic condition does not allow any serious consideration of austerity measures; unemployment is at 21.5% with Spanish GDP growing at less than 1% over the last year and widely expected to shrink in the current year. In summary, Spain’s troubles seem unlikely to fade as well, although for entirely different reasons.

Similar conclusions can be drawn for Portugal and Ireland, though the latter seems to be best placed to weather the storm. The common thread in all these cases is the increased possibility that these countries may not be able to finance their needs independently, and if they are, the cost of this financing would do more damage than good. Consequently, the most popular solution among market participants at the moment seems to be the Eurobond solution. In this proposed solution, all national sovereign bonds in the Eurozone may be replaced with generic Eurobonds. Since these Eurobonds will be backed by the combined financial strength of all Eurozone countries, their credit quality will be better than that of the individual countries mentioned above and lenders would be more willing to buy these at yields significantly lower than those existing for these countries.

However, on the flip side, the credit quality of the combined entity would be worse than the individual credit quality of both France and Germany. As a result, both would need to borrow at interest rates higher than they do at the moment. An indication of the rate at which funds would be available to this combined entity is available in the market yields of bonds issued by the European Financial Stability Fund (EFSF) which was established to fund bailouts of these periphery nations and is backed by the financial might by all nations of the Eurozone. EFSF bonds currently trade at 200 bps, or 2% above German Bunds. This is where the solution starts unravelling.

Germany’s current Debt/GDP ratio is just over 81% of GDP and it generates a primary surplus of 1.3%, which covers an average interest cost of 1.6% p.a. Its current cost of borrowing is in the region of 1.8% p.a. which when seen together with GDP growth of 3.6% in 2010 and expected GDP growth of about 2% in 2011, will allow it to progressively reduce its Debt/GDP ratio every year. Any increase in borrowing cost would hamper this reduction and will be extremely tricky to position politically.

After all, in the German mind, they have done everything as it should be done and are being rewarded by the markets with low interest rates on their borrowings. Accepting a cost of funds that is more than double their existing cost along with the possibility of greater debt burden, to assist nations which have been unreasonably profligate in their ways is sure to offend the austerity loving German gravely. This is especially true when there is no sign of the peripheral nations making any serious attempts to address the root causes of these issues. While almost every elected official has paid lip service to this goal, when confronted with the task of implementing decisions that would achieve it, responsibility has been entrusted to non-elected governments in two of the most severely afflicted countries. And while there is hope that these technocrat-heavy governments will be able to implement unpopular decisions, this hope may well be dashed at the altar of populism when the time comes.

This sentiment was reflected in the German Chancellor, Angela Merkel’s statements yesterday. While stopping short of an outright rejection of the Eurobond solution, Ms. Merkel made it clear that in the current environment, it is extremely difficult to imagine German support for it. It seems increasingly clear that Germany would consider it only if fiscal decision making in these countries was moved from local politicians to a central European body, where Germany would have the required influence to ensure fiscal discipline. This is, at best, a long drawn process involving political negotiations and treaty renegotiations.

In the absence of any short term solutions, it seems extremely likely that the Eurozone crisis will continue to haunt markets. Unfortunately, this is not one of those situations that find a cure in the passage of time. In fact, each passing week worsens the finances of the peripheral nations. Each passing week increases the probability that the Euro, in its current form, will soon cease to exist.

The blogger is an independent macro-economic consultant and has been a part of the debt market for over 15 years. He also blogs at www.rajivshastri.com. Views are personal

David Beckham - the footballer

Tuesday, November 22nd, 2011 November 22nd, 2011 Aabhas Sharma

When asked to comment on David Beckham, Manchester United legend George Best had this to say: “”He cannot kick with his left foot, he cannot head a ball, he cannot tackle and he doesn’t score many goals. Apart from that he’s all right.” Despite Beckham, being one of the most-well known football players in the last 15 years or so, he never gets the credit he deserves. There’s always this talk about Brand Beckham and how it’s his former Spice Girl wife Victoria who wears the pants in the Beckham household.

There’s no doubt that being as famous as Beckham brings its fair share of public glare and there are bound to be people who find that irksome. The haircuts, the tattoos, the sarong-wearing act can put some people off quite a bit. But Beckham the footballer? A sheer joy to watch,  especially when he wasn’t the most talented as compared to a Ronaldo, Ronaldinho or even Luis Figo.

On the field – I have always found him one of the best role models that kids should look up to.  The old adage “Practice makes a man perfect” could not have been more relevant than in the case of David Beckham. One of the best – if not the best – crosser of the ball you would have come across in the last two decades, Beckham for all his off-field shenanigans remains a model pro.

I have often heard or read people say on the Internet that if he wasn’t good looking or had a celebrity wife, people wouldn’t talk of him like they do now. As if he was just another average Joe who struck gold because of his good looks. You don’t play or rather become one of the star players at clubs like Manchester United, Real Madrid and even AC Milan (Beckham spent 12 months at Milan in two six-month loan spells) by being average. In fact, he was one of United’s best players during the club’s most successful period from 1998-2001. And yet, he is extremely underrated by football fans all over the world.

I am writing about Beckham now as last weekend he won the Major League Soccer Cup with his club Los Angeles Galaxy. Even when he moved to Los Angeles, people said it’s about the money or probably his wife wants to have a career in Hollywood. I don’t deny that such theories could be right but does that take anything away from the footballer? In my opinion, it doesn’t and he proves it on the pitch by winning trophies.

I saw Beckham in his prime and honestly I wasn’t that big a fan – for different reasons. People always assumed that you were a Manchester United fan because Beckham played for them and it used to rile me a lot. But as I watched him create goal after goal, week after week  and season after season, I wondered why do people despise him? He was a fantastic player, modest and above all someone who loved the game and cherished the fact that he was playing for some of biggest clubs in the world. Forget the ad campaigns, forget the hair styles and forget the fact that he probably loved the media chasing him and we should remember Beckham the footballer. The man who could cross the ball as well as anyone could do, the player who could score some outrageous free kicks and defy gravity with the bends he used to put on the ball. As a United fan, there’s no greater compliment I can give him than this: one of the most worthy recipients of the number 7 jersey.

Put a stamp on it

Monday, November 21st, 2011 November 21st, 2011 Veenu Sandhu

Some time ago, a friend who had just started collecting stamps lamented how bland Indian stamps were as compared to the ones brought out by most other countries. Surely India, with its wealth of history, colours and cultures, couldn’t make for a dull subject. And what a pity if the Indian postal department had failed to celebrate this country. Curiosity led me to the India Post website – something I, like many others like me, have never quite given a thought, even though our growing up years wouldn’t have been the same had it not been for the Indian postal service.

And what a treasure I stumbled upon. Of course there were the usual dull brown, the sickly yellow and the faded green stamps. But there was also a lot more: the history of India through its stamps, the events, moments and landmarks that have made and defined India and Indians, and the people who have been part of our lives through it all. Among the commemorative postage stamps issued in 2001 was a set of four stamps based on stories from Panchatantra. Another one was on Raj Kapoor, released on his birth anniversary (December 14), that captured three characters, including those from Mera Naam Joker and Aawara, played by the legendary actor. And one of V Shantaram which immortalised his character in Do Aankhen Barah Haath.

Two years later, the department issued stamps as a tribute to some of the country’s finest singers – Kishore Kumar, Mohammed Rafi, Mukesh, Hemant Kumar. The play of light which was so crucial in Guru Dutt’s films is also visible in the stamp brought out in his memory in 2004. Bimal Roy, S D Burman, Ritwik Ghatak, Bismillah Khan, Madhubala, all of them have a stamp to their name. And each of them is worth possessing. The 2006 series on ‘Stop Child Labour’, the 2007 series on the landmark bridges of India (Howrah, Mahatma Gandhi Setu, Pamban Bridge) and the series on Rajasthan’s Pushkar fair are not just stamps; these are storyboards.

But perhaps the most significant of the lot is the story of the Indian freedom struggle through its stamps, starting from the uprising of 1857. Sepoy Mangal Pande of the 5th Company, 34th Native Infantry, looks out of a stamp. In another stamp, Rani Laxmibai, the woman who was described by a British general as “the only man among the rebels”, is astride her horse, sword in hand. Kunwar Singh, nearly eighty and ailing when he took up arms against the British, a couplet by the last Mughal Emperor and poet Bahadur Shah Zafar, Tatya Tope, who led the revolt against the British in Bundelkhand, Awadh’s Begum Hazarat Mahal who took control of Lucknow during the revolt of 1857, Rani Avantibai, the queen of Ramgarh (Madhya Pradesh) who led her forces to reclaim her land from the British in 1857 – they are all there with the story of India’s fight for Independence.

No, Indian stamps do not lack colour. In fact, they go much beyond the colour and into stories that some people remember to this day. I wonder, though, if decades from now the stamps to commemorate Commonwealth Games 2010 will also tell a story. Only, I doubt if many people would want to remember that story.

Confessions of a security breach

Friday, November 18th, 2011 November 18th, 2011 Sundaresha Subramanian

It all began with a dare. Some people in office had registered themselves and had secured admission into an international conference happening in Mumbai. I had missed out on the registrations, having gone to a less happening place for a week.

While casually checking out the venue and timings, it dawned on me that it was no ordinary conference and unregistered people would be denied entry. “They have clearly said so in the invite and I hear they are very, very strict,” one proud registrant quipped.  “They have even rejected some applications. They are not entertaining too many from a single newspaper,” he rubbed it in.

This can’t be Mumbai, I thought, and this can’t happen to me. I could see myself standing before a billboard saying: “Dogs and Sundar not allowed” in front of the five star hotel.
“There is no place in Mumbai that I can’t get into. And, there is no one in Mumbai who has the guts to stop me,” I thought I had thought, only to realise that my vocal chords had decided to amplify it to the whole office.

The thought thus became a statement and soon turned in to a matter of pride, prestige and other such P-words as the haves continued to taunt the poor have-not. “Let us see how you get in.”

Honestly, I did not realise what I was getting into. In the evening, when a photographer friend had called I just checked if he was coming to the Summit next day.

He said his boss, who himself was a panelist at the conference, could not get him in even after escalating it.  “They refused pass and am cooling my heels at home tomorrow,” he said.

If the Paparazzi brethren, who are known to climb trees and get under tables for a good angle, had given up, what am I gonna do?  All I could do was buy a ticket for TinTin at Phoenix and look for some inspiration.

Usually, conferences are only too happy to let in journalists, I thought and by some carrot or/and stick trick I can find my way in.

Though I was more nervous than confident, I picked myself wore an old formal shirt and shoes, that  I hate to wear and reached the place around 10.

I bumped into a ‘Have’ at the gate. And, we walked in.  What I saw sank my heart –Not the gun totting, black suited white men and women reminding me the Thompsons of Tintin, but the sight of my former bosses, people who almost became bosses and potential bosses, who had registered themselves and got admission, standing out.

“We don’t have a clearance from the Vakola police station. So, they are making us wait,” the ex-boss said.

The Have, who came with me, had got it all right and got himself in. “Our boss is coming in few minutes. You tell him,” he advised me considerately.

Boss came and got busy with friends and he was rushing to catch the 5-star session that was about to start. I didn’t want to bug him.

The ex-boss advised me “Stay close to him. He is like you. He has not registered like. He is your best chance,” pointing to Q, a very big potential boss.

Q was arguing at the counter. “I am from dash-dash. I have to be inside.” The pretty young things did not give a damn.

I went to one of them. “Can you get me in?”

“You are not registered?”

“No.”

She gave me a condescending smile, which made her look more beautiful, “No chance.”

Dawn breaks when the night is the darkest.  BOOM. I was in.

It was a split second. Probably, even lesser.

But, I was in, that is all matters.  The feeling was incomparable — almost like having turned that condescending smile in to a romantic one.

To ice it, one of our haves, all decked up, shook my hands saying, “Maan na padega.”
I am not telling you here the mechanics of the breach as it may get very mundane and may also hurt the black suited white guys n gals who did their jobs admirably for two days.  I even shook hands with one of them saying, “Great job, mate.”  “Alvidha,” he said.

As I walked out on the first day, another of the haves said, “I will get you six beers for what you did today. If you come back in tomorrow, I will get you sixteen.”
Another Dare? Why Me?

How did I get in on Day Two? That is a different story altogether.

When competition can actually kill you

Monday, November 14th, 2011 November 14th, 2011 Jyoti MukulJyoti Mukul

As I got into an autorickshaw on Saturday to go up to the Metro station, all hell broke loose. It was a culmination of an argument preceding my taking the seat. The driver of another auto parked next to mine asked me to come in his auto. “Pay Rs 60,” he said, hinting at a straight cut of Rs 10 on the standard rate from near my house to Huda City Centre. For any consumer of a service, as essential as public transport, this is nothing but the power of bargain working to his favour but before I could decide, pop came the answer from the driver of the auto I was sitting in. A throttle and a slap and soon the two were on each other’s neck. Before I could decide to make a choice, the offer was in a mess. Soon enough, I too decided to avoid being a witness to a literal aggressive selling and a customer retention plan, depending on which side you are. The offer of making a choice was abandoned and I got down. Within seconds I realised, a stick came out from behind where I was seated earlier and was about to land on the head of the offer maker but for some Samaritans who decided to intervene.

If the early morning incident is any indicator, market is not always perfect. The second auto was not resorting to predatory pricing under section 4 of the Competition Act for “predatory price” means the sale of goods or provision of services at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors. The cost of service, in this case, is far below the price charged by autos in Gurgaon since they do not run by the meter though the chance of eliminating competitor was threatening to be a reality.

What of course can be said about pricing here is the formation of cartel in a situation where there is oversupply, certainly outside the metro stations. Strictly going by the Act, any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise, including cartels, engaged in identical or similar trade of goods or provision of services, which directly or indirectly determines purchase or sale prices or limits or controls production or provision of services is presumed to have an appreciable adverse effect on competition. The second auto driver was breaking this cartel.

The auto story drives in the point that the more unorganised a market is, the more there are chances of imperfection creeping in and here the Competition Commission of India cannot help. Market economics teaches you that the power of bargaining lies with the one who has an upper hand. Consumers can dictate the price if the supply is more but if the demand outstrips supply, the supplier is the king. This theory has proven to be right even before economists decided to write it down. Yet, a slap and a throttle can easily kill competition.