Economy
Indian states need to strategise their development
The Modi government has been pulling all stops to improve the ease of doing business rankings since it came into power in a bid to improve Indias image as a business-friendly economy and attract global investment.
 
In the last three years, the states have been given a 98-point, 340-point and 295-point reform agenda to achieve key targets that determine the World Bank ranking. The states have themselves been caught up in a frenzy to attract investment. State Chief Ministers have been seen making trips to other nations to woo investors and almost every major state has picked up the trend of organising an investment summit on the lines of Gujarat.
 
However, Mamata Banerjee's trip to Germany last year to attract investment to West Bengal failed to yield any results. Similarly, Amarinder Singh's recent trip to Mumbai elicited demands of first revamping Punjab's industrial policy and criticism for a lack of action to revive existing industries. Elaborate investment summits in these states have suffered a similar fate. Although these efforts are laudable, Indian states need to understand that one size indeed does not fit all.
 
First, Indian states are as big as nations across the world. For instance, Uttar Pradesh's population that lives below the poverty line equals the entire population of South Africa. Similarly, Bihar, which has the dimensions of the 16th-most populous state of the US (Indiana), is home to a population equalling the combined population of the first four most-populous states of US. So, quite clearly, strategies that work for one state will not necessarily work for the other.
 
Each state needs to understand its drivers of competitiveness and play them up for prospective investors in that area. For instance, Punjab was historically an agrarian success story. So, it could incentivise setting up of food processing units by playing out the proximity it has to offer with high-yielding farms. It can also work on reviving its dying industrial cities of Jalandhar and Ludhiana as sports and cycle industry linkages already exist in thesecities. West Bengal can work upon developing a steel cluster owing to its proximity to neighbouring resource-rich states. Yhe northeastern states can develop a thriving tourism industry. States with port facilities can encourage development of export-oriented industries.
 
The investment summits that states have put so much faith into fail to follow such a focussed approach. When anything and everything is on the table, industries fail to see how a particular state is unique in its competitiveness. Throughout history, economic successes of regions have been stories of rise of particular industries followed by reinvention with the times. 
 
For instance, both New York and London were centres of garment production and trade followed by the rise of financial industries when labour became costly. Regions like Detroit that were once known for being a production hub of certain industries but failed to reinvent have fallen into oblivion.
 
This brings us to the second point of the fallacy in the idea of merely attracting investment. More than business incentives, industries follow skill. Bengaluru has become an IT hub not because the Karnataka government offered tax breaks or speedy contracts -- but due to easy access to a pool of talent in the field. An initial kernel of engineering talent attracted companies like Infosys and a virtuous cycle of workers attracting potential employers and employers attracting potential employees developed.
 
Human capital, more than anything else, explains economic successes of regions. A study in the US showed that as the share of population with a college degree in an area increases by 10 per cent, its per capita gross product rises by 22 percent. On the contrary, an area with a skill-deficit usually loses out in the long-run. Detroit, which was once a production hub for cars attracted plenty of low-skilled workers and when the firms moved out of the city after the labour began demanding higher wages, the city failed to re-invent itself unlike New York or London due to a lack of skill in the area.
 
Therefore, to ensure economic success, states need to understand these two things: develop and showcase their drivers of competitiveness and simultaneously develop a vast pool of talent for long-term sustainability of its economy.
 
The role-reversal of corporates running after chief ministers for setting up industries to chief ministers wooing the former is a welcome picture in the Indian business landscape. However, short-sightedness and a lack of strategy is delaying change across Indian states. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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India's wholesale price inflation in March falls to 5.70% month-on-month
New Delhi, India's annual rate of inflation based on wholesale prices softened in March at 5.70 per cent after having risen to over a three-year high of 6.55 per cent in February, official data showed on Monday.
 
The wholesale price index (WPI) in March 2016, however, had declined to (-)0.45 per cent.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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BHIM UPI: NPCI says it won’t be responsible for loss or fraud, user fully takes the risk
National Payments Corp of India (NPCI), which is set up as a Section 25 company under the Companies Act 1956 (now Section 8 of Companies Act 2013), and is seen promoting its Unified Payments Interface (UPI)- based Bharat Interface for Money application (BHIM) app, says it should not held responsible for any loss, claim or damage suffered by the user. What is more shocking are the terms and conditions (T&C) for the UPI BHIM app from NPCI, which are one sided and affords no protection whatsoever to the end user or consumer. 
 
In its terms and conditions for use of the BHIM UPI app, the company, promoted by 10 banks, says, "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application. The user agrees and acknowledges that NPCI shall not be liable and shall in no way be held responsible for any damages whatsoever whether such damages are direct, indirect, incidental or consequential and irrespective of whether any claim is based on loss of revenue, interruption of business, transaction carried out by the user, information provided or disclosed by issuer bank regarding user’s account(s) or any loss of any character or nature whatsoever and whether sustained by the User or by any other person. While NPCI shall endeavour to promptly execute and process the transactions as instructed to be made by the user, NPCI shall not be responsible for any interruptions, non-response or delay in responding due to any reason whatsoever, including due to failure of operational systems or any requirement of law."
 
 
The T&C of NPCI are not easily available and one needs to search for it. But whatever is stated in the T&C documents, appears completely one-sided. Take for example point 6.2 in the T&C documents, which emphasises that only the user is responsible for any failed transaction or any loss and neither NPCI nor the bank can be held responsible. It says, "NPCI shall not be liable for any loss, claim or damage suffered by the User and/or any other third party arising out of or resulting from failure of any transaction initiated via BHIM App on account of time out transaction i.e. where no response is received from NPCI or the beneficiary bank to the transaction request. NPCI or the beneficiary Bank shall also not be liable for any loss, damage and/or claim arising out of or resulting from wrong beneficiary details, mobile number and/or account details being provided by the User." 
 
This means, even if NPCI or the bank fails to send the necessary response, it is the user who is liable for the loss. Therefore, NPCI, the developer and promoter of this UPI BHIM app, and banks on its platform, are under no obligation to send responses to these transactions within time. "NPCI shall not be responsible for any electronic or mechanical defect, data failure or corruption, viruses and bugs or related problems that may be attributable to User telecommunication equipment and/ or the Services provided by any Service Provider," NPCI says.
 
Remember the Bank of Maharashtra case, where fraudsters siphoned off Rs25 crore from the lender, using a bug in its UPI app? For such kind of misuse, too, NPCI says the payer is responsible. It states, "The Payer is solely responsible for the accuracy and authenticity of the payment instructions issued via BHIM App. Once a payment instruction is issued, the same cannot be subsequently revoked by the Payer. NPCI accepts no liability for any consequences arising from erroneous information provided by Payer in payment instructions."
 
Now, let us see what happened in the Bank of Maharashtra case (Read: UPI bug costs Bank of Maharashtra about Rs25 crore). P Hota, Managing Director and Chief Executive of NPCI, told the Economic Times that the Pune-based bank had procured an UPI solution from a vendor (reported to be city-based InfrasoftTech), which had a bug that resulted in the fund moving out of the accounts without the sender's account having the necessary funds.
 
As per the procedure, when the UPI app receives such a request, it sends a query to the other party (customer) and, after obtaining acceptance, it checks fund availability in the UPI-linked bank account. However, the UPI app used by Bank of Maharashtra sent two messages to NPCI, one as 'success' and other as 'error:insufficient funds'. In these fraudulent transactions, NPCI only read the first message and cleared the payment.  
 
This is an interesting situation because the money was taken from accounts which did not have necessary funds. So, who will bear the loss? As per NPCI's T&C, it cannot be the company or the bank, but the user. However, in this case, the user was not even aware about this fund transfer. In addition, NPCI is not under any obligation to keep a record of instructions, making the job of the investigation agencies difficult.
 
In its T&C documents, NPCI states that it has no liability or obligation to keep a record of the instructions to provide information to the user or for verifying the instructions. "All instructions, requests, directives, orders, directions, carried out by the User via BHIM App, are based upon the User’s decisions and are the sole responsibility of the User," it says.
 
After making claims that over one crore users have downloaded the BHIM app from Google Play Store, the government is now trying to boost its actual use. The government has come out with a customer referral scheme, which promises to pay Rs10 per reference to the referrer and Rs25 for the new user for downloading and transacting from BHIM app. But this will happen only on completion of three unique transactions of Rs50 in total to any three unique customers or merchants.
 
Here is the copy of the T&C of NPCI for UPI BHIM app…
 

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COMMENTS

krishna

6 months ago

BOM became cashless!

Sudesh Pratap

6 months ago

I am surprised that people are surprisingly talking about UPI and NPCI in this regard. Have you come across any app or any service provider taking responsibility ? Unfortunately it includes all apps, the ISPs including social media platforms like twitter-facebook etc. This is the risk for the user/consumer likeall others.

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

jaideep shirali

6 months ago

Not surprised by the conditions, I would be glad to know one government department or undertaking that takes responsibility for anything. Banks charge us for the 'safe deposit' lockers, but legally they have no responsibility if anything happens to the locker contents! BMC takes no responsibility for the potholes. Why deny NPCI this opportunity to take all the credit and none of the blame ?

REPLY

Gupta

In Reply to jaideep shirali 6 months ago

:-)

Gupta

In Reply to jaideep shirali 6 months ago

:-)

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