Saturday, January 21, 2012

Shampoo for lunch

It must have happened to you too. Standing in a long checkout line in an Indian "supermarket". Rajalakshmi , in front of you, has 742 items to bill. You wait patiently (as if you can do anything else). The bloke behind you is poking at your spine as he wills you to advance. Rajalakshmi is intently watching the  amount totalling up on the display. It now stands at Rs 3742.50. After 18.5 minutes when all the 742 items have been billed (and not one second before), she digs into her purse and comes out with three fat wads of Sodexho coupons. All in denominations of Rs 5. And then proceeds to count them out laboriously. Being mathematically challenged, each time, she comes up with a different answer. 14 minutes later she discovers that she is Rs 5 short in coupons. She then proceeds to dig in to packed bags, go to the bottom, remove an item and ask the checkout guy to deduct that from the bill. She is now Rs 7 excess. She wants change back. He refuses ........You can do precious little but curse at the injustice in the world.

Forget Foreign Direct Investment. The biggest change required in Indian retail is the banning of Sodexho coupons. I don't mind Walmart not being there. I just want Sodexho to disappear.

For those unfamiliar with the Sodexho problem in India, this is a by product of feeding the thousands of coders who throng Indian cities. The office canteen providing free meals was always a part of the corporate landscape. But when the IT lot descended on the scene, they brought with them the Sodexho coupon. Each employee is given a thick wad of these blasted coupons. She's supposed to exchange them when buying lunch . Of course she does no such thing -she either starves, or has a banana or brings a tiffin box. Saves these coupons which then can be used to buy grocery in shops.

This is tax evasion on a grand scale by the relatively well to do. Food coupons are tax exempt with the ostensibly laudable objective of feeding Rajalakshmis. They are meant to be used to buy food when in office. Not to buy toilet paper for home. By Indian standards, coders are well paid. Their effective rate of taxation is usually low at 10 or 20%. This is blatant tax evasion which everybody indulges in. Before throwing mud at politicians, one should ensure that one's own shirt is white.

The problem has grown into an epidemic. Apparently there are 300,000 people using Sodexho coupons like this. Nobody knows the value , but the speculation is some Rs 3000 crores. This is parallel currency sloshing around along with the rupee. I have sometimes been offered these coupons as change. The look I give the retailer who suggests this, gives meaning to the term kolaveri !

Pre budget consultations are currently going on in India. Here's a free suggestion to the Hon'ble Pranab Mukherjee. Remove the tax exemption on Sodexho coupons. And just watch them disappearing at lightning speed. I shall cheer mightily if Dada would do that.