Editorial 1 : Market Facts and Fears
Context: Predatory Marketing by e-commerce companies
Introduction
- Minister of Commerce and Industry raised the issue of “predatory pricing” by e-commerce platforms and the possibility of “social disruption”.
- The rapid growth of e-commerce could adversely impact millions of small retailers across the country leading to social disruption.
Predatory Pricing
- Predatory pricing involves selling goods or services at a price lower than their cost of production.
- This is an anti-competitive practice that works to the disadvantage of the firm’s existing competitors and also dissuades prospective new entrants in the market segment.
Consequences of Predatory Pricing
- Driving out competitors could result in the creation of a monopoly-like market structure.
- While consumers benefit in the short-term via lower prices, the long-term consequences are less market competition, less choice for buyers, and the possibility of the dominant firm later raising prices to the detriment of consumers.
- But, determining if a firm has engaged in predatory pricing is not a straightforward exercise.
Countering the argument: Positives of e-commerce
- While e-commerce is indeed growing at a fast pace, it comprised only 7.8% of total retail sales in 2022.
- Around 1.76 million retail enterprises take part in e-commerce activity in India, with the online vendors generating 15.8 million jobs, including 3.5 million for women.
- e-commerce vendors say that their sales and profits have increased after they started selling online.
- Integration with e-commerce platforms has delivered benefits to vendors in smaller cities.
- According to the report by Pahle India Foundation the growth of e-commerce segment is “not at the cost” of the traditional brick and mortar stores.
- With e-commerce not only do consumers feel they have more choice, but they also feel that pricing is in their favour.
Way Forward
- The e-commerce market in India is a fast-growing segment.
- With more and more consumers and businesses using such platforms, the Competition Commission should ensure that firms do not indulge in unfair practices, that there is fair play and a level playing field.
- There should be greater transparency in pricing and lesser information asymmetry. Policy should be guided by the objective of safeguarding competition.
- There should be greater transparency in pricing and lesser information asymmetry.
- Policy should be guided by the objective of safeguarding competition.
Editorial 2 : Fighting the Water
Context: Recent flash floods and landslides in Tripura.
Introduction
- Southern districts of Tripura including the capital Agartala are witnessing heavy rainfall and flood in the last four days.
- The unprecedented rainfall caught the state administration off-guard.
- For public safety and in order to mitigate the impact of flooding, more than 50,000 people have been shifted to relief camps.
Centre Government’s role
- The Centre has promised Tripura all help in dealing with the emergency.
- But states need more central support in combating the vagaries of the elements.
- The Centre have to hand-hold states in building resilience against climate change.
Converging the efforts: Science and Administration
- Scientists in different parts of the country are working on mechanisms to alert people about landslides.
- IIT Mandi, has installed sensors to measure rainfall, soil moisture and humidity in Kinnaur and Kangra districts of Himachal Pradesh.
- The data collected by these devices can help forecast landslides about three hours in advance.
- Administrators need to sync research with the observations of the weather bureau and coordinate with telecom operators to provide timely SMS warnings to people.
- The past experiences and climate action plan of states have shown that the states’ local agencies cannot be left to their own devices.
- Tripura’s climate action plan, for instance, has only a few sentences on floods and landslides.
- The destruction caused by the latest floods is proof that such measures have remained on paper.
Destruction in Tripura
- The raging waters have submerged the fields of Tripura’s paddy and jute farmers, most of whom are small agriculturists.
- The state’s farm sector is yet to recover from the damage caused by Cyclone Remal in May.
Way Forward: As with early warning systems or urban infrastructure, governments (centre & state) will need to find ways to shield the fields from the ravages of floods and landslides. These tasks cannot be postponed for long.