So finally, after facing much noise in November last year, our government introduced up to 51% FDI in multi brand retail (I know there were other reforms too, but I’m concerned with multi brand retail for this post) last fortnight by not giving a damn to the opposition or even certain allies who were opposed to it. And rightly so, this slew of reforms unleashed by PM Singh’s government, reminiscent of 1991 to many in India Inc. were much needed to revive our falling economy and reverse the growth slowdown.
The best and cleverest part of this reform was of letting the CMs decide whether they want it in their states or not, which would have prevented the government from facing opposition similar to that in November ensuring smooth sail. But Alas! Govt was wrong. Mamata Banerjee, as we all know, instead of acing quietly by not allowing FDI in WB, fumed and took back the support of TMC from the government citing her concern for the ‘aam aadmi’ (who funnily will benefit from this FDI) and as expected, the ‘anti progress’ BJP who rather than debating in a civilized manner went for forced bandhs in its governed states and whose supporters were shown disrespectfully burning the effigies of PM Singh and forcibly halting trains in the media.
But luckily, the government remained stable, the void left by Didi was filled by Mulayam and government successfully notified the regulations for FDI. And as far as the BJP is concerned, it acted stupid by forcing a bandh (yes, it was forced, I saw in Ahmedabad how BJP supporters forcibly made the retailers who didn’t want to close, shut their shutters. Bandh should be voluntary, not forced) and causing loss to the same small time retailers (for the malls etc. functioned normally) for whose benefit they were supposedly ‘fighting’ for. So the bandh of 20th September did no good, as govt didn’t budge, and ended up costing the nation Rs 12,500 crores as calculated by CII (worth one scam in itself) All thanks to BJP!
Now TMC and BJP might have succeeded to some extent (for their vested interests) in convincing the semi literate bunch that FDI is bad for the nation, it will create unemployment or India will be doomed if Wal Mart enters its shores etc. but I’ll be blunt here, FDI IS NOT BAD! And here’s why…
Consumers will have a new array of brands and products to choose from with lower price.
Retail investment ensures that supply chain and logistics will be more efficient reducing wastage which currently stands at 30%.
Not just the consumers, farmers will benefit too because these high end retail stores buy farm products directly from the farmers, thus eliminating the middlemen who take away most of the profit.
So for example, now a farmer who is paid Rs 2/kg for the vegetables he produces, they are sold at Rs 40/kg in the market, and out of that half the money goes to the middleman, so now with FDI, farmer will be paid Rs 10 for the same and the consumer will have to pay Rs 20, thus benefiting both sides.
*(This is mere an example, numbers used are for representational purpose only)
Out of minimum $100million investment, 50% will be in back end infrastructure and for investment in rural areas which will create jobs for rural youth, this apart from the people in urban areas who will be employed at the front end stores.
Retail sales outlets will be set up only in cities with a population of more than 10 lakh, so there’s no point of affecting mom and pop stores in rural areas.
Such mom and pop stores wouldn’t be affected even in urban areas. With their personalized services, credit options, home delivery etc. such stores are at benefit. Also a consumer goes to them only when he needs products in small quantities for which he won’t go to the organised retailers.
Subhiksha and Reliance Fresh targeting the consumers of such stores failed; also bigger players like Big Bazaar, Reliance Hypermarket, Star Bazar couldn’t affect them, so how a Spar or a Tesco will? (This reminds me of the feature I saw on prime time on Centre Stage, Headlines Today last night (24th September) where kirana store owners from different cities of India were interviewed and none of them showed any fears of running out of business.)
So it’s a policy well thought of, keeping everyone’s concerns in mind!
Now looking at all the above benefits, why is BJP opposing FDI?
First of all it’s BJP’s ‘anti progress’ attitude, inherent in its blood. It opposed the IT revolution and 90s liberalization too, today we all see how wrong BJP was! If it had succeeded, we Indians would have still been driving Ambassador cars and Bajaj scooters, watching Doordarshan on TV and using landlines; computers would have been a privilege rather than a necessity, our youth wouldn’t have benefited from the software boom which created ‘quality’ employment for them (Heck I wouldn’t have had my prestigious job in this American firm, fresh out of college, that I’ll be joining in January). But now even BJP is reaping the fruits of the reforms brought by the then FM MMS! I sometimes feel that, in spite of being corrupt and having numerous scams on its resume, it’s only the Congress that has always worked for India’s economic progress.
Second, its vote bank is this illiterate/semi literate section comprising of these middlemen and kirana wallas. There are more consumers and farmers than middlemen and kiranas in India, so if BJP really cared for the ‘aam aadmi’ it would have looked for their benefit rather than contemplating about non existing danger to these kiranas and middlemen!
Third, the opposition doesn’t comment on the above asked question that how can foreign retail chains affect the kiranas if the already existing Indian retail chains couldn’t! Another thing they are silent on is BJP’s proposal of pushing for 100% FDI in multi brand retail in 2002 and the now 360 degree turn! Even I asked about this on twitter to Priti Gandhi (@MrsGandhi), who calls herself ‘Narendra Modi worshipper’ and always promptly responds to my allegations about BJP being anti progress and non secular. But repeatedly being asked about this hypocrisy and double standards of BJP, she chose to remain mum on this issue! This shows that BJP has this adopted policy to oppose whatever the ruling government comes out with, even if it’s good for India!
In those who oppose this reform, I have also seen the sentiment of fear of economic colonization, as in foolishly comparing and bearing fear by citing the example of East India company which came to India centuries ago to trade but ended up ruling us. This just makes me laugh on the petty mindedness of those harbouring this sentiment, I mean it’s 21st century for goodness’ sake, such situation can’t be recreated in today’s economic atmosphere where we have well governed rules for foreign investment, regulation on FDI being a part of it! And no wonder, on twitter, such individuals are BJP supporters.
So in conclusion, FDI will do nothing but benefit India and I appreciate the stand of the government taken on this issue in spite of the pointless and brainless opposition.
Let there be the opposition who for its vested interest opposes FDI (their loss), let there be the saffron clad Uma Bharti who may claim of setting the first Wal-Mart store in India on fire, let there be a certain CM (Narendra Modi) with Hitler like deeds who wants to act as the leader of opposition and call PM names and talk rubbish in the rallies organised on name of Vivekananda… India doesn’t need to care about them, for INDIA IS NOW OPEN FOR BUSINESS!