Tuesday, December 04, 2012

FDI in Retail

Disclaimer : I am not an economist nor an expert on this matter, but as a citizen of this nation, I have to decide what is best for me and my country.
So where do we begin?? The basic premise is that the development model India is pursuing is probably now nearly completely divorced from the vision of the welfare state that India saw herself as in 1947. This debate is not new and it surfaces every time the monopolies and licence permit raj is dismantled. However, like in all situations extreme positions lead to disastrous situations. The Congress justifiably says that the opposition speaks the language of opposing when out of power, only to enact the same legislation when in power. So where is this debate on FDI in retail different?

The demography of India is slowly changing and an agrarian society based on low scales, massive production losses and lack of technology needs to get a boost. However, the boost cannot be at the cost of loss of bio-diversity, native wisdom and destruction of ecology and a model of unsustainable development which is imported from the West. If India and China reached the same consumption levels as the US of A there would not be any earth left. While I am not a Luddite who wants to take us back to the pre-industrial era, i believe that a food chain model based on organic farming, with active encouragement to the native farmer to protect his seeds and improve them is the way forward. A top class cold chain for storage and a practice of giving best prices to the farmer, while ensuring reasonable cost to the consumer will result in gains for everyone and our country. Do our expert economists and confident industrialists need FDI to ensure the above reforms. While i do believe that there is no need to reinvent the wheel in every case, my common sense says that the provisions of FDI in retail stipulating only 30% of local sourcing, means that the local manufacturer will take a huge hit. Are foreign investors charitable philanthropic organizations coming to emancipate our farmers, or are they coming for the massive profits that the increasing buying power of the Indian consumer can give them?? The answer is obvious.

The last question that comes to my mind is that can we the common man have any say or power in this matter? Does this Government, perceived as the most corrupt Government of post-independence India have the credibility to take such major decisions without a wide ranging consensus?? What the opposition leader said in Parliament about Walmart, Pepsico, Carrefour etc. is nothing new or unknown, what frightens me is the disconnect of the middle class and the nouveau rich with the farmer and the poor vendor who has served them faithfully all these years. It seems that naked self interest of the political classes will stage manage a debate and ram through the reform which they desire collectively. The poor of this land will be the ultimate loser.

Yours sincerely 


1 comment:

SMS said...

What a shame on Congress,they will by numbers that too by manipulation of SP and BSP.This is the dark history of congress.Now the downfall of congress has been started.