Sonia Gandhi in a letter to the PM stated:
“I have received suggestions from many quarters about the desirability to first study the possible impact of transnational supermarkets on livelihood security of those engaged in small-scale operations... I thought I would convey this to you so that you may consider having the relevant issues properly examined before further decisions are taken.”
A seemingly innocuous request(one might even argue how someone who is not a part of the Union Cabinet makes such a demand)- to study the possible effects of Foreign Direct Investment in Retail.One can easily see who the "quarters" are - the Leftists in the coalition have made their opposition very clear.What is a concern is that in Indian politics a study means....delay.The entry of Wal-Mart,Carrefour etc at this time when Indian biggies haven't yet matured is vital.It will mean that Reliance,Birlas and likes would be kept on their toes.And more competition means better prices for the consumers.
The potential benefits of FDI in developing economies are manifold and their effects in India post-reform are well documented.They have even been endorsed by PM Manmohan Singh himself.Add to that a large amount of jobs that are likely to be created along with a steady flow of capital.
So whats the catch- the fear that smaller neighborhood stores will be wiped out.But with 97% market share they are more likely to play a part- and a significant one too.Reliance will pass on the efficiency of its supply-chain to them by allowing them to buy on a wholesale basis.And when one takes into account the massive amount of commercial space likely to be required , kirana stores will more than happily rent it out.
The reform process has seen a gradual growth of foreign firms in India.And all the fears of them gobbling up the Indian market have been proven wrong.On the contrary, Indian firms are on a foreign acquisition spree.The caps on FDI are in place to allay any fears.But the reforms need to continue - regardless of political compulsions - if we are to make progress.
There's no need to blank out this F-word!
1 comment:
I completely agree.
This is clearly a case of opportunistic politics. No wonder the letter comes from a person who is nothing less than a drama queen. And the timing of the letter is also politically perfect! 3 states with assembly elections plus one with municipal elections.
And why they leave out some crucial points is beyond my understanding.
First, FDI in retail already exists. Only that the cap has been raised. Kiraana shops haven't suffered till now. By laws of averages and statistics, they wont with the 49% regime.
Second, Kiraana shops will in fact profit out of this one. Reliance fresh with its cash-n-carry model is a good example.
And why does the defn. of common aadmi change from time to time.
In this case, Aam Aadmi is the kiraana shopkeeper and not the customers.
In other cases, these 'customers' are referred to as the Aam Aadmi!
Whose benefit and loss are we talking anyway?!!
A very nice article that again highlights the appeasing tactics of the Congress. (though, this time they're appeasing the pro-China and hypocritic red brigade!)
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