Continued from:
INDIAN POLITY AND THE VALUELESS POLITICOS - THE POLITICAL
JAMBOREE CALLED INDIA
(III)
Though Manmohan Singh did some plain talking in terms of the tough
economic measures on September 21, it is not enough to help his cause (if
there is really any cause). But apart from ‘that some plain talking
element’, it was all similar Manmohan’s speech, playing with statistics,
overstating his achievements and beating the drum about the bravado of his
1991-1996 term as India’s finance minister. The way he has been doing it so regularly,
it has started belying his persona. His speech on this Independence Day was
full of canards and was widely panned.
Sadly, he still doesn’t look to offer us anything more sensible.
Manmohan’s laidback attitude on Coalgate and other scams have
shown him in poor light. It was only exacerbated with the timing that he chose
to push forward his reformist agenda.
There is nothing wrong in opening up sectors for FDI. Caps have
been raised or new norms have been introduced in single brand, multi-brand,
broadcast, aviation and power exchange sectors. The only noise puller is the retail
FDI move as it concerns a large segment of population. Other sectors, being too
small in terms of people directly associated with them are of no use for the
political parties.
And in any case, opening up of the retail sector for FDI would
help the country in the long run, there should be no denying to this fact. Organized
retail is a reality in India
and is growing strongly. Currently it is about 7 per cent of the total retails
business in India
($35 Billion out of $450 Billion). An AT Kearny 2010 report projects it to
reach a size of $200 Billion by 2020 with a growth rate of 25 per cent. We
should expect a better rate as the multi-brand retail FDI was not allowed when
this report came out. But the other side of the report tells even a better
story. It tells the Indian retail sector would reach to a size of $850 Billion by
2020. Its means the unorganized retail business would be of $650 Billion
turnover.
So, where is the loss factor for the common man? Both modes of
delivery would grow.
And how does it matter if the owner of an organized retail chain
in India
is the Future Group (Big Bazar) or the Wal-Mart?
Are the foreign multinational chains going to bring foreigners
to man the stores? That is foolhardy to think and only politicians and politician-likes
can think.
So where does the question of livelihood and employment loss
come-in?
In fact, multitudes can get benefitted by the improved business
practices that the multinational retail chains would bring in like investment
in backend infrastructure and logistical operations and supply chain
management. Also, it would help to enhance the farm productivity manifold as a
major chunk of the farm produce is destroyed in transit due to poor storage facilities.
Better storage facilities would push for improved availability and logical
prices for the consumer. The direct access (that is likely to happen) to the
farmers would reduce the burden of food spoilage on the farmers giving them
more produce at hand per crop cycle.
The real thing is about the volume business here. If both, the
producer (farmers) and the trader (retail chains), manage to do good volume business,
there is nothing like that. And organized retail can do that in India.
It is true that there would be no immediate changes, not in
terms of the livelihood of the farmers or the fiscal deficit of the government
of India.
It is true that the immediate beneficiaries would be the large Indian retail
chains in the business who are currently bleeding and would get a fresh lease
of life with the FDI cash infusion.
But in the long run, it is going to benefit all in a country
like India
which is basically about volumes and masses. What Wal-Mart or likes do in their
respective countries or other developed economies is not going to help in India. They
need to adopt an Indianised strategy (something like McDonald’s McAloo Tikki).
That means going mass-centric and that is certainly going to help masses of India –
optimized prices and a better people driven business sense.
Given the large size of the retail business, that makes around
15 per cent of the Indian GDP and employs around 3.5 per cent of the Indian
workforce, any fundamental business policy move here comes with big-ticket
returns that can only be realized over sustained period of time.
So it’s not about a bad policy move.
So, it’s about good politics and bad politics.
So, it’s about ruling politics and opposition politics.
Manmohan cannot be blamed for pushing Indians to misery on this
front (in fact, he would have deserved accolades) provided he had acted on the
right time, with the positioned elements.
To continue..