20120923

Allowing FDI in retail: some eye-opening facts



All variants of opponents are status quoists and status quoism â€" being standstill â€" is the perfect recipe for undevelopment and poverty.  Even if you do things blindly   - whether right or wrong, only time will tell â€" there is a 50:50 chance of your decision turning right bringing windfall benefits â€" and here our PM and FM are knowledgeable economists unlike the others like the fuddy-duddy Advani, the lawyer Jaitley or the mercurial Mamta who are more interested in the short-term goal of bringing down a duly elected government - and a mid-term poll would cost thousands of crores to the tax-payers.  On the other hand, if you fail to act, as we Indians do, raising some phobia, bogey or dead ideological issue, the poverty-ridden country will continue to remain in the same rut.

Were you to look at the world history, every paradigm shift development, every breakthrough technology has had hitherto known risks.  But only risk-takers, those cut thin and those stick their necks out ultimately won â€" examples: the countless inventors, discoverers and explorers, but for their adventuresome, never-say-die spirits the world would have remained where it was.  The meaningful analogy of sticking one’s neck out to success refers to snails, tortoises and turtles â€" if they did or do choose to retain their necks within themselves for fear of being killed or maimed, they wouldn’t be able to move forward nor search for food, and would die in their own shells (as we Indians seem to be hell bent on doing!)

India has singularly lacked world-class geniuses in science and technology that changed the world for the better.  We were merely followers.  Judging by current happenings in the country, if we did have such great talents, our humongous numbers of negative thinkers, bogey-creators and mass hysteria-raisers would never have allowed those in authorities to put their invention into good, practical use.  For examples, if an Indian, in the not-so-likely event, had invented computers, the opponents would have said use of computers on a massive scale would have put the large numbers of lowly typists out of work! Remember, not very long ago, the entire banking employees were up against computerization and went on strike several times to press their demand that it would affect employment opportunities and promotions?  Similarly, if our engineers had invented internet, several other Indian NGOs would have said it would destroy the entire work of computers via Trojan programs and have successfully sabotaged their introduction in the country.  There is so much blind opposition to nuclear energy in the country citing the stray Japanese disaster, but no one talks of the little known fact that France has the largest numbers nuclear reactors in operation and there hasn’t been a single major accident in any of them.

India loses thousands and thousands of crores worth ready foodgrains and other perishable commodities like vegetables as we lack pucca warehousing facilities for the former and refrigerated storage for the latter as the country simply does not have the hard cash and/or the necessary technology. A few months ago our media was agog with reports as to how thousands of tons of wheat were rotting having been stored in the open save a tarpaulin cover when millions were dying of hunger and malnutrition.    Do we let the poor die or allow FDI?

The biggest opponents, UP, Bihar, West Bengal, MP and Kerala are also the least industrially and economically developed in the country.  Most reprehensible is the behavior of the Kerala Government, supposedly a Congress-led coalition, and a state that takes undue credit for being also the most literate â€" should literacy lead to obduracy, willful dogmatism and obscurantism?

I am no big fan of Raj Thackery who has since given his thumbs-up to FDI in retail but I readily concur with him when he says that the UP/Bihari Bhayyas, Bengalis and Keralites should not be employed in the organized retail outlets, those already in existence or those in the pipeline, in Mumbai as the home governments are tooth and nail opposed to FDI.  One would even go to the extent saying that the Bhayyas, Bengalis and Keralites already employed in the retail sector in Mumbai should be shown the door and sent packing to their hare-brained home states â€" after all their legislative members are elected by the people themselves.

People vehemently find fault with Raj’s MNS and also with Shiv Sena for their sons-of-the-soil insistence on jobs, saying India belongs to all our nationals and anyone can go in search of their livelihood and settle there.  I have, however, a different take.

 The reason why people from other states make a beeline for Maharashtra and especially its capital, Mumbai, is the employment opportunities available here.  My question is: how come the economic development or industrialization in the states of UP, Bihar, Bengal and Kerala has remained almost static even after 65 years of India’s Independence?  The answer is the state politicians who were more interested in serving themselves and protecting their own turfs never bothered to develop their states and in fact Kerala and the once-prosperous Bengal closed down the few industries it had on some flimsy ground or the other, radically regressive thinking or demagoguery, and scared the daylight out of prospective investors from other states or countries.

Now coming to the specifics..

It’s said 50 million kirana shopowners will go out of business.  The figure itself is farfetched because it means one out of every 25 Indian is a shop-keeper, an impossibility.

How could all of them go bust? â€" another impossibility.

Even if most of them did, why make a hue and cry?  Most of the Kirana shopowners are Banias known (or rather, notorious) for their short-changing customers and sharp practices on weight and measures and pricing.  On packaged items, they always sell things at MRP, not a Paisa less and on other commodities where no fixed price exists, what they quote rules without question and whenever an item is scarce or in short-supply, they brazenly resort to black-marketing it.  Some apologists of mom n pop shops say they offer a line of credit to the needy, but such customers are supplied goods at a hefty premium â€" see, there can be no free lunch.   In fact, Bania has become a pejorative byword for anyone being a heartless cutthroat.  So if these species do become extinct â€" most of them will not, why shed tears? On the contrary, it’s time to rejoice!

Another school thinks FD Investors will enslave us and take over India like the East Company Co. did centuries ago.  A most preposterous theory, indeed! It only goes to show we Indians have no confidence in ourselves.  Fact is, many big foreign brands are weary of the doing business with India â€" our tough pro-labour exit policies and labyrinthine rules and regulations needing palms to be greased at every stage before clearance - are too intimidating even for the bravest hearts among them.  Beggars cannot be choosers and as foreign investments in several sectors are the dire need of our country it is they who dictate terms to us before entering.

Big Mall supermarkets are certainly most welcome. 

They offer a wide variety of choice at varying price levels and also a discount on MRPs of all packaged items.  Whenever a new consumer business company sets up shop or an existing company comes out with a new product, they always tie up with Big Malls to push their products offering hefty discount or even one-for-one, a real boon for consumers looking for bargain offers.  For example, one of any of the big or small brands in edible oils, butter, ghee, papads, juices, soft drinks, pickles (in fact the palate-ticklers are so inexpensive at the Malls that it isn’t cost-effective to make them at homes!) , ice creams, etc. is almost always available at a fat discount.  And you could do the shopping in an air-conditioned ambience!

The pay and perks they offer to their large workforce aren’t bad in contrast to the peanuts the Kiranawallas offer to their few staff, who are of course employed only where they cannot manage their shops with the hands available in their families.

The big foreign retail chains have deep pockets and can invest heavily in creating huge storage facilities, refrigerated or otherwise, for food grains and other perishables, saving thousands of tons.

And yes, the Rajasaheb phenomenon was created by the regressive, unlettered, parochial and self-politicians politicians in other states who now cry wolf convincing no discerning Indians.