A Capitalist Move Of Indian Brand Of Socialism

The Union Government's step of allowing 51 per cent FDI in multi brand retail segment, boasted as the next biggest step since 1991 reforms by government, has proved political opportunism overriding the economic logic. Government thinks FDI as it is a source of filling the savings, forex reserves, trade deficit, management and technological gap and as an instrument of international economic integration but without considering the socioeconomic status and needs of the people of India, a policy like the multi brand FDI may prove the smacking of utter policy paralysis. Government's arguments behind the adoption of FDI in multi brand retail segments are like recognition of serious supply-side constraints (particularly in the food-related retail chains); improvement in back-end infrastructure promotion of share values of the farmers by reducing the role of intermediaries who obtain a disproportionate share value; identification between interests of consumer (nearly 115 crore) and the interests of retailers (nearly 5 crore); strengthening the tax collection of the government by improving the possibilities to tax the unorganised retail sector; improvement in quality standards and customer expectations; etc. Moreover, Indian Council of Research in International Economic Relation (ICRIER), which was appointed to look into the impact of big capital in the retail sector, also come to the conclusion that investment of big money (as FDI in multi brand) in the retail sector would, in the long run out not harm interests of small, traditional retailers. But above all, the most important fact is that FDI driven modern retailing is labour displacing to the extent that it can only expand by destroying the traditional retail sector. cmpanies like Wall Mart, Carrefour, Tesco, etc. will offer a range of household items and grocery directly to consumers in the same way as the ubiquitous 'kirana' stores. With their incredibly high capital, FDI driven retailing units such as Wall Mart, Correfour, Tesco, etc. will be able to sustain losses for many years till its immediate competition is wiped out. This is normal predatory strategy used by these companies to drive out small and dispersed competition. Once a monopoly situation is created, they will then turn into buying low and selling high. To obtain goods and services at the lowest possible price is in the interest of the consumer and it is his/her privilege but it cannot, in any circumstance, override the responsibility of any society to provide economic security for its population and collective well-being must take precedence over individual benefits. The primary task of the Government of India is still ti provide livelihoods and not create so called efficiency of scale by creating redundancies.

--Piyush Tripathi