Should FDI in retail sector be allowed? – Who will decide?

The recent move of the Indian government to allow 51% FDI in multi-brand retail trade has evoked massive protests from varied sections of people throughout India. Farmer’s organisations, retail and small wholesale traders, shopkeepers, kirana store owners and employees, trade unions, political activists and parties have demanded that this move should be withdrawn.

We have pointed out on several earlier occasions that allowing FDI in retail trade will affect millions of small producers and traders adversely. Large monopolies in retail trade control the entire supply chain and make maximum profits by squeezing the producers and eliminating the intermediaries. Using their vast financial and distribution muscle they beat down the prices paid to the millions of small producers. They eliminate all the intermediate levels of traders who help to transport goods from the supplier to the ultimate consumer. Since they can afford to hoard goods for days and months together, they manipulate the selling price of essential commodities in the market for making a killing.

The move to allow monopolies like Walmart, Carrefour and Tesco to open up shop in 53 Indian cities which have a population of more than 10 lakhs will affect the livelihood of millions of producers and traders and allow the manipulation of prices of essential goods. The negative experience of retail monopolies abroad and those in India such as Reliance and Big Bazaar is a strong argument for withdrawing the permission granted to foreign investors in Indian retail trade.

But the government refuses to listen to sane voices. Prominent members of the government and big industrialists and their associations claim that allowing FDI in retail trade will bring down prices, create more jobs and make India a favourite destination for investment! This is a total lie.

Several opposition parties have opposed the move. Some of the ruling UPA government’s allies are opposing the entry of FDI into retail trade. Several members of Parliament have been demanding that a policy such as this which has wide-ranging consequences should be properly debated and everyone’s views should be heard.

The government has been claiming that a discussion in Parliament is not required since it is an executive decision and does not involve legislation or change in law! In its anxiety to please the big industrial houses and foreign multinationals who have been demanding that the second generation reforms have to be given a push, the government is adopting an ostrich-like attitude and ignoring the demands of the people and their elected representatives. 
This is one more glaring instance where the executive is going ahead with a decision that would have grave implications for the people without consulting them. This again shows how the present political process thoroughly marginalises the people. It shows how a handful of people sitting in the Council of Ministers decide on the fate of millions of people. This incident once again demonstrates how intolerant the rulers of India have become to any opposition to their policies which only serve the big industrial houses and foreign monopolies.

Let us step up our demand that the government should immediately withdraw its decision to allow FDI into retail trade!
 

Posted In: Policies    Political Process    multi-brand retail trade    kirana stores    Walmart    Carrefour    Tesco    Reliance Retail    Big Bazaar    FDI policy