Statement of the Lok Raj Sangathan, August 5, 2007

On August 9, 2007, traders, hawkers and shopkeepers, supported by workers and other sections of the population, will be participating in protest actions all across the country. Their worry — that even as they are facing increasing threats to their livelihood from sealing of their shops, evictions and restraint of various kinds, they see the growing penetration of giant Indian and foreign monopolies into the retail trade business. They see their space to earn a livelihood shrinking while that of the big corporations is expanding. Therefore, they are demanding that far from facilitating the penetration of big foreign and Indian monopolies in the retail sector as the Central government is presently doing, the government must enact strict laws to ban their entry in retail trade.

A great deal of propaganda is being carried out by those who favour the big corporations that the entry of these giant monopolies into retail is to the benefit of the people. They claim that prices will be lowered, quality will be better, time will be saved, customers will have a cleaner environment to buy in, overall wastage will be reduced, etc, etc. They claim that farmers will get better value for their return, as "middlemen" will be "eliminated". In other words, a rosy picture is sought to be created in which the working class, the peasantry and the urban middle strata will all enjoy improved quality of life thanks to Reliance Fresh, Bharti, Subiksha, and others.

What is the reality?

Firstly, these giant foreign and Indian corporations are expanding into retail trade through the direct support of the state. Big retail companies are using their enormous financial clout to politically ensure that the Central and state governments pursue policies in their favor, against their rivals, as well as against the people. For instance big Indian corporate houses manipulated the situation and blocked the entry of foreign multinationals like Wal-Mart step by step by getting the government to put such restrictions as will benefit the big Indian companies, till such time as they had established themselves in the market.

Secondly, despite all the catch phrases about efficiency, etc, these retail companies will not have an easy time in retail if they were forced to compete with shops run from homes, or from street vendors. They have to forcibly deprive the small retailers as well as the hawkers of the right to sell— that is forcibly depriving them of their livelihood. And together with the small shopkeepers losing their livelihood, the workers in these shops will also lose their livelihood. This is how these multinational retailers want to rake profits in retail trade. Hence, the corporates involved in retail trade and the big mall construction companies are also among those forces directly behind the sealing of shops and demolitions in Delhi and other places which have already affected the livelihood of lakhs of people.

Lok Raj Sangathan therefore demands that the state immediately stop its ceiling and demolition activities which are depriving retailers and hawkers of the right to earn their livelihood. Lok Raj Sangathan calls upon the urban working population — whether workers, small shopkeepers, or working people at large, to unite on this important question of principle that the state has no right to deprive anyone of their livelihood, and it has a duty on the contrary to ensure the security of livelihood of everyone.

Let us now review the issue of middlemen. Today, both the peasant in the village and the working person in the towns are exploited by the wholesale traders, the middleman, in agricultural commodities. The monopolies entering retail are promising a better deal to both the peasant and the working person in the city, claiming to eliminate this middleman. But the corporate retailer is not merely a retailer – he is himself a middleman, a trader between town and country, and a very, very, big middleman at that! He wants to pocket the profits that the wholesale trader makes, as well as the profits that the retail trader makes, all rolled into one in his pockets. He will soon be a monopoly buyer and the farmer will be pitted against these giant companies to obtain fair price for their produce. He is setting up the retail outlet and investing crores in establishing supply chains from the countryside to the cities, not for charity to the peasants and to the urban working people, but to make maximum profits. Being a monopoly will enable these corporate retailers to manipulate prices whenever they wish, in the same manner as the big traders do today, with the same aim and result — superprofits through ruining the peasant and robbing the urban working people, except that this will be done on a much bigger scale. The Central government is assisting these monopolies in this dastardly aim. In the field of agriculture procurement and marketing, the Central government is following policies aimed at placing the peasants at the mercy of the multinational agricultural trading companies. This is the reason changes have been made to the APMC Act.

At the present time, the farmer’s family as well as the urban working family is being looted in the process of trade. This is because the control of wholesale trade in agricultural commodities is in private hands, in the hands of players who are able to make maximum profits by hoarding, and so on. Now, with forward trading, and the entry of multinational and Indian retail trading companies into this business, the loot will only intensify.

Therefore the issue really is this: wholesale trade should be nationalised in the interests of the peasants as well as the working population of the cities. Why is the state shirking its responsibility on this vital question for the worker, the peasant, and the retailer? Why does the state not invest in cold storage, better transportation, etc. to improve the life of agricultural produce and to help this quality produce to reach the working people in the cities?

Lok Raj Sangathan demands the nationalization of internal wholesale trade and all foreign trade and a ban on the entry of Indian and foreign monopolies and multinationals in retail trade in whatever form.

Lok Raj Sangathan calls upon the workers, peasants, retail traders and all other productive sections of society to seriously discuss how wholesale trade within the country and trade between India and foreign countries, should be reorganised so that it benefits the Indian people and not the giant corporate trading and retailing companies, Indian as well as foreign, who are trying to destroy the livelihood of the millions of our retailer brothers as well as our peasant brothers.

Lok Raj Sangathan firmly believes that we the Indian people have the ability to determine a bright course for all our 110 crore strong people. We need to create a modern society that will ensure Sukh and Suraksha for all. At present, we are the victims of a political economic system which was put in place by the British colonialists and which is maintained by their loyal followers who are ruling us today. The present political system ensures that people are deprived of power, and power remains entrenched in the hands of a minority of the financial oligarchy. LRS calls upon all to work to create an alternative system wherein people will be in power, and will decide the course for India, and not a handful of monopolies, Indian and foreign.

There are 15 million retail outlets in India. 96% of them occupy less than 500 sq feet in area. Most are family owned shops and establishments. Much of this is classified as "unorganised" sector. The retail sector contributes about 10% of the GDP and 6-7 % of employment.

The value of organised retail is expected to grow Rs 1,000 billion industry in just 4 years, and is therefore attracting many global retail chains like Wal-Mart, Tesco and Carrefour. In 2006, the Union government permitted Foreign Direct Investment (FDI) up to 51% in single brand retail and it is under pressure from multinationals to open up multi brand retail to FDI soon. Meanwhile, Indian retail chains like Reliance, Croma, Aditya Birla group, S Kumars, Shoppers Stop, Westside, Subhiksha and Trinethra have been rapidly expanding, both in the metros as well as in smaller towns.

The retail giants, the largest being Wal-mart-Bharti, Reliance, AV Birla group and Future group, plan to expand the share of organised retail from the current 3% to 15-20% in 4 years by investing more than $2.5 billion, excluding real estate investment. Two thirds of this investment will go towards setting up the supply chain of food and groceries.

 

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