The "P" Factor

The recent hullabaloo over foreign direct investment in retail sector has unnerved Parliament into hysteria. The first inkling I got from the opposition by BJP, is this same party which was mooting 100% FDI in retail sector nine years ago. The Chief Ministers of Uttar Pradesh, Bihar, Tamil Naidu and how can we forget West Bengal have vowed not to permit FDI in their states. Mamata Bannerjee, who usually act the character of opponent within the UPA government and has presently walloped a populist pose on retail, she should spot where the bona fide interest lie. The BJP might plausibly put on by tripling up the UPA, Trinamool Congress unquestionably won’t.

In veracity the, far-off multi-brand retailers cannot wholly substitute mom-and-pop stores, but undoubtedly create more jobs and momentously, are associated with revenue generation and overall economic development. As the chosen rulers, the Chief Ministers of all states should mull over the philosophical impact that the retail sector has on a country’s socio-economic development. Our economic expert PM. Singh will do well to remember that the economy is in parlous state.

Retailing in mature markets, without similar FDI constraint, employs proportionally more people as well as provides greater education, training and personal development opportunities.

The familiarity of other states should enlighten the guideline dispute in our country. Retailing in middle-aged bazaar without parallel FDI constraint, such as England, provide work for comparatively more people (10.5 % in England versus 8.2 % in India), as well as endow with superior education, training and personal development opportunities. In nations like Brazil, Malaysia, Thailand, lessening of FDI has turn out to be, lessening of unemployment and amplified revenue generation for the economies as a whole. Moreover this might results in shutting down of some neighborhood stores due to inefficiency.

With proper political management Congress can ride out the present FDI crises.

Furthermore, the current FDI policies allow state governments to latitude to march in and grant the incentives and fiscal support to perk up the competitiveness of the mom-and-pop stores. This is what the Malaysian government did when it liberalized the retail sector in 95. There is to a large extent global skill that state governments can hear from.

The definition of Retailing is to provide right product at the right price at the right time to the customer. Accordingly the mom-and-pop stores supply three chief advantages- location, time of delivery and tailored recognition. Those qualities are almost impossible to replicate in modern retail shops. It also includes home delivery, year’s relationship with retailer and mutual trust. This is the very reason why till now we have more consumers in mom-and-pop stores but not in a small modern retailing like Food Bazaar or Spencer.

The BJP might conceivably gain by tripping up the UPA, Trinamool Congress certainly won’t.

In India, stat shows retailing is second largest employer after agriculture. If at this point Congress tries to role back it would spell out the end of the Indian story, as it would indicate government failure. If BJP can arrange the traders bandh as we saw yesterday why not Congress appeal to the farmers and consumers. If would act if it gets words of support from allies like Sharad Pawar, who is seen representing the interests of the farmers.

Bracing FDI limitations in a coordinated and managed way offers the leeway not only to give consumers new options but also could provide benefits to farmers, manufactures and small business enterprises.

The FDI stroke gives a break to State Governments to artistically enclose their own canon and smash their own limitations and admonition. If the Chief Minister of some states do not want FDI in their representative state that too is possible. Let them guard their citizens from profits and expenditure that might mount up to other states. To oppose this stroke on the national level seems irrational based on experience somewhere else. In spite of an open market, no one retailer dominates European retailing, you should have solid reason for your opposition. India too can be same as Europe to set its own priorities and principles. It is the time to climb above wobbly and tenuous affirmations. India’s future financial and societal growth is at venture.