Thursday, October 4, 2012

FDI IN RETAIL IN INDIA : WHAT IS THE FUSS ABOUT?

With great difficulty and hesitation the UPA government has taken a small step in the reforms towards building a modern prosperous India. Most of the opposition parties have taken a position against this measure based on their so called political ideology which only caters to populism and vote catching rhetoric. Surprisingly even the principle opposition party which was a strong exponent of this reform when in power has shown the famous crab mentality and is vehemently opposing the measure.
The main advantages of this measure were discussed in FDI in retail in India : A step in the right direction and its direct and indirect contribution to the fiscal health of the country cannot be undermined. However India as a country has to take a call on few basic postulates of Growth of the Indian economy and mitigation of poverty. Unless and until polity takes a forward looking stance on major policies Indian poor will remain poor and a neglected lot.

  • The first and foremost step in the right direction will be aiming at bringing in majority of Indian workforce in the organised sector with a shift from daily wage workers to regular employees in the quickest possible time so that they also start living a meaningful life with a better work place environment, medical care and retirement benefits. Such things can happen only when the scales of operation of every business whether in manufacturing, service industry, retail or construction industry are increased manifolds. FDI in retail and encouragement to Indian organised retail with strict adherence to employer employee relationship is definitely a game changer in this direction.
  • A farmer is a producer of goods no doubt, but is he not a consumer. He produces say five items but consumes hundreds of other everyday requirement items and is going to be doubly benefited through higher prices for his produce and at the same time getting his everyday requirements at cheaper prices.
  • Industrialisation, automation and large scale operations in any field are cost effective and ultimately result in lowering down of prices of products. These processes and operations have not harmed any country on this globe and there is no reason or truth that they will harm the Indian citizenry. In fact the woes of the advanced countries and their economies emanate from over doing of social security and unfavourable demographic mix . The Indian polity will do well if they foresee all this and succeed in not letting the country ultimately fall in this trap.
The Indian rulers and polity will do a service to the nation if they become a little forward looking and try to spend their energies in putting every Indian worker in the organised sector with proper policy decisions and legislative measures wherever required instead of harping upon the rhetoric of retrograde vote catching slogans.