One year after the government first proposed to allow foreign direct investment in multi-brand retail, both houses of Parliament approved of the policy last week, but not before facing some stiff opposition.
This decision will allow foreign retail giants like Walmart, Tesco and Carrefour to set up shop with a 51 per cent stake in it. Education plus caught up with some Economics and Commerce students from the Loyola College to get their view on the government’s decision.
Most of the students were not convinced that the decision is in the best interest of the country. Sebin Bapty Nidhiry, a final year BA economics student felt the government was forced into the decision to increase its foreign currency reserves in view of the depreciating value of the Indian currency.
Mudith Katrela, a final year B.Com student, like much of the opposition groups protesting the move, felt that big retail giants will drive out the neighbourhood stores.
He said, “The big giants at the beginning can afford to give steep discounts but down the line, it will drive competition out, these companies will start to dictate and control everything.”
Helping farmers?
The government went ahead with the move saying it will help out farmers in getting better price for their yield with the retailers directly purchasing the produce and avoiding the middlemen. Most of these students though were sceptical and believe the move will be of little help to the farmers.
Abu Alex Mathew, a first year MA Economics student said, “this move will just worsen the agrarian crisis. It will cause a lot of migration to the urban centres which will mean there will be less people to work in the fields.”
Venkatapathy Raju a final year B.Com student, who hails from a family involved in agriculture, added that, “there is concern and fear that once the middlemen are eradicated in the beginning, the farmers will be at the mercy of the retailers. They will hold monopoly over the purchase of the farm produce.”
He added that there was genuine concern whether the retailers care for the farmers and the fear that the market will be flooded with cheap products from abroad hurting local business.
Another issue raised by the students was the increase in dependence on foreign capital and companies.
Sourabh Agarwal, a final year B.Com student felt that, “this action will even more link our economy with the rest of the world and so we will be more susceptible to external factors.”
Drowned in the some intense arguments against FDI in multi-brand retail, S. Ahem Shimray, a second year MA Economics student said he is on the same page with the government’s decision which he believes will bring down the prices of essential commodities.
“We are a price- sensitive country and with this move the consumers can save money. Another advantage is that the quality of products will be better and the consumers will have value for money.”
