Opinion » Lead

Updated: October 13, 2012 00:14 IST

Let grass roots decide on Walmart

Garga Chatterjee
Comment (21)   ·   print   ·   T  T  

If we are going to buy American, why not adopt the American way of giving local bodies the right to refuse entry to super stores in their area

There is the United States of America and then there is the ‘idea’ of USA that exists in the minds of significant portions of the middle classes all across the globe. How this looks in real life varies slightly according to the region of the world, reflecting specific aspirations and anxieties. In the subcontinent, the latter idea is increasingly not made in a Hollywood basement, given the ‘IT-coolie’-fired traffic to the U.S. One important element of the newer idea of USA that flows back daily by television, Skype, photographs, phone conversation and emails is the ease of the consumer experience in multi-brand retail stores as big as football stadia, with the variety of wares on offer seemingly endless — from bananas to bikinis and beyond. Walmart is unquestionably the most prominent of these chain-stores, a super-brand. Viewed in another way, it is a ‘shop’ whose name is more famous than the brand names of the things it sells.

The shopping experience

I have been living in the U.S. for the last few years, more or less in east coast cities. The last six have been in the Boston area. Many separate municipal towns constitute much of the Boston area. My location however deprives me of the quintessentially ‘American’ experience of shopping at Walmart. I live in Cambridge and hence I am at least 10 miles away from the two Walmarts in the vicinity. Given that I use public transport and my bicycle to move around, both these locations are quite inaccessible for me. Walmarts and stores like that cannot exist in the U.S. in the absence of the stupendous subsidy to the highway systems that make the stores viable, not to mention the mass culture of individual car ownership that makes such stores reachable. If one were to look at a map of Walmart locations across the U.S., it corresponds very well with a population density map of the nation. That said, the absence of Walmart in my neighbouring areas and the preponderance of such stores all over the nation is a phenomenon that needs to be explained.

It is not that Walmart did not want to set up a store in my vicinity. In fact, it tried and tried hard. When I was a student, as a part of my on-campus job as a server and bartender for the Harvard University Dining Services, I would be deputed to various addresses around the area to serve at parties, clean dirty dishes and do similar chores. One such assignment was in the neighbouring municipal area of Watertown. When I was going into the house, I saw a sign on the lawn that said “No Walmart — No more big boxes.” ‘Big box’ incidentally is the nickname for Walmart and other such stores, for that is what they look like. Given that I knew there weren’t any such stores in the area, I wondered what this was about. After my working hours, I talked to the house-owner and he told me he was part of the burgeoning local citizens’ movement, ‘Sustainable Watertown,’ which was opposing a proposed Walmart ‘big-box’ store near the central square of Watertown. In the U.S., citizens of towns and villages have a say in what happens to their areas, and elected officials can veto proposals — be they of setting up stores, building highways or railways. He informed me that they had been getting a lot of support, which had translated into some elected city councillors getting pressured not to court Walmart.

Fast-forward a few years. In November 2011, the incumbent vice-president of the City Council came very close to being defeated by a candidate fighting almost solely on the agenda of stopping Walmart from gaining a foothold in Watertown. In June 2012, Walmart announced it was shelving plans to set up shop in Watertown. At the same time, it also suspended plans to build in a store in the neighbouring town of Somerville.

The Walmart spokesperson said, “In the case of the Somerville and Watertown sites, we made a business decision that the projected cost of investment would ultimately exceed our expected return.” There was another thing common to these two towns — both had popular citizens’ initiatives opposing the entry of Walmart in their areas. In response to this, Barbara Ruskin of Sustainable Watertown issued a statement that read “We, the members of Sustainable Watertown, applaud the news of our campaign’s success and pledge to continue to work with town residents and members, supporting neighbourhood groups, taking an early role in planning and development projects, and providing venues for discussions of sustainability. We will continue to advocate on behalf of the town for a positive vision of a healthy, just and prosperous community.”

Gaps in the network

This is not a long-winded argument against Walmart or other large multi-brand retail chain stores and their pros and cons vis-à-vis the local community. This simply is a reminder that there are gaps in the network of stores Walmart wants to establish. Those gaps are populated by real people, who, like most of us, are consumers who love low prices. But at the same time, many of them feel that they would have to pay a very high price in other aspects of life in their community if they bite the ‘low price’ bait. These gaps, in the shadow of the glorious network of Walmart, when joined together by an alternative perspective of what really matters, also form a United States. It extends beyond Watertown and Somerville and beyond the faux anti-corporate sensibilities of affluent white hipsters. Among the cities, towns and villages all across the nation which have put a low upper limit to the maximum area that can be covered by a ‘shop’, one can count Ashland (Oregon), Oakley (California), Madison (Wisconsin), Ravalli County (Montana), Sante Fe (New Mexico), San Diego (California) and many more. Join the dots and the contours of a nation emerge. This is a USA of Walmart-gaps that few hear about, but it exists nonetheless.

The UPA government has cleared foreign direct investment in multi-brand retail. This adds diversity and capital-power to the already existing scene of Indian multi-brand retail giants. In a rare and cunning gesture to State rights, it has added an enabling rider so that individual States can choose to not permit the entry of foreign multi-brand retail entities in their respective areas. The Centre has made a lot out of this enabling clause, and has waxed eloquent about its commitment to State’s rights as well as democratic principles. It has also driven home the opposite point that the refusal of a certain province should not hold up the power of other areas to host Walmarts. This is quite reasonable, in my opinion. But what is good for the goose is good for the gander. If the Centre is indeed sensitive to the differing aspirations and ‘development’ trajectories of different regions, why does it not have such clauses across the board, in all aspects of trade and commerce and beyond that, in much of what are called the ‘Central’ and ‘Concurrent’ lists?

The Indian Union never tires to tout its successes in the devolution of power by the Panchayati Raj system. In fact, taking the logic of devolution to its logical end, why does it not allow the lower units of the local government to veto decisions and policies that the local body thinks are inimical to the interests of the area? By feverishly canvassing for the rights of the individual as a consumer, this apparently libertarian rhetoric is exposed when the Centre devolves powers to local bodies without giving them veto powers over most decisions that govern life on the ground, including the right to refuse certain kinds of entities to set up shop in an area. As long as the fundamental rights of the individual citizen are not compromised, what does the Centre fear? If the gram panchayats could decide the fate of what comes up in their areas, future Nandigrams could be avoided. They might choose to have Walmarts. Or not. On being liberated from Lutyens’ notions of constitutionality, that is what democracy looks like.

(The writer is postdoctoral scholar in Brain and Cognitive Science at the Massachusetts Institute of Technology.)

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The Walmart is all over the world. But there is no Walmart in New York. The reasons are: (1) Objections by local merchants who will loose their monopoly of high prices. (2) Availability of land in the city. Walmart is not used to occupy expensive ground floor space. They do not generally occupy multi floor buildings. There is no cheap ground floor and expansive floor space in New York (3) Possibility of traffic congestion near the area. In spite of all these reasons, Walmart is still trying for a foothold in New York. The local governments welcome Walmart because the store adds revenue, employment and provide cheaper goods. But there are no protests organized by political parties in the form of strikes, bandhs, hartals, sathyagrahas or shutdown of normal public life or transportation. The protests are the curse of India against any development projects by government or private sector. The politicians and political parties thrive on protests with intimidation for bribes.

from:  Davis K. Thanjan
Posted on: Oct 14, 2012 at 20:56 IST

I live in Western Australia. It is true that local community decides
what is good for them. Any major policy changes to be introduced by
any government has to be endorsed prior to the election. For example
Sunday trading that was introduced by the present government was a
promise made before the election.

Local government has a say in what they want in their area of
jurisdiction. No other level of governance like state or federal can
overrule it.

India has such a system which should have the power and authority to
decide what is good for its electorate.

What UPA II is doing is nothing but betraying the people of India.

from:  Vishnu
Posted on: Oct 14, 2012 at 12:44 IST

The question the author has asked is why the union government does not give veto power to smaller governing bodies in states. The answer to this lies in the fact that India is a union of states and not federation of states like USA. In USA every state has its own constitution and people have dual citizenship i.e. one of the state and other of the country.In USA the states have larger say in policy making as compared to India. Right from the very beginning the Union government has got the residual powers and also the power to alter the legislation of the states. But the coalition form of government that India has had for the last one and half decade, has given the states some power. This power can only be utilized when the regional political leaders show some courage as Mamata Banerjee did few weeks ago. But the problem with India is that the regional politicians are not mature enough.

from:  Divya Prakash
Posted on: Oct 13, 2012 at 08:51 IST

Panchayats and other local bodies are controlled by States and not the Centre. Many times, these local governments have been suspended, dismissed etc. by State governments. Why blame Centre on Walmart issue, because Centre says that it is upto States to invite FDI.

from:  Hari Subramanian
Posted on: Oct 13, 2012 at 04:12 IST

There is no Wal-Mart in greater NYC, Phily, DC.Is that right? Perhaps
this absence is due to people's resistance.If greater NYC (the world-
capital!) cannot accept, why shall we? It's true, middlemen are
appropriating a lot, but we should look at the problem from a
completely different angle. In an economy where there is too little
people HAVE to SHARE. That is the survival technique; it's true
everywhere, be it local vegetable market, auto/rickshaw pullers, petty
manufacturers. We have to understand this different logic.If we always
look from the perspective of 'profit calculation', we cannot explain
the high levels of tolerance of incumbents towards the entrants.Why
and how people share even small 'spaces' need to be understood and
this should be counterposed against the logic of competition in a
'market economy'.We always think the market logic is better than the
logic of sharing of social cake.It's true market generally delivers
quick benefits, but at the cost of huge social losses.

from:  saumya
Posted on: Oct 13, 2012 at 03:37 IST

China could allow Walmart and other retail MNCs inside their country because they had from the beginning planned ahead that it will be a give-and-take policy - economic, national, people, and foreign policy. Their plan was - our people (China) will manufacture and you (retail MNCs) help us sell those to other countries, and as a bargain we will also let you sell to us - hence a win-win situation. Unfortunately, India at present cannot manufacture, and can mostly consume/buy. Furthermore, India does not seem to become a major manufacturing power. Infact, with cheaper Chinese products that will get "dumped" (which the Chinese Govt has institutionalized as a national and foreign policy), Indian manufacturing sector (plus retail sector) will be severely damaged. I have 12 years experience with Walmart-like model of life. Indian Govt should not have allowed FDI in retail until and unless they could have devised a credible and sensible national and foreign policy of give-and-take.

from:  Khoka
Posted on: Oct 13, 2012 at 01:22 IST

Unlike in U.S. in India, the powers are vested only with Central Govt,
and not even State Govts. do not have any powers and democracy is only
on paper. When such being the case, how can the local panchayat,
or Municipality or Corporation dictate terms. Definitely, if Wall Mart
comes,it will be death kneel for the indian products. Indian political
system is such that it does not have any interest on our country.

from:  R.Gurumurthy
Posted on: Oct 13, 2012 at 01:02 IST

An eye opening article with a few revolutionary insights. The idea put forwarded by the author deserve due consideration. The idea of making Panchayati Raj institutions as unit of self-Government enshrined in article 40 of the Indian constitution paved the way for 73rd Amendment of constitution Act of 1992.But the real ‘devolution of power’ is not happened as what it meant in the amendment. The example of what is happened in Somerville and Watertown sites of USA is unimaginable for a village panchayat in India even in state like West Bengal and Kerala. The only exception is the popular movement against Coca-Cola bottling plant in Perumatty panchyat of Palakkad district in Kerala. That is even too because of the collective and grass root level protest by a few activist group not directly connected with any main stream political parties or their feeder organization.

from:  Shukkoor Thahir
Posted on: Oct 12, 2012 at 12:14 IST

Overlooking the IT-Coolie remark, what the author is suggesting is introduction of direct democracy in India. This is both good and bad. If the governing units are given freedom to decide on central government policies then there would be a referendum every other month. Such a situation is not healthy even in the US. Not only because of the economic costs of having a referendum but also because of resulting delay in implementation. The author did tell us that people in certain municipalities do not like Walmart, but he did not tell us the reason. The reasons might not hold good for India. Referendums might work in a country with a population of 300 million. Imagine it in a country with 1.2 billion people. Reading other articles by the same author I feel that he has some thing against the prevailing federal set up in India and takes everything in the same direction. Some times it is good just to stick to the point.

from:  Vijender
Posted on: Oct 12, 2012 at 11:44 IST

I second what Mr. Subramanyan has written above -- ground realities
have to be taken into account. While devolution of power to the
grassroots sounds very empowering and 'sexy', reality of the
panchayats is what Mr. Subramanyan has written about. The author
should come and see how devolution works in a program like MGNREGA and
then decide whether the recommendation of devolution will work on such
things as deciding on FDI and Walmart.
By the way -- although I live in India now, I too lived across the
river from the author - in Boston - for more than two decades. I too
attended universities there, and like Ravi Kumar wrote above, the 'IT-
Coolie' comment shows that east-coast-Indian-transplant-academician
arrogance that I have often witnessed (I am not in IT, so it is not

from:  lrao
Posted on: Oct 12, 2012 at 11:20 IST

I am not clear on why we are apprehensive of giving a chance to Walmart or such big global chains. With their good supply chain mechanisms , they might reduce the food wastage which is so rampant in India from the time it is grown to the time it reaches the market shelves. It might also reduce the maddening inflation being introduced by middle men. It might prevent menace like food adulteration with their strict quality controls. As for taking livelihood , they are going to hire people from India only . Its not as if they are going to recruit foreigners over here.

from:  Himanshu
Posted on: Oct 12, 2012 at 10:37 IST

When I moved to Ohio four years ago there was only a K-Mart in the
neighborhood. It was actually the first Big K-Mart (opened in 1991) in the US
featuring a full-service grocery store and general merchandise. Shortly thereafter
a Walmart Super Center opened. There seemed to no real difference between the
two except the prices in Walmart were always a little below that of K-Mart. And a
little is all it takes! There was a slow attrition of customers from K-Mart, and by
end of 2011 its parking lot sported a deserted look. Eventually the K-Mart closed
in mid 2012.
If an American company, with decades of experience in multibrand retail is not
able to survive this onslaught, I cannot imagine how the 'kinara' shop can - with
or without the help of states or the panchayat. In India, where the understanding
of economics is limited to the colleges, the prospects of the panchayat coming to
the rescue looks bleak.

from:  Krishna Kumar Sankaran Kutty
Posted on: Oct 12, 2012 at 09:34 IST

In USA, democracy really, really works at Centre, state and village level. With corrupt politicians at all these levels, opinions are steamrolled by these so called leaders to favour the corporates as is happening for power plants or pollution-emitting chemical and other industries. Even now UPA by leaving to the States the decision regarding Walmarts, it is enabling Walmarts to "convince" and "manage" the local satraps of the States by hook or by crook for giving permission to their entry. What was not mentioned mischievously by Anand Sarma, is that, if a Party in power in a particular State which allowed Walmarts, is displaced by a new Party, can it throw out Walmarts from their State?? Answer to this question is vital, and this provision should be incorporated in the permissions granted by Central government allow such decisions by successive governments in a State.

from:  M.V.J. Rao
Posted on: Oct 12, 2012 at 08:32 IST

The author's prescription of permitting local panchayats to decide on
whether to have Walmart type of stores or not shows a complete lack of
appreciation of the realities on the ground. The panchayats have no
wherewithal to decide on essential matters pertaining to their life and
death, livelihood and sanitation and education and they continue to eke
out a bare existence in spite of these six decades of independence. They
have far great items to decide for themselves than meddle themselves
with asking for Walmart type of things!

from:  S. Subramanyan
Posted on: Oct 12, 2012 at 08:09 IST

When the behemoth Walmart could impact the prospects of local traders
in cities of USA, just visualise by copy-pasting the same in Indian
retail scenario. Is it worthwhile anymore to buy the idea of retail
MNCs contributing to national economy, as the ruling dispensation
unconvincingly try to sell crying from rooftop? We are aware of the
political compulsion of UPA which now has pressed call divert button,
to rid of scams it is mired in. With renewed animal spirits, it tries
to push the reforms agenda to silence opposition. BJP is dump found as
it is also seen on the same pages of economic policies. An alternative
political wing alone can show the way.

from:  C.Chandrasekaran
Posted on: Oct 12, 2012 at 07:04 IST

I have been living in the US since 1981. I do not think Walmart will serve India's best interests. Personally, I think it will be a death-knell for the hundreds of thousands of Indians who will lose their livelihood. Walmart will dump imported produce items in Indian market at the cost of local produce.

from:  Seshadri
Posted on: Oct 12, 2012 at 05:59 IST

Let the market decide

from:  R. Ganesan
Posted on: Oct 12, 2012 at 05:46 IST

An excellent article. But, problem with 'Indians' is that they want
power without accountability and this mentality moves from bottom to
top. With this view, we have on our own will enculcated the seeds of corruption.For ex- by 73 & 74 amendment, constitutional sanctity was
given to panchyati raj system ( i presume we know why of this). But,
what is happening in actual is that corruption has increased manifold
due to this. We have problems in our attitude which is so called
liberal, rather it should be fundamental atleast for some important
reserved areas. We have made corruption as a part of our system and
all this we have received in legacy (as citation from the period of
maurya, mughal raj, british raj.

from:  Mohit Jangid
Posted on: Oct 12, 2012 at 05:41 IST

"But at the same time, many of them feel that they would have to pay a
very high price in other aspects of life in their community if they bite
the ‘low price’ bait. "

What could be the high price in other respects??

from:  Kamlesh Tiwari
Posted on: Oct 12, 2012 at 05:07 IST

Local supermarkets have had ample time to copy the foreign supermarket concept but no one has taken the plunge. Let walmart or others in but let the people decide whether they wish to shop there or not.The Government should ensure that at least 75 percent of goods sold should be Indian and not flood it with foreign products.

from:  Chandra
Posted on: Oct 12, 2012 at 03:43 IST

Nice attitude from the author. "I have a PhD from an American University, and I work at MIT. The regular software engineers who come to the US to work for few years and go back to India are IT-coolies".

from:  Ravi Kumar
Posted on: Oct 12, 2012 at 02:35 IST
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