Opinion » Lead

Updated: September 29, 2012 02:43 IST

Money does grow on trees, Prime Minister

Jaswant Singh
Comment (62)   ·   print   ·   T  T  
The Hindu

The U.S. experience proves that big retailers like Walmart are destructive for the community and will not generate the benefits that India has been promised

There is no way we can take lightly the Prime Minister’s recent address to the nation. It was, unarguably, an exceptional step for him to take, renowned as he is neither for his loquacity, nor for his oratorial skills. Why then did he mount his Rocinante of ‘91 vintage and futilely lance opponents of his policies by alleging that they were “spreading canards”? Also, which Sancho Panza on his staff persuaded him to use this insulting noun? But for this, his otherwise rather nondescript address would have been best left to its inevitable fate of oblivion. Not, however, now.

Telephone call

First: this rather admonitory “money does not grow on trees”. Just a day after this astonishing, also so unneeded, reprimand, I received a telephone call from a retired soldier colleague, who had served with me as my tank driver, sharing with me for many years my tank lean-to shelter at night. I save his name lest he be nagged by the otherwise inefficient Intelligence Bureau. “Sahib”, he said in his thick Shekhawati dialect and accent, “please educate the PM that money does actually grow on trees and plants; we get all our fruits, vegetables and animal feed and also firewood from a ‘tree’. So tell him to think of the farmers, not of the ‘foreigners’, who over two centuries back came as a company and took away our land. Not one ‘biswa’ [a measure of land] was left to us”. I promised him I would do so, but advised him not to disturb his retired life over such depressing thoughts, for just as our ‘dhabas’ defeated a rather cocky Colonel from Kentucky, US of A, India will defeat this, too. And not one word of this anecdote is made up.

Therefore, next to the fabled merits of multiple retail shops of (in)famous names.

Please reflect first on the merits of India’s unorganised and widely dispersed retail trade, explained with admirable clarity and succinctness by S. Gurumurthy (“‘Reform’ at Nation’s Cost,” New Indian Express, September 20) : “The unorganised retail trade in India represents the traditional, community-centric, low-cost … employment intense retailing that includes, but is not limited to, kirana shops, owner-run-general stores, paan-beedi shops, convenience stores, and hand-cart and pavement vending. In this model a whole family works in one shop and a whole community is engaged in the trade in a defined area. Most advocates of corporate … and retail firms … ignore [this] critical contribution of the [existing system] to the Indian economy and society (emphasis added). This “multi-layer retailing is the most decentralised economic activity in India after agriculture. Second, it constitutes almost 98 percent of the total trade with an estimated 12 million outlets. In contrast, organised trade accounts for just 2 percent. Third, it is the largest employment provider after agriculture, employing an estimated 40 million people”. In contrast, the world’s largest retail chain, Wal-Mart, employs just about five lakhs. Fourth, being “self-employed … with their families”, this activity comprises “120 million people”.

It is “retailing that continuously generates … huge community-based entrepreneurship”. And then “it contributes over 14 percent of India’s GDP, while all [the] companies in the BSE 500 Index, put together is some 4 percent”. Also that the “unorganised retail segment has been growing at an average rate of over 8 percent a year for the last eight years (1999-00 to 2006-07). … second only to construction …” Let us consider seriously that “if [this] social capital link to retail trade is unsettled, the entire distant and remote supply chain will suffer over a period, disturbing the social equilibrium and the organic social links that have evolved over … centuries”.

There is then a further ‘canard’ spread by our dear PM and his ilk, suggesting that concerns like ‘Walmart’, and others of that variety, overflow with the milk of human kindness and act only out of empathy and compassion for India’s farmers and poor. Gurumurthy very effectively comes to our assistance here, too, the evidence, even in the U.S. being to the contrary: “Walmart entered in Austin neighbourhood of Chicago in 2006. And by 2008, some 82 of the 306 small shops had closed down.” Further, “the Economic Development Quarterly study found the closure rate around Walmart location at 35-60 per cent.” Such studies in the U.S. reject the UPA’s assertion that FDI in retail does not hurt small shops. On job creation, a January 2010 report titled ‘Walmart’s Economic Footprint’, prepared for the New York City Public Advocate, says that “Walmart kills three local jobs for every two it creates”. Jayati Ghosh, an eminent Indian economist cited by Karan Thapar, asserts that “one Walmart store in India will displace 1400 small retail stores costing 5000 jobs”. This, too, is dismissed by the government as “meaningless”.

Misplaced view

As for Walmart offering better prices, please recognise it does not buy or pay for goods over the counter. It purchases the nation’s next harvest in futures market and fixes farm prices. It also “imports cheap goods and destroys local production like it has done in the U.S.” And an outstanding example of this is provided by President George W. Bush, who gratuitously observed “that [rice] prices had gone up because newly prosperous Indians had begun eating more”. In truth, as detailed by USA Today (April 23, 2008) and CNN (April 24, 2008) the “California Rice Commission and USA Rice Federation” denied there was a “shortage of rice”, explaining that it was because ‘Sams Club’ (Walmart’s wholesale division) was holding ‘huge stocks’, and ‘pushing up the prices’.

Two UPA government reports — of the Planning Commission Working Group on Agriculture for the XI Plan (2007-2012), and the 19th report of the Standing Committee of Parliament on Food (2006-2007), to Parliament — “themselves nail the lie that Walmart will link farm-gate to its gate and make Indian farmers rich”.

There is then that absurd assumption that this variety of capital inflow is the answer to our present trade and current account deficits. First, this is neither true nor tenable. Secondly, whose misgovernance/absence of governance has brought about this situation? Please do not place all blame on the ‘global situation’ when you do not hesitate to pat your back about crossing the 2008 fiscal obstacle course. “The trade account deficit of about US$150 billion and the current account deficit exceeding 3 per cent of GDP is very alarming and may lead to a balance of payments crisis of much graver nature than the 1990 position”. It is this continuous pressure on the “trade account and the sudden withdrawal of funds by FIIs from the stock market that has weakened the Indian Rupee”, (Rs. 16 in 1991 to as low as Rs.50 per U.S. dollar) during the UPA-2’s Rule, resulting in a “devaluation of more than 300 per cent”. (Thus becoming) one of “the major causes of imported inflation in the country during the past two decades”. Should our domestic savings, contributing almost 90 per cent of investments in the country, go down, which without fiscal and monetary incentives could well happen, and should the Investment to GDP ratio fall below 30 per cent, then surely we will revert to a ‘sub-Hindu rate’ of growth. That is why prime ministerial favours to foreign investors and step-motherly treatment to our dear desis is so difficult to grasp.

Finally, a brief word about the totally wrong phraseology, to which all have by now succumbed. The measures recently undertaken are not in any sense ‘reforms’, and I am very glad our distinguished Deputy Chairman of the Planning Commission has candidly and correctly said so. These, at best, are ‘administrative’ measures which the government has now, with much fanfare, announced. Misplaced again, for the first reform needed, the very first is ‘reform of government’, and reforming governance is vital so that corruption is minimised and efficiency in administration maximised. I am doing what I promised my soldier colleague I would do. Are the knights of “El ingenioso hidalgo …” listening?

(The writer is Member of Parliament.)

More In: Lead | Opinion

With 350 million middle class with considerable disposable
income in hand, the need for a giant retailer like walmart of USA will
be a good business proposal. But on which terms and conditions they
enter india business is a matter of guess. Since the entire western
world including US are on economic recession, it is a possibility that
they may repatriate whatever is invested in other countries rather
than investing fresh capital. They come to do business in india but it
is likely that they raise resources other than FDI.In that unlikely
event, our objective may not be served.In any case the proposal can be
given a try and wait for the results. As the adage goes "no pain no
gain,we must support the government .

from:  E.Sivasankaran
Posted on: Sep 30, 2012 at 21:55 IST

This is not the first time that the idea of inviting FDI in
retail business into india was mooted. On an earlier occasion this was
brought out but protest alround has postponed the idea to an opportune
time. it was only proper that Manmohan introduced it without much
consultation with the backing of SP and BsP and mamata banerjee
opting out og coalition. When the parliament is disrupted by BJP led
opposition, and country is affected by corruption, and scams, Man
mohan took the right step to divert people by lauching a new set of
reforms, if you may call it, which is hopeful of succeding . FDi may
not be a solution to arrest rupee devaluation and increase in
employment, it will only prove whether expected result would be
forthcoming or not. Our Pm is talking in principle to achieve the
growth and improve our rating by s7p which would help attacrt foreign
investments other than fDI flow.One has to keep the fingers crossed
and watch.

from:  E.Sivasankaran
Posted on: Sep 30, 2012 at 21:29 IST

I agree to every word of TKP.Mohan Venakataraman.
Further to this, everyone is forgetting about one major thing.
Which is "INCOME TAX".
None of these so called kirana shop guys don't pay a single rupee tax.
If Walmart is really succesfull, the government is assured of decent sum of money paid in the form of income tax.
Further to this, the middle man would be ruled out of the overall equation and I am pretty sure that a common man would benefit form this by lower rates from Walmart.

from:  Sridhar P
Posted on: Sep 30, 2012 at 12:19 IST

I have no clue why in India there is so much ballyhoo about FDI in
retail. All other BRIC nations except India have allowed FDI in retail
for sometime now and none of them have seen adverse effect to their
economies from this. Evidently, the positives outweighs the negatives.
If you are not capable of making creative decisions, just doing what
others have done successfully will get you where you want to be.

Moreover, I agree with the comments of Incheon mentioned above. As he claims, India is not USA and making an argument against FDI in retail by saying that Walmart will do to India what it did to US is a
specious argument.
When will Indian citizens be wise enough to understand the smear campaigns put out by the unscrupulous politicians to stay in power and to come to power?

from:  Matt
Posted on: Sep 30, 2012 at 11:47 IST

To say that bringing in big retail stores like WalMart will kill Mom&Pop stores is like saying bringing in McDonalds killed all the dhabhas in the country.
An operation, the size and scale of WalMart can be opened only in select few locations in the country. True it might uproot a few stores in the locality (Reliance Retail, Big Bazaar etc) but it also fosters competition in the market place leading people to find new means of making profits which ultimately leads to a wide array of products and options for the consumer.
65 years of unorganized retail only led to escalating farmer suicides and sub Saharan standards of living for their families. The paradox that more people have access to mobile phones than power supply is something we could ponder at this point.
And personally, I think our ex-Finance Minister would do better to take his concerns and discuss them at the Parliament and leave online petitions to us common folk.

from:  Deepak Thomas
Posted on: Sep 30, 2012 at 10:46 IST

Inviting foreign companies to invest in dollars to protect the
rupee ,s sliding may help to a certain extent. This is a short term
measure.When retailers like Walmart when they come to india, they try
all means to shore up their profit and repatriate to their country.
This is a natural corollary.What we want is a sustained growth and
welfare of the Aam Aadmi. As an economist , our Prime minister
should not lose sight of this point. Since lot of protest all around
agaist FDI, there is some sense in their protest and Government should
have wider discussion and arrive at a consensus before finalising it .
this is particularly necessary because many states are against FDI

from:  E.Sivasankaran
Posted on: Sep 29, 2012 at 09:03 IST

The article from Mr. Jaswant Singh looks to be full of inaccuracies. I
would like to contradict a few points. He was quoting article of
Gurumurthy, in New Indian Express . S Gurumurthy, who is a hardcore
RSS sympathizer which obviously reflects in his articles and
activities. I was born and brought up and worked in India and moved
to U.S for the last 11 years and still holds Indian citizenship. I
run a gas station with a convenience store not very far from Austin
neighborhood of Chicago which was taken an example in his article. He
is right, Wal-Mart moved to Austin and subsequently a few shops were
closed. Even my business too got hurt. I sell a bottle of water 20
(oz.) for $1.79 which one can get in Wal-Mart for 39cents. I sell
Hershey chocolate for $1.79 (king size) which you can get in Wal-Mart
for just under 50 cents in bulk. These are the few examples of price
difference. Of cause the arrival of Wal-Mart has hurt my business.
But who benefited from this initiative. Of cause Mal-Mart comes first
as they look for profit as any other business outfit will look for.
But who benefited the most, and of course that is the customer. With
Wal-Mart, the customers have huge options under one roof and huge
price difference from a local store. Mr. Jaswant from his contacts
should talk to the locals in Austin area (most of them earn income
below national average) and they vouch for what I said. In the poor
neighborhood, of cause the alderman gets his funds to fight election
from business men and the alderman opposes the move in the pretest of
helping the poor. And for Wal-Mart, competition is heating up from
Target, Kroger etc. One can also find other midsized shops thriving
along with Wal-Mart
On issue of rice and Bush. Bush was just making a point of that demand
and supply theory. He was, in a way, complementing India of its
achievement of getting out of poverty and reminding Americans that
times are changing.

from:  Shaju Joseph
Posted on: Sep 29, 2012 at 06:21 IST

Would you walk to school or ride a bicycle? The answer is, it is more efficient to ride a bicycle, especially for a country like India with limited resources. The old lady selling vegetables at the corner will probably lose her job when efficient companies (not just foreign) start selling the same vegetables but that is the price we pay for progress. I am as left of the left as they come, but if we insist that we don't take advantage of efficiency improvements (read bicycle), the entire country will end up a basket case where we have 8 babus to man 2 sarkari counters. Why? Because, they will lose their jobs and what about their poor wives and kids?

And Mr. Singh, the increase in rice prices during the summer of 2008 was due to speculation at the Chicago Mercantile Exchange, not Walmart.

from:  Rahul Garg
Posted on: Sep 29, 2012 at 04:20 IST

Big retailers are going to close down a some segment of small retailers because of their
superior economies of scale. But is improving economies such a bad thing? India needs a
huge boost in improving its infrastructure, but this cannot come from Governments spending
lots of money. The economic dependency on these will create the need to create ans sustain
them. For all faults attributed to the likes of Walmart, it must be remembered they do improve
the economies of production and distribution, not to mention they do make more things
available to the man on the street at cheaper prices. The trick for India to achieve is to
piggyback on this by helping local producers and suppliers hop onto this by ensuring power
is available to the most profitable ventures, stop subsidizing farmers and diesel car
drivers and other vested interests.its a lot to do, but with a billion people and millions of
hungry mouths we need to realize, business as usual is not giving them better lives.

from:  Sridhar kolinjavadi
Posted on: Sep 29, 2012 at 04:15 IST

Opening up our economy to retail is not going to contribute positively to the economy. It is true that we cannot compare India to the developed nations but we should not be aping them either and should rather evaluate the social and economic structure of our country (which is starkly different from western countries). By allowing FDI in retail India will become vulnerable to the global economy and if there is another global downturn nothing will save India this time. We were largely untouched the last time because we were isolated.

On another note, Wal-Mart does not create jobs that benefit the common man. The jobs they create are minimum wage jobs (in the US) and their standard of living is still very poor. A lot of them have to fight for their benefits and it has been said Wal-Mart is not one of the best employers.

from:  Vishnu
Posted on: Sep 28, 2012 at 23:28 IST

Opening Wallmart or Super Stores will not affect any one.Forget about Wllmart, did Reliance Fresh, Spencer,Big Bazar,Kannan,Murugan Stores affected anyone.Only monthly purchaser go to these stores.Small purchaser go to their nearar shop to purchase Grocery and Vegetables they buy from the Vendors who comes to their doorsteps, or go to the nearest daily veg markets.Why do you unnecessarily creating panic over this issue.Wallmart will have to buy commodities only in India,they cannot import from another country,for this condition they will agree.They will give at cheaper prices to us.It is beneficial for Middle class people.Any trader invest money to earn some profit.Can yu say that small local vendors are not cheating us.If you do not want to go to Wallmart then don't go.Why do stop people who want to go to Wallmart.It is our Rights,we want Wallmart like stores.Did you ever cried when Suzuki,Hyundai,Ford,Toyoto were allowed to manufacture Cars in India,Where is Ambassadar,Fiat Cars now?

from:  TKP.Mohan Venakataraman
Posted on: Sep 28, 2012 at 22:59 IST

Gurumurthy is a well read man and watches the economic situation of this country with more clarity than anyone else. He is the one who brought an "White Paper" on Black Money in Swiss which our PM picked up as his electoral agenda. So do not throw filth without knowing the facts.

As far as your globalisation and liberalisation myth is concerned, we have had a meagre amount of FDI in the last 20 years and not the other way around. The economic growth is due to our human capital and not because of anything else. Get your facts right before writing.

from:  Vijay
Posted on: Sep 28, 2012 at 22:24 IST

What I don't get from this article is that why does the author does not want the 'kirana shop owners' et al to prosper by contributing to the economy by using their manpower for better infrastructure rather than doing meagre jobs and strive for better standards of living.

from:  Naval Gupta
Posted on: Sep 28, 2012 at 20:31 IST

I disagree with the author for the following reasons:
1. As mentioned in another comment, India's supply chain is incredibly
inefficient with 40-50% of perishable goods rotting. Efficiency in
this will be a huge benefit.
2. On employment, if I extend your argument, we should stop the use of
machines entirely and replace it with humans - that should further
employment! Unfortunately, progress begets change, and change begets
someone winning and someone losing. In this case, the end consumer
benefits, and the the entire supply chain becomes more efficient.

from:  YP
Posted on: Sep 28, 2012 at 19:54 IST

Don Quixote was eccentric, i.e., "quixotic", but he was not a politician or a crook. By equating Manmohan Singh with Don Quixote, and his staff member with Sancho Panza, Jaswant Singh is casting aspersions on the fictional hero and his squire.

from:  vorpal
Posted on: Sep 28, 2012 at 19:04 IST

Trees may not bear money, but it does carry a lot of money in terms of fruits, nuts,foliages and in fact are much worshipped by ancient men and there are tribes who worship trees.The point was money comes from investments and consequent development.Inflation has made life further miserable to "aam admi" and unemplyment and underemployment skyrocketting.Governence is at the lowest efficiency and the health of common man badly affected due to polluted water, inadequate food intake and what are happening in homes are against all codes of conduct.Pessimism is creeping in and exploitation of unemplyed is rampant.The only one thing which keeps the nation as one entity is its ancient culture of fatalism-every thing left to your fate-.Is it desirable for a nation where Gandhiji dreamt of a Ram Rajya where no one will go unclothed,hungry and shelterless.During travels at night around public places you find unfortunate Indians sleeping in the worst conditions imaginable.Where are we?

from:  Dr K V Peter
Posted on: Sep 28, 2012 at 18:41 IST

Why are we against the FDI in retail while we have "walmarts" like Reliance,BigBazar,More etc...??Are we against the MNCs entering our market and if so,what is then gloablisation means?

from:  Kannan M
Posted on: Sep 28, 2012 at 18:34 IST

as writer has said walmart uses techniques like hoarding to push up
the prices, can writer elaborate what happens when thousands of tonnes
of grain gets wasted?

One should have done the quantitative analysis before doing
qualitative analysis, like how much these stores can store illegally
and how much grain gets wasted, you should have an equation before
computing that.

India will face problem only in manufacturing sector (due to FDI)
which is in dismal health, everything else is pretty well arranged if
you analyze that quantitatively

from:  some one
Posted on: Sep 28, 2012 at 16:35 IST

While we may look at Walmart as the only case-study in point, we also need to understand what Pepsi,Coke did to others in soft drinks business and you would see similar stories in the FMCG like soaps, paste... Indonesia, Thailand etc may not compare to the scale of US, but they dont compare to the scale of India too, the impact will affect millions in this country.. The survival of a road-side vegetable vendor flourishing in life nor the case studies of foreign countries can be a case in point for a key decision such as FDI. This decision should have been taken by UPA with its allies on board at the minimum and we are seeing an unanimous opposition of the elected representatives on this issue... While the educated indian crowd (IT & such) may talk about jargons of productivity, innovation et al, it is time to understand that India employs its maximum in agriculture (farmers & such) and any decision impacting it directly or indirectly needs to be debated thread-bare before enacting it

from:  R Ramanujam
Posted on: Sep 28, 2012 at 15:59 IST

This is with reference to "money does grow on trees, Prime Minister" . I do not oppose FDI in retail per se, but what I fail to understand is why are we waiting for the foreign retail chains to come to india to replenish our consumer and farmer fortunes. “Consumer and farmers will get the better prices” is often the argument given in favor of FDI in multi brand retail. It is irony, that despite of being the largest vegetable producer in the world, a major part of our produce get wasted because of lack of cold storage and transportation facilities. FDI in multi brand retail can wait but not the reform in agriculture sector, which in, will lead to better prices both for farmers and consumers.

Posted on: Sep 28, 2012 at 15:20 IST

this article is totally 1 sided and makes no sound economic sense and not at all surprising to read, coming from the opposition party who should atleast compare economic reforms the years they were in power with 'India Shining'propaganda that suddenly seems to have lost the glimmer when they were booted out, with the last 5 years of world economic recession. Jaswant miserably failed as finance minister and also as external minister (personally escorting terrorist to the afghans!)

from:  Ralph
Posted on: Sep 28, 2012 at 15:06 IST

Good effects of FDI:
1. Those who has ageold thinking that girls and children shall not study and work in such family businesses, will finally know the importance of education
2. Centralisation of resource buying will leave more land area for housing projects and more people will be able to buy their own home.
3. Small shops will still have business because of their credit sales. People who depend on salary for payment, will still go to these shops
4. The big shops will come only in big cities in coming decade or so. So the effect is not as ghastly as is being made.
5. Most important matter is that you can sue this big malls for quality degradation, which you can't do for small shops.

from:  Abhijit
Posted on: Sep 28, 2012 at 14:46 IST

In a blind,ignorant man's world one eyed,misinformed Jack is an Emperor of Spin and invented fluff.This guy has never done an honest days of work and is everready to play to the gallery.What is written is utter commercial drivel and is purile obfuscation to deceive and mislead ill informed,communist mindset Indians, who knows nothing better.I for one have extensive intrinsic knowledge how the Supermarkets in the West operate and their corporate culture, which does not stack up to the written diatribe.The truth, facts and reality becomes self evident of the benefits of Super markets to farmers and consumers,if you study the models of Africa,Asia/Latin America.It is not for misguided politicians with a anti-national agenda to decide what is good for the Indian consumers,let the individual states to decide.Stop the spread of canard,fear factor it is unfounded, there are enough checks and balances for all to benefit from FDI in muti brand, and not swadeshi mumbo jumbo.

from:  DILIP
Posted on: Sep 28, 2012 at 14:31 IST

Firstly, large retailers like Walmart can enter only large cities over 10 lacs of population, large chunk of which is already blocked by the opposition. Secondly, real estate is expensive and it is for large retailers to manage effiently with different conditionalities. Our Kirana shops are in their own groove for a long time. Many of them cheat in different ways both customers and the government. They are already established even in small places with limited accessiblity. They have an established base which cannot shift easily to "Walmart" located at far away places. The article is biased.

from:  M.S.Kamath
Posted on: Sep 28, 2012 at 14:13 IST

the oldest refuge of scoundrels is 'patriotism' and 'national interest'. there is no national interest in consumers of india getting ripped off and the biyanis and mandiwallahs of india benefitting.i am sure walmart is not kindhearted.those who expect kindheartedness are fools who think the farmer in india is kindhearted. they are not.every economic agent is out for his own benefit.
this xenophobic behavior is what is anti national.if such faux patriots dont want to buy chinese stuff, they should stop doing so.let indians who love the stuff (that is why the shops are full of them) buy it.
this arbitrary political boundary of nation states is the worst possible invention of the last century.
anyone citing national interest is talking thru his mouth.all he wants is to dictate how others shoud live

from:  pravin
Posted on: Sep 28, 2012 at 14:00 IST

As our honorable PM had given the speech to the Nation at the same day
introducing the FDI in parliament. But, its really shocking that the
great economist is not concerned for Agriculture dominated country
like India and says the jumla," Paise pedd per nhi ugte"...But i would
say, Yes! paise PM ki pocket se nikalte hai naa ki aam
janta(farmers)ke kheeto se...Is he not aware, that the food he eat it
costs Rs.7721/ per plate only, and the middle class person in India,
his per day diet costs only RS.16 only.What is the planning commission
view on this?I would totally condemn our current PM's view. He is not
concerned to average class people of this democratic country.

from:  Pratyusha Khandelwal
Posted on: Sep 28, 2012 at 13:59 IST

It is rather unfortunate to see opposition politics where a political
party cant take stance of what they really want to do. All they do is
to misguide people and try to increase vote bank by populist measures.
How come a FDI in multi brand Retail favourable to same set of people
in early 2000s and not now?

If we think of how many retailers does not pay tax for the goods they
sell, it is huge loss to IT department? No, I am not talking about the
street vendors and footpath seller, who just try to earn there living.

All in all, FDI can bring some changes in the manner in which retail
market works and bring in some inefficiencies which we Indians usually
dont care. It is just our habit to be in status quo.

Is the government ready to spend money on back end infrastructure and
cold storage to preserve food wastage? If it can and is willing to
rent to retails then only it can avoid large investors in retail.

Finally it is upto customers to make it work or not, if against it
don't buy.

from:  Mayank
Posted on: Sep 28, 2012 at 13:56 IST

Change is always good . I am afraid our Parliamentarians are having
hard time accepting this , Mr. Jaswant Singh failed to acknowledge
that the 4% Gdp provided by the BSE satisfies more than that 14 % of
our unorganised , dissatisfied lot . I know people working in kirana`s
and others still getting the same Rs. 100 a day which was 5 years ago
which is much below the minimum wages provided for labour without any
accounts of PF , gratuity etc. The problems that exist with FDI in
retail(as listed by Mr. Singh)can be monitored and regulated, instead
of totally rejecting on grounds that it will only cause
failure.Comparative study must on the grounds such as the market ,
population , per capita income . Of course India is not a capitalistic
economy as the US but it is closer to China where the model is
successful.I think the risk is worth taking amidst all the protest, to
revive the sinking Indian economy.

from:  Ganshyam Meena
Posted on: Sep 28, 2012 at 13:49 IST

It is amusing to see how extremists of both the Right and the Left
always seem to make common cause whenever they see an opportunity for
the country to progress. We must overcome this tendency toward
xenophobic protectionism and encourage linkages with the global
economy in order to build our muscles as competitors, look at hard
evidence across the world, recognize that there are segments in the
retail trade and that our biggest challenge is to significantly raise
the PRODUCTIVITY of our economic activities. The Indian people are
wise enough to ignore and defeat these sorts of obscurantist voices as
they have done in the past on computerisation,nuclear power,etc.

from:  Dharen Chadha
Posted on: Sep 28, 2012 at 13:38 IST

The impression that I get from this article is that the author:
a: is well-read
b: has done his research quite well

But, is it the whole story? Is he really presenting the entire picture here?

Like many people have mentioned above, when computerisation wave hit India, many feared that jobs would be cut. However, just the opposite is happening today.

Similarly, we need to think on this: Do all nay-sayers of FDI want to protect a certain segment of population (middlemen, traders) at the cost of much larger number of consumers, who are bearing the ill-effects of inflation and recession?

When thinking of FDI, we need to consider:
a. Will the farmer/consumer ultimately benefit?
b. Will there be better infrastructure in India owing to boost from these investments?
c. Are we thinking too much of protecting (flush with cash) jobs of the inefficient and corrupt middlemen who are squeezing the hapless farmers on one side and the equally helpless consumer on the other?

from:  Suyash
Posted on: Sep 28, 2012 at 13:38 IST

Dear PM, Yes money doesn't grow on trees. What about the money India lost due to the constant scams.It is public money, belonging to every Indian looted by the corrupt politicians and administrators. The way planning commission worked after independence was to use natural resources pay in an indirect way for the economy to keep it inflation under control.Our beloved Harvard educated PM gave away coal blocks, oil blocks, spectrum, Highways and what not to private companies at throw away prices.Yes the private companies owned by our beloved corrupt politicians.These people become billionaires overnight at the cost of the Indian society.The indicators of economic growth are not alone the S&P ratings or BSE index.There are lot of social indicators where we are doing poorly( social,education & health indicators).FDI's are not here to do social service, to do business, make profit & its a well known fact that Walmart pushed the US unemployment rate up and its going to repeat its trick here

from:  praveen
Posted on: Sep 28, 2012 at 13:27 IST

Foreigners will come to India to make money but Indians are
not any more fools as they were earlier. - P.Tauro

Then why we Indians still believe we too could become like westerners by just applying scores of fairness creams than realising the fact that both black and white are just complexions rather no colour is superior than other.

Yes really we are not fools thats the reason we allow heaps of lands to get turned into flourishing Malls in cities like Bangalore,Chennai with two great American fast food outlets to serve Indians appetite.

Did you imagine before 20 years that we would end up paying money for natural resources like water ?

Did you imagine before 20 years whether we could see any ads for service sectors like Hospital Industry or Educational institutions ?

From Education to Natural Resources to Hospital Sectors everything snatched from Individuals to Corporates.Still some more left.That too now has been grabbed from us.Gandhi must be silently crying from his grave

from:  SM Subramanian
Posted on: Sep 28, 2012 at 13:13 IST

It is like the US telling Americans that it's outsourcing to Indians that employment in the U.S. has suffered! We cannot eat the cake and still have it. In an open world, such economic measures as enunciated by the PM cannot be avoidable. However, in the Indian context, sufficient safeguards should be built in to address some of the genuine concerns raised by the writer and the commentators.

from:  D. Chandramouli
Posted on: Sep 28, 2012 at 13:09 IST

I think FDI in retail should be allowed not just to invite foreign
capital and employment generation, but mainly to change the mindset of
the people who are still resistant to change. It is opposed by those
who doubt their own capabilities and fear that they will fall when
faced with stiff competition. Charls Darwin's theory of 'survival of
the fittest' is the core and competition is always a healthy sign for
an economy. Take the example of Indian Railways, if competition is
allowed in this sector then it is the customer who will be in the
receiving end with better services and better efficiency. Similarly
foreign competition will force local retailers to innovate and become
more efficient. every aspect has benefits and ills but here benefits
outcast the ill effects. What more important is the change in the
mindset of the people to accept change. The only permanent thing in
this world is change and FDI in retail is an inevitable change which
will happen someday or the other.

from:  Akshay Dhadda
Posted on: Sep 28, 2012 at 13:07 IST

It's a class war. And over the years, this government has not made a
secret of which side its on.

from:  Harsh
Posted on: Sep 28, 2012 at 12:36 IST

A sincere request to people who debate endlessly about what good/bad can FDI in retail can do to India : "think like an Indian consumer".

Can Walmart and likes home deliver products at 10 PM in the night? Can they serve as matchmakers for your son/daughter? Can they pay your utility bills for a nominal amount? No....right?

Mr Singh, i'm sure you are aware that analogies are the poorest and weakest tool in an argument. As someone has correctly pointed out, all the multinational retail chains failed to make big in China because the consumer characteristics are totally different.

The closure rate around Walmart in US is such a big number because consumers do not have mom&pop stores near their houses.

Tell me, what would you do to buy a Kg of rice? Would you want to go to a Walmart supercentre, spend an hour in commute and wait endlessly on the chec-out OR walk down to a kirana store and get it instantly?

Food for thought?

from:  Harshavardhan Chinchore
Posted on: Sep 28, 2012 at 11:47 IST

We should promote agriculture more than industrialization. Foreign
companies will come and acquire our land. Why can't we encourage our
people to be self employed rather than being employed at the retail
store. After all Indian money is going outside. I don't see any
improvement in living style of indian people if fdi comes. While america
and uk are not allowing indian guys to work over there, why should we
allow their companies to float here?

from:  Niki
Posted on: Sep 28, 2012 at 11:30 IST

I think it was outrightly stupid to quote an article by Mr Gurumurthy who has been a chief opponent of liberalisation. He opposed the 1991 reforms which brought a sea of change in the indian economy and continues to oppose anything which he believes is not swadeshi!!

from:  Ahmad
Posted on: Sep 28, 2012 at 11:30 IST

Well, frankly speaking earlier i was swinging back and forth in
deciding whether we should go for FDI in multi brand retail or not. I
am following credible and genuine concerns and statements by the
intellectuals from both sides. After reading and analyzing all views
and opinions, I am of the opinion that FDI should be allowed with
proper control and regulation. So, I would go in favor of FDI in multi
brand retail. One good thing about this decision of government is that
it has been left solely on the state government to decide whether to
permit entry of foreign retailers or not. Therefore, a state can take
decision in welfare of society. To say that it is tantamount to
Britishers' entry in India, is ludicrous and outrageous. We'll have to
take the risk and with proper regulation, policies and control.

from:  Amit Kumar
Posted on: Sep 28, 2012 at 11:30 IST

Truly, all arguments that can be put by BJP has been written here.We can understand BJP's frustration for sitting a long time in opposition.

from:  lalit kumar naik
Posted on: Sep 28, 2012 at 10:53 IST

How meaningless things become we can make out on reading Jaswant
Singh’s article. Is it his case that our learned PM doesn’t know the
value of what grows on plants and trees. On reading the article one
gets the impression that retail traders in India as a class do not
overcharge, do not horde, do not manipulate prices colluding with
middlemen at the cost of both farmers and consumers, do not employ
under aged children and always respect and involve their family member
in running the business including decision making. One also gets the
impression that Walmart after destroying small business everywhere is
coming to India to destroy the paragons of ethical business, our
retail traders. In the part of Bangalore where I live Muniraju takes
care of my need of fresh fruits and vegetables. He used to get
concerned whenever a Nilgiri’s, Spencer’s or a Big-Bazaar is opened in
the locality. But he continues to prosper. He has recently built his
own house, drives his Alto and his son studies in Kumaran’s.No Big-
Bazaar could make a dent in the business of M.K.Ahmed group
Bangalore’s trusted retail traders since 1927.Similarly when banking
operations were being modernized by introducing computers there were
apprehensions of job losses but today banks are recruiting people in
thousands and do not find enough candidates to hire. Retailing giants
will hire people without any caste or communal and gender bias.
Especially educated girls from rural areas will benefit from that.
Jaswant Singh should know that he cannot fool us by selectively
quoting jayathi Ghaosh and Gurumurthy. If somewhere in America if some
shops get closed because of Walmart should it happen everywhere? Is it
a formula? These are certainly irrational fears. If shops do not get
closed when Big-Bazar or Spencers are opened they will not be closed
because of Walmart. Also those people who welcomed Dr.Manmohan Singh’s
economic reforms in 1991 should have known that when wind comes whirl
wind also comes. We cannot be always selective.

from:  Baikadi Suryanarayana Rao
Posted on: Sep 28, 2012 at 09:53 IST

It would not take much analysis to find that the FDI in retail would cuts jobs in India heavily as indicated by the author. Wall Mart are retail experts and highly efficient and they would employ nearly one fifth or less of the workforce required to produce the same outcome that the unorganized retail sector in India produces currently. It is very true that organizations should be highly productive,organized and efficient but at the cost of what? If the society were very modern,workforce highly skilled and their numbers limited then the induction of organizations like Wall Mart make sense.Mahatma Gandhi also at a point of time objected the use of too much machinery as it would reduce jobs heavily.
The need of the hour was to provide skills, encourage innovation, boost up manufacturing sector and help bring people from the unorganized sector to the organized one but I fear that the UPA government is doing just the opposite. The move would also displace the social base of millions.

from:  Divya Prakash
Posted on: Sep 28, 2012 at 09:49 IST

The US and the Eurozone pressure on our Government to open up the retail sector cannot be discounted. US cannot arm-twist China to open up their markets because of the money they owe to China. The next biggest market waiting to be taken to the salughter house is India. Pity is that the Government is unable to counter the US moves and buckling under pressure. If it is forced down our throat, let's take the Gandhian 'swadeshi' route again - 65 years after independence.

from:  Mani Sandilya
Posted on: Sep 28, 2012 at 09:49 IST

This entire debate about FDI in retail reminds me of the debate around
computerisation in the late 70s. Virtually everyobne was opposed to
computerisation because it would lead to loss of jobs. Quite the
contrary happened and today if one were to examine the data and
arguments put forth at that time, we would be laughing ourselves
silly. The reason primarily is that the Indian economy is plauged by
shortages in virtually every sector. The primary job of government is
to implement policies that create capacity. This creation of capacity
is what forces producers to compete, and this competition is what
leads to significant benefits to the consumer. And this should be the
final aim of all governments- to benefit the citizens over any other
interest groups. FDI in retail, or in any other sector will lead to
capacity creation and should be welcomed under a robust regulatory
framework. As present experience has shown,Reliance Mart and others
have hardly affected kirana stores.

from:  bhaskar bhattacharya
Posted on: Sep 28, 2012 at 09:41 IST

Well said Mr.Singh. But what foxes me is why the Prime Minister who himself is a renowned economist cannot see the bigger picture. I for one does not doubt one iota his patriotism or his commitment for the betterment of the common man. Is it that he feels by having the retail sector under the corporate set up, better harvesting of tax revenues can be achieved.
The first family is calling the shots on this with their own private agenda. Dr Singh is parroting what is being told to him. Rest of the Cabinet and UPA can be dismissed as they have precious little input and are busy defending themselves in various probles and courts.

from:  mani sandilya
Posted on: Sep 28, 2012 at 09:36 IST

The US experience is sour only for a few individual store owners who went out of business due to Walmart. If you have done your research, you will have immediately realized that their markup was not practical, and that was the important reason for their demise. Any day, people would prefer to walk to a shop to buy a bag of onions in an emergency, but if they cost 50% more than at Walmart, they will plan and stock up, rather than ever have to pay that much. That being said, what Walmart is doing for countless other families is providing them with savings on each and every item bought at their store, compared to any other place within their state. While people in New York City might fight against Walmart and write lengthy reviews in the paper about its evil business plan, no one in Sandusky, Ohio or Wichita, Kansas is going to heed those reviews. Please stop quoiting the US experince, THIS IS NOT THE US!

from:  Raghuram
Posted on: Sep 28, 2012 at 09:36 IST

Dear Sir,

I do not agree with your article. Giving an excuse of what happened 2 decades back, we can not stop our journey towards achieving growth. We should do only those work which we can do best, rest let others do for us. this is what i learned from my ECONOMICS classes. as you are aware of that 30% of total food production is going into waste due to lack of poor infrastructure such as old cold storage, roads etc and we do not have money to support improve this. Then who is going to do this.
Our spending is more than what we earn and the deficit is been covered through borrowing and investment. if we keep on borrowing and dont let investment in, very soon we will be like Next Europe.

So please tell your Solider Friend..they this is not the time to be emotional but rather taking some tough decisions for betterment of indian people and indian economy.

from:  JYOTI
Posted on: Sep 28, 2012 at 09:09 IST

At least for this eye opening article we have to appreciate Mr Jaswant Singh. I hope even communists will not hesitate to appreciate jaswant Singh, forgetting that he is BJP man!! If Mr jaswant Singh's prediction is wrong,let some knowledgeable expert economist through some light on the future scenario. Other wise common man will be left confused.

from:  C S Sundaresha
Posted on: Sep 28, 2012 at 09:01 IST

I can assure you the cheating done by street corner vegetable sellers,
fruit merchants, kirana shops are the worst. Poor quality, short
measures, excess pricing are the common tricks adapted. Our villagers
use all types of pesticides and fertilizers and bring the grains and
vegetables to the market and commission agents corner the products. We,
the consumers, are the worst affected. Let the supermarkets enter.
Situation in India is not consumer friendly today.

from:  chandrasekaran
Posted on: Sep 28, 2012 at 08:29 IST

Enough wririten material i available of the ahvoc supermarkets did not
only for employment but to the small retail trade. India needs to hed
these before plunging into trhis new fascination. IN th laat decade,
British supermarkts like Asda, Sainsbury and Tesco promised huge
emplopoyment. But these figures eventually proved to be false. Wjhat
is mroe surprising and not so much in public k nowledge is the fact
that this finding refutingthe cliams of the supermarkets was made by
noen otther thn the agency funded by the supermarekts themselves.
Before the decision makers of these propagandist material before
committing tghe antion to this new invasion!

from:  s.subramanyan
Posted on: Sep 28, 2012 at 08:22 IST

The author misses the economic lesson here. Walmart is destructive of JOBS, not of the ECONOMY. Those are two different things. Yes, Walmart will put a lot of low incomes kirana shop owners out of business. But so what? That is the only way to rejunevate and restructure the economy. Those temporary pains will pave the way for better infrasructure in retail and a growth of high paying jobs in the future. In the U.S. Walmart has killed off a lot of low paying retail jobs, but has also made possible a lot of innovation and high paying jobs in IT and infrastructure. As long as India keeps preserving millions of low paying jobs, it can not create high paying, high value added jobs.

from:  K. Raghunathan
Posted on: Sep 28, 2012 at 08:17 IST

I really appreciate the data driven, independent research validated approach taken by the Author to explain why FDI in retail is being done. Not for Reforms, Not for benefiting the farmers, Not for stocking up shares market.
But because Current Trade Deficit of $150 billion and current account deficit of 3 percent is alarming and can lead to a balance of Payment Crisis. An appreciating dollar has de-valued our domestic savings, and if not checked can spiral out of control. The reforms, much touted by whole government, is actually an Administrative Measure to stop that from happening. Why not let the people of this country know. The people of this country can think through and digest the bitter pill. But only if their PM is honest and when explains and brings these data driven facts to its peoples. Why stop at a 10 minute address to Nation, when you can have a series of half hour addresses to the Nations, explaining why bitter pill is essential.

from:  Umesh
Posted on: Sep 28, 2012 at 07:15 IST

(1) It is good that BJP has taken a principled stand FDI in retail.
Hope it sticks to it as and when NDA comes to power. (2) More
important questions are three: (a) Are consumers, who far outnumber
the traders, not more important? (b) How would BJP protect and further
interests of all sections namely, consumers, farmers, traders and
small kirana stores? (c) Is there any scope for reducing the gap
between the price farmers get paid for their produce and final price
paid by consumers? (3) Is it okay for our traders to import
uncontrolled quantity of Chinese goods of doubtful quality, which is
ultimately killing our local manufacturing? Has any political party,
particularly BJP and other parties who are opposed to FDI in retail,
have expressed any opposition to such imports? (4) Lastly, what kind
of measures BJP would promise to protect consumers from middlemen who
exploit both the farmers and consumers? So far it has not spelled out

from:  Narendra M Apte
Posted on: Sep 28, 2012 at 07:09 IST

Indians must stop comparing everything with America and England. We
must evolve our own models and strategies to fight our problems. Just
because some things did not work there, it does not mean that it wont
work here. No harm in trying out and seeing. If life can be better for
not only the farmers but also business people, why not use the "phoreen
brand" ? Foreigners will come to India to make money but Indians are
not any more fools as they were earlier. If Indians can go out and teach
the world in some areas, I am sure we will manage this FDI in retail

from:  P.Tauro
Posted on: Sep 28, 2012 at 07:08 IST

I have not got past the first paragraph, but it is wonderful to know
that Mr. Jaswant Singh, unlike our other politicians, is well-read man
of letters.

He enjoys critical analysis and is very systematic in it. In the first
para itself we get to know that he has read Don Quijote, and has an
insight to relate it to contemporary political situation. I wonder how
the Prime Minister would react to such a comparison. It was thoroughly
amusing to me. However, I must move on to something else now. This too
comic for a Friday morning.

from:  Mia Wallace
Posted on: Sep 28, 2012 at 07:04 IST

Mr.Jaswant Singh for all his experience draws on comparisons which are not appropriate to the scenerio in our country. He has no answers to the millions of tonnes of food grains, vegetables and fruits rotting for want of adequate storage. Also what about the actual grower who is unable to sell his produce at a proper price and often has to resort to distress selling to recover whatever is on offer.
The interpretation of "Money does not grow on trees" is to say the least perverse. Every father is known to tell his son this particular adage to make him realise the value of hard earned money. Coming from a Prime Minister who is a patriarch to the nation at the age of 80 his advice should be taken in the right spirit. Surprisingly Jaswant Singh does not quote the example of China which has accepted FDI in retail whole heartedly and benefited from it. Modern Retail is a work in process and its success or failure cannot be judged in the short term.

from:  R.Vijaykumar
Posted on: Sep 28, 2012 at 06:55 IST

Finally, a very good, eye-opening article that sheds light on why FDI is not good for Indian economy and the Indian society. Hope the recently rich, middle-class IT jerks who visit and return from western countries on work assignments that make much noise in favour of FDI really start thinking in terms of national interest. Nation is much beyond the handful of Metro-cities and national interests goes much beyond having good mobile phone reception/ mobile broadband connection and atrociously priced foreign brand consumable commodities.

from:  vadivel
Posted on: Sep 28, 2012 at 06:49 IST

Show us one developing nation where the big retail chains have destroyed the economy as this writer claims. Go to Thailand, Philippines, Indonesia etc..these countries have been having these big European and American retail giants for decades. What we see - is the people there have a better quality of living than vast majority of Indians. Last count there are 600 million below poverty line while the jingoistic xenophobia infected writers and thinkers in India play their favorite game - ENDLESS TALK.

from:  Anand
Posted on: Sep 28, 2012 at 06:34 IST

A very well written article by Mr. Jaswant Singh and I fully agree with him.I am glad that India has some good members in the parliament. Where there is corruption, "money does not grow on trees", there.

Posted on: Sep 28, 2012 at 05:27 IST

Well I personally seen walmart, carrefour, Tesco all came in China. But funny enough
none of them take away the wet markets and corner mom-pop store. This retailers
cater to monthly or weekly purchase not to day to day fresh purchases. Due to their
cost structures and large outlay of capital they are always more expensive than Wet
market and mom pop store. In US they might take away mom-pop store due to car
and availability of transport. India is more similar to China than US. So I do not feel
FDI will take away the store.
Its just FUD (Fear Uncertainty and Doubt). Study other markets for the multi-brand
retail FDI besides US, and you might find a different picture. Let the market compete
on its own rather than creating barrier and giving one section benefits. BOth Walmart
and Mom and Pop store are for profits and let them compete in market for the same.
Just regulate in such a way to avoid monopoly.

from:  Incheon Korea
Posted on: Sep 28, 2012 at 04:59 IST

One pertinent point has been missed by the author. The FDI in retailing
stipulates that at least 30% of the traded goods must be Indian made.
This means that the balance 70% goods will be imported from China in
keeping with WalMart's merchandising strategy. On the eve of the 50th
anniversary of the India-China war, our leaders want to oblige China
with increased prosperity for all those shoddy goods.

from:  Jay Ravi
Posted on: Sep 28, 2012 at 03:55 IST

Kudos! What a superb article setting out to explain in its simplest words, the dangers we are about to face because of "canards" in PMO and a particular Don Quixote on the proxy golden seat.It is but strange when someone comments and applauds on the ingeniousness of these "administrative steps" ? I neither see geniousness nor nationalist sentiment on the steps taken. All i can see is callousness, desperation, deviousness and a man out of date with his times and insensitive to the country's true future. His time on the bench is over.

from:  Jayakrishann Rajendran
Posted on: Sep 28, 2012 at 03:13 IST
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