It is strange that all non-Congress parties joined together to reject the UPA government's proposal to allow FDI in multi-brand retail. Foreign investment was allowed in car manufacture, stock market, insurance, etc. But there was only a mild whimper, no loud protest. All along, traders here have been accused of exploiting hapless small farmers and consumers. All efforts that went into organising cooperatives have not succeeded. Did not the entry of Coke, Pepsi, Kellogs, and multibrand pizzas affect small retailers? Why didn't the political parties protest then? In the U.S., retail giants have been accused of exploiting producers with strong-arm tactics. But small producers flock to them because they are ready to buy any quantity and pay promptly. For the consumers, they mean wide choice, good quality and low price. Let Parliament approve FDI with a proviso that the State government will take a decision on allowing it.
It is well known that besides real estate and film industry, retail business is the largest source of black money. The income is seldom taxed. Politicians love it. Hence this drama over the last 10 days with all actors executing their part, leading to the resounding failure of FDI in retail.
In our country, more than 60 per cent of the population is on low wages. International retail giants will make it poorer. Street-corner kiranas know most local people personally. Daily wage earners can buy small quantities of provisions from them on a daily basis. The grocer provides credit facility to people, including daily wage earners. Since the kirana shop owner knows his customers very well, exchange or replacement of defective stuff becomes easy. There is personalised service as the owner is available during working hours. The employees behave politely and respect the customer. On the other hand, in supermarkets we find the staff unfriendly and unhelpful. It is not possible to return or exchange things once bought. Responsible persons are not available for customers to lodge complaints.
FDI in retail will provide remunerative price to farmers. The claim that small retailers will be swept away is ill-founded. In a typical mega-urban setting, the aam aadmi will prefer personal shopping at the nearest kirana store. Competition will force the downsizing of middlemen. However, we should ensure that foreign retailers are not allowed to become the next more-powerful middlemen. The excessive labour laid off in the small retail sector will also need to be employed somewhere. All these concerns entail that a decision of such great significance be taken after full preparation.