By Dr Pravin Togadia
Everyone in Bharat is inefficient, useless, unwise and stupid. Obviously, not you or me, but Government of India thinks this way. From ancient times, the world’s trade was controlled by Bharat. Spices, textiles, Jwellery, marble, oil, etc were carried by traders from Bharat through sea, mountain, land and river routes to many faraway countries like Egypt and Africa. Today there is an intelligent and efficient amalgamation of this ancient wisdom in trade and modern technology. Brains behind e-marketing are Indian. Bharat has the highest number of high net-worth individuals and most of them are wholesale and retail traders / manufacturers of various things like food grains, textiles, Jwellery, fruits and milk etc.
Yet, Government of India thrusts FDI in retail on Bharat giving all sorts of hollow arguments.
1. With FDI in retail, consumer will get everything cheaper and better
Consumer in Bharat is not stereotypical like in America. His / her needs and choice vary per State and social stratum. What is needed by a housewife in Chennai may not be bought by a housewife in Chandigarh. Marketing geeks of retail giants in Europe and America know it well. They may keep state specific things in their stores. But then how would it ensure bulk purchase of fresh sambhar Masala if it is only for South stores? The customer will get stale sambhar Masala, so what it is cheaper! Extend this logic to all things—even to rice. Punjab eats Basmati and Odisha eats boiled rice. Wal-Mart, Carrefour, TESCO, COSCO, etc will have to keep specific rice only for limited number of shops. So it can never be bought in bulk. With coupons and schemes, bearing losses these stores will give things cheaper to customers to get and retain them. Being cash rich they have long gestation periods. When Kellogg’s came to Bharat they announced that they could sustain losses for 13 years until they changed the breakfast habits of India and a full generation got addicted to their cornflakes. They gave their cornflakes free and cheaper to hook customers. Now theirs is one of the most expensive breakfasts suiting only to a few city households.
If the claims of cheaper and better from foreign retail were true then why they lost around 70 per cent customers in Europe and America past five years? If this style of economy is perfect then why western economies have taken worse beating with consumer index falling sharply? Why parking lots at most such big multi brands retail stores abroad look half empty now as compared to ten years back?
Claims of ‘cheaper and better’ for customers are hollow.
2. Government says with FDI in retail, minimum one crore people in Bharat will get jobs.
Wal-Mart has 21 Lakh crore dollars turnover with 10,000 shops in 180 countries. Only 21 Lakh people are employed including front end like shop floor, counters, etc and back end like storage, transportation etc. Meaning, per shop 2,100 people. Per Indian government only 53 cities in Bharat will have such stores. They sure will not be 10,000 even if one puts together TESCO, Wal-Mart et al. How would one crore people get jobs? With over $ 400 B turnover Wal-Mart employs only around 21 Lakh people whereas with Rs 400 crore turnover Bharat’s retail industry employs / gives contracts to 40 crore people! PM can daydream in youth meets but should not show unreal dreams to Bharat. This, in Aam Aadmi’s language, is cheating.
Western unemployment rate has crossed double digit. Every month thousands of people are being laid off. If multi brand retail stores had big capacity of employment, then why is the West facing alarming unemployment crisis? They cannot employ own people and claim to employ Indians in stores here?
Claims of high employment are humbug!
3. Government says Indian farmers will get better prices because middlemen will be out; produce will not rot and farmers will not commit suicides.
Then why Canada and America have to import farmers from Punjab and Haryana? Their farmers are leaving farms and almost every one minute a farmer in Europe is running away from farming.
In Bharat, government had enough time to create large storages and infrastructure needed for storing the agro-produce and transport it to the markets. Bodies like Food Corporation of India were created. Government failed to run them efficiently and now wants to bring in foreigners to do it in the name of FDI in retail.
From farmers to consumers, 3-4 stages middlemen play, increasing the prices for consumers and reducing rates to farmers. But the problem that can be sorted out internally is never handed over to foreigners! Government does not want Indian middlemen but loves foreign middlemen who may initially give better rates to farmers. With the promise of bulk purchase farmers will grow more produce. By destroying the age-old trade systems the farmers would have no option left, the foreign retail stores will dictate the pricing terms.
They did it in Indonesia, Vietnam, and Malaysia etc. This is ‘Purchasing Monopoly’ and per any economic standards, it is the highest risk for Bharat. Today most farmers in these countries are poorer; their daughters and wives work in shoe factories of American brands in unhygienic conditions and with lowest wages. Is that why our Commerce Minister said, “Wives and daughters of Indian farmers will get a chance to get out of their homes and work in the back end of these stores.” This means Indian farmers will NEVER get better rates! If he would then why would he send his family members to work in back end storages! Indian farmers will die seeing his family go through such an ordeal!
Government flashes the condition they put to contenders in retail FDI: 30 per cent will be sourced from small and medium enterprises and farmers. In fine print it adds ‘from anywhere globally’. They will get cheap things and Soybeans from China; Basmati and onions from Pakistan; Garlic from PoK; Chilly from Mexico; Tomatoes from Spain; Corn and apples from US; Saffron from Afghanistan, etc. Fooled by government, Indian farmers commit suicides; yet government continues with it!
Claims of better rates to farmers have no basis.
4. See more mess by the government
a) G-20 has an obligation on the government for FDI in retail. Promise was for last year. Their own minister countered in G-20 saying Indian farmers will have to compete with American treasury and not with American farmers. Now government bends to G-20 force.
b) One month back PM said that there should be more production of food grains in Bharat to avoid high rates as the poor ate more and therefore more land should be brought under agriculture. Now in youth meet he said that there was excess food grains production so it rotted. With retail FDI, they would build big storages! Flip-flop is ok in politics, but not such pick-pocketing of Aam Aadmi! If really there is excess production, then government should help Indian companies build big modern storages and facilitate wise Indian traders into localized multi brand retail stores; why love Firangis?
c) American farmers, despite big multi-brand retail stores, get over $ 500 B government subsidy. If they were benefiting by the stores, then why this subsidy? ‘Benefit to farmers’ is a blatant lie.
d) Electricity, fuel and water are in short supply in Bharat. With such big stores only in 53 places using so much of them, how will economy prosper when other parts of Bharat will face shortage further?
Government has no answers to many questions. Hi-Tech, complicated machines and nuclear tech are the fields where too Bharat’s scientists are becoming self-reliant now but killing traditional trade and self-employment structure of Bharat’s strong economy is government agenda in getting petro-Jehadis’ Dubai stores and recession hit west’s stores in Bharat. Bharat will not allow government to sacrifice farmers, small and medium traders, large middle class and the poor.
Courtesy: Organiser – Weekly Date: 12/4/2011