Saturday, September 22, 2012

FDI Opposition In India

                             FDI Opposition In India
       Permitting FDI in multibrand retail is opposed in India. There are mainly two reasons to opposing it. One: it will devastate kirana and small traders. Two: it will harm the farmers. Almost every decision has two sides positive and negative. The sum of two must be positive to accept it.
      There are many negatives. The fear that small traders will get harm is not without reasons. Big companies like wall mart are sound in every respect. They can manipulate all situations in their favour leaving the small traders on their fate. Here adage big fish eats small fish fits to understand the situation.
      Farmers will not benefit. I was in USA for one year. I did my grocery. While in shop to purchase eatable items, I used to study the dynamics of the shop. Seeing the excellent quality of all items, I keep asking how you manage it. Shop keeper told me he used to import the best quality items from all over the world.
       He told me his shop is like assembly place of electronic items, all its parts are imported from abroad after through market search. Base on my experience, I can say coming big retail mall will follow the same steps what they are practicing. They will import the best quality at the lowest price worldwide.
      Distributed wealth among citizens is better than accumulated in few hands. Occupy Wall Street movement is a product of such cause in USA. This permission will help the process of wealth accumulation as the cost of small traders. If items are imported as expected then farmer will loose their market share. This may lead to reducing their incomes.
             Much of the inequality in the US arises out of rent-seeking -monopoly, exploitive practices by banks and corporate exploitation of public resources. In the Indian context, you will call it corruption but we call it corruption American-style, where you give away natural resources below market prices. India is doing it now but America has a long history of doing this. 
     The occupy protesters’ main issues are social and economic inequality, greed, corruption and the supposed undue  influence of corporations on government. We, addresses the growing income inequality and wealth distribution in the U.S. between the wealthiest 1% and the rest of the population.
      There are positives. It will put our small and kiran traders to competition. This will lead to breaking of their monopoly. This will also help in reducing their hoarding capacities. In competition, there will be improvements in their style of managements.
         Consumers will get better quality at reasonable price- not the lowest price. The prices will not be much lower as said. There is reason for this. Maintaining big AC shops and cold chain storage will incur additional cost. This will be loaded on items. Hence cost benefit will be meagre.
       Hoarding and market manipulation hit hard the consumers. This problem will reduce to some extent. Big malls try to keep away from such activities.
       New York City has rebuffed attempts by Walmart to open a store, making it one of the last remaining large US cities that the supermarket giant has failed to crack. Opposition to Walmart in the city is driven by what protesters say is the chain's history of low wages and poor employee benefits. There are also fears from unions that the company's low prices will hurt the profit margins of other shops, endangering the jobs of its members.
       A study says the buildings, pavement and consumerism created by Malls destroy farm land, wetlands, jobs, neighborhoods and social cohesion. They contaminate or eliminate the clean water supply and contribute to global warming through heat produced from pavement. They create and support massive global shipping and transportation of products we don't need, eliminate small businesses and jobs, degrade wages and impoverish the nation.
       Chetan Bhagat says FDI permission is no trick rather it is a treat. Accepting his arguments, we can say it is a treat and it is required too. But this treat is having dire side effects. Hence, we need desi treatment with less harm.
      The negative impact of shopping malls on the terrain of the human mind, converting core humanistic values into stark materialism and conspicuous consumption is immeasurable. We should not shed tears for the demise of the places where our purses, the environment, food and water supply, sense of community and the human mind are constantly being mauled.

        In the light of development, India lack much behind the America. If Americans are fearful and opposing it in a city like New York, how we can permit it. Except Congress and a few allies, almost political parties are opposing it on the ground that it is not in our favour now. Therefore, in the view of timing and situation, we can say, this reform will bring more harm than good in the long run. May be after a decade, we land in a economic situation like America as on date.

Heera Lal

(Views are personal and based on different sources)