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Why the Opposition is wrong and FDI in retail is good for India

Last updated on: December 2, 2011 16:31 IST

Why the Opposition is wrong and FDI in retail is good for India

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Suhel Seth

With the middleman being bypassed, the farmer will get more money and the end-consumer will benefit as prices will fall, says Suhel Seth.


There is a certain wanton hypocrisy to us using democracy and its visual symbols as tokenism when it suits our purpose and it is most evident in the manner in which our country's Parliament functions (or perhaps doesn't) and this is what saddens me.

We cannot have Parliament being disrupted for reasons that are both facetious and trivial. It is fine for the Opposition to clamour for probity and transparency and decisive and swift action from the executive but when the same executive takes an executive decision, Parliament is used as the whipping boy and conveniently disrupted.

So is the Opposition a disruptive and digressive force in our country? And is this the kind of democracy we wish to hail and ascribe to?

The most recent case in point is FDI in retail. I believe it is good for India. It is good for the farmer; it is good for the consumer and it is good for our food security and our overall economy.

Especially good for the same farmer who is exploited by almost every political party as is the aam aadmi. I cannot fathom why the Bharatiya Janata Party had to indulge in such blatant hypocrisy but then again history is a great leveller.

The very same BJP in its 2004 manifesto (an election they subsequently lost) made FDI in multi-brand retail a critical task to complete and today, seven years later, it is the same BJP that is crying foul.

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Photographs: Reuters
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Their argument is both trite and untenable. They believe that because Parliament was in session, Parliament should have been consulted.

But then given the track record of this Parliament, does Parliament even allow for a healthy debate? We have become so myopic in terms of partisan politics that we fail to even debate issues of such enormity with either gravitas or any amount of sincerity and this is what worries me.

It is time to examine the whole FDI in retail issue within a context. When Brazil and Argentina opened their retail sectors to FDI, they saw an increase of 37 per cent in the net realisation at the farmer's end. So who benefited first? The farmer.

They also concurrently saw a one-sixth of prices fall for almost every item as far as the consumer was concerned. So who benefited as well? The consumer: the one that every political party seems to bat for.

Look at India for a moment. Post the entry of organised retail, we saw a jump of 19 per cent in the kirana shops that these politicians keep talking of in terms of their eventual extinction.

Look at India's current cash-carry retail method. Bharti-WalMart has 30,000 kirana storeowners buying from them. Why? Because they get the products cheaper now.

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Photographs: Reuters
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Earlier, the middleman was the one taking the icing off the cake. Now the farmer and the end-consumer benefit. It would have also helped if some of the Opposition folks had actually read what the government put out in terms of the FDI-in-retail policy. The minimum investment sought is $100 million by anyone who wishes to enter India of which $50 million must be spent at the source, which are our villages.

So I cannot for the life of me, figure out, what is it they are objecting to. Replacing progress with populism is not only dangerous but has become a pernicious trend with the Opposition in this country and they now need to be exposed for what they are worth.

I believe we are living in fragile and dangerous times. Every time the government moves its feet on something substantive and life-altering for the Indian economy we throw up our share of doom-sayers and ones who criticise for the sake of criticising.

This does not augur well. Neither for our democracy, nor for Brand India. We cannot be seen as a fractured polity on issues that have nothing to do with populism but everything to do with real progress for real people.

It is ultimately not about the Congress or the BJP. It is not even about the Executive or for that matter about Parliament.

It is about We the People and we are currently being squeezed out of both the debate and the discourse and our agenda for progress is being hijacked at the altar of democracy. This needs to stop. And needs to stop now.

Suhel Seth is managing partner of Counselage India and founder of Equus.


Photographs: Reuters
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