Monday, 17 September 2012

FDI in retail is too important an issue to be pushed through autocratically

Below is my letter to the the editor of Times of India which I wrote in response to and editorial 'UPA Stand UP' of Sep 17, 2012. The editorial advocates a strong stand by the UPA government for its decision on FDI in retail. It advises the government not to give in to "rabble-rousing pressure from the opposition". It mentions that the view that "FDI in retail will lead to closure of small shops is a lie". It goes on to claim "it has happened no where else in the world". Editorial says that if people fear it will happen in India then it "reveals a deep-seated inferiority complex". Citing risk of credit rating downgrade it makes a tall claim that "retail reform is estimated to bring in $16 billion worth of FDI in the next 3 years". Here is my response in my letter to the editor which I a suspect will not be printed, neither do I expect any other view questioning the ramming down of FDI in retail down the throat of the citizens of India to be printed. One wonders, what is the cause of this partisan reporting? Is it big business being able to convince the media better (Nira Radia tapes controversy comes to mind) or is it supposed pro-reform activism by some sections of the media. Both are bad but former seems more likely because of apparent half truths mentioned in the editorial. The reader has to decide.

"This is with reference to editorial 'UPA Stands Up'. While the need for efficient decision making by governments is well understood, FDI in retail is too important and issue to have been pushed without sufficient consensus. We would do well to keep in mind that UPA has only 37% of the votes cast in the last general election. Pushing though this kind of change under considerable opposition is not in line with democratic principles.

     The editorial expresses strong views in favour of FDI in retail. The figure of $16b investment in 3 years should be studied, Kishore Biyani had recently mentioned $10b in 8-10 yrs. These figures have been mentioned but empirical evidence has not been shown and we don’t know how they will benefit our productive capacities or just lead to more imports from China in the long run. Monopolistic retail chains do threaten local businesses; a case in point is the recent example of New York's refusal to allow Wal-Mart for the same concerns. TOI should allow a more informed debate on these issues by presenting views from both sides. This is too important an issue to be pushed through autocratically by any government, Congress or BJP."

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