Thursday 1 December 2011

Foreign Direct Investment in Retailing

When I joined sea in mid eighties and went places, It was a typical case of a an average lower middle-class young Indian being exposed to the world. That was then. India, though a democracy, was heavily under the influence of socialism.Russians were very active and aggressive in propagating Marxism through glossy magazines at throwaway prices. We were happy that the magazines could fetch more money than the cover price, when sold to junk dealers.But we, the young Indians, could not help developing rosy picture of Russia, till of course I visited East European and Russian sea ports on the vessels I sailed. The aura was dispelled in time.
                        Visiting a port always brought excitement. That meant shore leave, eating out and moving about wonder struck in departmental stores and malls.There were none in India then. "Why there is no Kraft cheese, or  Snickers or Mars chocolate bars available in India?", I always thought to myself and wondered. I hardly understood capitalism or  socialism at that time.
Now after a long time, supposedly after shaking off policy paralysis, the Indian government has decided to allow FDI in retail brands.Now, I am not much concerned about chocolate bars or cheese.But the now teenage population and of course many others (who does not like chocolate?) will be able to  relish them. So much so for reliving my old cadet and junior officer days at sea.
But FDI will bring far reaching sweeping changes. New jobs will be created.The middlemen who have been fleecing the public and sucking the blood of farmers will have to think of other ways of having honeymoon.
The general public will have greater variety, better quality and competitive prices. The farmers will get better and cash payment for their produces. They will have far lesser reasons to commit suicide. Infrastructure, which has been waiting to see light of the day, will come into being. India will become economically stronger.
Every year worth thousands of billions of produce perishes due to lack of storage, transport and distribution network. FDI will take care of that.
Produce perishing will come down and there will be more of it available for consumption. Demand and supply balance will tip over in favourable side and inflation will come down.
So the voices of resistance to FDI entry are not matched with logic or reality. The politicians opposing the move may temporarily delay the initiative but will not be able to stop its march. Let them wait and watch. The people of their own states will raise the demand for opening stores like Walmart and Carrefour. Especially when they see their own counterparts in neighbouring states, who took the initiative, prospering and leading better lives.
                    ------------- Captain Yashpal Singh, New Delhi.

1 comment:

  1. Wonderful! this is such a mature 'economist' type analysis of the world...do send it to the economic times or mint (livemint.com) - i'm sure its worth the space in the orange newspapers!

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