As of December 03, 2011
And again they performed their duty to the perfection – literally living up to their designation, OPPOSITION. When I first heard about the decision to allow 51% FDI in retail, it wasn’t something outrageously exciting to know but I felt something right was done by UPA after a long long time. Correctly, as some of the journalist put this, it seems the Nuclear Deal moment as long as MMS goes. While the conviction of him and his team (Mukherjee and Anand Sharma) is laudable, the current situation reinforces, what some people might think, that Congress is the best party with worst allies. Given the history, opposition from TMC was very much expected as it was also from BJP.
However, what baffles is the nature of protest that defies all the logic in the world. BJP has been the strongest opponent of FDI in retail even though it was in NDA’s tenure that organized retail entered in India. In addition, it was also in NDA’s tenure that the contemplation on allowing FDI in the retail sector began. While the opposition parties are behaving in a populist manner, it is completely overlooking the idea behind allowing FDI in retail as well as the benefits of it to the ailing agriculture sector in the country. While the country and the third largest producer of food grains and the second largest producer of fruits and vegetables, a large part of our harvest is rotten without proper supply chain and storage facilities. The problem is even more acute in perishable items, especially fruits. This results in an increased import bill and rise of prices due to shortage of food items. According to the statistics from food ministry, food grains worth $6 billion were wasted in 2010 alone due to inadequate storage capacity. That meant 25% of the total crop production was rotten as there was no storage space available with the State Warehousing Corporations and other agencies. And these are just the numbers for the grains that did not get storage space. The grains that get storage space but get rotten due to improper storage facilities and maintenance will take the numbers to the next level.
The retailers, that the opposition pretends to be worried about, still account for 94% of the retail sector even after almost a decade of organized retail in India. And it will continue to account for a larger pie even after the entry of foreign retailers. Retail in India works way too differently than retail in the western countries since the consumer mindset is different. Moreover, the FDI, at this moment, has been allowed only in the selected cities of India which has a population of over a million. In addition, the government is also of opinion that the states will be free to implement the FDI in retail at their will. BJP’s own power center, Gujarat, has agreed to implement FDI in retail since it will be highly beneficial to farmers. It will allow the companies to source items directly from farmers and eliminate the middlemen. This will provide farmers with better compensation for their farm products and a cheaper cost of acquisition for retailers which will eventually allow the products to customers at a cheaper rate. However, BJP’s understanding of politics seems to be much more than economics.
While I have complete respect for Mamta Banerjee, on this issue, her stand is on the wrong side and on false apprehensions. Who is she to dictate terms on what should be implemented in the country and what should be not? The mistake that was committed during Tata Nano case is getting repeated. However, I feel and hope that MMS and his team sticks hard to their stand and makes sure that the boat sails through the ocean – something similar to what Virat Kohli and Rohit Sharma did in Vishakhapattanam.