Hearing the cacophony of noises in India’s ‘temple of democracy’ last week on FDI (Foreign Direct Investment) in multibrand retail, one couldn’t help conclude that FDI is back again to haunt us. I am referring to the “Famous Desi Insecurity” among the ‘pujaris’ of the parliament temple. In the annals of Independent India, this FDI has a long history and raises its head with alarming frequency!
- 1988: The topic for a group discussion in a B-School where I went for admission was “Is computerization a boon or bane for modern India?” Today it looks like such an obvious topic to have any discussion about or have any debate at all – with computing being omnipresent on the ground, on the move and even in the Cloud! However, those days the case for computers had not been wrested. Trade Unions in many establishments across the country were up in arms against computerization which was supposed to leave millions jobless. The “INTEL” inside a PC will leak our country’s secrets and is a threat to our sovereignty was even one of the naïve apprehensions, I remember. 3 decades hence, as I create this piece in my laptop, if I attempt to explain what actually the consequence of computerization is, I will be only accused of stating the obvious.
- 1991: The year in which liberalization and reforms were undertaken by the Government when the country was in the brink of an economic collapse. The Naysayers that time accused the Govt. of
- walking into the trap laid by the IMF,
- attempting to kill the domestic industry by de-licensing, by cutting import duty, by bringing goods under an “Open General license regime”,…,,…
Nothing of that sort happened and on the contrary, India graduated from a much contended ‘Hindu rate of Growth’ of 3 % on an average in the previous 2 decades to average ‘Indian rate of Growth of 7.5% in the next 2 decades. We became part of the famous “BRIC” story that was being built globally.
- 2001 : All around the country there was a symphony of voices about the threat of domestic manufacturing industry getting wiped out in several sectors including many small scale industries like Locks, Toys,. The government was about to remove the Quantitative Restrictions for imports across many sectors as per WTO. The Quantitative Restrictions were hitherto acting as a protection to the flurry of imported goods except in “Burma Bazaars”. The local manufacturing of FMCG (Fast moving consumer goods) will face a slow and steady death as the Indian consumer will be bombarded with imported “Charlies” and “Camays” – was the war cry. 10 years hence, has the local mfg. industry been wiped out? Has the imported Camay overtaken the local Cinthol? The answer is Yes and No. In small-scale sectors like lock manufacturing,.. due to no investments in technology, the units have been facing a serious lock out. (Eg: Lock mfrs. in Aligarh). The Chinese locks today protect most households. However in sectors where mfrs. have looked at ‘opening up’ as an opportunity rather than a threat, have upgraded their works, have got into strategic collaborations, got in investments and have eventually flourished. Camay is produced in India now by a Contract mfr. for P&G.
VAT introduction in India in 2005, Opening up of the Insurance sector to FDI in 2006, the Indo-US civil nuclear treaty in 2008 and now the opposition to allow FDI in multi brand retail.
I can go on and on on the list of issues where our politicians pontificated doom and created kerfuffle.
In all these, the common thread is the Insecurity among the politicians about our own country and the lack of self-confidence or the “Can-do” spirit which today’s youth in the street display day in and day out. In spite of the fact that in all the above instances the Indian enterprise has repeatedly demonstrated that “India today” is not the one to cowed down by outside influences but is one that looks at all possibilities to collaborate and prosper.
I for one am delighted to see the opposition to FDI in retail and finally government of the day pushing it through by Hook or Crook I mean Mayawati or Mulayam!!! Going by past history and instances whenever our politicians oppose something vociferously and foretell that doomsday is here – we know what will happen. So I believe, thanks to FDI in multibrand retail,
- Kiranas are not going to get wiped out so soon
- Farmers are not going to be exploited
- Millions of Indians are not going to lose jobs
Or for that matter
- “Will not make our children sales boys and girls”
as being apprehended.
For, advent of computers in the 80s in India didn’t leave millions of Indians jobless but created a fledgling US$100bn IT Industry that creates an estimated 230,000 jobs or round about annually thereby employing 11 million people directly and indirectly. So like computerization, retail could be a game changer. However whether this FDI policy of the Government will be a Game changer? That will keep it for my next post.
So let’s not stop the FDI (Foreign Direct Investment) in retail but ban the FDI (Famous Desi Insecurity) – wholesale which seems to have engulfed many of our politicians!!!
Postscript: The joke used to be that in the 70’s if some Govt. babu was seen wearing a denim, he was suspected to be a CIA implant and R&AW was let after him!!!