Saturday, September 15, 2012
Indian Retail Opened Up For FDI: The Day After Diesel Price Hike!
The economist in Dr. Manmohan Singh, Prime Minister of India, has finally decided to take control of the country’s economy and growth, and end the nearly one-year-long policy plus reforms paralysis politically enforced by the opportunist opposition parties as well as the allies of the ruling coalition. Undaunted by the countywide rallies and protests against the diesel price hike on September 13, 2012 Dr. Singh captained his government along to push through the reforms further the very next day. Goodness for the country’s economy and future growth prospects in a global perspective must be kept beyond politics and political fortunes of the government; he seemed to have decided upon.
In a landmark decision on the evening of September 14, 2012 the Government of India approved the much opposed 51% FDI (Foreign Direct Investment) in the over $500 billion Indian multi-brand retail market and 49% FDI in the misery-ridden Indian aviation sector. The FDI cap for the Broadcasting sector has also been raised from the current 49% to 74%. Prime Minister Dr. Manmohan Singh has justified this decision and the diesel price hike as much needed reforms to rescue the country’s economy from stagnating growth and the fears of being termed junk by the international credit rating agencies. But still the reforms were not imposed on all states leaving the governments free to allow FDI or not in their respective states.
The markets immediately responded to the diesel price hike buoyantly. The industrialists, business experts and the economists hailed both of the courageous steps as the much awaited policy reforms to sail the economy out of the present crisis. Many of the experts dismissed common perceptions that marginal and small retailers will go out of business, global giants will make profits at the expense of indigenous entrepreneurs and farmers will be adversely affected as completely unfounded. They pointed out that in various advanced countries where the multi-brand giants opened shops the small retailers continued to exist, that in a global economy no country could afford to go back to self-reliant policies and that the farmers in fact stand to benefit getting better prices for their crops in the absence of the middlemen.
But unfortunately the opposition political parties and allies do not want anything good happen to the country at the moment, because at the moment they only want to capitalize on the crisis-ridden government and want to come to power forcing early elections. They are not ready even to debate the possibilities as was corroborated by their tactics to stall the entire monsoon session of the Indian Parliament. They are sure of victory, because they represent the middlemen and moneylenders who exploit and loot the farmers often driving them to suicides; because they represent all the unscrupulous traders who adulterate our food serving poison on our plates; because they represent all the apathetic and comfort loving middle classes who spend thousands at restaurants and bars but grimacing at the 20 bucks to be paid as taxes and who swoop down on the cinema multiplexes or most expensive shopping complexes spending dirty sums and yet bargaining with the local vegetable vendors for a buck and because they represent all the gullible masses, their largest vote banks and divided on caste or religion or language or whatever lines, who know little politics and much less economics.
Of course, one cannot be damn sure about all possible benefits or losses of reforms at the moment and therefore befitting a perfect democracy the people can elect their beloved leaders like Mulayam Singh Yadav, Mamata Bannerji and a whole lot of aspiring others into power. Their beloved leaders will never let them down, because they will oblige by never raising the fuel prices again or will try even reducing; because they will oblige by never allowing foreign investors enter the country; because they will oblige all their vested interest groups and protect them viciously. If finally, the worst economic crisis of the millennium engulfs the country and threatens the very existence of the masses they will simply pass on the blame to their predecessors and lead the masses again on protests.
At the moment if a political leader says that going back to the good old days of the barter system would be beneficial for all the democratic people would hardly get the difference!
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