Retail polity

In the on going debate on FDI in retail sector, even the so called liberals are grouped in different camp. If you  glance through the following pieces you will get to know what I meant so called liberals. But the fact is that Walmart is not the only guy who is going to stay here for long, after all the king of competition is going to help us  in improving our life style. These pieces in my view are must read, if at all you bother to get some concrete view about why we should or should not allow FDI in retail sector in India.

Market economy or market society by S.Gurumurthy

Exploring pros and cons of FDI in retail by Bibek Debroy

The party of no principle by Surjit S Bhalla

“Marxists are not against the market”-Really?

The following is from a news report published in The Hindu:

• Mr. Karat said that contrary to the misconception, “Marxists are not against the market,” or opposed to FDI. 
• “Our experience of building socialism has led us to understand that the market has a function even in a socialist order… and that if you eschew the market, or fail to integrate the market into a planned economy, as the Soviet Union did, you are in trouble,” he said.
• He cited the example of China, which had changed course in the 1970s to successfully build a socialist market economy that did not relinquish centralised planning. 
• The CPI (M) never said that it was opposed to foreign capital, he said. In fact, the party programme made a clear distinction between the positive impact of FDI inflows into productive activities and opening up sectors such as banking and insurance to speculative financial flows, Mr. Karat said. 
• “We must decide in which sectors we need the FDI and which sectors need to be regulated,” he said. 
• While India had survived the recession and was on target to achieve a GDP growth of 8.5 per cent, the question to be asked was whether this was the ideal type of growth that the country required and whether it was beneficial to the entire people, he said. 
• Focusing on GDP growth alone could provide a skewed and distorted picture of development when it benefited only the privileged few. “India, with the fastest rate of growth of dollar billionaires, now has some of the richest people in the world and also some of the poorest,” he said.

No doubt we all know from out own old days and the present day Chinese system of how the so called socialist market economy functions. The denial of basic right to express alone shows how shoddy the socialist market economic is. What Mr. Karat is trying to say is no surprise and in fact really they have no other option to escape other than the 2007-2009 financial crises examples.

Just see what he indeed said in another interview.

You also recently announced that Marxists are not against market and foreign direct investment (FDI). Does it not indicate a shift in the CPM’s policies towards capitalism?

• This is too complicated a topic. I was speaking to business houses in Chennai and they had asked me about my views. I tried to explain that Marxists are against the market. We have never been opposed to foreign capital but we must decide in which sectors we need FDI and which sectors need to be regulated.

And Sitaram Yechury said in his interview with BS:

• But our position is clear: restrictions must remain. We are in the favour of FDI only if it satisfies three conditions — augments existing production capacity, generates more employment and upgrades technologies. Apart from generating more employment, what other conditions will FDI in the retail trade be able to fulfil?

  

What want to summarize is simply a paragraph from an Internship paper of CCS, 2005.  

• “Political parties (Congress, BJP, CPI (M)) have changed their stance when in power and when in opposition and opposition (as well as public debate) is driven by partisan considerations rather that and effort to assess the merit of the policies. This is evident is the public posturing of Hindu right, left and centrist political parties like the Congress. The growing recognition of the importance of FDI resulted in a substantive policy package but and also the delegation of the same to a set of eminently dispensable bodies. This is indicative of a mood of promotion counterbalanced by a clear deference of responsibility.”

But the above para is appearing exactly same in the recently published paper. Really it is another scam!! Because the authors are different. The Internship paper of CCS was published in 2005 and the article published the same paper in a different journal just recently only.

Also see 1 2

Markets are unsympathetic and unforgiving

It doesn’t mean The State or government is sympathetic and forgiving when you don’t pay your tax. 

This country is full of crooks and bad babus in all kinds of regulatory system which attempts maximum to help people die.  Recently I met a person whose job is a rescuing snakes and snakes bights. He told me no modern medicines are available in India if anyone gets snakes bights that have higher venom. More importantly he shared one of his experiences with Doctors in government Hospital and government officials. He said even for a fever one should not go to government hospitals. Of course it’s true but the poor people don’t have any other option because since independence our bureaucratic ruined all other option to give good healthcare to our people. 

Ramesh Ramanathan has worst experience with a person who had bad experience with government hospitals. I friend of mine told me a similar experience with his father critical operation in the government hospitals. 

Similarly, the ruining is happing in the retail sector in the country just see for example: 

A guy writes

• "A Parliamentary Standing Committee on Commerce has actually recommended a blanket ban not only on FDI in organised retail, but also on domestic corporate heavyweights entering the sector. Already, several large domestic companies are into organised retail covering food, textiles, electronics, furniture and household items. 
  
• ….it would be unfair to throw small retail among wolves, as it were, because markets are unsympathetic and unforgiving.
  
• On the other hand, looking at the economic situation in the country (with over 200 million below the poverty line and many hundreds of millions barely managing to make ends meet) there is absolutely no urgency to open up FDI in retail.
  
• The country can do without it for some time. But it is important that the process of capacity building among unorganised retail commences soon.
  
• Another issue is regulation. A strong regulatory oversight may help bring some discipline.