Politics behind fdi in retail in india
Published on: Mar 4, 2016
Transcripts - Politics behind fdi in retail in india
POLITICS BEHINDFDI IN RETAIL IN INDIA
Prepared by P.SARAVANAN B.Tech.,MBAwww.twitter.com/saravananrulez
Beginning of FDI in Retail in India• In PV Narasimha Rao’s govt,the finance minister Manmohan Singh allowed limited FDI in retail as a result of which Dairy Farm, a multinational corporation made an entry in India.• In 5years, P Chidambaram, Commerce Minister of the same government who initiated trade reforms and changed Import & Export Policy, changed laws to go back to square one because by then he was finance minister of a communist-supported government.
Entry of FDI• In 1997, FDI in cash and carry (wholesale) with 100 percent ownership was allowed under the Government approval route.• In 2006, 51 percent investment in a single brand retail outlet was also permitted in 2006.• FDI in Multi-Brand retailing is prohibited in India.
BJP’s ego in politics• In 2002 FDI was rejected by the Vajpayee (BJP) govt.• Dr. Manmohan Singh had argued against FDI
FDI rejected..• On December 21, 2002, The finance minister gave an assurance that the government had no proposal to invite FDI in retail trade.
Suspending of FDI in Retail• 7th december,2011 the government has decided to hold back its decision to allow 51 per cent FDI in multi-brand retail.• FDI in multi-brand retail could have created over 10 million jobs in three years, curbed wastage of farm products and benefited farmers through better prices for their produce.
Opposing parties• BJP• UPA Ally Trinamool Congress• TamilNadu AIADMK• DMK• Industrialists in Indian retail chains like Future Group, Reliance and Tata
Politics behind Opposing• Political parties are opposing these reforms, purely to pick up votes from select constituents by making inflammatory statements• Some opposition parties are opposing FDI reforms, merely to embarrass and corner the ruling Congress leadership
Missed oppurtunity• The hygiene levels of small shops are very poor.They abound in rats, insects and ants. Some shopkeepers do not even undertake basic pest control, just to scrounge on some money.• Many small shops sell date expired stocks by deleting or smudging the information printed by manufacturers on the packs. Many small grocery stores do not give the free gifts (consumer offers), which are given by the manufacturers of consumer product companies. Professionally managed hypermarkets do not indulge in such malpractices
Conclusion• A simple commercial decision has been exacerbated and elongated into an unnecessary political crisis by thoughtless opposition. Hypermarkets co-exist with small shops in most countries in the world - in large, small, rich and poor nations, in all corners of the world.• It is time India removed its blinkers.