Re­ject­ing Global Greed

Southasia - - 11 -

In­dia’s Congress party, led by Prime Min­is­ter Man­mo­han Singh, was forced to sus­pend its decision to open up In­dia’s $450 bil­lion re­tail sec­tor to global su­per­mar­kets such as Wal­mart and Tesco. While some saw the Congress’s bow­ing to public dis­con­tent as a triumph of

democ­racy, oth­ers have an­a­lyzed it as a fur­ther po­lit­i­cal weak­en­ing of the party that is al­ready in trou­ble. Though the for­eign min­istry an­nounced that the Re­tail Plan would be sus­pended till con­sul­ta­tions with var­i­ous stake­hold­ers were com­plete, few be­lieve that the plan will be re­vived.

In­dian re­tail­ers who were to part­ner with for­eign firms had seen their stocks rise, fol­low­ing the an­nounce­ment by Prime Min­is­ter Singh. How­ever, the same stocks crashed as quickly as they rose. The idea of for­eign firms retaining 51 per­cent of mar­ket share and 100 per­cent of sin­gle-brand re­tail­ers gave rise to public protests as many felt this would en­croach and de­stroy small to medium en­ter­prises, thus giv­ing rise to mas­sive un­em­ploy­ment and in­fla­tion. The gov­ern­ment had ini­tially sup­ported for­eign en­trants into the mar­ket as­sur­ing lo­cal in­dus­try work­ers that for­eign in­vest­ment would be capped at $100 mil­lion and would be re­stricted to cities with a pop­u­la­tion of over 1 mil­lion, thereby guar­an­tee­ing se­cu­rity for small to medium en­ter­prises. The gov­ern­ment claimed that such mea­sures would at­tract much needed for­eign in­vest­ment and would in turn gen­er­ate more than 10 mil­lion jobs.

Such de­fenses fell on deaf ears and pop­u­lar sen­ti­ment fur­thered by op­po­si­tion party – BJP – suc­ceeded in halt­ing the plan. Eco­nomic an­a­lysts have la­beled this move as dis­as­trous and re­gres­sive for an econ­omy like In­dia’s that can ben­e­fit largely from re­forms such as this.

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