Archive

Posts Tagged ‘Big State’

Retail FDI – The Real Dangers

December 4, 2011 18 comments

With hands tied behind their backs, Indian retail is being asked to ‘compete’ with Big Retail. Like Subhiksha, Big Retail will fail – unless funded by RBI or US Fed.

Can an Indian bania fight against Ben Bernanke's printing press; churning out paper-dollars 24x7, for US corporations to buy the world.  |  Cartoonist - Clay Jones. Published 01/26/11 by the Fredericksburg Free-Lance Star (fredericksburg.com); source and courtesy - civilwar.org  |  Click for larger image.

Can an Indian bania fight against Ben Bernanke's printing press; churning out paper-dollars 24x7, for US corporations to buy the world. | Cartoonist - Clay Jones. Published 01/26/11 by the Fredericksburg Free-Lance Star (fredericksburg.com); source and courtesy - civilwar.org | Click for larger image.

Dominated by banias, small shopkeepers are notorious for cheating customers through adulteration and fiddled weighing scales. They are also notorious for evading sales tax and income tax. That’s why the bania is widely despised (although it is wrong to tarnish all with the same brush).

Yet we have the astonishing spectacle of several political parties and state governments supporting the crorepati bania against foreign retailers, whose alleged crime is that they will lower prices so drastically as to wipe out small shopkeepers. If indeed, foreign retailers will reduce prices dramatically–a highly exaggerated hope-this would be a fabulous blessing for the aam admi, struggling with inflation. So, politicians who oppose foreign retailers are promoting the aam bania against the aam aadmi. This is all phrased in socialist rhetoric, but amounts to backing rich traders against poor consumers. (via Swaminomics : SA Aiyar’s blog-The Times Of India).

Have no data – but will caricature

What data does Swaminathan A. Aiyer (SAA) have when he says ‘small shopkeepers are notorious for cheating customers’?

Swaminathan A. Aiyer (SAA) is actually attempting a simple colonial-socialistic demonization of the Indian entrepreneur. All but forgotten, SAA is trying to revive this propaganda image. The corner banias are usually more ethical than Big Corporations – especially looking at new, post-liberalized companies in media, power, finance, food, electronics, mining, .

Moreover, it is always easier to shift my business from an unethical bania than from the few monopolistic unethical companies in the new-era oligarchy.

Small business has disappeared from the economic landscape of the G20 countries - except India. How can the 'small' guy be allowed to survive?  |  Cartoonist - Terry Wise; source and courtesy - cartoonstock.com  |  Click for source image.

Small business has disappeared from the economic landscape of the G20 countries - except India. How can the 'small' guy be allowed to survive? | Cartoonist - Terry Wise; source and courtesy - cartoonstock.com | Click for source image.

Hoax Claims

The other claim that modern retail makes is lower prices for consumers.

But, all major existing retailers in India have not been able to lower prices to the consumers in any manner, whatsoever.

Why assume foreign companies can do it?

Foreign retail has not benefitted the consumer or the farmer in the West.

Why assume that this miracle will happen in India?

One thing that unites both the proponents of foreign investment in multi-brand retailing and their disparate opponents is the conviction that foreign capital will introduce a spectacular degree of efficiency in a largely chaotic sector. It is recognized, and has been recognized since the NDA was first excited by the idea, that bulk buying and a streamlined distribution channel will help lessen the huge ‘farm to fork’ differential. That a transformation of retail into a part of the modern, organized sector will have a multiplier effect is also not seriously disputed. (via Right & Wrong : Swapan Dasgupta’s blog-The Times Of India).

With their hands tied behind their backs, Indian retail is being asked to 'compete' with big retail. Like Subhiksha, Big Retail will fail - unless funded by RBI or US Fed.  |  Cartoonist - Clay Jones. Published by the Fredericksburg Free-Lance Star (fredericksburg.com); source and courtesy - civilwar.org  |  Click for source image.

With their hands tied behind their backs, Indian retail is being asked to 'compete' with big retail. Like Subhiksha, Big Retail will fail - unless funded by RBI or US Fed. | Cartoonist - Clay Jones. Published by the Fredericksburg Free-Lance Star (fredericksburg.com); source and courtesy - civilwar.org | Click for source image.

Foreign more problematic

Many commentators talk of how Indian business is afraid of competition. And wants protection.

The real story is that US corporations with access to endless dollars from the US Fed can easily kill Indian retailers.

And that is a real fear and a real problem.

Bad Idea

Giant Retail will wipe out 50 million entrepreneurs and convert them to obedient employees.

This basic change from an entrepreneurial India to employee-India is the dream that the Desert Bloc has – and with the help of our Desert Bloc polity, will attempt. The change from entrepreneur-to-employee is something that will help in the creation of Big Business and the Big State.

As it has happened in the West.

Worst Idea

As consumers we may get a few years of lower prices – financed by RBI /US Fed, but finally we will pay the price. We, the Indian farmers and the Indian consumers.

Make no mistake about that.

Advertisements
%d bloggers like this: