The great Indian reform trick is probably on show again — this time in organised retail. First-time spectators will draw the hasty conclusion that organised retail is in irreversible retreat. After all, not only is the policy on allowing foreign retail chains in limbo, activists, traders and politicians are together targeting big domestic retail chains. At the national political level, support for retail reform or even for the right to conduct lawful business peacefully has been lukewarm. And what about reports that corporates with large retail expansion plans are shedding newly recruited labour?

Experienced observers will keep an open mind for another ending though — a long and tortuous period that sees some regression followed by some negotiated progress that incrementally becomes rational policy. That’s been the story of some of the most major reforms. Think VAT, switching private telecom companies from licence fees to a revenue sharing model, insurance reform, and airport privatisation. Disinvestment was thought to have crossed the political-agitationist hump till this government made a mountain out of the NDA’s procedural molehill. But chances are disinvestment will be back on the policy table once the only group that wants to seriously block it — the Left — matters less in Delhi. In any case, in states, including in Bengal, disinvestment is not a dirty word. SEZs and the larger issue of land for industry are also caught in political-agitationist controversies. But it is not overly optimistic to suggest that the system will grind out a compromise, and that before a national formula is found, states will work towards individual solutions.

... contd.