Why FDI retail no-go in state that earns well, spends better

A state with one of the highest per capita incomes in the country and spending the highest on durable goods and food in India should have nothing holding it back from a leap into the future. That is, discounting Kerala's politicians.

The opposition by political parties of all dispensations in Kerala to the throwing open of retail sector to FDI, including the ruling Congress, is the most recent example. That too in a state where shopping malls and branded product outlets can be seen in even panchayats with a population of 25,000. At last week's investor's meet 'Emerging Kerala', a major chunk of the proposals from non-resident Keralites envisaged building swanky commercial space, malls, convention centres and multiplexes, many of them in small municipal towns.

It's not the first time politicians have said no to change in Kerala. When domestic chain stores wanted to open outlets here in 2008, the entire political spectrum opposed it, saying it would affect prospects of retailers. The hypermarkets, they feared, would hit retail traders — a profitable vote bank.

When there was a proposal to build better roads in the state through land acquisition using the Build, Open, Transfer model, it was opposed because "Kerala is not ready to hand over its roads to monopolists". Earlier, unlike the rest of the country where 60-m-width national highways are the norm, Kerala resolved not to go beyond 30 m. The result is that only 100 km of the 1,540 km-long NH in Kerala is four-laned, leaving its 3.30 crore people and 73 lakh registered vehicles jostling on the roads.

Last week saw politicians up on arms over a suggestion by Planning Board Deputy Chairman Montek Singh Ahluwalia that Kerala not worry about food security but instead focus on cash crops. His suggestion must have been prompted by the large tracts of paddy fields lying uncultivated in the state for years because of lack of labour hands — both outward migration from middle-class agri-families and shift from food crops to cash crops hit the fields.

... contd.

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