Is this the familiar pre-election tizzy the Congress gets into or is this indicative of a shift? If it is the former, Sonia Gandhi’s now-public intervention in the retail FDI issue may not yield the disruptive effect many Congressmen are hoping for. But if it is the latter — bear in mind that the fresh controversy over retail FDI follows the one about SEZs and that has had some disruptive effect — the Congress will be committing a big political error. Proof of that comes if one looks at the issue of retail FDI via the interests of the aam aadmi, allegedly the prime mover behind every
Congress self-doubt over reforms.
Inflation is a big political concern right now. Rightly so because Indian voters do not have high inflation-tolerance. Politically, Inflation is understood mostly in terms of high prices of basic commodities. Large stores and chains, the kind that FDI and Indian capital in retail will build, typically bring down prices, sometimes considerably, by rationalising supply chains. Wal-Mart, evil incarnate for those opposing retail FDI, has made money everywhere by delivering goods at low prices to the not-so-well-off. Organised retail also does this by ensuring quality — the super-cheap Chinese goods now found in informal markets are often dodgy, when a retail chain imports products from China, it can’t afford to sell lemons. Why these benefits should be denied to Indians is a question that has no answer. Neither does the question why big retail operations are unacceptable only when owned, even partly, by foreign capital.
The aam admi is also served by retail FDI on the jobs front. That a big expansion in organised retail, which FDI and Indian capital together can achieve, will be a big job creator is beyond doubt. Less appreciated is the fact that the quality of jobs in organised retail will be infinitely better: working hours will be regulated, wages will be properly structured, benefits will be applicable. None of these exists in the jobs provided by unorganised retail. The aam aadmi also needs the Government to spend money on him. The more organised the retail sector, greater the revenue. There is of course the question of job and business losses in unorganised retail. Of course this will happen — but it has happened in other sectors that have modernised. Why is it that only the PM and a handful of Congress ministers seem to understand...
