The year 2012 has been the most troublesome for ruling congress government under the (un)able leadership of Manmohan singh , the man who is known to have turned the economic situation in India under primer minister late Mr Narasimha Rao.
There are several issues that have stormed the Government one of the most critical for the Indian polity and society being the FDI in retail .
FDI in retail, it means openings up 51% investment in retail stores in India
On my view impact to Indian economy is very high , may be the current is government is short sighted and fooling around.
Today i see that branded apparels are very expensive costing 1000 - 2500 for trouser , the same trouser actually exported from India and re-branded in US or other markets and returned back as an expensive stuff and we boast of it have brought a branded trouser, actual truth is producer cost would not even come to 10% - 20% final selling price.
By virtue of this simple case we have killed Indian textile profit making.
Lets take the positives of FDI in retail , job creation through new employment opportunities middle man being reduced, and good or decent pricing to farmer who actually produces the goods.
First to counter it, new employment opportunities, yes it creates new job avenues, but the price we pay is too high for it. Here is how it is.
We all know the, very good and proven fact India has a good retail market. What does good mean here, there are way too many options or purchasing power of consumer is too high , which means spending power of people is high. How did the Indian people have so much spending power ? Where did they get it from ?
The business, agriculture or self employed avenues like kirana shops, small scale retails trading. etc.
India's backbone is business class by itself or modern term Entrepreneur. Any village or town or city we take or our father occupation either he will be working for Govt sector, working for private sector longer duration or running a small business. population running a small business will be higher. the small business i mean kirana stores, Juice shops, fruit shops. trading in pulses, cereals, fertilizers, whatever items that is required for household.
Which means most of them are self sufficient either as small scale entrepreneur or employed under an entrepreneur. Over the period of time one working will start a new business. it will be a cycle, thus tax collected will be an income to government again.
Now with advent of FDI in retail i could see below impact
- we are killing entrepreneurs or budding business class making most of them as working class, this results in breaking working class and business class equations.
- Leads to labor shortage and kills the small business class to shut shops are not proceeding with expansion plans, which has already been proven in agriculture sector there which is forcing small farmers to sell this farm to realtors and moving into some other sector. this has disturbed the balance in agri produce resulting lesser exports , and increasing imports or shortage which again leads to price rise and hence inflation.
- Job creation by FDI, people have good money does that mean wealth creation ? No.
- Here is what i could see underneath, salaries paid to employees will be small when compared profits earned big retailers.
- Big retailers are again foreign investor with vested interest, any investor motive would be take profit , thus he takes away his profit. Impact of taking profit?
- Retail goods are produced by farmer, re-branded sold at higher price, not sure farmer gets the fair price, here is catch is money earned as profit is taken out of country., earlier it would be invested in India for sure or be as saving with an Indian,, but with FDI not the case, thus this routes back to British east India company, could be one another freedom struggle? foreign investors making big money out of nowhere.
- Thus Indian wealth is again plundered by cheating innocent people!!!!!
