Govt has it’s say on FDI in retail in Lok Sabha

Photo: Tehelka Photo Archives

The motion to withdraw government’s decision to allow 51 percent FDI in multi-brand retail and motions related to FEMA was defeated in Lok Sabha on Wednesday 5 December. A similar discussion and vote is to be held in Rajya Sabha on 6 and 7 December. The motion was defeated (Yes – 218, No – 253, Total – 471) after Samajawadi Party and Bahujan Samaj Party walked out of the voting.

The debate in Parliament on FDI in multi-brand retail was bereft of facts of the matter. Arguments were loud but not convincing, didn’t share solid examples and was, at times even comical, and that doesn’t include the humour by Lalu Prasad Yadav. It proved our leaders forget that economics is not about politics but the other way round. And that while democracy is about consensus, it’s primary focus should be the citizen.

How do you explain BJP’s admission that it went wrong in wanting to get FDI earlier? Today it opposes the same. But the ultimate irony remains that the vote gets through due to support from BSP leader Mayawati, under whose tenure in Uttar Pradesh, retail stores were attacked and vandalised. Today she has come to the rescue of the UPA, clearly implying the FDI debate remains less about economics and more about the politics of it.

It took six years for UPA chairperson Sonia Gandhi to change her mind but now she rallies for FDI jobs. Kamal Nath gets some credit since it was he as Commerce Minister who kicked off the Bharti-Walmart tie up, today he managed the numbers on the floor of the House to make this deal and others as a part of legitimate policy.

CPM stuck to the swadeshi/videshi act and insisted it was a bad idea to force farmers to sell for cheap. How many leaders really know that state taxes in mandis are killing the farmers. State agriculture acts are archaic. Wholesale-retail arms of Metro, WalMart, Carrefour have existed in many states and sourced from the farmers. If states have had any issues, by now, they should have rapped these companies and raised some questions.

For a moment, one thought Sharad Yadav had changed his mind ‘for’ retail when he cleverly asked if non-FDI states would lose out on sourcing by these big box retailers. For someone opposing FDI in retail so vehemently, why must sourcing count when retail doesn’t? How come the debate around retail simply forgets that big stores sell more than just food. Textiles to toothbrush, India’s other industries will get newer and more opportunities to sell and consumers a place to buy.

Sushma Swaraj had created the benchmarks a day ago asking questions like, “Will Wal-Mart care about the poor farmer’s sisters wedding? Will Wal-Mart send his children to school?” Did Indian retailers such as Kishore Biyani or Tata promise this? The consumer lies at the core of this story. Did we forget the focus of the FDI debate are ‘companies’ that want to enter the Indian ‘market?’ What made the debate less palatable was the detailed discussion on potato procurement by McDonalds, Pepsi. Swaraj made global headlines for suggesting they import produce when most of it is grown in India, some reportedly in BJP states. This egg on face reflected poor understanding of the issues involved.

Jayant Chaudhary of RLD compared Occupy Wall Street to the Opposition to FDI in India. That might be an extreme. Some credit must go to such protest (albeit too long) because it forced the government to introduce appropriate riders to protect small and medium suppliers. The latest version of the reform is sound and takes care of farmers, SMEs alike.

Gurudas Dasgupta of CPM cited the nation’s economic decline and connected a lower GDP to presence of foreign money in India. To borrow from Sharad Yadav’s vocabulary in today’s debate, that argument is “doomed.” India opened its doors to the global auto giants, we got factories, new technology and jobs. We did the same for telecom and electronics and we created a revolution. FDI may not have any immediate impact on growth rates, but it certainly isn’t going to cause a drop.

Lalu Prasad Yadav came out in support of FDI. His humour may just help shake off some fears since he wants to know why high heels can be sold in malls but not food which is still being sold on the streets.

The vote is through and so, the real reform must now begin.


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