The cabinet has given its nod to 51% FDI in multi-brand retailing and 100% in single-brand retailing. This decision has been welcomed by many industry experts but at the same time some have lambasted the authorities for the clearance.
The BJP and the Left are opposing the move. It’s a sort of an ironic position. A right wing party ie the BJP (whose ideology is based on free market and open economy) is opposing the move and a centre-left party (who is a beneficiary of the Socialist model of Nehruvian ideology which talks of a controlled economy) is promoting this to give further flare to the Indian Incorporation. I find the BJP’s stand far more ironic because on one hand they say that price rise is a concern and on the other hand they oppose FDI in retail just to save the jobs of those middlemen (apart from small scale commodity sellers) who play a very pivotal role in sending the prices up. The BJP fears for the jobs of those middlemen who might get eliminated once organized retail creeps into India.
I don’t find the Congress’s stand ironic at all even though it’s against their centre-left ideology. The current PM Dr Manmohan Singh during Narsimha Rao’s regime de-regulated the economy demolishing Nehru’s Socialistic economic model and ever since then the Congress has moved in a direction which has been very different from the one envisaged by Nehru. I personally feel that the Cabinet’s nod to this particular issue is a good one. Organized as well as unorganized retail both can easily co-exist in India. Local vendors will give tough competition to the foreign players. Foreign players shouldn’t expect to completely take over the market as the local players won’t be giving them a cakewalk. What will lie in store will be intense competition and the co-existence of both organized as well as unorganized retail will help play a role in diminishing the demand-supply imbalance.