Whats Right with FDI?

Most of the ignorant arguments which are being put forth in opposition to FDI in Multi Brand Retail are laughable and devoid of any factual data. Walmart is being portrayed as some job eating firm which will either displace or take away the livelihood of 44 million side shop keepers operating in India and forming the basis of an industry which is valued at close to $400 billion. First of all, we need to be clear about certain things pertaining to this perceived American monster named Walmart. Walmart along with its other subsidiaries (well over 50) happens to have about 8900 stores in 15 different countries, employs 2.2 million people and has revenue of approximately 447 billion dollars. It’s stupid to think that a company of such size (although huge but tiny in front of the gigantic unorganized retail sector in India) can decimate the Indian economy when it’ll not even operate in more than 50 cities since the policy paper on FDI in Retail states that foreign stores can be opened only in cities with a population of over 1 million. A brief overview of the census provides us with 53 such cities and that keeps nearly 3500 cities and over 6,00,000 villages of India totally insulated from the invasion of any foreign outlets and thus the ‘projected’ job losses. For arguments sake let us assume that even if Walmart was to establish 10% of its total business in India then too it won’t offer more than 2.2 lakh jobs. From where does the question of strangulating 4.4 crore jobs arrive now ?

Some people (including the grand old patriarch of the Bhartiya Janata Party) cite the example of Thailand to highlight the ill effects of FDI in retail where 60% of domestic shops had to be shut down since they could not compete with the foreign players but what they don’t tell us is that Thailand’s economy is not even 1/5th of the Indian Economy as its GDP stands somewhere around 345 billion dollars and the country has an unemployment percentage of less than a percent, to be precise, 0.7% while we happen to have a GDP of 1.6 trillion dollars with an unemployment percentage of over 9% and so it’s completely unfair and absurd to make a comparison between the two nations. However, for our better understanding of FDI in retail we should look at our neighbouring China with whom we share more commonalities. A decade after FDI in retail was introduced in China, the number of jobs grew from 28 million to 54 million, that’s nearly 100% and guess what ? Even after being in the Chinese market since the past 12 years, Walmart has not been able to extract even a penny as profit. This is indicative of the fact that Walmart isn’t eyeing short term gains and is in China for the longer run. 29 developing economies have had FDI in the retail sector for more than a decade now and each experience has happened to be fruitful and prosperous. A study conducted by the CII with the BCG tried to foresee the impact of FDI in retail on the Indian Economy and it concluded that by 2020, business would increase from 26 billion dollars today to 260 billion dollars, direct employment would increase by 4 million people and tertiary employment would go up by 6 million people.

The policy paper on FDI in Retail makes 50% investments in back-ends (cold storages and warehouses) a necessity and this will not only reduce wastage but also create more jobs in rural areas. Farmers would get better remunerative prices for their produce as middlemen would get eliminated. These middlemen are the ones who deprive farmers of genuine profits since the farmers get only Rs 5 of the tomatoes which are sold to us for Rs 20, rest are pocketed by the middlemen. Another big apprehension is that of predatory pricing. Foreign outlets would initially offer items at really cheap rates, eliminate all competition, monopolize the market and would then all of a sudden start increasing prices thereby causing inflation. The best response to this argument was provided by Thomas Di Lorenzo in his research paper titled ‘The Myth of Predatory Pricing’. He described predatory pricing as a ‘conspiracy theory’ and stated that ‘no economist stands by it since it exists only in theory not in practice’ and that ‘there is not even a single example of a business enterprise raising its prices after wiping out competition.’ However, there are numerous ways in which unfair trading practices igniting a price war can be avoided. Germany is a brilliant example of this. In the year 2000, German competition regulators asked Walmart to increase its prices when it initiated a price war with two domestic supermarket chains by selling products at a cost lesser than its wholesale price.

Making unorganized retail more organized will also boost the prospects of the state exchequer as the government will have a big resource pool to extract from. This will ease the burden of taxation on the petroleum industry and effectively distribute the tax burden. The money collected could go into strengthening social security schemes and subsidizing food, education and health. The entry of foreign players into the Indian market would also give a boost to the real estate business and property rates will thrive. The pros of FDI in retail are so many and so serious that they cannot be set aside. Those who are opposing it need to have a broader vision and get over their protectionism after all this is the age of economic liberalism.    

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Legacy of India’s Foreign Policy – Shouldering the Baggage of Pakistan

The foremost reason why India has not been able to make its presence felt at the international forums of diplomacy is because our diplomats seem to be out of touch with reality and it becomes evident on evaluating the narrow foreign policy which we have pursued over the years. We have spent most of our time, energy and resources on a country which hardly has any say in matters of international importance.

Yes, you’re right, I am talking of Pakistan. Had Pakistan been bereft of its internal disturbances, the international community would have treated it as just another Islamic Republic with a fundamentally flawed democracy. Most of our foreign policy initiatives have been directed at Pakistan and they have yielded no results at all. The other major Indian contribution to the world of international affairs was the Non Aligned Movement, a Nasser-Nehru brainchild, but it seems to have turned into a Non-Commital-Movement since the non aligned countries have chosen to be modern day Nero’s as they have looked the other side each and every time when the world was burning and required them to take a stand. SAARC happens to have had a total loss of direction and has become plainly a photo-op event held every year where leaders go only to decide when and where they’ll be meeting next year.

It’s time we had a substantial change in our foreign policy. South Asia is going to play a very critical role in the decades to come. In our immediate neighbourhood, we have two growing giants, namely, China and Indonesia. Indian interests would be better served if we would set our sights towards having a more proactive relationship with the two countries. The reason why I choose China and Indonesia over Pakistan is because both these countries are politically in a far more stable position than Pakistan. The polity of the two nations is less fragile and not as irrational as in Pakistan. Economically, both China and Indonesia have piloted financial miracles. While China has registered a growth rate of 9.2%, Indonesia has continued to grow annually at a decent pace of 6.2% with a GDP of $ 1 Trillion.

The third reason is the religious pluralism which exists in these two countries in a far greater quantity than in Pakistan. Indonesia is home to the largest Muslim population in the world and also has a good share of Protestants who happen to be well over 6% of the total population. Catholics and Hindus are next big minorities in Indonesia with a total share of approximately 4.6%. China’s cultural diversity is also worth a watch. With over 60% population being atheists, it houses the highest number of Atheists in the world. Taoism and Buddhism happen to be the biggest Theism’s in the country with a population share of 30%. Christians and Muslims are significant minorities with a population of 4% and 2%, respectively. The statistics are indicative of the fact that both these countries are religiously more tolerant than Pakistan where consistent persecution of Christians, Hindus and even Muslim minorities like Shias and Ahmaddiyas has become a day to day affair. Safety and security are pre-requisites to having a stable relationship. The prospects which China and Indonesia have on offer for India are far more economically prosperous and culturally peaceful than the ones offered by Pakistan. John F Kennedy, the youngest elected President of the United States, remarked, ‘Domestic Policy can defeat us, foreign policy can kill us.’ Keeping this in mind we should move towards forging better relations with China and Indonesia. This doesn’t mean ignoring Pakistan or going to war with Pakistan with the intention of obliterating the nation. It simply means that Pakistan should rank low on our priority list since they are more of a liability rather than an asset. A sound relationship with Pakistan is good for India’s future but Pakistan is not the country to concentrate on if we intend to take forward the dreams of becoming a superpower.  

Immigration is the Doorway to Pluralism

The severity of the issue of immigration has increased gigantically over the past one decade. Immigration at the right place and at the right time has helped both struggling as well as talented individuals in establishing an economically better future for themselves while simultaneously helping in the area of nation building. Complex economic analysis of the money swing caused due to the increasing number of immigrants in western economies might throw up interesting numbers to analyze but what cannot be disputed upon is the fact that immigration is one of the foremost ways through which the foundations of an ideologically liberal state can be laid.

A truly diverse and pluralistic nation needs to have four essential features and the four requirements are that of it being a multi-religious, multi-cultural, multi-ethnic and multi-lingual country. Immigration guarantees nearly all the four listed above but the most stubborn challenge in implementing a liberalized immigration policy comes from the regional political satraps and populist protectionists playing the card of votebank politics who don’t want to flirt with the idea of letting the ‘electoral equilibrium’ change as immigration leads to considerable alteration in demographics. What I must make clear is that my support is for immigration achieved through proper diplomatic channels as established by international law and not infiltration into the territory of foreign states by means of dubious tactics.

However, two important things need to be kept in mind while opening the doors of a country to large-scale immigrants. The first one is obviously to screen the populace coming in and put into place a proper checks and balances system to eliminate the threat of population explosion. This is important because no society can benefit economically without having a sustainable population. The second and more important one is to ensure the employment of more than 50% of the domestic workforce in order to prevent the local population from thinking that they are being demoted to the status of second class citizens because of the entry of foreigners. Immigration sets the much required stage for effective competition and anyone shying away from it by demanding bizarre protectionist legislations is sounding overtly possessive and incapable of handling challenges. The world can’t give the phenomena of immigration a miss. As I wrote earlier, immigration is the way towards establishing a diverse country but the journey doesn’t stop at this point. Ours is a diverse and pluralistic country but not a mixed society because society consists of individuals and families and Indian families are fundamentally opposed to the idea of stepping out of their comfort zones. One cannot expect to see many inter-community marriages in a country like ours when even people belonging to the same faith and caste don’t marry each other because of geographical reasons. The key to bringing about a mixed society is by shattering the barriers of faith, culture, language and region through the institution of marriage. Someone quite correctly said that ‘love is the remedy’. 

Justice in Modern World

The concept of justice in world society has evolved enormously and grown into a complex area of study. With increasing instances of crime the entire world has witnessed a steady rise in prison inmates. But the fundamental question which the world needs to address today is in relation to the goals achieved by sentencing people to serve long terms behind bars.

Many view the modern system of imprisonment as an official paid holiday for goons which is evident from the angry reactions of masses in relation to terror convicts. Statistics show us that India had as many as 3,60,000 prisoners at end of 2010. The critique of the system of imprisoning is based on two very simple logics, the anatomy of which is that the modern prison system fails to make any reformation in the prisoner and it also fails to extract due retribution. As far as the question of retribution is concerned, we cannot afford to go back to the ancient times where biblical principles like an ‘eye for an eye’ used to serve as the perfect way to extract revenge but what can be done to bring about vendetta and make the wrongdoers pay is by trying to create a global consensus on the utmost necessity of capital punishment in cases pertaining to mass murders and rapes. We cannot hoodwink ourselves by falling into the trap of human rights activists. It’s true that even prisoners have a right to be treated as humans but what we should not forget and what we overlook quite often is the victim’s natural human right to compensation and retaliation.

The second and more important question is obviously how to bring about a radical change in the character of the prisoner. Most intellectuals are of the opinion that mandatory community service for offenders is the way towards moulding them into better human beings but I view this approach with a  bit of scepticism. Firstly, community service is not a new idea. During ancient times, people were never imprisoned but were converted into slaves and this is the principle threat emerging from promoting community service. There is every possibility of institutions exceeding their ambit by maintaining ownership of convicts as was done previously by many aristocratic regimes. Secondly, we cannot afford to let people accused of crimes like molestation to legitimately infiltrate into community service centers. The pool of prisoners can be broadly classified into two parts. Only the ones who are accused of lapses within the purview of civil law should be made to do community service. However, the challenge before us is to think of a feasible way with the help of which we can reform the real baddies who’ve indulged in extremely notorious crimes against humanity without compromising on security.

Governance in Gujarat under Modi – A Critique

Narendra Modi’s has been trying to portray himself as a development specialist since quite a long time. His ‘Sadbhavna Mission’ was the first open intimation of his larger national dreams. Modi’s supporters have lambasted at whom they call ‘pseudo-secularists’ for ignoring the model governance provided by Modi in the state of Gujarat. They’ve alleged that foreign funded human rights activists have been on a ‘smear Gujarat’ spree since a decade and they can’t afford to think beyond the 2002 Gujarat riots. In the midst of all this action, the larger question lies in scrutinizing the extent to which Gujarat has developed.

It’s indeed true that Gujarat rules the roost when it comes to promoting industrialization and rural electrification but the Gujarat Government’s PR machinery has worked overtime to ensure the smooth burial of the ill-effects of the growth story in Gujarat. What is so inspiring about Gujarat? The Sujalam Sufalam Scam of Rs 1700 crores or the NREGS scam of Rs 109 crores or the Fisheries Department Scam of Rs 600 crores. The reality is that Gujarat is a state which remains soaked into poverty. More than 30% of the population of the State of Gujarat lives in poverty. Numerically that figure is 4 times the population of the United Arab Emirates. As per the Planning Commission, the most backward district in India is Dangs which happens to be in Gujarat. Due to the ill-conceived industrial onslaught launched by the Modi Government in Gujarat, the state has become a nightmare for poor farmers. Heavy land acquisition for industrial projects has left farmers landless and 2.1 million farmers are still awaiting compensation. 16,000 farmers have committed suicide due to stress under the tenure of Mr Modi as CM. A survey conducted by NSS in 2005 revealed that 45% of the farmers in Gujarat wanted to quit the agricultural sector.

The growth rate of Gujarat till two decades back happened to be anywhere between 12-13% (Primarily due to early industrialization) but now it’s down to 11%. 55% of the women living in the state suffer from anaemia and 41% of the children under the age of thee are underweight. As per a report by an NGO named Pratham, Gujarat is worse than Bihar in terms of educational standards. Gujarat was ranked 14th in a list of 17 states on the ‘India State Hunger Index 2008’. It was placed above states like Bihar, Chhattisgarh and Madhya Pradesh whose score on the hunger index was nearly equivalent to that of Ethiopia. Only 20% of the money pledged in the highly glamorous Vibrant Gujarat summits held in 2003, 2005 and 2007 has been put to work. In 2007, the State Government falsely claimed raising an excess amount of Rs 10000 crores during the Vibrant Gujarat summit. Gujarat still lags behind states like Maharashtra in terms of Foreign Direct Investment. Among 18 big states, Gujarat’s budgetary allotment towards the development of the social sector is ranked 17th. Gujarat is at the bottom of the list in terms of the rollout of NREGA.

The Gujarat Government has failed to live up to the tall assurances it made in 2007. BJP’s Election Manifesto for Gujarat Assembly Elections in 2007 stated that if it was voted to power, the BJP government would establish a SEZ in every district, pilot the growth of the state at 12% per annum, double the GDP and raise the per capita income to Rs 80,000 per annum and above. All this obviously never happened. Narendra Modi promised to build a Statue of Unity in the honour of Sardar Patel and it was supposed to be twice the size of the Statue of Liberty and 4 times the size of Christ the Redeemer but this promise like all other promises was never met. Gujarat has still not enacted the minority scholarship program of the Government of India which was to benefit 55000 people. In government schools of Gujarat, the state government has been trying to build a personality cult around Narendra Modi and has promoted hero worshipping. Chapters have been introduced in school textbooks tracing the life story and achievements of the Chief Minister. This happens to be a kind of narcissism which leaves behind even Mayawati’s obsession for building her own statues. Gujarat has been turned into a laboratory of Hindutva.

Even ten years after the Gujarat riots, people have been living in refugee camps. Muslim ghettoes are assuming Hindu names to avoid being attacked in the future. The state has put into place a blanket ban on cow slaughter thus depriving Dalits of the only meat they could afford to eat. The Comptroller and Auditor General of India indicted the Gujarat Government in 2012 for having caused losses amounting to Rs 16000 crores by favouring industrialists. The Gujarat Government had to suspend the entire opposition from the State Assembly in order to ensure the swift tabling of the report and to evade criticism and accountability. The Deputy Speaker’s post was left vacant by the Gujarat Government for a decade because a member of the Opposition was supposed to occupy the post. The Gujarat Government did not appoint a Lokayukta for 8 years, starting from 2003. In 2011, Governor Kamla Beniwal appointed the Lokayukta without consulting the Chief Minister and his Council of Ministers. Modi lambasted at her and accused her of acting in a partisan manner. He described the Raj Bhavan as the ‘centre of congress conspiracies’. Thus denigrating the highest constitutional office of the Governor of the State.

Modi has crushed all opposition to him from within the party as well. The principle example of this was a split in the Gujarat BJP and RSS camp which ultimately culminated into the ouster of Former Chief Minister Keshubhai Patel and RSS Pracharak Sanjay Joshi. Modi has been totally deserted and has been criticized by hardliners like Uma Bharati who called him a ‘vinash purush’ and stated that she had never seen Hindus living in such a sorry and fearful state as they were in Gujarat. In September 2003 the Supreme Court said that they had lost faith in the Gujarat Government. In April 2004 the Chief Justice of the Supreme Court of India said in open court that, ‘Modi was like a modern day Nero who looks the other side when helpless children and innocent women are being burnt.’ 2000 cases pertaining to the Gujarat riots were arbitrarily shut down by the State Government in Gujarat. The Supreme Court had to move cases to neighbouring Maharashtra in order to ensure a fair trial. Maya Kodnani (now convicted for the Naroda Pattiya Massacre which led to the death of 35 children, 32 women and 30 men) was made the Child and Women’s Development Minister by Narendra Modi in 2007. When Sonia Gandhi called Narendra Modi a ‘Merchant of Death’, Lal Krishna Advani jumped to his rescue and said that ‘Modi can’t be a merchant of death but he can certainly be Hitler.’

Modi’s biases are clearly visible during the speeches which he delivers at his rallies. During the Gujarat Gaurav Yatra in 2002 after the riots, Modi stated ‘What should we do ? Run relief camps for them. We don’t want to open baby producing centres. Hum paanch, humare pachees’. This comment of his was a dig at the ones who had taken refuge at relief camps after the riots. 2500 people died and 2,50,000 were displaced but Mr Modi felt that the refugee camp inmates were doing nothing apart from having sex and increasing population. He further stated that ‘those who were increasing the population of the state should be taught a lesson’. On another occasion he happily announced that he brought the waters of river Narmada during the Hindu holy month of Shravan and not Ramazan. When the Election Commission decided to not hold elections in Gujarat in the aftermath of the riots due to the prevailing tense situation, Modi hit out at the EC by attacking the then CEC JM Lyngdoh. He said, ‘Is JM Lyngdoh from Italy ? If not then why is he helping Sonia Gandhi. Or is he helping her because they are both Christians.’ When General Pervez Musharraf threatened raising the issue of the Gujarat Pogrom at the United Nations, Modi said, ‘Miyan Musharraf, if you don’t stop pointing your dirty figure towards Gujarat, five crore Gujaratis will not hesitate to cut off his hands.’ Just imagine the furore which would have been caused had such a statement been made by a Governor of a Pakistani State when the Indian Foreign Minister Mr SM Kirshna rightfully raised the issue of the ill treatment being meted out to Hindus in Pakistan or when the Indian Parliament held a debate on the same issue. During his Gujarat Gaurav Yatra in 2002, Modi also said, ‘The day Hindu terrorism comes into being, Pakistan would be wiped out from the face of the world map’. In a speech delivered shortly after a terror attack in Maharashtra, Modi heavily criticized Manmohan Singh and went to the extent of deliberating mocking his faith by sarcastically calling him ‘Sardar Manmoham Singh’ twice during the course of his speech. In that very speech, Mr Modi distorted Lalu Prasad Yadav’s name by referring to him as ‘Lallu’.

Mr Modi certainly never had any control over his tongue but his government was always trying to limit free speech by banning documentaries on Gujarat riots and detaining activists who chose to speak out against his government. Gujarat was the first state to ban Joseph Lelyfield’s controversial book on Gandhi which has now become a rage on the internet. Narendra Modi and his government has subverted all fundamental rights which citizens of India cherish and honour, be it the Freedom of Speech, Freedom of Religion or even Freedom of Movement which was torn apart when Modi’s bête noire Sanjay Joshi was disallowed from stopping over in Gujarat by the administration. The institutions which happen to be the pillars of our democracy, namely the State Legislature (Inclusive of the State Governor), Judiciary and the Election Commission have all been belittled by Narendra Modi and his team. What remains to be seen is India in a position to defeat a fundamentalist and polarising figure like him. The answer isn’t easy and it’s going to take a while till we get to know the eventual outcome of the Modi saga.