My tryst with FDI...!

FDI in retail... A boon or bane?

With Wal Mart already having made its presence in several cities, we find it futile to discuss the advantages and disadvantages of FDI in retail. Now the point is to find a measured way of allowing (as if there is a chance to deny now?) FDI in India, so as to inflict minimum damage to our producers and reap the maximum benefit to our consumers.

It was in this connection that I recently delivered a lecture at SHREE Institute of Technical Education on the impact of FDI in India.

Here's the text:

I quote

"FDI is such a  complicated subject that even renowned economists and policy makers are not in a position to ascertain the pros and cons of it.

            Well there are too many expert speakers  who have plunged their heads into the issue to come out with a solution acceptable to all. As a journalist with business management background, I just give my individual opinion about how the policymakers could adopt a cautious approach to the issue.

There is no second opinion that FDI is good for economy, as the huge inflow of funds will augur development and usher in growth. The second point is that competition improves quality and is always beneficial to the end-user. It gives chance for the best available product in the market to become still better than what it was… When faced with a threat, man should see an opportunity in it and choose 'n' number of options for survival. It is this instinct that makes him constantly go for innovation. The threatened entities face the heat and look for opportunities for survival that is common in the competition-ridden world.

The negative side is also there. When the floodgates are opened in one go, the friendly neighbourhood kirana outlets to small time traders to street vendors will be directly exposed and will be washed away in the gush. The rule is to have a level playing field between two rivals  competing in any game. A ‘Bakka Ramanna’ (metaphor for the scrawny little trader) can not be allowed to fight a ‘Bakasura’, for surely the former will die a pathetic death. So, it is here that the policymakers will have to step in and play a crucial role in ensuring sufficient protection, at least in the initial days, till the reality dawns and the ‘Bakka Ramanna’ braces up for the fight to the finish.

Agreed, some of you may ask that when we have already allowed large supermarkets and malls such as the Reliance Mart, Heritage Fresh, Spencer’s, Big Bazar, etc. thus creating competition, why not FDI? Yes, a small fish Vs a big fish in a tank is ok… a small fish vs a whale?   Even the so-called big fish is threatened by the entry of shark or whale.. right?

A hare in a forest is eaten by a dog, which again is eaten by the tiger. That's the rule of the jungle and every creature is constantly on the run. But this is a society, not Jungle Raj. The constitution and the Government have a responsibility to protect every man in the community.

There is nothing like allowing or not allowing now. The question is to take a comprehensive view, adopt a holistic approach of the pros and cons, safety of the products being thrust on us, manpower being imported and take a step by step approach. Once damage done at the policy level can not be undone and a comprehensive view has to be taken before letting things get out of hand.

I wish you all success".
I unquote...