Business asks farmers to speak up against FDI ‘false drama’

Mumbai, Dec. 4: Two prominent leaders of India Inc have slammed the way Parliament has virtually been locked down by “misconceived and unfortunate” protests against foreign investment in retail — a decision they termed “an essential part of India’s growth story”.

The concerns and an appeal to farmers, consumers and common people have been flagged in an open letter by Ashok Ganguly and Deepak Parekh. Ganguly, a Rajya Sabha MP, is a former chairperson of Hindustan Lever (now Unilever India) while Parekh is chairperson of HDFC.

This is the third open letter that the two stalwarts of India Inc have written but it reflects a significant change. Unlike the earlier letters that dealt with concern over corruption and an inclement investment climate, the latest one acknowledges the government’s initiative to “act” and expresses alarm at the “chaos” that followed.

Ganguly and Parekh urged farmers, consumers and the common people to raise their voices against the “false drama of apprehension against investment and modernising trade in agriculture and consumer goods”.

They said a bigger crisis than the slowdown in the economy was the way sacred institutions like Parliament were unable to function because of the strident protests against FDI in retail.

“There are 32 bills in this winter session of Parliament for consideration and passing, many of which are of far greater consequence and importance for the country than FDI in retail,” the two eminences grises of corporate India said in their open letter.

“A democracy encourages openness and permits dissent, but perennial disarray and disruption is sacrilegious... the more important question is how should some semblance of order be restored in Parliament,” they said.

The government has told key ally Mamata Banerjee, who has been opposing FDI in multi-brand retail, that the decision is being “suspended” until it is able to drum up sufficient consensus.

Asked if Parliament would function normally from Wednesday, Prime Minister Manmohan Singh said this evening: “Hopefully.”

In an open letter to the Prime Minister in January, Ganguly and Parekh had expressed anguish over corruption scandals and a perceived governance deficit. They wrote another letter in October in which the government was urged to cobble measures to improve the economic and investment climate and push through reforms.

The earlier epistles were signed by several other leaders of India Inc.

In their latest letter, Ganguly and Parekh said no one had objected when corporate India protested against poor governance and demanded that the government “stem the slowdown, increase investments, bring in new reforms”.

“But when the government began to act, what have we but chaos and adjournments over a decision to allow foreign direct investment (FDI) in retail,” they said.

Ganguly and Parekh pointed out that the decision on relaxing FDI rules in retail had not been sprung on the legislators suddenly, having been debated for over 14 years. “The protests on FDI in retail are misconceived and unfortunate.… What is intriguing and bewildering is that the false alarm of FDI is continuing to be used after so many years, as a bogey in modern times against foreigners and foreign investment.”

The letter sought to rubbish the argument that the decision to open up organised retailing would wipe out the small groceries. “It is illusory to believe that the market will be flooded with FDI. Retailing is not an easy business — margins are thin, large parcels of real estate are not easily available and the supply chain logistics ranging from warehousing, cold storage to transportation pose a major challenge.”

Ganguly and Parekh attempted to address the concerns raised by chief ministers like Mamata. They said the Centre’s role in retail FDI was minimal. The state governments had the final say since a maze of legislation from the Shops and Establishments Act to the Agriculture Produce Market Committees Act was in their domain.

“Progressive states that wish to attract FDI in retail will encourage investments and vice versa. Either way, the fruits of organised retailing will not happen overnight, but will take several years,” they added.


The above is from the Telegraph.
I am not surprised that both Ganguly and Deepak Parekh should support FDI. After they are of the business class who have been looting India and would like to continue doing so.
Who is FDI going to benefit?
The politicians who are going to get a good payoff for introducing it and of course the big business who enter it.
For farmers it will make no difference as now the middle men are squeezing them the big retailers will squeeze hem. The big business have not come on a philanthropic mission, they have come to make profit for their share holders.The will buy as cheap as they can get. Having no competition, you can just imagine the prices they will get.
The local kirana stores will lose out on their business as they cannot compete with big business. We are already seeing that in Bangur Avenue where their business has shrunk to less than 25% of what they had before Reliance opened their store. Reliance Fresh.
The consumers like myself have gained as we go to a Reliance store where everything is displayed and we are spoilt for choice. But how long? Once the kirana stores close down, then Reliance will start showing its true teeth and start increasing their prices and profits.
This is what FDI will do.
Initially, consumers may gain, farmers and traders will lose. But in the long run everybody will lose except the big business and its share holders.
Sorry, Ganguly and Parekh, I do not agree with you.