Is the government resorting to such acts to cover up and elude their corruption scandals or genuinely concerned about bringing economic reforms?
This is so incorrect and silly. No government would introduce such major landmark reforms just to cover up their faults. It's foolish to say that. I dont see why the country is so apprehensive, bitter about FDI in retail while it's got so many advantages. Even the BJP was talking about introduction of FDI way back during the 90s. I think the ones who're against it are just politicising the issue by launching nonsensical, baseless tirades against the govt. The decision wasnt taken just by the politicians... it was moved by some experts in the PMO, the whole thing is researched, studied carefully and is decided by the experts of the country(people of the PMO). You do know that it's the PMO that's apparently the brain of the Prime Minister, dont you? Now, how can they take wrong measures or do it just to avert the attention of the country from the latest scandals? Come on, people need to grow up and use their brains. Implementing something that affects the entire country, entire economy, entire govt isnt done merely to "sideline corruption scandals" . Coming to the topic,
Firstly, I'd like to say that FDI in aviation was unavoidable. The aviation sector in India was already in it's lows, running into losses, thanks to PM's move, we can hope for some improvement in the aviation.
Secondly, FDI in retail is a beautiful move by the PM, and I'd say he should've done this long back. FDI in retail has so many advantages-
#1 -- More than anything, it improves the supply chain management which is lacking in India. Supply chain management deals with the procurement of commodities, storage, transportation etc.
#2 -- Due to the above stated advantage, there will be less loss, wastage of raw materials. Thousands of tonnes of raw materials(veggies and fruits) go waste just because of lack of supply chain management.
#3 -- Increases employment opportunities.
#4 -- Prices would come down, the consumers are at great advantage - cheaper commodities, quality, and wide range of choices.
#5 -- Increases the competitive ness among the enterpreneurs. This, I believe is essential. More competition, more research and production, more new stuff, imrpoved quality, more advantage to the consumers, more advantage to the economy.
#6 -- Farmers will be paid much better, because their produce will directly reach the stores.
I think it is a kind of a revolutionary step by the Indian government.
They say the small retailers and kirana shops will come to an end, but, I think it's wrong. I dont think they will be sweeped out. Afterall, the FDI backed stores will be opened only in towns having a population more than 10 lakhs. And, considering the fact that the traffic in India is very dense... not ALL the people will flee to multi-brand retail stores. Kirana shops will continue to exist... atleast for the next 20 years. Lets just take a look at Reliance Fresh, there's atleast one Reliance Fresh in a radius of every 5-6 kms in Hyderabad. Did the Kirana shops cease to exist?
There is a myth, that entrance of the foreign stores will have an impact on the domestically produced - especially the infant industries, I think the govt. already offers some subsidies to all the small-scale infant industries. It will be survival of the fittest, I think this should be taken in a competitive sportive spirit. That's what brings out a true enterpreneur anyway :)
There's one more myth, that foreign brand would 'invade' the Indian market. This is utter bullshit. The FDI in retail is 51% only. I dont understand how people make such blind comments. The Indian-made would incur losses, that means it wasnt that good anyways. I am up for anything progressive anything improved, anything better. We are consumers, the producers in India who want to fight the compeition, will. I dont understand what kind of person wouldnt want to buy something better and imrpove his quality of life. Ever worn a comfortable Indian-made jeans in your life?
Some countries like China, Singapore, Brazil,etc have no caps on the FDI . Those countries have allowed 100% FDI!
It is true, inflation would be increased a little for a while.. but, it will come down eventually and improve the economy.
Edited by Angel-likeDevil - 23 September 2012 at 2:44pm