The wobbly embrace to FDI

The shrill debate (or, in plain words, just noise) in Parliament over 51 per cent foreign direct investment (FDI) in multi-brand retail has reached ridiculous proportions, thanks to political parties that seem to be so ignorant of the ground realities of the issue that India's premier lawmaking body lies paralysed.

It is not just the BJP that is opposing the move; Left parties as well as Congress' allies in the UPA government such as the Trinamool Congress as well as the DMK say that FDI in the retail sector will be disastrous for the small shop owners in India.

Whatever be the merits of the arguments on both sides, the truth is that the Union cabinet never thought it wise to include or even consult the Opposition. The government may argue that since it has the mandate of the people, it need not, theoretically at least, consult the Opposition on such decisions. However, considering that member parties of the ruling UPA themselves had opposed the move until Finance Minister Pranab Mukherjee reportedly lost his temper and got the cabinet to decide in favour of FDI, it would have been wiser to come to a far more inclusive decision.

Consequently, the Congress stands isolated on the FDI issue. There is no denying that FDI in retail will help the investment climate, in addition to giving the Indian customer a better choice of products at highly competitive rates. But some political parties are either blind to this, or they have internalised (wrongly) that supporting the small shop owner shall somehow enhance their vote bank.

That something new will cannibalise something old is not a novel argument. If that were true, television would have killed newspapers and radio stations; the Internet would have killed newspapers and magazines; and malls and supermarkets would have killed the local kirana shop and "readymade" stores. None of the fears ever came true. And it's unlikely they would.

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