“I have a friend from a neighbouring country who also became a Finance Minister. The day he got his job, I called to congratulate him. He said, ‘Don’t congratulate me. I am only a half Minister. The other half is in Washington.’”- Manmohan Singh.
East India Company came as a trading group to India and built a political empire. At present, India is being invaded by more powerful corporate giants from all directions. Under globalised economy, the gap between the developed and developing countries, and between the rich and the poor within countries, has increased.
We cannot deny the fact that economic interdependence at the global level has come to stay. While the economic development has certainly added to the economic development in India in respect of national income at the macro level, the government has failed miserably to achieve its stated objective of alleviating poverty and backwardness through its new economic policy.
In spite of the laudable promises given by finance minister in 1991 and the congress manifesto of 2004, and despite the FDI in retail trade is banned, giant international corporations are entering India, overtly or covertly, through the long chains of retail shops established in the names of big Indian trading groups.
Mukesh Ambani’s Reliance Industries has planned to invest a huge amount in a large number of retail shops across the metros in India. It has tied up with the second largest international retailer, Carrefour (of France). Sunil Bharti Mittal of Airtel is entering the retail trade in India with the world’s largest supermarket chain Wal-Mart. Tata Industries plans to establish trade with the backing of Woolworths, and many other big business houses in India are competing with one another to get international patterns for organising the retail trade in India.
Multiplex in recent times has also attracted many international players to venture into the business. No wonder the multiplex business is so lucrative that foreign entertainment giants like Time Warner, South Korean multiplex operator Megabox, and Australia’s Hoyts are in talks with real estate developers such as the DLF group, the Raheja Group and Sobha Developers to set up chains of multiplexes across the country. We should not forget that roughly a dozen Indian players have entered in the business in small or big way. New players are trying to enter this sector and the existing players are busy expanding their horizons!
The United States has 85 per cent of its retail trade organised against India’s 4 per cent. Departmental stores and supermarkets cater to the higher income group in large cities; India has 70 per cent of its people in rural areas with very low income. It is calculated that every departmental store employing 40 persons will make 400 retail traders unemployed. Against the unrestrained invasion of the powerful foreign giants with the help of national business barons, the future of several million retail traders of India and their families is bleak. Unless the government takes effective steps to create alternative employment facilities for all retailers thrown out of job, India will witness growing unemployment, and poverty will prove to be a great disaster for the country.
The reason to the emerging threat is, India has failed to impose strict restrictions on the area and the extent of domination available to giant corporations whether Indian or foreign. In many countries there are significant market access restrictions on foreign investments in trade, on foreign equity ownership, on purchase or renting of real estate, on practices of service suppliers and on forming joint ventures with local suppliers.
For instance the supermarket giant Wal-Mart was not allowed by New York City to open even a single retail store in New York. New York objected to Wal-Mart on the grounds that it paid low wages and provided deplorable health benefits to its employees. Initially, similar incidence was reported in California.
Moreover, according to a policy in France, if there is an application for setting up a supermarket with a space of 300 square metre or more, the French government accords permission only after getting the approval of the local authorities and consulting the local traders. Similarly, the Ministry concerned in Japan first ascertains the possibilities from local authorities and finds out the views of the local small-scale retailers.
Alas! In India, there are no legal restrictions or limitations on the allotment of space to retail giants or on the variety of commodities to be sold by them. Nor is there any consultation with the local authority or the retail traders in the area concerned.
It is difficult for anyone to pinpoint correctly the extent of the benefits that India or any other developing country may be able to get by being part of the globalised economy, but it is abundantly clear that the present arrangements accepted or imposed on India have totally failed to bring about the sustainable development or to contribute to the process of equitable distribution of benefits to all sections of society. It’s an irksome fact that the political sovereignty of a developing country like India has become subservient to a globalised economy.
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