Why Manmohan Singh is so Adamant on FDI?
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Why Manmohan Singh is so Adamant on FDI?

By Suman Ravikumar, SiliconIndia   |   Wednesday, 30 November 2011, 12:40 Hrs   |    34 Comments
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Bangalore: "FDI in Retail," a key word which is a buzz everywhere so popular that even newspapers and Google might consider to have a fragment of its large database preordained for it. The introduction of foreign retailers into the humongous potential market of India has become the "Apple of the eye." What makes the topic even more debatable is Prime Minister Manmohan Singh's adamancy to bring in the phirangis when there are many other grim issues that are in dispute to be heeded - inflation, the slowdown of the economy and the rupee depreciation has been an objective to criticize the PM. Leaving the elucidation on RBI and India's think tanks, the PM has personally got down marching his way for the FDI. Why?

Manmohan Singh

PM insisting on the FDI has put many threats in queue. Manmohan Singh's mutinous, yet determined will to bring in the supermarkets of foreign stores will actually make him mislay his allies, will be at the receiving end of collective anger of both the right- and left-wing opposition. Practically his adamancy could end up in potential collapse of the coalition itself, as the Trinamool Congress and the Dravida Munnetra Kazhagam, key allies also demanded a rollback. There is a high probability that if the government does not roll back the policy of allowing 51 percent foreign direct investment in multi-brand retail, BJP will stall Parliament for the remainder of its winter session, which ends on Dec. 21, the same party which once supported FDI in Retail back in 2002 when it was the leading party in a coalition led by former prime minister and key BJP leader Atal Bihari Vajpayee.

"We want a discussion in the Parliament on our adjournment motion on FDI in retail," tweets Sushma Swaraj. "My stand is the same as that of my party BJP & which is in the interest of the nation," tweets Narendra Modi.

"When in power they supported FDI in Retail now they oppose it. They opposed Computerisation when Rajiv Gandhi introduced it," tweets Digvijay Singh. "No one is forcing FDI in retail down anyone's throat. States not interested have right of first refusal. What could be more fair???," tweets Omar Abdullah.

"We have not taken this decision in haste, but after a lot of consideration. We believe that FDI in retail will result in the creation of many new employment opportunities in a range of sectors like food processing, transportation and storage," Singh said while rejecting demands for a rollback of the policy which has stalled Parliament.

"Any government in a democracy should follow the democratic process, especially on such a big-ticket item. They should have taken not only the allies into confidence on this matter but also the opposition, as it affects the entire country. Democracies are all about talking and not about bull-dozing," Dinesh Trivedi, Trinamool Congress leader and railways minister said in an interview to WSJ.

"Only Pranabda! PM not willing to meet his own party MPs and opposition for resolving Parliament logjam on FDI and other issues!" tweets Prabhu Chawla, Editor-in-chief, The New Indian Express.

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Reader's comments(34)
1: manmohan singh's one of the best human beings in india...that is, as far as sonia gandhi & family are concerned. he's a man, who'd just about do anything for this family. it might not be a surprise if he leaves his wife & own family of several decades for this wretched family. if he can do all these, what's fdi for him? he'll do exactly what his masters order him to do. shouldn't we be proud to have dr. man's our pm?
Posted by:gerry kenny - 09 Dec, 2011
2: whynobody ask who decide prices of vegetable, rice, grain..
government, farmer, consumer or kiran store owner - No answer is NO. Now find the answer and decide who is controlling inflation and who is scared of FDI in retail.
Posted by:SURESH PANDAY - 07 Dec, 2011
3: whynobody ask who decide prices of vegetable, rice, grain..
government, farmer, consumer or kiran store owner - No answer is NO. Now find the answer and decide who is controlling inflation and who is scared of FDI in retail.
Posted by:SURESH PANDAY - 07 Dec, 2011
4: The question should have been why is Manmohan adamant only for the policies that help west! The two policies which we have seen him are Nuclear & FDI both are so misconceived and dangerous.

For nuclear while boasting about its positives he so easily forgets how nuclear plants came in US after 70s. And also that there are companies capable in India to build even if we need at lower prices.
One more thing the risk they provide and result - 2-3% of our whole requirement. And the risk in populated place like India.

And coming to FDI the reasons given are stupid. They are telling it will help farmers & consumers. The problems to farmers will be over just by bringing FDI in retail ha wat an idea.. Has the - already here - Indian multi-brand retail chains helped farmers? Govt. cannot do anything to get fair prices to farmers or check middlemen. And now they r telling FDI in retail is going to get this done.
Posted by:Raman - 06 Dec, 2011
5: Is it right time for FDI when america who is most aggresive (or even say pushing Manmohan) on FDI but America is still charging approx 1 lakh for for just 1 visa only to reduce Indians to get a work or training there.
Is Mr. Manmohan Prime-Minister of America or India
Posted by:Sumit - 04 Dec, 2011
6: It sounds strange that we Indians can not manage to live independently without foreigners. For the sake of so called Development of Infra Structure in the Country we have already shown our inefficiency in developing INDIAN SKILLS and have gone for Foreign Support (as Short Cut). This has already disabled the India Brand to come up. Our Leaders when speak in debates do not discuss the merits or demerits of the issue, but quote the mistakes of one or other. What an irony of our fate to bear them all to ruin our Identity as INDIAN.
To add more Misry it is not out of place to see the contrast between GANDHI-1869 to GANDHI-1969
Posted by:Nimitt - 02 Dec, 2011
7: It looks like the author of the article is a representative of the middle men in Indian retail who are worried that if it happens than there this so lucrative business option will be lost and they will not be able to loot the consumer. I will just appeal to people to first understand the things and then to decide whether to support or oppose. I would like a answer from all you people "Has opening of retail sector for Indian biggies like Reliance Fresh, Big apple etc. made any adverse impact on the employment of retail traders?" If no then how the foreign chains can impact us. They will make them just more competitive. One thing can say is that there may be more scope for monitoring policy but this rule is not gonna make any adverse impact on Indian economy or on the livelihood of retail traders. Even one thing which need to be remembered is that it is being opened in the cities with population more than 10 lacs which itself rules out the possibility of any wrongdoing on common man of India.
Posted by:True Patriotic - 01 Dec, 2011
8: Nehruvian Congress Party (NCP)has to collect more money for next election and wants obligation in turn from the US and MNC and its media support to confuse Indian voters at the time of election. Where is the need of FDI when so much money is available in foreign banks.
Posted by:shirish dave - 01 Dec, 2011
9: His age is having its ill effects on him and so he behaves in a very funny manner like a jester of a sort, as if everybody will be carried away by his views! This is nothing but a downfall of a great economist, a former governor of the RBI and an IMF executive! It is simply foolish to set about on a venture, risky and uncertain, without taking into confidence those who really matter - the 1.21 billion people of India! How can he just come to a conclusion without weighing the pros and cons of this controversial matter visavis the people of India and their present needs? Ill advised and halucinated he lies, like a beleagured foolish general!
Posted by:sooraj kumar p m - 01 Dec, 2011
10: India needs FDI but not in retail. There are millions of people to take care of the retail. FDIs' are needed only in sectors where large investments are required and cannot be supported by the common man. FDIs' should come in with expertise to enable our technocrats stay in India and export such produces which will pay for the skill as well as increase the balance of payments favourably for India and Indians
Posted by:K. Mohammed Abdul Rasheed - 01 Dec, 2011
11: Why can't we structure our Retail sector instead of looking at Foreign Investment. Encourage retail sector, provide supply chain mechanism, infrastructure and facilities. If foreign investment comes they would certainly look for their own profit rather than further development. Can FDI guarantee 80% sourcing from local market at minimum fixed price decided by Govt. and 20% from outside market, rather than just 30%. This is just an eye wash by making 30% sourcing from local market. If you make 80% sourcing from local market with international standard goods, then only it will help local employment as well as increased local standard. This could be the best way to undo Chinese competition who are little superior than sub standard Indian products. Large population of India will still depend on Kirana stores except Metros. So welcome FDI only when 80% sourcing is from Local market at regulated price by Govt. Lets see how many takers in this world.
Posted by:Prashant - 01 Dec, 2011
12: People who are opposing FDI move is mainly middle men and traders. India is a country where still 60% of population rely on agriculture.FDI in retail will benefit larger section of Indian population comprising farmers and common consumers. Those who are making noise and crying afoul are people (12%) and they had corrupt history of exploiting 88% of Indian population. I am born in a small rural farmer family at Theog (Shimla)/Himachal Pradesh, Theog is famous for growing non seasonal vegetables, my home town Theog tehsil is regraded as Asia's leading non seasonal vegetable grower place. Like every Indian farmer most of the farmers in hilly states have small land holdings. Despite the hard work of farmers their hard earned money is always slurped by middle men and traders. In last five years some big companies like Adani brothers and Reliance fresh had started buying vegetables and fruits directly from farmers, most of farmers had seen big increase in their earnings and they are quite happy in dealing with them. Being a farmer's son I welcome this move and I am 100% sure most of my farmer brothers share my point of view. WE THE SAMLL FARMERS OF INDIA wants FDI and wants to kick out rogue middle men, traders mostly corrupt baniyas, Indian history will tell you that these corrupt small traders mostly Baniyas have know become big traders and have formed trade unions with heavy donation to political parties. All these small traders know big or medium one had mostly amassed their wealth by involving in corrupt business practices like black marketing, hoarding, stocking food items in their large ware houses to create artificial inflation. These traders having nexus with rogue middle men, corrupt politicians and all sort of rogue goons had strangulated indian farmers to a point where no Indian farmers son wants to go back to agriculture. Agriculture once regarded as a hope, prosperity and happiness for general populace is now a outdated thing and new generation of farmers are forced to quit it and were pushed to migrate toward cities in search of menial works. Results are in front of everybody today urban poverty is more than rural poverty and India is place of poor suffering farmers.

Change is the law of nature, India on its own, in its current sluggish democratic process can not transform rural ECONOMIES. Pvt-Public partnership can transform Indian agriculture. FDI is best example where PVT companies are providing direct platform for farmers and giving them their due money. FDI will increase competition, which means farmers will have more options to sell his crop at best available prices.
Posted by:vivek verma - 01 Dec, 2011
13: We will have to allow the foreign companies to compete ourselves in the market. We have to wander to so many stores, if we have to buy different items. When the can supply Chinese items at cheaper rates, we will buy the Chinese items. They will also export our cheaper items to their shops in abroad. In this way we are benefitted. Our prices will be competitive to the international market , our earnings too.
Posted by:Rafi - 01 Dec, 2011
14: FDI is a simple solution for the benefit of politicians who have black money in swiss banks. And the farmers are going to loose as they shall be dictating the price being given to the farmers. As a cartel formed will them will not buy if they do not get their fat profits. We have seen it in fruits say apples. Apples which were easily available during season at a price of Rs. 40/= per kg are not available for less than 100/= at any time. Similarly we find that the good dresses which used to be in the range of Rs 500/= (Louse philip ) are now rated at Rs. 1700/= less 10%. Who gains? The shops. Otherwise they do not display your product. Why potatoes are being thrown in to river, because the chip cartel is not backing the price and not purchasing it.
Another reason for this move is to harm Jan lok pal Bill. With the blockade, the reason given will be we want to bring the Jan lok pal bill but the oposition is not allowing us to run the house.
What a mockery of democracy
Posted by:Subhash - 01 Dec, 2011
15: Dear Indian Citizen

In reality of life, please check our supply chain system reaching the rural it may be as a customer or seller/ farmer. The middle points which we see are the so called middle man / brokers who are enjoying the returns. The so called large retailers buy directly from the farmers / or SME or Large scale industries and sell it to direct to the customer. These middle man in big villages are also political leaders as they have money and as they control the market, the framers has to listen to them. It further goes to financing also. The middle chain also funds the farmers with a daily interest of 10% and even this gets stopped as the big retailers also funds the farmers as the farmers are permanent suppliers. Our PM is so keen for this FDI because this is the only industry which can give employment for a rural youth who is 10th fail also and it will remove the middle man and gives all the profit to the farmers and if the farmers progress the Village will progress and the country will progress. If this does not happen only few people in the county will be rich and our farmers will always live in poverty. Let us recall those days when Mr.V.P Singh was PM and he took the country to 20 years back and thanks to Mr.P.V ji and Mr. Manmohan who has bought the change. Now this is the second revolution and let us not forget that Indian constitution is very strong and we have so called MRP which no country has for a price control.

Coming to states, just imagine all the products in the state are being sold with a proper receipt, the VAT or sales tax revenues can be three times then what they are collecting today.

With all this facts and figures, I request Indian citizens to support Mr.Manmohan Singh in having FDI in Retail.

Posted by:Laxmi - 01 Dec, 2011
16: It is always said " You cannot be Half pregnant". If we want to sit in the dark ages and cry over fate then I guess its upto those indians who are crying foul over the FDI. Initially when reforms started and the FDI was permitted in various sectors, the fears allayed were of the same level, but hwet has actually happened, there has been a sea change the wway Indians Ride, drive, communicate and Bank. FDI will not only help the beleagured Retail sector, but will proove beneficial for the Indian employment and Industrial sectors. Look at the Automobile sectors, Two Indian Gianta are global players.
Manmohan is not a fool and half informed like our other foolish BJP leaders. They are always suggesting something that can never be practical. What is the difference between the Lays Fritto and Nanaji ka Bhujia, well that's all a History. Better stuff at competetive rates. If our Industry is to innovate and develop we need an influx of expertise. Companies Like Vishal Megamart fleeced people of their money and siphoned off millions of Rupees. what is the state of those evndors today is evidentally clear.

WHat we need is a credible establishment of serious players inIndia to really rejuvenate the Indian Retail sector. and FDI is good stepping stone
Posted by:Ravi - 01 Dec, 2011
Posted by:P R BAALU - 01 Dec, 2011
18: Just like anything else, there is initial overreaction from opposition and some sections of society. I think FDI in retail is going to be good for India. It will certainly put pressure on local supermarkets and small businesses to compete in a healthy way, keep stuff nice and tidy. Some of the stores now are in a bad shape handling eatables in an unimaginable manner. This will change. Welcome new things and the market will decide the rest.
Many Indian producers are just incompetant and complacent and are lobbying against chinese goods. Just compete or stay away..

Posted by:Sur - 01 Dec, 2011
19: It is a well known fact that WallMart flourishes on razor thin margins. And this they manage by squeezing every drop of blood from local suppliers and on top of it they also work on JIT (just in time) process to refurbish their shelves.

There is an outside chance that once they have squeezed Indian suppliers and once the suppliers are no longer able to supply at the low margin and JIT procedures, WallMart may start looking at China to supply goods to Indian centers. China has established itself into a large supplier of goods to WallMart and hence WallMart's high presence in China already.
Posted by:Partha - 30 Nov, 2011
20: All this generation of emplyment and cheaper goods to consumers may be the possibility but at what cost, one can see the scene in UK where all have all kiranas gone run mostly by Asians and Africans...Just outwitted by major retail chains like 7-11 Tesco etc...Its only in North America that that this is beniffiting consumers bacause of Cheap property and huge spendthrift consumers who spend beyoud their means....In india a Retail chain may employ 15-20 at max but without it there are 30-50 small time vendors on the streets living their livelihood.....The only reason why MMS is determined for 51-49 FDI is obvious reason that unable to generate money locally from trusted funders for elections in five states due to Anna movement is looking at white(gora) money for the same...hope opposition prevails and its pros and cons put forth with case studies of different countries with market size as big as BHarat...not compared to market size of Sri Lanka or Burma or Singapore,Denmark or even...South Africa...
By the way who are investors who wants to come in Hope Govt. MMS declare the names which promptd them to take up this issue with so much zest.
Posted by:Jitendra Joshi - 30 Nov, 2011
21: Looking at the current state of affairs, India should welcome "FDI in Retail" and the likes, with both hands. Looking at some of the Indian retain chains, it doesn't looks like Walmart and KMarts will flourish and make tons of money. India is a different market. Local grocery shops will not be affected. As we see, despite the existence of More, Spencers, etc. we only see the local grocery shops on the increase. So, being selfish (in national interest), we should welcome FDI which will address the immediate challenges around Inflation, Rupee valuation, and the likes. In any case, unlike the automobile sector and others (even those setting up shops in India including for exports) for Retail, considering India is a different planet, any big names will have to depend on the local supply for most products.

In fact the big names like Wal Mart, will try to source more commodities from here for exports, once they understand the nuances of local market. So, it will only be a win-win-win all the way.

Politicians are politicians, they need something or the other for discussions, boycotting sessions, securing vote banks, etc. But anybody looking at the bigger picture would look at all the benefits and give a nod.
Posted by:Nivas Tago - 30 Nov, 2011
22: FDI in retail will hardly make a difference. Local retail chains like MORE, Spencers, Big Bazar are there for quite some time, did the local Kirana stores stop and wind up their business. MORE is selling vegetables, Spencer selling fish, chicken too, Local chains like Arambagh in Kolkata has been selling chicken for ages, that hardly created dents in the local markets. Don't expect Walmart, or Carrefour to set up shop in every dusty corner in rural India. It takes a huge amount of investment to set up a retail chain and these people are smart enough investors. Indian market is too huge to be impacted by retail Chains whether Indian or foreign.
People against the bill are clueless on the impact of the bill. The opposition is trying to project itself as the messiah of a few million middleman, who are organized, rather than a billion plus consumers, who are not.
A few billion dollars of investment by the foreign retail chains is definitely welcome now, it will strengthen the rupee, impact the inflation and help competition.
After all nobody has put a gun on your head and said you have to buy from Walmart.
So before commenting on some inane articulations of clueless politicians, my request is grow up, you are part of one of the strongest economies of the world not some banana republic that will be swept away by FDI in Retail.
Posted by:Arindam - 30 Nov, 2011
23: Unfortunately the comments are passion oriented. I do agree that FDI is not going to bring heaven to India. Neither it makes things hell by their entry. It is an established fact that mighty will always cheat the weaker. Whether they are FDI or Indian Capitalists.

You might have noticed that you are getting a discount on the MRP when you buy from a super market. Do you think they were giving it from their pocket ?. It is not so. They get the product at a special bargained rate. And do you think manufactures absorb this special discount ?. No. they spread it across the board by increasing the MRP. What happens then ?. Those buying from convenient shop next door end up subsidizing who purchase from super markets luxury.
So just like any economic activity it is a flow from upper terrain to lower.

This was happening in the past. Many conning people become rich by trading. Not so smart continued to be peril of their existence. This will continue even after FDI.

One advantage is that there competition building up among the smart people. It is such people who need to be bothered about the new entry. Convincingly they are using media hype to create a feeling that other group is going to loose by FDI. Our politician pity or smart , they were also carried away with this hype.
Posted by:Hari - 30 Nov, 2011
24: Manmohanji will not be losing anything either way, but India will definitely. Earlier Indians were proud of smuggled goods, smuggling is not working as they are available in the open markets at a competitive rates. By refusing more FDI, the opposition says India is economically sound and strong. It is a win-win for MMS, any which way.
Posted by:Kurup - 30 Nov, 2011
25: To invest in this country, all top rankers of the gvt take large amount of money, (in billions) gandhi family was given, rahul's frds want to invest, congress after robbing in crores in every states, only 05% has come out, selling the country to foreign element who are in slums now, robbery, murder, rape name it everything happens under the rule of congress.... not now from 1947 & still continues, gandhi family should be eradicated from the face of the earth if INDIA has to survive. No right move was made by congress all selfish for their benefits
Posted by:Venki - 30 Nov, 2011
26: We are not talking about improvement of our technology by inviting participation in developing alternate energy like Solar. On the contrary, we are proposing to give a blast of ozone into an Oxygen starved Economy. There has been no new initiatives in the last 4 years and we are just riding the general wellness initiated by the IT explosion in the world, India playing a major role.
One wonders what good the foreign retailers are going to bring to India, except enhancing the already growing consumerism. What means does the Government have to control exploitation of local agriculturists when they plead helplessness to control local middle-men?
Posted by:krish - 30 Nov, 2011
27: Very soon there would come a LAW directing FDI in Retail for selling flowers in front of the Temples and religious places and even PAN shops will be invaded by Foreigners' investment by 51/49%. Oh, Indians be careful and alert that Pakistan or America are NOT our enemies, but our own present rulers of India with Manmohan and Sonia are. Oh, Vegetable vendors be alert that you people will be soon out of your independent profession. You all will be overthrown by FDI retailers of Foreign nations. Oh,Street Cobblers! Be alert that you will be thrown to streets without job because your street profession will be absorbed by FDI Foreign Retailers.

Posted by:Srinath. - 30 Nov, 2011
28: If we have to remove corruption, control inflation we have to all support FDI in retail and remove the middle man. People who are opposing it are themselves working as middlemen. I am shocked even a crusader like Annaji is against it as he started th anti-corruption movement in India.
Pm please stick to your decision what may come.
Posted by:Nanda - 30 Nov, 2011
29: Hi All,

Why are we not taking examples from the history. These companies for sure will sell us things for cheap but then our own brothers will not be able to compete. So the local agriculture production will go down as people will start moving out of the competition and start getting jobs under these so called companies providing you the job opportunities. Once our local production is down these companies will start dictating the terms and you will not be able to do anything. We will be enslaved again. I remember the sayings of allama iqbal here..."mile khuskh roti jo azad rehkar, hai woh khauf aur zillat ke halwe se bahtar" (Getting stale bread by being free is much better than a sweet dish we get under fear and humiliaton)....For freedom ...Jai Hind
Posted by:Syed Mujeer Hashmi - 30 Nov, 2011
30: FDI in retail is really a bane for local market. In the name of creating employment in food processing n transport sectors, government is cheating the local market n local retailers. Many farmers gave already lost lands due the so called development of S,EZ, now local retailers will loose their self respect also.. Think it...
Posted by:Dhanu - 30 Nov, 2011
31: Please stop giving any sort of credence to Manmohan Singh, all his education and experience are a waste, cause he is nothing but a rubber stamp to Sonia, he sold India out. What else do you expect from a Manmohan Singh, he is just obeying orders and being a mouth piece, please Indians get rid of such shameful characters. Jai Hind
Posted by:Prem Kumar - 30 Nov, 2011
32: We have no Self respect and are bunch of nincompoops
We can accept a foreigner as the most important political
head and nearly our ruler and now we are out to sell this
country to the whites who shamelessly raped us for three
centuries now
Posted by:andeeluv - 30 Nov, 2011
33: Manmohan is like a good apple packed in a rotten apple box! Got rotten in no time! Thanks to his wonderful colleagues who respond to the names of Farouk Abdulla, Sharad Pawar, Digvijay Singh, Kapil Sibal and most importantly, the PC. Well, I dont have concerns about the FDI in Retail, I wont mind even if government holding is reduced in many sectors to just 26% (sufficient to prevent a special resolution under Companies Act) including banking. But my worry is corruption and corruption alone, in the entire government machinery from top to bottom, and then the government's obvious resistance to bring in useful anti corruption measures and defying the public interest.
Posted by:APB - 30 Nov, 2011
34: India can not live in the past. Look at Gujarat, so many MOUs agreed and the foreign investment is needed.Either India speeds up on its infra structure, storage and access to goods it will be a chose. Foreign companies needs to be given limited access then it works both ways. India is exporting, our companies are buying business abroad. Tata is a great example. Bigger is better it will help sock up massive poverty. Go for it Manmohanji...
Posted by:Buddhdev Pandya - 30 Nov, 2011