Tuesday 18 September 2012

Opposition in a fix as UPA stands up

The UPA has unleashed a wave of reforms, including opening up the multi-brand retail sector. But the reform push and diesel hike has hit a wall of protest. BJP is opposed to FDI in retail given its trader constituency, but has to offset that with middle-class appeal for more FDI.

While BJP activists in the states were busy protesting the reforms and diesel price hike, Goa’s BJP government slapped 2% more VAT on diesel; the result, diesel in Goa is now approximately Rs 49.70 per litre, a combination of Rs 5 hike of the centre, the Rs 1.37 hike by the state’s VAT increase.

The opposition’s view that FDI in retail will lead to the closure of small shops is a lie. This has not happened anywhere in the world. To say that this will happen in India is undermining the enterprising character of Indians, whenever given a chance, reveals an inferiority complex. Why should BJP, Mamta or Akilesh decide what is bad or good for say Maharastra, Goa, Karnataka or J&K, etc. If they don’t agree, they are free not to implement, but they can’t stop others from implementing it. Government is determined to stick to its gun as far as FDI goes. Opposition to FDI is a big mistake in today’s global economy.

Those who are opposing FDI in retail on the grounds that lakhs of small traders will lose out are making a big mistake. They are forgetting that the loss for these traders will more than be compensated by the gains to hundreds of millions of consumers and farmers who will benefit from cutting out these middlemen. The big retailers that will result from letting FDI in should hugely improve efficiencies in the retail trade and the economy can only benefit from that. Political parties may have reasons to focus on only on half of the picture, but the common man should not be misled by this. The gainers should vastly outnumber the losers.

Normally anything new introduced, like a reform or a new policy is bound to face opposition either through ignorance or the fear of the unknown.

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