Try out FDI in retail in Punjab
Here’s a solution to the political logjam over the Centre’s decision to permit 51% foreign direct investment (FDI) in multi-brand retail. The UPA is largely isolated on the issue. But the NDA’s Shiromani Akali Dal is game for the move the government believes would create infrastructure in the countryside, generate employment, promote small and medium manufacturing enterprises, help farmers and reach commodities at affordable prices to consumers.
The Union cabinet’s decision isn’t binding on States and is restricted to cities with a million plus population. There should be no problem then to open Punjab’s agrarian economy to the experiment most political parties think could have a deleterious effect on farmers and neighborhood mom and pa stories that are a source of sustenance for millions of people. The dip test in Punjab will confirm or dispel the widely articulated apprehensions, showing the country the way forward on the issue made controversial by the sheer timing of it.
But for the impending assembly polls in Punjab, UP and Uttarakhand, the issue that has to be evaluated in economic terms wouldn’t have got caught in competitive populism. Among those who want the proposal junked are the UPA’s opponents and allies such as the Trinamool and the DMK, not to speak of outside supporters such as the SP and the BSP against whom the Congress is pitted in UP. The BJP and the Left also are on the same page advocating protectionism.
An additional factor weakening the government’s case is the Congress MPs’ failure to defend upfront the FDI initiative. They are coy in order not to annoy the sizeable constituency of grocers and small store owners in urban and semi-urban centres.
The stand-off gives one a sense of déjà vu. The scenario was no different when VP Singh imposed the Mandal report for OBC reservation. Even the 1991-92 Dunkel Draft— named after the then GATT Director General Arthur Dunkel— that set the stage for the World Trade Organisation was painted as a sort of death warrant in an unbridled, ill-informed public discourse at the time.
All those who opposed Mandal are now its strong votaries. The WTO became a reality — as did India’s membership of it — after such outlandish skepticism as then voiced by the likes of Lalu Yadav. The RJD leader would hold Bihar’s rural folks in thrall with the claim that “water-melons will yield cow dung” if Dunkel’s proposals became a reality.
Like any new idea, FDI in retail must’s be rejected out of hand. The final judgment on it should await the outcome of a closely monitored pilot project in a State where the idea has acceptability.