Reform, FDI in retail and Indian Ruling class – Guruprasad Kar
Central government is desperate in promoting foreign direct investment in india’s retail sector. The entry, in principle, has been recognized long back when WTO agreement came. With that agreement already foreign company can invest 50% (now raised to 100%) in single brand commodity. But all the big retailers like Walmart, Cafoo, Carefoo are interested in investing in multi-brand retail sector which will not only secure their profit but also partially solve the investment problem for their surplus capital. In the mean time Walmart has entered in a joint venture with Bharati Retail owned by Mittal. Similarly Trent of Britain has aligned with Tesco of TATA. But Indian democracy is fragile, that it shamelessly favours foreign monopoly capital against Indian retailers even violating the law.
Due to some opposition from the local political parties, officially the bill seeking FDI in multi-brand retail is yet to be passed in Parliament. But recently there is media reports that tells that the foreign retailer are already involved in multi-brand retail business through backdoor. The back door has been provided none other than Indian businessmen in retail. The Times of India reports, “ The Delhi high court on Wednesday sought replies from the Centre, Bharti Walmart Private Limited and Bharti Retail Limited on a plea for a probe against the firms for allegedly carrying out retail trading in multi-brand sector in violation of India’s FDI policy.” (Times of India, July 12, 2012)
The PIL filed by scientist and environmental activist Vandana Shiva alleged that Bharti Walmart was illegally carrying out multi-brand retail trade despite being permitted only to carry out wholesale cash-and-carry trade in India. In cash-and-carry trade, goods are sold from a wholesale warehouse and customers settle the invoice on the spot in cash and carry the goods.
“This instant case seeks to expose how many established Indian companies are actually fronting for foreign trading companies that have partnered with them for setting up companies in India for the purpose of carrying on trade, so as to give the foreign partner majority control and economic interest in the Indian retail sector, thereby circumventing the FDI prohibition of multi-product trading in the retail sector,” the PIL said.
Senior lawyer Pinky Anand, appearing for Shiva, alleged that many established Indian companies were acting as “front” for foreign firms to give their offshore partners a “majority control and economic interest” in retail sector.
This deeply once again reflects the character of the big Indian capitalists. From their very birth in colonial regime, they are serving the foreign monopoly capital to serve their own interest. Now, when the world monopoly capital is in deep crisis and are seeking the severest reform in our countries like FDI in multi-brand retail, opening up the area of pension fund, Bank and insurance, the big capital in India have aligned themselves in the chorus. Who is shouting for these reforms;
(1) President of US : “In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow,” Obama said.
(2) Prime Minister Manmohan Singh.
(3) Heads of the Indian Business Organization like FICCI.
The comprador character of the Indian big bourgeoisie and its ruling elites (either in power or in opposition) is once again exposed by their reaction to Obama’s harsh statement regarding the reform. “We cannot do things to impress another country or their economy, but we will take decisions to fulfill the needs of our own economy,” said Congress leader Harish Rawat. “If Obama wants FDI in retail and India does not want, then it won’t come just because he is demanding it,” was the terse reaction of BJP leader Yashwant Sinha. Everyone knows that the policy decisions regarding all these reform have been made long back in Washington and all the subsequent governments since 1990 are part of these processes form reform. Now being consistent with their comprador character, they have to show that these decisions were taken not at the dictate of foreign monopoly houses but these are their own decisions for serving Indian people.
Why capitalists of a country would invite foreign investors to invest in an area like retail where 200 million people depends on it for their survival. They are openly telling that for retail, the new technology that is required will not be available if these monopoly houses are not allowed. Why should we not develop the economy of our country and lives of people so that there is sufficient purchasing capacity as well as capacity of developing indigenous technology. This has been the natural aim of the capitalists of various developed countries in the past. The big bourgeoisie of our country is a class which by its very origin remains subservient to foreign monopoly capital and favours the drain of surplus values and hence neat capital from the country thereby hindering the capitalist development. This nature is so intrinsic to this class that we can get rid of them only by uprooting them.