FDI: Why it Shouldn’t Have Been Passed

By Apoorva Sinha (Editor, Democracy and Governance)


Indian economy, which is struggling to wade through the flood of difficulties, would suffer a hard blow if Foreign Direct Investment is allowed. The approved 51 percent FDI in multi-brand retail, 100 percent in single-brand retail, although proposed with an intention to cruise through the difficulties being faced by Indian economy, is probably going to worsen the situation. If ‘Marts’ sink their claws in our country and become the sole retailers we can be dependent on, replacing the small retailers, havoc would be wrought, veering people towards unemployment.

The government has assured that these MNCs will generate employment opportunities. But how many? A few thousand? The retailers are in crores. How will all of them find gainful employment? Secondly, the MNCs would look for at least an average literate person whereas most of the retailers are not educated. Even if they are educated, they tend to communicate in their local language. So, the assurance given by the government is not at all practical or satisfactory. India, where more than half of the population is poor and deprived, more than half of it being below poverty line due to many factors- one of them being unemployment- will be plundered.

The rich and the middle-class would rush to the closest ‘Walmart’, obviously overlooking the small retailer, leaving him jobless. It is obvious that the variegated system of economy would die, leaving people starving and begging.  Only a very small section of society would be able to survive, and a yet smaller section, flourish in the FDI system.

Capitalism will absolutely out socialism. Money would go into select hands, thus going against the basic structure of our Constitution which defines India as Socialist state. Such a philosophy is generally successful in countries where population is small and living standards of people is high. In India, none of these conditions are satisfied. People literally scrounge for a square meal everyday.

The government is being short sighted here. A big step like this, taken to heal the economy-in-shambles might just direct the flow of money out of India, as this befits purely capitalist economies better – drying our country of its own wealth and leaving the citizens harassed.
The lives of the people would turn for the worst, if not the economy, which will see betterment for sure, with FDI implemented.

Here’s something to think about – Montek Singh Ahaluwalia fixes Rs 28 as the minimum wage for being above Poverty Line in an economy where Potatos cost more than Rs. 20/kg and milk, more than Rs. 40. When the MNCs come into business, the irony will be greater. Does it not seem ridiculous, especially, when three economists, including our Prime Minister, are working in tandem?


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