Death for small business, says BJP

FDI in retail: Samajwadi Party chief sings along with opposition parties
Last Updated 04 December 2012, 20:24 IST

United Progressive Alliance ally Samajwadi Party joined opposition parties on Tuesday in attacking the government for allowing 51 per cent FDI in retail sector.

Initiating the politically sensitive debate in Parliament on Tuesday afternoon, Leader of Opposition in the Lok Sabha Sushma Swaraj quoted global studies and the experience of foreign countries to drive the point home that opening up of this sector will not promote employment but decimate neighbourhood shops, impoverish small farmers besides hurting consumers.

She appealed to parties like the Samajwadi Party, Bahujan Samaj Party and the DMK to support the motion moved by her and CPM’s Khagen Das against 51 per cent FDI in multi-brand retail.  She allayed their fears that any defeat during the vote which will follow the debate taking place under rule 184 will not bring down the government but force them to rollback the decision on FDI.

SP chief Mulayam Singh Yadav, whose support to the UPA is crucial to ensure the vote against them is defeated, opposed FDI on the ground that it was not in “favour of the nation”. “Had Gandhiji and Lohia were alive, they would not allow FDI in retail,”  the veteran leader said in his brief speech.

 But, Yadav hinted at continuing support to the UPA government but may abstain from voting on Wednesday.

Swaraj drew an ironical situation by stating that US president Barak Obama is promoting “small businesses” concept which is equivalent of country’s weekly bazaars that provides market to poor traders for selling their products at cheap prices benefiting consumers.

In this year’s budget, the US government had listed a ten-point formula to promote small business as they believe that it is the engine of job growth, she pointed out in her 90-minute speech with facts, data and sarcasm. The speech  disrupted by heated exchanges between the two benches. The BJP leaders also referred to a 2008 European Union Parliament report to substantiate their fears that “competition is always in the interest of the consumer and monopoly is not.” 

She said the report highlighted the fact that the farmers, including in France, Italy, the Netherlands, Ireland,and Hungary were agitating against giant retailers since they were squeezing profit margins while buying products from them.  They indulged in predatory pricing by initially selling products at lower prices to kill competition but after the consumers get accustomed they jack up the rates. At the end the consumers have little choice, she remarked. 

Picking loopholes in the government commitment that FDI in retail will generate 40 lakh jobs in the country, she remarked that it is not feasible as the policy is supposed to be implemented in only 51 districts having population of 10 lakh and more. To generate such huge volume of jobs, 36,000 stores have to be opened, which would mean that 600 stores in one districts. In comparison, Walmart has 9,826 stores globally employing only 21 lakh persons. Carrefour has 30 stores and 15,937 employees only.

Swaraj also quoted Punjab’s example saying Pepsi promised to buy potatoes and tomatoes from farmers, but backed out later. She also asserted that her party was not opposed to FDI per se and offered to travel with the prime minister across the world to invite investments in other sectors like infrastructure.

(Published 04 December 2012, 12:14 IST)

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