S. Gurumurthi

S. GURUMURTHY (The Hindu Businessline,14 June 2013)

India is running after dollars created out of thin air that comes as FII and FDI to buy high-value real assets.

Gurunath is in police custody for an offence that is yet to be made clear and his father-in-law is fighting to save his seat as chairman of the prestigious BCCI. But Vadra still walks like the President and Prime Minister of the country uninterrupted by security in airports and his mother-in-law pontificates on honesty and calls for war against corruption, mocks S Gurumurthy

Known as ‘Mappillai’ in Tamil and ‘Damad’ in Hindi, all sons-in-law have high standing in Indian families -- religion, caste, region and language regardless.

Finally, FDI in retail has arrived. The collapse of the Rupee by one-fifth in just weeks, dwindling forex inflows and net FII outflows have forced a desperate government to sell India’s retail trade wholesale. Corporate and multinational lobbying to induct FDI in retail, branding it as “big ticket reform”, has been intense in the last few years. The lobbies have won. India has lost. The decision betrays a metropolitan bias; and exposes lack of understanding of India’s agricultural and rural economy.

Indeed ironical. On the same Friday (September 14) Prime Minister Manmohan Singh rolled out the red carpet for Walmart, New York City, America’s largest, shut Walmart out. Again ironically the very Friday the UPA government handed the FDI bouquet to Walmart and lobbyists assured that small retailers are safe, Atlanticcities, a web-newspaper from the stable of the famous Foreign Affairs magazine, carried a devastating headline news: ‘Radiating Death: How Walmart Displaces Nearby Small Businesses’.

The UPA government’s FDI policy, which allows entry of multinational retail giants like Wal-Mart in retail sector in India, gravely prejudices national economic and social interests. The commerce minister’s admission that the new policy may enable global retail giants to get into multi-brand retail by investing in Indian companies shows how shamelessly the government is seeking to smuggle them into the crumbling indigenous retail corporates to save them.

It is Hillary Clinton, US secretary of state now and Walmart director till 1992, who has been lobbying for foreign direct investment (FDI) in retail in India, the visa Walmart needs to enter India. Now it is the United States President Barack Obama himself. In the guise of urging a fresh wave of economic reforms, Obama has clearly asked India to invite Walmart. India is shocked at his ugly intrusion. The opposition is angry. The prime minister, as usual, is silent. The otherwise talkative India Inc too is quiet. “Obama is not properly briefed”, laments Veerappa Moily.

The agitation against the Koodankulam Nuclear Power Plant has been running as a TV reality show for weeks now. The news-starved visual media has reduced the Koodankulam nuclear plant – a national investment of Rs 13,000 crore and just about to start – to a day-matinee-night show. The Koodankulam theatre is plagiarised on the Anna Fast model for media to hype it. The media too obliged and packaged it as hapless villagers fighting for their right to live. For long, it had winked at the scriptwriters, directors and actors behind the show.

The ongoing debate on the FDI in retail is intolerably superficial at times. For a rational debate, the fundamentals of conflicting alternatives must be understood. Here are some basic truths about conventional Indian retail. For thousands of years, retailing in India has been local community business - selling retailers and buying households being familiar with each other. Even now Indian retailing is mostly neighbourhood, relation-based business.

How could the percentage of fiscal deficit have come down?

“I have spent more, yet, I have brought down the fiscal deficit for 2010-11 from 5.5 per cent to 5.1 per cent,” claims Finance Minister Pranab Mukherjee. The amount of fiscal deficit has actually gone up by Rs.20,000 crore. How then could the percentage of fiscal deficit have come down? It defies the logic of numbers. Yet, none of the commentators in awe of his miracle have asked Mr. Mukherjee how he achieved the miracle. It is not his feat. Runaway inflation did the trick, not the Finance Minister. Surprised? Read on.