5th of December, 2012 was a history making day for India. The country witnessed one of the biggest debates in the lower house, Lok Sabha which is known as the House of People; a debate which is significant enough from the point of view of India’s economic development. On one hand, where the ruling party placed its ideas and arguments in favour of FDI in retail, the opposition on the other hand made every possible argument to bring down this reform.
The debate finally took face of a voting wherein 254 members voted in favour of the government whereas 224 voted against the reform. Thus the government were in majority to pass this reform and bring it into action. So what is FDI exactly and what is it that is persuading the opposition to go against it.
FDI is Foreign Direct Investment wherein a company from some country invests in a company in another country or expands its branches in another country. It provides opportunities to the foreign companies to invest or make expansion plans in other countries where it finds a good consumer base and better incentives to expand its own market.
If we take a look at history, US have been the largest recipient of FDI till date. Accompanying US are many other European nations that have seen economic growth and development through FDI. This is about the developed countries. Amongst the developing countries, progress of China through FDI has been remarkable. So what is it that is preventing the inflow of foreign investments in India and what is it that the opposition passed a motion against this reform for.
If we analyze the current statistics, we will understand the following facts about India as an emerging market:
Keeping in mind the above points, let us understand the advantages of FDI for a developing country like India:
With the above points in focus, there seems to be no reason that the opposition passed a motion against this reform. Yet the reasons that they placed were something like:
These are definitely some points of concern. But at the end, we must understand that any step towards the development of the nation must be taken only after considering the various aspects of that proposal.
The points mentioned above are some of the many clauses placed in the reform for allowing FDI in retail in India. Analyzing these clauses makes it clear that the reform is in no way killing the interests of the local kiranas, retailers or the consumers.
Thus, I would say that with each clause taken into consideration, one can sure enough that FDI in retail is truly a win-win situation for India, if the policies and guidelines mentioned are properly monitored and followed. The kiranas and the foreign retailers can always co-exist, especially considering the wide range of consumer base divided into different classes and also considering the purchasing habits of the different groups of people here.
For the opposition, I would say that it is necessary for them to welcome this move with a positive gesture. As a politician it becomes their duty to understand the things from every perspective and work along with the government for what is right. Also it is the duty of every citizen of any nation that they understand any idea or a reform in its totality and then take any step.
Disadvantages are always there in every move that one makes. But with conscious efforts and the right clauses and also with the timely monitoring of those clauses, things can be handled efficiently eventually leading to the overall development in the interest of every individual involved in the process cycle. One can just wait and watch what direction this entire wave takes in near future, but today it is surely a move that it worth making.