Box Populi

FDI in retail: BJP’s latest flip-flop act

Once heralded as a party with a difference, the Bharatiya Janata Party continues to disappoint as it continues its journey to become just another ordinary force in Indian politics.

Being a good opposition is the basic tenet and the founding stone of a successful democracy, but the BJP today is neither a good opposition nor does it have a grasp on national politics.

BJP like the Left Front has shown signs of sticking to their age old agendas which the voters have rejected, a fact that is evident from their poor show in recent assembly polls; where the BJP has not won more than 10 seats in the five states that went to poll this year and the Left lost power in West Bengal and Kerala.

To top it up the BJP had dubious distinction of opposing issues for the sake of destabilising the government.

Doing a flip-flop comes easy to the BJP. How can one forget the Wikileaks expose? The party's opposition to the India-US nuclear deal and its criticism of the US in public were to score 'easy political points' against the United Progressive Alliance government. Wikileaks also revealed that when in power, the BJP government would not have opposed the Indo-US nuclear deal.

Was it not under the leadership of Atal Behari Vajpayee that India became a nuclear state and was it not the NDA who started talks with the US on the nuclear deal?

The BJP's latest opposition is to the 51 per cent 'Foreign Direct Investment' in the Indian retail sector which was proposed by the Manmohan Singh government during the winter session of Parliament. But in 2004, the BJP and its allies promised to allow 26 per cent FDI in the retail sector.

When Arun Jaitley was quizzed about the party's stand, the veteran leader told news channels, "It is a reality. We have not denied it. But in 2009 we had changed it. In 2004, the NDA may have seen some merit.... We are not against the concept of FDI but not in retail. There may have been some rationale for it in 2004".

In 2004 the party was bracing for Lok Sabha elections and now the party is in opposition and in between the BJP had to bite dust twice; so the best thing for the party can do is oppose to any change that the government proposes.

A Headlines Today report states the National Democratic Alliance of which BJP is the major constituent, in 2002 proposed 100 per cent FDI in retail in 2002.

A cabinet note accessed by Headlines Today points to the fact that the then industry minister Murasoli Maran in 2002 had advised that FDI in retail would benefit the nation greatly.

The note said: "There is empirical evidence to show that FDI in retail has a positive impact on growth and productivity in the sector. The huge capital infusion by foreign investors meant substantial investments in real estate, storage and transport logistics. The entry of foreign brands will help Indian small scale sector as foreign companies will source their requirements locally. A direct fallout of huge FDI would be employment generation, both direct and indirect. Notwithstanding the capital intensity of modern retail business it continues to be labour intensive."

Allowing supermarket chains like Tesco and Wal-Mart to open their stores in India would be one of the most effective ways of helping the country deal with food inflation (which stands close to 10 percent) and create at least 10 million jobs.

Then why does the BJP now oppose FDI in the retail sector?

The BJP says that disinvestment in the retail sector would lead to closure of small shops and lead to mass unemployment but then should not existing Indian supermarkets like More, Big Bazaar, Home Shop, Metro and the likes be banned and don't their existence lead to joblessness and closing down of the local 'kirana' (or mom-and-pop stores)?

No it does not; as we have seen supermarkets and the neighbourhood 'kirana' co-exist peacefully. What the BJP is doing here is fueling a sense of paranoia in local traders to their advantage. Big names have already entered the retail space and are being given a run for their money by small stores as customers patronize both to meet different needs. There is no reason to believe that the entry of foreign retailers will lead to a vastly different outcome.

The BJP is resorting to blackmail and threatening the government that it will not allow the parliament to function smoothly if the United Progressive Alliance does not roll back on FDI in the retail sector.

The winter session of the parliament has not functioned a single day without being adjourned thus causing crores of tax payers money being wasted. This is where the BJP is losing credibility as it forces parliament logjam to its own advantage so that no law can be amended for which the ruling party can take credit.

Their opposition to the FDI in retail shows that the BJP can resort to 'swadeshi' sentiments when it suits their cause and become champions of free market when in power as they did during the NDA rule when they pursued policies of capitalism by privatising government-owned businesses like VSNL, Maruti Udyog,  and airports.

BJP's insistence on derailing the proposal of FDI in the retail sector may work for now but a few years down the lane, the party will be remembered for their efforts of depriving India of growth and socio-economic development.

Now, it's up to the top leaders to decide how do they want the BJP to be remembered - as the party that ushered growth or the party that derailed it.

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