Tag Archives: FDI in retail

‘Big Ticket’ Reforms and Bigger Deceptions: Shankar Gopalakrishnan

Guest post by SHANKAR GOPALAKRISHNAN

When the country’s rulers have to tell barefaced lies to get their policies through, you know that there’s something wrong. Consider the recent “big-ticket reforms,” of which the two biggest (in terms of direct impact) have been the diesel price hike and the opening of the retail sector to FDI. The diesel hike, we’re told, was a “tough decision” necessary to “prune subsidies.” Except that diesel isn’t subsidised in this country. To repeat: there is no subsidy on diesel in India. As for FDI in retail, the Cabinet statement on the policy cites four justifications, accompanied by a “Studies show…” claim. Except that the data in the government’s sole study on the issue does not support three of these four justifications. As for their much touted “safeguards”, at least one has been said to be illegal by the Commerce Ministry itself, while the very same CCEA meeting diluted a similar safeguard for single brand retailers. Continue reading ‘Big Ticket’ Reforms and Bigger Deceptions: Shankar Gopalakrishnan

FDI In Retail – What Does the Government’s Own Data Say? Shankar Gopalakrishnan

Guest post by SHANKAR GOPALAKRISHNAN

In his budget speech, Finance Minister Pranab Mukherjee declared that the government’s “decision” to allow FDI in multi-brand retail outlets “has been held in abeyance” until there is a “broad based consensus.”  In other words, it’s already a decision, but it’s just being held back until the government feels it can go ahead safely.  The question though is: why is the government so convinced of its decision?  How does Mr. Mukherjee so firmly declare that “organised retail helps in reducing costs of intermediation… benefiting both consumers and producers”?  Has the government done the homework to justify its actions?  This note looks at the government’s own data to find out.

As far as is known, there was only one study commissioned by the government in this regard (Business Standard 2007)  This was done by ICRIER in 2007, first published as a Working Paper in 2008 (Joseph et al 2008), and subsequently converted into a book – Retail in India: A Critical Assessment – in 2009, with one chapter added by other authors.[i]

Continue reading FDI In Retail – What Does the Government’s Own Data Say? Shankar Gopalakrishnan