FDI in multi brand retail - Should we really be concerned

Today as we hear various arguments in favor and opposition of FDI in multibrand retail sector, I find one very important point missing in them. All these arguments and counterarguments whether they were expressed in the parliament or are being expressed through various articles in the print and electronic media have not been able to bring into focus and clarify "why FDI in multi brand retail is significantly different from FDI in single brand retail or FDI in any other sector". Why is it that we should be so concerned about 51% FDI in multi brand retail and not about the 100% FDI in single brand retail.

Is really there a big reason to worry? Is it because the entry of foreign retailers will result into large scale unemployment or is it because foreign retailers will exploit the small farmers of this country which constitute the majority in our agricultural sector. No, the real reason to worry is far bigger than all of these. And that is "the new format of multi brand retail" prevalent across the world. Today giant multi brand retailers are selling almost everything under the sun. This makes them immensely powerful and gives them the capability to influence the entire economy of a country like India where domestic retail sector is largely unorganized. All the production of the manufacturing and agricultural sectors will end up in such retail stores because they are willing to sell everything that a consumer may require in his entire life. In future such retailers can become the only mediators between the production at factories and farms and the consumers. What if they find it more economical to source cheap and better quality products from foreign manufacturers in countries like China (which is today called as the production house of the world). In such case our entire manufacturing and agricultural sector will be under pressure to produce cheap and better quality products as the USP of these retailers is "value for money".

Is our economy ready for such a big jolt. Has the government done thorough analysis of the possible scenarios. If it has it must come up with a report on it so that the people of this country don't panic and welcome the decision. Why should we worry if our economy is ready for it but what if it is not.   

Sandeep Anand

Is cooperation an answer to the economic mess world 

is in today

The basic difference between capitalism and communism lies in the nature of ownership of the property. Capitalist argument is that when the ownership of the property is in the private hands there is a greater chance of growth in the property and the best efforts made by each individual for his well being results in the development of the society as a whole through an invisible hand in the free market. 
On the other hand communists say that when the ownership of the property is with the community instead of the individuals there is greater chance of development.
Now suppose that there is a piece of land which has to be owned by five individuals. The ownership of the land can be held in two ways. First could be if the land is divided in five equal parts and the ownership of each part is given to one individual and this individual is free to develop his land in the way he wishes. In such a scenario there is a greater chance of development of each part of land because each individual will work at his best to grow his property as he feels that he is the sole owner of this property which could result in the development of the whole piece of land. But there is also a chance that each individual will try to grab the land of others since he is not satisfied with his own land and want to become more and more rich which would result in unemployment and exploitation.

In the second scenario where the whole piece of land is owned jointly by all the five of them nobody will try to grab the whole land because he believes that the whole property is already owned by him. But again the risk here is that nobody would give enough attention towards the land as everyone feels that the land is not only his responsibility.
So we can conclude that both models have their positives and negatives and neither one is perfect. That's why a hybrid model was needed. As capitalism failed in its pure form we shifted to the model of "public corporations" which is a hybrid of the capitalistic and communistic models. In such corporations ownership is in the hands of shareholders and not any one individual. At the same time such a corporation is free to compete in the market. This model can work well if the public corporations start understanding their responsibility towards the society and stop competing with each other just for the sake of monetary benefit only and keep in view the larger goal of the development of the society as a whole. Imagine what will happen when the shareholders of a corporation start competing with each other instead of cooperating. Can't this principle of cooperation be applied to the humanity as a whole? Can't we treat the whole planet as a corporation and work towards its well being as shareholders of this grand corporation?


Sandeep Anand