Where do i shop ?

I have long wanted to type this down somewhere, to serve as a “ah ha i was right” post or “i was an idiot” post to future dinesh.

This issue has been debated for a while, and what pushed me to do this now is my recent discovery of a certain party’s stance on this issue. And everywhere i read/watch/talk people talk about the same pro and cons and i felt that it was the same points over and over. Here is mine and i think it is different to what one might hear from mainstream media.

FDI in retail in india.

1)I do not believe that govt has the right to tell me how i spend my money, or where i shld shop. So i dont think govt shld have this authority to prevent companies from opening shops in india. If people strongly feel that walmart should not open stores here, they shld not shop there, then walmart will eventually wrap up its operations in india. We call our country a democratic country, however we want a totalitarian action on this ? Let markets, the true democracy determine if foreign companies should operate in india or not.

2)Lot of ppl tell me this will ruin the small shop owners, i find them hypocritical, when pepsi,coca cola came lot of local beverage business owners went out of business, we buy foreign cars,phones,laptops and favour them more than indian made products. Yet some how when this is sold in a walmart all hell breaks loose ? So these so called defenders of small shop owners are hypocrites to me. If they truly believe in swadeshi they shld stop using all foreign made goods or at-least advocate that position. Another group argues, foreign companies will take profit out of country, while this is true, how is it different from buying any foreign made product ?

3)Others tell me govt should protect our local businesses , i find this horrifying. If we all ppl decide to support local businesses it is one thing, but asking govt to do this is astounding. We want out local businesses to compete with the best in market. Competition improves the quality if service. Eg: If we had a kid, we would want him to compete with best students in the best school possible. we wont put him in a bad school where he is always the topper. Protecting any business will lead to shoddy service from them because of lack of competition. Out business should learn from foreign companies and compete with them and go outside india and increase our exports. Having a protectionist govt in favour of local business has always ended in a disaster. All we have to do is read up some history on what happened when govts acted like this. We shld learn from the mistakes we committed in the past.

4)The fear of monopoly.

Some say “one of the” companies will become a monopoly. From what we know from economic history, monopolies can only exit with govt intervention. In free market, there will always be competition. When govt legislates against certain products we have black market. Free market forces are too strong to force a monopoly. Even if monopolies exist for a while, it will only be a matter of time before that system will perish. Simply because monopoly will cause the company to slacker off because of lack of competition(hello microsoft) and new competition will pop out eventually. India with 1.4 billion ppl, is simply too large a market for monopolies. It will consolidate several small players and will reduce the number of retail chains but monopoly is just a fear tactic. I dont agree to Cho Ramasamy in lot of things, but i completely agree to this one quote from him “Even if big chains come, people who want their veggies from road side shop or from vendor in their door step will continue to buy from them”.

Now about the party that does now like FDI is sadly AAP. I was shocked by the comments from its leader. I dont think Arvind is ignorant , i think he knows well what he wants, and we should see the true intentions from what he is telling. Here goes

“The government is claiming that Walmart will build cold-storage units for the benefit of farmers, but can we believe their claims — the government itself failed to do so in the last 65 years so how can foreign companies do that in a few years. I don’t think that Walmart is coming to India for social work.”

1)”Government itself” – What makes Arvind think that govt is as efficient as Walmart ? It is well know that pvt companies are more efficient in getting things done compared to govt. Govt is made up of politicians who want to be re-elected and bureaucrats who want to have a cozy retirement , a pvt company is motivated by profit. They will do everything in the most efficient way to make the most money. If arvind is suggesting that govt is more efficient in delivering services than pvt companies, then his mask is off already. I am not going to tell he is just being ignorant. Anyone with understanding of govt bureaucracy will know how ineffective govt is in delivering services.

2)”benefit of farmers” – This seems to be a straight up lie(still looking for sources if govt did claim this). But from what i have read so far, govt did not say that. Walmart will build cold storages because it will benefit THEM. More products walmart sells to end consumer more is their profit. So it is in their best interest to increase the shelf life of a product. If walmart can keep a perishable good longer from going bad, they can ship it to different markets there by increasing their profits.

While lot of people in india believe they have found their saviour, i am still saddened by the fact that there is not one serious political alternative to the current establishment. What pains and shocks me the most is the complete lack of reading history in india. It was only 20 yrs ago we opened by our markets on the verge of bankruptcy due to licence raj, which Arvind seems to be advocating.


~ by dineshabe on December 31, 2013.

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