FDI IN RETAIL WILL DESTROY EMPLOYMENT, SAID DR. MANMOHAN SINGH IN 2002

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In an earlier blog I had recalled how when the NDA Government was in office the then Chief Whip of the Congress Party Shri Priya Ranjan Dasmunshi had cited the Planning Commission’s recommendation in favour of FDI in retail, and on that basis condemned the Vajpayee Government for contemplating this ‘anti-national’ move.

Arun Shourie as Minister of Commerce promptly stood up in Parliament to affirm that Government was not in favour of any such proposal.

At the Suraj Kund conclave of the BJP’s National Council, speaking on the Economic Resolution, my colleague Shri Venkaiah Naidu read out from a letter written by Dr. Manmohan Singh, at that point of time Leader of the Opposition in the Rajya Sabha, to confirm this fact. Federation of Maharashtra Traders had conveyed their concern to him about this matter. In his letter dated December 21, 2002 Dr. Manmohan Singh said that the matter had been raised in the Rajya Sabha two days earlier. “The Finance Minister gave an assurance,” Dr. Manmohan Singh said approvingly, “that Government had no proposal to invite Foreign Direct Investment in Retail Trade.”

The letter from Federation of Associations of Maharashtra has attributed to Dr. Manmohan Singh an even more forthright criticism of FDI in retail. The letter written by Shri C.T. Shanghvi, Chairman, Foreign Trade Committee of the Federation, has said:

“Your honour would recall that during the year 2002-03 I had occasion to lead a delegation of the Federation of Associations of Maharashtra to meet your goodself as the Leader of the Opposition in the Rajya Sabha, in connection with the important subject of FDI in retail trade of the country.

Even before we made our detailed submissions, you had categorically stated that ‘we should not permit Foreign Direct Investment in Retail Trade’. You had further mentioned that “India does not require this kind of reform which would, rather than creating employment, destroy employment”. 

Shanghvi adds in the same letter :

We had briefed you, Sir, about the unfair trade practices such as (predatory pricing) adopted by the multinational retail chain stores organization to kill the competition by small retailers. Our delegation also drew your kind attention to the highly undesirable impact that has been felt by some of the Far Eastern Countries – Thailand, Malaysia, Indonesia - who had erroneously permitted FDI in retail trade during the late 1990s.

Later, our delegation met you on a couple of occasions and submitted the details of our various representations to the concerned authorities on this subject. In view of the seriousness of this issue from the overall National angle, you had raised the subject in the Rajya Sabha on 18^th/19^th December 2002 and had obtained an assurance from the then Finance Minister that there was no proposal before the Government for permitting FDI in retail trade. Your letter addressed to the Federation in this regard is enclosed for ease of reference.

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Many interesting comments have been made on the Prime Minister’s address to the nation in which defending his decision on FDI in Retail, he made the trite remark “money does not grow on trees.”

My colleague Jaswant Singh who is an ex-Army Officer has written an article for The Hindu (September 28, 2012) which recounts his conversation with his own tank-driver. I found Jaswant Singh’s article enlightening. The paragraph quoting the interaction with his driver may be very appropriate as tail piece for today’s blog. This is what Jaswant Singh says about the PM’s “rather admonitory” remark :

TAILPIECE

Just a day after this astonishing, also so unneeded, reprimand, I received a telephone call from a retired soldier colleague, who had served with me as my tank driver, sharing with me for many years my tank lean-to shelter at night. I save his name lest he be nagged by the otherwise inefficient Intelligence Bureau.  “Sahib”, he said in his thick Shekhawati dialect and accent, “please educate the PM that money does actually grow on trees and plants; we get all our fruits, vegetables and animal feed and also firewood from a ‘tree’. So tell him to think of the farmers, not of the ‘foreigners’, who over two centuries back came as a company and took away our land.  Not one ‘biswa’ (a measure of land) was left to us”. I promised him I would do so, but advised him not to disturb his retired life over such depressing thoughts, for just as our ‘dhabas’ defeated a rather cocky Colonel from Kentucky, US of A, India will defeat this, too.  And not one word of this anecdote is made up.

L.K. Advani

New Delhi

 http://blog.lkadvani.in/blog-in-english/fdi-in-retail-will-destroy-employment-said-dr-manmohan-singh-in-2002