BAN THE “FDI” – WHOLESALE I Say!!!

FDiHearing the cacophony of noises in India’s ‘temple of democracy’ last week on FDI (Foreign Direct Investment) in multibrand retail, one couldn’t help conclude that FDI is back again to haunt us. I am referring to the “Famous Desi Insecurity” among the ‘pujaris’ of the parliament temple.  In the annals of Independent India, this FDI has a long history and raises its head with alarming frequency!

  • 1988:  The topic for a group discussion in a B-School where I went for admission was “Is computerization a boon or bane for modern India?”  Today it looks like such an obvious topic to have any discussion about or have any debate at all – with computing being omnipresent on the ground, on the move and even in the Cloud! However, those days the case for computers had not been wrested. Trade Unions in many establishments across the country were up in arms against computerization which was supposed to leave millions jobless. The “INTEL” inside a PC will leak our country’s secrets and is a threat to our sovereignty was even one of the naïve apprehensions, I remember.  3 decades hence, as I create this piece in my laptop, if I attempt to explain what actually the consequence of computerization is, I will be only accused of stating the obvious.
  • 1991: The year in which liberalization and reforms were undertaken by the Government when the country was in the brink of an economic collapse. The Naysayers that time accused the Govt. of
    • walking into the trap laid by the IMF,
    • attempting to kill the domestic industry by de-licensing, by cutting import duty, by bringing goods under an “Open General license regime”,…,,…

         Nothing of that sort happened and on the contrary, India graduated from a   much contended ‘Hindu rate of Growth’ of 3 % on an average in the previous 2 decades to average ‘Indian rate of Growth of 7.5% in the next 2 decades.  We became part of the famous BRIC story that was being built globally.

  • 2001 : All around the country there was a symphony of voices about the threat of domestic manufacturing industry getting wiped out in several sectors including many small scale industries like Locks, Toys,. The government was about to remove the Quantitative Restrictions for imports across many sectors as per WTO.   The Quantitative Restrictions were hitherto acting as a protection to the flurry of imported goods except in “Burma Bazaars”.  The local manufacturing of FMCG (Fast moving consumer goods) will face a slow and steady death as the Indian consumer will be bombarded with imported “Charlies” and “Camays” – was the war cry.  10 years hence, has the local mfg. industry been wiped out?  Has the imported Camay overtaken the local Cinthol? The answer is Yes and No.  In small-scale sectors like lock manufacturing,.. due to no investments in technology, the units have been facing a serious lock out. (Eg: Lock mfrs. in Aligarh). The Chinese locks today protect most households. However in sectors where mfrs. have looked at ‘opening up’ as an opportunity rather than a threat, have upgraded their works, have got into strategic collaborations, got in investments and have eventually flourished.  Camay is produced in India now by a Contract mfr. for P&G. 

VAT introduction in India in 2005, Opening up of the Insurance sector to FDI in 2006, the Indo-US civil nuclear treaty in 2008 and now the opposition to allow FDI in multi brand retail. 

I can go on and on on the list of issues where our politicians pontificated doom and created kerfuffle.

In all these, the common thread is the Insecurity among the politicians about our own country and the lack of self-confidence or the “Can-do” spirit which today’s youth in the street display day in and day out. In spite of the fact that in all the above instances the Indian enterprise has repeatedly demonstrated that “India today” is not the one to cowed down by outside influences but is one that looks at all possibilities to collaborate and prosper.

I for one am delighted to see the opposition to FDI in retail and finally government of the day pushing it through by Hook or Crook I mean Mayawati or Mulayam!!! Going by past history and instances whenever our politicians oppose something vociferously and foretell that doomsday is here – we know what will happen.  So I believe, thanks to FDI in multibrand retail,

  • Kiranas are not going to get wiped out so soon
  • Farmers are not going to be exploited
  • Millions of Indians are not going to lose jobs

Or for that matter

  • “Will not make our children sales boys and girls”

as being apprehended.

For, advent of computers in the 80s in India didn’t leave millions of Indians jobless but created a fledgling US$100bn IT Industry that creates an estimated 230,000 jobs or round about annually thereby employing 11 million people directly and indirectly. So like computerization, retail could be a game changer. However whether this FDI policy of the Government will be a Game changer? That will keep it for my next post.

So let’s not stop the FDI (Foreign Direct Investment) in retail but ban the FDI (Famous Desi Insecurity) – wholesale which seems to have engulfed many of our politicians!!!

Postscript: The joke used to be that in the 70’s if some Govt. babu was seen wearing a denim, he was suspected to be a CIA implant and R&AW was let after him!!!

Bring in the “FDI” !!!

For the short-term (1999-2001) industrialist A.C.Muthiah served BCCI as its President, he made one stellar contribution to Indian Cricket. That was the time when Indian cricket was besieged with problems a plenty. Match fixing allegations, pathetic track record in “Away” tests, no significant ODI tournament wins and so on. Raj Singh Dungarpur a very passionate Indian cricketer turned administrator mooted the idea of a “Foreign” coach for the 1st time for the Indian team and in the year 2000, John Wright was appointed coach of the Indian cricket team – a position which was reserved for Ex-Indian stalwart players till then. The rest they say is history. Under Wright, India made the right journey – apart from continuing to be “tigers at home”, they went on to draw a test series in Australia, defeated Pakistan in Pakistan in tests, reached the finals in the 2003 World cup, to name a few milestones. This set the trend for hiring only foreign coaches subsequently for the cricket team so much so that these days I see that even most of the IPL teams have only foreign coaches !!!

The recent turnaround of the fortunes of the Indian hockey team is attributed to (among other things) the role of Michael Nobbs, an Aussie and again a foreign coach!

If you look at Indian cinema of late, even the forgetful “Ra one” or Shankar/Rajinikant’s Super hit “Robot” boasted of technology which was at par with Hollywood. Recently they say that even in an average movie, the technique in Bollywood is comparable to Hollywood cinema. This has not happened by magic or by Rajini’s wish! A quick glance at the “credits” scroll in any Hindi movie will show you many names of foreign technicians. Though the contribution of the Indian technicians in movies like Ra one or Robot cannot be underestimated, the makers admit that they accessed the best talent available worldwide and that has indeed made the difference.

Godrej group’s Chairman Adi Godrej candidly admits that though they broke off ties with P&G and GE at one point of time due to strategic issues, the group strengthened its balance sheet with intangible assets like acquiring knowledge of new management systems, marketing processes, quality control processes,.. from GE and P & G. When Mukesh Ambani puts his feet into organised retail, the 1st thing he does is to tap talent from global retail giants like TESCO,.. to roll out the retail venture in India.

So there has been a lot of “Foreign Direct Investments” in India perse and its nothing new!

Where I’m coming from is if Foreign hands can value add significantly to our nation’s cause in Industry, Sports, Cinema and many other fields which I’ve not touched upon due to lack of space, why not try some foreign hands to shape up the “Governance” of our country ? Can’t we not hire experts with great track record in economics, administration, and governance in other countries to look at governance issues we have? My premise is that people from outside bring in a completely different perspective and come without a baggage and may pitchfork great ideas which can plug some of our country’s problems.

To our netas and may be public at large, this may seem to be an outrageous proposition and one that is fraught with dangers related to nation’s security and other sensitivities. And this could seem to be a very specious argument. After all is nation’s security or economic position same as a game of cricket or a SRK’s flick? Certainly not. If we can’t bring in people of foreign origin to work with us in governance matters, can we do the next best thing? Which is – at least tap the enormous PIO (Persons of Indian Origin) talent which is available outside the country to contribute in solving some of the plaguing governance issues. One sterling example in this context is how Rajiv Gandhi brought in Sam Pitroda in the 80’s I guess as technology advisor and he heralded the telecom revolution in the country! Similarly why can’t we tap Nobel laureate Amartya Sen to consult on policy making and economy? or a Vinod Khosla to bring in an “Innovation culture” in our education system? Shashi Tharoor is another good example of a bureaucrat who is trying to make a difference in the Indian political scene with a different perspective on governance. He has been a PIO for a long while and the time he spent outside I’m sure is shaping his approach to his job as a MP in India. It’s another matter that his too “social” attitude and functioning cost his job  as a minister too early in his political career.

It’s not to say that we don’t have talented people within the country at present or that people here are not capable. It’s just that some of these people who have a successful track record outside by their experience in other countries could bring in a fresh perspective to solve problems.

So my clarion call for bringing in 100% “Foreign Direct Indians” to Delhi for contributing to our country’s Governance!!!

Tailpiece:

Journalist: Why are you opposed to “FDI” in retail?

Mamata: How can they propose FDI in retail? If they had proposed “FDIDI” in retail, I would have supported it!!!