One of the larger problematic questions associated with the entire idea of corruption is its definition- what is corruption and who defines it? Is corruption merely the act of an illegal financial transaction to get some work done? Or does it involve practices that could be non-financial in nature? If so, what practices can actually come under the purview of corruption and is there a way to classify these as black and white?
Generally, corruption is seen as an exercise where the idea of money or some monetary gain is involved- hence the super blow-ups (even if temporary) that we regularly see where thousands of crores of rupees worth of public money is involved. But there exists, within (for example, in this case), areas where political corruption, which is conventionally defined as the use of political power of governmental powers by officials of the state for illegitimate private gains, an area where misuse of other forms of state power, such as censorship, use of the police force against seeming non-legit activities or a simple suppression of any political opposition is practiced. These may not come under the purview of the conventionally defined term ‘corruption’, but seem equally evil and unethical.
No, this blog is not about corruption, but rather the ethics associated with the running of the nation state by a democratic government. Today, I’m picking up the issue of FDI in retail allowed by the current government at the centre and its consequences. To begin with, let me explain briefly what this means. ‘Retail’ is defined as the selling of a particular product to the ultimate consumer directly. A can of Pepsi sold to you by your shopkeeper is a simple example of a retail transaction. FDI stands for Foreign Direct Investment. Simply put, allowing 100% FDI into the retail sector means that brands such as Walmart & Harrods will set up shop here very soon. But what does this mean for the common man?
It is estimated that over 5 crore people in India are involved directly or indirectly in the retail sector in the form of small businesses and shops. With time, it is believed that a lot of these people will lose their jobs/means of livelihood to bigger players such as Walmart, leading to the vicious cycle of unemployment.
Firstly, what is interesting to note is that a lot of countries in the world have actually banned any FDI in retail. In places where this FDI is regulated in the form of local regulation (for example, in Germany, a Walmart is not allowed to sell any product below its cost price to the company, thereby leading to the entire model failing miserably there and shutting shop), FDI in retail has failed. Moreover, surprising as it may sound, a city such as New York has till date rejected Walmart’s plans to open even one store there, in order to protect local businesses. Then why is it that a country like India, where the population is huge and the unemployment/seasonal employment is anyway a huge issue, allows full FDI in retail? In this two-part series blog, I shall focus on the intent of the Indian state in the context of FDI in general and specifically in retail, and how this intent seems to be hypocritical and malicious in context of the state’s policy on FDI in different sectors.