The 100% FDI approval by government had seen intense opposition from almost all quarters. The nationalist intellectuals & Economists, like Gurumurthy ji, and Vaidyanathanji had been the intellectual forefront of this FDI opposition and their tweets had been the most fiery one.
I am sharing some of my random thoughts on this aspect here.
Economy, Administration and Social Structure:
Economy doesnt exists independantly on its own. It needs a society, and a governance & administrative structure to thrive. So depending on the kind of government, and the kind of society, the economy will take its shape.
Today, in india, two kinds of economies exist.
1. The economy that exists in the rural areas, that functions in traditional way, and is a continuation of our civilization. This economy is people oriented, and people based. This economy is also Need based.
2. The Economy that exists in Urban Centers like Metros, Cities, and towns. This is market based, and Population based. (there is difference b/w people based and population based).
In villages, due to the traditional jathi based societies, everyone had been doing their kula profession. So there is no competition for capturing any other’s market. Trading here is largely about exchange of products, for their respective profession.
On the other hand, in urban centers, we have only population and NOT society. The buying power of these population constitute the market potential of that town. This market potential varies depending on the size of the town or city.
Next, how can a city function? The indian government had been enforcing its urbanisation policy, since independance. But till liberalisation of 1990s, the size of each of the urban centres did not expand much. The reason is because, these cities were depending on Rural society. Cities served just as integrating point for villages.
However, after liberalisation, almost all cities witnessed a cancerous growth. Particularly the metros, like chennai and Mumbai, and recent ones like Bangalore. These growths were largely because of Export Money, and artificial free flowing of indian currency. Because of this, the indian cities, once a trading and integrating point of indian villages, had now become, centres of business, serving foreign clients, and foreign corporates. BPOs, Software Companies, Industrial estates, all served foreign corporates, and their exhorbitantly high income is due to Currency difference. One dollar begets them 50 indian rupees, and thus creating extreme disparities. Due to this foreign based export oriented industry and business, the life style in these cities were shaped based on western model. Malls, parks, over-bridge, theatres, and you name it.. everything is built on western model. As a result, the economy in these cities, also evolved resembling western economies, rather than indian rural ones.
When big Foreign Retail Corporates like Walmart wants to enter india, they exactly target these urban economy, and NOT the rural economy. No corporate can compete or prosper in our rural economy, because it is decentralised, and based on people and relation.
What is use of shouting against government, when we ourselves destroy rural economies and create westernised ones?
Imagine, how many villages had been destroyed to create a chennai metro. Which means, how many village economies, how many local markets, and how many farming based families collapsed?
And till today, many cities are expanded by dismantling the village panchayats, all across the country, and our Nationalist Intellectuals, are totally silent on this. No one had so far questioned the Urbanisation policy of the government in these 60 years.
And i find no meaning in their current opposition to FDI in retail. Are they trying to convey, that only indian urbanites had the right to destroy rural economy and NOT the foreign corporates?
The solution lies in strengthening our traditional local economy, and developing our national economy on top of it. And if we can do that, we can boldy challenge Wal-Mart to come and try their luck in our country. I bet, they cannot compete even an inch in our traditional people based economy.
To quote an example, can any corporate replace mumbai dabbawalas? That is the power of people based, and jathi based economies. (And for your info, most members in the dabbawalas belong to a single caste. I think their caste name is malwa )