UPA is on fire!
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| Mulayam, Chandrababu, Sitaram hand-in-hand during Bharat Bandh |
People say that, whenever the Cong-I faces any problem, faces the uproar of people against their anti-people policy, they have always been trying to divert the people’s focus into some other issues. This time also they are playing the same game.
In the last monsoon parliament session, opposition parties, led by BJP didn’t allow the Govt. to run the both houses of parliament smoothly till the last day in the name of Coal Gate, 2 G spectrum & some other issues & raised their voice to step down Dr. Monmoham Singh as PM. They also shouted against P. Chidambaram, allegedly involvement in 2-G spectrum case etc. etc. The ruling party could not convince the people of India that Dr. Monmohan Singh is not involved in the coal blocks allocation scams, where public and private companies obtained "windfall profits" of 1,067,303 crore (US$193.18 billion) in which private companies obtained 479,500 crore (US$86.79 billion) (45%) and government companies obtained 507,803 crore (US$91.91 billion) (55%).
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| Communists during Bharat Bandh |
After above-mentioned imbroglios, the UPA Govt. entangled with some other major controversies, the invitation of FDI in retail sector, diesel price hike up to 5 and reducing the allocation of LPG cylinders to 6 with subsidy and extra 3 without subsidized rate for the year for single family. Most surprisingly, they have taken the discriminating policy that only the Cong-I ruled ststes will get extra three cylinders, non-Congress-I ruling ststes are not!
Against all these issues, BJP called Bharat Bandh, where Left, SP, TMC, TDP etc. parties also extended their support & worked hand-in-hand to make that “Bandh” successful. The Bandh got almost full support nationwide.
Attacking DR. Manmohan Singh for allowing FDI in multi-brand retail, Gujarat Chief MinisterNarendra Modi said, Former US President Abraham Lincoln gave world famous definition of democracy as “of the people, by the people and for the people”, but our Prime Minister has altered the definition of Indian democracy to "of the foreigners, by the foreigners and for the foreigners". "This Congress-led government has overnight introduced FDI in retail, keeping Parliament in dark and have broken the promises it has given on the floor of the House," he added. "Bangladeshis, who are foreigners, have started asserting their rights in Assam and our Prime Minster who is also elected from Assam is silent," he alleged. He also alleged that, "If you put these two issues, violence in Assam by foreigners and allowing FDI in retail together it clearly shows central government's love for foreigners".
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| Bharat Bandh |
A bold step has taken by TMC leader Mamta Banerjee, withdrew her party support to the UPA Govt. and forced all 6 ministers to resign from the Govt. "I don't care. I am not scared of anyone. As long as I live, I will live like a tigress," Banerjee declared in that way in a speech in West Bengal on Friday, while her ministers resigned in New Delhi, when some ministers of UPA Govt. slammed her for her decision.
Reacting on the Govt.’s decision to increase the fuel price hike & inviting FDI in retail, also whether he will continue support to this Govt., Mulayam Singh Yadav says, “I am not in UPA, but, I am supporting UPA from outside. We can’t allow any political party to come into power, who is communally motivated”
By frequent price hike of fuels, this UPA Govt. has created a record and the poor people are suffering a lot because of the price hike on every items in the market.
On the other hand, Industry bodies like ASSOCHAM and CII said today's Bharat Bandh would have caused losses ranging between Rs 10,000-12,500 crore to the economy which is battling slowdown.
What is FDI
Foreign direct investment (FDI) is direct investment into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region.
Foreign direct investment in India
Starting from a baseline of less than $1 billion in 1990, a recent UNCTAD(United Nations Conference on Trade and Development) survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010–2012. As per the data, the sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, US and UK were among the leading sources of FDI. According to Ernst and Young, foreign direct investment in India in 2010 was $44.8 billion, and in 2011 experienced an increase of 13% to $50.8 billion. India has seen an eightfold increase in its FDI in March 2012. India disallowed OCB's i.e. Overseas Corporate Bodies to invest in India .
On 14 September 2012, Government of India allowed FDI; in aviation upto 49%, in Broadcast sector upto 74%, in multi-brand retail upto 51% and in single-brand retail upto 100%. Now, FDI in retail, in India means, “Govt.would allow global chains like Wal-Mart Stores Inc and Carrefour to own up to 51 percent of retail ventures. The policy would let foreign retailers own up to 51 percent of supermarkets and 100 percent of single-brand stores. The policy doesn't require parliamentary approval, but foreign retailers must get approval from state governments where stores will be located”.
What is Wal-Mart?
Walmart Stores, Inc. (NYSE: WMT ), branded as Walmart since 2008 and WAL★MART before then, is an American multinational retailer corporation that runs chains of large discount department stores and warehouse stores. The company is the world's third largest public corporation, according to the Fortune Global 500 list in 2012. It is also the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family who own a 48% stake in Walmart. It is also one of the world's most valuable companies.The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas. Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51% of its US$258 billion sales in the U.S. from grocery business. It also owns and operates the Sam's Club retail warehouses in North America.
Walmart has 8,500 stores in 15 countries, under 55 different names. The company operates under the Walmart name in the United States, including the 50 states and Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu.
Walmart in India
Walmart is not new to India. In 2007, Walmart announced an agreement with Bharti Enterprises to establish a joint venture, Bharti Walmart Private Limited, for wholesale cash-and-carry and back-end supply chain management operations in India. A typical wholesale cash-and carry facility stands between 50,000 and 100,000 square feet and sells a wide range of fruits and vegetables, groceries and staples, stationery, footwear, clothing, consumer durables and other general merchandise items. The first Best Price Modern Wholesale opened in 2009(Recently, American retail giant Walmart and its Indian joint venture partner Bharti Enterprises came under scrutiny over a public interest suit that alleged violation of multi-brand trade norms. Because, Foreign Direct Investment (FDI) was not allowed in multi-brand retail before Govt.’s declaration.)
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| Walmart store |
Wal-Mart Stores Inc (WMT.N) is looking to open its first retail outlets in India within 12 to 18 months, Scott Price, president and CEO for Asia, said in an interview with the Wall Street Journal.
Walmart and China
A Govt., with strict domestic & foreign policies, China has also invited FDI in retail. But the question is, whether FDI(in retail) in China & FDI in India are same?
There is huge difference between the Chinese model and the Indian GDP growth model, as the Indian model is essentially domestic demand driven unlike the Chinese counterpart which is driven by export growth. More than 70 per cent of the commodities sold in Wal-Mart are made in China. Wal-Mart Stores Inc, says its inventory of stock produced in China is expected to hit US$18 billion this year, keeping the annual growth rate of over 20 per cent consistent over two years. "If Wal-Mart were an individual economy, it would rank as China's eighth-biggest trading partner, ahead of Russia, Australia and Canada," Xu Jun, Walmart China's director of external affairs said.
Insiders point out that Wal-Mart's imports from China have largely influenced the US trade deficit in China, which is expected to reach US$150 billion this year.
According to Larry Mishel of the Economic Policy Institute about Wal-Mart's China policy, "A very conservative estimate could say that we (USA) have lost over a million jobs to China."
Can Walmart affect other Indian retailers?
It is alleged that in all of the countries, where Wal-Mart has set up shops, they have put other retailers out of business and driven down wages. Wal-Mart has a clearly defined anti-union policy aimed at preventing its work force from gaining any collective bargaining power, which could result in increased wages, covered health benefits and job security. Many reports have been written documenting the economic and eventual social and environmental degradation, which occurs when Wal-Mart “comes to town”.
In some countries, over the course of [a few years after Wal-Mart entered a community], retailers' sales of men’s' and boys' apparel dropped 44% on average, hardware sales fell by 31%, and lawn and garden sales fell by 26%. In towns without Walmarts that are close to towns with Walmarts, sales in general merchandise declined immediately after Walmart stores opened. After ten years, sales declined by a cumulative 34%.
According to experts, at first, the retailer giants, like Walmart etc. will sell their products in cheaper rate. They may also sign into some agreements with the farmers that they will purchase all their products in higher rate and sell it in the global market so that they(the farmers) get the best value for their product. But, once they capture the market and once they win in the competition over local competitors, they will force people to purchase their product in higher prices & also they will force the farmers to cultivate crops as they want. Our farmers depend on weathers for their cutivation. If any case the farmers fail to supply the product, their future could be uncertain.
Some facts about Walmart
Public Advocate Bill de Blasio and the Hunter College Center for Community Planning and Development published a research paper last year in New York will clear the bad impacts of what the retailer giants like Walmart do. According to them-
“The joint review of key research papers from the past seven years indicates that the opening of a Wal-Mart in New York City would likely eliminate more jobs than it creates, result in the loss of independently owned small businesses, and create an increased burden on taxpayers.”
“The history of the last decade tells us that Wal-Mart stands to be our City’s Trojan Horse,” said Public Advocate Bill de Blasio. “Wal-Mart’s record of driving small businesses out of town and paying below-poverty line wages to its employees will only exacerbate the current decline of New York City’s middle class. We must do everything we can to spur job creation in New York City, but that does not include opening our doors to a proven job-killer.”
Some of their findings are given below:
Wal-Mart’s Economic Impacts: Net Loss of Jobs, Fewer Small Businesses
Wal-Mart store openings kill three local jobs for every two they create by reducing retail employment by an average of 2.7 percent in every county they enter.
Wal-Mart’s entry into a new market does not increase overall retail activity or employment opportunities. Research from Chicago shows retail employment did not increase in Wal-Mart’s zip code, and fell significantly in those adjacent.
Wal-Mart’s entry into a new market has a strongly negative effect on existing retailers. Supermarkets and discount variety stores are the most adversely effected sectors, suffering sales declines of 10 to 40% after Wal-Mart moves in.
Stores near a new Wal-Mart are at increased risk of going out of business. After a single Wal-Mart opened in Chicago in September 2006, 82 of the 306 small businesses in the surrounding neighborhood had gone out of business by March 2008.
The value of Wal-Mart to the economy will likely be less than the value of the jobs and businesses it replaces. A study looking at the estimating the future impact of Wal-Mart on the grocery industry in California found that, “the full economic impact of those lost wages and benefits throughout southern California could approach $2.8 billion per year.”
Chain stores, like Wal-Mart send most of their revenues out of the community, while local businesses keep more consumer dollars in local economy: for every $100 spent in locally owned businesses, $68 stayed in the local economy while chain stores only left $43 to re-circulate
locally.
The full report is available at: http://advocate.nyc.gov/files/Walmart.pdf
If these can happen in the country like USA, what worst can’t happen in the country like India?
Think it!!
