Thursday, May 31, 2007

CPI-M on retail

The Red brigade has come up with a masterplan to "regulate" retail. Defiant and obstinate in the face of overwhelming evidence from the brief economic history that India has bore, they actually have the chutzpah to suggest going back to the licence raj regime: a regime which set back development by decades and deliberately shortsupplied generations of consumers.
Another point to note is the smug and naive belief that the very thought of breathing life into a dysfunctional governement entity suffices; the abracadabra too trivial to bother about. Contrast this with the frantic sops being offered in private retail these days to acquire and retain even talent.
Where is the "new" PSU going to get the people to create an entity that can give the Tescos and the Walmarts a run for their money? The present flock, clearly, is too incapacitated to effect that. The answer is obvious, analogous as it is to the "post-liberalization" oil sector. Sops, blatant taxpayers' money-backed sops in the form of subsidies and favored access to distribution: in the face of the PSU's inability to manage half the efficieny in supply chain and distribution of the private-sector competitors; even at twice the cost and thrice the manpower.
Hoping (more foolishly, I feel, as each day passes) that with the dawn of the age of reason, mankind is in the path of slow and steady progress in thought and lifestyle, with a few hiccups here and there, I believe that in a few centuries, when we have finally disposed off these ignoramous, wasteful and self-defeating idealogies, such policies will be viewed in the same rueful light as the inquisitions. Doing irreversible damage to humanity and the cause of reason for the sake of petty politics, miseducated charity and obstinacy to change.

NEW DELHI, MAY 30: After its opposition to FDI in retail trade, the CPI(M) has now prepared the ground for regulating the entry of corporates in the sector by suggesting a system of licensing for organised retail. It has also called for the Government’s intervention to prevent “private monopolies” from developing by asking the Government marketing agencies to compete with large private retailers. It even suggested ways to create big public sector retail chains. Building on the argument that small retailers need policy support to fight organised retail in the light of their falling numbers and the use of monopoly buying power by organised retailers, the party’s framework for regulating organised retail includes a system of licencing in cases where retail outlets went over the “appropriate minimum floor area”. According to the National Policy on Regulation of Organised Sector in Retail Trade: A Proposal, which the CPI(M) has evidently aimed at private players and plans to circulate among political parties for a full-fledged discussion, corporate entities should not be allowed to operate retail outlets below a minimum floor area. Party General Secretary Prakash Karat said the proposals came against the backdrop of the growing retail trade network since the UPA came to power. “We are writing to all political parties. We feel we have made a case for stringent regulations in this and have argued for a licensing system for the entry of the organised sector in retail trade,” Karat said. The proposal says steps should be taken to prevent single large format retailers from entering the market and framing of guidelines to prevent predatory pricing. It suggests ways in which “decaying” government marketing agencies can be revived to compete with the private retailers. “Consolidation of several government marketing agencies in order to create a few public sector retail chains should be seriously considered, which can also invest in developing modern supply chain infrastructure,” the proposal says, while including suggestions for safeguarding farmers interests. Red retail • Authority to grant licences should be with the urban local bodies and there should be transparency in granting licences • A process of open bids to be considered • Separate licences for each format for organised retail based on floor area • Slabs for different retail formats, like discount stores, supermarkets, hypermarkets and shopping malls, also based on floor area • A cap on number of licences that can be given in an area, using the population criterion • Larger retail outlets to be kept out of existing commercial zones and where they are not, the retail outlets should share space at concessional rate with small retailers


Nothing Spectacular said...

the age of reason seems further and further away. the idiotic (idiotic is not the right word - i think corrupt is better) commies and their acolytes (e.g. arjun singh, sonia gandhi) will ensure total destruction of everything that is rational (look at the quota policy, the blatant intervention in pricing in cement or iron, the oil marketing cos 'liberalisation', the sops of free electricity to farmer vote banks... the list is endless!!)

moimystique said...

hey,nice blog here.will be back,keep writing :)

Bland Spice said...

I have dabbled with communism in the past. My major reason for rejection were these very obstinacies of the red party.