Column : FDI as a tool of social liberation

Written by MK VENU | Updated: Dec 11 2012, 06:29am hrs
FDI in multi-brand retail could improve the lot of the small shopkeeper at the bottom of the social ladder

The BJP was taken completely by surprise when the Bahujan Samaj Party(BSP) chose to vote in favour of FDI in multi-brand retail in the Rajya Sabha within 24 hours of having abstained from voting in the Lok Sabha on the same issue. Assuming Mayawati would abstain from voting in the Rajya Sabha, BJP leader Arun Jaitley had declared UPA to be on very shaky ground on the eve of voting. But the BSP leader chose to pull the rug from under the main oppositions feet. The BJP cried foul saying Mayawati had been coerced into voting in favour of the UPA because of some pending CBI cases against her. Indeed, that would be a very nave reading of the BSPs motivations. A more nuanced analysis of BSP actions suggests that it abstained from voting in the Lok Sabha after speaking against FDI in retail because it wanted to generally cash in on the prevailing fears and apprehensions among small businesses over the impact of foreign investment in this critical sector. Mayawati had earlier made a statement that she would consider endorsing FDI in multi-brand retail after seeing what impact it has on farmers.

Her vote in favour of the policy measure in the Rajya Sabha possibly represents what some prominent Dalit intellectuals have described as the socially liberating potential of FDI in retail. Some years ago, BSP member of Parliament Arif Mohammed Khan had told me that the BSP historically regarded the global multinational business culture as an antidote to the local caste system because global capital only valued economic surplus and had no social hegemonic agenda.

Another well known Dalit writer and intellectual, Chandrabhan Prasad, has argued that FDI in retail has tremendous socially-liberating potential. He said that while Mayawatis stand is political, there is clearly a bigger and more significant social dimension to it from the Dalit perspective. Further, Chandrabhan Prasad welcomes the new culture spawned by economic globalisation because unless culture breaks, caste cannot break. Another prominent Dalit political thinker, professor Kancha Ilaiah, believes FDI is generally good for the economy as it will break the bania communitys hold over money circulation.

So the Dalit thinkers have a more socially and culturally driven view of global capital, in general, and FDI in multi-brand retail, in particular. For an average Dalit, the process of globalisation offers an escape from his/her current oppressive social condition to another world of cross-cultures where enough anonymity and economic independence is afforded. It is largely the narrow, often politically motivated, Hindu upper castes who seem preoccupied with the notion of the Indian culture getting polluted by the onslaught of globalisation. In its crudest manifestation, we see this phenomenon play out when certain bigoted groups attack MNC food outlets or threaten young people celebrating Valentines day.

So Mayawatis stand on FDI in multi-brand retail has many layers to it. A recent survey conducted by the Dalit Indian Chambers of Commerce and Industry (DICCI) showed that Dalits have virtually zero presence among the established grain and vegetable mandi traders, generally referred to as Arhatiyas. The Arhatiyas are the most powerful lot of wholesale middlemen, who control the business of aggregating produce from millions of farmers which is brought to the Mandi. They also lend money to farmers at what someone described as credit card rates.The Arhatiyas are known largely to be supporters of the BJP. This is why some speakers dared the BJP in the Lok Sabha debate to come out openly and declare they are representing the interests of the Arhatiyas. The UPAs contention is these Arhatiyas grab the bulk of the margins between the farmer and the consumer. The entry of the big retailer could provide competition to them and get the farmers and the end consumer a better deal. Of course, Arun Jaitley argues that the Arhatiya will be replaced by the representatives of the foreign retailer.

Jaitleys political argument is that Indian societys fragmented business arrangements at all levels provide livelihood to millions in a decentralised and autonomous manner. Any attempt by big foreign entities to homogenise this arrangement could create a monopoly of sorts. This fear may be exaggerated as there will continue to be multiple players at all levels. In Asian and Latin American societies, which are more akin to India, foreign retail brands have not got more than 20-25% market share in the retail business after decades in operation. In more homogenous Western economies, big retail chains have got over 85% of the market.

Another intellectual argument favouring a somewhat decentralised, even if inefficient, existence of our farm-to-retail chain says Indias petty bourgeoisie (a Marxian term for small trader, shopkeeper, etc) probably want to remain autonomous of the big global capitalist value chains run by the Walmarts and Tescos. A sense of being the master of ones own business is probably valued far more than being subordinated to a global capitalist chain, based on new rules of the game. Well, this may be true for the well-heeled Arhatiya community, which is politically powerful and controls the mandis of India. It will seek to protect its autonomy.

But this would certainly not be true for millions of very small shopkeepers who are essentially suffering from disguised unemployment and would want to escape their current social and economic condition. The problem with the opposition argument is that it is trying to mix up two different categories altogetherthe well-heeled and exploitative big trader as against the impoverished small, hole-in-a-wall shopkeeper. The social and economic profile of the participants in Indias vast retail trade is complex and varied. Besides, there is ample evidence that large sections of the petty bourgeoisie (trader and shopkeepers) may not be happy with their current existence. They would not mind if global capital inflows result in the creative destruction of existing arrangements. After all, many of our established industrialists who have reaped the benefits of globalisation were small shopkeepers/ traders at one time! The petty bourgeoisie has its own aspirations that go beyond their perceived sense of autonomy at present!

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