Column : Jobs, economics and self-esteem

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SummaryMany of the arguments against foreign investment in retail in Parliament were fuelled by fear, self-interest and economic illiteracy.

Three reasons why the opposition to foreign direct investment in retail deserved to lose

Many of the arguments against foreign investment in retail in Parliament were fuelled by fear, self-interest and economic illiteracy. But one of the most pregnant statements was that big retail stores in the future “would be owned by American or British companies, sell goods of Chinese origin while India becomes a nation of sales boys and sales girls”. This statement implies that foreign companies have unfair advantages, sales is an inferior job, and buying goods made in China means the Chinese make all the money. It also implies that India will become like the Wimbledon; it is played in England but a Britisher almost never wins. I disagree and believe the opposition to FDI in retail was wrong for three reasons:

Jobs: We know that kirana (unorganised retail) shop owners are a much smaller population than exploited kirana workers. We know that unorganised retail is the biggest user of child labour. We know the tragic costs of informal employment (no PF, no ESI, no appointment letters and no minimum wages). We know that 100% of net job growth since 1991 has been in informal jobs; the slavery of the 21st century. We know that kids don’t view employment as a lifetime contract (mai-baap) but a taxicab relationship that is intense, intimate and short. We know that 10 lakh kids will be joining the labour force every month for the next 20 years. We also know that a sales job is the most blue-collar white-collar job. The notion that agricultural jobs or manufacturing jobs pay more, provide higher job satisfaction or offer better physical environments is not a myth; it is a lie. I am not sure where the romanticism of shop floor or fields comes from but our economy is driven by domestic consumption—strength as the global crisis enters its sixth year—and that means sales and customer service will be the biggest job creator in the next two decades. So, there is nothing horrible about “India becoming a nation of sales boys and girls”. This will be a less poor India.

Economics: The notion that foreign-owned retail will sell more foreign goods or have higher margins is irrational. Foreign retailers can only sell whatever sells and whatever prices consumers are willing to pay—they are the waiter, not the chef. But the notion that goods made in China overwhelmingly benefit

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