India DC

Jul 24 2013, 03:52 IST
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SummaryFrom potholed highways to gridlocked politics, India has so much in common with the US

If the potholed highways, the gridlocked politics and the bad tax codes werenít enough, those against big retail can take heart from another recent US practice. The Economist reports that Washington DC has just passed a rule that, without specifically talking about Walmart, is aimed at it since it requires retailers, with at least $1 billion in annual sales and stores of more than 75,000 square feet, to pay their workers $12.50 an hour, or 50% more than the cityís maximum wage of $8.25 that, in turn, is a dollar above the federal rate.

Clearly, Washingtonís politicians are willing to give up the 1,800 new jobs Walmart is promisingóthis, despite the fact that DCís unemployment rate is 3 points higher than the neighbouring state of Virginia. Much the same is happening in India where, never mind the evidence, the political class is bent on playing the same games. A back-of-the-envelope calculation shows that with Indiaís GDP likely to grow at 15% annually, even if the share of organised retail grows from 6% today to 20%, that still leaves enough room for kiranas to grow at over 13% a year. But whoís interested in logic? In either Washington or in Delhi.

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