How deep is the political weight of Wal-Marts in the Indian government is evident from a cable sent by US Secretary of State Hillary Clinton to her embassy in New Delhi in September 2009, (WikiLeaks India cable series: March 18, 2011), enquiring about “How does (Commerce Minister) Sharma view India’s current FDI guidelines? Which sectors does he plan to open further? Why is he reluctant to open multi-brand retail?” Wal-Mart International Division chief John Menzer took pride in claiming that “We’ve energised the FDI lobby and pre-empted the anti-FDI lobby in India.”
The apparent tempting sop held out by the Minister of Commerce that Wal-Mart will have to procure 30 per cent of its value from the local market is a non-starter in the light of the actual practices followed by Wal-Mart and others. It is universally known that over 90 per cent of the products in Wal-Mart are sourced from China, which in view of the already cheap Chinese imported goods will ruin the local Indian industry. Moreover, Article III of GATT explicitly forbids regulations like specific sourcing requirement from domestic industries.
This touching faith in the all-pervading positive result of Wal-Mart incursion in India is ironically not shared in its home country. Thus, on September 14 New York City shut Wal-Mart out, and mass marches in Los Angeles city (known for Hollywood billionaires) were held in protest against “we do not want you in Los Angeles”. That closing down of small shops at 35 per cent - 60 per cent immediately flows from the entry of Wal-Mart is the finding in a study made by Economic Development Quarterly.
That Indian farmers will benefit by Wal-Mart building refrigerated warehouses is a lie. In the US, out of the 1578 refrigerated warehouses, 839 are in the public sector and 739 are private or semi-private. The public warehouses are much larger, accounting for 76 per cent of the general storage capacity, with private and semi-private facilities accounting for only 24 per cent. As against this, it is shameful that over 95 per cent of India’s cold storage capacity is in the private sector whereas only 0.44 per cent is in the public sector. Does the government need Wal-Mart’s permission to increase the number?
The touching faith of the governments in globalisation is repudiated by Joseph Stiglitz, the Nobel laureate economist, “Globalisation is neither socially benign nor has it been instrumental in reducing poverty; it has been detrimental to the poor and other weaker sections of society. In fact, globalisation has been associated with a growing divide between the richest countries and the poorest, and growing inequalities within most countries around the world.”
To the plea by the corporate sector that businessmen need incentives to invest, let them listen to the jibe of the biggest votary of capitalism, Warren Buffet of the US, who felt compelled to publicly confess, “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.” Is the Central government listening.
I wish the votaries of reform, when talking of increasing the growth rate, were to pay a little attention to the paradox of gross poverty. It shows that while Delhi is supposed to have the highest per capita income in the country, in terms of actuals, according to data presented in the 65th round of the National Statistical Survey Report (2010), it embarrassingly shows that 70 per cent of households in Delhi have a monthly per capita expenditure of less than Rs 1500. Even the self-opinionated Planning Commission has been forced to accept this as the poverty level. Heaps of statistics are thrown at us by the Union government to show that we have no internal resources and, therefore, must invite foreign investment. How deliberately misleading — 500 listed Indian companies have enough cash on their books to double India’s power generation capacity of 2,00,000 MW or build over 40,000 km of six-lane highways every year (compared with the current 800 km). At the end of fiscal year, March 31, 2012, these companies were sitting on cash and cash equivalent — the legend investments that can easily be converted to cash — of over Rs 9.3 lakh crore or $ 160 billion.
How false is the government’s pretended claim of shortage of dollars for investments in India is shown by the fact that in the ending months of 2011, there was a record level of Rs 9.8 lakh crore. The further concentration of wealth is shown by the fact that the top five companies in the Bombay Stock Exchange-500 held about Rs 2.07 lakh crore or 22.3 per cent of the total cash of these companies. And yet by the collusion of the Central government, these companies are permitted to take Indian money out of the country by being permitted to invest in countries like England, Australia and Belgium. The result is that coal, the strategic item needed for an increase in our economic growth, is not being mined in India but is being imported from Australia and other foreign countries. Is the Central government working for the people of India?
The government cannot silence the discontent in the country arising out of extre
me poverty by putting a claim which is false that prosperity so generated will move down and improve the condition of the poor. This is a false claim as given in a warning by Nobel laureate Joseph Stiglitz — “The theory of trickle-down economics is a lie.”
Governments should realise that such ugly poverty and disparity in our country is contrary to the mandate given in Article 39 (c) of our Constitution — to prevent that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment…. In that connection it may be instructive to remind the Central government of the warning given by Mr Justice Brennan of the Supreme Court of the US who put it succinctly, “Nothing rankles more in the human heart than a brooding sense of injustice, illness we can put up with. But injustice, makes us want to pull things down.”
The writer is a former Chief Justice of the High Court of Delhi. & publish in The Tribune' Chandigarh
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"Democracy means- A government of the people, by the vote of the people, by the money of the people, and for the welfare of the people".
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