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Opinion
Beware the ides of March
By Rajindar Sachar
"
I was reminded of the ancient maxim “Those whom the gods wish to destroy they first make them mad (with power), the very moment Government announced policies approving majority F.D.I. in retail (read Wal-Mart stores USA) increase in Foreign Investment because this very step united the disparate opposition in one strong single fist cuff, as shown by massive opposition bringing the country to a halt.

How deep is political weight of Wal-Mart’s in Indian government is evident by a cable sent by US Secretary of State Hillary Clinton to her Embassy in New Delhi in September 2009, (As per Hindu-Wikileaks India cable series: March 18, 2011), enquiring "How does (Commerce Minister) Sharma view India's current Foreign Direct Investment 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 prided by claiming that "We've energized the FDI lobby and pre-empted the anti-FDI lobby in India." June 6, 2005.

The apparent tempting sop held out by Minister of Commerce that Wal-Mart will have to procure 30% of its value from the local market is a non-starter in the light of actual practices followed by Wal-Mart others – it is universally known that over 90% of the products in Wal-Mart are sourced from China / which in view of 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 14th, 2012 New York City shut Wal-Mart out, Mass marches in Los Angles city (known for Hollywood Billionaires) protested with “we do not want you in Los Angles”. That closing down of small shops at 35% – 60% 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 USA 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% of the general storage capacity, with private and semi-private accounting for only 24% - as against, to Indian governments shame over 95% of India’s cold storage capacity is in the private sector whereas only 0.44% is in the public sector. Does the government need Wal-Marts permission to increase the number.

The touching faith of the governments in talism of globalization is repudiated by Joseph Sliglitz, the noble laureate economist, thus “Globalization 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, globalization 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 incentive to invest, let them listen to the jibe of biggest votary of capitalism, Warren Buffet of USA who felt compelled to publically 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 which 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), embarrassingly shows that 70% of households in Delhi have a monthly per capita expenditure of less than Rs. 1500, which even the self opinionated Planning Commission has been forced to accept as the poverty level.

Heaps of statistics are thrown at us by 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 high ways every year (compared with the current 800 km), (Economic Times Dated, 20/08/2012) 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 9.3 lakh crores or 160 Billion dollars.

How false is the government’s pretended claim of shortage of dollars for investments in India is shown by the fact that in year ending, 2011 there was record level of Rs. 9.8 lakh crores. The further concentration of wealth is shown by the fact that top five companies in BSE 500 held about Rs. 2.07 lakh crores or 22.3% of total cash of these companies. And yet by the collusion of Central government these companies are permitted to take Indian money out of the country by being permitted to invest in countries like England, Australia, Belgium. The result is that coal, the strategic metal for increase in our economic growth is not being mined in India but is being imported from Australia and other foreign countries. Is the Central Govt. working for people of India or for their erstwhile colonial lords of yesterday.

Government cannot silence the discontent in the country arising out of extreme 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 Noble Laureate Joseph Stiglitz — “The theory of trickle-down economics is a lie”.

Governments should realize that such ugly poverty and disparity in our country is contrary to the mandate given in Article 39 (c) of our constitution, namely to prevent that the operation of the economic system does not result in 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 waning given by Mr. Justice Brennan of Supreme Court of U. S. A. who put it succinctly: “Nothing rankles more in the human heart then a brooding sense of injustice, illness we can put up with. But injustice, makes us want to pull things down.”

(The author is Chief Justice (Retd.), High Court of Delhi, New Delhi and was Chairperson Prime Minister’s High Level Committee On Status of Muslims. He can be contacted at: rsachar1@vsnl.net)


News Updated at : Monday, November 19, 2012
 
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