Are we ready for FDI?

3 Dec

FDI in India, will it help?Who cares if we are ready for FDI or not? Government wants it badly because they care for us, doesn’t it sound like a joke of the century “Indian Government caring for Indian Citizens”. Those who support FDI claim that we will benefit economically; increased job opportunities, higher standards of living and better infra-structure are some of the positive that flows from FDI. To back their claim they cite the example of economies such as China, South Korea, Singapore and the Philippines that benefited from FDI in to their economy.

The real question is why are we seeking FDI? Our great Prime Minister Manmohan Singh describes it as the best solution for bridging India’s current account deficit. A solution for fighting inflation, driving development and creating employment opportunities. Looks like the government cites Gross Domestic Product (GDP)/Gross National Product (GNP) as the only way to move our country forward.  Planning Commission Deputy Chairman Montek Singh Ahluwalia on Dec 1, 2012 said “India needs high GDP growth to reduce poverty at faster pace”. Ahluwalia himself spent Rs. 35 lacs just to renovate two blocks of toilets and said an individual above a monthly consumption of Rs. 859.6 in urban and Rs. 672.8 in rural areas is not considered poor. Is he even eligible to talk about what it takes to bring down poverty in India?

In 2011 World Bank stated 32.7% of the total Indian people fall below the international poverty line of $ 1.25 per day while 68.7% live on less than $2 per day. With this kind of statistics probably 70% of Indians really don’t care FDI bill about which out ministers have already created much drama on streets and in the parliament. Surely economy of India is under strain, but FDI will only help 5-6% of Indian population while others will surely remain unaffected.

Manmohan Singh cartoon on FDIThe great economists such as Mahbub ul Haq and Amartya Sen have stated that development is not just growth of GDP/GNP. How developed India is in terms of education, nutrition, female education, health etc? Doesn’t our great prime minister know that India ranks 65th out of 79 countries on the Global Hunger Index. Don’t we have other bigger issues than FDI to be tackled first? Here are our few reasons for a big NO to the FDI:

1. With corruption on all-time high and greedy Netas/Ministers all around the corner do we have regulatory regime to control the game of foreign investors? It’s a well-known fact that Multi-National Companies bribe politicians for running their way of business. Do we have single Neta/Minister in our country who can deny the bribe paid in dollars?

2. While workers in India will be paid peanuts the big profit and handsome salary will go outside India. Maruti Suzuki’s Manesar plant is the perfect example of this scenario.

3. MNCs have a tendency to capture the market completely and make us their slaves, what happens to the Indian entrepreneurs?

4. Government says Farmer will be paid more; farmer by the end of the day is also a consumer who again will be charged more for consumption.

India has already allowed FDI in so many other streams such as IT, infrastructure, manufacturing, telecom etc.? Why it is now required in retail is just beyond imagination? Is it just because Obama has said sentiments of Foreign Investors are negative towards India or because our great Prime Minister is being called under-achiever by foreign magazines. Whatever may be the reason the so-called leaders of our country must think whether FDI is for India or India is for FDI.

Important websites: Indian Government’s website on Industrial Policy and Promotion, Indian Governments website on Invest in India

Is India ready for FDI?

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