Ian Jack in The Guardian:
Certain habits in Indian life once gave an illusion of permanence. On hot afternoons 30 years ago, for example, you could lie on your bed under a slow-turning fan and hear noises from the street that had been the same for at least a century. The lonely wife in Satyajit Ray’s film Charulata heard them in the film’s celebrated opening sequence as she flitted about her Victorian mansion in 1870′s Calcutta like a trapped butterfly, and in 1982 you could hear them still: some rhythmic chanting, the hollow patter of a little drum. And if, like Charulata, you went to the window and looked down, there in the dusty lane you would see a gang of coolies shouting something like a work-song as they pushed a wooden-wheeled cart with a heavy load, or a street entertainer drumming up business with his tabla. The most common sounds, however, were the singsong calls of peddlers selling fish or vegetables, or milky sweets and ancient biscuits from a portable glass case. Some salesmen rode bicycles; that transport apart, these were scenes that looked as if they had existed for centuries and would never be expunged by modernity.
Their extinction is coming – not immediately and not everywhere, but probably inexorably in the middle-class districts of the big Indian cities, now India’s governing coalition has said it will open up the retail market to foreign supermarket chains. The coalition put the plan on hold last year after some of its smaller parties, notably West Bengal’s Trinamool Congress, branded it as against the interests of “the common man”. The postponement suggested a weak and muddled government. Economic growth was faltering, the prime minister, Manmohan Singh, looked particularly ineffectual, and the administration’s reputation suffered the lash of critics at home and abroad (not least in the USA). Last week it decided to face down opponents and show its free-market muscles by reviving planned reforms that will allow familiar European and American names – Walmart, Tesco, Carrefour — to build stores in cities of more than a million people, providing the local state government agrees. More
Singh doubles down on reform
Ashok Malik in Yale Global:
Why does India need FDI in retail – and just how damaging will it be to existing small and medium retail?
In 2008, the Indian Council for Research on International Economic Relations, ICRIER, published a paper titled, “Impact of Organised Retailing on the Unorganised Sector.” The findings were included in a 2010 discussion paper on the topic and influenced the government. This discussion paper, in turn, defined the contours of the new FDI policy for retail.
“Given the relatively weak financial state of unorganised retailers, and the physical space constraints on their expansion prospects,” the ICRIER document noted, “this sector alone will not be able to meet the growing demand for retail. Hence, organised retail which now constitutes a small four per cent of total retail sector is likely to grow at a much faster pace of 45-50 per cent per annum … This represents a positive sum game in which both unorganised and organised retail not only coexist but also grow substantially in size.” The rate of closure of small retail stores “on account of competition from organised retail” was found to be 1.7 percent per annum. More: