Killing Them Softly
One of the neglected aspects in the whole issue is the social impact of this reform on communities and their livelihoods. Is there any particular community which would be impacted the most?
By Uppili.R
Mamata Banerjee wrested control of West Bengal from Left Front Government after 34 years emphasizing on the slogan “MA (Mother), Maati (Land) and Manush (People). Till recently, she supported a Government which violated her cardinal 3M principles. UPA Government through their policies destroyed MA (Coal Gate), Maati (Adarsh Scam) and Manush (Appointment of CVC – Thomas). The UP elections brought in another M –Mulayam Singh Yadav, who witnessed landslide victory in Uttar Pradesh riding on his son’s charisma and innovative electoral promises. There is another M – Manmohan Singh, who has come out of his slumber by initiating plethora of reforms such as FDI in multibrand retail (26.0% to 51.0%), Insurance, Pension, Hiking diesel prices and pruning LPG subsidy. He took these so called reform measures due to absence of another M – Mukherjee, who moved to cushy President job is a different issue altogether.
Mamata lost her patience after these reform measures such as FDI in retail, Hike in diesel prices and pruning of LPG subsidy. The reform measures initiated by UPA Government debased her 3M‘s. She withdrew her support to UPA Government primarily targeting UPA policy on allowing FDI in multibrand retail. Her withdrawal of support had led to UPA Government relying on another two M’s namely Mulayam and Mayawati. It is a known fact that Mulayam and Mayawati are unreliable allies. Who is right- Maverick Mamata or Meditative Manmohan Singh regarding foreign investment in retail?
Pros and Cons of FDI in Multibrand Retail
UPA Government allowed FDI in Multibrand Retail (51.0%) as it curb inflation by reducing the intermediaries in the farm to fork chain. CII –Boston Consulting survey clearly points out the fact that Indian farmers earn only 30.0% of the consumer price compared to developed markets (50-70.0%). The reduction in intermediaries will boost the share of farmer’s income and reduce prices. Retail chains will invest in improving the supply chains which could reduce wastage estimated around 40.0% in the case of fruits and vegetables. The move could boost employment of about 10 million semi-skilled workers in India (Source- Anand Sharma). FDI in Multi Brand Retail could address the current account deficit of India around 3.0% through Foreign Direct Investment flows from International retail majors. FDI in Multi brand retail could induce more competition which could benefit the invisible face of India namely the Aam Aadmi (Mango People of Banana Republic of India)
On the other side, allowing FDI in Multibrand Retail could result in large scale closure of mom and pop stores. This could impact livelihood of 40 million people in India. Has it been factored in Anand Sharma’s calculation of 10 million jobs? Maybe Kapil Sibal can justify his claim by insightful analysis similar to 2G Scam? There is wide spread apprehension that foreign retailers could adopt predatory pricing to gain market share by weeding out competition. After establishing their market share, they may reduce the remunerative price paid to farmers. Farmers could be at the mercy of the retailers. Walmart dictated pricing terms to P&G is a well-known folklore. Agriculture is a state subject in India and they are regulatory hurdles like Agricultural Produce and Marketing Control Acts (APMC). APMC acts stipulate purchase and sale of commodities like grain only in designated mandis or outlets.
One of the reasons for lack of investment by Indian Retail giants such as Reliance could be outdated laws like APMC. Why should foreign retailers be different?
One of the neglected aspects in the whole issue is the social impact of this reform on communities and their livelihoods. Is there any particular community which would be impacted the most?
Spaces - Education and Employment
Dr Rakesh Basant (IIMA) had published a paper titled “Education and Employment among Muslims in India” which details the education and employment scenario of the Muslim community in India. The author points out nature of the problems of Muslim community in terms of Spaces namely Education, Employment, Political and Social. The paper points out the fact that Muslim community faces a double whammy of being labeled as “Anti national (My name is Khan and Not a terrorist) and appeased by different political parties for their gains.
The appeasement policy hasn’t provided much benefit to the Muslim community in terms of improving the educational level or employment opportunities. The analysis will harp on two spaces namely “Education and Employment”
Percentage Distribution of Persons by Education for Each Socio-religious Category (SRC), (Rural + Urban and Male + Female), 17-29 years
Year ( 2004 -05) | Hindu -UC | Hindu - SC | Hindu - ST | Muslims | Other Minorities | All |
Not Literate | 9.6 | 33.9 | 45.6 | 29.3 | 14.2 | 24.8 |
Secondary and Below | 57.1 | 56.4 | 47.5 | 60.7 | 61.1 | 57.9 |
Year ( 2009- 2010) | ||||||
Not Literate | 5.7 | 24.7 | 30.1 | 26.1 | 8.8 | 17.1 |
Secondary and Below | 51.2 | 60.8 | 58.0 | 59.0 | 56.2 | 58.2 |
The analysis clearly proves that Muslim community not literate population is way above other Socio religious category (SRC). In addition, not literate population had declined from 29.3% in 2004- 05 to 26.1% in 2009-2010 which pales compared to other SRC’s such as Hindu SC and ST. The trends are in sync with Sachar Committee (SC) opinion that “Educational Status of Muslim community” is a matter of Grave concern”. Furthermore, rate of progress has been the slowest for Muslims in terms of improvement in educational status. One of the primary reasons for low level of educational attainments of Muslims is attributed to lack of good quality government schools in their vicinity. In addition, Government schools are few beyond primary level. Furthermore, exclusive girl’s schools are few in number. Lack of quality education provided by Government schools had led to higher drop out of Muslim children as they cannot afford private education. It doesn’t need extensive analysis to point the fact that low educational levels of Muslims could deprive them of employment opportunities in knowledge based sectors such as Software, Biotech and Pharma. Sachar committee clearly points out the ownership of physical assets (especially land) and human capital (especially education) is a key determinant of occupation patterns.
Occupational Trends
In terms of occupational patterns, Muslim community has the lowest percentage of population engaged in agriculture. The percentage of Muslim population engaged in agriculture is only 39.8% of the population compared to Hindus which is around 60.0% according to Sachar Committee. The analysis by Dr Rakesh Basant substantiate the findings of Sachar Committee(SC) by stating that only 51.4 % of the Muslim Population engaged in agriculture compared to All persons average of 67.0% as of 2009- 2010 . Muslim community low participation in agriculture (Land) can be attributed to higher landlessness and larger population of the community residing in urban areas. The Sachar committee clearly states that Muslim population employed in Central Public Sector Undertaking is mere 3.0% of the total working class. The employment picture is better in terms of State Public Sector Undertaking of about 10.0% of the total working class .The analysis should be a wake up for so called “Secular parties”. Which sector provides livelihood to Muslim community?
Hindu -UC | Hindu - SC | Hindu - ST | Muslims | Other Minorities | All | |||||||||||||
Industry Group | All | M | F | All | M | F | All | M | F | All | M | F | All | M | F | All | M | F |
Manufacturing | 12.4 | 13.1 | 10.7 | 8.7 | 9.1 | 7.9 | 8.7 | 9.1 | 7.9 | 20.5 | 17.1 | 31.8 | 9.0 | 9.3 | 8.5 | 11.8 | 12.2 | 11.1 |
Wholesale and Retail Trade | 13.4 | 17.1 | 4.2 | 4.7 | 6.4 | 1.9 | 4.7 | 6.4 | 1.9 | 16.8 | 20.2 | 5.3 | 9.7 | 13.3 | 5.3 | 9.1 | 12.1 | 3.1 |
Finance, Insurance, Real Estate etc.., | 3.7 | 4.5 | 1.6 | 0.7 | 0.9 | 0.2 | 0.7 | 0.9 | 0.2 | 1.2 | 1.3 | 0.6 | 2.3 | 3.0 | 0.6 | 1.6 | 2.1 | 0.6 |
Community, Social and Personal Services | 12.4 | 11.6 | 14.6 | 6.3 | 6.4 | 6.2 | 6.3 | 6.4 | 6.2 | 6.8 | 6.3 | 8.5 | 10.2 | 8.8 | 8.5 | 7.9 | 7.8 | 8.1 |
Source- Sachar Committee
The two sectors which provide employment opportunities for Muslim community are manufacturing and retail trade. The major employers of manufacturing are Textile industry, Tobacco, Metal fabrication, Leather and Silk. SC committee clearly states that import of silk from China had a devastating impact on silk industry. The other industries are mainly commodity industries, which mean pricing power is low for the manufacturers. Indian suffers from various infrastructure deficit such as power, lack of credit for Small and Medium enterprises, exchange rate issues and availability of quality manpower. Apparel exports had declined by 7.2% in dollar terms during August 2012 -2013 compared to corresponding period last year. The apparel industry case applies to other industries which employ the Muslim community. This leaves wholesale and retail trade as the primary source of employment of the Muslim community. Muslim community scores over other community in terms of dominating the wholesale and retail trade. Wholesale and Retail trade is a major social security net of this community. This safety net has been established due to inherent entrepreneurial capability and traits exhibited by men and women of this community. To add to the fact, Wholesale and Retail trade is preferred source of employment for Muslim women compared to other community. Muslim women accounts for 5.0% of the total working class of this community compared to average of 3.0% in terms of wholesale and retail trade. Further liberalization of retail could impact the livelihood of Muslim community is beyond doubt.
PM’s Double Speak
After sufficient hibernation, India’s Honorable Prime Minister addressed the nation to dispel doubts regarding the reform measures. With respect to FDI in Multibrand retail, PM opined that small traders wouldn’t be impacted by this reform measure. He illustrated with an example of Delhi which had witnessed threefold increase of small shops despite presence of big Indian retail chains. The decision to allow FDI in Multiband retail would be prerogative of respective state government. Mamata was categorical that West Bengal won’t allow FDI in retail. Nitish Kumar had opined allowing FDI in retail is “Suicidal”. Mulayam Singh Yadav opposed the move on foreign investment in retail but was magnanimous in providing support to UPA. The surprising fact to note that of Kerala too opposed the move. Kerala is ruled by Congress party. Prime Minister wasn’t able to convince the Chief Minister of Kerala, who belongs to his party about the merits of FDI in Multiband retail. How can the PM expect allies and opposition ruled states to take the hard decision? Does the PM‘s words have any credibility?
The states are right in opposing foreign investment as they have significant Muslim Population. According to 2001 census, Muslim populations accounts for West Bengal ( 25.0%), Kerala (24.7%), Uttar Pradesh ( 18.5%) and Bihar (16.5%). They understand the fact that FDI in Retail could have significant impact on the livelihood of the entrepreneurial Muslim community. The political parties who view India as a secular republic will oppose the FDI reform in retail.
Congress party led UPA should realize the decision of allowing FDI in Retail would damage the Secular credentials of the party? This decision could result in more collateral damage to Muslim community than Godhra? Sometimes Mamata Didi is right than Manmohan Singh. FDI in Multibrand Brand retail will kill the livelihood of Muslim community softly. Still the UPA wants to purse this policy measure? The choice is left to them?
(Views are personal) http://www.moneyindices.com/detail_news.php?id=50