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READING COMPREHENSIVE (RC)
Read the passage below and write a 100 word summary:
" Foreign direct investment (FDI) doesn’t have too many supporters in the Indian political class. Although it is favoured by Prime Minister Manmohan Singh and his few proreforms colleagues in the cabinet like the finance minister, it is a safe bet that a majority of politicians in the Congress and outside are uneasy about the concept.
They seem to believe that it means inviting foreigners to come and exploit the country, as the East India Company once did. Even if the political parties do not seriously believe this, they apparently would still like to exploit the paranoia about foreigners to secure votes for themselves.
Among the most consistent opponents of FDI are the trade unions, especially those affiliated to the Left such as the Centre of Indian Trade Unions (CITU), which is aligned to the CPI(M), and the All India Trade Union Congress (AITUC), which is close to the CPI.
They regard FDI as an integral part of what they call neo-liberal economic policies, which, according to them, are heavily tilted in favour of the rich. They also regard it as an instrument of America’s imperialism, which has the backing of the World Bank and the International Monetary Fund.
These views have prevailed in the political class ever since Narasimha Rao and Manmohan Singh introduced economic reforms in 1991 to tide over the balance of payments crisis. Many in the Congress also opposed the reforms because they held them responsible for the party’s defeat in 1996. It is only now that the party has decided to go along with Manmohan Singh, but its heart is still apparently in favour of the old-style Nehruvian socialism.
The communists, especially those based in New Delhi, had once been vocally opposed to FDI, but now they have moderated their views in deference to West Bengal Chief Minister Buddhadev Bhattacharjee, who is an ardent advocate of FDI. He is seeking foreign and domestic investment in order to breathe life into the state’s moribund industrial scene.
So, the Delhi comrades are now saying that FDI is welcome if it brings new technology, increases productivity and enhances employment opportunities. But generally their attitude is unenthusiastic. And if there is one sector where they have openly said `no’ to FDI, it is in the retail sector.
Even Bhattacharjee is opposed to foreign money pouring into this sector although he has had discussions with Wal-Mart and other investors on the subject. The Manmohan Singh government seems keen on FDI in the retail sector, but it is apparently hesitating because of the resistance not only from the political class and even some apparently pro-reforms journalists who have argued that it will put the small shopkeepers out of their business.
As one of the journalists has written, the entry of these giant enterprises has already spelt doom for the mom-and-pop corner stores in Europe and will do the same in India.
The loss of employment on this score is the main argument advanced by the Left against FDI in this sector. It is a matter of pleasant surprise, therefore, that Sharad Joshi, who claims to represent Bharat against India, has spoken in favour of FDI in the retail business.
Joshi, who is the founder of the Maharashtra-based Shetkari Sangathan and is a Rajya Sabha member, told a meeting of the parliamentary consultative committee of the Union commerce and industry ministry that fears of the family-run small stores going out of business are unfounded.
Instead, he expects a huge increase in economic activity in the rural areas and a large-scale increase in employment opportunities. Because of his expertise in rural economy, his views will undoubtedly attract a great deal of attention and influence thinking in both official and unofficial circles.
According to him, FDI in the retail sector will have a multiplier effect by generating jobs in construction, furnishing, hardware, food processing, packaging, management, data processing, etc. because the supermarkets have a huge potential for aiding development.
As he has said, “a nationwide retail network or, even better, a number of competing networks will bring about an economic revolution and can deliver a body blow to the problem of poverty and unemployment”. He also said that the supermarkets and the small stores can be complementary to one another and not end up in a bitter competition. Both have their advantages.
The small stores score over the supermarkets by offering fresher products and greater personal attention. The supermarkets can be somewhat impersonal in this regard. But they do allow the consumers to shop for everything under one roof.
The opponents of the giant retailers forget that India is large enough for both the multinationals and the small family-run businesses. For instance, when McDonalds, Kentucky Fried Chicken and other such outlets came to India, their opponents in the Left parties and in the saffron Swadeshi Jagran Manch (SJM) argued that the Indian eateries as well as the small roadside vendors will become bankrupt because the foreign investors have deep pockets. But nothing of the kind happened.
All businesses have thrived. The idli and dosa still remain the favourite meals of Indians along with the burgers. The aloo tikkis sold on the roadside still sell like hot cakes.
There is nothing to fear, therefore, from the advent of the giant retail stores. On the contrary, they will bring in an element of high professionalism in the production and sale of the commodities in daily use, and also highlight the need for improved infrastructural facilities linking the towns with the countryside.
Evidently, storage and transport arrangements will receive a boost. All of this has considerable employment potential. Since any economic change entails disruption, some small retailers will undoubtedly suffer because of the competition. But the more enterprising among them should be able to overcome the challenge by offering a greater variety of goods and by establishing close personal contacts with the customers.
It has to be remembered that a major reason for opposing FDI in the retail sector is political and not economic. The politicians seem to believe that by raising the fear of a foreign ‘invasion’, they can appear more patriotic. They also apparently consider the thousands and thousands of small shopkeepers as constituting some kind of a nationwide vote bank for those who oppose FDI.
The Left and the RSS-dominated SJM also have ideological objections. The former look upon the supermarkets as typical of a capitalist society, where unbridled consumerism is the driving force of the economy. For the SJM, the attraction which the shining shopping malls have for young people will make them imitate the western way of life at the expense of their Hindu cultural roots.
The anti-western views of the Left and the Right are supplemented by a third, largely nonpolitical group, which regards the fascination for liberalization and globalization as a betrayal of the Gandhian ethics of austerity exemplified in the simple life of the villagers, which is held up as a romantic ideal.
But, despite such opposition, there is gradually a realization that the new economy offers a better scope for development than the earlier licence-permit-control raj, with its snail-paced Hindu rate of growth. Sharad Joshi’s support for FDI in the retail sector is an example how the views on the subject are changing. "
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