Thursday, November 11, 2010

A few days before President Obama's visit an official of Wal Mart, the largest grocery chain in the world, was in India and supporting the opening up of the retail sector in India. India allows foreign companies to retail their own brands but will not allow retailing of multiple brands under one roof. Thus Reebok and Benetton have their own stores selling their own brands of clothes, shoes and sports goods but the likes of Wal Mart and Tesco are not allowed. The advantages of having such companies setting up giant hypermarkets are many. Consumers will gain as they will keep prices down by concentrating on volume and by directly sourcing fresh produce from farmers will cut out middle men and pay better prices to farmers. Thus farmers get more money while consumers get cheaper products. So why should the government, which is always bleeding for the aam aadmi, oppose such benefits to the people? Firstly, middle men are politicians who, by controlling the economic activity of the rural people, keep them under their control. A politician instead of a zamindar, the feudal system still operates. Secondly, if farmers gain control over their produce and are making more money there will be no need for the various financial schemes such as PDS, NRAGS and so many others designed to help the rural poor. The financing for such schemes run into hundreds of billions of rupees every year. Naturally most of the money is looted by criminal politicians and thieving civil servants and they will be most displeased if the source of their wealth was suddenly cut off. Is it any wonder people are taking to arms?

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