Lok Sabha

December 14, 2012

Mr. Saugata Roy`s speech on FDI

Mr. Saugata Roy`s speech on FDI
(s2/1540/snb-gg)
1540 hours :

PROF. SAUGATA ROY (DUM DUM): Madam, I rise in favour of the motion moved by Smt. Sushma Swaraj and also in support of the motion for amendment moved by me and Janab Hasan Ali. It is very difficult to make a speech after Sushmaji’s beautiful speech in flowery and flowing Hindi. But still I will make an attempt.

Madam, for us, FDI is a matter of faith. FDI in multi-brand retail is something we have decided to fight tooth and nail. On 20th September, this Government took the decision to introduce 51 per cent FDI in multi-brand retail.

On 21st of September, all the Ministers of Trinamool Congress, setting an example before the country, resigned from the Council of Ministers. We have shown the moral courage to oppose and take a stand. When we brought the No Confidence Motion, we knew that by ourselves we do not have the numbers. We appealed to all parties, but they did not stand with us. But you, my friend, your party, stood with us, for which we are grateful. But still we persisted in moving the motion and that is why again I have given this motion for amendment to the rules. Madam, FDI in multi-brand retail to the extent of 51 per cent is a step that will jeopardize the livelihood of 3.3 crores of people who are employed in the retail trade and as I will show directly and as I will show later, it will impact the lives of the farmers whom this so called reform FDI in retail is seeking to address. But before that may I give a brief chronology of the events. One would remember that on the 22nd of July, 2011, the Committee of Secretaries took a decision to introduce FDI in multi-brand retail. On 24th November, 2011, the Union Cabinet paved the way for retail measures by allowing companies like Walmart, Tesco and Carafone to open retail shops in India. The Winter Session of Parliament was totally stalled by the Opposition protesting against FDI in multi-brand retail. On 7th December, 2011, the then Leader of the House, Shri Pranab Mukherjee called an all Party meeting and it was 04.12.2012 : am-pk agreed, as has been correctly mentioned by Smt. Sushma Swaraj, that FDI in multi-brand retail would be kept in suspension till a consensus was arrived at with all stakeholders. Now, this was on the 7th of December, 2011. What has happened in this brief interregnum? The Government’s hands were certainly forced to announce this decision.

Madam, let me give you another chronology. In September, 2009, revealed by the Hindu Wikileaks, cable series, March 18, 2011, the then Secretary of State of USA sent a cable to the US Embassy in India. She had asked, why is he, that is Shri Anand Sharma, reluctant to open multi-brand retail? Further, another cable read, does Sharma get along with Mukherjee — meaning Pranab Mukherjee — and Prime Minister Singh?

It is Assange’s cable and not mine. So, it is on record. She also asked: Why was Mukherjee chosen for the Finance portfolio over Ahluwalia? These cables were the sparks that boarded the Government into action. Then, as I said, the Government took a decision on 24th of November. After that, we know that the Secretary of State came to India on 7th May, 2012 and one of the major agenda she had was to persuade the Government of India to agree to FDI in retail. Madam, the next spark for action was provided by The Times Magazine in its issue dated 16th July, 2012. You can see that it is written with the photograph of our Prime Minister. The Underachiever. There, one lady, Krista Mahr has prescribed as to what is expected of Dr. Singh. It said that industry leaders are demanding a host of bold reforms such as an end to expensive subsidies, deregulation of diesel prices and resumption of a law to allow multi-brand retailers like Walmart into India. The Government originally backed down from such legislation in order to keep coalition members happy.The Government ultimately acted according to the prescription given by The Times Magazine and that was what rattled the Prime Minister so much knowing that he had coalition compulsions. Earlier he had not acted on the 2G scam citing coalition compulsions but knowing coalition compulsions, he went ahead and his Government announced FDI in retail.

The other point that I would humbly mention is about Mrs. Clinton. She was a Director on the Board of Walmart for a long time and when she was trying to become the American President in 2007-08, Walmart executives and lobbies paid for her. She was obviously interested in Walmart getting into India. But why does the Government of India have to respond to the American urgings? Madam, being from Bengal, I remember (Interruptions) Shri Khursheed, I am not yielding. Whatever you have to say, you say later. Madam, I am not yielding. I just want to mention that it is mentioned under rule 352 as to what we can say and not say in this House and it does not include a reference to a dignitary of any other country. If we mention Aung Sang Suu Kyi in this House, it would not be out of order. We have shown her the respect that she deserves. So, please do not allow him. I am not yielding.

SHRI SALMAN KHURSHEED: I am on a point of order(Interruptions), I seek your ruling in this matter. May I speak? It is a question of patriotism. I would appeal to all sections of the House, including those in the ruling benches, including Netaji who supported the bandh against FDI in retail, including the DMK which opposed the FDI in retail, whose base are the retail traders, to forget party affiliations. I am not talking of majority. In this very House wades of currency notes were displayed. We know to what depth Indian democracy can sink to. I am not concerned about that. It is a question of principle.

We are from Bengal. It is in Bengal that the sun set at Plassey. Tagore has written boniker mandando dekha dilo rajdando rupe, pohale sarbonash. They come as traders and they become rajas. That is how British behaved. Are we again seeing a repeat of that? Americans coming through Walmart and capturing the Indian market and ultimately the Indian power. This is something which we should not allow.

I would like ask the Government, through you, as to why does the Government take a divisive decision every time immediately before an American presidential election. The Indo-US Nuclear Treaty took place before an American presidential election. This FDI retail decision took place again before the American presidential election. Where are we going? This is a country of 120 crore population with a tradition of 5,000 years. Are we selling our heads for a few pieces of silver? That is the principal question today. It is between Indian patriots and those opposed to patriotism in India.

Let me talk a little about the Walmart. There are three major companies doing retail in the world. Number one is the Walmart; number two is the Carrefour as Smt. Sushma Swaraj has mentioned; and number three is the Tesco.

There are other companies also, like Marks & Spencer. But Walmart is very big. It is so big that its turn over is at least four times bigger than that of the next company. Its turn over is 421 billion US dollars. One billion dollar means 100 crores. So, imagine how much it is. It is 4,21,000 crore dollars. That is its turn over.

Whom are we bringing into India? We are bringing in Walmart which makes a profit of 20,000 dollars every minute. We are bringing in Walmart which sources 82 per cent of its products from China. Shrimati Sushma Swaraj correctly said that bringing in Walmart either helps the Americans or the Chinese. It will not help the Indians. Who is the Prime Minister trying to help? We must realise that this is the question which is upper most in all our minds. Walmart has already entered through the backdoor with Bharti Retail. It is operating in 13 wholesale stores in four States of India.

They say that there are safeguards. What are the safeguards? They will open only in cities with a population of one million or above; that they will source thirty per cent of their products from the SME sector; that they will bring in a capital of 100 million; and that they will do fifty per cent of their backend operations here. What did the Parliamentary Standing Committee on Commerce say in June, 2009 on the retail sector? They studied the whole question and gave a very good report.

They gave a very good report. They said that FDI-driven retailing would be labour displacing. The growth of labour in manufacturing is insufficient to absorb the labour that would be displaced. Two, the global retail chain with deep pockets would sustain losses for many years till their competitors were wiped out. The pricing strategy of large retailers would drive out small retailers resulting in job loss. For a few years, they will sell at low price and then they will sell at high price when their competitors are eliminated. This is the standard Walmart strategy.

Three, once the monopoly of global retail chains were stabilised, they would buy cheap and sell dear and disintegrate the established supply chain by controlling both ends of the chain. Lastly, this does not help GDP. Retailing being an intermediate value-added process cannot boost the GDP by itself. So, why are you bringing in FDI in retail?

The hon. Commerce Minister was commenting outside the House that foreign investment will not come in, otherwise. If I may ask how much foreign investment, Mr. Commerce Minister, do you get. At least three billion dollars you would get over five years. India has, in any way, 20 billion dollars of foreign investment every year from 2006 to 2009. Three billion dollar is what is traded by the Reserve Bank in foreign exchange market every day. For that, you are going to lead so many small retailers to death? For whom is it meant?(Interruptions) They say as you sold your head for thirty pieces of silver, we are selling the country for 30 pieces of silver to Walmart! Mrs. Clinton does not matter. She was a Director in Walmart. But why are our people so much concerned about it?

PROF. SAUGATA ROY (DUM DUM): I say it is the Secretary of State. Yes, I can understand his sensitivity.(Interruptions) SHRI GURUDAS DASGUPTA (GHATAL): I am telling what you were saying.You objected to name the President; you objected to the mentioning of the name of that person. This only shows how vulnerable you are to the American President!

Madam, I am not bothered about Shri Khursheed’s sensitivity. He is sensitive to two names, positively, about Mrs.Clinton and negatively about Arvind Kejriwal. These are the two names about which he would react. I am helpless in this matter. Madam, what happened in the United States, leave alone the other countries. The entry of Walmart led to the closure of 40,000 US factories.

Shrimati Sushma Swaraj was mentioning that this has an effect on the American Industry also because Walmart is importing from China – You may listen to this – between 2001 and 2007, throwing millions of people out of their jobs. In these years, imports from China rose from nine billion dollars to 27 billion dollars. It means, it has tripled. What does that mean? Wherever they get cheap, they will buy from there. If necessary, they will close down the factories in their own country. Between 1992 and 2007, the number of independent retailers fell by 60,000 in America. Now, I want to ask the Commerce Minister, through you, Madam, this question. Have they done any study on the impact of FDI in retail? (Interruptions)Yes, you have done only two studies ‘one is in the Mid-Term Appraisal of the Tenth Plan. Now, who is the Deputy Chairman of the Planning Commission?

PROF. SAUGATA ROY (DUM DUM): I am not mentioning anybody. Who is the Deputy Chairman of the Planning Commission.
PROF. SAUGATA ROY (DUM DUM): In two minutes, I will wind up.
PROF. SAUGATA ROY (DUM DUM): What I was saying was this. You know who the Deputy Chairman of the Planning Commission is. They have said in their Mid-Term Appraisal this thing.