Year 2008 appears to have taken off on a good note for the retail sector as business found a strong supporter in veteran CPM leader Jyoti Basu, who came out strongly in favour of capitalism – close on the heels of West Bengal Chief Minister Buddhadeb Bhattacharjee and his Uttar Pradesh counterpart Mayawati, who showed flexibility to facilitate organised retail in their states.
Basu’s remarks supporting capitalism caused ripples in political circles, with its ally Revolutionary Socialist Party (RSP) livid over this stand. At the other end, business circles told Indiaretailing, “What Basu is saying about capitalism is another euphemism for money and clearly favourable for the retail sector and other big business to come to the state.”
On the flak being faced by the CPM from political rivals and its allies, industry sources said, “This kind of criticism is bound to be there, but it shows the ground realities and that is why, be it the Left or the BSP, they have to come around in terms of supporting business.”
Mayawati is the leader of Bahujan Samaj Party (BSP), which came to power in Uttar Pradesh with a decisive victory in the assembly elections in May 2007.
On Saturday, Basu pulled up Left Front allies for accusing his party of deviating from the socialist line in pursuit of industrialisation.
“In a federal structure, how can one state establish socialism when the country’s economy is controlled by capitalism? Private investment is playing a major role (in Bengal). In recent years, we have succeeded in attracting around Rs 5,000 crore for industrial development in Haldia. We failed to do this in the ‘80s because of Central laws and the license raj. Now, we have forced the Centre to do away with those rules,” Basu said, after the weekly meeting of the party state secretariat.
Basu said the state government has clarified its position before the Assembly and it is pointless to raise the matter again. “We believe in socialism and a classless society. But right now, the ground reality is very different. We have a long way to go.”
Earlier, Chief Minister Bhattacharjee had told the 153rd annual general meeting (AGM) of Bengal Chamber of Commerce and Industry (BCCI) that if the state needed a market mechanism, it must “allow corporate houses in retail, though slowly and cautiously. We want private participation.”
‘”If we want new market mechanism, we should allow foreign houses into the agricultural retailing sector. We have to switch over from the conventional market to a new type of agricultural retailing market,” Bhattacharjee said.
“There is a controversy going on over foreign investment in the agricultural retail trade in West Bengal,” he admitted. According to him, “If we want to consolidate our agricultural market with increasing production rate, we have to take up new policies slowly and cautiously.”
“If we want to set up a chain of cold storages and generate employment, we have to allow big corporate houses to come to the agri-retail sector,” Bhattacharjee asserted.
The reason cited was that 10-30 per cent of vegetables perish due to lack of market mechanism. West Bengal produces around 11.6 million tonnes of vegetables annually.
Leading retailers had faced stiff opposition in the state when they opened their outlets, forcing many of them to pull down the shutters.
In the case of Uttar Pradesh, the high-level committee constituted by the chief minister plans to convene a meeting of top companies having operations in the food and grocery retail business, including Reliance Retail, Aditya Birla group, and Spencer’s, to work out a viable formula wherein organised retail activities can continue in the state.
“We are keen that people living in the state avail of top-class retail options. But at the same time, concerns of small retailers cannot be ignored. We hope some amicable solution will be worked out,” a UP government official said.
A recent study by Jones Lang LaSalle Meghraj identified six districts in the state as emerging destinations for organised retail in India – the most in any state in India. The six districts are Agra, Meerut, Lucknow, Kanpur, Allahabad and Varanasi.
– Sri Krishna