Joydeep Ghosh: The ugly, uglier and ugliest

Three recent events make for sad statements on our current state of affairs

Last week was quite eventful. Three key events – the debate on foreign direct investment in retail, GMR’s exit from Maldives and India’s loss to England dominated newsrooms. Each one of these had their ugly moments.

The ugly – FDI in retail: While some of the best political orators argued their case, Arun Jaitley’s famous ‘country of sales boys and girls’ comment was, to say the least, surprising.

In a country where unemployment among the educated rural is the highest – 13.9 per cent in 2011 vis-a-vis 7.6 per cent in urban India – becoming sales boys and girls is at least an option. Underemployment is at least better than unemployment.  If they are good, there is a system that allows them to grow. Or, the money earned can assist them to do an evening course in business or something else. In the US, many people do the same – work as waiters or store assistants and educate themselves further.

Besides this, one of the biggest benefits that FDI in retail brings is higher revenues through taxation. Interestingly, even the proponents of FDI did not stress on it. Today, most kirana shops – millions of them – do their entire business in cash (read in black) and little tax is paid on their profits.

With the entry of organised players, much of this money will go into the states’ and Centre’s coffers. Sure, this will happen over time but everyone will realise this big benefit.

But some good has already come out of FDI in retail. With Wal-mart declaring that it has paid Rs 125 crore for lobbying with US lawmakers to enter India, there is more transparency in this sector. If others in the sector or other sectors do the same, things would be simpler. And Mr Kejriwal will have less to complain about.

Let’s move on to the uglier: GMR’s exit from Male and confused signals from the Indian government. Initially, it criticised the Maldives government. But after that, there was silence.

Amid claims and counter claims, the fact remains that GMR has already spent over Rs 700 crore on the project – out of this $78 million was paid upfront to the government. While the Maldives government has full rights to cancel the project, it should pay GMR.

But comments coming out of the country indicate otherwise. Uza Aishath Azima Shakooru, attorney general of Maldives, told Business Standard, “We have filed for arbitration. Normally, these proceedings can take two to three years. Who knows, at the end of it, GMR might have to pay damages to us.”

What the Indian government needs to take cognizance of is the attitude, not the eviction per se. In the recent past, there have been other countries like Bolivia and Zimbabwe where Indian companies have suffered.

Several Indian banks will hurt because of these ventures. Given this situation, banks can rightfully deny funding to projects in these countries in the future.

And here’s the ugliest: Mahendra Singh Dhoni’s defiance in defeat. Ten losses in eleven tests do not stack up well for the Indian captain. Wasn’t this the same team which was making statements like “let them come to India” in Australia?

They still haven’t but we are in trouble if they do. It’s not important whether we lose or win the last Test in Nagpur; we have already lost.
Like a friend said, “Humiliated, yet not humbled.”