Financial thoughts had applauded Manmohan Singh when FDI was announced one year back. http://www.financialviewsonline.com/2011/11/indias-next-it-boom-fdi-in-retail.html . But got disappointed when Trinamool congress & other political quarters pressurized him to pull it back.
Last year when FDI was announced, it was the right time. Rupee was around USD=Rs 47/- Indian GDP around 7%. Drop to 6% was unthinkable. If anyone said then Indian GDP will drop to 5.3%, he would have been laughed at. Oil price in Indian rupee terms was much favourable and petrol, diesel and gas cylinders costed much less – thanks to Indian Rupee at Rs.45-47 range in first three quarters of 2011.
After one year, Indian Rupee touched USD =Rs.57/- Oil companies suffering losses, indian subsidies rising fast, fiscal imbalances increasing, cost of oil imports in rupee terms shooting up hurting the increasing consumers of petrol, diesel and gas cylinders in India. Above all, India's growth rate dropped to 5%, falling behind Saudi Arabia (6.2%), Turkey (8%), Indonesia and Philippines. No wonder FIIs and FDI have touched recent historical lows during the last one year.
Trinamool supremo just needs limelight and goes to any extent even thrwating India’s growth and common man's future. If FDI is rolled back again now, 2013 Oct will witness USD = Rs 70/- india’s growth rate below 4%, imported cost of oil shooting up, petrol, diesel and gas cylinders costing much more than what Govt. of India is offering now and mark the words by Financial Thoughts – MARKET WILL MAKE INDIAN CONSUMERS PAY MORE WITHIN ONE YEAR. All FDI and FII will have migrated to Indonesia and Turkey which is growing by more than 8%. India is no longer attractive compared to Philippines etc.
FII knows how to make money from India whether it goes up or goes down. If India goes down, they will short Indian Rupee and equities and make money. Entire Indian retail investors are long on equity, who will be losers. Common man will suffer heavily in all fronts.
Hope the efforts of Manmohan Singh and Chidambaram will get the support from Indian politicans who have capacity to think in broader terms. A little suffering now will bring in lot of future benefits. Any attempts for little benefit now, will bring in lot more future worries.
Had FDI decision in Nov 2011 not rolled back at the behest of Trinamool, Indian situation now would have been much better – there would have been no increase in gas cylinder and diesel prices now.
PS: an article on poor distribution in India, which highlights need for modern technology and techniques thru retail FDI
http://www.ndtv.com/article/india/foodgrain-worth-rs-250-crore-rots-in-maharashtra-godown-state-government-blames-the-centre-253898?fb_action_ids=10152024799815584&fb_action_types=og.recommends&fb_source=aggregation&fb_aggregation_id=246965925417366
