cotton bags,messenger bag,reusable bags-India suffering from ‘too much of democracy’

In every sense it was illuminating – the venue, the speakers and the subjects.

The Hindustan Times Leadership Summit held on Dec 2 and 3 at the luxurious Taj Palace in New Delhi, came alive with extremely interesting and insightful ideas and discourses participated by a galaxy of leaders from India and abroad – former prime ministers, social activists, intellectuals, movie actors, even a “celebrity former hacker”.

The theme was “Keeping Pace With the Changing World” and the topics discussed and debated over were thought-provoking and wide-ranging – from the Arab Spring to India’s rise and current economic turmoil in Europe and the US.

But what made every one pause and think was the observation made by former Malaysian prime minister Mahathir Mohammad that India is perhaps too democratic to manage divergent ideologies and conflicting agendas.

In his key-note address at this high-profile annual event organized by India’s second largest newspaper group, Mahathir said had India been “less democratic”, it would have, by now, emerged as another China in terms of growth development”.

“Democracy is the best form of government, but it is not the easiest because most people do not understand the limitations of democracy,” commented Mahathir who from 1981 to 2003 ruled Malaysia with an iron hand, and guided his country to growth and prosperity.

The 86-year-old statesman in fact put a perspective into the imbroglio prevailing since India’s central cabinet on Nov 24 approved 51 percent foreign ownership of multi-brand retail stores.

Just over the issue, both houses of Parliament failed to function for about two weeks and a countrywide general strike was called this month to protest against the decision.

Already shares in Indian retailers are dropping with Pantaloon Retail India closing down by more than 12 percent on Dec 5.

Meanwhile, the Confederation of Indian Industry (CII) said the organized retail share in countries of comparative development such as China and Malaysia is much higher.

“While in China, it is estimated at 20 percent of the total retail sales, in India, it stands at a miniscule 4 percent,” the CII wrote in its website.

The other Southeast Asian countries, too, have much larger shares with Indonesia at 30 percent, Thailand at around 40 percent, it said. In Malaysia, it added, the share of organized retail share is as high as 55 percent.

But as Mahathir said, “too much democracy” in India blocks road to changes. Taking a cue from him, India’s Finance Minister Pranab Mukherjee at the summit warned his “friends in the opposition” that the price of blocking FDI in India’s big retail market would be too heavy.

According to a CII study, opening up of FDI can increase organized retail market size to $260 billion by 2020.

Mukherjee used the Leadership Summit podium to appeal to not only the opposition parties, but also some key allies in the United Progressive Alliance government, to start dialogues and reach consensus as soon as possible.

But as of now, such exercises appear a far cry.

On Dec 7, the finance minister announced in parliament that the government’s FDI decision will be put on hold until a consensus is reached.

This followed his abortive “mission” to persuade one of the key allies in the government to play ball.

The Congress, Mukherjee’s party, does not have an absolute majority in the 543-member Lok Sabha, the lower House of Indian parliament, and has to depend on its allies in the coalition for continuance of the government.

L.K. Advani, who is one of the most influential leaders of the main opposition party, the Bharatiya Janata Party, also made it clear, at the Leadership Summit, about his party’s strong reservation against FDI in retail.

He said India needs to be more cautious given the fact that it cannot “insulate or isolate from the current uncertainties in Europe and North America”.

On the other hand, CII President B. Muthuraman in a statement has said FDI in the retail sector would improve investment sentiment in the country. “At a time when declining investments have led to slower GDP growth, the entry of foreign funds in retail as envisaged by the government would go a long way in boosting confidence,” he said.

But Advani, who is a strong prime ministerial candidate in the event of his party’s coming to power, was not convinced. He said, “How many people in our society can it benefit?”

The audience, clearly dominated by industry leaders, looked depressed.

But, as former Malaysian premier Mahathir observed, changes are not very easy to come by in a huge democracy like India’s.

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