Penetrating The Retail Sector in Bengal - The Reliance Juggernaut
By Partho Sarathi Ray
20 August, 2007
Countercurrents.orgThe latest neo-liberal onslaught on the lives and livelihoods of working people in India is taking place in the retail sector. After agriculture, the retail sector employs the largest number of people in India. Of the 40 million people involved in retailing as an economic activity, 0.5 million are in organized retail whereas around 39.5 million people are employed in unorganized retail trade. This includes all sorts of small retailing operations ranging from neighbourhood "mom-and-pop" shops to street vendors to small farmers who travel to cities daily to sell their produce to the small-scale transporters who transport the retail goods. These 40 million adults in the retail sector roughly translates into 160 million dependents, making the retail sector the source of livelihood for approximately a sixth of India's population. The decade of liberalization, which has seen stagnation in the agrarian economy and large scale job losses in the manufacturing sector, has pushed more and more people into different aspects of retailing in absence of any other opportunities.
On the other hand, the small but burgeoning middle class in India, with immense spending power compared to the vast majority of the poor people in the country, has been eyed for quite some time by both multinational corporations involved in the retail trade and by Indian corporations which want to enter the arena sensing it to be a source of huge profits. Walmart from USA, known for its hated business practices, Metro AG of Germany and Carrefour of France have all been trying to enter the Indian retail market. As the Indian government has still not allowed foreign direct investment (FDI) in the retail sector, Walmart is trying to enter the Indian market in a joint venture with Bharti, an Indian company.
Leading the charge among Indian corporations in this field is the Reliance Industries limited, which has opened a chain of retail stores called "Reliance Fresh" in most of the major cities in India. Other Indian corporations that have gone into the retail sector are Bharti, ITC, Godrej, Big Bazaar and Subhiksha. Reliance has an ambitious agri-retail plan, variously described as "farm-to-table" or "field-to-fork" , whereby it will directly source produce from the fields, route it through its national distribution centres and bring it to the urban consumers in the ambience of air-conditioned stores displaying packaged produce under artificial illumination. Being able to handle large volumes and to absorb initial losses, they can sell cheap and therefore undercut the market, pushing small vendors and groceries out of business, as happened over most of USA. Once a monopoly is set up, they can increase prices at their will. On the other hand, by handling the entire supply chain, and probably by going into corporate farming in the near future, they will push numerous people involved in the production, procurement and transportation of retail goods out of their means of livelihood. This is probably going to spell disaster for the large number of people employed in the retail sector.
As Reliance Fresh outlets started operating in a number of major cities, small-scale vegetable and fruit sellers started reporting reductions in sales by as much as 40% within a few days. Protests erupted in May in a number of cities such as Ranchi, Patna, Indore, Jaipur and Delhi. Protesters, mostly comprising of vegetable vendors and fruit sellers, picketed Reliance Fresh outlets or went on hunger strikes. The protests had turned violent in Ranchi and Indore, and the protesters were beaten up by the police. In Chennai (Madras), there was a protest march on May Day that proceeded from the wholesale Koyambedu market, which is suffering huge losses due to the opening of Reliance Fresh, to the Reliance Fresh shop, where the protestors were arrested. These protests by small retailers, to protect their livelihood and to prevent their being pushed into extinction, are spreading and need to be supported and organized into the general struggle against neo-liberal economic policies unfolding in India.
In West Bengal, ruled by the Left Front, led by the so-called Communist Party of India (Marxist) (CPIM), which is a darling of capitalists in India and abroad because of its abject surrender to all their demands, the situation is developing along a different trajectory. Reliance has been trying to enter the retail market in Bengal as a part of their Rs 25,000 crore national roll-out, but has been opposed not only by the people of the state but even by the non-CPIM parties in the Left Front. A major obstacle in their path has been the fact that the agriculture marketing department of the West Bengal government, which is the relevant authority in this sector, is controlled by a minister from the Forward Bloc, a junior partner in the government which is much closer to the people on this issue than the CPIM. To circumvent this obstacle, Reliance had tried to put a food-processing tag to its national distribution centres, as the food processing department is controlled by the CPIM. As this tussle continued between the two parties in the Left Front, Reliance found another way to penetrate the market in West Bengal. The municipal corporation in the West Bengal state capital of Kolkata (Kolkata municipal corporation, KMC), controlled by the CPIM, declared in May that it was going to hand over a major market in the city, the Park Circus market, to Reliance on a ninety-nine year lease. This was part of a process in which bids had been called for renovating and rebuilding this 76-year old market located in a prime location in the city, for which Reliance had emerged as the highest bidder.
The same process is supposed to happen for all the KMC-owned markets of the city. These civic markets of Kolkata, referred to locally as "bazaars", are not only the sources of livelihood for hundreds of thousands of people, they are also an organic part of the culture of this teeming city of millions. These are places where buyers and vendors directly interact with each other, and where farmers and fisher-folk from the outskirts of the city bring their produce, helping sustain the economy of the entire hinterland of Kolkata, one of the most densely populated areas in the world. In face of opposition in the KMC legislature, and from the agriculture marketing minister of the Forward Bloc who wanted the job of developing the civic markets to be transferred to the agriculture marketing board, Bikash Ranjan Bhattacharya, the CPIM mayor of the KMC, declared that Reliance would only be responsible for rebuilding and renovating the Park Circus market, not in using it for their retail trade. However, the proposal that was passed by a majority vote in the CPIM controlled KMC legislature states that Reliance "shall have the right of usage" of its portion for commercial purposes like "markets, offices, seminar halls, multiplexes, restaurants, entertainment hubs, etc, or for any other purpose as mutually agreed upon by the KMC and the private partner".
According to the plan, 150,000 square feet of the renovated market will go to Reliance on a 99-year lease, whereas the rest 55,000 square feet will go to KMC and existing stall owners. This again seems to be a case of doublespeak by the CPIM, where the mayor declares that Reliance would not use the Park Circus market to get into the retail trade but the actual agreement with the company does not explicitly say so on paper.
When asked about the protests by the traders who have been carrying out their business in the Park Circus market for generations, the mayor is reported to have said "The traders have no right to oppose the civic body's decision to hand over the Park Circus market to a private party. If they don't accept our decision, they are free to carry on their trade somewhere else."
In addition, when reminded about the plight of small vendors, a large number of whom sell their stuff in and around the market, the mayor had to say "KMC is not responsible for the future of these vendors. They will have to fend for themselves once the new and improved market is constructed," This portrays the callous disregard of the CPIM for the lives and livelihoods of these people who not only depend on this market as their source of income, but have also developed close, mutually helpful relationships with the regular buyers of the market.
The corporatization of Kolkata's markets is another neo-liberal assault by the CPIM on the people of Bengal in the name of development. This would result in the handing of public assets, maintained on tax-payers' money and sustaining huge numbers of working people, on a platter to corporations. Opposition against it needs to be built up among all sections of the people, and the small traders and vendors who are at the receiving end of this policy, needs to be supported as part of the general struggle against capitalist development being thrust over the people of India. Another imperative is the proposition of alternative models for the solution of this issue.
It is plausible that the KMC is unable to maintain these markets out of its limited finances. The disturbing thing is that the only solution that is part of the dominant discourse is the handing over of these markets to private operators. The possibility that the small traders and retailers, who carry out their trade from the market, might be able to get together and mobilize finances to buy or lease out the market is not even being explored. This would not only prevent the wiping out of their source of livelihood, but would also make them stakeholders in it. Such alternative
possibilities need to be constantly raised as part of the discourse in order to resist the neo-liberal policies being imposed by the CPIM in West Bengal.
(Partho Sarathi Ray is a regular contributor to Sanhati, an organization dedicated to fighting neoliberalism in India.)
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