Penetrating
The Retail Sector in Bengal - The Reliance Juggernaut
By Partho Sarathi
Ray
20 August, 2007
Countercurrents.org
The
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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