India's Pandora’s Box is now being opened

Foreign Direct Investment will help some of India, but won't correct growing inequalities.

Last Friday, the Indian government announced big bang reforms signalling that the Indian economy is now wide open for business. The landmark decision includes allowing 49 per cent foreign direct investment (FDI) in aviation, raising the FDI cap in the media industry to 74 per cent and most pertinently allowing 51 per cent FDI in the sector of multi-brand retail. This means the Tescos and Walmarts of the world can now set up shop in India.

In the lead up to the high octane announcements the ruling party at the centre - the Congress - that leads a coalition government which rather tellingly goes by the moniker of UPA 2 (United Progressive Alliance; "2" to indicate its second term) was reeling under the vertiginous impact of "Coalgate" – a scam unearthed by the national auditor, the CAG (the Comptroller and Auditor General). Suggestive of crony capitalism, the government "gifted" coal mining permits to private players fleecing the national ex-chequer to the tune of £33bn. The new wave of economic liberalisation policies is a laudable attempt to take the spotlight off the scam. The policies are also a damage limitation attempt by a floundering government to counter allegations of inertia in national and foreign publications. The unflattering foreign reviews unsurprisingly hurt most.

The new measures were explained by India’s Commerce and Industry Minister, Anand Sharma, in an "exclusive" on India’s premier news channel, NDTV. He said the reforms, in particular, those in multi brand retailing were what India needed. Let’s set the record straight here. Which India was the minister referring to? If we look at India’s 1.2 billion population as a pyramid, at the apex sit 1.2 million affluent households. They tend to live in India’s top eight cities. Approximately 300 million people are middle class. It is the base of the pyramid that comprises the biggest section in terms of the number of people – at least 700 million people consisting of 114 million families. This is nearly 60 per cent of the country’s population. They include "struggling India" and "destitute India"; those for whom making needs meet is a daily battle and those who are below the poverty line. Surely, the minister was not referring to this chunk of the Indian "market"? They simply do not have the purchasing power for a Carrefour or a Walmart. Their everyday grind absorbs them, survival overwhelms them. Conspicuous consumption does not feature on their agenda of preoccupations. Neither will the big retailers be counting them in. It is a mutual disaffection.

A strong argument in favour of FDI in mammoth retail is that it will generate employment. Surely, it will. But we can’t let the question lie there. We must ask, for whom? Will it source employees from the unskilled, illiterate vegetable vendors who, akin to a capillary network, are spread across the length and breadth of the country? Operating at the point of delivery to the grocery shopper, they are the lifeblood of India’s unorganised grocery sector. Succinctly asked – will the giant retailers employ from the displaced workforce? If the big chains simply usurp their livelihoods what will become of their families entirely dependent on their incomes? Or are they simply not part of this narrative? In which case let’s be clear – in the way FDI is being sold it isn’t for the appeal of the Indian imagination but of a sliver of the Indian imagination.

Since the first wave of economic deregulation reforms in 1991 (ironically passed by the incumbent Indian Prime Minister Manmohan Singh when he was finance minister) select segments of India have unequivocally prospered. Even a cursory look at the 2G spectrum scam and "Coalgate" make clear the benefits accrued to the political brass and to the corporate sector. The famous Indian middle class has also expanded. And on a recent visit to South Kolkata, in the vicinity of an upmarket supermarket, the prosperity of urban sprawl was also plain to see. An open garbage dump heaved and street urchins ran around it. A friend plaintively remarked "garbage dumps are flourishing too". The brush of 1991 painted some of India gold, the other parts left to fester into elision.

Will the brush of the 2012 reforms paint India differently? In the "spillover" effect of the big foreign companies operating in India, there will be benefits to be had. The promises of improved supply chain infrastructure and the elimination of middlemen (how the middlemen will be redeployed is another matter) have been reiterated over and over. The headlines of the "in-favour" rhetoric relay thus - more FDI will drive consumption, manufacturing, economic growth and GDP. But for the holistic temperature of the development of a nation the Gini Coefficient and the Human Development Index are more apposite thermometers – and on both counts, unlike the growth index, India’s score is not reassuring. Also, if we put to the test the theory of how gigantic foreign retailers will encourage Indian manufacturing by citing the example of the "Walmart effect" on American manufacturing – then the prognosis is slim. The bottomline is this: it will certainly help "some" of India, but it is definitely not the panacea to India’s most pressing woes.


Members of The Indian National Association of Street Vendors shout anti-government slogans during a protest against Foreign Direct Investment. Photograph: Getty Images
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After the “Tatler Tory” bullying scandal, we must ask: what is the point of party youth wings?

A zealous desire for ideological purity, the influence of TV shows like House of Cards and a gossip mill ever-hungry for content means that the youth wings of political parties can be extremely toxic places.

If you wander around Westminster these days, it feels like you’re stepping into a particularly well-informed crèche. Everyone looks about 13; no one has ever had a job outside the party they are working for. Most of them are working for an absolute pittance, affordable only because Mummy and Daddy are happy to indulge junior’s political ambitions.

It’s this weird world of parliament being dominated by under 25s that means the Tory youth wing bullying scandal is more than just a tragic tale. If you haven’t followed it, it’s one of the most depressing stories I’ve ever read; a tale of thirty-something, emotionally-stunted nonentities throwing their weight around at kids – and a promising, bright young man has died as a result of it.

One of the most depressing things was that the stakes were so incredibly low. People inside RoadTrip 2015 (the campaigning organisation at the centre of the scandal) cultivated the idea that they were powerbrokers, that jumping on a RoadTrip bus was a vital precondition to getting a job at central office and eventually a safe seat, yet the truth was nothing of the sort.

While it’s an extreme example, I’m sure it happens in every political party all around the world – I’ve certainly seen similar spectacles in both the campus wings of the Democrats and Republicans in the US, and if Twitter is anything to go by, young Labour supporters are currently locked in a brutal battle over who is loyal to the party, and who is a crypto-Blairite who can “fuck off and join the Tories”. 

If you spend much time around these young politicians, you’ll often hear truly outrageous views, expressed with all the absolute certainty of someone who knows nothing and wants to show off how ideologically pure they are. This vein of idiocy is exactly where nightmarish incidents like the notorious “Hang Mandela” T-shirts of the 1980s come from.

When these views have the backing of an official party organisation, it becomes easy for them to become an embarrassment. Even though the shameful Mandela episode was 30 years ago and perpetrated by a tiny splinter group, it’s still waved as a bloody shirt at Tory candidates even now.

There’s also a level of weirdness and unreality around people who get obsessed with politics at about 16, where they start to view everything through an ideological lens. I remember going to a young LGBT Republican film screening of Billy Elliot, which began with an introduction about how the film was a tribute to Reagan and Thatcher’s economics, because without the mines closing, young gay men would never found themselves through dance. Well, I suppose it’s one interpretation, but it’s not what I took away from the film.

The inexperience of youth also leads to people in politics making decisions based on things they’ve watched on TV, rather than any life experience. Ask any young politician their favourite TV show, and I guarantee they’ll come back with House of Cards or The Thick of It. Like young traders who are obsessed with Wolf of Wall Street, they don’t see that all the characters in these shows are horrific grotesques, and the tactics of these shows get deployed in real life – especially when you stir in a healthy dose of immature high school social climbing.

In this democratised world of everyone having the ear of the political gossip sites that can make or break reputations, some get their taste for mudslinging early. I was shocked when a young Tory staffer told me “it’s always so upsetting when you find out it’s one of your friends who has briefed against you”. 

Anecdotes aside, the fact that the youth wings of our political parties are overrun with oddballs genuinely worries me. The RoadTrip scandal shows us where this brutal, bitchy cannibalistic atmosphere ends up.

Willard Foxton is a card-carrying Tory, and in his spare time a freelance television producer, who makes current affairs films for the BBC and Channel 4. Find him on Twitter as @WillardFoxton.