This same government was shying away from taking decision since last three years on almost anything. So when the Team Anna with full might of the people of India behind it, applied pressure to pass the Jan Lokpal Bill in the monsoon session of the parliament itself, the same government's response was prompt. It is a bill that would have long-term repercussions and hence it needs time to be studied and debated amply before it can be passed. For some strange reason, this same government apparently thinks that the decision on FDI in retail does not require such due diligence. Its almost like Rip Van Winkle woke up from a deep slumber of three years, one fine morning and said "Hey, we need to do FDI in retail..quick!"
Here's what happened while the government was sleeping. We had a big real estate bubble - both commercial as well as residential. While the interest rates were soft, builders aggressively borrowed to buy land and build residential and commercial structures. Property prices kept going up like never before. A lot of this business flourished on the back of ill-gotten wealth of the politicians. Now we are in a situation where commercial realty has already crashed and residential is in a deep mess. Don't ask me the source of my information. I am not in the habit of maintaining links and references to my information source. You just have to search for real-estate inventory in the 4 metros and the numbers are available all across the internet. The builders will hold on to the inventory so long as the real investors behind it (the politicians with black money) are willing to stay put.
These politicians will soon need the money. You need money to fight elections and election season is round the corner. First some major states that are going to polls, and then the grand finale' in 2014. Where will this money come from if it is stuck up in inventory that is refusing to get sold? This is where FDI comes in. Walmart is going to need space, a hell lot of space to open its malls. Initially, the malls are going to get permission only in the big cities. The same cities where land is scarce and where the ill-gotten wealth is stuck up the most.
This explains the haste with which the FDI needs to happen, no matter its long-term impact. As I said earlier, I have no problems with opening up retail to foreign kirana-wallas, provided it emerges are a well thought out decision after proper study and adequate national debate.
