India strike over supermarket reforms

BBC’s Yogita Limaye: ”The government faces a tough challenge to implement the policies”

Opposition parties and trade unions in India are joining in a day-long strike over the government’s plan to open the retail sector to global supermarket chains and other reforms.

Early reports said that opposition workers had blocked railway tracks in Uttar Pradesh and Bihar states.

A key ally of the ruling coalition has pulled out of the government in protest at the plan.

Observers say the coalition’s majority in parliament is not at immediate risk.

Thursday’s nationwide strike, called by the main opposition Bharatiya Janata Party (BJP), its allies and Communist parties, has shut down schools, businesses and public transport in many cities.

TV channels showed protests taking place in the cities of Patna, Allahabad and Varanasi in northern India.

Most businesses were shut in the eastern city of Calcutta and public transport was disrupted, reports said.

The southern state of Karnataka, which is ruled by the BJP, was shut down in response to the strike call with buses off the roads and schools, hotels and commercial establishments closed.

The state capital, Bangalore – home to hundreds of IT companies including multinationals like IBM and Microsoft – was completely shut down.

“The fear factor is the reason for the closure,” a spokesperson for a multinational company told the BBC.

“We have asked our employees to stay back at home. We will instead work on Saturday,” an official of Infosys, one of India’s leading software companies, said.

The Confederation of All India Traders said 50 million people were expected to participate in the protests, and that large demonstrations were planned in Delhi and other cities.

‘Adverse impact’
“Multinational companies will destroy the economic and social fabric of the country and will adversely impact traders, transporters, farmers and other sections of retail trade,” Praveen Khandelwal, the head of the group, was quoted as saying by AFP news agency.

Small shops fear they will be put out of business
Delhi’s plan is aimed at reviving a flagging economy, but small shops fear they will be put out of business.

A Delhi-based trader Deepak Sethi said shopkeepers would lose business if foreign supermarkets were allowed into India.

“These big companies can attract customers by selling at cost prices. That means people here are going to lose jobs. Shops like ours will be hit the most.”

The Trinamool Congress party, a key ally of the ruling coalition, has said it would pull out of the government and that its six ministers would resign on Friday.

The BBC’s Andrew North in Delhi says the scale of protests will help tell whether the government can execute the reforms successfully.

The government also announced a 14% rise in the price of diesel, which is heavily subsidised in India.

Under the government’s proposal, global firms – such as Walmart and Tesco – will be able to buy up to a 51% stake in multi-brand retailers.

Multinational retailers already have outlets in India, but at present they can sell only to smaller retailers. This decision allows them to sell directly to Indian consumers.

Indian Prime Minister Manmohan Singh has said the reforms would “help strengthen our growth process and generate employment in these difficult times”.

20120920-081347.jpg

Advertisements
This entry was posted in Retail. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s