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Showing posts from June, 2010

Inflation and the Case for FDI in Retail

As the debate opens up again for FDI in retail, it is interesting to examine the contours of the issue.

As things go,only 51% investment is allowed in single brand retail and 100% is allowed in wholesale operations.Almost no one, not even the opponents of FDI have any argument against the economic benefits of FDI. The reasons are political. The ICRIER in its report had strongly and staunchly enunciated the benefits of FDI and the fact that it has had manageable adverse impacts in emerging countries. The reasons for opposition are political and it is good fodder for the press.

But the question is can any country manage without a large organized retail and can any emerging country do it without FDI?

The Government has woken up to the fact that inflation is a monster that can be tackled only by efficiency and productivity. With the world economy likely to remain vulnerable for some time, sustaining fiscal deficits is not the answer. The Indian interest rates are also high enough to make the…

Roots of Denial

In a recent discussion on TV after Mamata’s triumph in the municipal elections, the Trinamool spokesman Deerk O’Brien kept on saying to several points the CPM spokesman raised that the communist were living in denial. We see denial every time when seemingly intelligent people refuse to see the truth. The latest scientific studies suggest that denial has its origins in power play and emotions.

1. Most denialists deny anything that they cannot see. Their vested interest survive because of this denial. For example, the society has denied global warming (as long as it did not see it directly),keeps denying evolution and earlier denied harmful effects of smoking. These denials serve to perpetuate the old mindsets preserving established interests.

2. Most denials are based on emotions and anecdotal evidence. So there is no rational study or assessment of evidence but the mere occurrence of event is touted as causality. Human beings also tend to react to emotions and thus it is fertile ground …