Metro faces protest on Bangalore route
The Karnataka government has asked top officials of the German Metro cash & carry outlet in Bangalore to refrain from selling directly to consumers or consumer co-operatives.
By Mayur Shekhar Jha, TNN |
NEW DELHI: No state government wants to be seen lagging behind in public display of its support for local traders. After UP, West Bengal, Kerala and Orissa, the Karnataka government has now asked top officials of the German Metro cash & carry outlet in Bangalore to refrain from selling directly to consumers or consumer co-operatives. Sources attribute the sudden rush by state governments in distancing themselves from corporate retailers to the possibility of mid-term general elections. Even if there is no mid-term polls, general elections are slated to be held in early 2009, alongwith assembly elections in Andhra Pradesh, Orissa and Karnataka.
Operating in the cash & carry (wholesale) format, Metro is allowed to sell products to retailers and institutions with sales tax registration number. Anti-organised retail groups allege that employees of some Bangalore-based IT companies had formed consumer co-operatives and got sales tax registration number to buy from cash and carry stores at wholesale prices. Subsequently, some leaders of India FDI Watch, the organisation which has initiated the campaign against organised retail, have filed a public interest litigation against the German retailer and the matter is now sub-judice.
“This way, the company was clearly circumventing rules. Alongside the PIL, we had taken the matter up with the state government as well,” said India FDI Watch convenor Dharmendra Kumar. The state government’s intervention clearly means that the company will only be able to sell to retailers or institutions such as restaurants, hotels and canteens. However, for the company it will not be easy to differentiate between an institutional buyer and a consumer co-operative.
The Karnataka government’s intervention comes at a time when most state governments are trying to show that they care for the well-being of the domestic industry and the millions of people whose lives are dependent on the retail trade. Traders form a powerful pressure group as well as a significant votebank in all states of the country.
The political clout commanded by traders is evident from the fact that in case of UP, the protests were spearheaded by the opposition Samajwadi Party. But in no time, the ruling BSP reacted and gave in to the demands. Under normal circumstances, a ruling party giving in to demands raised by the leading opposition party is unheard of. The timing of these developments could also be a reason why no state government or political party wants to be perceived to be siding with the retailers. There are fears of mid-term polls and obviously no political party wants to antagonise a solid votebank.
Sources say that certain sections of the ruling UPA are in favour of organised retail, but the UPA chairperson Sonia Gandhi is known to be apprehensive about the concept. However, there have no reports of any major violence against Reliance Retail in any UPA-ruled state. Last week, in Delhi, the company had to down shutters in an east Delhi store, but resumed operations after about an hour.
Local administrations are increasingly distancing themselves from organised retailers. For instance, in Bhubneshwar, the local police asked Reliance to down shutters amidst fears of violence. In Ranchi and Kolkata too, the local police had not provided additional security to Reliance Fresh stores.
Operating in the cash & carry (wholesale) format, Metro is allowed to sell products to retailers and institutions with sales tax registration number. Anti-organised retail groups allege that employees of some Bangalore-based IT companies had formed consumer co-operatives and got sales tax registration number to buy from cash and carry stores at wholesale prices. Subsequently, some leaders of India FDI Watch, the organisation which has initiated the campaign against organised retail, have filed a public interest litigation against the German retailer and the matter is now sub-judice.
“This way, the company was clearly circumventing rules. Alongside the PIL, we had taken the matter up with the state government as well,” said India FDI Watch convenor Dharmendra Kumar. The state government’s intervention clearly means that the company will only be able to sell to retailers or institutions such as restaurants, hotels and canteens. However, for the company it will not be easy to differentiate between an institutional buyer and a consumer co-operative.
The Karnataka government’s intervention comes at a time when most state governments are trying to show that they care for the well-being of the domestic industry and the millions of people whose lives are dependent on the retail trade. Traders form a powerful pressure group as well as a significant votebank in all states of the country.
The political clout commanded by traders is evident from the fact that in case of UP, the protests were spearheaded by the opposition Samajwadi Party. But in no time, the ruling BSP reacted and gave in to the demands. Under normal circumstances, a ruling party giving in to demands raised by the leading opposition party is unheard of. The timing of these developments could also be a reason why no state government or political party wants to be perceived to be siding with the retailers. There are fears of mid-term polls and obviously no political party wants to antagonise a solid votebank.
Sources say that certain sections of the ruling UPA are in favour of organised retail, but the UPA chairperson Sonia Gandhi is known to be apprehensive about the concept. However, there have no reports of any major violence against Reliance Retail in any UPA-ruled state. Last week, in Delhi, the company had to down shutters in an east Delhi store, but resumed operations after about an hour.
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Local administrations are increasingly distancing themselves from organised retailers. For instance, in Bhubneshwar, the local police asked Reliance to down shutters amidst fears of violence. In Ranchi and Kolkata too, the local police had not provided additional security to Reliance Fresh stores.
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