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This is an archive article published on July 2, 2007

VS runs the shop

Kerala’s Marxists are trying so hard. But its people may still respond to economic signals

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Coke poisons people. Highway tolls exploit them. Fiscal discipline starves projects that can better their lives. So, of course, big retail chains, as Kerala’s Left explained to this newspaper on Monday, are anti-people. V.S. Achuthanandan’s revolutionary wolf of a government in the clothing of democratic sheep is nothing if not consistent, although some shine must have gone off the ban-retail-investment Bill on account of its sponsorship by a CPI minister. So much better it would have been had the idea come straight from VS’s office. Food minister and CPI leader C. Divakaran is ever so bold in proposing to ban a business activity permitted almost everywhere bar places like North Korea. But VS communicates the grandeur of Marxist praxis so much better. Doubtless, once the Bill becomes a law, we will hear from Kerala’s chief minister, who may well recommend that this revolutionary law should be exported, at least to other parts of India.

We would urge VS though to remember people, even Kerala’s people, have an odd habit of responding to economic incentives and disincentives. The fine theory behind the bill is that ration shops will come up instead of retail stores and people will be delighted. We fear Kerala’s consumers may decide that shopping in neighbouring Tamil Nadu, which shockingly has no bar on big retail stores, may be a profitable activity. Profitable both as a consumer as well as an arbitrager. Since it is typical of “anti-people” big retail stores to offer lower prices, Keralites may spot an opportunity for some inter-state informal trade. When Haryana became a model pro-people state and imposed prohibition, its people had displayed a similar disappointing liking for profit-making opportunities and regular runs to and from Delhi were made. State border control was of course happy, as it will be in Kerala. Who’s a capitalist subverter, they will ask in Kerala. Answer: Anyone in possession of a kilo pack of branded refined rice.

There are four more years of this government in Kerala and so many business activities still not banned. Of course, the need to ban some of them doesn’t arise because Kerala’s governments, even Congress ones run by A.K. Antony, have ensured investors understand the state is too special to be spoilt by things like job creation opportunities and new industry. The ruling party incidentally is fairly active commercially. But that’s different, of course. So, and VS should consider this seriously, what about a Left-backed big retail chain?

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