Mayawati - why not Reliance ?

The shutting of Reliance Retail within 24 hours of its launch in Uttar Pradesh has led industry leaders to ask why the company was singled out by Chief Minister Mayawati, who has openly given the nod for similar other ventures, including Spencer's of the RPG group.

Representatives of the industry, intellectuals and common consumers all have been making wild guesses about why Reliance outlets were closed down, which has dealt a big blow to the world's richest Indian Mukesh Ambani's first foray into Uttar Pradesh, which was projected as India's biggest market.

But the worst hit by the order are around 900 of the 2,000 employees who have been retrenched, while thousands of those who were looking up to the retail sector in general and Reliance in particular as a major source of employment see major disappointment in store.

Reliance Retail alone had projected a potential for providing direct and indirect employment to nearly 50,000 people, according to a highly placed company source. An investment of Rs.80 billion was also projected in the state by Reliance over a three-year span.

What seems to puzzle all is the "discriminatory attitude" of the government towards Reliance.

"If the government were to be believed that the decision was taken in the larger interest of vegetable growers and small time vendors, then the same should have been applied on Spencer's and Big Bazar, whose operations are no different from Reliance," a company official sought to point out.

"After all, the others too have vegetables and fruits as a component," he said.

"More than 90 percent of our trade at the proposed 300 Reliance Retail stores was non-agri, and vegetables and fruits formed only 8 percent of the retail business," he pointed out.

Meanwhile, Spencer's, Subhiksha and Vishal Mega Mart are already running 56 retail stores across the state, while 21 new ones are in the pipeline.

Industry and commerce representatives feel that if the government really felt that giant retail stores would adversely affect vegetable and fruit vendors then Reliance could have been asked to go ahead with other goods.

They also wondered why the present government, which believed in dealing firmly with all unlawful activity, had chosen to give in to a minor protest and that too by activists of its rival, the Samajwadi Party.

They were apprehensive that such an attitude of the government would discourage other prospective investors who otherwise see UP as a major potential state.

Referring to the protests, Punjab Haryana Delhi Chamber of Commerce state spokesman Anil Shukla said: "We have already said in a letter to the government that resistance is a natural response to every change."

Terming the protestors as protagonists of "middlemen", the letter states: "In case of the retail business too we understand the resistance has come from a handful of people, largely middlemen who account for less than one percent of the society."

It added: "Uttar Pradesh has abundant capacity to expand in the field of organized retail. This is the time to welcome businessmen in Uttar Pradesh. The benefits to state and public could be phenomenal and the state could witness new economic growth without having to make any investment; better price for the farmer for his produce, besides throwing open a vast new avenue for employment."

A similar letter has been sent to the government by the Confederation of Indian Industry (CII) state chief Deepak Malik, who sought to draw the government's attention to the fact that retail business "could ultimately bring investment to the tune of Rs.40,000 crore (Rs.400 billion) in Uttar Pradesh".

While no government official is willing to make a comment, there is also none to either lend an ear to their pleas, they lament.

A well known Kanpur based industrialist told IANS on the condition of anonymity, "by shutting Reliance, the government has killed the golden goose".

The state government shut Reliance Fresh outlets in the state in August following protests by the opposition Samajwadi Party.