Saturday, April 6, 2013

Holding a common man hostage for selfish gains

Few months back, I wrote an article about having multiple choices for the consumer, after Government of India at the end of a long parliamentary struggle, opened up organized retail marketing sector to foreign multi brand corporations like wall-mart. Unfortunately, no progress has taken place in this matter and no multinational has yet opened a store in India. I must admit that this far, I had never felt real need for availability of such multinational stores, as I am feeling now for last few days.

For last one week, ordinary citizens like me, are being subjected to unnecessary hardships and troubles, just because traders, distributors and small retailers from my home city Pune, who were once projected as victims or poor sufferers, when large retails shops would open up their stores in India, have arrogantly shuttered down their shops over some trivial issue of local taxes. They do not seem to realize that they form an important link in the chain which delivers consumable goods like food to the common man and have certain responsibilities in this respect.

It all started in third week of March 2013, when State Government of Maharashtra, announced that they would be abolishing a centuries old entry tax, commonly known as Octroi, from 1st April 2013. The step was welcome by everyone because this archaic tax was collected, when goods enter the boundaries of the city. This means that the goods would not be allowed to enter the city, unless this tax is paid to a tax collecting office located near major road arteries. This system required the truckers to wait on roadsides till importer of goods or his representative physically came to tax collecting office and paid the tax. This involved delays, traffic congestion and in general inefficiency in movement of goods near city boundaries and the system caused great harassment for ordinary people, who moved their residence from one city to other.

This tax, as Government announced in March, was to have been replaced with a new tax, based on the books of accounts of the importer of goods, known as LBT or local body tax. I think this was an excellent idea, as this new tax was to be paid by the importer, much later like other taxes, such as sales taxes or service taxes and not at the time of the physical import of goods. The trading community of the city, however was extremely unhappy. Account based tax meant their books of accounts would be subjected to scrutiny, which meant that their operations would have to adhere to the rules.

The traders tried to block the new tax by petition to courts of law, giving all kinds of justifications and reasons. The High court however refused to give any interim stay to the Government order and the law came into force on 1st April 2013. Having left with no legal recourse to block the new law, trading community suddenly decided to close down their shops from 1st April 2013, causing enormous hardships to common and poor people.

As happens everywhere else in the world, salaried people from my home town Pune, also receive their monthly salaries in the first week of every calender month, and with that money, usually bye groceries and other provisions for the month. With all grocery and provision shops closed, they are being subjected to unnecessary hardships and troubles. 


I have nothing to say about the rules and clauses of new tax and the way it is to be implemented. It is a matter between the Government and the importers of goods within the city. They can discuss and negotiate for whatever changes that they desire. What I do not understand is why common man is made to suffer because of the quarrel between Government and the traders.

Incidences like this, really highlight the need to have multiple choices for the consumer in each and every area that caters to some or other aspect of living, may it be food, banking or transport. In banking, we have private banks, government banks and credit unions. In a city like Mumbai, a city dweller has multiple choices for his transport, in the form of local trains, buses and taxis. Similarly, we must have a choice for our shopping needs. There are big and organized grocery stores run by Indian companies like Reliance and Big Bazaar. However, it appears that they have preferred to keep their stores closed during this week for unknown reasons. This means that they are just an extension of other trading chains and not really an alternative. This is why a multinational marketing chain would be useful here, which would not have links with other traders and would operate independently on its own. The present chain of distributors and retailers have to be clearly shown that they are just an alternative. The consumer is the real king and he would choose the best alternative.

In any case, this unilateral action to close down their shops by traders, is very much regretted, as it is nothing but harassment of common people. I sincerely hope that Government remains firm and settles the issue with traders on its merits. The trading community must appreciate that taking a common man as hostage to blackmail the Government, would not achieve whatever they hope to gain.

6th April 2013


  1. "their operations would have to adhere to the rules."
    What's wrong with that?

    "What I do not understand is why common man is made to suffer because of the quarrel between Government and the traders. "
    That's because it is not necessay for merchants to care about customers nor necessary for anybody to care for them. The politicians can get elected by hiring goondas, fraud. After all common man in India does not vote. They go on picnic, drink parties. The traders will get their way, if they give sufficient money to ministers. Or they always have an option not to obey laws. After all, yeh India hai bhai!1

    Some people are under false impression that there is democracy in India. The system in India is different. At least that is what I was told when I went to India.