Kerala government to take on Reliance

Indian Express reports

The Left government in Kerala has decided to do a Reliance to Reliance and back it up with a major subsidy splurge, to meet the retail behemoth’s “threat” to the state. “Reliance is a big challenge. It’s large enough to control the market and decide prices. We will take it head on,” Agriculture minister Mullakkara Ratnakaran told The Indian Express......

So the Left government will now mimic Reliance itself, and have its own Kerala Horticulture Development Corporation (Horticorp) set up procurement centres all over the state, cutting off middlemen the way Reliance does. And to take on the Reliance Retail outlets, vends across the state. This is while very few of the over 900 set up by the then Left regime in the 1990s have survived. Besides, to cope with the expected brand pull of Reliance’s sophisticated supermarkets, the government will mimic those too. “We have decided to set up our own state-of-the-art, world-class supermarkets in Thiruvananthapuram, Kochi and Kozhikode,” says Ratnakaran.

For good measure, the comrades will also go for large-scale contract farming — something Reliance officials say they are not considering yet. The government model distinctly mirrors what yet another Left bete noire, Pepsi, had been successfully doing in Punjab and elsewhere — Pepsi had to shelve tentative plans for contract-farming ginger in Kerala in the 1990s, during the Left government of E K Nayanar.

In fact, it could tackle Reliance better if it gets support from people who know retailing business. It should let THEM take on Reliance - and can expect even better results. And, for the government itself, there are better and more important things to do.