Following an attack on a few Reliance Fresh and Spencer Daily stores in Lucknow, the Uttar Pradesh Chief Minister Mayawati has ordered a closure of all large-format retail stores.
The hooliganism was organized by a sitting Rajya Sabha MP Banwari Lal Kanchal of the rival Samajwadi Party and his organization UP Udyog Vyapar Mandal.
There has been a lot of anger against large-format retail chains across several states. Some states have resorted to violence - most notably Ranchi in Jharkhand, near Kolkata in West Bengal, Indore in Madhya Pradesh. There have been several demonstrations in Tamil Nadu.
In West Bengal, the ruling partner AIFB has promised not to let Reliance Fresh in and has said it will demonstrate (and perhaps also indulge in violence) in front of Reliance Fresh stores.
For a while, I was under the impression that it is not possible for state governments to control who sets up what kind of shop and what can be sold there. I was wrong. An archaic and bad law in the form of Agriculture Produce Marketing Committee Act exists in all the states. This seems to be a state subject and hence you have roughly 30 variations of this act, state to state.
This act has primarily been used till now to determine to whom farmers can sell foodgrains. Vegtables, fruits and such have been left to open market purchase and resale. However, I fear this law can be (mis)used by left leaning governments to impact organized retail from selling agricultural produce.
This will affect shops like Reliance Retail from selling vegetables, fruits and may probably even be extended to cover milk. Such a retail shop then will be forced to only sell groceries and FMCG products.
The state variation in such a law can also determine where agricultural produce selling shops can be opened, the size of the shops, licenses for such shops etc. This will be an extremely retrograde step.
It may be worthwhile for the central government to enact a law which at best controls only foodgrains (even that should be avoided, if at all) and release the rest of the agricultural produce from the state list and abolish Agriculture Produce Marketing Committee Act across the states once and for all.