IN THE MAKING
Indian economy is subjected to changes, not
according to planning commission and Pranab Mukherji, but according to the tax
payers, says one unknown NDA political leader passed 4th standard.
Even though his claim doesn’t make any sense, he got what he wanted i.e., publicity.
It has said to be a dramatic stunt for overshadowing
revolutionary lokpal bill but in fact it has been a long time since Rahul
Gandhi found excited about FDI in retail, most probably after having done
shopping with his girl friend{including ex}at walmart!! It would have been
tough for him to find GUCCI for her in Amethi, that’s why he tickled Pranab
Mukherji to launch FDI but it indeed tickled many in many ways. Sharad Pawar
found himself having more than required number of tablets for controlling his
blood pressure, Prakash Karat couldn’t resist editing his election campaign
materials and L.K Advani found busy with his eco-friendly Rath Yatras!!!!!
RULING PARTY, FDI AND ME
The first point which Rahul Gandhi put forward
before explaining the FDI concept was about the unbelievable growth of China
after approving 100% percent FDI and the tremendous uplift of Thailand economy.
He did mention about the developing scenario of Indonesia too. Excitement
overwhelmed and all top B-School students kept busy doing case study on this.
Every day it was FDI in media. As usual I and my mediocre thoughts lost in
front of all these. It took a while for someone from Govt. to explain the FDI in retail concept. I
found myself seating in front of T.V sets searching for some boring FDI debate
and ended up listening to Pranab Mukherji’s claims about FDI.
It was indeed lack of huge investments in the retail
sector which would have seen a gainful employment opportunities in
agro-processing, sorting, marketing, logistics management etc. paved way for
slow growth of economy.
According to Govt., Policy mandates a minimum
investment of $100 million with at least half the amount to be invested in
back-end infrastructure, including cold chains, refrigeration, transportation,
packing and processing. This is expected to considerably reduce post-harvest
losses.
Foreign retail majors will ensure supply chain
efficiencies, hence having a positive impact on food inflation.
A strong legal framework in the form of the
Competition Commission is available to deal with any anti-competitive
practices, including predatory pricing ensuring ‘all is well’.
The main advantage of FDI in retail is that the
brokers/middleman concept will be erased. At the end of the day farmers and end
users will be benefited. Experience
of the last decade shows small retailers have flourished in harmony with large
outlets. Hence at least 10 million jobs will be created in the next three years
in the retail sector.
OPPOSITION, FDI AND ME
Even if something good happens from the ruling party
side, it’s a habit of opposition party to oppose it at all the possible ways
even by calling it as utter nuisance. It was Prakash Karat, the comrade, who
opposed FDI straight away even before officially announced by Govt. He said, move will lead to large-scale job
losses. International experience shows supermarkets invariably displace small
retailers. Small retail has virtually been wiped out in developed countries
like the US and in Europe.
The party which always calls for the development of
the country[only during elections],BJP, claimed that fragmented markets give larger options to
consumers. Consolidated markets make the consumer captive. Allowing foreign
players with deep pockets leads to consolidation. International retail does not
create additional markets, it merely displaces existing markets.
Experts says that Jobs in the manufacturing sector
will be lost because structured international retail makes purchases
internationally and not from domestic sources. This has been the experience of
most countries which have allowed FDI in retail.
A large group of economist says that International
retail players have no role in building roads or generating power. They are
only required to create storage facilities and cold chains. This could be done
by governments in India.
MY TAKE
HATS OFF to Rahul Gandhi to his one man show, salute
to Pranab for his ever diplomatic approach and still amused by the ever silent
PM. Literally I am a fan of this so called controversial FDI in retail. If this
comes to reality, there will be a huge growth in the economy. When Indian Govt.
welcomed the concept of open economy, there were thousands of economist who
opposed it. I cannot even imagine the
condition of Indian economy if it was not accepted. Also when the computerization
came into India, there were major concerns about job losses. But now it has
been a prime cause for the standard of living.
In India, 60% of the people are farmers. In
developed countries, it’s 20%. Seriously who wanna be a farmer these days??
If anything, the entry of retail big boys is likely
to hot up competition, giving consumers a better deal, both in prices and
choices. Mega retail chains need to keep price points low and attractive -
that's the USP of their business. This is done by smart procurement and
inventory management: Good practices from which Indian retail can also learn.
Time for big bazaar, More and Star bazaar to think out of box.
The fears about the small shopkeepers replaced by
big retailers are baseless. Who will buy 1rupee matchbox from walmart??? Who
will go to supermarkets to buy vegetables when it is available at nearest
shop?? How many of us purchase goods for our one full month at a time?? Who
wanna be in long queue holding 1kg rice in walmart because of 2rupee discount??
There will be competition among big retailers, but not with local shopkeepers.
Big retail chains are actually going to hire a lot
of people. So, in the short run, there will be a spurt in jobs. Eventually,
there's likely to be a redistribution of jobs with some drying up (like that of
middlemen) and some new ones sprouting up.
In short, if govt. thinks it’s gonna be a developing
factor, they have to welcome it!! Let the
dogs bark, they will stop when they get tired!!!!
