FDI in Retail

1. FDI in Retail “A ‘No’ uttered from the deepest conviction is better than a ‘Yes’ merely to please, or worse, to avoid trouble.” “An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it.” “Honest disagreement is often a good sign of progress.” “If “my brother” is out of work because of imported cloth, then how can I be better off by it?” - Mohandas Karamchand Gandhi B.Vaidyanathan, Chief Mentor, CPC, RKL

2. FDI in Retail What MBRT means Allowing giant retailers like Wal-Mart to set up operations in the country. (Annual Revenue – $ 422 billion / Rs. 21,10,000 crores, employing only about 15 lakhs) In contrast, the Indian Retail Sector is accounting for about 12% of GDP – Rs. 10,38,000 crores, employing 4 crores. In due course of time while the relationship with the producers will be that of “oligopsony” and with the consumers, it is likely to be one of “oligopoly”. B.Vaidyanathan, Chief Mentor, CPC, RKL

3. FDI in Retail What MBRT means Giant retailers like Wal-Mart can source 70% of the products/goods from anywhere in the world resulting in the decimation of the not so competitive manufacturing sector and loss of job to millions of workers; and even the agricultural sector would be crippled. The decimation of ‘Forced Employment’ Sector (Retail) will have an unbearable human cost for sizeable population of the country. The poor and the unemployed/underemployed will become poorer and their survival…? B.Vaidyanathan, Chief Mentor, CPC, RKL

4. FDI in Retail Before launching MBRT Make the manufacturing sector competitive – In China, the manufacturing sector’s contribution is around 60% of GDP (In India, it is only about 20%) Strengthen the agricultural sector – micro credit system, etc. Strengthen the quasi-judicial machinery and ensure their proper functioning – This to a great extent can act as a major disincentive for those who sell defective goods and is likely to enhance the competitiveness of goods made by Indian manufacturers. B.Vaidyanathan, Chief Mentor, CPC, RKL

5. FDI in Retail Before introducing MBRT Enhance investment to strengthen the infrastructure, including refrigerated storage facilities, which could ensure better price for the farmers and fresh produce for the consumers. Strengthen the PDS so as to protect the ‘aamadmi’ from inflation and to ensure adequate off-take from the villages. Strengthen the CCI so that the monopolistic tendencies of the Companies can be monitored and curbed. Introduce a Regulatory mechanism for prescribing support price. B.Vaidyanathan, Chief Mentor, CPC, RKL

6. FDI in Retail To sum up Introduction of MBRT at this juncture should be avoided, as this will result in: Large scale deprivation of those engaged in retail business; Decimate the manufacturing industry resulting in loss of jobs & widespread unrest; Crippling of agriculture and more suicides; The consumer will also be exposed to “oligopoly” and he will have to shell out more; Hence shelving the introduction of MBRT is the need of the nation. ********** B.Vaidyanathan, Chief Mentor, CPC, RKL