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FDI in Retail- Part IV

So once again the debate on FDI is on... I wrote earlier about the same here.

At that point of time the MMS and company chickened out and decided to roll back the same. This time it looks they are willing to fight it out with Ms Banherjee and others who believe 1977-78 was the best period in India's economic history.

Let us look at the basic argument most people have against investment in retail.

1. It will impact the livelihood of millions of Kiryana shop.

My question is what about the millions and millions of farmers who will benefit and the consumers who will get better price goods? Do we really want to keep the interest of Kiryana shop owners above our farmers and consumers?

I don't think any body would like to do that. So why is Ms. Banherjee et. all opposing it. Well she has a history to oppose things she even opposed Nano in Singur. Guess what Singur is the loser and Gujrat won and today the area around Nano factory in Gujrat is more prosperous. I don't think Ms. Banherjee has stopped liking her role as main opposition in WB, she still continues to be the leader of opposition without realizing that now she is the CM of the state that has elected her with a lot of hope.

Anyways coming back to the Kiryana shop...

A lot of them are guilty of following ( please not I am saying a lot not all
1. Not paying all their taxes like Sales tax, Income tax etc.
2. Employing underage kids
3.Not paying minimum wages to the employees
4.Selling goods that are spurious to make some extra money.

I am pretty sure no MNC will actively get involved in point no 1 to 3, the 4th is more of our national problem and needs a different debate.
Yes I understand that the MNC are not coming to India for the love of the land but they do bring some good things like better infrastructe, better wages etc.
Just imagine if 15-20 years ago we have said that oh we have Infosys and Wipro and TCS and hundreds of small IT company in country so we should not allow Microsoft, IBM, Accenture etc in the country. I think if we had done the same we would have been a have been in IT and BPO also and not the world power that we are today in IT and BPO. And the best part is both Infosys and IBM have benefited from the competition and today IBM has more employees in India than in most other countries. 

Why not repeat the same in Retail and make it a win win situation. 


6 comments:

  1. Good though but unfortunately politics , business and people all are different ideas here in India and no one dares to create a win win situation.

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    1. Hi Kumar: The good thing this time is that selective states are willing to implement the same, and if it works there others may also want it... till then let us keep our fingers crossed.

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  2. what are the problem would face after allowing FDI in Inda?

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    1. Only time will tell...I see more challenges in form of infrastructure bottlenecks

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  3. i have been toiling a lot about FDI nowadays...and to some extent i agree to your point while there are many that would be hazardous...

    1) i am not in support of miss Bannerjee (n not banherjee) but i still fill the MNC's are here for their own profit mainly n not the development of society.
    2) India's GDP from Agriculture sector is merely 13% percent and i don't see any thing that will help the farmers to either raise their daily wages or the GDP if FDI is approved...The MNC would try and exploit the farmers more by trying to get goods at even more cheaper prices than the Kiranas.
    3) While talking ABOUT IT sector you were comparing Indian IT powerhouse to that of the foreign players...that a fair match but where do you see Local Kirana stand against MNC's?

    TIll today...only 9% of people are working under IT and other government sectors waht about the rest?
    the rest is from local kirana's and by approving FDI sanction to more than 50% we will kick the daily wage of not million but nearly a half a billion people.

    it's nor that i don't support FDI but there are various other reasons which will hamper these multinational companies forging their way to our country...!!!

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  4. Hi Anjan: First please accept my thanks for being such a wonderful reader and commenting in detail. Nothing better than getting a reader who makes you think about your posts.

    I am not in favor of giving MNCs a free hand in India, there needs to be checks and balances to make sure they do not exploit
    a) Vendors
    b) Employees
    c) Consumers

    My problem is with blind opposition as well as with support of MNC retailers. We need to understand when we cheer Tatas and Mittlas for taking over companies in UK and Africa and Korea we have to open our markets.
    As far as small Kirana stores go they are surviving the onslaught of Biyanis and Ambanis and will survive the Wal Marts and Tescos of the world. Even in US the number of small retailers has reduced but not vanished.

    The good ones will survive and find their niche, the lousy ones will not survive, but this is a continuous process only to be accelerated by opening up of sector. Also we need to note that a lot of indirect employment is generated by organized sector e.g cab drivers in BpO and a lot of transparency in system specially monetary transaction will come in system.

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