FDI in Retail
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“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
12-01-2012
B.Vaidyanathan, Chief Mentor, CPC, RKL
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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”.
12-01-2012
B.Vaidyanathan, Chief Mentor, CPC, RKL
2
FDI in Retail
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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…?
12-01-2012
B.Vaidyanathan, Chief Mentor, CPC, RKL
3
FDI in Retail
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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.
12-01-2012
B.Vaidyanathan, Chief Mentor, CPC, RKL
4
FDI in Retail
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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 ‘aam
admi’ from inflation and to ensure adequate offtake 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.
12-01-2012
B.Vaidyanathan, Chief Mentor, CPC, RKL
5
FDI in Retail
To sum up
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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.
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12-01-2012
B.Vaidyanathan, Chief Mentor, CPC, RKL
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