Saturday 8 December, 2012

FDI in retail sector in India

Few days ago, Central Govt. was able to defeat the bill that was introduced against FDI in retail sector.

If we leave the politics in this issue then also keeping other factors in mind like macro economics, employment, education and others we can easily come to conclusion that big retailers entry in our country will do more harm then the benefit that they will bring to our country.

Retail is the most easy type of venture to start. That is why most of our population who do not have proper education or finances to start any other occupation starts a retail venture. And for this purpose they also use their residential space as well.

A person can easily start a roadside hawker for grocery or a snack / pan counter for fulfilling his livelihood. Problem is not that he will not have customer, but those customer will ask for the same price as that of big retailer and ask for bargain.

Indirectly in this situation that small retailer whose family is also involved in this venture is facing stiff competition from big chain retailer.

In fact just look the Biyani group  Big Bazaar chain could not face stiff competition from Reliance and Easy Day and Bharti Walmart Best Price wholesale chain.

If Govt. is really to contribute this sector then it should make some mechanism to education small retailers of sales methodologies, management technique, and other points that will help them to make educative decision.

But on the other hand Govt. should try to bring FDI in other sectors like manufacturing, education,  shipping, highways , power generation and distribution, Railways and others rather than in retail sector. Although this may have some bad sentiments on rising stock exchange indices, but corporate India have no stake for welfare of poor and small retailers.

If the corporates needs to expand their bottom lines, then why they are not entering into other above mentioned sectors.

FDI in retail sector should be opened after careful thoughts only. The passing of Bill in Parliament does not meant that mass population had approved of it. Parliament in constituted by political parties and they have their own interest in voting for or against the bill or remain absent from it.

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