I am not too sure whether FDI should
be allowed or not, whether much talked about benefits of FDI viz., 1) Price reduction 2) infrastructure 3) job
creation etc are real or just theoretical.
Logically speaking if today we buy goods worth Rs 1000 from
retail channel (any) and if foreign retail chains were to create NET employment
generation in economy, how is that possible unless they sale the goods at Rs
1000 plus? And even if they sale goods at Rs 1000 minus (which we are assuming)
and still make profit, will not somewhere someone lose job on Net basis in the
economy? This is because retail does not actually add value and hence cannot really
change the size of the economy. What it therefore changes is distribution of
income. How it can favorably change the distribution of income need to be
understood.
None of the Indian organised retailers have succeeded in
India - is it because Indian’s don't know how to do business or our economic
structure is getting more and more distorted for organised retailers to survive.
We are assuming that foreign retailer, with even tougher conditions to comply with, will be able to do profitable
business and reduce cost for consumer at the same time. How is that going to
happen? Rental prices of real estate and
commodity will further go up in anticipation of FDI, making business even more
difficult. Why should they come? Even if they come how long can they sustain?
Why will foreigners come to India, just for creating infrastructure
for us? Forget about that - thinking of such dependency isn’t that a clear admission
of failure on our part? A child to grow has to
start being own - a country to grow does
not need to be on its own? Will India never see it’s home grown brands in top
ten retailers list inspite of being second most populated country?
There are many reforms to be done to let the organised
retail grow in India - GST, giving industry status etc. Unless we address that,
organised retail cannot thrive whether it is Indian or foreigner doing
business. Why should not we think of making our retail companies strong before we
send them to compete with the big retailers?
It is also difficult to get a sense out of FDI from people
advocating FDI as they act only out of vested interest 1) organised retailers
are looking for much needed money which they are unable to get from India (the
same Kishore Biyani was against FDI in his slight less horrible days. 2) govt
is looking to distract people from the coal and other issues and improve image
in front on Indian and foreign media. In my view going by the views of these
people is a big mistake.
We have had phenomenal increase in price of basic food
commodities during this era of modern retail. I don't believe that this is just
a coincidence. With foreign retailers coming in who would be looking at
capturing market share, we should be prepared for more price rise. (in my view
heavy demand from them to fill there racks may put pressure on prices of food
items)
While we may feel good seeing good/ air conditioned malls
and a pleasant shopping experience. My
real worry is whether we are going to see further divide in the ever increasing
income gaps in the society due to FDI -making food more and more inaccessible
to poor? Are we evaluating that,
while we evaluate FDI?
I want to discuss FDI in light of just this one question . Unless I am not too sure
about that, I don’t mind shopping from cramped Kirana store/ inefficient Indian
store.
