Now the war of words is going on between parties trying to prove how good or bad this decision is for India. People in favor, quote Indian Staffing Federation (ISF) which says that this move will create around 10 million new jobs in India. But ‘what about the millions of people already employed in unorganized retail, who will be negatively affected?’ asks the opposition.
The second major petition that comes from the earlier camp is that the giant retailers will build an infrastructure of cold storages and warehouses and will manage the supply chain system more efficiently which will reduce the wastage and in turn will benefit the farmer as they will get the value for most of their produce. Well I was reading somewhere that in India we waste 1 out of 3 apples in the journey from farm to the refrigerator of the end user, whereas this figure is as low as 2 out of 100 in Australia. In a country where we see tons and tons of wheat rotting under the sun and rain, this betterment of supply chain surely makes a lot of sense. But then there is a flip side too which comes from same Australian example where wine industry is dominated by a cartel of few players. These giants dictate the prices and farmers have been heard of getting cheated / exploited at times.
As we see, there are hundreds of lucrative arguments in favor of FDI in retail but there are thousands that are horrifying as well… So what should we do? What should government of India do? Guess the answer is not as difficult as it looks like – people feared in a similar way when ‘Computers’ were brought to us for the first time. They said one machine will do the work of hundred people and will in turn make them jobless. Well today we are one of the biggest exporters of IT and ITES and the industry has created millions of new jobs. People also feared when the FDI in manufacturing was introduced that this will kill Indian manufacturers and so on. Well today we export cars to US and Europe; the big foreign car manufacturers became umbrellas to the small scale industries nearby and not only shielded them but also provided them business and employment.
So, being skeptical at times is OK, but not always. Today when countries in Europe are filling bankruptcy and the growth story of India is fading, I would say that this decision will be a major turnaround for the people of India. This will have much wider impact on employment than IT impact 12 years back as it will also open the doors for less skilled / educated people of India. Not only the supply chain network will grow and become efficient but also it will educate our farmers how to improve efficiency and use the best practices in their farming. Surely it is a dream today but 10 years down the line we may see many English breakfast tables in UK whose items will read ‘Grown in India’. Wow what a sight that’ll be…
Also, I don’t understand why we are underestimating our baniya sitting at the neighborhood Kirana stores. He has been innovative in selling since inception. He did not get impacted when the likes of ‘More’, ‘Food Bazar’ etc. opened in India. In fact this Kirana guy learnt the concepts like ‘Visual Merchandising’ (off course not using the planograms and all but the effective utilization of his space) and ‘Free home delivery’ etc. So I am sure he will thrive against this new competition as well. Now about the fear of monopoly and cartel formation by the international retail giants, there are 1609 cities/towns in India and only 52 of them (at max) are going to have these giants. And there too the Mandis will still be around and not banned. So I don’t think that anyone can ever form a cartel here in India and exploit the sellers/farmers.
In the end, I would just like to quote one good line (from a not so good soft drink’s add) – “Darr se mat daro, darr ke aage badho, kyunki darr ke aage jeet hai”. So let us put an end to our fears and welcome the FDI in retail and see what it has to offer.
