590 billion retail trade is the catch price. Kirana (mom pop) shops in India have the highest shopping density with population per outlet being 91 shoppers & the organized retail is just 4% of the total market. The USP of kirana shops model is home delivery & credit (not to confuse credit card). India has 1.2 crore shops & has employed 4 crore people; 96% of these are small shops run by self employed people. The government fear of people losing jobs, market flooded with cheap Chinese imports is a myth- Government has shielded its SME’s by ensuring 30 % local component in purchase; ultimate gainer would be consumer & farmer/producer as this would enable local manufacturer to scale up & meet international standards while remaining competitive.
The opening up of the economy took India on spiral of progress, success stories, new entrepreneurs replaced the old brigade from the dalal street due to their aggressive strategies of business in the competitive arena helping the consumer with a broad band of products, services & cost effective pricing ,increasing consumption & adding value to the supplier–consumer chain. This all was the result of the far sightedness of the economist Manmohan Singh who pledged gold & gave liberalization, globalization & privatization with FDI pouring dollars to the economy. Things were on the fast track of vibrant growth; slogans like India shining were echoed in the hearts of progressing India (though this made the then government lose the election as the effects of India shining were not demonstrated to the rural India, though cascaded to their benefit, progress). It was at this time when FDI in retail was proposed by NDA government in 2001 but snubbed by the then Congress government by proposing (opposition attributes) excuses like retail being unorganized, dispersed & labor intensive does not advocate for the International investor as it was thought that the investor would source from low cost economy and kept the decision on FDI on hold.
Come 2011 government paralyzed by non decision making due to political compulsions; the country bitten by the bug of inflation; food prices continue to gallop; industrial deceleration & rupee depreciation propelled the weak government to take a delayed but highly desirable though old but bold step to infuse FDI in retail by suddenly announcing 51% limit increase for FDI in multi brand retail & 100% for single brand retail. The positive step would have increased the efficiency of farm products, reduce wastage & speed up in distribution thus lowering the input costs by reducing/eliminating wastage & ultimately benefitting the CONSUMER by cost effective module & better input to the producer by supporting the inputs costs/improving on better yields. But it was the opposing Opposition & few allies who took the mantle of Opposition for the sake of opposition & derailed the forward process, first by strongly opposing & then by arm twisting by the major alleys who were not cajoled before the step by its major ally the Congress. FDI became forgotten dollar input, forced democratic interference.
The objective of effective reforms initiated in 1991 has derailed, lowered the country’s think-tank prestige due to non implementation of vital reforms which would have brought the much needed dollars, efficiency in business & smile to consumers by offering more versatile & diverse portfolio of products at competitive/better rates. FDI is the oxygen to survival & catalyst to India’s progress. By sheer opposing attitude of the opposition the government has lost its focus & this will impact the so called aam admi more than to the protesters for political reasons.
Several global retailers like Wal -Mart, Tesco are waiting in the wings to enter India’s multi-brand retail wagon. FDI is not a disease or allergy which will spread to destabilize the nation. It is a well accepted norm for the country’s progress & people’s wellbeing. Worlds no. 1 FDI is in America and America’s progress was due to FDI influx, China is no.2 with FDI influx, Thailand, Indonesia, Malaysia, Singapore are just few growing economies & the key is FDI, be it retail, banking, manufacturing, R&D, CRAMS, insurance,infrastructure etc.
FDI is a measure of ownership of productive assets, such as factories, mines, land, services etc, and barometer of a country’s progress is the influx of FDI. The approach, the attitude, the abrasiveness of opposition for FDI in retail is an unwelcome approach, an unhealthy sign for the 1.2 billion consumers.
Once the country’s doors are open for FDI; FDI becomes an irrevocable way forward; like it or hate it, liberalization is one way road and FDI is its lifeline.