51% FDI In Retail:
Indian government has allowed 51% FDI in multibrand retail and 100% FDI in single brand retail, a move for which Indian government is getting praised by foreign companies like WalMart, Carrefour, Tesco, Adidas, Gucci etc . Now what is FDI in multibrand retail and single brand retail or what do you mean by FDI in retail. Multibrand is many brands under one store i.e. Big Bazaar where multiple brands can be found under one store is multibrand retail. Single brand retail is the store that sells only one brand i.e. you must be knowing exclusive showroom of Spykar or Levi Strauss, these are single brand retails. Companies like WalMart, Carrefour, Tesco, Adidas, Gucci etc. companies have their eyes set on huge still unexplored retail sector in India but they were not able to set foot in India because of the restrictions imposed by Indian government.
Are We Not Capable Enough to Run Our Own Business:
The decision of government to allow FDI in retail raises doubts on our own ability to create an ever-growing retail business in the country. The question is not just about allowing FDI in retail but also it’s about how much foreign participation should Indian government allow in our economic system and take care of its own people. Government is saying that it will create 1 crore jobs in the next 10 years, but it’s forgetting the fact that self-employment opportunities on which our retail system at present works will get destroyed, and at a time when we needed to promote self employment in our country as getting a job is getting tougher and tougher and bringing FDI in retail would even add fuel to the fire. I have to say Thailand is a recent victim of FDI in retail. Nearly 60% of small businesses got shut down within no time and there exist a monopoly of few such big players.
Does Money Mean Everything to Our Government:
Our government has been sold out to the idea of bringing $590 billion and hence took this decision to bring FDI in retail. Our retail business never fell short of funds then why do we need to bring FDI in retail. The fact is our retail business ran out of customers in many cities, however, street-corner shops kept doing fabulous business all over the country apart from the 53 major cities that the government has decided to open mega stores for international retail business giants. There’s really no need to bring FDI in retail at this present moment in Indian conditions. The retailers would get affected adversely. One suggestion is government should allow it in wholesale so as to make wholesale distribution equal to root out inflation from the country rather than forcing it on retailers. Doing it in wholesale will create boost for retailers and also for the consumers which in turn result in smooth supply of the products.
Save The Street Corner Shops:
Our government is simply not interested in verifying truth, and is interested in drawing its own conclusion by bringing FDI in retail and showcasing its own way about it and saying it’s better than everything else. Reforms need to be done and nobody would have an opposition to that if they’re doing for the right reasons, but please don’t make reforms look ridiculous than being practical at all. The government lacks true vision to go ahead with reforms. Reforms as I said are all right but that doesn’t mean we keep opening up areas in which we can do well without reforms. A quarter of a century ago in United States WalMart was doing exceptionally well, but wherever WalMart store came up, dozens of Pop-and-Mom stores in small neighbourhood around the mega store went out of business, no matter how good those small stores were and no matter how good those couples.
This is Not Our Way of Doing Business:
Obviously, a Pop-and-Mom store can’t compete with a giant like WalMart. As in the US the free market economy exists death of innumerable Pop-and-Mom stores didn’t make any difference because “Survival of the fittest” is the ultimate slogan of the free market economy there. India isn’t US, there’d be uproar if such stores keep dying everyday and there would be a sense of instability within the system as a whole. People will lose their employment, a business that they were running from years. Do we want such a system in our country? Basically, street corner grocery shops have a very personalised style of doing business where each customer is special and gets customised treatment. In contradiction to this when we go to a megastore we realise how impersonal are the services there. There, a customer is only a person who flaunts his wallet, stuffs things in his cart and, pays the bill and walk away. On almost every occasion, he doesn’t know the name of any person in the store nor does the person behind the counter know what the customer name is, the relationship is so impersonal. Do you want such stores in our country?
So, 51% FDI in retail business in 53 big cities is like adopting a new culture of doing business. Impersonalised culture has already replaced personalised culture in many cities and things are getting bad to worse and yet the common Indian man prefers personalised store more than impersonalised ones. Government doesn’t wish to consider this subtle difference of the economic system in the retail sector. Government says FDI will control food inflation, I wonder how are they interconnected to each other. There's no proof that FDI in retail will control inflation, hence this claim lacks credibility.
Nothing Against WalMart or Any Other American Company:
It has nothing to do against WalMart or Carrefour or Tesco or any other multinational. This is only offering a reasoning why 51% FDI is not welcome in Indian conditions. There’s absolutely nothing wrong in learning good things from anybody, we shouldn’t weigh profit and loss only in terms of money, which government is at present doing. However, advocates of this idea would say that WalMart, Carrefour and Tesco and others would only operate in 53 major cities where a personalised system of doing business doesn’t work, but this argument is hollow and has little substance. Major Indian cities, too, are made up of smaller neighbourhoods where still a nukkad like atmosphere exists and it’s not vanished completely yet, where a Mr Mishra knows Mr Gupta and Mr Gupta knows Mr Tripathi and where marriages and deaths are matters of everybody’s concern. Mega stores may have certain advantage but the weight of lost advantages would be more than the weight of advantages gained, hence the 51% FDI in retail business is not welcomed. We don’t want Indian culture to die just for the sake of those $590 billion, there’s something called humanity and culture that we need to preserve and that means more than money.