Government of India finally came out with much awaited declaration to allow 51 percent FDI in retail. The declaration seemed to be more of an adaptation from Karan Johar movie with that much drama rather than directly from Prime Minister's office. We have seen the inspiring 'We made a tryst with destiny' and the 'I have a dream' by the Nehrus and the Luther Kings of the world but 'Money does not grow on trees' seems like a tamer version of standard IV English essay of Delhi Public school student.
So why Retail sector ? The Retail sector of India is vast, and has huge potential for growth and development, as the majority of its constituents are as unorganized as Indian team batting lineup in T20s. The retail sector of India handles about $250 billion every year, and is expected by the know how to reach to $660 billion by the year 2015. The business in the organized retail sector of India, is to grow most and faster at the rate of 15-20% every year. Thats the exact YOY growth figure of sale of parking tickets of multiplexes when Rajnikanth movie is in session.
The retail sector of India contributes about 15% to the national GDP, and employs a massive workforce of it, after the agriculture sector. And who can forget the fact that it acts as a new avenue for some politicians to fill their pockets. Lets go FDI way .. Funds for Daily Intake !! Yayy !!
Obviously the announcement was meted by huge positive response from the opposition who lauded the decision and offered full support #NOT .. So as expected like any other Saas-Bahu lingering drama, the opposition and even the allies barked and woofed and hoped for a roll back. But to no avail TILL NOW.
So it stays, 51 percent but limited to 53 cities specially identified which the Goverment feels can cope up infrastructure wise. So the Walmarts & the CarreFours of the World are rejoicing with moist eyes and cheques in hand ready to invest.
So lets take a look at the upside. This step will bring modern technology to the country and improve rural infrastructure to the maximum. The most important thing is for the farmer. Owing to superior technology the wastage of his produce would be minimal and this extra produce can be sold in domestic markets for more revenue. The farmers will get fair prices from the giants of the markets and lets just hope its not a false promise from those who are just tourists and dont give a fish about where India goes. And yeah Goverment earns too. Obviously we are not that selfless.
The downside is .. yes there has to be a downside .. that these giants would flex their money muscles and use our lands for their benefit and totally forget about the domestic products. Then there are countless middlemen or as some may call them meddle-men to cause discomfort. Even Ranjeet & MacMahon were better as compared to these villains. Also there are many people employed by Government, be educated or semi educated but the Walmarts and the Tescos will always want the smartest of Gangarams and Tukarams !! The kirana going out of action factor is still there.
Whatever it maybe, we cannot deny that since a decade malls and departmental stores have always shown their existence and that did not cause the kiranas to go out of business. This phase will also come and go. So Keep Calm and let the Big boys Enter !!!
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