Thursday, October 4, 2012

FDI in retail not beneficial for Indian economy

The government claims that FDI in multi-brand retail will bring modern technology to the country, improve rural infrastructure, reduce wastage of agricultural produce and enable the farmers to get better prices for their crops, besides generating employment and bringing down prices. The government is trying to falsely project that FDI in multi-brand retail is an essential  " reform"  to boost the growth rate of the economy. It is nothing but a fallacious and deceptive propaganda. Evidences from various parts of the world indicate that widespread emergence of big format retail super stores opened by multinational retail giants have led to extensive ruin of retail stores/shops thereby resulting in the loss of employment and livelihood to millions of persons involved in retail trade. These multinational retail giants will wipe out many smaller Indian retailer chains and the small retailers like the kirana stores, mom and pop stores, provision/grocery shops, hawkers/push cart vendors and so on. These tiny entrepreneurs will not only lose their source of income and livelihood, but also their honour and prestige, once they lose their retail trading occupation due to the competition from multinational retail giants. Moreover, there is scarcely any evidence to show that foreign investment, especially FDI, has acted as an enabling factor for controlling inflationary pressure anywhere in the world. Similarly, evidences suggest that nowhere in the world consumers have benefited from the establishment of super stores by multinational retail giants. In short, FDI in multi-brand retail trade will not serve any purpose. It will do more harm than benefit the people, especially to the unorganised/informal retail sector, which is an important source of employment and livelihood for the multitude unemployed people of the country, besides being the cushion for those who are displaced for various reasons from other occupations/employment in the industrial, agricultural and services sectors.
Dr. C. Murukadas, The Times of India, Oct. 4, 2012

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