FDI: Full of Political Stunt

Retailing is one of the pillars of Indian economy which consists of 14-15% of its GDP. An unorganized sector in which, about 40 millions of people (3.3% of the total Population) are involved as in various form of employment. The Cocoon type of self employment has least competition among them. Such least competition provide an environment of cooperation where the survival of millions of small businessman being made possible.

But recently Govt. of India is trying to bring the Foreign Capital in this sector, in the form of FDI.

They argue that the arrival of FDI will not affect retailers in any way and it will increase the competition in this sector so the quality of the commodity can be improved. The farmers of the Country will be freed from the clutches of middleman. But the question is here how the small capitalist of the retail sector can compete with tycoons like WALMART? And even the contract farming assures about the contract but there will be restriction not to produce other than the contract, in this condition the profit oriented farming of MNCs harsh the quality of the soil also.

The statistics says that in last decades about 4000 small grocery shops got closed due to tough competition with WALMART in USA. Hence the Indian scenario is quite different from the other developed countries like America. A small businessman, who runs a shop of about 100-200 square feet, cannot compete with the multi stories shops like WALMART. Even there would be a competition between them no doubt that the survival of small shopkeepers depends upon the taste of the customers, but in recent years the taste of the customers have changed dramatically. The retail chain like “Subhiksha” and “Reliance fresh” have provided various options of shopping and a large numbers of customer they have grabbed.

At the phase of Globalization when the whole world has come in a village and an open market concept, we cannot tavern the vendors either it is tycoon or a small shopkeeper. But we should build our industrial environment before doing competition with such big competitors; revival of economy should be started from the grass root levels. We should transform our unorganized sector into an organized sector at domestic level before implementing tough competition like FDI. If we succeed to organize our small industries as well retailing there would be a possibility to establish ourselves at the global platform.