Impact of Foreign Direct Investment In Retail In India

PRESIDENT
NAG VIDARBHA CHAMBER OF COMMERCE, NAGPUR

THINGS TO REMEMBER
 Before we go ahead, we should keep certain basic facts in
our mind.
 We are a country with huge population out of which majority
are unprivileged and Below Poverty line.
 We are people with tradition, culture and ethics.
 In our country it is very difficult to get alternate employment.
 Our survival is because of our collective strength.
 The Govt. policies have been anti growth oriented for traders.
 The traders voice is not heard by decision makers.
 In fact traders have no representation in Govt.
 The decision makers do not ever hear him on policy matters
affecting his trade.
Presented By Mr. B.C.Bhartia,Nagpur.

PREAMBLE
“WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute
India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC
and to secure to all its citizens :
JUSTICE, social, economic and political;
LIBERTY of thought, expression, belief, faith and worship;
EQUILITY of status and of opportunity; and to promote among them
all
FRATERNITY assuring the dignity of the individual and the unity and
integrity of the Nation;


INDIA UNDER MNC’s REGIME :
WILL THE PREAMBLE BE RECONSTITUTED.
“WE THE DICTATORS TO INDIA having solemnly resolved to Reconstitute
India into a SLAVERY CASTE BASED UNSECULAR DIRECTED
DEMOCRATIC REPUBLIC and to ENSURE to all its citizens that :
JUSTICE, social, economical and political is discriminatory
LIBERTY of though, expression, belief, faith and worship is permitted
as long as it is in line with MNC & World Bank thought to make world a
single religion, belief in single god and faith in them as single
economic power.
EQUALITY of status and opportunity is not applicable to local citizens.
AND TO PROMOTE AMONG THEM ALL INDIVIDUALITY, HATRED FOR
OTHER CASTE AND SURRENDER OF THE NATION TO THE LONE
ECONOMIC POWER ON EARTH.

PRESENT CONDITION OF TRADERS
Fringe Benefit Tax

VAT
INEFFICIENT
LABOURS

LICENCES & PERMITS
INDUSTRIAL DISPUTE ACT
SHOP & ESTABLISHMENT ACT
COSUMER PROTECTION ACT
WEIGHT & MEASUREMENT ACT
PACKAGING ACT
PREVENTION OF FOOD ADULTRATION ACT

PREVENTION OF BLOCK MARKETING ACT
ANTI HOARDING & PROFEELING ACT
MONEY LENDING ACT
PRODEND FUND ACT
MINIMUM WAGES ACT
ESI ACT
GRATUITY ACT
BONUS ACT

ENTRY TAX
SERVICE TAX

FDI in Retail Trade

ANTI SOCAL ELEMENTS

OCTROI
WATER TAX
CENTRAL
EXCISE

POLITICIAL INTERFERANCE
PURCHASE TAX
POOR MARKET
CONDITION

INSPECTOR RAJ

INCOME TAX

SALES TAX
POWER PROBLEM

Cash Transaction Tax
&
Quarterly ‘C’ Form

STAMP DUTY
WELTH TAX
HIGH BANK
CHARGES

PROFESSIONAL TAX

New Naka Complex


ESSENTIAL COMMODITIES ACT

Aviation

Information
Technology

Telecom
Infrastructure

Retail Traders

Banking
Insurance
Pharma

Mining
Steel
Professional
Education


RETAIL TRADE :
BACKBONE OF ECONOMY
 Retail trade is world’s oldest business.
 Retail trade consists of sale of goods & services to consumers
for their personal, family or household use.
 Based on turnover and volume, retail trade is worlds biggest
economic activity.
 In the year 2000, world turnover in retail trade is estimated
around Rs. 3,10,20,000 crores.
In India by investing nominal Capital a person can start retail
business.
In India Retail shops are generally owned and run by family.
The whole family gets self employed.

HISTORIC CONTRIBUTION BY TRADERS :
During Pre-independence days the traders have helped
the leaders in all forms like man power and money.
In all social activities & establishment of schools, colleges,
hospitals mandir, masjid etc. traders have contributed.
Round the year 24 hours a day, traders have made all the
goods required by customer available to them
During the days of acute shortages, the traders have
some how managed to arrange goods for its customers.
Relationship of Indian traders and
more than mere business

customers is much

Indian traders have always seen customer satisfaction
above personal profit.

SUPPORT AND HELP
TO GOVERNMENT
 Traders are self employed and give employment to entire
family and others.
 Traders give employment to that neglected section of society
who do not get employment any where.
 Traders take care of entire family of his employees.
 All direct and indirect taxes levied by Central, State and local
govt. are deposited by trader in Govt. treasury without any
charges or commission from Govt.
 During famine, floods, earthquakes tsunami and other natural
calamities, the traders have always come out openly to
extend full help to Govt.


TRADERS BEING IGNORED
BY GOVEREMENT
 In Order to gain political mileage, traders have been termed
by objectionable words.
 After independence one after another anti trade, anti trader
laws have been made.
 Traders have been made slaves under Inspector Raj.
 Time & again new legislatures are being imported. Small
Traders have been put under heavy burden of book keeping,
taxation and compliances under various laws.
 In the name of development and road widening the shops
are being demolished only to give passage to hawkers and
footpath shopkeepers to establish their business.
 Local Govt. failed to build new markets. old traditional
markets in different localities are being removed to make way
for Big stores to get customers.

CONTRIBUTION OF TRADERS
IN ECONOMY
 In comparison
traders.

to world, India has largest number of retail

 In our country there are about 1,25,00,000 retail out lets.
 Retail trade contributes about 10% - 11% of our country’s
GDP.
 Total turnover of retail sector is about Rs. 8,75,000/- crores.
 After agriculture, Retail trade provides employment to
maximum number of persons.
 1.25 crore shops are providing employment to about 4 crore
people.
 In a study conducted by Reserve Bank of India, India Retail
Traders charge less margin.


FOREIGNERS ARE MORE
DEARER THAN INDIANS
 Indian traders, Businessman and Industrialists have established their
leadership across the world.
 India is emerging as a big economic power.
 Our country is progressing in all economic fields.
 We have lagged behind in infrastructure, irrigation power etc. i.e.
such sectors which were under control / monopoly of Govt. We
could not grow to full potential in such sectors.
 These infrastructure sectors require huge investment with larger
gestation period. Hence special emphasis has to be given to these
section.
 It is unfortunate that instead of focusing development of such core
areas the govt. want to hand over our established retail trade to
foreigners.
 It is surprising that suddenly govt. feels that our traders are
incompetent to serve the people or handle retail shops OR in disguise
of Foreign Direct Investment our retail trade is being sold to
foreigners.

WHAT WAS THE CRITERIA
FOR FDI


Some time in 1991-92, the then Finance Minister and
present Prime Minister Dr. Manmohan Singhji referred to
certain criteria for allowing Foreign Direct Investment.
These were :

1.

Establishment of basic industries requiring huge capital
and advanced sophisticated technology.

2.

Infrastructure projects like electricity generation road
building etc.

3.

Projects which would generate employment


WILL THIS HAPPEN WITH FDI
IN RETAIL TRADE
 Throughout the world it is known fact that huge
investment is not required to open a retail shop.
 Investment is required to build infrastructure for
shop, sophisticated technology is not required in
retail trade.
 Small Retail shops provide more employment then
large chain of Retail stores.
 There is no gestation period. Hence business starts
from day one.
 Instead of developing under developed areas
these stores capture prime commercial property in
cities.

WHAT DO
FOREIGN / MULTINATIONAL
COMPANIES DO
 In 60s Big foreign houses entered in retail trade in other parts
of world.
 This is against our culture of “One family One shop”.
 These big companies, in order to crush competitors sell goods
cheap. Later on effective prices of goods are increased.
 These companies buy material from International market.
Hence local producers are put to loss
 These companies buy in bulk quantities directly from
manufacturers. The intermediaries loose business.
 After conquering the markets of Europe and America, these
companies have now entered Asian markets.
 After establishing their footings in Thailand, Indonesia, China,
Japan, Philippines, etc in Asia, these companies are now
targeting India.

EMPLOYMENT GENERATION
UNDER EXISTING SYSTEM
 FARM LABOURS
 HAMALS
 DALALS
BROKERS
TRANSPORTERS
TEA SHOP OWNERS
HOTELS
DHABAS
SHOP KEEPERS

AFTER M.N.C. TAKE OVER
ALL WORKS IN FARM BY MACHINE UNDER CORPORATE FARMING
AUTOMATIC TRANSFER AND PACKING BY MACHINES.
SALE TO CUSTOMERS THROUGH CHAIN OF DEPARTMENTAL STORES.
LARGE NUMBER OF SELF EMPLOYED TO BECOME UNEMPLOYED.

WHAT WILL HAPPEN TO RETAIL TRADE
 These companies open chain of shops. With a shop in each area the
retail small shopkeepers will be put to heavy loss
 Slowly the local shops will start closing down.
 These shops will capture the trade.
 In countries where they have established their market share is
Name of Country
America
England
Western Europe
Brazil
Thailand
Korea
China
Malaysia
India

% of Market Share
80%
80%
70%
40%
40%
35%
20%
20%
3%

 Remember example of ‘BATA’ in shoe business.
 Imagine Roadside DHABA’s after RELIANCE FOOD CHAIN Starts
working.
 Cold drink business in India.

WHAT WILL HAPPEN TO
LOCAL RETAIL TRADE
 No of Retail outlets Between 1981-99 in United
Kingdom came down from 56862 to 25800.
 Between 1970-80 in Europe about 4 lakhs Retail
shops were closed.
 Competition shall be limited to Big Retail Houses
 In the year 2000 Five Big Fast food companies
captured following percent market share :
Country
Norway
Swezerland
Sweden
UK
Portugal

% Share
99
88
94
64
57

WHAT HAPPENED IN THAILAND
 In price war traditional shop keepers are facing problem of
survival. Many small shop keepers have closed down their
shops.
 Big companies have seen growth of 40%
 There was adverse impact on 60000 small shopkeepers.
 A small shopkeeper fired rocket in Big shop & committed
suicide," frustration”.
 The Prime Minister of Thailand agreed that there was adverse
impact on retail trade.
 The Govt. which had opened its door for FDI in retail trade
with big bang had to provide financial assistance to retail
traders by establishing a special fund.


WHAT HAPPENED IN CHINA
 There is a race to capture more & more space for
retail trade.
 There is allegation of flouting the norms on these
stores.
 There is anger against these companies amongst
general public.
 Media is also reporting how traditional shops have
been thrown out.
 The suppliers and manufactures are also facing
problem. These are closing down.


WHAT HAPPENED IN OTHER
ASIAN COUNTRIES
 Other countries are also unhappy.
started taking precautions.

Many countries have

 Indonesia and Malaysia have established zones within which
these foreigners can do trade.
 In Japan Big companies have to discuss with small traders.
There is Zoning system also. Hence these companies have to
establish their shops outside city limits.
 There is wide discontent amongst shopkeepers & people in
the countries to which these store belong.
 The city counselor of California & Chicago have refused to
allow opening of new shops to WALMART.
 These shops are required to take permission in countries like
France, Germany and America.


NOW ITS TURN OF INDIA
 The tough stand taken till recently by Central Govt., Foreign
Retail Traders could not enter India.
 It is unfortunate that Central Cabinet has given approval to
FDI in Retail Trade.
 Shift of Major retail trade to these big companies will render
small traders & their employees unemployed.
 Many companies with the help of contract farming will sell
goods produced in farms directly from their chain of stores.
 After establishing control over purchases & sale these
companies will start dictating.
 These companies will keep only graduates and above in their
employment. There will be no scope for employment to
under graduate and others.
 In the event of non receipt of payment of supplies, it
becomes impossible to reach owners.

CONTRACT FARMING

COLLECTION OF
AGRICALTURE PRODUCTS

TO OWN FACTORY

TO CUSTOMER


TO OWN DEPT. STORE

REQUEST STOP FDI IN
RETAIL TRADE
 If Domestic Retail Trade is allowed by Big MNC’s etc., there
will be Large Scale Unemployment.
 A new class of unemployed called “Unemployed Traders”
will join the existing force of unemployed persons.
 These companies will sell internationally procured products.
Domestic Industry will suffer.
 Everybody knows how Big Fish eats away small fishes.
 Keeping the experience of other countries in mind, Govt.
should not take any such decision for which the whole
country and coming generation will have to suffer.


SELF EMPLOYMENT IN INDIA
 India has huge force of unemployed persons.
 Govt. has failed to generate need based
employment..
 Majority of people in India are self employed.
 The Major area of self employment is Agriculture
and Retail Trade .
 The farmers problems were not addressed timely.
They are committing suicide.
 WHAT is the future of Indian Traders in India?
 WILL next generation pardon us?


WHAT SHOULD GOVT. DO
 Govt. should identify the weakness of present
retail trade.
 Govt. should specify the areas where customers
are not being served properly.
 Govt. should specify what it expects from retail
trade that is not being met presently.
 Govt. should publicise the sector / persons who
have demanded FDI in Retail Trade.
 Govt. should come out with white paper on FDI in
Retail Trade specifying the picture after 25 years
and 50 years.


ns’k dk O;kikjh
gkykr dk ekjk cspkjk O;kikjhA
viuks ds gh } kjk Bqdjk;k cspkjk O;kikjhA
ns’k dh vktknh fd [ kq’kh;k euk Hkh ugha ik;k
Fkk
fd ukSdj’kkgh dk xqyke cu x;k O;kikjhA
brus lkjs dkuwu dk;ns vkSj fjVuZ fd
O;kikj djus ds fy, le; [ kkst jgk O;kikjhA
ns’k ds O;kikj dks fons’kh;ksa dks cspus fd
,slh gksM + yxh gSa fd lgh ns’k izseh dks
< waM + jgk O;kikjhA
yksdrkaf = d ns’k esa rkuk’kkgh ljdkj fd ekj [ kk
jgk O;kikjhA

INDIA : MY COUNTRY
DON’T SEE INDIA AS POPULATION OF ONE HUNDRED CRORE
MOUTHS TO FEED.
SEE IT AS A MARKET OF ONE HUNDRED CRORE CONSUMERS WITH
TWO HUNDRED CRORE EYES TO WATCH YOUR PRODUCTS AND
TWO HUINDRED CRORES HANDS TO BUY YOUR PRODUCTS.
WORLDS LARGEST EMERGING RETAIL MARKET : WHO WILL
CONQUOR IT : WE OR THEY?
DO NOT MAKE MY GOVEREMENT AS,
 GOVEREMENT BY MNC,
 GOVEREMENT OF MNC AND
 GOVEREMENT FOR MNC’S

Impact of Foreign Direct Investment In Retail In India

Impact of Foreign Direct Investment In Retail In India

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (18)

Semelhante a Impact of Foreign Direct Investment In Retail In India

Semelhante a Impact of Foreign Direct Investment In Retail In India (20)

Mais de Hitesh Kukreja

Mais de Hitesh Kukreja (20)

Último

Último (20)

Impact of Foreign Direct Investment In Retail In India