Now-a-days there is a hot news regarding foreign direct investment in retail sector. A few multinational companies have made an agreement with Indian companies for their induction in retail sector in India. Wall Mart, an American company, is planning to invest fifty thousand crore rupees in Indian currency for the first year. Apart form this, many companies like Tesko, Carrifor and Kargil etc., are ready for their entry in retail sector of India. Their collective annual turn over is more than total Indian GDP. Now this is a question before us, whether, our retail sector will survive or not due to entry of these multinational companies in retail sector. About twelve crore individual are engaged in this sector in India, they are the source of livelihood of their families.
Whether these individuals will not become jobless due to entry of such multinational companies or how many will get the jobs in multinational companies. This main question is before all of us. According to the experts of our country, we cannot compare the retail sector of India with that of America and European country. At present there are about 1.20 crore retail shops in our country. What will be the fate of these retailers. This is the prime duty of the politicians of this country to concentrate their mind on the issue. Some say upper class will like to have such shopping malls. But how can we forget this that the main target of these multinational companies is our market. By snatching the monopoly of LIC, they have became share holders of 30 per cent in LIC. Our Industry and Commerce Minister says that to safeguard the interest of retail sector, he will frame some policy. God knows about his policies. These multinationals will not hesitate to capture the market owned by 93 per cent of unorganised sector workers.
In our country the average Carpet Area of retail shops in 20 sqr. yards, whereas that of multinational company is more than 500 sqr. yards. The average of workers engaged in the retail shops of our country is 10-12 per shop, whereas that of multinational companies is 4-5 men per shop. The Wall Mart company has captured 75 per cent market in retail sector of America, whose turn over is more that 25 lacs crores of rupees. In America Wall Mart has provided jobs to near about fifty lacs people. In comparison to it, in India the turn over of retail market is about four lacs crores and the jobs provided to the Indian people through retail sector is 4.5 crore. According to the report of Shri Macanji, if Wall Mart provides jobs to 1000 people in our country, then 15000 people of India will become jobless. Shri Macanji has further said that India may attract FDI in the initial stage but he was not hopeful in future. Wall Mart company which is marching in India, is passing through critical stage in most of the developing countries viz., Honk-Kong, Indonesia, Jakarta, Germany, South Korea etc., due to revolt of its employees or due to not fulfilling the requirements of their citizens. After capturing the market of America and Europe, these multinational companies are looking the market of China and India, but no fruitful results will come out from China, because China is providing more subsidy to their farmers and the Commercial Laws in China are not elastic. That is why, these multinational companies can not stand in China. As a result of which, the total attention of these multinational companies is towards India. It is true that these multinational companies will come in the retail sector of India with the help of local companies viz., Bharti, an Indian company has made an agreement with Wall Mart for launching in the retail sector of India. Reliance company is also coming in the retail sector. But it is sure that the multinational companies will remain in the decision taking position. A few multinational companies who are launching in the retail sector of India, they have got such a huge infrastructure and are capable to capture the whole retail sector of our country. It is sure that there will be a big competition in the retail sector due to induction of multinational companies. A few Industrialists of our country think that Carpet Sector of our country has been developed to such an extent that there will be no problem for us to compete with multinational companies. Entry of FDI in retail sector will have effect on economy, employment and even cultural values. We expect from the government of India to take a critical view and act, so as to promote fair-trading without disturbing socio-economic fibre.
The problem is, how a poor retailer of our country will safeguard himself. There is an issue for competition with multinational companies. The government may give protection to its retail shopkeeper for sometime, but after that the open market will be in the hands of multinational companies. Only those will survive, who have strong footings. Those who will not have strength, will run away from the field. According to our views, government should invite FDI as per our requirement but it should not be invited blindly and under pressure. Now, we are visualising the results of globalisation after one and half decade. The globalised economy had betrayed the developing countries by giving them unemployment, starvation and poverty. We are of the firm view that due to induction of multinational companies in the retail sector of our country gap in the society will be widened. Central Government should think over it and restriction should be imposed on induction of multinational companies in the retail sector of our country to safeguard the interest of more than fourty crores of retailers and their family.
(The author is President of Bharatiya Mazdoor Sangh and can be contacted at Ram Naresh Bhawan, Tilak Gali, Pahar Ganj, New Delhi-110055)
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