Retail Sector in India
Retail industry in India is one of the fastest growing. It contributes 14% to the national GDP and employs 7% of the total workforce. Retail industry is divided into organised and unorganised sectors. Organised trade employs roughly 5 lakh people whereas the unorganized retail trade employs nearly 3.95 crores. Growth in Retail as a result of economic expansion as well as jobless growth.
Major arguments against adoption of FDI in Retail in India:
Ø FDI driven modern retailing is labour displacing.
Ø It can only expand by destroying the traditional retail sector.
Ø Foreign retail firms have deep pockets and can cause even the organized retail sector to go out of business.
Ø Will buy big from India and abroad and be able to sell low.
Ø When monopoly situation is created will will buy low and sell high.
Ø It is true that it is in the consumer’s best interest to obtain his goods and services at the lowest possible price.
Ø But collective well being should take precedence.
Suggestive measures to eliminate the negative effects of FDI in Retail:
v FDI should be aggressively promoted in R&D, Manufacturing, Entertainment to accommodate the people who have lost their jobs.
v Import duty should be imposed to protect domestic production units.
v Labour laws should be imposed to ensure that no management jobs are outsourced.
v Jobs should be reserved for the poor people.
v Hindi and local languages as a mode of operation should be encouraged.
v Cooperative societies should be formed for the farmers and other agricultural suppliers to take care of their rights.
v The foreign retail units should be made to divest a certain percentage of their equity in the Indian financial markets.
v Social infrastructure like schools, colleges and hospitals should be developed to promote human capital formation .