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26 March 2014

Retail Sector in India

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 .

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