Organised retail lacked a policy, Bhattacharya said.
"Studies have shown that around 1 to 5 per cent of small shops would shut down in places where organised retail outlets came up", he claimed.
"Around 7.5 crore families depended on these smaller retail shops, and care should be taken so that sections that depended on unorganised retail did not lose their livelihood", he added at the retail sector seminar organised by the Indian Chamber of Commerce (ICC).
The minister had nothing to say on the losses being incurred by the bigger players in organised retail. For example, RPG Group's Spencers Retail posted a loss of around Rs 150 crore last fiscal.
Reliance Fresh managed to open around 585 stores across the country as against a target of 1000, while Aditya Birla Retail opened around 515 against a similar target. Future Group retail brand Big Bazaar planned to open 61 new stores this fiscal.
Bhattacharya later admitted organized retailers were operating below expectations.
India's retail sector was one of the country's largest employers after agriculture and was clocking growth rate of 22 per cent per annum.
Indian organized retail was estimated to grow to a $440 billion industry by 2010 and its share in gross domestic product (GDP) expected to rise to 22 per cent by 2010 from 12 per cent now.
