| It is ironical that while each October we pay our grateful homage to the Mahatma, who gave us the dream and the courage to exhort our occupiers to Quit India, a bunch of activists could not find a more worthwhile cause than organising rallies in support of their quixotic Quit Retail movement. |
| The "case" against efficient and modern retail has been building up for some years now, primarily on account of the lack of any timely intelligent, coherent, and forceful rebuttal from either the government or Indian industry even though directly or indirectly they are also stakeholders. Due to lack of conviction (about the merits of an efficient retail system) in two successive governments and thereby lack of any serious effort to study the issue comprehensively and empirically, half-truths and blatant untruths have been dressed up as truths by a motley group of a few habitually disruptive political parties and politicians, and a few characteristically obnoxious, perennially bile-spewing activists. |
| There is no large and diverse economy anywhere in the world that has such an antediluvian distribution system for basic commodities and consumer products for day-to-day use as in India. Enough has been documented, argued, and spoken about the wide-ranging benefits of a strong, farm-to-retail and factory-to-retail distribution and retail system in the country and hence I would not like to repeat them. What I would like to highlight is that if the government and industry do not nip this growing tide against the emerging modern retail sector in the bud, the impact will be more disastrous for the country as a whole rather than for most of the players who have announced plans to enter this sector. The Tatas, Birlas, Ambanis, Mittals, and Goenkas (among others) are large (and almost invariably) highly diversified business houses. They can very easily afford to shelve their plans for the retail sector and divert their attention and resources to a host of other equally exciting opportunities in India and beyond. Wal- Mart, Metro, Carrefour and Tesco (among a few others) may be excited with the potential of India but India is not the only country offering potential and is not the only business opportunity for them. They can, at the very least, defer their plans for India for years to come. The only loser in the process would be hundreds of millions of middle- and lower-income Indians who could have potentially benefited from competition- and efficiency- induced lower prices, better quality, and superior service and shopping comfort. The losers would also be the millions of farmers who would be constrained to continue to sell to the middlemen, who do not mind creating scarcity when it suits them, only to raise the final prices for the consumers even as the farmers continue to live an impoverished existence. The losers would also be those millions of average Indian men and women who could have found some jobs (in sales as well as myriad other retail ecosystem support systems) with their otherwise nearly unemployable situation. And finally, the loser would also be these very state governments who would have otherwise gained from better tax compliance at the retail end. |
| I look back with extreme sadness and some anger at the fallout of a similarly misguided nationalism in the early 90s, when supposedly to protect the interests of handloom and powerloom weavers and independent processors/small garment makers, the entire textile and clothing sector was shut out to large business by policy as well as by a discriminatory taxation regime. The policymakers and rabid opponents of anything remotely modern or efficient all came together to systemically weaken the organised "mill" sector, leading to the sorry state of affairs today, wherein the Indian textile and clothing industry remains mortally weakened and is unable to compete for getting a much larger share of the global market. |
| Reserving almost every conceivable industry as small-scale for years has kept India's manufactured goods export basket abysmally small, with our small-scale manufacturers usually not able to compete with the right-scale manufacturers elsewhere in the world including China. |
| If the government and industry bodies do not come out forcefully against the growing tendency of the fringe political parties and all kinds of self-interest groups and individuals to meddle with the normal economic evolutionary process without having any sound rational (economic or social) argument, the malaise can spread rapidly. India needs massive private investment in every sector, be it retail, education, healthcare, infrastructure including power, transportation, telecommunication, housing, etc. It should be of no surprise to anyone that in the current state of our developing economy and with a population exceeding 1.1 billion, the majority will be self-employed. Most of these are self-employed not by choice but are forced to be so because they do not have jobs. We need large investment in every sector to create the tens of millions of jobs every year so that most are not forced to attempt to eke out a living through millions of microscopically small one-person or one-family enterprises. Retail is no exception. |
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
