‘For every 20 lakh jobs, four crore are rendered jobless’

DK Sharma, director, India FDI Watch, the organisation fighting against the corporatisation of the retail sector, spoke to VIVEK SINHA about its pitfalls

Why do you oppose the entry of multinationals in retail?
After all, MNCs have been in the country for a few decades now and have brought in technology and more job opportunities. Corporate giants are welcome in sectors where innovation and technology are involved, but retail is a different ballgame. There is no value addition in retail. It involves the sale of finished products that our neighbourhood kirana stores have been effectively and efficiently selling for years. Allowing MNCs and other corporate bodies in retail will spell drastic changes. Over a period of time they will wipe out the smaller stores by establishing their monopoly. There is limit to demand in retail sector, so these MNCs eat into the profits of independent kirana stores.

But can’t the mom-and-pop stores coexist with the MNC ones? The Chinese example is a case in point.
The Chinese model has been distorted to suit the vested interests of corporate organisations. The truth, however, is that small retailers are finding it extremely difficult to survive even in China. The local newspapers in China are full of stories of small retailers being edged out of the market. Also, when China opened its retail sector in 1992, it was highly regulated. It allowed joint ventures with only 49 percent foreign ownership in just six cities and restricted the number of stores. But in India, they can open any number of stores at almost every location in the country, which is inimical to the interests of the small traders.




Don’t you think that big shops can accommodate the smaller ones?
It is not happening in the countries where they are present. For example, the soft drink market. Today only two companies — Pepsi and Coca Cola — exist, taking over all the other Indian brands.

Isn’t it that the entry of corporate retailers would be beneficial for commodities with a limited shelf-life like fruits and vegetables?
It is illusory to think that there would be a drastic reduction in wastage in the supply chain. The street vendor delivers fresh fruits and vegetables brought directly from the mandi whereas the corporate stores resort to extensive chemical spraying to give their produce a “fresh look”. Moreover, 15 percent wastage has been reported even in countries where Wal-Mart is present, so the argument of wastage reduction does not hold water.

Corporate retail would mean more and better jobs.
For every 20 lakh jobs provided, at least four crore people are rendered jobless. It is neither economically viable nor sustainable.

But what is the way out of this impasse? What should the government do?
We want the government to formulate a national policy on retail trade by constituting a special task force of stakeholders. Regulatory policies should look into the location, size, number of stores and the amount of capital brought in by the MNC giants. All expansion of retail trade should be put on hold till that happens.



Courtesy: Tehelka.com