The expected job creation following the opening up of the retail sector for FDI will be doubtful, says Sukhpal Singh, Chairman, Centre for Management in Agriculture, IIM-Ahmadabad.
He was delivering the keynote address at a seminar on ‘Benefits of FDI in Multi-brand Retail Trade in India: Myths and Reality,’ organised by College of Cooperation, Banking and Management, Kerala Agricultural University.
Opposing the government’s arguments in favour of FDI in retail trade in India, he pointed out that farmers or consumers are not going to benefit from it.
Govt intervention
He said that unless there are interventions on the part of the government such as setting up Fair Trade Commission to regulate FDI players, protection of the traditional retailers, encouragement of contract farming, and reforming the APMC markets, the policy of allowing MNCs in India in the retail business will be against the interests of millions.
According to M. Jayaprakash, State General Secretary, Kerala Vyapari Vyavasay Ekopana Samithy, FDI in retail would lead to monopolisation of the retail sector by the transnational retail chains.
Market manipulation
The foreign retailers with their money power can procure farm produces in large quantity at lower price and sell them at higher prices by creating artificial scarcity in the market, he said.
Jayaprakash was of the view that FDI in retail should not be looked from the economic angle alone. Its social dimension is more important. Millions of small traders will lose their livelihood if FDI is allowed in retail trade, he said.
He warned that the entry of foreign retailers in Kerala will invite mass agitation from traders as it is a do-or-die situation for them.
The government should tap other sources to find capital for investment in backend infrastructure for agriculture, he added
T.R. Vijayakumar, Managing Director, Elite Super Market, opined that foreign retailers would find it very difficult to open shops in Kerala even if the government permits FDI in retail because of opposition from local traders. According to him, the retailers have to win over the consumer by making shopping a delightful experience.
Support for FDI
Vijayarajan, Director, Nanma Producer Company, strongly supported the FDI in retail. He argued that the entry of foreign players in retail will provide greater choice to the consumer and make available world-class products at reasonable prices because of competition.
A. Sukumaran, Associate Dean, presided over the function. Philip Sabu, Director, MBA, welcomed the gathering.