FDI In Retail : Where Is It Heading ? Do We Need It?

FDI In Retail : Where Is It Heading ? Do We Need It?

It has taken over 20 years for people to recognize that the decision that was taken by Dr Manmohan Singh during his term as a Finance Minister was correct.

People are making the same mistake again by not recognizing the benefits of a strictly regulated FDI in retail sector. Everything in life has a positive and negative side. One should always try to minimize the negative effects by taking proper steps against it in order to prevent it .

If Dr Singh failed to make that decision 20 years back , then our situation as consumers would have been totally different.

It was because of Globalization, Privatization and Liberalization policy taken by the Government that we are enjoying benefit’s such as getting telephone connection instantly (Mobile) , the call charges getting reduced, private companies being allowed to run Aviation business and hence people have a choice.

What this has done for the people of this country is something many of us fail to understand. Nowadays almost anyone can have a mobile phone, but 10-15 years back the situation was different.

Now coming to our main issue , the FDI in retail sector.

FDI in retail sector means what for the consumers ?

As consumers we are having multiple choice for products, competitive pricing, better quality products and less hoarding.

The result is simple - the cost of goods will come down because the farmers sell these products directly to MNCS.

Food adulteration is minimized

FDI in retail sector means what for the farmers ?

If strictly regulated then farmers will get a better pay for their goods and services.

It will provide them with the benefit of having direct contact with the purchaser.

As a result the amount of money that middle man takes away is saved and its benefit reaches

the farmers and consumers.

FDI in retail means what for the Government ?

Better tax collection with organized retail sectors.

More FDI into the country means more foreign exchange reserve for the country's use.

But along with benefit’s ,it may also bring problems.

The problems that are likely to be caused by this and solutions for this are as follows

1. Exploitation of farmers

The farmers could be easily exploited by these MNCs if there are no strict regulations

Solution

Strict Government regulation on minimum support price for items being procured.

Zero Tolerance Policy towards the MNCs that tries to exploit consumers and farmers.

2. High Cost of essential commodities

This can happen if the MNCs controls the whole market.

Solution

Government maintains the first right to acquire essential commodities from the farmers

Setting up of Grievance Control Cell for Farmers and Consumers

Zero Tolerance Policy towards the MNCs that tries to exploit consumers and farmers.

3. Shutting up of stores of common man

Small traders maybe forced to shut down due to competition in prices of goods.

Solution

Place a system by which the Government ensures that these MNCs don’t sell good below its procurement price.

There are about 40 million traders in India and they have to be taken care of.

Allow FDI-MNC stores to be opened only in big metropolitan cities. This will allow the millions of traders to continue on with their business. Also those traders in cities will now ensure that their products are up to the mark.

Conclusion

If people have more choice, then only they will get the best product at the lowest cost.

FDI in retail is not bad ,but it has to be strictly regulated. Going completely against FDI in retail is like paralyzing the poor consumers who are already facing a lot of problems. An Government which monitors the actions of FDI and protects the consumers and farmers is vital for FDI in retail to be a success story for all.

The quality of food items sold in the market are poor. It is adulterated and it causing problems to our health.

Will these agitating traders give us quality products ?

It is for the consumers to decide what they want . If the nearby Shop gives he/she a better product then he /she should go to that shop or else if a MNC store gives him a better product at same price then should he not go there ?

Should he still go to local trader who is trying to give him poor quality product ?

The choice is with the consumers of this country. But for having more and better choices we need FDI, MNCs to setup more stores.

There are always agitations against new policies , see there was a talk that computer would make people job less. There was also a talk that traffic signals would create job problems .

None of these talks became a reality and instead these electronic equipment made life easier for the people.

India needs more development and it will surely develop into an economic super power.