WHO SAYS ‘WALMART’ WOULD BRING HAPPINESS TO ALL?

At the cost of being branded as an alarmist or a mad-person with phobias or even as a lackey of some vested interests, I wish to predict the scenario 10 Years from now, with FDI in Retail Sector, based on the Historical Data.

According to the ‘World Bank- Global Development Finance Report 2009’^[1] Educational Qualifications of Organised Retail Sector are – mostly computer savvy – 56% of Undergraduates, 36% of Graduates & 8% of Post-Graduates.

If Walmart succeeds the way it did in Mexico – capturing as much as 62%, in the first 15 Years (since 1997) ^[2] – assuming our Retail market stagnates at the current level of only Rs. 21,34,400/- Crores of Sales with 12 Lakh businesses – owned by individuals of Families that employ as many as 4 Crores of mostly Computer-illiterate, School Drop-outs – It would displace, like it did in Mexico – around 7 Lakh businesses and would employ just over 13 Lakh Undergraduates, Graduates & Post Graduates, with a Sales of around Rs. 13,23,328/- Crores – after disemploying as many as 3,86,76,672.

       01)  Who says FDI in Retail Sector, with the likes of unscrupulous Walmart ^[3] entering Indian Retail Sector would create jobs and not take away them?

Much larger studies concluded that the Prices of Supermarkets in Latin America, Africa & Asia have remained higher, by 20%-30%, than those of the open Markets.

         02)  Why anybody should peddle canards of ‘the Prices at Large-Format Retail Outlets’ would be Cheaper to the Consumer?? 

 

In USA, the birth-place of “Walmart” and several other Large-Format Retail Outlets, their Government has been subsidizing its Farmers to the tune of US$ 60/- Billions a Year!

             03)  What is the logic or motivation ^[4] behind spreading rumours about Farmers Getting better prices???

For further study, kindly visit,

^[1] http://www.dnb.co.in/IndianRetailIndustry/insight.asp

^[2] http://www.ilsr.org/walmart-de-mexico-scandal/

^[3] http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?pagewanted=all&_moc.semityn.www

^{[4] http://www.thehindu.com/opinion/op-ed/article3897906.ece?css=print}

Govt. to take early decision on allowing FDI in multi-brand retail!

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Sujay Mehdudia, The Hindu / NEW DELHI, August 3, 2011.

Commerce and Industry Minister Anand Sharma - PTI.

Asserting that a decision on allowing foreign direct investment (FDI) in multi-brand retail will be taken soon, Union Commerce and Industry Minister, Anand Sharma on Wednesday said whatever is done would be in the supreme national interest.

“Policy formulation is a careful calibrated exercise. Once recommendations formally reach my table, we will take early and appropriate policy decision,” Mr. Sharma said in the Rajya Sabha during Question Hour.

Replying to concerns expressed by members about job losses following opening up of the sector to foreign retailers, Mr. Sharma said any decision would be in supreme national interest and create millions of jobs across the country. “A group of Secretaries headed by Cabinet Secretary, Ajit Kumar Seth last month, made specific recommendations which are in the interest of all stakeholders, including farmers,” he added.

Mr. Sharma said CoS has recommended that at least 50 per cent of the investment and jobs go to rural areas and the entities with FDI should source at least 30 per cent of their requirements from the MSME sector. A minimum investment of $100 million has been recommended, he said. At present, India allows 51 per cent FDI in single brand retail and 100 per cent in cash and carry format of the business.

The Department of Industrial Policy and Promotion (DIPP) had last year in July floated a discussion paper on opening of the politically sensitive multi-brand retail. Only four per cent of India’s retail is in the organised sector.

Full Story at,

http://www.thehindu.com/business/Industry/article2319040.ece