Ad Here  
June
July
August
September
October
November
 
 
Tax evaders’ get out of Jail-Free Card After all, customer is the king Truce at Kasturi Buildings Skewed Economic Zones? Oh my GOLD A tale of two Bihar babus Pool energy prices Land, land everywhere, but... Industry can’t get it from Mars, yet MS Installed A Fine division of responsibilities Welcome move to widen the tax net… Miles to go... South India’s 100 most valuable companies If not Tamil Nadu, where else? Focus on southern TN... Indian GST – Between extremes… Much can be done by us Rail-road Rajaraman An eco-friendly commute in Mysuru Policy Makers Babes In the wood-RBI North block has little clue to curb inflation Need for radical RBI reform Star of the South Healthy finances of the Chennai Corporation They add lustre to Padma Awards What the big B should offer? 1800 parties registered with EC – Less than 60 contest elections Two welcome measures from the chief minister... Strategic planning the missing link Research for survival... Little surplus after salaries, subsidies and debt servicing Reform this licence to…kill Economy through the month Much ado about nothing Need plan over the long term planning Why (not) abolish? No groundnuts in groundnut oil! Outward ho A dual GST that will protect prosperous states Chennai Airport-Ready for a rapid take off... Weaving wealth of western Tamil Nadu Ganesh’s mantras Jobs - Lost, Changed or Gained How will it PAN OUT You too T M Krishna? A blueprint for the future Sowing seeds of hope Better relations with UK... The deluge and the several kindly souls Welcome rains for damaged roads... Breaking news or breaking credibility? Well-administered State Sustainably developing manufacturing sector… TN - so much to offer... Trail-blazing Tamil Nadu Technology and economic development should be linked Babes In the wood-RBI North block has little clue to curb inflation Kudos to GIM organisers... Public investments and welfare will surge Make way for Make in India... An eventful week with VVIPs of Delhi A historic indirect tax reform Deming awardees galore! When the examiner cheated... Focus on agriculture and human resources CSR, tech revolution and bank crisis The Great Fall Low profile moves INDIA keeps its date with destiny In the horns of a dilemma Sardar Sarovar – the seventy year itch A gratifying record Why throw baby with bath water? BJP can now hasten its thrust for reforms It’s raining funds for states. Really? Cleansing Indian retail Tryst with GST PC please be our Santa Wanted: decentralised financial system CAD and the emergency thereof Welcome Measures. Work for 10X Change
 
Cleansing Indian retail
Foreign Direct Investment (a k a FDI) in multi-brand retail is possibly the most progressive reform that India has embarked since 1991.
THIS WILL LEAD to a defining churn in the industry. We will see dramatic changes in the supply chain systems that will bring enduring benefits across the value chain. This will not destroy the kirana shops; just as the KFCs and Pizza Corners did not kill our dhabas.

There is a raging debate focused only on traders and middlemen. The humongous benefits that FDI in retail can bring to consumers and producers have been largely ignored in these very intellectual discussions.

Consider the following issues to appreciate the enormity of the problems we are dealing with:
• India is short by 10 million tonnes of cold storage capacity due to which over 30 per cent of agricultural produce goes waste every year.
• At least 20 per cent of foodgrains that India produces annually is eaten by rodents, thanks to improper storage facilities.
• India, the world’s second largest fruit and vegetable producer encounters close to 40 per cent waste.
• India, the world’s largest producer of milk, wastes each year, the quantity of milk that equals the total milk produced in the European Union.

Attending to these call for investments.The government does not have the money for it. Indian private players may not necessarily have the resources, expertise or the interest.

Game changer

At first, let the foreigners create these permanent facilities and also earn money from them. Even if 50 per cent of the above loss can be translated into savings, the benefits to the nation can be enormous.

Secondly, the farmers will benefit immensely. A CII-BCG report says that an Indian tomato farmer earns 30 per cent or less of the final price,whereas in the developed countries,the farmer receives as much as 70 percent. This scheme, therefore, would be a game changer.

Profits in organised retail is not necessarily a function of volume. In reality, they are made from superefficient supply chain systems and food handling technologies that cuts down costs by eliminating non-value adding processes. Efficiency is the name of the game in modern retail.By calculating the inventory of a store on a dynamic basis, the 

reporting of the stock levels happens in real time leading to sharply accurate purchases.Advanced cold storage systems with standardised grading and quality checks lead to better produce for the consumer and savings for the retailer.

If FDI is allowed, key players who have international markets will invest in India indirectly through tax havens..... Indirectly it will be a round tripping structure which is illegal..... Ultimately, it results in tax evasion, imposition of huge price towards brand cost etc.... They will kill medium level merchants by creating artificial demand for their products... – Dwarakesh Sridharan

Lastly, we must remind ourselves that an FDI in retail is no substitute for investment in basic infrastructure by the state. Walmart can invest in large and technologically advanced cold storage warehouses but it is for the state to provide continuous electric power to run them. Tesco can bring in large modern freezer trucks to transport their produce from warehouses to its stores but it is for the states to build good roads. What India needs is massive investmentsin its crippling infrastructure but let’s make a beginning somewhere through the process of FDI.

FDI in multi-brand retail is here to stay. The process has just begun.During his 1991 Budget Speech, Dr Manmohan Singh quoted Victor Hugo’s words: “No power on earth can stop an idea whose time has come”.(Drawn from various reports and studies)
Author :
Reported On :
Sector :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com