There is space for the Mall and the Kirana

Cricketer Mohinder Amaranth once called selectors a “bunch of jokers”. One cannot but have the same feeling looking at the way our parliamentarians behave, stall debate and progress in the country. One has to give it to the ineptness of the ruling party’s political think tank for messing up issue after issue and creating political confrontation with the opposition and allies on almost all critical policies. The opposition is equally obscurantist but the onus of opening a healthy debate and consensus is with the party in power. Middle ground is a forgotten term for our elected representatives.

FDI in retail, there is no doubt it will benefit in development of infrastructure (cold storages, ware houses), improve supply chains and finally benefit the farmers (middle men are hurting the country’s farmers), ultimately it will bring done costs to the consumer because of efficiencies across the chain (there is no way we can compare the cost efficiencies of our malls to that of Walmart or Carrefour etc) malls in India are for the upper and middle class and they are taken for a ride by the mall owners). There is enough proof of the success of FDI in retail contributing to growth in china (100% FDI limit), Brazil, and Singapore etc. In china itself 600 + hyper marts have been built over the past decade leading to large scale employment, employment in the sector in china rose by 100% between 1992 to 2001 (from 28 mil to 54 mil). Are we anywhere near China or Brazil in the retail space – our pathetic infrastructure destroys fresh produce and more than 30% of the fresh produce is thrown as waste. On products other than fresh produce we are inefficient in costs.

Folks who are fighting for the neighborhood kirana shop are raising a bogey, kirana will survive or transform itself if the big retailers are ever going to have an impact on them, I think there will be no impact, shopping habits are hard to change and we will still walk across to the kirana shop to buy the toothpaste and dal. The same bogey was raised when KFC and Pizza hut entered the Indian market, they have in fact contributed positively to the economy by generating employment. At the same time Saravan bhavan’s, Kamat’s and Nirula’s are still doing their business briskly. We are big country and there is space for the kirana and the mall. Ultimately our objective should be to generate quality employment for our millions and at the same time invest in improving our infrastructure, technology, supply chains etc.

The ongoing ruckus is going to have an impact on FDI in aviation, this sector is struggling and badly needs cash infusion and strategic partners. Delay in formulating and rolling out a forward looking aviation policy will hurt the private players which is unfair. Why keep pouring public money in Air India while we penalize the private players with whole host of regulations?