PRESENT SCENARIO OF RETAIL BUSINESS IN INDIA

. Monday, March 29, 2010
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Ashrujit Nandy

There are around 15 million retail center in India. •According to 2001 census, near about 30 million people were in retail business; among them, 19million in rural area, and 11million in cities. 17million of them were non-matric. At present, the number of people involved in retail business has been increased to almost 40 million, which is approximately 7- 8% of total number of employed Indians. Only agricultural area involves more man power than retail business. •Total transaction in retail business is 90 billion Rs/year. •Only 4% of this sector is organized •Number of retail center per 1000 people is highest in India, 11 retail centers / 1000 people. •14% of GDP comes from retail business. •Total 160million of Indians, directly or indirectly depends on retail business. Why the domestic and multinational investors are interested in Indian retail market?

The aim of the capitalists is to search and gain more profit. Because of unimaginable economic stagnancy in the western capitalist countries, they are forced to adapt globalization, privatization and open market policy, in order to sustain there capital. Now it is not possible for them to invest in their own product based sectors. They are looking for new areas of investment and their new target is the large retail market of India. At present big capital controls only 4% of Indian retail market. They want to reach 20% in next 4 -5 years, i.e. near about 200,000 crore rupees. Walmart, Costco of USA, Metro, Aldi, Rewi of Germany, Carifore of France, Ahold of Netherlands, Tesco of Britain, Reliance, RPG, Spinach, Subhiksha, Tata, Pantaloons, Birla, Bharati and others are trying to capture the retail market. Walmart : World's largest retail organization. Annual turn over is about 350 billion USD, which is more than that of entire retail market of India. Presently they are interested in joint venture with Bharti group. Pantaloons: Largest group in essential commodities sector of India. They are planning to build 2500 outlets, investing 30,000 crore rupees, by 2010. Reliance: Planned to have few thousands of outlets in 784 cities of India. By 2010, aimed annual turn over is 90,000 crore rupees with present investment of 30,000 crore. Big investors want to have 25-30 thousands outlets in next 4-5 years. They are trying to capture the retail market by investing crores of money. According to the supporters of large investors in retail market:

Generate employment.

Due to complete abolition of middleman system, price will be low. Growers and producers will gain more. Using this logic, the big political parties like Congress, BJP, CPM as well as, the regional ruling parties are welcoming the domestic and foreign investors in retail business. Some of them are campaigning for domestic capital only. Some are protesting just to secure their vote bank.

Why are we opposing?

At present only 4% of retail business is dominated by organized sector and the aim is to control 20% of retail business, in next 4-5 years. One survey says, if Walmart has only one outlet, in each of 35 Indian cities, with more than 1 million populations, then the turn over will be of 8033 crore rupees and 10,195 people will be employed. At the same time, 432,000 persons, related to Indian retail market will be jobless. That means, every Walmart employee will be responsible for unemployment of 42 person related to Indian retail market. It negates the view of employment generation.

So the middlemen, who play an important role between producers and consumers, will be thrown out from the scenario. It is already noticed from the western capitalist countries, that, initially the
farmers and small scale producers get more profit due to removal of middlemen. But, later, as they completely depend on the big investors, they have no choice other than selling their product to investors, and finally the farmers are forced to sell in the price set by the investors, compromise with the conditions, and the labors related to small scale production are forced to work more and get less paid. On the other hand, initially the big investors sell the product in lesser price, only to capture the market. But when the market is completely monopolized, they force the customers to pay high price for their product. Just to increase the profit, they compel the farmers to sign contracts and grow only the profitable crops. Use of high-tech seeds, excessive amount of pesticides and fertilizers, preservatives to store the huge production finally affects the farmers and farm lands. In the vicinity of the large outlets, the small scale retail business is decreased by 40-50%, resulting in unemployment, poverty, social problems like drug addiction, domestic violence, criminal and suicidal tendencies. In last 15 years, though the GDP has increased, there is no significant employment generation.

Today for many Indian, small scale retailing is the only way to earn bread. Hawker eviction, implementation of VAT, all is to help the big investors. Just within 10 years of business, Walmart has captured 20% of the Mexican retail market. Now Mexican government is looking for ways to protect their small scale business sector. Even in USA, many business houses had to close their business because of Walmart. Germany and South Korea has banned walmart for selling products in less than the production cost. In Thailand, due to big investors, 60,000 shops are closed. A survey, done by prof. Anuradha Kalhan of Mumbai, Joy Hindu College, says that there is a 71% decrease in small scale business due to two shopping malls in Mulund. Around 87% grocery shops admit loss in their business. 63% of the small scale retailer has fear of losing their business. In 92% families next generation is not interested in this business anymore. 72 % hawkers are humiliated by the shopping mall agents. 17% businessmen are reported pay more bribes and illegal weekly fees to these agents. In another survey it is observed that in delhi , within one km radius of reliance fresh, there is 88% decrease of business of shop owners and hawkers. 45% have reported that their business has gone down by 50%. 59% are thinking of leaving the business because of excessive losses. Already many vegetable vendors have left the business in Lakshminagar and Paharganj area.

So our appeal is to unite against these big investors and the political parties who are just resourses to provide food, health and education to all the Indians, it's the time to raise the question why 80% people are deprived from the basic needs. So mass movement is the only solution to protect ourselves from the brutal aggression of the state and big capital.

Already people are retaliating.

In Chennai, Ranchi, Bhubaneshwar, Indore and Patna, organized movement has forced Reliance Fresh and Spencer's to close their outlets.

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