Govt stick it stand on MNC retail store

The growing protests against organised retail in various parts of the country, the central government has decided to reject the political demand for banning entry of corporates into the booming sector. Officials said the political push for protecting mom-’n’-pop stores would not result in action preventing corporate companies from tapping retail that has grown into a Rs 8,40,000-crore business.

As opening up of retail to FDI turned into a political issue recently, Congress president Sonia Gandhi urged the government to study the impact of MNC supermarkets on small vendors. The government feels the impact of corporate retail on mom-’n’-pop stores would be same as that of MNCs, but officials said there would be no bar on domestic companies entering retail. This is despite the prevailing election mood that is giving birth to populist ideas and schemes.
Nearly 30 representations against corporates and FDI in retail from industry associations and 20 references from MPs, including Cabinet ministers, are under consideration of the government. The commerce & industry minister has commissioned a study by ICRIER on the impact of retail on mom-’n’-pop stores but its outcome is unlikely to result in a situation where the government would have to rein in corporates, they added.

Taking into consideration the employment-generation potential of organised retail and benefits to consumers, the Centre is likely to stick to its stand of backing organised retail. The officials said private final consumption expenditure in the country was estimated at Rs 16,90,000 crore in 2003-04, and even a small price-benefit will enhance purchasing power of consumers. Apart from creating 25 lakh more jobs by 2010, it is felt organised retail would also produce better quality employment

Courtesy:Economic Times
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