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Why FDI in retail will work

Surendra Kumar Evidently, there is no national consensus on allowing FDI in retail. Advocates tout it as the much-needed major policy push that could arrest the economic downturn, bring in not only foreign funds but advanced technology and e pertise, create infrastructure, offer better prices to farmers, generate ancillary industries and create millions of jobs. !owever, sceptics present a doomsday scenario" it will wipe out small farmers and traders, result in job losses and open the floodgates for cheap goods from countries li#e $hina, adversely impacting Indian industry. %hile both arguments have some validity, the two sides err on the side of e tremes. FDI in retail is not an unmitigated disaster as projected by some, nor a magic wand leading to instant economic growth. If allowed with professional circumspection and safeguards and viewed dispassionately, it is in the country&s national interest to allow FDI in retail. 'pening up the telecom sector to foreign investment wor#ed by bringing a communication revolution that embraces everyone. (imilarly, foreign investment in the automobile industry ended the long wait for outdated scooters and cars and led to leading global companies vying to sell the latest models in India. %hen )i**a !ut, Domino&s, +cDonald&s, %impy, ,urger -ing, -F$ and other such international brands were allowed, there were orchestrated demonstration in many cities. they were painted as anti-people and anti-Indian enterprises. %e were told !aldirams, ,i#anerwalas, /irulas, /athus and their il# will vanish.

All these Indian chains have multiplied their outlets, diversified their production line, upgraded their pac#ing and presentation, and are doing roaring business. In fact, some of the largest +/$s li#e +cDonald&s, )i**a !ut and Domino&s have been forced to Indianise their offerings. %here else in the world would you find a +cDonald burger with paneer and potato patties and coriander sauce0 %hile many starve, millions of tonnes of grain rot for want of ade1uate storage facilities. As# how farmers in )unjab feel when their produce is not pic#ed up and lies unsold. $an they negotiate higher prices0 %hen the mercury rises, fruit don&t last more than two days. 23 channels often show how adulterated ghee, mil# made out of detergent, mangoes and papayas ripened with masala, vegetables and fruit injected with dangerous concoctions are flooding the mar#et. %ho is to blame0 FDI in retail0 /o one should underestimate the ingenuity of ordinary haw#ers and small grocery owners. 2hey #now how to reach out to their potential customers. 2oday, in many areas of Delhi, vegetable vendors present their carts, laden with fresh stuff straight from the farm, as early as 4"55 am. +any joggers and wal#ers find it convenient to pic# up their daily re1uirement of vegetables from these vendors. In the evening, they move near temples where devotees find it a blessing to shop for fruit and vegetables at the temple gates. (mall grocery shops realise the value of home delivery, small stores also reduce a rupee or two on most items. 2his demand-and-supply relationship will remain unchanged notwithstanding the entry of bigwigs li#e 2esco, $arrefour and %al-+art.

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