STOP ENTRY OF CORPORATES IN RETAIL TRADE

STOP ENTRY OF CORPORATES IN RETAIL TRADE

The declared intention of the government in various fora to permit FDI in retail trade is highly deplorable. In our country 125 lakhs of small and medium shops exist providing direct and indirect employment to more than 4 crore people.

In this way this sector provides livelihood to more than 20 crore people with employment opportunities next only to agriculture and contributing 13% of GDP. This sector consists of hawkers, cart vendors, street sellers and also small and medium shops. The sector also is known for providing more employment with least amount of capital.

GOVERNMENT’S POLICY OF OPENING RETAIL TRADE TO CORPORATES

Under pressure from MNCs, the government has so far permitted 51% FDI in single brand retail and efforts are on to further open up the sector. After taking over the retail trade in U.S., U.K., the rest of Europe, South East Asia and China, the MNCs have now turned their attention to India. Because of popular resistance, the government is unable to proceed further in its intentions. This has resulted in MNCs making back door entry in association with Indian corporates. Some big Indian companies are also entering the retail trade in a big way trying to increase their hold on Indian Retail Sector.

EMPLOYMENT ENDANGERED

According to McKinsey report, labour productivity in Indian retail trade is hardly 6% of what it prevails in U.S., In other words every job created in organized retail trade displaces 15 jobs of normally less educated people in the informal sector who cannot be employed elsewhere leading to high unemployment among ordinary people.

OTHER DANGERS

The entry of corporates will also affect the productivity of Indian manufacturing sector, whole-sale trade and the consumers in the long run. It may be noted that MNC’s finished the shoe industry of U.S., and led to the closure of Coats in U.K. After monopolizing retail trade, these companies start fleecing the consumers. According to a study made by the Fortune magazine, due to monopoly of retail trade. the MNCs sold the goods at a price of 40% over the existing price in Europe leading to increased cost to the consumers.

When the METRO Multinational tried to enter retail trade in Bangalore misusing the whole sale license, due to opposition by SJM–lead traders agitation, the company shelved its plan and also the lost the court battle. Opposition to the entry of MNC’s and Indian Corporates in retail trade continues through out the country.

In this background, the SJM demands that:

01. Entry of MNCs and Corporates in retail sector be stopped forthwith to save the livelihoods of crores of people engaged in the sector.

02. Encouragement be given to the retail trade to modernize and expand their business by provding all out support including tax rebates and finance at an interest rate of 4%.

RESOLUTION NO. 2, Swadeshi Jagaran Manch, 8^th ALL INDIA CONFERENCE Indore

7 ^the TO 9 ^the DECEMBER, 2007