War between "Brick and mortar" store retailers and e-commerce market players-Where will this end?

With on -line retailing giants like Amazon.com, Flipkart etc pitching their tent in India there are naturally apprehensions all around in the throbbing $ 600 billion retail market in India regarding the ultimate out come of this churning process. Admittedly unorganized market segment is controlling the market currently while the more sophisticated supermarket players have not been able to penetrate the market as expected leaving the latter with with less than 10% of the market share. During the last one and a half decade many supermarket chains have sprung up in the country, the investments coming mostly from domestic players with some marketing muscle in other sectors. Recent foreign investment policy changes effected by the UPA government raised lot of expectations, hoping for an influx of international giants to tap the ebullient market. This has not materialized due to many reasons though there are a few successful whole sale trading players making a mark for themselves. Under such a situation sudden appearance of another competitor in the form of on-line sellers is causing a churning in the market place with no one sure about the future contours of retailing business in the country in the coming years. Recent street protests in some parts of the country against on-line retailing sector, mostly spearheaded by unorganized traders will not solve the problem, real or imaginary and there is an urgent need for the government, traders and the on-line players to better understand the reality at the ground level. Here is a commentary on the situation which is revealing as far as the common man is concerned.

"At a time when the hotting online-offline war is making headlines in India's retail space, the brick-and-mortar (offline) segment seems to be putting up much less than a spirited united fight against its online challenger. Even as deep discounts by e-tailers are hurting the bottom lines of all companies running physical stores, and smaller offline traders - mostly mom-and-pop stores - are resorting to protests and agitation, the larger ones are looking to leverage the online medium. They see in the e-commerce marketplace model, also followed by the likes of Amazon, Snapdeal and Flipkart, a great opportunity to spread their reach and sales. While brick-and-mortar stores account for the bulk of India's $600-billion retail market - a majority of the total retail trade is still unorganised - online transactions' share stands at three-four per cent. For large groups with deeper pockets, the online marketplace model reduces the real estate cost of opening more physical stores and allows passing of the saving to consumers in the form of chunky discounts, say analysts. By comparison, the smaller traders, wary of the deep discounts they would also have to offer if they went online, are resorting to protests. Recently, the Confederation of All India Traders (CAIT) led a nationwide agitation that saw about 250 unions (primarily of smaller retailers) holding street protests. Major offline retailers chose to stay away from this, in spite of efforts to get them on board. According to CAIT Secretary-General Praveen Khandelwal, the larger players form about 10 per cent of the total offline retail trade. "We are trying to communicate to them but many of them are keeping off the protests and favouring discriminatory laws. This is also because of cut-throat competition among themselves," Khandelwal says. Ajit Joshi, chief executive of Croma Retail, Tata Group's electronics and durables chain, says his company is against predatory pricing, but street protests are not the ideal way to address the issue. "We have to reach our consumers and, if some of them are online, we should to take a balanced path and make an attempt to reach them as well... Of course, selling below cost price will do no good to anyone," Joshi says, adding digital presence of media outlets will not kill the traditional medium. Online retail has grown over time, but the recent pre-Diwali mega sales by Flipkart and Amazon, which offered deep discounts, drew severe criticism from offline traders."

Whether one likes it or not on-line trading or buying and selling is loaded in favor of the consumer and there is no way consumer is going to give up this advantage easily. It is well known that mark up in prices between the manufacturer and the retailer can be as high as 35-75% and and naturally the on-line products will incur insignificant promotional, ware housing, distribution and aisle display costs making them pass on the savings to their consumers. How ever if predatory pricing, offering even at prices below the manufacturing cost, is resorted to by the on-line sellers it is reprehensible to say the least. As for the government it will be a big dilemma as to who should be supported in this attrition war. Of course the small traders numbering over 8 million, according to some estimates, cannot be allowed to wither away because of this fierce onslaught on them by the organized trade. Another dimension to this issue is the unevenly loaded advantage for only a section of the consumer community who are computer savvy while denying the same to a vast segment of the population. But how this can be solved is a question that needs further consideration.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

MINISTERS MAY CHANGE BUT EMPTY TALK CONTINUES!

It is difficult to decide whether one has to cry or laugh when grandstand statements are made by new ministers in new governments, repeating the same made by many of her predecessors which really means nothing but an empty talk. Neither the minister nor the those who listen to her believe a word of what they say or hear. It is nothing but a charade which has been going on for the last 5 decades in this country without any thing happening at the ground level. The present minister in the highly redundant and irrelevant ministry of food processing industry who must not have been born when the "40% food waste" story was invented by some one which was being repeated ad nauseum by every "tom dick and harry", the last heard being from our erstwhile "silent" prime minister last year. Funnily there is not even an iota of data derived by scientific studies to make such inane statements and it is like a "recorded tape" stored some where in the dusty office of the ministry being made available to every new unfortunate minister who is allotted this portfolio, to speak whenever and where ever there is a seminar, workshop or meeting for inauguration or press briefings! It is the turn of this new young minister to "speak" these words of "wisdom" in a seminar of no consequence recently! Here it is.

Our government is currently working on the National Food Processing Policy to reduce wastage of perishables and improve the supply situation. Food Processing Minister Harsimrat Kaur Badal recommends that agriculture credit should also be connected with food processing sector as the ultimate beneficiary is the farmer. "There is an urgent need of some integrated policy for the food processing sector. We are working on it with the purpose of reducing the wastage of perishable fruits and vegetables so that we can bring down the inflation," the Minister said. She was speaking at the National Cold Chain Summit organized by CII jointly with Ministry of Food Processing Industries and Ministry of Agriculture and National Centre for Cold Chain Development (NCCD).

 

Some of the stock words like "reduce wastage", "supply situation", "perishable", "agricultural credit", "cold chain", "integrated policy" etc will always appear in such statements whether the minister understands the nuances of such words! Government does not realize that food industry is capable of developing it self if it does not interfere or puts road block in working smoothly with least control at every level. Of course the Government has a duty to provide infrastructures support for any industry worth the name and facilitatory policies for sustainable growth. Last year this country had to "invite" foreign companies through the FDI incentive for "helping" our farmers without realizing that the MNCs are least interested in the well being either the farmer or the consumer! Probably it is time that the glorified MoFPI is wound up soon for which no one in this country will shed tears!  

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

MEGA STORES AND MALLS-CAN THEY SUSTAIN INDEFINITELY?

So much is being talked, discussed and written about entry of giant global retailers into India where most of the population is used to the "pop & mom" stores around the corner of their house for their daily necessities. Of course this also happens to be a hot political issue with some parties arguing the case against allowing FDI in retail sector because of their fear about its consequences on the survival of about 8 million trading units spread across the country which form a sizable vote bank. Those vigorously pushing the case of the foreign retailers are accused of unabashed crony capitalism under the pressure of the "Big Daddy" the American government which is eyeing the vast Indian market with great hope. Emergence of on-line business as a formidable competitor to large super markets and malls for supplying many items of daily needs is raising the inevitable question whether these attractive, glittering, air-conditioned and one stop buying centers will be able to sustain themselves for long. Here is an interesting critique on this perplexing issue.

"There are very few retailers that have that kind of lifespan. There aren't too many that have been around for a hundred [years]. But even if they still exist they may be quite different. For example, you see now retailers trying very much to integrate their physical store with their Internet store. So maybe the physical store becomes mostly a showroom — you don't actually go there to buy things and walk out with them. You go there to look at things and then you order them online and then they're delivered to your house. Or maybe you order them online and you go to the store to pick them up, but the store may not be filled with quite so much merchandise. There are quite a few possibilities and I think it's really foolhardy to guess what this is going to look like frankly in 10 years, much less 50."

Take the case of India where urban land is very expensive and hard to get for setting up such huge business complexes. Will the masses patronize such places when transporting infrastructure is so primitive it may take any where from 2-3 hours to make a shopping expedition to these shopping enters? Even the affluent population with their chauffeur driven vehicles will hesitate before making a trip to these places where parking facilities are grossly inadequate. Here comes the role of on-line marketeers who can book orders from families and deliver them to their house. It is amazing that an internet company like Amazon.com has thousands of consumer items to offer and buyers get their requirements within a matter of 24-48 hours! In Bangalore an on-line company like "Big Basket" supplies fresh fruits and vegetables of high quality within Bangalore area in a matter of few hours without any risk of spoilage. Probably the surmise in the above report that in a few years time people will venture out only to physically see for themselves their choice and it will be the on-line companies who will deliver the goods ordered, a win-win situation for both the seller and the buyer!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

"BUDGET"-FOR WHOM?

One of the severest criticisms about the latest Budget presented by the Finance Minister is that the much hyped poor "aam aadmi" is again left fending for himself while corporate sector continues to receive government's priority attention. Many reforms have been set in motion to free the manufacturing sector from unnecessary bureaucratic control, interference and messing up but the much awaited agricultural reforms and smooth backward linkages for the food processing industry have not received the attention due to it. The Budget takes care of just increasing food production on a short term basis to prevent serious shortages of food, in stead of any long term strategy to lay a firm foundation for the farming sector. It looks more like a fire fighting operation which is bound to fail no matter how much money is pumped into the prevalent archival farm management system. Here is a take on this issue articulated by some news media.

"Removing supply-side constraints - a major cause of food inflation - is among the five focus areas that Mukherjee outlined in his speech. Steps likely to follow include importing food in small amounts during occasional shortages to keep supplies up, taking perishables out of government regulation, avoiding multiple taxation of food items and increasing inter-state trade. Foreign Direct Investment in multi-brand, which would have been the biggest farm-sector reform, is still stalled amid political opposition. "Agriculture will continue to be a priority for the government," Mukherjee said. Total funds for the department of agriculture have gone up to Rs 20,208 crore in 2012-13 from Rs 17,123 crore last year, up 18%. As it takes farmers to grow food, but scientists to show them how, the new budget has set aside Rs 200 crore for boosting research in the field of agricultural technology. Kisan credit cards for farmers are being upgraded to smart cards that can be used in ATMs. However, despite all the positive factors, the big miss continues to be big-ticket reforms, which alone can deliver high farm growth. The country's contrast with China is stark, which began with reforms in agriculture, not industry. India freed industry first, but remains cagey about opening up its farm sector. Without reforms, agriculture cannot do anything more than just feed the nation".

It is truly said that a paltry Rs 200 crore for R & D to upgrade farm technologies for achieving quantum jump in land productivity cannot be expected to yield much positive results. The realization that subsidies do not work in motivating farmers but good infrastructure and correct inputs, both for production and marketing only can make agricultural system vibrant and strong, has not yet dawned on the government. As every body knows China is where it is to day, is largely due to agricultural reforms and with such a strong agricultural base it is a power to reckon with in the global arena. If with all the subsidies amounting to trillions of rupees during the last few years, India still cannot stop the farmer suicides taking place across the farm belt, there is no way it can reach a position any where near China.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FOOD INFLATION-"BLIND LEADING THE BLIND" IN INDIA!

Food inflation figures over the last few weeks, as published by GOI reminds one of an ECG readout with swinging ups and downs. How far these figures are reliable, no one knows! But ask any consumer and sure enough they will vouchsafe for the galloping price of practically every product that is needed for leading a decent life in this country. But the political and bureaucratic class, holding a vice-like grip on the country, does not seem to be too much sensitive to the sufferings of common man and go around their favorite game of scoring political brownies with no sense of urgency to tackle inflation. There is no dearth of loud statements practically every day assuring the aam aadmi that inflation is going to come down and they must wait patiently. Is there no salvation for Indians from these miseries in the foreseeable future? Over obsession with economic issues seems to be blinding them to the real solution to the problem and using economic tools to subdue inflation has not worked so far. The real problem as illustrated recently by a dispassionate observer of Indian situation is interesting though it may not catch the eyes of the players at the Delhi Durbar.

"Heard of the man who justified looking for a lost ring under a lamp post, although the ring had probably slipped off his finger in a dark alley some way off, on the ground that he needed some light if he were to find anything? If you feel the urge to meet him, go no farther than Raisina Hill, where sit hon'ble members of the Union council of ministers. Are vegetable prices going through the roof ? Increase the minimum support price of wheat forthwith! Never mind if your stocks of grain are pushing an unmanageable 52 million tonnes. Food prices are going through the roof, so the government must be seen to be doing something. Raising the output of vegetables is a dark alley whose shadows swallow those who venture there. So potter around in the familiar, well-lit grain stockyard; someone might even credit you with some remedial action. This kind of thinking is as useless for bringing food prices down as a monetary policy squeeze. As per capita incomes rise, demand for vegetables, meat, fish, poultry and milk will rise in tandem. This is elementary. Both growth and redistribution are pushing up purchasing power but there is no coherent strategy to increase the output of the food articles in demand. The result is food inflation. There is no alternative to increasing the output of vegetables and protein foods sharply. That would mean tackling two problems. One is the paucity of essential infrastructure: motorable rural roads, electricity to run climate controlled warehouses. The other is an obsolete, inefficient supply chain in which a hierarchy of intermediaries gobble up the bulk of the gain from high retail prices, muting the production-enhancing impulse of the price signal. Funds are not the primary constraint in tackling either challenge. Making road-building funds actually build roads, instead of getting diverted into the coffers of the neta-babu nexus is a political challenge. So is upsetting the vested interests who keep the farm produce supply chain the way it is. These challenges have to be tackled head-on. It is a political battle with considerable overlap against the ongoing drive against corruption. The point is to take the lead, and not follow the fool under the lamp post".

It is sad that a problem, that ought to have been dealt with by the governments ruling the country during the last 3 decades, is being thrown at the door steps of Global Retail giants through the recent opening up of the sector to them. GOI is hoping against hope that the FDI in retail sector will bring hordes of retail chains with foreign money and expect them to invest on the badly needed infrastructure for cutting down on food losses and increase the income of the farmers! If this is not warped thinking what else it is? After showering billions of rupees on subsidizing the agriculture sector during the last so many years, all the GOI has to show is the number of farmer suicides reported all around the country year after year! Land reforms have not been attempted to consolidate the agriculture activity. Agricultural reforms are still on the back burner. APMC reforms are just limping along with no concrete results. Under such a despicable situation Indian citizen can only pray for a miracle to happen to salvage the nation from mismanagement and non-management! 

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

INDIAN RETAIL SECTOR-IN FOR SOME TURBULENCE?

It took a decade of "indecision" for India to throw open its retail sector to Foreign Direct Investment though with extra ordinary caution. Uncertainty still plagues regarding the eventual fate of the policy which has just been orchestrated a couple of days ago with the government itself sharply divided on the desirability of allowing multinationals with its potential adverse impact on millions of small scale traders straddling the country, serving neighborhood families admirably well. Without entering into the raging controversy unleashed by the new policy, an insight into the rationale and logic behind the latest decision can be discernible from the following report on the issue. 

"India's commerce minister said Friday that the decision to open the country's $400 billion retail sector to global chains such as Wal-Mart has a built-in safety net for small shops and farmers. Anand Sharma told reporters that the Indian cabinet's decision late Thursday allowing 51 percent foreign ownership of supermarkets would vastly improve decrepit infrastructure that causes massive food waste in a country plagued by malnutrition and high inflation. Sharma said the new rule would only apply in cities with more than one million people. The minimum investment would be $100 million and half of this would have to be invested in rural infrastructure and refrigerated transport and storage. Thirty percent of the produce sourced by the retailer would also have to come from small and medium enterprises. Top retailers such as Wal-Mart and Tesco have lobbied for years for a chance to build stores in the nation of 1.2 billion people and political deadlock on long-promised reforms in retail and other areas has helped cool foreign investor interest in India. Foreign retailers have Indian partners in wholesale operations, but no retail stores. The Cabinet also allowed 100 percent foreign ownership of single-brand retail operations, up from 51 percent. Advocates see the move as a way to strengthen India's creaking food distribution system. The country suffers chronically high malnutrition and soaring inflation, but it's not for lack of food. It is the world's second largest grower of fresh produce, yet loses an estimated 40 percent of its fruit and vegetables to rot because of a lack of refrigerated trucking and warehouses, poor roads, inclement weather and corruption. That translates into lower incomes for farmers and higher prices for consumers. If companies like Wal-Mart and Tesco can open shops of their own, the investments they make in improving farming techniques and getting produce into stores more efficiently, could bring down food inflation -- which has averaged 10.5 percent over the last year -- and possibly improving rural incomes. Sharma said the policy would have a "multiplier effect" and tens of millions of people would gain jobs. Wal-Mart, British-based Tesco PLC and French-based retailer Carrefour welcomed the decision. "This legal evolution should contribute to modernize the Indian food supply chain and to fight against food inflation for the benefit of Indian customers," Carrefour said in a statement. It said the decision would help India's farmers and the nation's general economic development. Opposition parties and even a key ally of the government has been opposed to the move. The country has struggled to find consensus because of concerns that competition from the foreign retail giants could hurt millions of small shopkeepers, as well as the poor. Sharma said the new policy had been reached through a "transparent and democratic process of consultation with all the stake holders." The main opposition, the right-wing Bharatiya Janata Party, has decried the move. "The government has clearly bowed to international pressure," spokesman Chandan Mitra told the NDTV news channel Thursday. India's $400 billion retail sector is the nation's second-largest employer, after agriculture, according to consulting firm Deloitte. The Ministry of Commerce says it will cost 76.9 billion rupees ($1.7 billion US) to build the additional 35 million metric tons of food storage India needs".

An issue which is not yet clear is why the government did not make an assessment regarding the impact, both negative and positive, of the establishment of several retail chains owned by some of the Indian lead players like Fortune group, Reliance, Godrej etc during the last five years?. Admittedly these Desi retail conglomerates have been able to conquer about 5% of the business and a critical study on their performance and effect of their operation on farmers, consumers and the small traders nearby, could have given a clearer picture, before taking the decision on FDI. How far the ruling dispensation at New Delhi will be able to garner the support of the its coalition partners, opposition parties and the state governments remains to be seen. 

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

ORGANIZED RETAILING IN INDIA-A DANGEROUS "MINEFIELD"?

The retail market in India is again in the news but for a wrong reason. The reported failure of Reliance Retails to achieve even 5% of its targetted turn over after operating for over 5 years is a reflection on the tough market environment in the country. Those following the saga of Reliance Retails feel that the future for this group is going to be tougher in coming days with GOI talking about opening this sector for FDI. While opening more than 1000 outlets during the last 5 years by itself is an achievement considering the enormous logistical constraints in the country, it was expected that this industrial giant that dominates the landscape here would be able to at least gain the number one status leaving others way behind. This has not happened and it is difficult to foresee its future at this juncture as there will be a "blood bath" with many native players falling by the way side once FDI is allowed in the retail sector. Here is a commentary on the performance of Reliance Retails based on their track record so far and likely future scenario.  

"With retail giants Wal-Mart Stores Inc and Carrefour circling India in anticipation of a rule change that would allow foreign investment in supermarkets, Asia's richest man is scrambling to capitalise on his early mover advantage. Over the past few months, Reliance has accelerated store openings, brought in a management team from Wal-Mart China and launched wholesale operations that serve the small mom-and-pop players dominating the $450 billion Indian retail sector. It has also rolled out its first large-format hypermarket outlets selling everything from food to furniture. "In retail they are still a long way off," said Michiel van Voorst, portfolio manager for Asia-Pacific equities at Robeco Hong Kong, which is considering buying into the stock it sold off three years ago, tempted by its 22 percent decline in 2011. "The business will still require a lot of investments, and there is no synergy to any of other activities of the company," said van Voorst, whose firm manages $2 billion in Asia. Reliance battles the same problems that have thwarted faster growth for organised retail in Asia's third-largest economy, including expensive real estate and opposition from politically powerful small shop-owners, farmers and middlemen. At the launch of the retail arm in 2006, the energy-focused conglomerate set out to build a $20 billion-revenue business by 2011. For fiscal 2011 ended March 31, however, retail sales were just 56.77 billion rupees ($1.1 billion), according to two analysts' estimates, an increase of 27 percent, but a tiny share of the group's total haul of $53 billion. Net loss in the business is estimated to have doubled to 4.46 billion rupees. The company acknowledges its  retail business is loss making but declined to verify those figures".

"Reliance is the country's second-largest retailer by sales behind Future Group's Pantaloon Retail, but its overall market share is small in a country where more than 90 percent of the industry is made up of mom-and-pop stores. After launching operations in November 2006, it grew to about 1,000 stores within three years, but soon found it did not have the systems and infrastructure to support that expansion. Staff attrition, poor locations, supply-chain issues and infrastructure problems prompted it to shut nearly 50 stores within two years of the launch. Since then, the company has standardised its operations and increased centralisation of its supply chain."During the 2008 slowdown, we thought we were insulated but we have learnt a lot from what we did ," Bijou Kurien, chief executive of Reliance Retail's lifestyle arm, told Reuters. Reliance's supermarket push hit major hurdles in 2007 and 2008, when it was chased out of the states of West Bengal, Jharkhand and Uttar Pradesh, India's most populous region, after protests by small-shop owners and farmers. Reliance still does not have supermarkets in Uttar Pradesh, which was supposed to generate 15 percent of its retail revenue by 2011. It also lacks a major store presence in eastern India. The standalone "kirana" shops, or neighbourhood mom-and-pop stores, and street-side vendors where most Indians buy groceries are popular because they are convenient and give credit. They also operate with little overheads, forcing chains to compete on razor-thin margins. Still, some of Reliance's local rivals including Pantaloons and Shopper's Stop have managed to make a profit, helped by a compact network of stores".

Getting into wholesale market may be an appropriate strategy considering that the existing players like Metro Cash & Carry have done well in this sector, serving as a feeder source for thousands of so called "mom & pop" stores, especially in small towns and villages. One of the biggest problems facing retail food players is the difficulty involved in linking with growers for sourcing good quality food materials and establishing synergy with the processing industry for filling the shelf space. The tendency to compete with established brands through in-house brands can be suicidal till the organized retailing captures at least 20% of the market in the country. What is needed in India is an institutional linkage between the growers and the retailers with the latter providing reliable inputs and assured buy-back arrangement. Agricultural technologists and Food technologists must be an integral part of the retailing organizations to ensure lower prices and better products to the consumers. Food retailing cannot be based purely on "management" skills but also needs technical inputs of experts. Sooner this lesson is learnt better it will be for the country as a whole.  

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FDI IN INDIAN RETAIL SECTOR-IMPENDING POLICY CHANGE

Listening to some of the political comments which were orchestrated after the proposal to allow FDI in Indian retail system remind one of similar kind of sound bytes heard during the early decades of independence on the issue of encouraging large industries vis-a-vis the SMEs. To day whether one likes it or not large industrial monopolies have established themselves firmly in the business landscape of the country. Have the SMEs disappeared because of this development? A realty check will reveal that both large industries and small ones are co-existing without much of catharses. What has happened is that consumers are benefited immensely by the vast expansion of the product basket and dramatic improvement of product quality. Organized sector of food business whether in fruit processing or bakery sector, has not been able to even capture 50% of the market! Probably there is a synergistic development where product promotion by the big players gives sufficient space for smaller players to carve out a significant share, the latter's advantage being lower consumer price for their products. Similarly it is doubtful whether small retailer will ever disappear from the Indian landscape because of establishment hi-tech, glittering and air conditioned supermarkets operated by transnational companies. It is interesting to watch the performance of political parties on this issue.

"Along with price rise, unemployment has been increasing in this country. 50 per cent of our population, comprising of small traders, street-vendors and the self-employed sustain themselves through retail businesses. The UPA government wants to deprive them of livelihood by allowing FDI in multi-brand retail," BJP spokesperson Shahnawaz Hussain said. BJP will oppose this policy through which the government proposes to allow 100 per cent FDI in multi-brand retail in cities having population above 10 Lakh. The party has always counted on the support of small traders and feels that neighbourhood store-owners would be adversely affected by the entry of foreign brands like Walmart, Tesco and Carrefour. "The government should try to build a political consensus on this issue. The Rajya Sabha Standing Committee report had stated that FDI should not be allowed in retail as small shopkeepers would be affected," Mr. Hussain said. He alluded to this step being taken under foreign pressure, and mentioned the recent visit of US Secretary of State Hillary Clinton to India in this regard. "There is a suspicion that this government is working under pressure. Whenever some big leader, especially from the U.S., visits India the government forms a bigger committee to over-rule the decision of its Standing Committees," he said. A Committee of Secretaries, headed by Cabinet Secretary Ajit Seth, has cleared the proposal to have FDI in retail.

The experience so far indicates that organized retail has not made any dent so far in spite of the vast investments made by organized retailing giants within the country. According to estimates the retail business in the organized sector is hardly 4-5% and if FDI is allowed in this sector the scenario is not going to change much. The so called unorganized retailers are not going to stay quiet as being seen these days when many of them have modernized their outlets with scientific stock management and reduced loose vending. Added to this it is not realized that no transnational retailing organization will venture into rural areas with indifferent infrastructure, limited income, rampant illiteracy and it is here more than 70% of the country's population eke out a living. Besides Indian traders are no easy push over with their uncanny knack for business opportunities and they will remain a force o reckon with even under the worst scenario.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com