Retail industry is divided in two parts: 1.

Organized Retailing: These are licensed retailed who are registered for sales tax, income tax, etc. E.g. Retail-chain, Hypermarkets, Supermarkets. Privately owned large retail businesses. This account for only 3-4% of total retail. Organized retail is just 3% of total trade in Bharat today. Whereas organized retail sector in developed economies makes over 70-80% of total trade. Even in the Asian developing economies these figures are around 20-25% of total trade. 2. Unorganized Retailing: These are the traditional formats of low-cost retailing like Kirana stores. Owner runs the shop with the help of family. Nearly 97% of total retail. Pros: 1. It will lead to closure of tens of thousands of small retail stores. 2. Which may endanger livelihood of 4 crore people. 3. It may tame inflation initially but will fuel the inflation once MNC companies get a stronghold in retail. 4. Farmers may be given lucrative prices initially, but eventually they will be at the mercy of big retailers. 5. SMEs will become victims of predatory pricing policies of big retailers. 6. It will replace ordinary middleman with sophisticated corporate middleman. 7. Create cultural and ecological problems by twisting the food production and availability as per the profit margin. 8. It will promote cartels and creating monopoly.

Cons: (1) The entire back-end of sourcing/ growing, logistics and supply chain activities is an area where a lot more liberalization of policies is needed for example in land buying and growing (large-scale farming) and improving the farmer's co-operatives movement for better sourcing/ growing or at least allowing farmer's to access front-end retail without the use of intermediaries.

(2) Pricing for small-scale farmers (less than 2 hectare ownership) will probably not improve since they will still be subject to existing collection and consolidation setups and systems (based on local/ regional strongmen having access to regional farm clusters). (3) Wastage and rotting at the farming end is a big issue today in Indian retail scenario. This will probably not improve since the back-end investment and development/ utilization of supply chain (cold storages, warehousing) is still dependant on business/ political issues that have nothing to do with introduction of only front end retailers like Wal-mart, Tesco, etc....

competition. When foreign countries dont allow import of food products from India, then why should we allow them in our country. Ajit Setiya, president, Poona Merchants Chamber Once monopoly sets in market, small-time retailers, consumers and farmers get exploited I think that by allowing 51% FDI, it will have a negative impact on our retail market and farmers in the longterm. It will lead to creation of market monopoly, which is not good for economic growth. Bringing in big foreign players will, no doubt, give direct competition to big domestic retail chains but small retailers will eventually get eliminated. Though farmers will get good rates for their produce and storage facilities will improve, these are only temporary benefits. In the history of capitalisation, the beginning is always good but once monopoly sets in, small-time retailers, consumers and farmers get exploited. Subhas Vare, secretary, SM Joshi Socialist Foundation