While I understand your basic premise that competition would lead to efficiency which in turn would lead to progress. FDI in Retail is anything, but that.
Take the scenario of Agriculture, 70% of the population in our country are producing 25% of our GDP. That is gross inefficiency which is borne out of fractured agriculture sector with millions of small players. If we consolidate agriculture industry by allowing corporations to own vast areas of land to cultivate. What would that do to the country. Country will become much more productive and efficient. BUT, that will create massive unemployment and dislocate crores of people and the cost of productivity efficiency will be a very tragic disaster of unseen proportions. IT IS EASY TO SEE such a destruction that could happen in agriculture sector with such a move.
IT IS NOT EASY TO SEE the same effect immediately with the retail industry for some one who is not in the traditional business world. Its not just the small mom and pop stores at the street corner who are going to disappear with this. Its the whole supply chain that is going to disappear. small scale manufacturers, wholesale traders, stockists and substockists in every corner of the country, small retailers will be gone. not just in one industry, this is across the board. fmcg, food, pharma, clothing, electronics, mobile and what not. most of the middle class will be gone. the entrepreneur class will be gone in most of the sectors. there will only be salary makers and big corporations.
you might think i am talking in hyperbole.
With the scale these retail chains have they will go to the cheapest country where a certain product is available and its not necessary that they will be sourced from India. you don't need to look far beyond for examples. it is for all to see how the manufacturing sector has disappeared from USA. The idea that our farmers and our industries will benefit is not necessarily true.
Yes, there should be consolidation in our fractured and unorganized agriculture, small scale manufacturing and trade has to get more efficient and productive. We already have a healthy retail industry from Indian corporations that is growing at its own pace with number of small and medium retails chains in a number of industries. And we will continue to grow to a better efficient state as we move forward. But that growth needs to be organic. if given time some good indegenious solutions might come up. we should continue to educate our farming sector, create food processing industry in a large scale, promote cold storages through incentives, create a more transparent market structure so that the producers can benefit, promote computerization of the supply chains. there are so many things that can be done with out disrupting the lives of the majority.
There is a reason that FDI is kept on hold only in multi brand RETAIL while it is accepted in many sectors . the size of the country relying on the current structure is too vast. the human cost that we are going to incur is too high. The change that needs to happen over generations will be forced in the span of few years as the world will pump money into our country as there are very few other places they can invest with such high growth potential. .
I see I am everywhere in my explanation but given the time constraints I have I just hope you will see my point.
I was in for a little surprise when I launched 'AppFlow' app on my Samsung Omnia with Windows Phone 7.5 (Mango) last night to see a few India specific apps in the 'New and Impressive' list. Curiously all of them were launched in the Market Place on 28th December 2011. I suspect it has got some thing to do with Nokia Lumia launch. Nokia is claiming around 750 - 1000 India specific apps would be launched in the coming days. I suspect we might see a marketing campaign launched soon to highlight the local apps.
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