Shri Muralidhar Rao answering questions on FDI in Retail on 15th October 2012. 

 

Bharatiya Janata Party (BJP) Thank you everyone for your overwhelming responses & questions. Today Shri Muralidhar Rao will discuss “FDI In Retail: Impact on Traders and other areas of Economy” in this online discussion on Facebook.

 

Bharatiya Janata Party (BJP) Thanks to Shri Muralidhar Rao for sparing his valuable time to answer questions related to “FDI In Retail: Impact on Traders and other areas of Economy”.

 

Bharatiya Janata Party (BJP) Now Shri Muralidhar Rao will be answering questions collected from the past postings and the current wall.

 

Bharatiya Janata Party (BJP) Retail sector in India an important & critical for our economy. This sector provides 7% of employment, means almost equal to the employment provided by both organized & public sector. This is also contributing 10% of GDP. Uniqueness of this sector is the participation of the govt. in any manner whether it is credit, infrastructure or in other support system is almost NIL. The capital involved in this sector is mobilized by the service providers. Today we don’t have this kind of service provider in any other country. The trading is completely based on relation compared to transactional services provided by organized retail system. 4.5 crores jobs directly & within which 2.6 crores jobs in urban areas. The size of the retail market is more than $400 billion. Indian retail system is labour intensive, family driven, connected to every house hold from remotest village to highly urbanized colony. This sector is in news now because of the govt. of India decision to allow 51% FDI in the retail sector. This has been the contentious issue for the last a decade. Traditional retailers resisting the move & govt. particularly UPA bent upon facilitating the foreign companies & the foreign investment. BJP opposes FDI in multibrand retail for various reasons which we will discuss today.

 

Mrinmoy Banerjee

What is the impact of FDI in retail sector , as we all know that a large number of people are directly attached with the retail sector , so what is the impact on them ?

 

Debiprasad Bal my first question is:

1. Why India allows FDI in retail? is govt. allow them because of the high fiscal deficit.

 

2. FDI is not that, it will entirely badly affects the economy. that mean some sectors also will get benefit. then my question is which sector and which section of the soceity will get benefit form that?

 

3. some empirical study i did on “FDI crowding in and out effect in India”, in this case i got the results that FDI in the case of India have crowding in effect. that mean FDI is encouraging the private investment and hence growth of the Indian economy. So, in this regard what you want to suggest???

 

Bharatiya Janata Party (BJP) @Mrinmoy Banerjee, Debiprasad Bal & others: In response to how FDI in retail will impact employment : Mr. Anand Sharma, commerce minister, also promised there will be an additional employment with the entry of FDI in multibrand retail.

BJP disagrees on this count. With the FDI entry in the retail sector there will be a non level playing field between companies like Walmart, Tesco, Carrefour one side & the other side you have Kirana with the 500 Sq Ft space vegetable vendors, fruit vendors & the Push cart vendors. These small traders access the capital from the close relatives & pvt. money lenders at the cost of starting from 24% to sometime going to the extent of more than 400% paying the daily interest rate. Where as Walmart & other such companies are able to access the money from the formal institutions in the global market at less than 5%. Competition between unequals will result in job reduction & at max displacement of jobs rather than new job creation.

 

Geet Singh Mujhe jaha tak malum hai ki BJP khud FDI k favour me hai, fir aap kin muddon pe sarkar se alag hai?

 

Ab Hossain BJP khud Fdi ke favour ma tha,bt now Bjp is against Fdi for what,any reason . only vote bank,

 

Deepak Jaiswal
BJP apne raj me fdi kyu lagwana chahti thi?

 

Purushothaman Gajapathy Earlier, when u were in Power u had bn in favour of FDI and why hv u changed yr stand now ? Is it bcoz u r not in power ?

 

Bharatiya Janata Party (BJP) @Geet Singh, Ab Hossain, Deepak Jaiswal, Purushothaman Gajapathy & others: In response to if BJP will roll back FDI in retail if voted to power: BJP’s opposition to FDI in retail is complete. This govt. has violated the promise it had made on the floor of the house that it will take stakeholders in to confidence before taking it’s decision. Many allies of UPA have declared they will oppose this decision, we would like to see this govt. to roll back the decision as soon as possible. Our efforts in coming days will be in this direction. This govt. has no majority/numbers to make this decision.

 

Kousiq Che Senapati FDI is important but not in the retail sector….My question is whats will be the effects of FDI in Retail on Poor & lower middle class people.? & B.J.P is protesting against this for what reason when they were also interested to do the same thing..???

 

अजय कुमार भारतीय

How can we co-relate the impact of FDI on indian and usa economy..if there is some pattern about this..then explain..

 

Bharatiya Janata Party (BJP) @Ajay Kumar Bharatiya, Kousiq Che Senapati & others: On the impact of FDI in retail in US & other economies: Organized retail in USA, UK in South americal countries or in South East Asian countries wherever it was introduced it has always displaced the small shop keepers. Today in USA organized big retail occupies 80% of the market, in Europe it’s more than 60% in South America again it’s more than 40% & in south east Asian countries also the situation is not different. Before 1960 there were no organized retail in USA it means services were provided by the small traders. So in all these countries the space for the small traders has come down, so it is evident that in India the story will not be different from these countries with the introduction of FDI in retail.

 

Rajeev Satra Sir why are yoll opposing fdi.

 

Bharatiya Janata Party (BJP) Rajeev Satra & others: In 2009 manifesto BJP had clearly mentioned it’s policy against FDI in retail.

 

Santosh Tripathi need your views on merit & demerit of employment and farmers benefit

 

Saurabh Suman will Wal-mart generate the employment or kill the employment???

 

Saurabh Suman what will be the impact on farmers???

 

Saurabh Suman why state wise government hindrance in allowing FDI????

 

Amit Singh
How does it impact the Old Indian Economy…?

 

Bharatiya Janata Party (BJP) Santosh Tripathi, Saurabh Suman, @Amit Singh & others: Organized retail driven by foreign capital will have adverse consequences for the Indian farmers. In India we have peasants with the land holding of more than 1 hectare, agriculture is a means of subsistence for most of them. Capacity to bargain is very little, moreover, these companies purchase the food items by fixing the price in the commodity market, they never go for direct purchase. Even in other countries the share of farmers in %age terms in USA, UK in food items, milk products & meat products has come down only in India in the retail market each rupee spent by consumer the maximum % is reaching to the farmers. Eg. For Milk in US 38% of $ & UK 36% whereas in India 70-80% goes to farmers.

 

Sumeet Bhasin BJP opposition to FDI in retail is creating impression pro reform party is now against every reform only bexoz it is being done by UPA. Is it not true that NDA also wanted FDI in retail so why oppose it now?

 

Bharatiya Janata Party (BJP) Sumeet Bhasin: We have already answered your quety.

 

Saurabh Sinha Sir , if however we do not allow FDI in retail then how does BJP looks to create the mass storage facility for storing food grains and other perishable item ?Also even if the govt creates some of this infrastructure why will anyone invest in cold storage if there is no one to buy it from him

 

Harish Bajaj What is wrong with FDI when we already have Easyday, Marts in place but retailers have not been affected.

 

Varun Bawari

How it will impact the Indian Market significantly, as there are already exist Indian Multi Brand Retail.. and it hardly made any difference as they cater to different segment of the market!!

 

Moreover, food items they have to purchase locally, as the shelf-life of products are very short?

 

Bharatiya Janata Party (BJP) Saurabh Sinha, @Harish Bajaj, @Varun Bawari & others: Walmart & others would provide backend infrastructure like cold storage & other logistics is very flimsy. 1 – Indian annual budget is ~12Lac Crores in which the estimated requirement for the backend infrastructure is Rs 8000 crores. So in our budget this is not a big head provided the govt. is clean and provide corruption free governance. We are aware the nation has lost Rs. 1.76 Lac crores in 2G and Rs. 1.86 Lac crores in Coal scam. The Black Money of Indians stashed away outside is ~25 Lac crores. So depending on foreign retail companies for building up infrastructure in rural areas is no excuse. 2 – Produce from farmland to consumer will come when the better road connectivity is created & adequate power supply is ensured. These 2 things will not be met by FDI in retails.

 

Umesh Nayak 

Sir, If in Gujarat – a BJP ruled state where Sri. NaMO had allowed foreign manufacturers to set up their units there and further invited them to invest in the state on a large scale, then ‘WHY BJP is objecting to FDI in retail trade ?” This is only a common doubt which I had in my mind. Will it not bring in foreign capital in India and revenue income of this country will also boost up. As in the case of IT professionals, this may also create more and more employment opportunities in the nation. Please clarify.

 

Bharatiya Janata Party (BJP) @Umesh Naik & others: All BJP & NDA ruled states are unanimous in opposing FDI in retail.

 

Bharatiya Janata Party (BJP) Closing Comments from Shri Muralidhar Rao: Walmart symbolises foreign retail services for more than 400 billion USD turnover employment provided is 2.1 million. Average per store employment is 214. In India we have equal size of retail market (400 billion USD) the work force is 44 millions. So foreign retail is Capital intensive while Indian retail is Human intensive. So the fight against FDI in retail in India is to safeguard the interests of this 5 crores direct employment (25 crores dependents).

 

Bharatiya Janata Party (BJP) A big thank you to all of you who took out time to participate in this discussion.

 

Bharatiya Janata Party (BJP) Thank you everyone for your overwhelming response to this very important discussion on FDI in Retail.

 

Bharatiya Janata Party (BJP) Thank you to Shri Muralidhar Rao for his valuable time & taking personal interest in answering all important questions related to FDI in Retail.

 

Bharatiya Janata Party (BJP) You can follow Shri Muralidhar Rao on twitter at http://twitter.com/PMuralidharRao 

 

Bharatiya Janata Party (BJP) For further information & discussion please join Shri Muralidhar Rao’s FB page at http://www.facebook.com/MuralidharRaoBJP

 

Bharatiya Janata Party (BJP) Thank you everyone for your overwhelming responses & questions. Today Shri Muralidhar Rao will discuss “FDI In Retail: Impact on Traders and other areas of Economy” in this online discussion on Facebook.

 

Bharatiya Janata Party (BJP) Thanks to Shri Muralidhar Rao for sparing his valuable time to answer questions related to “FDI In Retail: Impact on Traders and other areas of Economy”.

 

Bharatiya Janata Party (BJP) Now Shri Muralidhar Rao will be answering questions collected from the past postings and the current wall.

 

Bharatiya Janata Party (BJP) Retail sector in India an important & critical for our economy. This sector provides 7% of employment, means almost equal to the employment provided by both organized & public sector. This is also contributing 10% of GDP. Uniqueness of this sector is the participation of the govt. in any manner whether it is credit, infrastructure or in other support system is almost NIL. The capital involved in this sector is mobilized by the service providers. Today we don’t have this kind of service provider in any other country. The trading is completely based on relation compared to transactional services provided by organized retail system. 4.5 crores jobs directly & within which 2.6 crores jobs in urban areas. The size of the retail market is more than $400 billion. Indian retail system is labour intensive, family driven, connected to every house hold from remotest village to highly urbanized colony. This sector is in news now because of the govt. of India decision to allow 51% FDI in the retail sector. This has been the contentious issue for the last a decade. Traditional retailers resisting the move & govt. particularly UPA bent upon facilitating the foreign companies & the foreign investment. BJP opposes FDI in multibrand retail for various reasons which we will discuss today.

 

Mrinmoy Banerjee

What is the impact of FDI in retail sector , as we all know that a large number of people are directly attached with the retail sector , so what is the impact on them ?

 

Debiprasad Bal my first question is: 1. Why India allows FDI in retail? is govt. allow them because of the high fiscal deficit. 2. FDI is not that, it will entirely badly affects the economy. that mean some sectors also will get benefit. then my question is which sector and which section of the soceity will get benefit form that? 3. some empirical study i did on “FDI crowding in and out effect in India”, in this case i got the results that FDI in the case of India have crowding in effect. that mean FDI is encouraging the private investment and hence growth of the Indian economy. So, in this regard what you want to suggest???

 

Bharatiya Janata Party (BJP) @Mrinmoy Banerjee, Debiprasad Bal & others: In response to how FDI in retail will impact employment : Mr. Anand Sharma, commerce minister, also promised there will be an additional employment with the entry of FDI in multibrand retail. BJP disagrees on this count. With the FDI entry in the retail sector there will be a non level playing field between companies like Walmart, Tesco, Carrefour one side & the other side you have Kirana with the 500 Sq Ft space vegetable vendors, fruit vendors & the Push cart vendors. These small traders access the capital from the close relatives & pvt. money lenders at the cost of starting from 24% to sometime going to the extent of more than 400% paying the daily interest rate. Where as Walmart & other such companies are able to access the money from the formal institutions in the global market at less than 5%. Competition between unequals will result in job reduction & at max displacement of jobs rather than new job creation.

 

Geet Singh Mujhe jaha tak malum hai ki BJP khud FDI k favour me hai, fir aap kin muddon pe sarkar se alag hai?

 

Ab Hossain Bjp khud Fdi ke favour ma tha,bt now Bjp is against Fdi for what,any reason . only vote bank,

 

Deepak Jaiswal

bjp apne raj me fdi kyu lagwana chahti thi?

 

Purushothaman Gajapathy Earlier, when u were in Power u had bn in favour of FDI and why hv u changed yr stand now ? Is it bcoz u r not in power ?

 

Bharatiya Janata Party (BJP) @Geet Singh, Ab Hossain, Deepak Jaiswal, Purushothaman Gajapathy & others: In response to if BJP will roll back FDI in retail if voted to power: BJP’s opposition to FDI in retail is complete. This govt. has violated the promise it had made on the floor of the house that it will take stakeholders in to confidence before taking it’s decision. Many allies of UPA have declared they will oppose this decision, we would like to see this govt. to roll back the decision as soon as possible. Our efforts in coming days will be in this direction. This govt. has no majority/numbers to make this decision.

 

Kousiq Che Senapati FDI is important but not in the retail sector….My question is whats will be the effects of FDI in Retail on Poor & lower middle class people.? & B.J.P is protesting against this for what reason when they were also interested to do the same thing..???

 

अजय कुमार भारतीय

How can we co-relate the impact of FDI on indian and usa economy..if there is some pattern about this..then explain..

 

Bharatiya Janata Party (BJP) @Ajay Kumar Bharatiya, Kousiq Che Senapati & others: On the impact of FDI in retail in US & other economies: Organized retail in USA, UK in South americal countries or in South East Asian countries wherever it was introduced it has always displaced the small shop keepers. Today in USA organized big retail occupies 80% of the market, in Europe it’s more than 60% in South America again it’s more than 40% & in south east Asian countries also the situation is not different. Before 1960 there were no organized retail in USA it means services were provided by the small traders. So in all these countries the space for the small traders has come down, so it is evident that in India the story will not be different from these countries with the introduction of FDI in retail.

 

Rajeev Satra Sir why are yoll opposing fdi.

 

Bharatiya Janata Party (BJP) Rajeev Satra & others: In 2009 manifesto BJP had clearly mentioned it’s policy against FDI in retail.

 

Santosh Tripathi need your views on merit & demerit of employment and farmers benefit

 

Saurabh Suman will Wal-mart generate the employment or kill the employment???

 

Saurabh Suman what will be the impact on farmers???

 

Saurabh Suman why state wise government hindrance in allowing FDI????

 

Amit Singh

How does it impact the Old Indian Economy…?

 

Bharatiya Janata Party (BJP) Santosh Tripathi, Saurabh Suman, @Amit Singh & others: Organized retail driven by foreign capital will have adverse consequences for the Indian farmers. In India we have peasants with the land holding of more than 1 hectare, agriculture is a means of subsistence for most of them. Capacity to bargain is very little, moreover, these companies purchase the food items by fixing the price in the commodity market, they never go for direct purchase. Even in other countries the share of farmers in %age terms in USA, UK in food items, milk products & meat products has come down only in India in the retail market each rupee spent by consumer the maximum % is reaching to the farmers. Eg. For Milk in US 38% of $ & UK 36% whereas in India 70-80% goes to farmers.

 

Sumeet Bhasin BJP opposition to FDI in retail is creating impression pro reform party is now against every reform only bexoz it is being done by UPA. Is it not true that NDA also wanted FDI in retail so why oppose it now?

 

Bharatiya Janata Party (BJP) Sumeet Bhasin: We have already answered your quety.

 

Saurabh Sinha Sir , if however we do not allow FDI in retail then how does BJP looks to create the mass storage facility for storing food grains and other perishable item ?Also even if the govt creates some of this infrastructure why will anyone invest in cold storage if there is no one to buy it from him

 

Harish Bajaj What is wrong with FDI when we already have Easyday, Marts in place but retailers have not been affected.

 

Varun Bawari

How it will impact the Indian Market significantly, as there are already exist Indian Multi Brand Retail.. and it hardly made any difference as they cater to different segment of the market!!

 

Moreover, food items they have to purchase locally, as the shelf-life of products are very short?

 

Bharatiya Janata Party (BJP) Saurabh Sinha, @Harish Bajaj, @Varun Bawari & others: Walmart & others would provide backend infrastructure like cold storage & other logistics is very flimsy. 1 – Indian annual budget is ~12Lac Crores in which the estimated requirement for the backend infrastructure is Rs 8000 crores. So in our budget this is not a big head provided the govt. is clean and provide corruption free governance. We are aware the nation has lost Rs. 1.76 Lac crores in 2G and Rs. 1.86 Lac crores in Coal scam. The Black Money of Indians stashed away outside is ~25 Lac crores. So depending on foreign retail companies for building up infrastructure in rural areas is no excuse. 2 – Produce from farmland to consumer will come when the better road connectivity is created & adequate power supply is ensured. These 2 things will not be met by FDI in retails.

 

Umesh Nayak

Sir, If in Gujarat – a BJP ruled state where Sri. NaMO had allowed foreign manufacturers to set up their units there and further invited them to invest in the state on a large scale, then ‘WHY BJP is objecting to FDI in retail trade ?” This is only a common doubt which I had in my mind. Will it not bring in foreign capital in India and revenue income of this country will also boost up. As in the case of IT professionals, this may also create more and more employment opportunities in the nation. Please clarify.

 

Bharatiya Janata Party (BJP) @Umesh Naik & others: All BJP & NDA ruled states are unanimous in opposing FDI in retail.

 

Bharatiya Janata Party (BJP) Closing Comments from Shri Muralidhar Rao: Walmart symbolises foreign retail services for more than 400 billion USD turnover employment provided is 2.1 million. Average per store employment is 214. In India we have equal size of retail market (400 billion USD) the work force is 44 millions. So foreign retail is Capital intensive while Indian retail is Human intensive. So the fight against FDI in retail in India is to safeguard the interests of this 5 crores direct employment (25 crores dependents).

 

Bharatiya Janata Party (BJP) A big thank you to all of you who took out time to participate in this discussion.

 

Bharatiya Janata Party (BJP) Thank you everyone for your overwhelming response to this very important discussion on FDI in Retail.

 

Bharatiya Janata Party (BJP) Thank you to Shri Muralidhar Rao for his valuable time & taking personal interest in answering all important questions related to FDI in Retail.

 

Bharatiya Janata Party (BJP) You can follow Shri Muralidhar Rao on twitter at http://twitter.com/PMuralidharRao

 

Bharatiya Janata Party (BJP) For further information & discussion please join Shri Muralidhar Rao’s FB page athttp://www.facebook.com/MuralidharRaoBJP