Retail trade in India is an important sector in terms of employment and meeting the needs of millions of consumers. The sector contributes nearly to 15 % of Indian GDP and has recorded annual growth rate of about 20% in the last few years. This has been achieved despite of the government indifference towards the needs of vendors and small traders. Nowhere in the world we have this kind of a community, without formal training and banking support, has achieved this level of performance. So far there is no policy for traders or vendors for promotion and regulation, but they have created a vibrant sector with large level of employment and wealth. 

 The total capital invested in retail trade, both in organized and unorganized, is  about Rs. 6 lakh crores in the form of stocks and Rs.30 lakh crores in the form of  infrastructure and capital assets  directly related to retail, without considering  the storages. As against a total investment of about Rs.36 lakh crores the bank  lending is about only Rs. 2,65,000 crores, which is less than 8% of the total   capital. This means that Debt Equity Ratio is of 1:12. The normal Debt Equity  ratio for other industrial activity in the organized sector in India is 3:1, or three  rupees of bank loan for every one rupee invested by the promoter. 

The retail trade segment has borrowed the entire balance capital required from the unorganized financial maket or invested from own savings over the period. Currently, the cost of capital for bank borrowings in India is on an average 13% p.a while the borrowings in the unorganized financial market costs on an average of 24% – 36% p.a.


Had banks supported this sector with liberal lending our traders would have created benchmarks in retail sector for the whole world.  

Mr.Prime Minister, the Indian retail sector, whom your government has called inefficient has achieved this and hence your claims are absolutely false.