Mr Kanoria was speaking at an interactive meeting in New Delhi on the issue of concerns of retail stakeholders like small kirana stores, farmers and consumers.
Backing FDI in multi-brand retail, FICCI President R V Kanoria on Saturday said about Rs 64,000 crore is required to build a strong backend infrastructure like cold storages to reduce wastage in agriculture items.
Mr Kanoria was speaking at an interactive meeting in New Delhi on the issue of concerns of retail stakeholders like small kirana stores, farmers and consumers.
Lack of adequate storage facilities causes heavy losses to farmers in terms of wastages in quality and quantity of produce in general and of fruits and vegetables in particular, Kanoria said, adding it also leads to high rate of inflation.
“Huge investment of almost Rs 64,000 crore is required to build a strong backend infrastructure in India. Thus, FDI in retail would help in addressing this issue with compulsory investment of 50 per cent in backend,” he said in a statement.
He also said investments in the retail sector will see gainful employment opportunities in processing, sorting, marketing and logistic management due to the decision.
According to estimates, about 4 million jobs will be created in the front-end alone in the next five years.
Speaking on the occasion, Raghav Gupta, Principal, Booz & Co. said FDI in retail can potentially add 1.5 million jobs by 2016.
FICCI Secretary General Didar Singh said India’s retail sector is expected to see significant growth in coming years.
“Within this, organised retail is expected to grow rapidly, further accelerated by the recent opening up of FDI.At the same time, unorganised sector will also see a reasonable growth,” Singh said.
Keywords: FDI in retail, FICCI, R V Kanoria, storage facilities, kirana stores, India retail sector
As a business leader, FICCI President Mr. Kanoria may have gotten strong analysis to come up with an investment requirement of Rs. 64,000 crore. But, the news item does not say if there is a 10 or 20% ROI for the investors, be they government, private Indian investors or foreign investors. The generation of 4 million jobs is an attractive outcome but the report does not say if those jobs will not be created in the absence of such investment. How does the job creation help investors? Unfortunately, the report is very sketchy.
I have a very simple question and which no one seems to be address in
this entire debate. Why will the infrastructure be set up by private
investment and ownership? Infrastructure is always the prerogative and
sole task of the government. If the government and industry feels that
it will benefit the farmer directly then why did they not start that
instead of the unworthy MNREGA and farmer loan waiver which is benefiting none but the unintended. And which private investment will
look at the interest of the farmers when they are going to look at
getting their returns many times over? I am not clear why no one wants
to debate this?
'FDI in retail' is required to address India's problems is a fallacy . Walmart and its likes have not done any such largesses anywhere else before,so why should they do it in India?Nobody who talks pro-FDI retail in India have yet been able to substantiate their claims with facts from across the world including from Walmarts' home USA.'Instead EVEN BEFORE THEIR FORMAL ARRIVAL , the ED(Enforcement Directorate) is already investigating them for alleged violations of India's forex laws & will soon file notices against Walmart as part of its probe against the company’s investment in an Indian firm(subsidiary of Bharti ventures via a Mauritian arm).And we expect such a Company to work for the profitability of our farmers and our nation! Wake-up India, wake-up FICCI- get real!Their objective is solely PROFIT.
I appreciate the efforts made by FICCI to address the concern about the
need of infrastructure in the country and raise the point that there
would be growth in both the sectors, Organized & unorganized. I think
with this kind of approach where we are highlighting the Golden Bridge
of benefits, People could be convince with the Idea!
The estimate might be significantly lower than the real need. This investment can come only from two sources- government or private sector. Government has little money. Indian private sector also does not have real deep pockets, and may be even the patience to build this sort of assets. No private sector will come without profit motive; and in India, with its uncertainties, the required profitability will be high. The best way to encourage FDI in this sector will be to allow it in new assets and not permit it to buy in to or buy out existing companies. Also they should be asked to meet the condition of investing a part of their money in the relatively backward areas like central, eastern and north-east India. This will ensure new capacity ceation and also competition. India will gain if wastage can be reduced by even 10%- that is 20 million tonnes of fruits and vegetables.
It is a fallacy to think that FDI would directly help the farmers and
also would reduce the food inflation. No one comes to India for
charity. They come here to invest and make huge profits in return.
When such is going to be the scenario, how is it possible for the
inflation to descend? The fact is this UPA Government has been
misguiding the people for the past eight years in the name of growth
and GDP. What has really gone up is the cost of living. The housing
has become criminally expensive, food prices are soaring, education
has become a daylight robbery. Now the situation is out of control.
Fiscal deficit, current account deficit have shot up. NPA's of the
PSU banks have increased. We need a Government which will focus of
self sufficiency and reduce corruption. Stop kidding.
People are forgetting how everything starts and refusing to work.When
we read that Rs.60,000 crores are required the immediate conclusion
is someone big has to do it and some big investor will start work.
Arundhati Roy makes a book " A God of Small Things".Mahatma Gandhi
teaches we should go small.They are correct.Gods way is make a small
start and then everybody gives a hand and the work is finished
fast.The more grandiose the project the more problems.We wanted high
speed rail but we dont see Indian Rail make a test track for shot 50
km and experiment.We are waiting for a big investor and we dont get
ahead.Actually only the title of that book is correct.The God works
always through small and not big.Small things lead to the biggest of
everything.
But still certain political parties, like the TMC and BJP, will continue to stymie FDI in retail. I don't understand why they don't get it straight that funds are needed for development of the agricultural sector where the largest number of Indians are employed. If we don't allow that to happen, where will the money come from? If it is stipulated in the contract that 50 percent will have to be invested in developing backend infrastructure, where is the problem? Even if they have serious concerns about the poor, which I don't think is correct, they can sit down and discuss the modalities of it instead of fomenting public unrest by predicting all is doom and gloom for the domestic business organizations if the foreign entities are allowed to come in and compromising on national interest at the altar of narrow political gain.
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