PRESENTATION ON:

FDI in Retail

PRESENTED TO:

B.K.BAL SIRPALLAVI MAM

PRESENTED BY:

RAJAN SINGHSAQUIB SALIMSANATAN SASANYSABYASACHI CHAND

About FDIForeign direct investment (FDI) is direct

investment by a company in production located in another country either by buying a company in the country or by expanding operations of an existing business in the country.

RETAIL TRADE : BACKBONE OF ECONOMY

Retail trade is world’s oldest business.

Retail trade consists of sale of goods & services to consumers for their personal, family or household use.

Based on turnover and volume, retail trade is worlds biggest economic activity.

In India by investing nominal Capital a person can start retail business.

In India Retail shops are generally owned and run by family. The whole family gets self employed.

Trader done

Traders give employment to that neglected section of society who do not get employment any where.

Traders take care of entire family of his employees. During famine, floods, earthquakes tsunami and other

natural calamities, the traders have always come out openly to extend full help to Govt.

In all social activities & establishment of schools, colleges, hospitals mandir, masjid etc. traders have contributed.

Indian traders have always seen customer satisfaction above personal profit.

LICENCES & PERMITSINDUSTRIAL DISPUTE ACTSHOP & ESTABLISHMENT ACTCOSUMER PROTECTION ACTWEIGHT & MEASUREMENT ACTPACKAGING ACTPREVENTION OF FOOD ADULTRATION ACT

PREVENTION OF BLOCK MARKETING ACTANTI HOARDING & PROFEELING ACTMONEY LENDING ACTPRODEND FUND ACTMINIMUM WAGES ACTESI ACTGRATUITY ACTBONUS ACT

INEFFICIENT LABOURS

PRESENT CONDITION OF TRADERS

INSPECTOR RAJ

POLITICIAL INTERFERANCE

ANTI SOCAL ELEMENTS

WATER TAX

POWER PROBLEM

HIGH BANK CHARGES

SALES TAX

OCTROI

SERVICE TAX

WELTH TAX

PROFESSIONAL TAX

INCOME TAX

ENTRY TAX

VAT

STAMP DUTY

POOR MARKET CONDITION

PURCHASE TAX

ESSENTIAL COMMODITIES ACT

CENTRALEXCISE

FDI in Retail Trade

Fringe Benefit Tax

New Naka Complex

Cash Transaction Tax&

Quarterly ‘C’ Form

IT WAS THE CRITERIA FOR FDI

Finance Minister and Prime Minister Dr. Manmohan Singhji referred to certain criteria for allowing Foreign Direct Investment. These were:

i. Establishment of basic industries require huge capital and advanced sophisticated technology.

ii. Infrastructure projects like electricity generation, road ,building etc.

iii. Projects which would generate employment.

What will HAPPEN WITH FDI IN RETAIL TRADE

Throughout the world it is known fact that huge investment is not required to open a retail shop.

Investment is required to build infrastructure for shop, sophisticated technology is not required in retail trade.

Small Retail shops provide more employment then large chain of Retail stores.

There is no gestation period. Hence business starts from day one.

Instead of developing under developed areas these stores capture prime commercial property in cities.

ALL WORKS IN FARM WILL BE DONE BY MACHINE UNDER CORPORATE FARMING

AUTOMATIC TRANSFER AND PACKING BY MACHINES.

SALE TO CUSTOMERS THROUGH CHAIN OF DEPARTMENTAL STORES.

LARGE NUMBER OF SELF EMPLOYED TO BECOME UNEMPLOYED.

AFTER M.N.C. /FDI TAKE OVER

WHAT WILL HAPPEN TO LOCAL RETAIL TRADE

No of Retail outlets Between 1981-99 in United Kingdom came down from 56862 to 25800.

Between 1970-80 in Europe about 4 lakhs Retail shops were closed.

Competition shall be limited to Big Retail Houses

In the year 2000 Five Big Fast food companies captured following percent market share :

WHAT HAPPENED IN OTHER ASIAN COUNTRIES

Other countries are also unhappy. Many countries have started taking precautions.

Indonesia and Malaysia have established zones within which these foreigners can do trade.

In Japan Big companies have to discuss with small traders. There is Zoning system also.

There is wide discontent amongst shopkeepers & people in the countries to which these store belong.

The city counselor of California & Chicago have refused to allow opening of new shops to WALMART.

NOW ITS TURN OF INDIA

The tough stand taken till recently by Central Govt., Foreign Retail Traders could not enter India.

It is unfortunate that Central Cabinet has given approval to FDI in Retail Trade.

Shift of Major retail trade to these big companies will render small traders & their employees unemployed.

Many companies with the help of contract farming will sell goods produced in farms directly from their chain of stores.

These companies will keep only graduates and above in their employment. There will be no scope for employment to under graduate and others.

CONTRACT FARMING

COLLECTION OF AGRICALTURE PRODUCTS

TO OWN FACTORY

TO OWN DEPT. STORE

TO CUSTOMER

REQUEST TO STOP FDI IN RETAIL TRADE

If Domestic Retail Trade is allowed by Big MNC’s etc., there will be Large Scale Unemployment.

A new class of unemployed called “Unemployed Traders” will join the existing force of unemployed persons.

These companies will sell internationally procured products. Domestic Industry will suffer.

Everybody knows how Big Fish eats away small fishes.

Keeping the experience of other countries in mind, Govt. should not take any such decision for which the whole country and coming generation will have to suffer.

SELF EMPLOYMENT IN INDIA

India has huge force of unemployed persons.

Govt. has failed to generate need based employment..

Majority of people in India are self employed.

The Major area of self employment is Agriculture and

Retail Trade .

The farmers problems were not addressed timely. They

are committing suicide.

WHAT SHOULD GOVT. DO

Govt. should identify the weakness of present retail trade.

Govt. should specify the areas where customers are not being served properly.

Govt. should specify what it expects from retail trade that is not being met presently.

Govt. should publicize the sector / persons who have demanded FDI in Retail Trade.

Govt. should come out with white paper on FDI in Retail Trade specifying the picture after 25 years and 50 years.

INDIA : MY COUNTRY

Don’t see India as population of one hundred forty-five

crore mouths to feed.

See it as a market of one hundred forty-five crore

consumers with,

Two hundred ninety crore eyes to watch your products

and,

Two hundred ninety crores hands to buy your products.

Worlds largest emerging retail market : who will

conquer it :?..................... we ………………

THANK YOU