For an individual consumer a store like WalMart would be beneficial. On the contrary, it is believed that this would be a negative introduction for the local “kirana” shops as it would displace their customers. It is believed that the high number of population (around 33,100,000)engaged in such stores would suffer a loss but a focus on creating jobs in manufacturing and smaller service sectors to employ the roughly 25 million youth who join the labour force every year would lead to a less severe economic impact of FDI retail.
Instead, Rajesh Shula states that the death knell of the kirana shops and local vendors is exaggerated. Countries like China have Wal-Marts but their retail industry is still flourishing. The policy also has its positive sides as with the introduction of FDI, the storage and warehousing facilities will improve leading to an efficient supply chain and reduction in wastage of grains. With this, many argue that the inflation would be brought under control. With the opening up of FDI norms, this may accelerate land prices and the cost of space in shopping centres bringing opportunities for real estate. This might not be immediate as there are a lot of non-performing retail assets on the market that will be absorbed in the first phase.
Yamini Agarwal | Guest Editor