THINGS TO REMEMBER Before we go ahead, we should keep certain basic facts in our mind. We are a country with huge population out of which majority are unprivileged and Below Poverty line. We are people with tradition, culture and ethics. In our country it is very difficult to get alternate employment. Our survival is because of our collective strength. The Govt. policies have been anti growth oriented for traders. The traders voice is not heard by decision makers. In fact traders have no representation in Govt. The decision makers do not ever hear him on policy matters affecting his trade.
PREAMBLE“WE, THE PEOPLE OF INDIA, having solemnly resolved to constituteIndia into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLICand to secure to all its citizens :JUSTICE, social, economic and political;LIBERTY of thought, expression, belief, faith and worship;EQUILITY of status and of opportunity; and to promote among themallFRATERNITY assuring the dignity of the individual and the unity andintegrity of the Nation;
INDIA UNDER MNC’s REGIME : WILL THE PREAMBLE BE RECONSTITUTED.“WE THE DICTATORS TO INDIA having solemnly resolved to Reconstitute India into a SLAVERY CASTE BASED UNSECULAR DIRECTED DEMOCRATIC REPUBLIC and to ENSURE to all its citizens that : JUSTICE, social, economical and political is discriminatory LIBERTY of though, expression, belief, faith and worship is permitted as long as it is in line with MNC & World Bank thought to make world a single religion, belief in single god and faith in them as single economic power. EQUALITY of status and opportunity is not applicable to local citizens. AND TO PROMOTE AMONG THEM ALL INDIVIDUALITY, HATRED FOR OTHER CASTE AND SURRENDER OF THE NATION TO THE LONE ECONOMIC POWER ON EARTH.
PRESENT CONDITION OF TRADERS Fringe Benefit Tax VAT INEFFICIENT LICENCES & PERMITS INDUSTRIAL DISPUTE ACT LABOURS SHOP & ESTABLISHMENT ACT PREVENTION OF BLOCK MARKETING ACT COSUMER PROTECTION ACT ANTI HOARDING & PROFEELING ACT WEIGHT & MEASUREMENT ACT MONEY LENDING ACT PACKAGING ACT PRODEND FUND ACT PREVENTION OF FOOD ADULTRATION ACT MINIMUM WAGES ACT ESI ACT GRATUITY ACT BONUS ACT ENTRY TAX SERVICE TAX FDI in Retail Trade ANTI SOCAL ELEMENTS OCTROI WATER TAX CENTRAL EXCISE POLITICIAL INTERFERANCE PURCHASE TAX SALES TAX INCOME TAX POOR MARKET CONDITION POWER PROBLEM Cash Transaction TaxINSPECTOR RAJ STAMP DUTY & Quarterly ‘C’ Form WELTH TAX HIGH BANK CHARGES PROFESSIONAL TAX New Naka Complex ESSENTIAL COMMODITIES ACT
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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 the year 2000, world turnover in retail trade is estimated around Rs. 3,10,20,000 crores.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.
HISTORIC CONTRIBUTION BY TRADERS :During Pre-independence days the traders have helpedthe leaders in all forms like man power and money.In all social activities & establishment of schools, colleges,hospitals mandir, masjid etc. traders have contributed.Round the year 24 hours a day, traders have made all thegoods required by customer available to themDuring the days of acute shortages, the traders havesome how managed to arrange goods for its customers.Relationship of Indian traders and customers is muchmore than mere businessIndian traders have always seen customer satisfactionabove personal profit.
SUPPORT AND HELP TO GOVERNMENT Traders are self employed and give employment to entire family and others. 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. All direct and indirect taxes levied by Central, State and local govt. are deposited by trader in Govt. treasury without any charges or commission from Govt. During famine, floods, earthquakes tsunami and other natural calamities, the traders have always come out openly to extend full help to Govt.
TRADERS BEING IGNORED BY GOVEREMENT In Order to gain political mileage, traders have been termed by objectionable words. After independence one after another anti trade, anti trader laws have been made. Traders have been made slaves under Inspector Raj. Time & again new legislatures are being imported. Small Traders have been put under heavy burden of book keeping, taxation and compliances under various laws. In the name of development and road widening the shops are being demolished only to give passage to hawkers and footpath shopkeepers to establish their business. Local Govt. failed to build new markets. old traditional markets in different localities are being removed to make way for Big stores to get customers.
CONTRIBUTION OF TRADERS IN ECONOMY In comparison to world, India has largest number of retail traders. In our country there are about 1,25,00,000 retail out lets. Retail trade contributes about 10% - 11% of our country’s GDP. Total turnover of retail sector is about Rs. 8,75,000/- crores. After agriculture, Retail trade provides employment to maximum number of persons. 1.25 crore shops are providing employment to about 4 crore people. In a study conducted by Reserve Bank of India, India Retail Traders charge less margin.
FOREIGNERS ARE MORE DEARER THAN INDIANS Indian traders, Businessman and Industrialists have established their leadership across the world. India is emerging as a big economic power. Our country is progressing in all economic fields. We have lagged behind in infrastructure, irrigation power etc. i.e. such sectors which were under control / monopoly of Govt. We could not grow to full potential in such sectors. These infrastructure sectors require huge investment with larger gestation period. Hence special emphasis has to be given to these section. It is unfortunate that instead of focusing development of such core areas the govt. want to hand over our established retail trade to foreigners. It is surprising that suddenly govt. feels that our traders are incompetent to serve the people or handle retail shops OR in disguise of Foreign Direct Investment our retail trade is being sold to foreigners.
WHAT WAS THE CRITERIA FOR FDI Some time in 1991-92, the then Finance Minister and present Prime Minister Dr. Manmohan Singhji referred to certain criteria for allowing Foreign Direct Investment. These were :1. Establishment of basic industries requiring huge capital and advanced sophisticated technology.2. Infrastructure projects like electricity generation road building etc.3. Projects which would generate employment
WILL THIS 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.
WHAT DO FOREIGN / MULTINATIONAL COMPANIES DO In 60s Big foreign houses entered in retail trade in other parts of world. This is against our culture of “One family One shop”. These big companies, in order to crush competitors sell goods cheap. Later on effective prices of goods are increased. These companies buy material from International market. Hence local producers are put to loss These companies buy in bulk quantities directly from manufacturers. The intermediaries loose business. After conquering the markets of Europe and America, these companies have now entered Asian markets. After establishing their footings in Thailand, Indonesia, China, Japan, Philippines, etc in Asia, these companies are now targeting India.
EMPLOYMENT GENERATION UNDER EXISTING SYSTEM FARM LABOURS HAMALS DALALS BROKERS TRANSPORTERS TEA SHOP OWNERS HOTELS DHABAS SHOP KEEPERS AFTER M.N.C. TAKE OVERALL WORKS IN FARM BY MACHINE UNDER CORPORATE FARMINGAUTOMATIC TRANSFER AND PACKING BY MACHINES.SALE TO CUSTOMERS THROUGH CHAIN OF DEPARTMENTAL STORES.LARGE NUMBER OF SELF EMPLOYED TO BECOME UNEMPLOYED.
WHAT WILL HAPPEN TO RETAIL TRADE These companies open chain of shops. With a shop in each area the retail small shopkeepers will be put to heavy loss Slowly the local shops will start closing down. These shops will capture the trade. In countries where they have established their market share is Name of Country % of Market Share America 80% England 80% Western Europe 70% Brazil 40% Thailand 40% Korea 35% China 20% Malaysia 20% India 3% Remember example of ‘BATA’ in shoe business. Imagine Roadside DHABA’s after RELIANCE FOOD CHAIN Starts working. Cold drink business in India.
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 : Country % Share Norway 99 Swezerland 88 Sweden 94 UK 64 Portugal 57
WHAT HAPPENED IN THAILAND In price war traditional shop keepers are facing problem of survival. Many small shop keepers have closed down their shops. Big companies have seen growth of 40% There was adverse impact on 60000 small shopkeepers. A small shopkeeper fired rocket in Big shop & committed suicide," frustration”. The Prime Minister of Thailand agreed that there was adverse impact on retail trade. The Govt. which had opened its door for FDI in retail trade with big bang had to provide financial assistance to retail traders by establishing a special fund.
WHAT HAPPENED IN CHINA There is a race to capture more & more space for retail trade. There is allegation of flouting the norms on these stores. There is anger against these companies amongst general public. Media is also reporting how traditional shops have been thrown out. The suppliers and manufactures are also facing problem. These are closing down.
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. Hence these companies have to establish their shops outside city limits. 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. These shops are required to take permission in countries like France, Germany and America.
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. After establishing control over purchases & sale these companies will start dictating. These companies will keep only graduates and above in their employment. There will be no scope for employment to under graduate and others. In the event of non receipt of payment of supplies, it becomes impossible to reach owners.
M.N.C. REGIME CONTRACT FARMING COLLECTION OF TO OWN FACTORY AGRICALTURE PRODUCTSTO CUSTOMER TO OWN DEPT. STORE
REQUEST 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 is the future of Indian Traders in India? WILL next generation pardon us?
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 publicise 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.