Fdi in retail

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Fdi in retail

  1. 1. PRESENTED TO:B.K.BAL SIRPALLAVI MAM PRESENTED BY: RAJAN SINGH SAQUIB SALIM SANATAN SASANY SABYASACHI CHAND
  2. 2. About FDI Foreign 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.
  3. 3. 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.
  4. 4. 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.
  5. 5. 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
  6. 6. 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.
  7. 7. 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.
  8. 8. AFTER M.N.C. /FDI TAKE OVER ALL WORKS IN FARM WILL BE DONE BYMACHINE 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.
  9. 9. 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 :
  10. 10. 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.
  11. 11. 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.
  12. 12. CONTRACT FARMING COLLECTION OF TO OWN FACTORY AGRICALTURE PRODUCTSTO CUSTOMER TO OWN DEPT. STORE
  13. 13. 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.
  14. 14. 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.
  15. 15. 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.
  16. 16. 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 ………………
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