PRESENTATION BY2nd B.COM(CORPORATE SECRETARY SHIP) S.C.P JAIN COLLEGE MINJUR-601203
INTRODUCTION• Foreign direct investment (FDI) or foreign investment refers to the net inflows of investment to acquire a lasting management interest (10% or more) in an enterprise operating in an economy other than that of the investor. Foreign direct investment is the sum of equity capital, reinvestment of earnings and other long or short term capital as shown in the balance of payments. It usually involves participation in management, joint venture, transfer of technology and expertise. There are two types of FDI: (a) Inward foreign direct investment and (b) Outward foreign direct investment. Foreign direct investment excludes investment through purchase of shares. Foreign direct investment can be used as one measure of growing economic globalization.
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.
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 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.
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
Aviation Information Telecom Technology Infrastructure Retail Traders BankingInsurancePharma Mining Steel Professional Education
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.
INDIA : MY COUNTRYDON’T SEE INDIA AS POPULATION OF ONE HUNDRED CROREMOUTHS TO FEED.SEE IT AS A MARKET OF ONE HUNDRED CRORE CONSUMERS WITHTWO HUNDRED CRORE EYES TO WATCH YOUR PRODUCTS ANDTWO HUINDRED CRORES HANDS TO BUY YOUR PRODUCTS.WORLDS LARGEST EMERGING RETAIL MARKET : WHO WILL CONQUOR IT : WE OR THEY? DO NOT MAKE MY GOVEREMENT AS, GOVEREMENT BY MNC, GOVEREMENT OF MNC AND GOVEREMENT FOR MNC’S
INDIA : MY COUNTRY• Being a citizen of INDIA , we the students should encourage the retail marketing in INDIA , We should send the request to our Honorable External Minister Dr.S.M.Krishna to solve the problems of retail marketing in INDIA• We should support our INDIAN retail traders to conduct the business in our own country. So only we can make our INDIA a super power country in future INDIAN MARKET FDI TARGET IF WE REGRET THEY WILL FORGET