This was the upshot of the panel discussion on 'Impact of organized retailing on the unorganized sector' which was organized on June 13th by Birla Institute of Management Technology (BIMTECH) in New Delhi. The panelists who were drawn from different political spectrums, organized and unorganized retail sector, the consumer activist organizations, political think-tanks, have endorsed the view that there should be a de-politicization of the entire issue to arrive at a pragmatic policy frame-work on retailing.
Kick-starting the discussion, Dr. Ashwini Mahajan of Swadeshi Jagran Manch , expressed the concern about the ICRIER report, keeping the domestic retail and organized retail at par. Sooner or later, foreign retail chains would have an upper hand in the Indian retail scene. He also expressed the view that the body of evidences collated across the world clearly indicates that the price differential in the organized retailing was short lived. Once the monopolistic competition was caught up, there would be ramping up of prices as that had happened in the USA.
Echoing the same sentiments, Mr. Praveen Khandelwal, General Secretary, Confederation of the Indian Traders Association, said that "the ICRIER report had also indicated that 1.7% of the traders would have to close shop on account of the entry of the organized retail chains. In the Indian context, this would work out to 2 lacs shops per year. "This is a matter of great concern and none of the successive governments have given any thoughts to enhance the efficiency of the traditional distributive trade and neither is there any institutional credit available to the small traders," he added. He mentioned about the predatory pricing that would be resorted to by the organized retail sector by offering attractive discounts. The end result of this would be an unequal playing field which could push the 'self organized' retailers out of business.
Mr. Tapan Sen, Gen. Sec, CITU, mentioned about the social cost that would be incurred by displacing the traditional retail trade. There should be adequate measures for rehabilitating them and also for regulating the functioning of retail chains in India so that they are not being given an unfettered freedom. He made it clear that his party is not against the opening up of the retail sector but is extra cautious about the social backlash that such policy decisions can create if it is not properly orchestrated and the decisions are not taken in the most democratic manner.
Mr. Sumit Sinha, CEO, Aditya Birla Retail, said that there are a lot of misconceptions about the organized retail trade in India. It would leave enough space for traditional retailing and kirana shops, since the focus of the organized retail sector would be to sell multi-products like furniture, electronic gadgets, textiles, etc. through one window. He also referred to the price advantage, lower transaction costs, scaling down of wastages and better remuneration to the farmers, by the induction of organized retailing. He mentioned that Walmart in US co-existed with a large number of mom and pop stores, which is indicative of the co existence of both in a harmonious manner.
Reflecting the same sentiments, Dr Shriram Khanna, a consumer activist and professor in the Delhi School of Economics said there is a very high degree of politicization of the retail trade. He wanted a fair and transparent on these issues of national importance. The consumer, he said, is for organized retail since he gets the price advantage, quality material, redressal of consumer grievances and elimination of deceptive prices.
The others who spoke at the discussion were, Mr. Sunil Jain, Consulting editor, Business Standard, Mr. Pratap Somvanshi, Resident editor, Amar Ujala, N. Soundararajan, co-author, ICRIER report and Dr Jagadish Shettigar, Professor, BIMTECH.
