Elementary, dear policymaker

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case is yes.

In the 1980s, when computers were introduced by the government to modernise the economy, trade unions, bank workers and railway employees strongly opposed the change on fears that livelihoods would be lost. Today, the IT sector is the backbone of the modern Indian economy, and the issue was merely one of adjusting to new technology. Modern large-format retail, at its most sophisticated, presents a similar transformation. It is better to adapt to it than resist it.

If we look at the bigger picture of costs and benefits to various stakeholders, it would be clear that the gainers would be farmers, who would welcome disintermediation and better renumeration for their produce, which would induce them to invest more in their farming operations. Besides, big retailers would help develop India’s processed foods industry, which would create millions of new jobs. In general, any sector that undergoes such thorough modernisation tends to have a ripple effect in terms of allied/secondary services and jobs.

All said, it is now up to India’s policymakers to decide whether the interests of 12 million retailers or the welfare of over a billion consumers and a huge number of farmers. Not to be ignored is the fact that the new retail revolution is expected to generate around 2 million new jobs in just a couple of years, and many more over time. The employment generated in agro-based industries could be still higher. A boost to agricultural growth will not only alleviate poverty but also increase demand for various industrial goods, which will further generate secondary employment.

Yet, the myopia of our politicians, vested interests and lack of initiative have been holding this retail revolution back. Many states have failed to follow the guidelines laid down by the model APMC Act, which encourages private players to buy agricultural products directly from farmers. Bihar has scrapped the Act, and the UP government has recently withdrawn the agriculture investment policy under which private players could directly buy products from farmers. Such inconsistency in policies will only discourage investors and hurt regional development. Political leaders, who speak about alleviating poverty through development, need to demonstrate their support for a long-term vision that involves creating an efficient and effective regulatory framework for the retail sector.