The Parliamentary Standing Committee on Commerce headed by BJP leader Murli Manohar Joshi has suggested a blanket ban on domestic corporate majors and foreign retailers from entering the retail trade in grocery, fruits and vegetables. This recommendation is, to put it mildly, highly impractical. It fails to acknowledge developments in organised retail during the last three years. And the accompanying fact that no job or business losses have taken place so far in the unorganised sector.
If the committee?s logic is extended to other areas, we should not have high-end hospitals run by corporate houses, five-star hotels should not be allowed to come up in cities as all these would take away business and jobs from the smaller, unorganised businesses in these segments. Even private schools should be banned to ensure that municipal schools are given a chance to flourish.
We should not underestimate either the entrepreneurial skills or the perseverance of the people who are involved in running mom and pop stores.
Organised retail in areas where the committee would like them to be banned is not new in this country. It has been around for long, sans the publicity and attention it gets today. Ten years ago when multinational fast food chains started setting shop in the country, similar fears and opposition were raised?domestic outlets would be uprooted, there would be job losses and our food habits would be changed. Today, no such fears have come true. The videshi biggies are happily coexisting with the desi chains.
Let?s look at the auto repair and servicing segment. Have the organised service centres wiped out the roadside repair shops? No. Also, any suggestion to institute a regulatory authority for the retail sector and malls are even more impractical. Most of the retail activity comes under the purview of states rather than the central government. In this context, how can any single regulatory authority be feasible? A better idea would be to have a single-window clearance, and not a plethora of approvals required to open a shop. We should remember that more complex laws tend to bias the system to organised retailers than the unorganised ones.
rishi.raj@expressindia.com