Kiranas under no threat from foreign investment: Ficci, CII

Written by fe Bureau | New Delhi | Updated: Nov 29 2011, 08:35am hrs
Amid protests on FDI in retail, the day saw the countrys top two industry chamber Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (Ficci) addressing press conferences to allay fears that entry of foreign retailers would lead to displacement of kirana stores and loss of jobs. On the contrary, they said that they would create more jobs.

Large formats (from Indian organised retailers) have existed for the last 10 years. Has it let to any displacement of kiranas asked Rajiv Kumar, secretary general of Ficci. Zero kirana displacement. The apprehension is more political and the fear is being created by vested interests, he added.

Chandarjit Banerjee, director general of Confederation of Indian Industry echoed the sentiments and said in turn the unorganised sector grew by 10% over the years.

Both the top two industry groups welcomed the government's decision to allow 51% foreign ownerships in multi-brand retailing and said it will help the SME sector.

FICCI says currently the retail business of $450 billion sources 35% or $157 billion worth of goods from SMEs and the small enterprises will supply $298 billion of goods as the country's retail sector grows to $850 billion in the next 10 years.

This will lead to better consumption and the benefit of the consumption is going to come to the MSMEs, says Thomas Varghese, the chief executive of Aditya Birla Retail and the head of CII committee for retail. They can not only supply to the retailers in India but also become suppliers to retail chains internationally, he added.

Both the groups said the government's liberalisation policy could help create millions of jobs, mainly for the not-so educated category of Indians. A CII-Boston Consulting Group report says the organized retailers would create 3-4 million direct jobs with 75% of them for non-graduates by 2020 and they will generate another 4-6 million create indirect employment in retail allied services during that time. The employment generated by this sector will be far more geographically widespread than any other industry and it will not be restricted to IT corridors and manufacturing centres, says Pranay Sinha, vice chairman for CII's Delhi State Council.

Varghese said the country's 50% population is under the age of 30 years and this generation is yearning for the best of the world including retail. Where do you think those 50% are going to shop and how their aspirations will be met. Not in the wet markets, he said.

Varghese urged different state governments not to view the opening of the sector to FDI through narrow political prism and rather see its benefits.