The railway ministry?s plans to bite into the retail pie may have to undergo some significant changes. Major retail players have told the railways that they would be interested in the department?s agri retailing policy only if it is expanded to cover non-agricultural products as well.
Retail companies are keen on not only sourcing products but also tapping the potential markets available in the rural countryside using rail transport and other facilities provided under the scheme.
Railways have already taken out expressions of interest (EoI) inviting private participation for the project. The ministry has given Rail Vikas Nigam Ltd the responsibility of floating tenders for inviting the EoIs from corporate houses and cooperative institutions.
However, based on the initial feedback from retail players, it is now doing a rethink on the policy. ?We are discussing these issues and will come to a final decision soon,? a railway official said.
The ministry too is concerned about getting a traffic guarantee from the players as it does not only want to lease out land to them.
Part of the Rail Budget this year, the agri-retailing policy would allow retail companies to set up warehousing and processing facilities in the surplus land available with the railways. The railways will also provide them with transport facilities at discounted rates to source products from the countryside.
The policy was formulated as over the past year a number of retail giants such as Reliance, ITC and the Future Group have asked the railways to provide them with supply chain logistics. For the railways, the policy is significant given that it can help bring in huge revenues. The railways is one of the biggest landowners in the country and has a total 4.23 lakh hectares of surplus land out of which 43,000 hectares is vacant land. The railways propose to provide the retail companies with land for national, regional and rural hubs.
Meanwhile, in India about 60% of the organised retail trade is likely to be centred around marketing of perishable food items, mainly vegetables and fruits.
Rail minister Lalu Prasad is also keen on using this as a vehicle to promote farmer interests. The project may be very useful for the farmers given that the country produces nearly 13% of the world?s vegetables and 10% of fruit. But in stark contrast, nearly 25% of this produce is wasted due to lack of proper storage and transportation facilities.