Why 51% FDI in multi-brand retail is risky in long term ?

Today UPA cabinet has approved the 51% FDI limit in $450 billion multi-brand retail sector.I think it is good for consumers in general because soon big multinational firms like Carrefour and wallmarts will heavily come down and open their outlets in every medium and big cities and starts offering retail items via big TV commercial and advertisements. These firms will build their warehouses and have deals with local formers for whole sale agreements.Consumers will get a lot of offers at attractive prices under one roof.

So question is if this the case then why some people are opposing UPA government...can't they understand this positive phenomenon ?
Actually UPA government is facing issue of price rise and inflation(Wholesale inflation in India has remained stubbornly high for more than a year and is now close to 10% despite RBI intervention) and so their argument (also backed by RBI) is that this move will help to dampen soaring inflation – an argument that several international retailers have also advanced to promote their case for entry. They have argued that a higher international presence in the retail sector could lower prices and improve the food chain.....This is valid in short term.......but but but ????

General election are due in 2014 (short term period) and so government wants to help/show the common people in this way ???
Later this Gandhi marked Congress will fight for rights of Swedeshi people....then things will be too late perhaps ....I don't know but why it seems to me that opening up FDI in multi-brand retail would spell the biggest disaster for Indian economy....and extinct our general stores( or kirana store )......which constitute more than 90% of retail market now.

What about the Govt.'s claim that it will generate the employment ? It is true in a sense :
- Is Mcdonald is generating employment which we all want in India ....they are just using the unemployed youth and giving them meagre salaries and earning huge profit with the help of low production cost.....How good is that for India ....

Regarding cheap products : Govt. should make sure that these big firms not spoil the Indian SME by buying cheap products from China and selling to the Indians.

The only positive sign that I see here is that this may lead organised retail system where formers gets satisfactory prices for their products and mediators do not eat away all the profit that should genunely be with formers( This is what is happening in Mandi system today). Even in this case government will have the greater role of monitoring that giants like wall-mart not become the new middlemen and take away the cream. After all they are not coming here for social welfare ....so risk is there a lot....as Amricans are new Britishers in modern world. 

Why everyone is interested in Indian Retail market  ?
India is ranked 4th on US consulting group AT Kearney’s Global Retail Development Index for 2011. Emerging markets like India($1.6 trillion economy), China and Russia are the next big markets for retail growth.


Kshitiz Anand Saxena said... Best Blogger Tips[Reply to comment]Best Blogger Templates

I Like It thanks for shearing your views. GOOD JOB.....

Kalyan Ganjam said... Best Blogger Tips[Reply to comment]Best Blogger Templates

I don't understand your reasoning behind Why 51% FDI is BAD. You think is is bad because
1) You feel so, but don;t know why - "I don't know why but it seems to me that opening up FDI in multi-brand retail would spell the biggest disaster for Indian economy"
2) Bad for Kirana stores.

You can as well, Ban Automobiles and be good to Rickshaw wallah's

Anurag Vidyarthi said... Best Blogger Tips[Reply to comment]Best Blogger Templates

@Kalyan Ganjam

Hi Kalyan,

Thanks for reading post.But with due respect I want to differ from you and actualy I do not understand comparing automobile-Riksha with retail FDI issue ?

1. Can automobile in any term replace the Rikshawala? I guess Never because for shorter distances,zero fuel expenditure, less investment riksha is always better than automobile.
2. Automobile is not substitute but technological advancement for long distance commuters where Riksha is not viable option ?
3. No-Multinational will come to invest in Automobile to take away the money earned by Rikshawala?

Hope that helps...Thanks

Blog Archive