Regarding the allowing of big foreign companies to do retail
business in our country, it is prudent for our leaders to do a little bit
re-thinking in the interest of our nation and its people.
It is no doubt a fact that if the foreign multinationals
start doing retail trade here, the local
retail traders of any commodity will be affected and will have to close their
shops. Of course the wholesalers have to follow them because there will not be any
retailers to buy from them. The big chain stores will directly buy from the
manufacturers and so the local small or big traders will have no chance to
survive. This does not mean that the prices of the products will be very less
as they buy the products directly from the manufacturers. These stores will
need sufficient margin to maintain huge establishment charges and also to pay
for the dividends to foreign and Indian investors.
One important aspect is regarding unemployment. However huge
their employment potential is, they still fall short because of the large
number of independent traders who lose their profession. Besides that, because
of latest mechanization the companies prefer to get maximum work with minimum
workers.
The present age old system has provided scope for hereditary
profession or trade. And even if the
organized sector cannot provide employment to all, there are self employment
opportunities in the retail trade which help to earn their living depending on
their capacity. In the 1960’s and 80’s when the unemployment was very high,
even many educated people took up small trades which survived them in the time
of their need. Now, where as the unemployment rate in India is 3.8% the unemployment rate in U.S.A. is 7%. This
is because, once the bigger companies take up the retail trade, small retailer
cannot survive and will have to take up the job in such big companies.
Supposing all the people are provided jobs in the big companies, as at present,
in the time of economic crises or when the population increases, the people
will be in distress. They will have no jobs and neither can they survive with
some independent trade.
This is so not only in U.S. but also in many European
countries.
About a few decades back, in order to encourage small scale
industries, many bigger companies in India were not allowed to produce and
market the products that can be produced by small scale sector.
Take the example of Mahatma Gandhiji who advocated against
the importing of cloth from U.K. because it will hamper the progress of Indian
weavers and make them unemployed. This has been the policy of any country,
including U.S. to ban or put additional tax on imports of certain commodities,
importing of which will work against the interest of their citizens.
In India, most of the people prefer to have independent
establishments than working in other’s companies. The retail trade can be
carried out with whatever little investment the retailer can afford. But once,
the bigger retailer takes hold, the small retailer will have no chance to
maintain his presence.
Considering the situation existing in our country, allowing foreign
direct investment in the retail trade will be suicidal.
At present, it seems, in every field, bigger companies take
hold of smaller companies and grow bigger. They will also, thus, avoid
competition. We are observing this bigger fish swallowing smaller ones, even in
health care. Now, health care is not a service, but business. The big
international companies expand buy buying smaller, other-wise doing good work,
nursing homes. This is taking place in every field, and all the citizens of the
world will be dependent on the jobs provided by only a few surviving companies.
