‘The organised retail market in India has to be regulated to avoid extinction of the traditional retail segment and loss of employment to many small retailers, and thus both can co-exist,’ agreed experts who spoke at the panel discussion on ‘Impact of organised retailing on the unorganised sector’, held by the Birla Institute of Management Technology (BIMTECH) in New Delhi.
The panellists, who came from different verticals of the society, approved the view that there should be a de-politicisation of the entire issue to arrive at a pragmatic policy framework on retailing.
Speaking on the issue, Praveen Khandelwal, general secretary, Confederation of the Indian Traders Association, referred to the ICRIER report, which indicates that 1.7 per cent of the small retailers will have to close shops on account of the entry of the organised retail chains. According to him, in the Indian context, the calculations will count a closure of around two lakh shops per year. “This is a matter of great concern and none of the successive governments have thought of enhancing the efficiency of the traditional distributive trade and neither there is any institutional credit available to the small traders. The end result of this will mean an unequal playing field that can push ‘self organised’ retailers out of business,” he added.
According to Dr Ashwini Mahajan of Swadeshi Jagran Manch, the body of evidences collated across the world clearly indicates that the price differential in organised retailing was short-lived. “Once the monopolistic competition catches up, the prices will ramp up, as had happened in the USA. Sooner or later, foreign retail chains would have an upper hand in the Indian retail scene,” informs Mahajan.
However, Sumant Sinha, CEO, Aditya Birla Retail, said that there are a lot of misconceptions about the organised retail trade in India. “It will leave enough space for traditional retailing and kirana shops, since the focus of the organised retail is to sell multi-products including furniture, electronic gadgets, and textiles through one window,” informed Sinha. He mentioned that Wal-Mart in the United States co-existed with a large number of mom-and-pop stores, which is indicative of the co- existence of both in a harmonious manner.
Other experts sharing the similar view included Sunil Jain, consulting editor, Business Standard; Pratap Somvanshi, resident editor, Amar Ujala; N Soundararajan, co-author, ICRIER report and Dr Jagadish Shettigar, professor, BIMTECH.