Dear Mr Prime Minister Dr. Manmohan Singh,
It is evident that with sheer power of money foreign companies like Wal-Mart and TESCO will transform the retail sector in India. But this will not happen in favor of India.
Wal-Mart’s lower prices will draw customers away from small shops and businesses, which are actually life line for Indian households, and hurt local communities.
Wal-Mart like companies are going to sell goods more cheaply then nearby micro Kirana shops, which simply means that it’ll represent a profound threat to the viability of those shops.
Most of fruits in India are sold on carts by Thela Walas [smallholders] even in the cities like Delhi. What will happen to these people if Wal-Mart start selling fruits in the market – for cheap?
Similarly, what will happen to small shops selling shoes, hardware, building supplies, paint and glass, groceries, fabric and jewelry? These things can be sold for cheap by big supermarkets, because they can afford, and because of this small shop owners will get out of business.
Companies like Wal-Mart, by selling goods for cheap, will force small shops to downsize and close their doors for business. This will simply create more unemployment. I am wondering why this is so difficult to understand by Indian Govt.
Similar thing have already happened in USA and UK where big supermarkets have indirectly forced small business to close themselves.
You might argue that, by hiring, supermarkets will create more employment in nearby local areas. True, but the workforce which will be used in supermarkets is not going to be same as who will be unemployed because of supermarkets.
An unemployed Subzi Wala or Dhoodh Wala can not go and work in Wal-Mart. Would you guarantee a balanced job growth against job losses because of new supermarkets?
In USA, Wal-Mart employs part-time and low wages workforce. They are also paid significantly lower than comparable to other sectors. This is important to sell their stuff for cheap. Similar practice may be applied in India and overall this will create more low end workforce, which India does not need.
Superstores will have central supply chains and this will kill local wholesellers. Again more unemployment.
Additionally superstores will force manufacturing jobs to go overseas. Walmart in USA is biggest importer of Chinese goods. If similarly happens in India, this will help shut down remaining local plants and move manufacturing to overseas.
Inflation in India is already so high and you are not able to control it.
India’s poverty line is set on 26 rupees in rural areas and 32 rupees in urban areas, which is really unrealistic. This means anyone earning say 50 Rs a day is not poor. Today a person can not buy one liter petrol in 50 Rs. How can this person not be poor?
And when companies like Wal-Mart will set the price for Indian consumers, how a poor Indian family, living on 50 Rs per day, will manage?
Amit
True Yogis should renounce worldly pleasures, give food and shelters to poors, but not like Baba Ramdev, who flies in private jets to start anti-corruption campaign.
Anna Hajare might have true intentions to cure corruption in India but having ally like Baba only hurts his campaign.