Society Magazine

West Bengal Needs 51% FDI in Retail

By Saurav2006complex @saurav_complex

51% Foreign Direct Investment (FDI) in multi-brand retail is the need of the hour in India and particularly in West Bengal. Presently FDI is not allowed in Multi-Brand Retailing in India. Whereas it should not only be permitted but also highly encouraged because it will surely benefit the producers (farmers) and the consumers. I’ll discuss it further in this article.

Another Historical Blunder in the making! Mamata Bannerjee’s strong opposition to 51% Foreign Direct Investment (FDI) in retail is like the opposition to computerization by the Communists in the 1960’s- 1970’s and that’s why this opposition is really hard to digest. Opposing the central government just for the sake of opposing is not-at-all a constructive movement for the future of West Bengal. West Bengal is lagging decades behind the progressive states like Gujarat, Maharashtra and Karnataka in almost every aspect – Apart from Kolkata there’s no other city which was developed in the past 60 years. We the people of West Bengal have unanimously voted Mamata didi into Power to get rid of the tyrannical communists and their ideologies thus, it’s high time that the state “Opens up” for new ideas and new investments wiping out words like “Cholche na- Cholbe na!” out of our dictionary! Quick-look at the Present Retail scenario:

  • Crumbling Infrastructure:The logistics of the retail chain is still lying in the medieval age leading to inefficient supply of goods. The lack of cold storages in the country and the pathetic Public Distribution system leads to an annual wastage of about 30% fruitsand vegetables produced in India
  • Middlemen’s Domination:The middlemen buy produce from the farmers mostly on credit at slashed down prices. Then the produce passes through a series of an average five to six middlemen until it reaches the retailer. In this whole process profit margins of these middlemen plus the profit margin of the retailer hikes the price of the product up to three to four times the actual price. Ultimately the Farmers and the Consumers are the ones who are losing out the bargain. Many a times the middlemen and intermediary traders create false shortage of goods to shoot-up prices.
Food Supply Chain Chart
51% FDI in Multi-Brand retail is for the betterment of “Ma-Mati-Manush”:
  • FDI in retail sector will be very beneficial to the farmers. The farmers will earn profits directly and will get rid of the middlemen and thus they can modernize their farming techniques for better production. Thus, if the farmers benefit, they will sell the product at lower prices in the market this will further create a win-win situation for the farmers and the consumers by wiping out middlemen menace.
  • Organized retailing is at a nascent stage in India whereas 97% of retailing business is run by the unorganized retailers. The entry of retail giants like Wal-Mart, Tesco etc  in Indian retail market would create lakhs of jobs within five to six years. 
  • Another effect of allowing FDI in retail trade would be improvement in quality standards and consumer expectations as inflow of FDI will surely emphasize quality control and bring about competitive pricing.
  • Opening up the doors for global retail giants will not only pump in the competition in the retail sector but will also help to establish a direct link between the farmers and the consumers thus, benefitting both. They would surely be interested to develop their own logistics which will be far better than the existing system thus reducing the amount of wastage. Thus, the end consumers will no longer have shell-out extra money for wastage and shortage of products.
  • Development of organized retail chain will boost the economy, greater GDP, greater tax collection and more employment and that too better paying employment. It will bring about advancement in agricultural techniques, supply chain improvement, tourism, greater sourcing from India. Thus, FDI should not be just allowed but encouraged.
Undoubtedly West Bengal is in a mess. We need better infrastructure which can be achieved by opening up routes for Foreign Direct Investment. FDI in retail is must for the benefit of the Farmers , the consumers and the Government. 

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