IndiaRetailBiz

Indian Council for Research on International Economic Relations (ICRIER), which at behest of the union government, in February, 2007, undertook a study to assess the impact of organised retail (modern, big) on livelihood security of traditional small traders (kirana stores) has after several extensions of time has completed its report.

Conclusions and recommendations of the study, which involved participation of 1,000 traditional small traders and 2,000 consumers, across the country, according to a DNA Money report, will be submitted to the Government on the 9th May, 2008.

Elaborating on scope the study at the time of assigning the task to the premier economic think tank of the country, Kamal Nath, the Union Minister of Commerce and Industry, had said; “ICRIER has been asked to take into account various aspects of the retail industry and its affect on several elements of the economy. It is essentially a study on big-versus-small rather than foreign-versus-domestic retail.”

The key findings, conclusions, and recommendations of the report to be submitted on Friday, among others, include:

• Although unorganised (or traditional) retail sector over the years will concede a part of its market share to the organised sector, the negative impact of organised sector will wear off with time.

• Despite the inroads being made by the organised sector, unorganised retail sector will continue to retain 84% of the market share even in 2013.

• Bottlenecks would continue until the retail trade is modernised.

• Government should rationalise licensing norms to encourage growth of organised retail.

The study, it may be recalled, was assigned to the premier economic think tank of the country following the ruling UPA Chairperson Sonia Gandhi’s missive to the Prime Minister Man Mohan Singh. She wanted the government to evaluate the impact of FDI and entry of big retail in the sector before initiating any big ticket reforms like allowing FDI in multi-brand retail in the sector.

The specific trigger for the study, however, was the strident opposition of political activists and trade lobbies following the world’s largest retailer Wal-Mart signing of a joint venture agreement with the telecom behemoth Bharti Enterprises for its foray into the retail sector of India. Small traders and political parties, particularly those following left of the centre, policies were also unhappy with the entry of top Indian business houses like Ambanis into the sector.

Most analysts at the time of assigning the study had thought it to be a ploy of the government to postpone inconvenient decisions on the subject of FDI in retail.