27 January 2012

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FDI in Multi Brand Good or Bad for India Answers to Doubts regarding FDI in Kirana Business Part 2

FDI in Multi Brand Good or Bad for India Answers to Doubts regarding FDI in Kirana Business Part 2

Few days back I wrote the article regarding FDI in Multi Brand is good or bad for India.
Regarding that article Mr.Pradeep gave following comment and raised few questions so here is answer to his comment.

Detailed Analysis FDI Good or Bad for India Who will benefit in India if FDI is allowed in Multi Brand this is Kirana Business




http://realityviews.blogspot.com/2011/12/detailed-analysis-fdi-good-or-bad-for.html

First Read the comment wrote by Pradeep on the above article.
You have explained well but in my view you are partially correct. It is not that if FDI is allowed then only rich and big politicians will enjoy. A simple qns to u.... Do we see only rich and big politicians going to Big Bazaar and other Shopping malls? Don' the middle class family go to shopping. You have explained well but in isolation. I disagree with you that FDI will be bad in India. WE need FDI and foreign investment in many sectors because of our open economy.
1- What is the quality of groceries and price in a normal Kirana Shop? I purchase my groceries from the kirana shop and complain him regularly about the quality but of no use.
2- Kirana Price is higher and benefit does not reach the farmers. Kirana Shop owners do not pay taxes. Shall we not make them organized?
3- Food wastages from in logistic and procurement. who will address that?
4- Being a consumer, should not I have the choice to choose which shop to buy from?
5- How many Kirana shops have closed after the opening of Big Bazaar and Reliance Fresh? Customer will always prefer the shops which is near by and good. So it is not that if big malls come then other kirana shops will lose their business.
6- As regards ur logic ar the kirana shops destroying the street vendors business because both are in the same business.

Now look at the other side of FDI

When foreign companies will bring investment, India will have money to build infrastructure in retail. cold storages, good logistics, reduced wastages.

Farmers will have choice to sell their produce whoever they find good. If Big investors pay them they will do business with them.

In the last 65 years govt of India has not been able to build infrastructure because most of our budget money goes in Subsidy and poverty alleviation schemes which are very poorly implemented and never reach the poor and targeted.

At present FDI will be allowed in a city of more than 1 million populations. For that to qualify only 53 Indian cities comes under the criteria.

Let’s open the retail sector and do it on an experimenting basis, if we need changes and laws we could certainly bring it. we have to address the farmers and consumer issue and protesting FDI is no way going to give us any valuable solution.

End of comment

Now Let us understand step by step each point.

Thanks for comment and here I will explain you step by step again.
I am not against FDI but currently Indian is not ready for FDI and Indian citizens are not ready for FDI.

Q 1 - It is not that if FDI is allowed then only rich and big politicians will enjoy. A simple qns to u....
Do we see only rich and big politicians going to Big Bazaar and other Shopping malls? Don' the middle class family go to shopping.
You have explained well but in isolation. I disagree with you that FDI will be bad in India. WE need FDI and foreign investment in many sectors because of our open economy.

Answer - Here you have to understand big people who are owners of the malls will sell their malls and they will become rich.

70% Indians are not middle class.
Only 30% Indians visit to the malls and they buy products from the malls.

Question 2 - What is the quality of groceries and price in a normal Kirana Shop? I purchase my groceries from the Kirana shop and complain him regularly about the quality but of no use.

Answer – We got the laws if quality of groceries is bad please complaining to authorities and change your Kirana store. Big malls will give you good quality I do not agree. Big malls also give dirty and expired things. There is no guarantee.

Question 3 - Kirana Price is higher and benefit does not reach the farmers. Kirana Shop owners do not pay taxes. Shall we not make them organized?

Answer - Yes I agree Kirana price is higher. But please try to find about USA and Europe their local markets and farmers. FDI benefits in USA and Europe also do not reach to farmers.

If you think Kirana owners do not pay taxes file a complaint to authorities.
There is no guarantee that big malls will pay taxes.
India is a corrupt nation. Corruption is in every government department.

It is the duty of government of India that benefits reach to the farmers.
It is the duty of government of India to control prices.
Big Kirana shops are coming to India to do business. They are not coming here do to social service.

Question 4 - Food wastages from in logistic and procurement. Who will address that?

Food wastage is the problem of India.
It’s the duty of Indian government of India to build cold storages.
In cold storage business 51% FDI is already allowed. Why still we need FDI to open cold storages in India.

It is the duty of Indian government to open cold storages in India.
Ask the government of India to open them.

Question No. 5 -Being a consumer, should not I have the choice to choose which shop to buy from?

Yes you got the right to purchase from the good shops.

But for the larger benefits in a democracy one has to adjust his needs.

I want pure water it’s my right, still I do not get the clean water. I have to purchase bottled water.

As you already mentioned we got the Big Bazaar, Reliance and Tata. So you should purchase from them. They got International quality when FDI will come these shops will get sold to other bigger shop owners who will bring FDI in India.

Question No. 6 - How many Kirana shops have closed after the opening of Big Bazaar and Reliance Fresh. Customer will always prefer the shops which are near by and good. So it is not that if big malls come then other Kirana shops will lose their business.

Answer -
Big Bazaar and Reliance do not know how to do business.
They are not competition to Indian retailers.

We are here talking about Wal Mart and other shops. Please get the information how they work and what happens in USA villages or County when Wal Marts start their business.

President Obama in his speeches he is telling American citizens to purchase from Local American Kirana shops.

Even Wal Mart faces objections from the local American people and they try and see that wal mart should not start business in their American villages or cities.

If possible read the studies and surveys done by many universities and they clearly mention that opening of big Kirana shops kills the local business that is local Kirana shops in American cities or villages.

Question No. 7 –
As regards ur logic ar the kirana shops destroying the street vendors business because both are in the same business.

Street Vendors are illegal in majority places. Doing business on street is illegal.
If you got problems with it go and complain to the authorities.

Because of necessity, no support from government the people have to do business on street to feed their stomach.

Do not compare them with the big malls and their owners.

Question no. 8 – When foreign companies will bring investment, India will have money to build infrastructure in retail. cold storages, good logistics, reduced wastages.

Answer – 51% FDI is allowed in cold storage.
It’s the duty of government of India to create and develop the infrastructure.
India is rich country and if there is no money Indian government can take the loans from the world bank to build them or create them.

Is it not possible Indian Govt. will give zero percent interest loans to Big FDI malls then they will build cold storages?

We do not need FDI in Kirana to build cold storages. Already it is allowed in Cold storages sector.

Question No. 9 - Farmers will have choice to sell their produce whoever they find good. If Big investors pay them they will do business with them.

Answer - In USA farmers are living on the subsidy given by the American government.
In Europe farmers are living on the subsidy given by European government.

In India also FDI will not make farmers rich. Currently Indian farmers do not have right to sell their produce. Just allow them and give them those rights and it will make them rich.

FDI will not make them rich. Big Shops are coming to India to do business and not the social service.

Government said buy 30% from Indian farmers but still they are not ready for this.

My suggestion is rule should be To make purchase from Indian farmers 50 to 60%.

Big shops will bring produce imports from china and other countries and it will kill Indian farmers.
India has signed world agreements like GATT. So it will become impossible for Indian government to control them.

Question 10 - In the last 65 years govt of India has not been able to build infrastructure because most of our budget money goes in Subsidy and poverty alleviation schemes which are very poorly implemented and never reach the poor and targeted.
Most of our budget money becomes black money.
You yourself answered that India is not ready for big malls.
If Indian government can not control corruption of Indians how you think it will control the corruption of big malls.
If Indian government can not make good rules for Indian citizens then how can you say Indian government will make good rules for FDI and benefits will reach to the farmers?

Question 11 – At present FDI will be allowed in a city of more than 1 million populations. For that to qualify only 53 Indian cities comes under the criteria.

Answer - Currently only 53 that is to fool the Indian citizens.
One city or 100 city or whole India this has nothing to do with the FDI.

On the contrary I will say FDI should be invited to open big shops only in Villages so villages will get the light, good roads etc.
Do you think big shops will open shops in villages?

Question 12 - Let’s open the retail sector and do it on an experimenting basis, if we need changes and laws we could certainly bring it. we have to address the farmers and consumer issue and protesting FDI is no way going to give us any valuable solution.

Answer –
Last 65 years you said Indian government failed.
Then how can you say that government will make good laws in FDI.

Be realistic the real aim is to make rich people rich nothing else.

FDI is not the solution to build cold storage.
FDI is not the solution to build roads.
FDI is not solution to give good price to farmers.

For FDI India is not ready.
For FDI Indian laws are not ready.
For FDI Currently Indian politician’s mindset is not ready.
100% Politicians in India only think about making money and not development of India.

So say no to FDI in India.

Suggested Reading –

Detailed Analysis FDI Good or Bad for India Who will benefit in India if FDI is allowed in Multi Brand this is Kirana Business

http://realityviews.blogspot.com/2011/12/detailed-analysis-fdi-good-or-bad-for.html


Reality Views by sm –

Friday, January 27, 2012

Tags – FDI Question Answer FDI Good or Bad India

13 comments:

sangeeta January 27, 2012  

Very well written and well balanced views on FDIs.I agree our country is not ready for this change.

Spiky January 28, 2012  

change is hardly acceptable for most people.

sm,  January 28, 2012  

@Spiky

thanks.
Please explain about which change you are talking.
if change is for good i am with it.
If change is for bad then i will oppose it.
Example is FDI.

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Gaurav Singh Bist,  September 16, 2012  

I have not much idea about terms like FDI and it's effects, but all I can say is that your logic seems plausible and fitting into the current Indian situations. Much work needs to be done in favor of the poor and the middle rich need to understand and compromise little on their "choices and facilities" for the "very survival" of the poor. Be peace everywhere :)

shyamal parikh September 17, 2012  

Thank you for enlightening us, Can you post a article on case studies on Walmart and how it affected Kirana stores

SM September 18, 2012  

@shyamal parikh

here is article

Sixty Facts from Report Wal-Mart’s Global Track Record and the implications for FDI in Multi-Brand Retail in India A report by UNI Global Union

Link = http://realityviews.blogspot.in/2012/08/sixty-facts-from-report-wal-marts.html

Navpreet SINGH,  September 29, 2012  

NO doubt it very knowlegdable and well written article
firstly we are in a point of view that india is not ready I think we are ready but our system may be not or perhaps ignorant over it and also we should not convert our state into totally privatised.I think privatisation is less or no accountable than government itself.
Secondly we pay tax to the government whose responsibilty is to service us back by providing suitable and adequate infrastructure.Why would government has to rely on foreign or other sources.Foreign companies are taking and will further take advantage of cheap labour, stock and bonds.
We saying that 70% of our population is not middle class but then again they are not educated as par especially in English, which we all try to babble in a buddhi jiv way to give our varied opinions. We should reach or educate our locals about this in our own language. we are harnessing what british left behind.
The questioni is we have can-to- solution or not I think we should stop complaining take a step head , if we have to sacrifice ourselves we should and change the way it is .Our motherland is not less than our own mother and everyone living on it is not less than our own brothers, sisters and parents. The government will do what they doing from bofors or pre independance way.
The question is what will bring change?or we have another alike "east-india company" take over but in a different way and then we say we actually warm welcomer's and this is just poor advantage of our humbleness which resulted in this way.

mayank,  April 10, 2013  

I am just completely agreed with you.