Advantage: FDI in retail
ADVANTAGE: FDI IN RETAIL
(Anshu Meghe)
Recently the most debated topic in India has been government allowing FDI in the Indian economy. It is one of the most critical reforms taking place in Indian economy post the great reform period of 1991. From vendors to politician everyone is talking about FDI, and many are just prattling without acquiring the full knowledge of the reforms. Not only the opposition but even some of the allies of the ruling party are raising hue and cry over the new policy of allowing 51% FDI in multi-brand retail in India. And on the other hand the government is trying to prove they are correct, but who is going to agree with already disreputed government? It is really very difficult to trust the government, but this time the picture seems to depict truth.
The truth about FDI is much different from what is being told. The FDI seems to be the only way to pace up the Indian economy which has shown lack of investment and growth in past quarters, which is further leading to inflation. But if we give a closer look the recently made reforms, we will know that this could be the turning point for the Indian economy.
The FDI is bringing in much needed benefits for the economy amongst which most prominent is the benefit to the farmers. Across the world the big retail giants are buying produce directly from the farmers, thereby eliminating the middlemen. Thus the farmers will get much better price which can be at least 15-20% higher than the current prices paid to them. Thus the farmers will benefit by the direct purchase.
The incoming of FDI will bring in strong competition amongst the retailers and at the same time elimination of the middlemen who are also the hoard the stock, this will help in reducing the supply constraint, thus helping in reducing food based inflation to a great extent.
India will also earn a great amount of foreign exchange from the investment which the big retailers will do in the country. Each retailer is supposed to do a
(Anshu Meghe)
Recently the most debated topic in India has been government allowing FDI in the Indian economy. It is one of the most critical reforms taking place in Indian economy post the great reform period of 1991. From vendors to politician everyone is talking about FDI, and many are just prattling without acquiring the full knowledge of the reforms. Not only the opposition but even some of the allies of the ruling party are raising hue and cry over the new policy of allowing 51% FDI in multi-brand retail in India. And on the other hand the government is trying to prove they are correct, but who is going to agree with already disreputed government? It is really very difficult to trust the government, but this time the picture seems to depict truth.
The truth about FDI is much different from what is being told. The FDI seems to be the only way to pace up the Indian economy which has shown lack of investment and growth in past quarters, which is further leading to inflation. But if we give a closer look the recently made reforms, we will know that this could be the turning point for the Indian economy.
The FDI is bringing in much needed benefits for the economy amongst which most prominent is the benefit to the farmers. Across the world the big retail giants are buying produce directly from the farmers, thereby eliminating the middlemen. Thus the farmers will get much better price which can be at least 15-20% higher than the current prices paid to them. Thus the farmers will benefit by the direct purchase.
The incoming of FDI will bring in strong competition amongst the retailers and at the same time elimination of the middlemen who are also the hoard the stock, this will help in reducing the supply constraint, thus helping in reducing food based inflation to a great extent.
India will also earn a great amount of foreign exchange from the investment which the big retailers will do in the country. Each retailer is supposed to do a