‘Retail to throw open 15 mn new jobs’

Despite strong demands from the industry to expedite the process of opening up the retail sector, the government is sticking to its guns in favour of a calibrated approach in initiating reforms and market access.

Despite strong demands from the industry to expedite the process of opening up the retail sector, the government is sticking to its guns in favour of a calibrated approach in initiating reforms and market access.

Speaking at the session on retail at the India Economic Summit Ajay Dua, Secretary, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry said that the biggest concern which goes against opening up the retail space for FDI is that some kirana operators will be hit once the big retailers come in and the government has to ensure their well being.

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“The neighbourhood mom and pop stores and kirana operators are a sizeable proportion and even as the industry believes that opening up the sector will see an integration of them with the mainstream, there will be some who will be hit and forced to close down,” Dua said while agreeing with the industry that removing regulations increases market in the longer run.

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Reliance Industries CMD Mukesh Ambani had earlier said that the retail revolution, especially in food, offers a huge opportunity to create purchasing power at the bottom of the pyramid. “It is important to focus on creating a value chain and large scale local employment. We have to focus in the rural areas which is largely agri driven. Our last mile efficiency is the best in the world and we have to cash in on that when we enter the retail space here,” he said.

According to Ambani, the opportunity for retail lay in partnering with the small “kirana stores” and in delivering health, micro credit, education and entertainment to the rural area. “We have to create purchasing power at the bottom of the pyramid and it is here that financial services in retail come in handy. Further opening up the sector will throw up huge employment opportunities to the tune of 10-15 million new jobs in the next 3-5 years,” Ambani said.

The panel which also consisted of Godrej Group Chairman Adi B Godrej and Emaar Properties UAE Chairman Mohamed A Alabbar, was unanimous that maintaining the flow of real estate at a reasonable price is one of the biggest challenges that can upset the retail revolution story. “A major requirement for the growth of retail is real estate development and adequate infrastructure. One way is to build these through the public private partnership model,” Godrej said.