PRESENTATION BY

1
PRESENTATION BY
CONFEDERATION OF ALL INDIA TRADERS NEW DELHI
ON
IMPACT OF FOREIGN DIRECT INVESTMENT IN RETAIL IN
INDIA
By
B.C.BHARTIA
PRESIDENT NAG VIDARBHA CHAMBER OF COMMERCE,
NAGPUR
2
THINGS TO REMEMBER

• Before we go ahead, we should keep certain basic
  facts in our mind.
• We are a country with huge population out of
  which majority are unprivileged and Below Poverty
  line.
• We are people with tradition, culture and ethics.
• In our country it is very difficult to get
  alternate employment.
• Our survival is because of our collective
  strength.
• The Govt. policies have been anti growth oriented
  for traders.
• The traders voice is not heard by decision
  makers.
• In fact traders have no representation in Govt.
• The decision makers do not ever hear him on
  policy matters affecting his trade.

Presented By Mr. B.C.Bhartia,Nagpur.
3
PREAMBLE

• WE, THE PEOPLE OF INDIA, having solemnly
  resolved to constitute India into a SOVEREIGN
  SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to
  secure to all its citizens
• JUSTICE, social, economic and political
• LIBERTY of thought, expression, belief, faith
  and worship
• EQUILITY of status and of opportunity and to
  promote among them all
• FRATERNITY assuring the dignity of the
  individual and the unity and integrity of the
  Nation

Presented By Mr. B.C.Bhartia,Nagpur.
4

• INDIA UNDER MNCs REGIME
• WILL THE PREAMBLE BE RECONSTITUTED.
• WE THE DICTATORS TO INDIA having solemnly
  resolved to Reconstitute India into a SLAVERY
  CASTE BASED UNSECULAR DIRECTED DEMOCRATIC
  REPUBLIC and to ENSURE to all its citizens that
  
• JUSTICE, social, economical and political is
  discriminatory
• LIBERTY of though, expression, belief, faith
  and worship is permitted as long as it is in line
  with MNC World Bank thought to make world a
  single religion, belief in single god and faith
  in them as single economic power.
• EQUALITY of status and opportunity is not
  applicable to local citizens.
• AND TO PROMOTE AMONG THEM ALL INDIVIDUALITY,
  HATRED FOR OTHER CASTE AND SURRENDER OF THE
  NATION TO THE LONE ECONOMIC POWER ON EARTH.

Presented By Mr. B.C.Bhartia,Nagpur.
5
PRESENT CONDITION OF TRADERS
Fringe Benefit Tax
VAT
INEFFICIENT LABOURS

• LICENCES PERMITS
• INDUSTRIAL DISPUTE ACT
• SHOP ESTABLISHMENT ACT
• COSUMER PROTECTION ACT
• WEIGHT MEASUREMENT ACT
• PACKAGING ACT
• PREVENTION OF FOOD ADULTRATION ACT

• PREVENTION OF BLOCK MARKETING ACT
• ANTI HOARDING PROFEELING ACT
• MONEY LENDING ACT
• PRODEND FUND ACT
• MINIMUM WAGES ACT
• ESI ACT
• GRATUITY ACT
• BONUS ACT

ENTRY TAX
FDI in Retail Trade
ANTI SOCAL ELEMENTS
CENTRAL EXCISE
POLITICIAL INTERFERANCE
PURCHASE TAX
INCOME TAX
POOR MARKET CONDITION
POWER PROBLEM
Cash Transaction Tax Quarterly C Form
INSPECTOR RAJ
STAMP DUTY
WELTH TAX
HIGH BANK CHARGES
PROFESSIONAL TAX
New Naka Complex
ESSENTIAL COMMODITIES ACT
Presented By Mr. B.C.Bhartia,Nagpur.
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Aviation
Information Technology
Telecom
Infrastructure
Retail Traders
Banking
Insurance
Pharma
Mining
Steel
Professional
Education
Presented By Mr. B.C.Bhartia,Nagpur.
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RETAIL TRADE BACKBONE OF ECONOMY

• Retail trade is worlds oldest business.
• Retail trade consists of sale of goods
  services to consumers
• for their personal, family or household use.
• Based on turnover and volume, retail trade is
  worlds biggest
• economic activity.
• In the year 2000, world turnover in retail trade
  is estimated
• around Rs. 3,10,20,000 crores.
• In India by investing nominal Capital a person
  can start retail
• business.
• In India Retail shops are generally owned and run
  by family.
• The whole family gets self employed.

Presented By Mr. B.C.Bhartia,Nagpur.
8
HISTORIC CONTRIBUTION BY TRADERS

• During Pre-independence days the traders have
  helped the leaders in all forms like man power
  and money.
• In all social activities establishment of
  schools, colleges, hospitals mandir, masjid etc.
  traders have contributed.
• Round the year 24 hours a day, traders have made
  all the goods required by customer available to
  them
• During the days of acute shortages, the traders
  have some how managed to arrange goods for its
  customers.
• Relationship of Indian traders and customers is
  much more than mere business
• Indian traders have always seen customer
  satisfaction above personal profit.

Presented By Mr. B.C.Bhartia,Nagpur.
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SUPPORT AND HELP TO GOVERNMENT

• Traders are self employed and give employment to
  entire family and others.
• Traders give employment to that neglected section
  of society who do not get employment any where.
• Traders take care of entire family of his
  employees.
• All direct and indirect taxes levied by Central,
  State and local govt. are deposited by trader in
  Govt. treasury without any charges or commission
  from Govt.
• During famine, floods, earthquakes tsunami and
  other natural calamities, the traders have always
  come out openly to extend full help to Govt.

Presented By Mr. B.C.Bhartia,Nagpur.
10
TRADERS BEING IGNORED BY GOVEREMENT

• In Order to gain political mileage, traders have
  been termed by objectionable words.
• After independence one after another anti trade,
  anti trader laws have been made.
• Traders have been made slaves under Inspector
  Raj.
• Time again new legislatures are being imported.
  Small Traders have been put under heavy burden
  of book keeping, taxation and compliances under
  various laws.
• In the name of development and road widening the
  shops are being demolished only to give passage
  to hawkers and footpath shopkeepers to establish
  their business.
• Local Govt. failed to build new markets. old
  traditional markets in different localities are
  being removed to make way for Big stores to get
  customers.

Presented By Mr. B.C.Bhartia,Nagpur.
11
CONTRIBUTION OF TRADERS IN ECONOMY

• In comparison to world, India has largest number
  of retail traders.
• In our country there are about 1,25,00,000 retail
  out lets.
• Retail trade contributes about 10 - 11 of our
  countrys GDP.
• Total turnover of retail sector is about Rs.
  8,75,000/- crores.
• After agriculture, Retail trade provides
  employment to maximum number of persons.
• 1.25 crore shops are providing employment to
  about 4 crore people.
• In a study conducted by Reserve Bank of India,
  India Retail Traders charge less margin.

Presented By Mr. B.C.Bhartia,Nagpur.
12
FOREIGNERS ARE MORE DEARER THAN INDIANS

• Indian traders, Businessman and Industrialists
  have established their leadership across the
  world.
• India is emerging as a big economic power.
• Our country is progressing in all economic
  fields.
• We have lagged behind in infrastructure,
  irrigation power etc. i.e. such sectors which
  were under control / monopoly of Govt. We could
  not grow to full potential in such sectors.
• These infrastructure sectors require huge
  investment with larger gestation period. Hence
  special emphasis has to be given to these
  section.
• It is unfortunate that instead of focusing
  development of such core areas the govt. want to
  hand over our established retail trade to
  foreigners.
• It is surprising that suddenly govt. feels that
  our traders are incompetent to serve the people
  or handle retail shops OR in disguise of Foreign
  Direct Investment our retail trade is being sold
  to foreigners.

Presented By Mr. B.C.Bhartia,Nagpur.
13
WHAT WAS THE CRITERIA FOR FDI

• Some time in 1991-92, the then Finance Minister
  and present Prime Minister Dr. Manmohan Singhji
  referred to certain criteria for allowing
  Foreign Direct Investment. These were
• Establishment of basic industries requiring huge
  capital and advanced sophisticated technology.
• Infrastructure projects like electricity
  generation road building etc.
• Projects which would generate employment

Presented By Mr. B.C.Bhartia,Nagpur.
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WILL THIS HAPPEN WITH FDI IN RETAIL TRADE

• Throughout the world it is known fact that huge
  investment is not required to open a retail shop.
• Investment is required to build infrastructure
  for shop, sophisticated technology is not
  required in retail trade.
• Small Retail shops provide more employment then
  large chain of Retail stores.
• There is no gestation period. Hence business
  starts from day one.
• Instead of developing under developed areas these
  stores capture prime commercial property in
  cities.

Presented By Mr. B.C.Bhartia,Nagpur.
15
WHAT DO FOREIGN / MULTINATIONAL COMPANIES DO

• In 60s Big foreign houses entered in retail trade
  in other parts of world.
• This is against our culture of One family One
  shop.
• These big companies, in order to crush
  competitors sell goods cheap. Later on
  effective prices of goods are increased.
• These companies buy material from International
  market. Hence local producers are put to loss
• These companies buy in bulk quantities directly
  from manufacturers. The intermediaries loose
  business.
• After conquering the markets of Europe and
  America, these companies have now entered Asian
  markets.
• After establishing their footings in Thailand,
  Indonesia, China, Japan, Philippines, etc in
  Asia, these companies are now targeting India.

Presented By Mr. B.C.Bhartia,Nagpur.
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EMPLOYMENT GENERATION UNDER EXISTING SYSTEM

• FARM LABOURS
• HAMALS
• DALALS
• BROKERS
• TRANSPORTERS
• TEA SHOP OWNERS
• HOTELS
• DHABAS
• SHOP KEEPERS

AFTER M.N.C. TAKE OVER

• ALL WORKS IN FARM BY MACHINE UNDER CORPORATE
  FARMING
• AUTOMATIC TRANSFER AND PACKING BY MACHINES.
• SALE TO CUSTOMERS THROUGH CHAIN OF DEPARTMENTAL
  STORES.
• LARGE NUMBER OF SELF EMPLOYED TO BECOME
  UNEMPLOYED.

Presented By Mr. B.C.Bhartia,Nagpur.
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WHAT WILL HAPPEN TO RETAIL TRADE

• These companies open chain of shops. With a shop
  in each area the retail small shopkeepers will be
  put to heavy loss
• Slowly the local shops will start closing down.
• These shops will capture the trade.
• In countries where they have established their
  market share is
• Name of Country of Market Share
• America 80
• England 80
• Western Europe 70
• Brazil 40
• Thailand 40
• Korea 35
• China 20
• Malaysia 20
• India 3
• Remember example of BATA in shoe business.
• Imagine Roadside DHABAs after RELIANCE FOOD
  CHAIN Starts working.
• Cold drink business in India.

Presented By Mr. B.C.Bhartia,Nagpur.
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WHAT WILL HAPPEN TO LOCAL RETAIL TRADE

• No of Retail outlets Between 1981-99 in United
  Kingdom came down from 56862 to 25800.
• Between 1970-80 in Europe about 4 lakhs Retail
  shops were closed.
• Competition shall be limited to Big Retail Houses
• In the year 2000 Five Big Fast food companies
  captured following percent market share
• Country Share
• Norway 99
• Swezerland 88
• Sweden 94
• UK 64
• Portugal 57

Presented By Mr. B.C.Bhartia,Nagpur.
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WHAT HAPPENED IN THAILAND

• In price war traditional shop keepers are facing
  problem of survival. Many small shop keepers
  have closed down their shops.
• Big companies have seen growth of 40
• There was adverse impact on 60000 small
  shopkeepers.
• A small shopkeeper fired rocket in Big shop
  committed suicide," frustration.
• The Prime Minister of Thailand agreed that there
  was adverse impact on retail trade.
• The Govt. which had opened its door for FDI in
  retail trade with big bang had to provide
  financial assistance to retail traders by
  establishing a special fund.

Presented By Mr. B.C.Bhartia,Nagpur.
20
WHAT HAPPENED IN CHINA

• There is a race to capture more more space for
  retail trade.
• There is allegation of flouting the norms on
  these stores.
• There is anger against these companies amongst
  general public.
• Media is also reporting how traditional shops
  have been thrown out.
• The suppliers and manufactures are also facing
  problem. These are closing down.

Presented By Mr. B.C.Bhartia,Nagpur.
21
WHAT HAPPENED IN OTHER ASIAN COUNTRIES

• Other countries are also unhappy. Many countries
  have started taking precautions.
• Indonesia and Malaysia have established zones
  within which these foreigners can do trade.
• In Japan Big companies have to discuss with small
  traders. There is Zoning system also. Hence
  these companies have to establish their shops
  outside city limits.
• There is wide discontent amongst shopkeepers
  people in the countries to which these store
  belong.
• The city counselor of California Chicago have
  refused to allow opening of new shops to WALMART.
• These shops are required to take permission in
  countries like France, Germany and America.

Presented By Mr. B.C.Bhartia,Nagpur.
22
NOW ITS TURN OF INDIA

• The tough stand taken till recently by Central
  Govt., Foreign Retail Traders could not enter
  India.
• It is unfortunate that Central Cabinet has given
  approval to FDI in Retail Trade.
• Shift of Major retail trade to these big
  companies will render small traders their
  employees unemployed.
• Many companies with the help of contract farming
  will sell goods produced in farms directly from
  their chain of stores.
• After establishing control over purchases sale
  these companies will start dictating.
• These companies will keep only graduates and
  above in their employment. There will be no
  scope for employment to under graduate and
  others.
• In the event of non receipt of payment of
  supplies, it becomes impossible to reach owners.

Presented By Mr. B.C.Bhartia,Nagpur.
23
M.N.C. REGIME
CONTRACT FARMING
COLLECTION OF AGRICALTURE PRODUCTS
TO OWN FACTORY
TO CUSTOMER
TO OWN DEPT. STORE
Presented By Mr. B.C.Bhartia,Nagpur.
24
REQUEST STOP FDI IN RETAIL TRADE

• If Domestic Retail Trade is allowed by Big MNCs
  etc., there will be Large Scale Unemployment.
• A new class of unemployed called Unemployed
  Traders will join the existing force of
  unemployed persons.
• These companies will sell internationally
  procured products. Domestic Industry will
  suffer.
• Everybody knows how Big Fish eats away small
  fishes.
• Keeping the experience of other countries in
  mind, Govt. should not take any such decision for
  which the whole country and coming generation
  will have to suffer.

Presented By Mr. B.C.Bhartia,Nagpur.
25
SELF EMPLOYMENT IN INDIA

• India has huge force of unemployed persons.
• Govt. has failed to generate need based
  employment..
• Majority of people in India are self employed.
• The Major area of self employment is Agriculture
  and Retail Trade .
• The farmers problems were not addressed timely.
  They are committing suicide.
• WHAT is the future of Indian Traders in India?
• WILL next generation pardon us?

Presented By Mr. B.C.Bhartia,Nagpur.
26
WHAT SHOULD GOVT. DO

• Govt. should identify the weakness of present
  retail trade.
• Govt. should specify the areas where customers
  are not being served properly.
• Govt. should specify what it expects from retail
  trade that is not being met presently.
• Govt. should publicise the sector / persons who
  have demanded FDI in Retail Trade.
• Govt. should come out with white paper on FDI in
  Retail Trade specifying the picture after 25
  years and 50 years.

Presented By Mr. B.C.Bhartia,Nagpur.
27

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Presented By Mr. B.C.Bhartia,Nagpur.
28
INDIA MY COUNTRY

• DONT SEE INDIA AS POPULATION OF ONE HUNDRED
  CRORE
• MOUTHS TO FEED.
• SEE IT AS A MARKET OF ONE HUNDRED CRORE CONSUMERS
  WITH
• TWO HUNDRED CRORE EYES TO WATCH YOUR PRODUCTS AND
  
• TWO HUINDRED CRORES HANDS TO BUY YOUR PRODUCTS.
• WORLDS LARGEST EMERGING RETAIL MARKET WHO WILL
  CONQUOR IT WE OR THEY?
• DO NOT MAKE MY GOVEREMENT AS,
• GOVEREMENT BY MNC,
• GOVEREMENT OF MNC AND
• GOVEREMENT FOR MNCS

Presented By Mr. B.C.Bhartia,Nagpur.
29
THANK YOU
B.C.BHARTIA