Organized retailing to help masses: Study

By agencies   |   Friday, 25 November 2005, 08:00 Hrs
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NEW DELHI: A study by PricewaterhouseCoopers and CII has said that organized retailing in India would benefit about 72 percent of the population as it would bring increased employment, efficiency in agriculture and increased exports.

According to the study " The Rising Elephant: Benefits of Modern Trade to Indian Economy" based on various reports envisaged on the levels of investment, an additional eight million jobs would be generated in India through direct and indirect employment through the development of organized retail.

PwC Partner Global Retail and Consumer Leader Jaques-Etienne de T'Serclaes said, "By 2020 India will have the lead in this sector. The demographics of the country is such that nothing can stop it from becoming the leader."

Allaying the fears of FDI in retail creating unemployment by wiping out the local mom and pop stores, the study said only those working in 100,000 mid-category stores were likely to be displaced in the mid-term as against the assumed workforce working in 12 million retailers across the country.

"In the long run, the metamorphosis of this sector will lead to the redeployment of this workforce also," the study said.

T'Serclaes, however, said unless India allows FDI in retail it would not be even in the reckoning of potential investors.

The study said development of organized retailing would result in increased efficiency in the agricultural sector and dis-intermediation in the food supply chain.

It said the high levels of wastages present in the industry now will come down with the investments in upgrading technology and practices in the entire value chain, including production, packaging, grading storage and logistics.

Highlighting the impact of entry of foreign players in retail on sourcing from India, the study said it would result in a significant increase.

"All the global players source 95 percent of merchandise locally wherever they are present. Hence the same would be applied to India, and the local industries are bound to benefit," PwC Principal Consultant (Retail and Consumer Industry) Asitava Sen said.

The study, however, said for the retail sector to develop in India, government would have to consider legislative reforms such as allowing FDI and granting industry status to the sector along with infrastructure development.

It also said the private sector would need to pump investments in supply chain and manpower development.

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