The Hindu Business Line : `FDI in retail will bring fiscal discipline to the sector'

FOREIGN Direct Investment (FDI) in retail would bring about fiscal discipline in the sector and also provide the necessary capital for setting up organised retail store chains, along with associated supply chains, said Mr L Mansingh, Secretary, Department of Consumer Affairs, at a symposium on `Indian Retail Bandwagon-Are You On?' organised jointly by Confederation of Indian Industry and Indian Institute of Foreign Trade (IIFT) here today.

Mr Mansingh said FDI would help the sector overcome both, the lack of experience in organised retailing as well as lack of trained manpower.

Making a case for the growth of organised retailing in the country, Mr Mansingh said that it reduced the cost of intermediation. It would entail setting up integrated supply chains that would minimise wastage, give producers a better price and finally benefit both consumers and producers. He said organised retailing would reduce problems of adulteration, short weight and substandard goods.

In his keynote address, Mr Vikram Bakshi, Managing Director of Connaught Plaza Restaurants (P) Ltd., said retail sector would grow at the rate of 100 per cent in the next five years to clock Rs 70,000 crore.Organised retail was poised for strong growth in India because of its demographics.

He said that quality real estate has become available with the construction of malls. Over the next 12-24 months, more than 300 malls with 40 million sq.ft. of space would come up in all classes of towns. "Organised retailing is set to grow fastest in tier two towns," he said.

Earlier in his address, Mr Prabir Sengupta, Director-General, IIFT, said that as India globalises its economy, the retail boom is inevitable. The top 20 per cent of the country's population earned 40 per cent of the gross national income. "The organised retail sector has to tap the enormous purchasing power of Indians and tap the largely unexplored rural market."

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