The Hindu Business Line : `Organised retail will benefit employment'

THE development of organised retailing in India will benefit a majority of the population as it will bring about increased employment, efficiency in agriculture and increased exports, a study by CII and PricewaterhouseCoopers (PwC) has said.

According to the study, The Rising Elephant: Benefits of Modern Trade to Indian Economy, the development of organised retail will generate an additional eight million jobs, directly and indirectly.

Commenting on the findings of the study, the PwC Global Retail and Consumer Leader, Mr Jacques-Etienne de T'Serclaes, said: "By 2020 India will have the lead in this sector. The demographics of the country are such that nothing can stop it from becoming the leader."

Allaying fears of FDI in retail creating unemployment by wiping out kirana stores, the study said only those working in one lakh mid-category stores were likely to be displaced in the mid-term as against the workforce working in 12 million retail outlets across the country.

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

Mr T'Serclaes, however, said unless India allowed FDI in retail it would not even be on the radar of potential investors.

The CII National Retailing Committee member, Mr Krish Iyer, said organised retailing in India was expected to touch Rs 1.1 lakh crore by 2010, but for that to happen it would need about Rs 20,000 crore of investment.

The study said development of organised retailing will result in increased efficiency in the agricultural sector and remove intermediaries in the food supply chain.

With the investments in upgrading technology and practices in the entire value chain, including production, packaging, grading, storage and logistics, the current levels of wastage ranging between 24 per cent and 40 per cent are expected to come down, it said.

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

"All the global players source 95 per cent of merchandise locally wherever they are present. Hence the same would be applied to India, and the local industries are bound to benefit,'' Mr N.V. Sivakumar, Retail and Consumer Industry Leader, PwC said.

The study, however, said for the retail sector to develop in India, the Government will 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 invest in supply chain and manpower development.

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