Parliament Standing Committee on Commerce invites suggestions of public on Foreign and Domestic investment in Retail Sector.
The department related parliamentary standing committee on commerce, headed by Dr. Murli Manohar Joshi, M.P., is examining the subject of Foreign and Domestic Investment in Retail Sector.
The committee has already heard some oral evidence and has also undertaken on the spot study visits to some places. The Committee would also like to receive inputs from a wider cross section of stakeholders and the public at large.
Please do submit your views and suggestions to the Committee. You may send your written memoranda (either in English or Hindi) on the above subject to :
Shri Surinder Kumar Watts
Director
Rajya Sabha Secretariat
240, Second Floor
Parliament House Annexe
New Delhi-110001
Tel: 011-23034240
Fax: 011-23013158
You can also email at watts@sansad.nic.in
Those desirous of being heard in person may indicate their willingness in their written suggestions / views.
Note: The last date for submission is 12 July 2008.
( A reference draft is given below. You are welcome to use it for drafting your memorandum )
In Solidarity !
Dharmendra Kumar
Director
India FDI Watch
M-9871179084
Email: dkfordignity@yahoo.co.uk
dkfordignity@gmail.com
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Memorandum to the Standing Committee on Commerce on Foreign and domestic investment in retail sector
To,
Shri Surinder Kumar Watts
Director
Rajya Sabha Secretariat
240, Second Floor
Parliament House Annexe
New Delhi-110001
Tel: 011-23034240
Fax: 011-23013158
Email: watts@sansad.nic.in
Sir,
India is a land of retail democracy- hundreds of thousands of weekly haats and bazaars are located across the length and breadth of our country by people’s own self-organizational capacities.
Our streets are bazaars / open markets - lively, vibrant, safe and the source of livelihood for millions.
In a country with large numbers of people, and high levels of poverty, the existing model of retail democracy is the most appropriate in terms of economic viability and ecological sustainability. The huge hype of the entry of corporate retail into India is infact nothing but a HIJACK of our vibrant, well organized, multi faceted, quality conscious, consumer friendly, Retail Service Economy.
Corporate retail will not create two million jobs — it will destroy 38 million livelihoods – the backbone of Indian unorganized retail economy.
People involved in running small shops, redis and street markets. The growth being projected as a new contribution to the economy hides the destruction of the contribution of the 40 million people involved in small retail to the Indian economy. Indian trade is highly organized and has existed for centuries on the basis of low cost and high efficiency. India needs the self organized skills of our traders, shopkeeper, hawkers and vendors both to provide employment to millions and affordable friendly community service for basic needs to society.
Our retail democracy is characterized by :
1. High levels of livelihoods in retail with nearly 40 million employed which accounts for 8% of the employment and 4% of the entire population.
2. High levels of self organisation.
3. Low capital input
4. High levels of decentralization
India has the highest shop density in the world, with 11 outlets per 1000 people. This number is very high compared to international average. It is the high level of decentralization in Indian market that keeps all these businesses running.
The existing decentralized retail environment in India, is the model for the future democratic, decentralized markets of the world.
Certainly not the so called “Undeveloped Retail”, requiring massive inputs of centralized, global, whimsical, unregulated, injection of speculative capital and logistics operations, governed by investor board rooms.
Unfortunately, there are people who are favouring the model that is increasingly being rejected by the developed countries and large sections of civil society in developed countries, who do not want to be force fed by a handful of consolidated retail chains.
The entry of the giant corporate retail in India’s food market will have direct impact on India’s 650 million farmers and 40 million people employed in retail. If we take examples of other countries, we can see that nowhere ( YES NOWHERE in the developed world, even where sophisticated Independent Market Regulatory Policies and Anti Monopoly regimes, with legal teeth and crippling penalty imposing powers, are in place ! ) have these corporations ever thought about the fragile connections between the People, Society and the Ecology.
Entry of Mega Corporations in Indian food market, will have disastrous political, social, economic and ecological outcomes in time to come, going much beyond the existing stakeholders.
IMPACTS OF CORPORATE ENTRY INTO RETAIL :
SOCIO – ECONOMIC IMPACT :
Livelihood of millions of small and big shopkeepers will be uprooted to set up the chain of corporation owned retail.
After farming, retailing is India’s major occupation. Census 2001 provides us the most authentic data on people involved in retail. According to it, there were 269 lakh `main’ and 24 lakh marginal workers in wholesale and retail trade. That is, nearly three crore people depend on trade, 1.1 crore in the urban and 1.9 crore in the rural areas. Of the total, nearly 1.7 crore are not even matriculates. Thus, the livelihood of more than 30 million is involved and if we count the dependents, in the form of children and others, at least 120 million will be impacted by the retail revolution created by the large corporations. The growth of corporate retail will take place by destroying the self-organized small retail in India.
In past researches have shown us that a growth in unemployment leads to a series of social problems, like rise in poverty, alcoholism, domestic violence, indebtedness, suicides, crime and have major implications by even making the political situation unstable. If we are following the American model of Walmart where the store employee gets a salary which is below the poverty line and the top management gets millions of dollars every year. We are following a trend that increases the divide between rich and the poor and history has shown us that these divide have always led to social unrest and political turmoil of a nation.
In the long run the independence of the farmer will be lost
Reliance and Walmart are presenting themselves as friends and liberators of farmers and they refer to small traders as middleman, as if they are not giant middleman. Atleast in the case of small traders, farmers have a choice in terms of whom to sell. The APMC Acts also ensures that farmers would get a fair price and there would be no single buyer. In contrast, Reliance and Walmart are monopolistic (a situation when there is one buyer and too many sellers) buyers who in due course of time will drive down procurement prices of agricultural and manufactured products.
They claim that they are paying more to the farmers, but the truth is that they are at present procuring from the existing mandis all across the nation, and not straight from the farmers, so there is no question of paying better returns to the farmers.
We have seen the dismantling of mandis in last couple of years in various parts of the country. The primary force behind this was the corporate entry into the supply chain management of food. It is true that this year they have paid better prices to the farmers than the mandis, what is threatening is the reduction in the number of options the farmer is left with to sell his/her crop. Similarly for the manufactured goods, the prices paid by the retails giants might be more competitive than others, but after other retails are wiped out, how many options will the producer have to sell his/her products. Farmers will be bound to produce as per the will of these corporations and have to sell at cheaper prices as decided by them. The experience of farmers of west has been the like this. If we also keep moving in the same fashion and there is no doubt that our farmers will also have to face such situation.
Threat to the existing industries :
Moreover another threat that we will be facing is the opening of a giant pipeline of cheaply sourced goods from China, Thailand, ASEAN, etc., leading to livelihood losses on a massive scale in India. This will be very harmful for our manufacturing sector and specifically our small scale industries. Our manufacturing sector is not as developed as these countries and competing with them at this time means wiping out our manufacturing industries.
ENVIRONMENTAL AND HEALTH IMPACT :
Climate change :
Climate change due to air pollution is already becoming a threat to human life. Temperatures are rising, sea level is rising and glaciers are melting. The imperative in the contaxt of climate change is to prevent increase of use of fossil fuel. Our hawker, redi wala and kirana store is the solution to climate change.The Reliance , Bharti- Walmart model will increase fossil fuel use and carbon emissions. Further destabilizing the climate the super market Lorries will consume huge amount of fuel and lead to enormous pollution. Even if we go by conservative estimates the super market Lorries in India will generate more than 7 million tonnes of carbon dioxide per year, adding more problems to the already fragile environment of the country. When petroleum is becoming more and scarcer, the Lorries of these supermarkets will consume more than 1 billion litre of petroleum per year.
For refrigeration of the vegetables and fruits, and for air-conditioning the retail outlets atleast 20,000 megawatt of additional electricity will be needed. We need to burn millions of tonnes of coal everyday to get this energy; the carbon-di-oxide released from burning this coal will substantially affect the climate patterns of the country. We are already in a stage where the present levels of pollution, and carbon-di-oxide emissions is going to wipe out the human existence out of world in a few years, at this point creating any model that increases carbon-di-oxide in the environment will be disastrous to all of us, even the propagators of this model.
Excessive Pesticides and Preservative in our food : The giant retail chains have their own standards of buying farm produce impacting on agricultural practices of independent farmers. Without using excessive pesticides it is very difficult for a farmer to produce fruits and vegetable which fits into the standards, so they are forced to use excessive insecticides and pesticides. Once these farm produce come to the retail giants, they sell it throughout the year, by preserving them in cold storage, but in the process a lot of preservatives are also added to the food. So at the end when a consumer gets a “preserved†vegetable from these giant stores, it is full of toxic material harmful for consumption.
Packaging of food creates a huge amount of unnecessary waste in the already polluted cities, woefully lacking, immense investments in waste recycling and disposal of food packagings.
At a time when every city and City Municipal Council, in the country is struggling to solve the problem of solid waste and refuse from urban environments, increase in the packaging waste, due to the mall culture will add to their woes.
Will these corporates and investment barons carry the financial and health burden of this packaging waste recycling and food wastage ?
The existing land fills are getting filled and then more land of the poor farmers will be acquired to make landfills for Reliance’s and Walmart’s packaging waste.
Sir, Corporate Retail giants like Walmart, Carrefour, Reliance and Tesco have become agents of destruction of skilled and semi skilled employment, community sharing practices, and respect for the local environment.
These mega retail brands have become known as Big Brands, in developed economies for all the wrong reasons, leaving behind, priced out Farmers forced to leave farming, and consumers identified by Shopper ID and Shopping Points !!
Across the world, movements are going on to create local farmers markets and street markets to resist the monoculture and monopolies of supermarkets. But alas, they come too late in the developed world, where only a small minority of overall population, constitutes the farming community and merchants.
Farmers in developed countries have been priced out of sustainable farming by food retail companies, into social security nets of developed countries.
Not so in India, which lacks even a semblance of legal infrastructure, citizen livelihood security, unemployment benefits and social security investments by federal or state governments !!
India has the diversity and the decentralization that large sections of increasingly restive civil society of the developed countries are seeking.
Let us not allow the destruction of our rich and robust small scale retail at this important and decisive phase of our collective retail democracy.
Let us not vote for monopolies, trade blocs, angel investors, venture funds, hedge fund investors, speculators, and invisible corporate boardroom investors, by playing illogically and against our collective self interest, with the diversity of our existing retail infrastructure.
Let us protect our diversified, decentralized retail democracy. Save our livelihoods, save our farmers, save our traders, save our communities, save our citizens. Save India.
Charter of Demands :
A Enact strict law to ban all corporations in retail and agriculture
B Cancel all Wholesale Cash-N-Carry permission granted to foreign corporations & immediately stop the backdoor entry of Wal-Mart
C Formulate a National Policy on Regulating Retail Trade and Small Manufacturing Industries
D Implement the National Policy on Urban Street Vendors in all states and municipalities with central financial support.
E Institute Independent Special Task Force comprising representatives of stakeholders to Study on the Socio-Economic-Environmental and Cultural Impact of Corporate Retail
F Enact stiff binding laws against predatory pricing, cartelization, price fixation, speculation, mergers and anti-competitive conduct of corporations
G Repeal the APMC Model Act
H Decriminalize street vending by amendment to the Indian Penal Code, Police Act, and all relevant State and Municipal acts.
I Protect natural markets
Provide social security for hawkers, including pension, maternity, and health benefits
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