Date:27/05/2008 URL: http://www.thehindu.com/2008/05/27/stories/2008052755581600.htm

Business

Organised retailing benefits farmers — study

Special Correspondent

There is no evidence of a decline in overall employment in the unorganised sector

No real threat to neighbourhood ‘kirana’ stores from modern retail chains
The study does not deal with the impact of FDI on small retailers

NEW DELHI: The growth of organised retail in India is benefiting low-income consumers and farmers, says a study conducted by the Indian Council for Research on International Economic Relations (ICRIER). It also says that there is “no evidence of a decline in overall employment in the unorganised sector as a result of the entry of organised retailers.”

The study titled “Impact of big retail on neighbourhood stores,” which was submitted to the Department of Industrial Policy and Promotion here, says that the farmers are benefiting significantly from direct sales to organised retailers. “Profit realisation for farmers selling directly to organised retailers is about 60 per cent higher than that received from selling in the mandi,” it adds.

Pointing out that the consumers are also at an advantage due to opening of big retail stores, the study further says: “While all income groups saved through the entry of the organised retail purchases, lower income consumers saved more.”

It also says that there is no real threat to neighbourhood ‘kirana’ stores from modern retail chains. However, it points out that initially, mom-and-pop stores, in the vicinity of big malls, saw drop in their sales and profit, but the impact would disappear in the long run.

The ICRIER report says the unorganised retail business is likely to grow at 10 per cent annually from $309 billion in 2006-07 to $496 billion in 2011-12.The findings of the study are based on survey of 2,020 unorganised small retailers across ten major cities, 1,318 consumers shopping from both organised and organised retail outlets, 100 intermediaries and 197 farmers. The study, however, does not deal with the impact of foreign direct investment (FDI) on small retailers. The impact of FDI on unorganised retail is being assessed by the NCAER.

PTI reports

Traders criticise report

The Confederation of All India Traders (CAIT) on Monday lambasted the ICRIER report. Criticising the report for being ‘biased’ and not reflecting the ‘ground realities of Indian trade,’ CAIT said “the alarming rise of corporate retail will be at the cost of millions of people employed in the unorganised retail sector.”