New Delhi, July 15 (Inditop.com) Questioning the government policy that permits foreign firms to set up single-brand retail stores, a parliamentary panel says the norms are being flouted especially in malls, adversely affecting small shopkeepers.
The panel, whose summary of recommendations were made available in the Rajya Sabha, the upper house, Wednesday also said that foreign equity in cash-and-carry wholesale trade was like backdoor entry into multi-brand retailing.
“Corporate retailers practise product bundling, whereby products of a single or different brands are sold as combinations and bargains in the malls,” said the Parliamentary Standing Committee on Commerce.
“The committee are also of the view that allowing cash and carry wholesale in India is nothing but allowing backdoor entry of foreign companies into retailing,” said the committee in its statement.
It said the idea behind allowing foreign firms into wholesale trade industry was to ensure that they sold their merchandise only to businesses. But in reality, they were also selling goods for personal consumptions.
It has, accordingly, made the following recommendations:
-Blanket ban on large domestic and foreign retailers in grocery, fruits and vegetables
-No further licences for cash and carry operations
-Place restrictions on organised retailers from opening malls for selling consumer products
-Reservations on the lines of small-scale industries to be provided for small retailers
-Bring policy to re-employ people rendered jobless due to opening of mall
-Credit at lower interest rates to small retailers by state-run banks
-Introduce legislation to protect small, medium retailers
-Prevent diversion of agricultural land for building malls
The committee said if the government persists with its current policy on retail trade, big retailers would attempt to wipe out smaller players by pricing their products lower.
“After wiping out the competition from local retailers, they would be in a monopolistic position and would be able to dictate the retail prices,” the standing committee report said.
The committee also predicted farmers would be hit if the government did not curb big domestic and foreign retail giants from entering food retail.
“Big corporates would initially pay attractive prices to the farmers, and cause gradual extinction of regulated market yards,” it said.
“Then on the strength of their monopolistic position, farmers would be forced to sell their produce at rock bottom prices.”
