Mangalore, December 6: The ruling UPA government comfortably defeated the opposition-sponsored motion against Foreign Direct Investment (FDI) in retail in Lok Sabha on Wednesday. Concerns over its implementation in the country continue to be raised.
Even as the nation is discussing the pros and cons of Foreign Direct Investment (FDI) in retail, the central government repeated its claim that states which do not want to implement the system are free not to do so. Karnataka being ruled by the BJP will not allow FDI in the state, at least as long as it stays in power but things could change after the Assembly polls.
The entry of FDI in Mangalore is also currently out of question as according to the requirements laid down by the central government, entry of FDI has been restricted to cities having a population of 10,00,000 or more. Mangalore, according to the 2011 census, has a population of 4,84,785.
However, concerns are being raised in the coastal city too. This is what various stakeholders have to say:
M G Hegde, JDS leader
The whole political ruckus created by the BJP is just a farce. Both Congress and the BJP agree in principal internally that FDI must be introduced. The world is getting small these days. We cannot be reacting in a sensitive manner to issues like FDI. However, it must be introduced in such a way that our local traders do not suffer. That said, if states do not want to introduce FDI, they have the choice not to do so. For FDI to be introduced, the cities must have a population of 10,00,000 or more. Most of these cities are in states ruled by the opposition parties so it is not going to make that big a difference.
N Yogish Bhat, Deputy Speaker, Karnataka Legislative Assembly
Investment in the field of infrastructure or power generation is welcome but not in the retail sector. Irrespective of whether it will come to Mangalore or not, the policy itself is one which hampers the growth of the citizens of the country because there are so many people involved in retail trade.
Muneer Katipalla, CPI (M) leader
When LPG (Liberalisation, Privatisation, Globalisation) policy was accepted by the government in 1991, it had said that there is no question of bringing FDI in the country. But today that promise has been broken. Similarly, we have seen governments break several other promises one after the other with regard to economic reforms and hence, although Mangalore remains out of the FDI ambit at present, don't be surprised if rules are amended in two years' time to bring cities with lesser population like Mangalore to also suffer at the hands of foreign companies.
Mohammed Ameen, President, Kanara Chamber of Commerce and Industry (KCCI), Mangalore:
True that the smaller retailers have a challenge up front but I feel it will help in the unorganized retail sector get organized. What the entry of these malls has done is it has opened up options for people. Mangaloreans who would earlier have to resort to bargaining to buy a product in a retail outlet without being sure of its quality, have now got a competitive market where even branded items are being sold at discount sales in several shops. These malls have even generated employment opportunities. And although it may appear that there is a huge crowd flocking to malls, it is also true that most of them just go there to hang out and not really for shopping. So I see scope for smaller retail players to continue existing because they will continue to have their customers coming to them
Dinesh M P, Proprietor, Yempi Family Shop:
“Smaller retailers like us work on the basis of a daily turnover target. Even if we lose ten customers, it concerns us. It's a fast pace life today and people look for convenience. If someone wants to buy clothes at our shop, to have some juice they need to go somewhere else, which is not the case in a mall where there is everything under one roof. There has been an impact to some extent for sure.
Harekal Narendra Nayak, Managing Partner, ‘Ganesh Bazaar' store:
The quality of products sold in the malls is not all that good. Not only has our existing customer base remained intact, we are getting these new customers too. Our 35 year old store is a brand in itself and our service and relationship that we have with our customers, have made sure that we continue to do good business in spite of these malls and one-stop markets coming up. Although I do feel that some other smaller retailers have suffered owing to this trend, I do not see shops like ours, or other shops like Fathima Stores and Jimmy's which also have built that reputation over a period of time, suffering. But a policy like FDI will certainly spell doom for the small retailers as they will lose their livelihood.
Ahmed Sharief, Owner, Fathima Traders
Malls have affected our business to some extent. It has become a fashion now for people to go to malls and do all the shopping. And if FDI makes its way into Mangalore, then certainly the situation will get worse. These corporate giants will then engage in direct supply and the distribution channel has no place in their functioning. Some hypermarkets actually run in loss as they keep lower rates to attract customers but their corporate backing and network is so strong that they can easily sustain that loss for months together. Whereas retailers like us cannot afford to keep that kind of a margin.
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