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Our Bureau

"We cannot buy directly from the farmers, but foreign retailers such as Wal-Mart will be allowed to buy from them directly."

Mumbai , Oct. 13

THE Federation of Associations of Maharashtra (FAM) has opposed the expected move by the Government to open up the retail sector to foreign direct investment (FDI). It also criticised the Maharashtra Government order to ban plastic bags and denounced proposed amendments in the Agricultural Produce Marketing (APM) Act at a press meet in Mumbai on Thursday.

Mr Mohan Gurnani, President, FAM, said, "These (allowing FDI in retail and amending the APM Act) will not only affect trade, but also the whole nation. These will lead to large-scale unemployment."

Mr Gurnani added, "The Congress party and the Prime Minister, Dr Manmohan Singh, have been opposing the moves to allow FDI in retail trade for the last five years, but now they have suddenly turned sympathetic to the cause."

According to the proposed amendments, Mr Gurnani said, existing foreign traders would have to operate within the notified area, as they have been doing so far, but they would be free to conduct their operations in any area of their choice. They will, thus, not be subjected to the regulations of the Agricultural Produce Market Committees, FAM said in a statement.

"India is not required to open up retail trade at present," Mr Gurnani said, "Then why is India showing haste in permitting FDI in retail trade?"

"We cannot buy directly from the farmers, but foreign retailers such as Wal-Mart will be allowed to buy from them directly," Mr C.T. Shanghvi, Chairman, FAM, said. "These organisations want to establish their monopolies on retail markets. They adopt predatory pricing to finish off all competition and then go for price rise."

Mr Shanghvi said that in India, where organised retailing constitutes just 2 per cent of the total retailing, 12 million outlets employ over four crore persons. On the contrary, Wal-Mart employs just over 14 lakh employees, though its turnover is in excess of the total turnover of the Indian retail sector.

"The impact of organised retail on countries such as Thailand and the UK has proved to be negative. The Thai Government was forced to create a separate fund to protect the local retailers. In the UK, enquiries have been initiated against some of the large retail chains that have been charged with excessive pricing because of their monopolistic position," Mr Shanghvi said.

"Except for investment in land and building, there is little investment required for conducting retail business. Goods are bought on credit and sales are made on cash basis. Hence, the working capital requirements are nil," a FAM release said.

Plastics `eco-friendly': Mr Vijay Merchant, representative of the plastic manufacturers, said, "Entire retail trading will crumble by banning plastic bags. Plastic packaging is used all over. It contributes just one per cent of the garbage in the city."

Mr Merchant said that the cost of packaging would rise manifold and wastage would go up by 200 per cent. Supply of essential commodities like milk, salt, sugar etc will also be hit."

"It is an eco-friendly material, which keep products safe, secure and hygienic," Mr Merchant said.

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