Allaying fears that opening up foreign direct investment (FDI) in retail will result in State Governments losing control over the trade, Mr Thomas Verghese, CEO, Aditya Birla Retail, said even today retailers need to get 35 licences to set up a supermarket and 43 for hypermarkets.
“They can always control modern retail while issuing the licences. Modern retail has managed to increase its market share to only 7 per cent from 2 per cent in last five years,” he said.
Stating that none of the mom-and-pop or
Mr Verghese made these comments at a CII event held on Monday.
“Even if there are some shutdowns, it would be because the children of kirana shop-owners do not want to continue in business. Probably, the business may not suit their living standards,” he added.
Though foreign investors are allowed to invest 100 per cent in retail backend infrastructure, such as cold chains at farm gates, warehousing and logistics, the response has been poor because none of the overseas companies want to commit unless there was clarity on front-end investment opportunities, he said.
Global retail giants will not open stores across the country once the Bill is passed. In the last 10 years, Metro Cash and Carry has managed to open five stores, while Walmart opened 12 or 13 stores in the last five years.
Mr Satish Jamdar, Managing Director, Blue Star, and Vice-Chairman of CII Maharashtra State Council, said opening up retail would also pave the way for meeting the requirements of the National Food Security Bill.
“About 52 per cent of India's population will be under 29 years and would require eight to 10 million jobs within a decade; not just for engineers and software professions, but also for (Class) 10-12th pass-outs,” he added.