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The interview with Mr Montek Singh Ahluwalia “Foreign investments in retail will help farmers” ( Business Line , April 5) makes readers feel that that there is no competence among Indian retailers and that only Wal-Marts and Metros and Carrefours are capable of providing an efficient supply chain.
The loopholes in the present food and essential commodities' distribution system is the biggest lacuna in the Indian market and the cartelisation by a few agents is due to the failure to arrest the same.
To enhance efficiency in the retail segment, the Government must provide a transparent mechanism that connects the producer and the consumer seamlessly. To rely on FDI to create this connection is tantamount to outsourcing retail efficiency without setting our house in order.
The Government must also monitor effectively the role of financial intermediaries which have no role in the production and consumption of such commodities but control the price through toxic financial steroids (read derivatives).
When we have real Indian retail heroes who can deliver a fitting climax, relying on FDI in retail and allowing unfettered growth of commodity derivatives will only provide an ideal mix for an anti-climax.
S.Vaidhyasubramaniam
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