Should FDI in retail be scrapped?

Should FDI in retail be scrapped?

Recently the Delhi government banned FDI in multi brand retail and consequently the Rajasthan government also closed doors for FDI in multi brand.. As a matter of fact central government in 2013 raised the FDI limit in multi brand to 51% whereas in single brand retail it is already 100%.

But this step by two state governments raises the million dollar question if FDI should be scrapped or not. Lets find out:-

For the argument
1. FDI in multi brand should be banned because it eliminates the space of small shopkeepers or wholesalers who are a large part of India’s employed population.

2. It will lead to monopoly by large players in the multi brand retail who will first eliminate the small scale shopkeepers and later on exploit the consumers for earning higher profits.

3. Many research have shown that all the countries where FDI in multi brand is not prohibited has witnessed a sharp growth in unemployment.

4. The big companies also exploit the farmers as due to elimination of wholesalers the farmers will have no platform to bargain for the prices of their crops. So they will have to settle with the price that company will provide.

5. FDI might initially benefit the economy but in a long run it will make the economy more prone towards international market fluctuations which are a threat to the economy.

Against the argument
1. FDI in retail should not be scrapped as it gives consumers a lot of options and reasonable prices for essential commodities.

2. FDI in single brand has generated employment in the country. So this way we can conclude that multi brand will also generate employment for a large number of people.

3. FDI in retail will lead to greater forex reserve of our country which is very much required at the moment.

4. With a lot of players in the market, the policies and price determination of big companies to move ahead in the competition is healthy for the consumers.

5. FDI in retail will lead to infrastructure development and urbanization of rural areas in the long run as all the companies will try to open their stores across the nation.

Conclusion
FDI in retail should be welcomed by the government as it is the need of the hour for our faltering economy. But the authorities need to make sure that the companies should be allowed to open their stores in areas where the middlemen and retailers are affected to the least. And the rules should be such as to avoid any sort of malpractice by the companies to exploit customers or farmers.