Most of the politicians who appeared on various TV channels on 24th November - the day that the union cabinet took a decision to allow 51% FDI in mulibrand retail and 100% in single brand retail - said that India had 1.2 crore (12 million) kirana shops. By the next week, the number had moved up to 40 million kirana stores and by the 3rd of December, it had shot up to 50 million kiranas.
If one was to believe this incredible claim that there are 50 million kirana stores, does it mean that there is one kirana shop for every 24 Indians? And if an average kirana shop employs four people, does it mean that 200 million of the 635 million Indians of employable age (31.5% of all employable Indians) are employed by kirana shops? Does any politician actually expect any educated Indian voter to believe this nonesense?
Since West Bengal's Chief Minister and Trinamool Congress party chief Mamta Bannerjee, as well as the lest parties who ruled the state for the last 34 years, are the most vocal critics of FDI, let me take the state of West Bengal as an example.
If there is a kirana shop for every 24 Indians, West Bengal (population 91.348 million) should have 3.81 million kirana shops. Since the state has an estimated consumption of Rs.553 billion in food, grocery & FMCG products (products sold at kirana stores), of which Rs.542 billion (98%) is sold by the unorganized sector , these 3.81 million kirana shops should be doing an average business of only Rs.142,257 per year or just Rs.390 per day. Obviously, this does not make any sense.
It is much more likely that there are only 180,000 kirana stores in West Bengal (1 shop for every 507 persons ), and the average business per kirana shop is Rs.3.011 million per year or Rs.8250 per day. This is not hard to believe, considering that West Bengal had 217,595 registered dealers as per the 2010-11 Administrative Report of the West Bengal Directorate of Commercial Taxes. If there are as many as 3.81 million kirana shops, then both the Left parties, as well as Trinamool Congress, need to answer why there are only 217,595 registered dealers in the state.
So how many kirana shop owners will get out of business if Walmart, Carrefour, Tesco and other foreign retailers are allowed to set up hypermarkets in West Bengal? Since Kolkata is the only city in West Bengal with a population of more than one million, "foreign " hypermarkets can only be set up in Kolkata. By any measure, Greater Kolkata can only have a maximum of 20 more hypermarkets.
These 20 hypermarkets cannot displace more than 1400 kirana stores (@ 70 kirana stores per hypermarket ). There will be absolutely no change in employment as about 7800 people will get employed by the "foreign " hypermarkets. Certainly, the 1400 kirana shops are not employing more than 7800 people. So, no one will lose jobs, period.
On the contrary, the 7800 employees of the "foreign " hypermarkets will have benefits such as PF, ESI and insurance. They will have far better training in personality development and selling skills, thus making them far more marketable. Does the kirana provide them all of this?
So is Mamta Bannerjee opposing FDI only for the purpose of saving the livelihoood of 1400 small traders (many of them non-Bengali ), at the cost of a better life for 7,800 Bengalis? Is this what the hoo haa is all about? Is this why the Indian parliament has got disrupted for nine days?
West Bengal's retail sector is estimated to have annual sales of Rs.1754 billion (at an average per capita retail expenditure of Rs.1600 per month). The state's sales tax (VAT) revenues in 2010-11 were only about Rs.74 billion (excluding fuel & LPG, aluminium , cement, chemicals, engineering goods, fertilizer, iron & steel and other items not sold through retail trade), or only 4.4% of the pre-VAT retail sales of Rs.1680 billion, whereas the most common VAT rate was 12.5%.
If one was to believe this incredible claim that there are 50 million kirana stores, does it mean that there is one kirana shop for every 24 Indians? And if an average kirana shop employs four people, does it mean that 200 million of the 635 million Indians of employable age (31.5% of all employable Indians) are employed by kirana shops? Does any politician actually expect any educated Indian voter to believe this nonesense?
Since West Bengal's Chief Minister and Trinamool Congress party chief Mamta Bannerjee, as well as the lest parties who ruled the state for the last 34 years, are the most vocal critics of FDI, let me take the state of West Bengal as an example.
If there is a kirana shop for every 24 Indians, West Bengal (population 91.348 million) should have 3.81 million kirana shops. Since the state has an estimated consumption of Rs.553 billion in food, grocery & FMCG products (products sold at kirana stores), of which Rs.542 billion (98%) is sold by the unorganized sector , these 3.81 million kirana shops should be doing an average business of only Rs.142,257 per year or just Rs.390 per day. Obviously, this does not make any sense.
It is much more likely that there are only 180,000 kirana stores in West Bengal (1 shop for every 507 persons ), and the average business per kirana shop is Rs.3.011 million per year or Rs.8250 per day. This is not hard to believe, considering that West Bengal had 217,595 registered dealers as per the 2010-11 Administrative Report of the West Bengal Directorate of Commercial Taxes. If there are as many as 3.81 million kirana shops, then both the Left parties, as well as Trinamool Congress, need to answer why there are only 217,595 registered dealers in the state.
So how many kirana shop owners will get out of business if Walmart, Carrefour, Tesco and other foreign retailers are allowed to set up hypermarkets in West Bengal? Since Kolkata is the only city in West Bengal with a population of more than one million, "foreign " hypermarkets can only be set up in Kolkata. By any measure, Greater Kolkata can only have a maximum of 20 more hypermarkets.
These 20 hypermarkets cannot displace more than 1400 kirana stores (@ 70 kirana stores per hypermarket ). There will be absolutely no change in employment as about 7800 people will get employed by the "foreign " hypermarkets. Certainly, the 1400 kirana shops are not employing more than 7800 people. So, no one will lose jobs, period.
On the contrary, the 7800 employees of the "foreign " hypermarkets will have benefits such as PF, ESI and insurance. They will have far better training in personality development and selling skills, thus making them far more marketable. Does the kirana provide them all of this?
So is Mamta Bannerjee opposing FDI only for the purpose of saving the livelihoood of 1400 small traders (many of them non-Bengali ), at the cost of a better life for 7,800 Bengalis? Is this what the hoo haa is all about? Is this why the Indian parliament has got disrupted for nine days?
West Bengal's retail sector is estimated to have annual sales of Rs.1754 billion (at an average per capita retail expenditure of Rs.1600 per month). The state's sales tax (VAT) revenues in 2010-11 were only about Rs.74 billion (excluding fuel & LPG, aluminium , cement, chemicals, engineering goods, fertilizer, iron & steel and other items not sold through retail trade), or only 4.4% of the pre-VAT retail sales of Rs.1680 billion, whereas the most common VAT rate was 12.5%.
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