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Why Fdi Should Be Allowed

  • Date Submitted: 12/19/2012 05:33 AM
  • Flesch-Kincaid Score: 55.7 
  • Words: 426
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Opening of foreign investment in retailing is good, since the ultimate consumers get better quality products at cheaper products. This is because large scale retailers like wall mart can source products directly from farmers and manufacturers by avoiding wholesalers. IF FDI in retail is allowed this wholesalers and middlemen will be the worst affected. Small time retailers will not be affected because common people have to approach near by shops to meet their daily needs, since they can't afford huge transportation cost to the distant super market. At the same time govt. should take initiate to start a chain of super markets like civil supplies supermarkets in kerala to sell the products at reasonable price. Otherwise giants like wall mart will become monopolist and exploit poor customers.

In my views FDI in retails shouldn't be allowed. I'l take an example to explain, Today I pay Rs.24 for buying potato of which say Rs. 5 go to farmer and rest to wholesalers, retailers and other middlemen as profits but aleast the entire sum of Rs. 24 remain in India only
and thus contribute to India's GDP and economy. If countries GDP grows fiscal deficit reduces, reducing inflation and increasing investments in more govt schemes or betterment of India.
Tomorow when Walmart comes i'l have to shellout Rs.20, farmer will get Rs.7 and wallmart Rs 13 of which atleast Rs.8 will go to US economy enriching their GDP. On top of it, It may happen that they will start procuring potatos from their own country or china
and then entire Rs.20 will go outside India further denting our economy. Correct me if I am wrong as I have only limited understanding of economics.

The only thing that will happen if Wal Mart or any other Multinational player comes to India is that.. Consumers like us who until now used to visit Reliance / Hypercity / Big Bazaars / Heritage / Spencer’s would start moving to the WalMarts etc. The Kirana guy will and cannot be replaced in the current scenario in...


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