Retail – 1: Jaise hain, waise rahenge?

Read the following lines attributed to Mr Nilotpal Basu, CPI(M):

The turnover per employee in Indian retail sector comes to around Rs 78,045 (assuming total employment of 4 crore). In contrast, turnover per employee of Wal-Mart comes to around Rs 75,18,332 (based on data from their website). This is 95 times the present Indian retail figures. The prospects for job creation are really great indeed !

If you didn’t get the sarcasm, Mr Basu is implying that we could lose 95 percent of those 4 crore jobs that exist in gazillion kiranaas around the country today.

What do you say, will organized retail sacrifice jobs for efficiency, and lead to jobless growth? And hence, is it bad for our country?

Mr Basu seems to be singing the tune – “Hum to bhai jaise hain, waise rahenge” (a memorable song from Veer Zaara, memorable only because the lady singer sounds like a ghost of her super past! Anyway). It also reminds me of an historical anecdote wherein our Mughal emperor Jehangir refused a watch gifted by his European visitors because he didn’t see a use for it.

Look at a parallel. Our agriculture sector employs a lot of people, 70% of our workforce apparently, but very inefficiently and pays very low wages to most. So just because a lot of folks at least have some employment due to our inefficient agri economy, shall we just leave it that way?

Short on time right now, but this will be continued later this week or next …

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6 Responses

  1. The retailer in india is street smart, he will also adopt the practices of the bigger guys.. it would be healthy compitetion. Another option for these retailers is to get organized ( look at our auto drivers!!) and fight unitedly and get the same discounts like a bigger guy.

    There is no question absolutely regarding uneconomical,inefficient products/services but due note should be taken to ensure environment is not damaged in this process.

    cheers
    mohan!

  2. I think the commies are really worried – and rightly so. If the biggies come in and are successful (which is most likely), then a lot of good will come in – Bad news for commies in particular and politicians in general. Will the traders /middlemen lobby be able to continue their stranglehold on the ‘trade’ – very unlikely ! Hence all this tamasha. I am waiting for the Bharti Wallmart and Reliance Fresh in Bangalore !!

  3. M O H A N, whether left lets FDI in or not, inefficiencies will go away. FDI will only hasten removal of these inefficiencies (and perhaps “loss” of jobs in unorganized retail sector)

    Namma Nadu Dont bash them too hard though. Commies and Lalus do bring the balancing opinion at times. And these are important because otherwise the vast poor populace may feel left behind and insulted. Commies and Lalus are the reason why our country is relatively stable despite such huge disparities of income. May sound like twisted logic, but I think it is true.

  4. The jokers sitting in power corridors did not allow Cars to be made and imported in india for more than 4 decades! Same case with Scooters, Cooking Gas etc.

    There was one Ambassador, a Bajaj Scooter, and a national bribe-throttled Gas agency.

    You want a Bajaj Scooter? Book two years in advance.
    You want a Telephone Connection? Book 5 years in advance or pay under the table.

    This is the same logic that has made a mess of airports. Single runways on most major airports !!!

    This is what govt. controlled and lack of competition did to all of us.

    We need anyone who can provide better service. If Walmart brings it – thats great.

    When i go out to get a Cooking Gas connection – the last thing on my mind is – whether the gas agency resulted in more jobs or less jobs. The thought on my mind is – will i be able to get the cooking gas today without paying a bribe and standing in a queue for 4 hours – while i get calls from the workplace to report to work immediately.

    Competition is good. See what the Telecom sector competition did!!!
    But idiots never learn lessons.. there is a new amendment to Telecom Laws making VOIP illegal to use in India. What exactly are these bureaucrats upto – they want to retain control – at the cost of suffering millions?

  5. how to enter into retail companies

  6. […] Time to continue the positivity I exhibited in “The Imbalance” and that blurb on “organized retail“. While the front-end of organized retail might attract controversies around job losses, […]

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