retail trading confederation 24 july 2010

8/8/2019 Retail Trading Confederation 24 July 2010

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CONFEDERATION OF ALL INDIA TRADERSVyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.

(An apex body of All Trade Associations & Federations)

Date: 24/07/2010

To,

The Secretary,Dept. of Industrial Policy and Promotion,

Ministry of Commerce,Govt. of India,

New Delhi

Sub :- Views and suggestion as invited on section-7 of papers entitle issues in resolution

concern relative to FDR in Multi-Brand Retailers.

Ref :- Discussion papers of foreign direct investment in multi-brand retail trading issued by

Dept. of Industrial Policy and Promotion, Ministry of Commerce.

Dear Sir,

At the outset we would like to thank you for inviting views and suggestions on the above

subject. Confederation of All India Traders through its research wing has been continuouslyinvolved in studying the nature of Indian retail trade, the kind of person, involved and the

nature of transactions that takes place at lowest level with consumers. It is accepted fact that at

present there are about 33 millions kirana shops. The owner of these shops are said to be inunorganized sector, which we call as self organized, to the extent of 90%. These retail outlet

owners are spread over in every nook and corner of the country. FDI in multi-branch retail trade

is expected to hit these traders the most. The majority of these traders are unaware of happeningat govt. level. Majority of them are not conversant with English (foreign) languages. They

know the national language Hindi and their respective regional languages. Confederation of All

India Traders demands that the discussion papers should be released in Hindi as well as inregional languages to enable retail traders at large to give their views. Vide publicity ofissue of discussion papers and calling of objections should be made. Thus the due date of calling

objections / suggestions or views should be extended till 60 days from the date of release of this

discussion papers in Hindi and regional language.

It is necessary to mention here that Govt. had set up a Jt. Parliamentary committee to

study FDI in retail trade. The Honble parliamentary committee of more than 40 MPsrepresenting different parties took more than 2 years to study the subject and submit its report.

The committee had discussions with cross section of societies representing all stake holders.

Report has been duly tabled in both houses of the parliament. It is unfortunate that the

discussion papers refers to ICRIER report which was submitted in May-2008 based on limitedsample study but the discussion paper has totally failed to refer to the report of Joint

Parliamentary Standing Committee which was tabled in both houses on June 8 th 2009. The

discussion paper has also totally failed to take into consideration peoples voice raised through




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Joint Parliamentary Committee. Thus Confederation of All India Traders demands that the

fresh discussion paper based of recommendations of Dr. Murli Manohar Joshi headed

Joint Parliamentary Committee report should be published.

The existing retail trade has proved its might over the years even during the period of

ultimate scarcity. Whatever shortcoming are being talked about are only due to lack of vision,

understanding and providing facilities such as power, finance etc. Indian retailers, which are all

in hands of govt. If the visionary govt. plans its internal trade properly makes available qualityand quantity of power and adequate need based finance at International rate available to

traditional retailers they can deliver better results then what govt. dreams FDI can do. Beforegovt. takes any decision on FDI in retail trade Confederation of All India Traders demands

that the Central Govt. should announce a national trade policy that can help protect small

and marginal retail traders. Such national trade policy should be evolved after due

consultation with all stake holders. The govt. should work for the benefit and upliftment of itspeople and domestic trade.

1. The policy laid down in the Discussion Paper is in utter disregard of the unanimous report ofthe Parliamentary Standing Committee of Commerce headed by Dr. Murli Manohar Joshi which

recommended a `blanket ban on the entry of MNCc and domestic Corporate Houses into

retail trade of India. It is most surprising that the Govt. did not think it proper to differ with the

report of the Parliamentary Committee by analyzing its recommendations. Therefore, theDiscussion Paper reflects arbitrary and illogical conclusions.

2. FDI in retail will render crores of people jobless and will have prejudicial adverse affect onRetail Trade. After Agriculture, retail sector is the largest employment generating sector in the

Country contributing about 10% of the GDP with more than 5 crore small shopkeepers and about4 crore small & medium enterprises and self employed persons. About 30 crore people are

directly or indirectly dependent upon retail sector for their livelihood. About 3% of the retail

trade is in the organized sector and balance 97% is unorganized. The countrys retail trade isexpanding 10% to 12% every year with an addition of about 25 million middle class consumers.

3. It is apprehended that due to lack of level playing field and with potential resources theMNCs and domestic Corporate Houses can throw domestic retailers out of business. Once a

monopolistic situation is created it could hit the consumers due to lack of competition. Retail

activities in various forms such as Door to Door selling, Street Carts and Market Stalls, acts as

last resort for the unemployed, because of lack of jobs in manufacturing and agriculture sector.

4. In post independence era, no governmental efforts were made to develop the existing retail

trade in to structured organized retailing. Hence, instead of allowing Multi Brand Retailing inretail trade, the Govt. should evolve a policy to upgrade the existing retailers by providing them



requisite assistance in terms of easy loans from banks and financial institutions on primary sectorlanding rate and to evolve a scheme to upgrade and modernize the existing retail trade.

5. The one of the reasons that has been stated in the discussion paper is, domination of valuechain by the intermediaries and realization of only 1/3rd of the total price paid by the consumers

to the farmers. It is necessary to appreciate that present intermediaries are, the bullock cart men


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in villages, transporter, Agent and small trader whereas in case of the global players theintermediaries are the Brand Ambassadors who are paid crores of rupees, high consumption of

power, high cost of warehousing and transportation. Indian intermediaries have not only

contributed to the economy but also to the substantial social development of the Country.Further, the small retailers are charged for keeping 2/3rd margin with them which is factually

wrong. Since year 2005 big corporate houses are also engaged in retail operations and their

prices are either higher or at par with the market prices. It establishes that the 2/3 rd margin are

kept by these big retailers and in no way they are going to sell the prices at lower rates.Therefore, allegations against retailers with keeping huge margin, is nothing but to malign the

trading community and finding ways to allow MNCs to enter into retail sector.

6. It is said that MBR will prove to be a boon to farmers which is far from truth. The global

players will initially buy the products directly from agriculturists at attractive prices through their

procurement centers on contract basis or otherwise. Once the agricultural mandis and regulatedmarket yards are closed and farmers loose their contacts, they will radically reduce the

procurement prices. As they possess tremendous bargaining power, farmers will be forced to sell

their produce at cut throat prices and even will be forced to part with their agricultural landwhich will render their status as merely employees of retail houses.

7. Due to lack of level playing field, our small retail stores, mid sized departmental and chain

shops would be severely hit, depriving millions of people of their jobs and livelihood. Suchuprooted section shall face much hardship as the Govt. has no plans for their rehabilitation.

While the Government has provided many concessions and implemented assistance schemes for

the protection and growth of corporate sector, no concrete steps have been taken to safeguardinterest and nurture the progress of Small and Medium sized retail units in the country. Prudence

demands that the Government should not disturb our traditional retail trade which is beingconducted without throwing any financial burden upon the Government.

VISION

8. The MNCs should not be allowed to enter into retail trade. It is true that there is a growing

demand for modern retailing formats that offer a clean and hygienic environment to shop in atcompetitive prices but this may not be a sound reason for the entry of global retailers in retail

trade and thereby allow them to rout our retailers and take away the livelihood of crores and



crores of people. Their entry would lead to Crony (monopolistic) Capitalism, at the cost of

established Retailers being rendered as destitute.

The arguments put forth by those who subscribe to the entry of MNCs in retail trade are

summarized below:1. It will spur the growth of organized Indian retail trade.2. Consumers will be provided with a better range of quality-ridden products at competitive

rates in better and healthier ambience.


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3. They will invariably source the products only from local producers which in turn willspur our industrial & economic growth. They may also be prompted to export Indian

products to their stores abroad.

4. Farmers will stand to gain by direct purchase from them.5. New job opportunities will be created.

Most of these arguments are fallacious and have no leg to stand. Let us take one by one:

a. It will spur the growth of Indian Retail Trade

It is true that entry of MNCs into retail would accelerate the transformation of unorganized

retail trade in our country into organized retail trade which accounts for just 3% of the total

retail trade at present. The sole aim of giant retailers is to dominate the markets they enterinto with the objective of eliminating the existing retailers. These corporate retailers given

their outsourcing skills and resources and adopting predatory pricing policy will provide

products at a cheaper rates than the smaller retailer in order to crush the competition andwhen competition will eliminate retailers they will dominate the market by charging

monopolistic prices. Presently, the retail trade cannot be monopolized as it is managed by

crores of people. Once it is captured by few selected players, the monopoly factor can not be

ruled out. Ultimately, it will spur the growth of corporate retailers.

b. Consumers will be provided with a better range of quality-ridden products at competitive

rates in better and healthier ambience.

To achieve this we dont need investments from global conglomerates. Organised retail tradeaccounts for 20 percent of total retail trade in China and 40% in Thailand as compared to 3%

in India. The blame solely rests on our rulers and those who framed our economic policies,

for this sorry state of affairs. Indian retailers were kept under constant threat of free flow offoreign investments at any time. No effort was made by the Government to motivate and

encourage retailers, who provide enormous employment, next only to Agriculture. Our



economic pundits have transformed the country into a testing ground for implementing their

varied economic school of thoughts.

As mentioned above, the scenario is fast changing. Indian retail trade sector comprising of

mostly family run businesses is gradually becoming modernized and organized. There arenow, a number of small and medium retail stores who have changed their retail formats by

opening up stores in spacious buildings with clean, hygienic and air-conditioned atmosphere.

Medium size retailers have opened up departmental and chain shops. Exclusive fruits andvegetables shops have already sprung up in urban areas across the country, which sell variety


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of products including farm fresh vegetables and fruits. Proximity to actual consumer isconsidered to be the prime requisite for successful functioning of retail outlets.

c. They will invariably source the products from local producers which in turn will spurour Industrial and economic growth.

This is a misleading statement put-forth to justify their entry. With large market share, global

retailers will have large volumes of business enabling them to dictate terms to most suppliersas these suppliers will heavily dependent on them. If local producers are unable to offer their

products at the rates offered by them, they will turn their head to the other side.

d. Farmers will stand to gain by direct purchase from them.

Absolutely incorrect.

They will initially buy the products directly from agriculturists at attractive prices throughtheir procurement centres on contract basis or otherwise. Once the agricultural mandis and

regulated market yards are closed and farmers losses their contacts, they will radically reduce

the procurement prices. As they possess tremendous bargaining power farmers will be forcedto sell their produce at cut throat prices and even will be forced to part with their agricultural

land which will render themselves merely employees of retail houses.

e. New job opportunities will be created.Yet another fallacy. They may provide employment to few thousands new recruits but only at

heavy cost of displacement of crores of small retailers including self employed.

What the Union Government should do?

We seek following measures for accelerating the growth of organised retailing without unduly

impacting existing Small and Medium sized retailers:



1. Categorical policy statement should be announced by the Government immediately thatno big investment will be allowed in retail trade in India even as joint ventures with

Indian partners.

2. On the pattern of MSME (Micro, Small and Medium Enterprises) Act, we shall have anAct to protect and promote small and medium retailers by name, Small and MediumRetailers Act (SMR Act) under separate Ministry with innovative schemes such as


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Cluster approach to convert our unorganised retailers into organised modern retailers.Even an individual shop can become a link of chain shops under cluster programme.

They should be provided with credit facilities at low interest rates. This will facilitate

number of retail units to come together and transform themselves into chain shops andthey will have the clout to bargain in purchase.

Formation of a National Commission to study the Retail Trade:In the past years several studies were conducted by various Government and non-

Government Agencies on nature, size, problems etc. of the retail trade but it is observed

that each study report differs from another report resulting into a picture of confusion and chaos

about Indian Retail Trade. In order to understand the ground realities of retail trade, its strength,size and possibilities of its structured development, we are of the firm view that as suggested by

Parliamentary Standing Committee headed by Dr. Murli Manohar Joshi, a National Commission

should be formed consisting of Senior Officials, Experts and representative of stakeholders.

b. Setting up of a Retail Regulatory Authority:endorse the recommendation of said Parliamentary Committee for setting up of a Retail

Regulatory Authority to be headed by a retired Supreme Court Judge. The mandate of theAuthority should be very clear as to avoid any kind of ambiguity.

c. National Trade Policy for Retail Trade:In the absence of any policy pertaining to retail trade, so far the retail trade has attained

growth on its own without any support from the Government. In the wake of globalization andeconomic liberalization policy of the Government, Indias retail trade is facing serious

onslaughts from different quarters and needs a structured parameters for its growth and

development. The unorganized sector needs to be converted into organized sector and forthis purpose, a National Trade Policy for Retail trade and small & medium industries is

the need of the hour.

d. Banking Institutions :The operations of Banking Activities in retail trade is a cause of major concern for the

retailers as Banks are unable to deliver satisfactory services to the retail trade.After

nationalization of Banks, marked deterioration in services is observed in comparison to service



being rendered by Foreign Banks operating in India. Functioning of Indian Banks is required to

be toned to match with standard of services given by Foreign Banks. Policy for grant ofloans to traders should be liberalized and cheaper rate of interest should be prescribed., taking

into consideration the factum that Foregin Banks are in competitive mode to offer lucrative

interest term even for purchases of vehicles etc. It is suggested that special procedure for creditevaluation in case of application by traders should be laid down. The deposits made by family

members of traders should also be considered asequity while determining the Debt Equity Ratio.

Advances giving to traders should be considered as priority sector advances.

e. India to be a Free Trade Zone :


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At a time when there is scarcity of commodities especially of the nature catering torequirements of daily necessity, there was justification to restrict movement of goods from one

state to another state. For the purpose, check posts and Barriers were put up. Road Permits

and Entry Forms were introduced to accompany goods while in transportation. In the presentscenario when situation has drastically changed to the extent that TINSYXS system has been

introduced and all articles are available in abundance in almost every state, free flow of inter-

state trade, should be ensured by abolition of all barriers in form of Entry Tax, Road

Permit, WAYBILL, etc making India a Free Trade Zone leading to single common market. Itis necessary that the internal trade of the Country should get all encouragement and Protection

from the Government. The traders of the Country are dutifully paying taxes and want tocooperate with Government in further widening of tax base and generation of more revenue.

f. Simplification and rationalization of tax structure:

The Retail trade is governed by multiple laws, rules and acts and most of them sincemany decades old have lost their significance in the present business scenario. To overcome

genuine problems and to mitigate legitimate sufferings of traders, it will be in the fitness

of things if the Central and State Govts redress these maladies by taking the following concrete

steps :-

a) Constitute a REVIEW COMMISSION to scrap outdated Laws and

Regulations.

b) To suggest remedial measures and amendments which may be incorporated insuch laws, rules and regulations in consultation with Trade?

c) To examine feasibility of compilation of a single guidebook in concise form,containing essential requirements of various laws as enacted by Central and State Governments,

as applicable to trade.

d) To examine fixation of accountability of officers and suggesting penal actions inevent of dereliction in duty / or high handed behavior.

It is also suggested, just as the advent of Lokpal is applicable to Union Government andState Governments; the Lokpal system should also be made applicable to all Tax Departments



for ensuring transparency in the system. The above steps will not only eradicate nepotism andcorruption but at the same time will encourage traders to voluntarily comply with the provisions

of law.

g . Recovery Tribunal:In order to ensure proper recovery of bank loans the govt. has constituted debts recovery

tribunal. The traders supply goods and services to industry, govt. and semi govt depts. There

money is blocked up with them for years. Under the existing judicial systems it takesyears to get their dues recovered through judicial process. It is suggested that an

independent recovery tribunal be constituted to recovered dues of traders.


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In case of Industries the sick units can take shelter of BIFR whereas in the case of traders,no such mechanism exists. It is suggested that some kind of mechanism on the pattern of BIFR

should be evolved for Retail Trade.

h. Traders are Tax Collectors and not Tax Payers:The trading community of the Country is collecting several taxes on behalf of the

Government and that too without any remuneration. Therefore classifying Traders as tax payers

is patently wrong and the trading community should be given a status of tax collectors withincidental facilities and expenses incurred in collecting such taxes may be reimbursed by the

Government.

i. Up gradation of retail trade :In the wake of changing business scenario, the traditional retailing in India needs to be

upgraded and traders may be encouraged to adopt modern technology of business, adoption of

computerization etc. Therefore, a scheme should be evolved by the Government underwhich traders may be educated for transform their business into modern outlook. The

cooperation of Trade Associations and Federations may be taken in this regard.

j. Social security for tax payers:In order to enhance revenue and encourage voluntary compliance as also to promote a

policy of reward to honest tax payers, it is necessary to give them certain incentives. Therefore, a

scheme should be evolved to reward such tax payers and for that purpose a grading system can

be evolved consisting of different class of tax payers.

It has been seen that once the tax payer becomes incapable of earning or is unable to earn

sufficiently to sustain himself, his life becomes miserable. Therefore, a scheme of social securityshould be evolved under which the Government should provide minimum sufficient funds for his

medical and monthly living expenses.

k Representation in Government Advisory Boards & Committees :Despite yeomen services rendered by the trading community which is contributing more

than 50% to the national exchequer, it is observed that internal trade is not getting due



importance and protection from Central and State Governments which gives rise to a feelingamong traders that in spite of being an integral part of economy, it is being sadly neglected.

The formation of Board of Trade by the Government of India does not have a singlerepresentative from trade and only industry people have been made as members, though it istermed as Board of Trade. It is suggested that Advisory Committees be formed with Ministry

of Finance, Ministry of Commerce, Ministry of Industry, Ministry of Consumer Affairs and

proper representation be given to trade representatives. It is also urged that representation totraders should also be given in the Economic Advisory Council of Honble Prime Minister.

The trading in Commodity Exchanges has proved to be a fatal exercise for retail trade,which has resulted into much speculative trading which in turn has given rise to inflation in the


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Country. Merely speculative business not supported by any kind of actual delivery has led tolarge scale of distortions. Therefore, it is suggested that the Regulatory Authority of

Commodity Exchanges should be made more effective by taking the representatives of trade as

its members and while defining the role of the Regulatory Authority similar on the pattern ofSEBI, the actual delivery concept for the deals materialized through commodity exchanges, must

be made mandatory.

The retail trade is a promising sector and if necessary efforts are designed to develop the retailtrade in a structured manner and within accepted parameters, it will earn more substantial

revenue to the Government and will be able to face any challenges whatsoever.

We trust that the above suggestions will meet with acceptance in order to refurbish and

reorganize the existing retail trade in a manner so that it can make significant contribution to thenational exchequer and also can withstand to any kind of global competition.

With the above reservations, we proceed further to express our question wise views on

issues for resolution mentioned in section-7 of discussion papers on FDI in multi-brand retail

trade.

Que 7(1) :- Should FDI in multi brand retail be permitted ? If so, should a cap on investmentbe imposed ? If so, what should this cap be ?

Ans : After having an in depth study of the existing retail business in India and

considering its contribution to the society and ability to service its customers,Confederation of All India Traders, expressing the voice of millions of traders of

country, is of the firm view that FDI in multi-brand retail should not be


(An apex body of All Trade Associations & Federations )

permitted. In view of answer of first question being negative answering question of

putting cap on investment does not arise.

Que 7(2):- To develop the retail trade in food grains, other essential commodities and multi-

brand retail in general; should FDI be leveraged for creating back-endinfrastructure? To ensure that foreign investment makes a genuine contribution to

the development of infrastructure and logistics, should it be stipulated that a

percentage of the FDI coming in (say 50%) should be spend towards building up

of back end infrastructure, logistics or agro processing ?

Ans :- In India traders are capable of development of each and every kind of

infrastructure and logistics required for retail trade. The experience shows thatthese FDIs have control over cheap finances. They have capacity of arranging


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bulk finances from local capital market at cheap rate and indulge in large scalehoarding. These companies start controlling the market since they are in control

of the entire food grains and essential commodities kept in their warehouses. The

existing retail trader is controlled through different legislations. The govt. policy,both monetary and fiscal helps in controlling the prices and also anti hoarding

steps. Thus Confederation of All India Traders is of the firm view that FDIs

should not be leveraged for creating back end infrastructure in food grains

and other essential commodities. They do not help in developing retail trade

but it will promotes hoarding.

Que 7(3):- It is necessary to encourage only genuine players in this sector and avoid asituation where retail outlets are run through working capital support from

financial institutions. Should a minimum threshold limit for investment in

backend infrastructure logistics be fixed ? If so, what should this financialthreshold be ?

Ans :- In view of the observation mentioned in 7(3) above there is no need to permit FDIeven for investment in backend infrastructure logistics, so question of fixing

minimum thresh hold limit for investments do not arise.

Que 7(4) :- To develop our rural sector, should conditionality be put on the FDI funded chainsrelating to employment ? For example, should we stipulate that at least 50% of the

jobs in the retail outlets should be reserved for the rural youth ?

Ans :- At present the govt. proposes to encourage rural youth to stay in its own village

and gets employment there only. The pressure of increasing population in metro



is also cause of concern with the govt. The discussion papers speaks about allowing FDIsinitially in metros. How the stipulation of employing at least 50% of jobs for

rural youth will be monitored has not been specified. What will be definition to

rural youth is also not specified. The traders of country are of the view that

such conditions are being proposed only to justify entry of FDI in retailsector. Thus the Confederation of All India Traders is of firm view that FDI

should not be allowed in retail trade.

Que 7(5):- Similarly, to develop our SME sector through local sourcing, should we stipulate

that a minimum percentage of manufactured products be sourced from the SME

sector in India ?


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Ans :- FDIs are known for arm twisting of their suppliers. It becomes practicallyimpossible to know who is owner of these chain. The sourcing parties are

different and supplier do not know from where to get money. This FDIs are also

known to form several other companies through which they source material fromSME sector. Thus FDI indulge in all sought of mall practices. This statement is

based on the limited experience SMEs of India had by entry of corporate in retail

sector. Thus Confederation of All India Traders is of firm view that the

discussion papers are artificially trying the justify entry of FDI in multi-

brand retail trade under disguise of developing SME sector.

Que 7(6) :- How best can small retailers be integrated into the upgraded value chain? Canthey be provided access to the logistics/ supply chain set up by the FDI funded

retailers? Should it be stipulated that a minimum percentage of the latters sales

should be made to retailers through special wholesale windows?

Ans :- At the outset we would like to mention that Govt. should not allow

logistics/supply chain set up by FDI funded retailers. In the paras above we havealready mentioned that we do not agree to any proposal of FDI investment in

multi brand retail. So any question requiring answer in connection with allow

ability of FDI in retail trade and steps thereafter is not agreeable to Confederation

of All India Traders. It is necessary that small retailers should be integrated intothe upgraded value chain. In fact. in the existing system itself the smallest of the

retailers is linked to all the value additions. What is required is making him free

from unwanted inspector raj and availability of need based finance at internationalrate of interest.

Que 7(7) :- As a part of a calibrated reform process, should foreign investment for such stores

be initially allowed only in cities with population of more than 10 lakhs (2001



census)? As there may be difficulties faced with regard to availability of real-

estate in such cities for setting up such ventures, should an area of 10 kms around

the municipal/urban agglomeration limits of such cities be included within the

definition of the city?

Ans :- We would like to reiterate that FDI in multi brand retail should not be allowed in

any form. Why do govt. want to relax condition for them is beyond ourimagination. The govt. instead of addressing difficulties faced by foreign

investors should concentrate on issues, problem and concerns of Indian traders.

The govt. should see what best can it do for Indian traders.


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Que7(8) :- Will any of the conditionality mentioned above be inconsistent with ourcommitments under the agreement on TRIM at WTO? If not, to ensure

national treatment, can such conditionality be extended to all retail chains in India

above a certain size? Will such extended conditionality be consistent with Article301 of the Constitution?

Ans :- Under disguise of various treaties / agreement / commitments, the govt. should

not try to pressurize Indian citizen. Govts. foremost priority has to be to protectand promote indian trade. The traditional Indian retail trade has to be protected

and maintained. If any progress / development in retain chain or retail business isrequired to be done, the govt. should come forward and help Indian traders. Govt.should not forget that the parliamentary committee has already made its

recommendations on FDI in retail trade. Due respect should be given to its

recommendations.

Que 7(9) :- What additional steps should be taken to protect small retailers? Should an

exclulsive legal and regularoty frame work be established to protect theirinterests? Is a Shopping Mall Regulation Act required? Does this require

intervention at national level or should this be left to the State?

Ans :- The Indian retail traders are as it is under lot of pressure for compliances undernumber of acts, rules and regulation framed by Central, State and Local govt.

Each regulation has its own inspector and compliances which is causing

frustration amongst retailers. If the govt. is really interested to take steps toprotect small retailers, Confederation of All India Trades demands that the govt.

should keep itself away from interferance in the matter of retailers. If there is nointervention of Central and State Govt. in working of the retail trade our

confederation is confident that the Indian retail trades will boost further.

Que 7(10):- The present public distribution system provides a valuable safety net to vulnerable

sections of society. To ensure that the integrity of the PDS system is not

weakened and buffer stock is maintained at the desired level, should Governemt



reserve the right of first procurement for the part of the season or put in place a

mechanism to collect a certain amount of levy from private traders in case thelevel of buffer stock falls below a certain level?

Ans :- It is necessary that Govt. should maintain buffer stock of all agro produce toensure supply of goods to all sections of society. Govt. should have right of first

procurement to maintain the buffer stock. The existing PDS system has to be

further strengthening by roping in more traditional retailers into its fold. The


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govt. should not start or put in place any mechanism to collect any amount of levyfrom private traders under any condition.

Que 7(11):- How should compliance be ensured with the above stipulations? Should acentralize agency, to be nominated by the State Govt. concerned, be empowered

to grant permissions to every outlet to be opened? The onus of providing

compliance with these conditions could rest with the concerned retail chain. The

chains could submit an annual statement to such State Govt. agency providingproof of compliance. Should this agency be empowered to monitor compliance of

the present cash and carry outlets too?

Ans :- The traders of India do not want entry of FDI funded retail chain. Thus there is

no question of having any Centralize agency for monitoring or granting

permission to any of the outlet. The existing system of administration bylocal govt. of all the retail outlet should continue.

Que 7(12) :- The penalty for non compliance could include cancellation of approvals as well asdenial of future permissions for such activities. What additional penalties could

be levied? Should civil penalities be imposed? Or criminal? Or both

Ans :- The question framed itself shows that there is a mind setup to allow FDI in retailchain. Accordingly the answers are being sought. Worldwide it is known that

these corporate entities are in habit of flouting rules and regulation. Thus this

confederation maintains that permission to FDI in multi-brand retail should not beallowed.

It is humble submission that the retail of Joint Parliamentary Committee table on both the

houses of parliament on 8th June 2009 shuld be debated and the recommendation made on retail

trade in India should be accepted. No other forum should be allowed to discuss this subject sincethe matter is pending before both houses of parliament.



We trust that the above suggestions will meet with acceptance in order to refurbish and

reorganize the existing retail trade in a manner so that it can make significant contribution to the

national exchequer and also can withstand to any kind of global competition.


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retail trading confederation 24 july 2010

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