"By giving permission to Walmart to directly invest in the retail sector, the Centre has jeopardised the employment opportunities of Dalits, poor and backwards," she told reporters here.
"I would personally set afire the showroom when it opens anywhere in the country and I am ready to be arrested for the act," Bharati said, condemning the decision of the Union cabinet to allow 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail.
She said that she had apprised BJP presidentNitin Gadkari of her plan of action.
Meanwhile, commenting on her remarks, CPI MP Gurudas Dasgupta in New Delhi said, "This is crazy talk...this is not the way...Having been a member of Parliament, can she speak like this?"
"A lot of international brands will look at entering India and scout for retail spaces. The vacancy level will come down for the existing supply available in the market," Cushman & Wakefield (C&W) India Director (Retail Services) Jaideep Wahi told media.
Asked about the rentals, he said there would be an upward trend in successful shopping centres and high-street sites, but declined to give any percentage of increase.
Expressing similar views, CB Richard Ellis (South Asia) Chairman and Managing Director Anshuman Magazine said: "There could be marginal increase in rentals of major high-street destinations and shopping centres as there is very limited supply there."
Asked about demand-supply outlook, he said there would not be any immediate impact. However, in medium-to-long-term, demand of retail spaces would improve, ultimately leading to increase in supply.
While welcoming the government's move, Magazine said: "This is of course a very good move, but it does not mean retailers will come overnight. One has to look at global situation, which is not very encouraging."
Property consultant DTZ India Chief Executive Officer Anshul Jain said it would take about 18 months for demand to pick up for retail spaces.
On rentals, he said: "There will definitely be an increase in retail rentals, but I don't see huge spike in it because beyond a point retailers cannot afford it."
As per a C&W study, as on June, rentals for high-street destinations such as Khan Market in Delhi stood at Rs 1,200 per sq ft per month.
Rentals in other high-street markets like Connaught Place, GK-I (Delhi), Linking Road (Mumbai) and Brigade Road (Bangalore) stood at Rs 650, Rs 550, Rs 685 and Rs 440 per sq ft a month respectively.
For shopping malls, the monthly rentals for Elgin Road (Kolkata) stood at Rs 533 per sq ft, while those of Lower Parel (Mumbai) and South Delhi (New Delhi) were at Rs 480 and Rs 450 per sq ft respectively in June.
It will also "lead to monopolization of the retail sector by the MNCs", the party said in a statement.
"The government seems to be more eager to meet the demands of the US and other Western governments and serve the interests of the MNCs like Walmart, Tesco and Carrefour rather than protect those of its own people.
"The conditions imposed by the government are insignificant and will not provide any effective safeguard to any section."
It said the investment floor of Rs.520 crore ($100 million) was "insignificant for giant retailers like the Walmart, Tesco, Carrefour, which are multibillion dollar companies.
"The restriction of foreign retail outlets to cities of over 10 lakh population is also meaningless because those are precisely the places where the MNCs want to go, to tap the lucrative segment of the market. The big cities are also where small retailers are mostly concentrated.
"India has the highest shopping density in the world, with 11 shops per 1,000 persons. There are over 1.2 crore shops in India employing over 4 crore persons. Ninety-five percent of these shops are run by self-employed persons in less than 500 sq ft area.
"These small shopkeepers in the urban areas are going to be hit the hardest with the entry of the MNC retailers.
"International experience shows that supermarkets everywhere invariably displace small retailers. Small retail has been virtually wiped out in the developed countries like the US and Europe.
"South East Asian countries had to also impose stringent zoning and licensing regulations in order to restrict the growth of supermarkets, after small retailers were getting displaced," it said.
The statement added: "International experience has shown that procurement by MNC retailers do not benefit the small farmers. Over time, they receive depressed prices and find it difficult to meet the arbitrary quality standards.
"Allowing procurement by MNCs is basically an attempt by the government to whittle down its own procurement responsibilities. This will have an adverse impact on food security.
"The small manufacturers will also get squeezed. Predatory pricing by the MNCs will eliminate competition and establish their control over the supply of a range of commodities, including essentials like food.
"The domestic market will get flooded with goods procured from foreign countries.
"The claim that this will bring down retail prices for consumers is utterly bogus. Great monopoly power and storage capacity for the big corporates will rather promote hoarding and profiteering.
"Over the last several years the MNCs involved in cash and carry trade in India, which had been permitted earlier by the government, have routinely violated the prohibition of directly selling to consumers, but the government did nothing to stop them.
"Similarly, the so-called regulatory measures based on a system of self-regulation will also be inconsequential, especially since there is no mechanism to ensure the enforcement of the conditions.
"The MNC retailers and foreign governments have been pressurizing the centre for opening up this sector since long.
"It was the opposition from the Left Parties, which had prevented the UPA-I government from taking this move. The UPA-II government has now fully succumbed to those pressures from vested interests."
Bharati also ventilated her strong displeasure against Prime Minister Manmohan Singh, UPA Chairperson Sonia Gandhi and Congress general secretary Rahul Gandhi and accused them of "shedding crocodile tears" in poll-bound Uttar Pradesh and expressing "fake anger".
"I too feel angry at the Central and state governments," she said.
If Rahul was really concerned over the plight of dalits, poor and backwards he should ask the Prime Minister to prevent the arrival of Walmart, she said.
"Economic liberalisation has snatched employment opportunities of about 90 per cent of the poor people and benefited only 10 per cent," Bharati said.
"Allowing FDI in retail is a lopsided decision. Walmart is not the solution to our economic problems. Walmart and Carrefour cannot be an economic model for us....Why do you ( UPA government) want to bring a US ailment here?" BJP leader Murli Manohar Joshitold reporters here.
The party, which created an uproar in Parliament today over government's decision to allow 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand, is mulling over bringing an adjournment motion in Lok Sabha on the issue on Monday.
"You (government) have created this problem.... The Rupee is falling due to your wrong policies. Don't bring a US solution. Indian problems need Indian solutions," Joshi said.
While BJP is planning to protest against this policy inside and outside Parliament, it also indicated that states where the party is in power may not permit these foreign companies to establish themselves.
Asked specifically about this, Joshi said "not only the BJP-ruled states but even states where Congress is in power should oppose them."
Party sources said since land and local bodies fall under the jurisdiction of the state governments, enough impediments can be created to prevent such foreign companies from establishing themselves.
Retail opening cheers big local firms, disappoints others
MUMBAI |
(Reuters) - India's move to open its supermarket sector to foreign investors brought relief to its capital-starved local chains but failed to impress small-shop owners who dominate retail in the country, despite rules intended to safeguard small operators.
The government approved its biggest reform in years by allowing global supermarket giants such as Wal-Mart Stores Inc and Tesco to enter India with a 51 percent stake in the hope it would attract capital to build much-needed supply chains and improve efficiency to alleviate food-driven inflation.
"This is an extremely important step for domestic retailers as this will get in much-needed capital, apart from domain knowledge," said Thomas Varghese, chief executive of Aditya Birla Retail.
Chain stores account for just 6 percent of a $500 billion retail market dominated by street stalls and corner shops.
Many Indian chains are cash-strapped and loss-making, struggling to build scale given high costs, poor supply chains and scarce real estate and have been eyeing equity investments and joint venture partnerships with global firms to build scale.
Vijay Karwal, head of consumer, retail and healthcare for Asia at Royal Bank of Scotland based in Hong Kong expects more than $5 billion in foreign investment into the Indian retail sector over the next five to seven years.
Given the relative lack of modern retail infrastructure in India, and particularly in the enabling back-end infrastructure ... the vast majority of investment this change is expected to trigger would be greenfield investment into new retail sites and infrastructure," he said.
Shares in Indian retailers Pantaloon Retail, Shoppers Stop, Trent jumped -- bucking a fall in the wider stock market -- on expectations that they will form tie-ups with foreign players, and not just compete with them.
Debashish Mukherjee, partner and vice-president at consultancy firm AT Kearney, expects joint ventures and investments in local players from overseas operators over the next six months.
"The set of transactions which will happen fast is foreign players who are in existing joint ventures with Indian firms, the increase or decrease in stake, will happen quickly," he said. "The second are a set of deals that are waiting to happen and have been just waiting for the announcement."
SMALL SHOPS UNHAPPY
To appease opponents, the government said foreign stores will only be permitted in cities of more than 1 million -- of which India has more than 50 -- and individual states can decide whether to allow global players on to their patch.
It also insists that foreign retailers source almost a third of their produce from small industries, invest at least $100 million in India and spend half of that on infrastructure such as cold storage and warehouses.
Many small shop owners fear for their livelihoods.
"It will affect my business as families prefer going to air-conditioned stores with fancy packaged goods these days," said Vinod Jain, a 27-year-old small grocery shop owner in the Lower Parel neighborhood of central Mumbai.
A trade group representing so-called "kirana" shop owners is planning protests.
"The move to let the foreign retailers in will most certainly lead to job losses," said Praveen Khandelwal, general secretary of the Confederation of All India Traders.
"They should have worked on some kind of protectionist mechanism for smaller traders before coming out with this policy," he said.
Foreign retailers who welcomed the Indian government's move to open the sector also view the entry conditions with caution.
"Some of the conditions look quite stringent. The investment in particular -- it's all quite big money. We'd need to know the details, and how that would be accounted for," said an official with a major global retailer who did not wish to be identified.
(Additional reporting by Sumedha Deo in Mumbai, Saeed Azhar in Singapore and Mark Potter in London, Editing by Tony Munroe)
http://in.reuters.com/article/2011/11/25/idINIndia-60732520111125
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