FDI in Indian Retail market

Doesn’t the Indian Cabinet enjoy a right to design a bill in the interest of the Nation and present it to the Parliament for approval? The Opposition parties  opposed  the bill of FDI in retail marketing tooth and nail and stalled the functioning of the law making body for a full  week.

Refusing the demand for shelving the bill totally, the government merely agreed to hold the bill  in abeyance  to be introduced at a later date.  This step not because the Opposition parties wanted  it but one of the government’s allies, the Trinamool Congress opposed the bill. And its view had to be respected .

Ms Mamta Banerjee’s stand was that if the Walmart and other international giants enter our retail  market, our Indian retailers would suffer and lose their job.

May I ask Ms Banerjee to answer some  questions connected with retail marketing?  Are we getting quality goods from our retailers?  Are all the items sold at fair price?  The answer is negative for both questions.

I wonder if our Political bosses are aware that the retailers have been too greedy and have been depriving the public  to the extent of  30 -40% profit on manufactured goods. They hve been swallowing the public’s share of the profit granted by the manufacturers? This has been going on  for over 40 years and the public does not know it.

Till the year about 1970, the manufacturers never printed the price on the manufactured items. Every retailer charged according to his whims. So, the  government  wanted the manufacturers to print  the sale price on the cover.  The  manufacturers came with a novel proposal that they would show the price to include 60-100% profit and  call it MRP (Maximum retail price);  the retailers must share this profit with the customers to any extent they liked.  Some took only 25% margin and gave the remaining to the customers. Some gave a nominal rebate of Rs. 5 -10. Over  90% retailers ignored this rule making themselves the real beneficiaries of the MRP formula. Thus the customers have been buying these products at a much higher price than intended by the manufacturer.

Very few retailers are considerate.  One electrical shop I know in Chennai has been observing this rule faithfully much to the astonishment of the customers.  For instance,  I bought an Immersion heater at Rs. 350 while the MRP marked was Rs. 525.  Did the retailer sell the item at a loss? No, he took his margin of 25% and transferred the rest to the customer. As a result, this shop is doing a roaring business.

One super market boasted that his shop  was an MRP market and never sold anything higher than the MRP price.  When I asked him, at what price he bought the items from the manufacturer or whole saler, he wouldn’t reveal it to me.

There you are, Ms. Mamta. The Indian public has been taken for a ride by these notorious retailers and you want to support them?

Go to any provision store. You  get rice and wheat mixed  with all sorts of  decorative materials such as twigs, stones and excreta and a small percentage of  rotten grains as well. Are they  quality material? Do the retailers  bother to sell clean  cereals in packets of sorts? They  cheat on the weight also.  You never get more than 900 grams when you pay for 1 kg material. Are the retailers being fair to their country men?

Let the TMC leaders carry out  a quality check of our retail market to get to know the truth and  also spot out the various tricks and other malpractices  being followed by our retailers.  When the multi nationals come, they may wake up and compete with them and the public will really benefit .An Indian  retailer will not suffer if he is honest and supply the material in  ship shape condition  at a competitive  rate.  An Indian customer then would opt for the Indian retailer and not enter the multi national shops.

Incidentally, it should the National policy that the profit margin should not be more than 25% of the ex factory price or market price. Give up the practice of  printing MRP approach and merely show, “Saleprice”.

 

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