Foreign Direct investment in retail:from environmental view

Foreign Direct Investment in multibrand retailing.

 

Retailing as we know selling goods directly to customer for his personnel use.Government of India  recently allowed foreign direct investment in retail sector.In India nearly 10-15 crore people are in retail business starts from small grocery shops to vegetables sellers on the footpaths.

Few facts about Indian Retail Industry.

1.Retailing accounts to 14-15% of India’s GDP.

2.Indian retail market estimated to 22 lack crores.

3.India is the one of the top 5 retail market in the world.

4.Retail giant like Wall mart turnover globally is approximately equal to  india’s retail turnover.

There is a direct connection between the environment and the economy ,the economical steps  which were   not cared for environment have not helped human beings in the history neither socially nor economically .

Many are in the side of FDI and many are not because of the intricacies involved in the issue but to resolve this, environment impact is just a  tool to understand whole issue logically as well as radically .

Some of the Major claims that government proving FDI is worth but

1.Government claiming Efficient supply system.

Yes in India due to lack of efficient end to end cold supply system 25% of the food produce going waste at the stage of  harvesting and consumption.Retail giants come up with high end infrastructure like cold storage ,cold transportation.But country like India which is not providing electricity for its maximum percentage of people how can one ensure that it will provide electricity to large number of Cold storage units which are high electricity consuming .

To support this argument Indian telecom companies currently self generating 60% of the electricity because of acute shortage of the electricity from govt maintained electric grids.The generation involves diesel generators thus polluting the environment by burning diesel accounts to 6 million tones of CO2 annually as well as enjoying subsidized diesel.

2.Government claims FDI can reduce food wastage.

Majority of the retail giants like spencer,wallmart,tesco are wasting the food produce by 20-30%  .Retail giants are rejecting food produce by its appearances like shape and color though quality ,nutrition meeting the standards.

3.Packaging  Problem.

 As retail giant always tries to mesmerize the customer by lucrative packaging .They  use 75% more material compare to conventional retail system adding substantial amount of solid waste .A study conducted by the Waste & Resources Action Programme estimates that the food and drinks supply chain in the UK generates 5.3 million tonnes of waste in the form of packaging materials only. The total amount of waste generated when both rejected food and packaging materials are considered is a colossal amount and is responsible for serious environmental problems. In UK an estimated emission of 10 million tonnes of CO2 equivalent greenhouse gases can be attributed to the waste generated by the food and drinks supply chain .

4.Government claims Farming technology improvisation.

The days are coming where farmers wants to even drop minimum technology like using the fertilizers and to follow organic farming .In India day to day there is vast interest building  in organic farming  where the organic farming  technique good for well being of human being and also for the environment  .Retail giants which always look on profit never think of well being  which  proved in the history.

In US and UK retail industry forcing farmers to use more chemical fertilizers,insecticides,ripening agents,artificial colors and growth harmones (oxytocin)to achieve cosmetic looks for food produce like vegetables and fruits.

5.Government claims 10million  employment and profit for farmers.

All over the world wall mart employs just  2 million people .It is far from the truth that in India retail giants like wall mart ,spencer creats 10 million job but significant number of jobs will be created but at the cost of  small retailers income and their reducing job security because of competition.Coming to increase in profit  for farmers, the study conducted by UK Competion commission claims that as retail giants achieve monopoly in market they will start to force the farmers to reduce price and follow ill procedures in procuring food produce and also clearing bills.

Verdict:With the entry of  retail giants like wall mart,Tesco,spencer can bring large investment in tandem they bring tools to create social inequality,economical imbalance and great ill-impact on India's rich biodiversity.India need bottom up approach than top down approach .

source:Wikipedia,http://www.legalindia.in, research papers