Speech My Mom s Voice - 1513 Words

â€Å"Ð’Ã' Ã'‚Ð °Ã ²Ã °Ã ¹ Ã'Æ'Ð ¶Ã µ, Ð ±Ã ¾Ã »Ã'Å'Ã'ˆÐ µ Ð ½Ã µ Ð ½Ã °Ã ´Ã ¾ Ã' Ã ¿Ã °Ã'‚Ã'Å'. ИÐ ´Ã'‚Ð ¸ Ð ²Ã'‹Ð ±Ã ¸Ã'€Ð °Ã'‚Ã'Å' Ã' Ã ³Ã ¾Ã ´Ã'‹.† My mom’s voice bellowed through that house. Our morning wakeup call which roughly translated to, â€Å"Get up already, that’s enough sleeping. Get ready and go pick berries.† I turned to look at my clock, wondering why I was listening to her rude awakening instead of my alarm clock. 5:23 am. Seven minutes before my alarm was supposed to have gone off. Before doing anything I laid in bed contemplating on how much trouble I would get in if I would just go back to sleep. â€Å"You guys complain about having no money, get up and go make some†, she ranted on and on. It had been a daily thing for a couple weeks now. I effortlessly learned to turn her out. It was that time of the year again. The excitement of school ending, as days grew longer and warmer. M ost children my age looked forward to summer break. Waking up early to watch cartoons with a huge bowl of lucky charms in front of them, or sleeping in late finally feeling refreshed after losing precious hours during the school year. Not me, my summers consisted of rising before the sun did to get the best rows on the strawberry field that was nearly three steps out the back door on my grandparent’s farm. The berries were normally ready for harvest about June 17th, so my brothers and I got a cherished eight days of freedom before the life of berry stained hands and unsightly farmers tans came about. As if on cue my grandfather is pounding on the back door. I mosey my way downShow MoreRelatedIs The Woman Struggle For Words?1328 Words   |  6 Pagesthe woman struggle for words. Staff, I supply. Yes, but how do your parents afford it? She s trying so hard not to let her curiosity show. Not hard enough. Well, my mother doesn t work currently, I see her eyes flash with both hatred and want, and my father works with business. He s the reason for our wealth. I answer vaguely. Oh, I see, she comments, her lustful eyes straying to find my father, I understand how difficult it must be for your father to travel all the way here and notRead MoreBiological Differences Between Males And Females1176 Words   |  5 Pagesbiological difference between males and females is in external genitalia: males have penises whereas females have vaginas. Sexuality refers to one s sexual orientation, sexual behaviors, and capacity for sexual feelings (YourDictionary.com). Someone who is not sexually attracted to anyone may identify themselves as asexual. And sexual identity is one s conception of themselves in terms of to whom they are sexually and romantically attracted, if they experience sexual or romantic attraction at allRead MoreEnglish As A Second Language Essay980 Words   |  4 Pagesmother to break down the stereotype that say immigrants lack full intelligence due to their â€Å"broken† English. 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Amy Tan uses this story thats based on her mother to show that the stereotypesRead MoreAnalysis on Jacks Speech Impairment1036 Words   |  4 Pagesas ottis Media, glue ear, etc†¦ that is/are effecting Jack’s hearing? †¢ Any concerns of future hearing problems? †¢ Hearing problems such as hearing loss, Otis media, and etc... will have a negative effect on speech language. †¢ Identify the relationship between the Jack’s level of speech, language and communication and hearing abilities and any adverse effect on educational, social and vocational performance. †¢ Hearing test conducted by audiologist. †¢ Make sure a report of the results is forwardedRead MoreThe History of the Wisconsin Indians844 Words   |  4 Pageswith Wisconsin Native Americans. I would talk to the Native American students in my class, and I would ask them what they would be comfortable with me teaching. If those students could not make up their mind, then I would talk to their parents. I would also talk to the other history teachers and see what their perspective is on the situation. After doing all of that, I would teach the information that I knew all of my students were comfortable with. Language (2 points). According to the handoutRead MoreThe Book Sailor Moon 1382 Words   |  6 PagesA Japan is quite an interesting place. I have never personally been to Japan, but my grandpa has gone there multiple times. I remember how he would bring stuff from his trips for me and my dad. It was interesting to see all the different stuff he brings back, it was crazy. One day he just got back from Japan and give me this comic book called Sailor Moon. To me at the time it was the weirdest thing. I don’t know if you know this, but Japanese comic books (also known as manga) are supposed to beRead MoreThe Air Is Electric, Entrenched With Gut Busting Enthusiasm From A Room Full Of People Essay1797 Words   |  8 Pageshardships of battle, and tonight, have cashed in the spoils from war. Chants of my family s surname, Brooks, echoes throughout the twentieth floor of a Beverly Hills privately owned office suite. With a grandeur name hanging outside the entranceway, beaming with familial pride, Brooks Brothers: Attorneys at Law. The sweet smell of ceremonial victory is serendipitous. Serendipitous. A word commonly used by grandmothers, such as my own, to relay their overdue elation when one of her two sons finally livesRead MoreHamlet, The Queen Of Denmark And The Mother Of Hamlet1722 Words   |  7 PagesJorge Escobedo English 102VY Dr. Fisher 06/28/14 In Hamlet there are 2 women in the intire play, one of them is Gertrude. Gertude is the queen of Denmark and the mother of Hamlet. The relationship between Hamlet and Gertrude(his mom) is rough because she marrys her husbands brother Claudius after killing King Hamlet and is now king of Denmark. She seemed not to have any guilt what so ever. The second girl in Hamlet is Ophelia, she is the girl who hamlet had a crush on, and went mad after herRead MoreSummary Of I Know Why The Caged Bird Sings 1184 Words   |  5 Pagesinsulting the offending party.  One time my brother helped me when I was being bullied and he did not get them back but he would help me feel better and would tell a trusted adult. 4) Momma won because she remained calm and did not fight back. Soon later the powhitetrash gave up and went away. I had a similar victory when my brother was being really annoying I remained quite instead of yelling at him soon he realized that I did not care so he stopped. 5) My personal response on the sister Monroe sceneRead MorePersonal Narrative Personal Writing1652 Words   |  7 PagesFor as long as I can remember, my dad has always corrected my grammar and manners. As a lawyer, he writes and reviews thousands of legal documents, which has sharpened his writing skills tremendously. With these skills comes a grammar geek who loves correcting people. Looking back at all the times my dad has reminded me of a certain rule, a particular occasion always comes to mind. This moment took place at my kitchen counter in Illinois when I was a Freshman in High School. It was a late weekday

Transformational Leadership And Situational Leadership

If I were the new director of an art gallery in New York City, I would utilize a mixture of transformational leadership and situational leadership styles. Transformational leadership is based on mutually beneficial relationships between leaders and followers whereby the leader is seeking to promote growth and real charge (Shriberg Shriberg, 2011, p. 78). Since the twenty employees have opinions of the former leader and how the gallery should be run and the stockholders also have input about what art to display and events to hold, the past managerial style did not sufficiently unify all stakeholders in the business. Utilizing the transformational style of leadership, I would strive to get everyone invested in a shared vision of what the gallery could be. I would listen to everyone s input because ideas can come from unlikely places and everyone needs to feel that they are a valued part of the whole company. Studies conducted on transformational leadership show organizations led by tr ansformational leaders perform at higher levels and have a higher satisfaction rating, by workers, than organizations led by other types of leaders (Riggio, 2009, March 24). There are four aspects of transformational leadership. They provide intellectual stimulation by encouraging employees to think outside of the box. They give individualized consideration by acknowledging each employee as an individual. They offer inspirational motivation to help employees have a passion for the sharedShow MoreRelatedLeadership Theories/ Approaches (Situational and Transformational Leadership)2362 Words   |  10 Pagescome to people on this is to achieve Leadership but to be able to do it, it is imperative to understand its meaning, its strengths, its weaknesses and all concepts that may help individuals and organizations to approach it in their modern world. 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Fdi Inindia Ananalysis on Theimpact of Fdi in Indias Retail Sector- Free Essays

FDI in India: An analysis on the impact of FDI in India’s Retail sector Submitted By: Subhajit Ray Department of Humanities and Social Sciences IIT Kharagpur Kharagpur-721302 1 Introduction: Initially the Indian policy makers were quite apprehensive about the flow of foreign capital into the economy. This can be attributed to the colonial past which saw large investments being made by their colonial rulers in the form of major infrastructure instruments like railways but only to make huge gains for themselves and sucking the host country of its resources. But currently the global economy has been witnessing an incessant form of economic growth characterized by the flow of capital from the developed world to the developing countries. We will write a custom essay sample on Fdi Inindia Ananalysis on Theimpact of Fdi in Indias Retail Sector- or any similar topic only for you Order Now During the 1990s Foreign Direct Investment (FDI) became the single largest source of external finance for the developing countries. When faced with an economic crisis during the same period the Indian policy makers had to open up the Indian market and accordingly India has been seeing a consistent increase in FDI inflows. Indian economy has been showing high growth rates in the post liberalization era. In the last fiscal year according to the Planning commission’s data the Indian economy recorded a growth rate of 8. 6% and 8% in the year before. This is reason enough to call it a high performing economy. All Multi National Enterprises (MNEs) have been eyeing the Indian market ever since they have opened up. The policy makers have been vigorously pursuing the reforms program as they believe that high growth has been the resultant of economic liberalization. FDI has been seen as a dominant determinant to achieve high rate of economic growth because of the ease with which it can bring in scarce capital, triggers technology transfer and enhances the efficiency by increasing the competitiveness of the market. Also FDI as a form of policy instrument to raise capital is usually preferred over other forms of external finance because they are non-debt creating, non-volatile and their returns depend on the performance of the projects financed by the investors. FDI is successful in human capital formation, increases total factor productivity and efficiency of resource use. But such benefits are highly dependent on the policies of the host government. It is furthermore described as a source of economic development, modernization, and employment generation. Several factors both political and apolitical have led to a greater acceptance of FDI. The envisioned role of FDI has evolved from that of a tool to solve the crisis under the license raj system to that of a modernizing force of the Indian economy. In support of their endeavor the policy makers have often cited the example of the Chinese experience of achieving high growth rate through foreign direct investment. India has opened up its economy and allowed MNEs in the core sectors such as Power and Fuels, Electrical Equipments, Transport, Chemicals, Food Processing, 2 Metallurgical, Drugs and Pharmaceuticals, Textiles, and Industrial Machinery as a part of reform process started in the beginning of 1990s. Currently FDI is also permissible in the Telecommunications, Banking, Insurance and IT sector. Currently there is huge debate going on about allowing FDI in retail. This paper aims to discuss the critical aspects of FDI in India, present a case study on the success of reforms in the telecommunications sector, analyze both sides of the arguments currently going on regarding FDI in retail and conclude with suggestive measures on the part of the government which can eliminate the negative effects of allowing FDI in India’s retail sector. Assessing the impact of FDI on host economy- a review of various economic literatures: FDI inflow into the core sectors is assumed to play a vital role as a source of capital management and technology in countries of transition economies. It implies that FDI can have positive effects on a host economy’s development effort (Caves, 1974; Kokko, 1994; Markusen, 1995; Carves, 1996; Sahoo, Mathiyazhagan and Parida 2001). It has been argued that FDI can bring the technological diffusion to the sectors through knowledge spillover and enhances a faster rate of growth of output via increased labour productivity. There have been a lot of empirical studies to assess the impact of FDI in developing economies and the results to this date have been found to be mixed. Many reports have questioned the positive effects of the FDI inflow in the host country. Some studies done earlier had found that FDI has a negative impact on the growth of the developing countries (Singer,1950; Griffin, 1970; Weisskof, 1972). Multinational Enterprises (MNEs) in the name of FDI may drive out the local firms because of their oligopolistic power, and also, the repatriation of profit may drain out the capital of the host country. The main argument in this regard was that the main component of FDI in less developing countries was in the primary sector. Then these primary products were exported to the developed nations and processed for import back to the developing nations and thus resulted in the host nations receiving a lesser value for their resources. Hanson (2001) argues that evidence that FDI generates positive spillovers for host countries is weak. In a review of micro data on spillovers from foreign-owned to domestically owned firms Gorg and Greenwood (2002) conclude that the effects are mostly negative. Lipsey (2002) takes a more favorable view from reviewing the micro literature which argues that there is evidence of positive effect. He also argues that there is need for more consideration of the different circumstances that obstruct or promote positive spillovers. Rodan (1961), Chenery and Strout (1966) in the early 1960s argued that foreign capital inflows have a favorable effect on the economic efficiency and growth towards the developing countries. It has been explained that FDI could have a favorable short-term effect on growth as it expands the economic activity. However, in the long run it reduces the growth rate due to dependency, particularly due to â€Å"decapitalization† (Bornschier, 1980). This is due to the reason that the foreign investors repatriate their investment by contracting the economic activities in the long run. FDI is an important vehicle for the 3 transfer of technology and knowledge and it demonstrates that it can have a long run effect on growth by generating increasing return in production via positive externalities and productive spillovers. Thus, FDI can lead to a higher growth by incorporating new inputs and techniques (Feenstra and Markusen, 1994). Aitken, et al. 1997) showed the external effect of FDI on export with example of Bangladesh, where the entry of a single Korean Multinational in garment exports led to the establishment of a number of domestic export firms, creating the country’s largest export industry. Hu and Khan (1997) attribute the spectacular growth rate of Chinese economy during 1952 to 1994 to the productivity gains largely due to market oriented reforms, especially the expansion of the non-state sector, as well as Chinaâ €™s â€Å"open-door† policy, which brought about a dramatic expansion in foreign trade and FDI. A study by Xu (2000) found a strong evidence of technology diffusion from U. S. MNEs affiliated in developed countries (DCs) but weak evidence of such diffusion in the less developed countries (LDCs). It concluded that in order to benefit from the technology transfer by the MNEs a country needs to achieve a basic minimum human capital threshold. A recent study by Banga (2005) demonstrates that FDI, trade and technological progress have differential impact on wages and employment. While higher extent of FDI in an industry leads to higher wage rate in the industry, it has no impact on its employment. On the other hand, higher export intensity of an industry increases employment in the industry but has no effect on its wage rate. Technological progress is found to be labor saving but does not influence the wage rate. Further, the results show that domestic innovation in terms of research and development intensity has been labor utilizing in nature but import of technology has unfavorably affected employment in India. The study by Sharma (2000) concluded that FDI does not have a statistically significant role in the export promotion in Indian Economy. This result is also confirmed by the study of Pailwar (2001) and the study also argues that the foreign firms are more interested in the large Indian market rather than aiming for the global market. The study by Sahoo and Mathiyazhagan (2003) also support the view that FDI in India is not able to enhance the growth of the economy. Though there is a common consensus among all the studies in the Indian context that FDI is not growth stimulant rather it is growth resultant. A study by Dr Maathai K. Mathiyazhagan(2005) demonstrate that the flow of FDI into the sectors has helped to raise the output, labour productivity and export in some sectors but a better role of FDI at the sectoral level is still expected. Results also reveal that there is no significant co-integrating relationship among the variables like FDI, Growth rate of output, Export and Labour Productivity in core sectors of the economy. This implies that when there is an increase in the output, export or labour productivity of the sectors it is not due to the advent of FDI. Thus, it could be concluded that the advent of FDI has not helped to wield a positive impact on the Indian economy at the sectoral level. Thus, in the eve of India’s plan for further opening up of the economy, it is advisable to open up the export oriented sectors so that a higher growth of the economy could be achieved through the growth of these sectors. 4 Foreign Direct Investment policy of India: Foreign direct investment policy of the government of India has been gradually liberalized. As early as in the year 1948 and 1956 (two industrial policy resolutions) government policy clearly reflected the need to supplement foreign capital and technology for rapid economic growth. The core objective of the foreign capital policy was that the control of industrial undertaking should remain in the Indian hands. However, the government had granted permission in certain cases for allowing establishment of exclusive foreign enterprises. Foreign capital was preferred in specific areas which bring in new technology and establish joint ventures with Indian partners. Government also granted tax concessions to foreign enterprises and streamlined industrial licensing procedures to accord early approvals for foreign collaborations. In the case of 100 per cent export of output, foreigners were allowed to establish industrial units. It needs to be noted here that under the Foreign Exchange Regulation Act (FERA) 1974 only upto 40 per cent of the equity holding of the foreign firms were permitted. Foreign investment was permitted under designated industries along with restrictions in terms of local content clauses, export obligations, promotion of R and prohibition by law the use of foreign brands (Hybrid domestic brands were promoted such as Ford Escort and Hero Honda). It needs to be pointed out here that the restrictions have been flouted frequently and relaxations were also granted. This process has culminated into gradual liberalization of government policy towards foreign capital. It is reflected in continuous increase in the number of approvals granted. During the period 19611971, the number of foreign collaborations approved was 2475 which were increased to 3041 during the period 1971-1980. There was dramatic increase in the foreign collaboration approvals during the period 1981-1990 (7436 collaborations were approved). This policy enabled to build domestic technological capability in many branches of industry but generally considered very restrictive. It has been widely accepted that protection of domestic industry for a longer period of time resulted into high cost production structure along with poor quality. Foreign direct investment policy announced by the government of India in July 1991 was regarded as a dramatic departure from the earlier restrictive and discretionary policy towards foreign capital. The FDI policy of 1991 proposed to achieve objective of efficient and competitive world class Indian industry. Foreign investment was seen as a source of scarce resource, technology and managerial and marketing skills. The major feature of policy regarding foreign investment up to 51 per cent of equity holding was permitted too. Automatic approvals were also allowed to foreign investment up to 51 per cent equity in 34 industries as well as to foreign technology agreements in high 5 priority industries. The Foreign Investment Promotion Board (FIPB) was set up to speedily process applications for approvals of the cases which were not covered under the automatic route. Laws were amended to provide foreign firms the equivalent status as the domestic ones. Government of India, however, put in place the regulatory mechanism to repatriate payments of dividends through Reserve Bank of India so that outflows are balanced through export earnings during stipulated period of time. Further liberalization measures with regard to foreign investment were taken during 1992-93. The dividend balance conditions were revoked except in the case of consumer goods industries. Non Resident Indian (NRI) and Overseas Corporate Bodies (OCB) were permitted in high priority industries to invest up to 100 per cent equity along with repatriation of capital and income. Apart from expansion of the area of operation for FDI in many new economic activities, the existing companies were also allowed to increase equity participation up to 51 per cent along with disinvestment of equity. Foreign direct investment policy has been changed frequently since 1991 to make it more transparent and attractive to the foreign investors. FDI up to 100 per cent is allowed under automatic route for all sectors/activities except activities that attract industrial licensing, proposals where foreign investors had an xisting joint venture in same field, proposals for acquisition of shares in an existing Indian company in the financial sector and those activities where automatic route is not available. The only sectors/activities where FDI is not permitted are agriculture and plantations excluding tea plantations, real estate business (excluding development of townships, housing, built up infrastructure and construction development projects-NRI/OCB investment is allowed for the real estate business), retail trade, lottery, security services and atomic energy. Government has simplified procedure, rules and regulations on a regular basis since 1991 to make Indian economic environment foreign investor friendly. Attempt has been made through FDI policy to make India the hub of global foreign direct investment as well as in economic activities. Trend and Dimension of FDI inflow in India: The dimensions of the FDI flows into India could be explained in terms of its growth and size, sources and sectoral compositions. The growth of FDI inflows in India was not significant until 1991 due to the regulatory policy framework. It could be observed that there has been a steady build up in the actual FDI inflows in the post-liberalization period (Figures 1. 1 and 1. 2). Actual inflows have steadily increased from US $ 143. 6 million in 1991 to US $ 37763 million in 2010. This results in an annual average growth rate close to 6 per cent. However, the pace of FDI inflows to India has definitely been slower than some of the smaller developing countries like Indonesia, Thailand, Malaysia and Vietnam. In fact, India had registered a declining trend of FDI inflows and the FDI- GDP ratio especially in 1998 and 2003 could be attributed to many factors, including the US sanctions imposed in the aftermath of the nuclear tests, the East Asian meltdown and the perceived Swadeshi image different political parties, which was 6 ruling government during this period in India. It is also important to note that the financial collaboration has out numbered the technical collaboration over the years. But since 2006 India has seen a remarkably higher growth of FDI in accordance with the general trends of the global conomy with a slight dip in the year 2009-2010. This can be attributed to the recessionary situation in the global economy. In recent years, India’s share in the global FDI inflows has increased substantially. Year wise FDI inflow in the post reforms era (1990-2001) 1999-2000 2439 1998-1999 1997-1998 1996-1997 FDI 1995-1996 1994-1995 1993-1994 1992-1993 0 1000 2000 3000 4000 US $ MILLIONS Figure 1. 1 Year 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 FDI 393 654 1374 2141 2770 3682 3083 2439 7 However, China receives a greater percent of global FDI inflows. India’s effort have not yet realized in comparison to the changes which has been made in the FDI policy. Year wise revised FDI inflow since 2000-2001 with expended coverage to approach International Best Practices. 2009-2010 2008-2009 2007-2008 2006-2007 2005-2006 FDI 2004-2005 2003-2004 2002-2003 2001-2002 2000-2001 0 10000 20000 30000 40000 US $ MILLIONS Table 1. 2 Year 200001 200102 200203 200304 200405 200506 200607 200708 200809 200910 FDI 4029 6130 5035 4322 6051 8961 22826 34835 37838 37763 Capital goods sector has more or less been bypassed by FDI. This clearly points out the tendency of foreign investment to exploit the pent up domestic demand 8 for consumer durable goods. Further more, there is a gradual increase in the mergers and acquisitions during the 1990s which show a tendency of FDI inflows to acquire existing industrial assets and managerial control without actually engaging in new productive activities (Nagraj, 2006). India’s large size of domestic market seems to have been the major attraction for foreign firms. SHARE OF TOP INVESTING COUNTRIES FDI EQUITY INFLOWS Others France Germany Cyprus Country Japan Netherlands U. K U. S. A. Singapore Mauritius 0 10 2 2 4 4 9 % 4 5 7 9 42 20 30 40 50 %age to total Inflows (in terms of US $) The analyses of the origin of FDI inflows to India show that the new policy has broadened the source of FDI into India. There were 86 countries in 2000 which increased to 106 countries in 2003 as compared to 29 countries in 1991 whose FDI was approved by the Indian Government. The co untry-wise analysis of the FDI inflows shows that Mauritius, which was not in the picture till 1992, is the highest contributor of FDI to India. A major share of such investment is represented by the holding companies of Mauritius set up by the US firms. It means that the investment flowing from the tax havens is mainly the investment of the multinational corporations headquartered in other countries. Now an 9 important question arises as to why the US companies have routed their investment through Mauritius. It is because, firstly, the US companies have positioned their funds in Mauritius, which they like to invest elsewhere. Secondly, because the tax treaty between Mauritius and India stipulates a dividend tax of five per cent, while the treaty between Indian and the US stipulated a dividend tax of 15 per cent (World Bank, 1999). Telecommunications Sector- A success story: Further narrowing of FDI in sub-sectors reveals the success story of the telecommunications sector. Research into Telecommunications furthers the haphazard nature of FDI investment and policy making. The current process for FDI in telecommunications can be attributed to two policies that were undertaken by the government: National Telecom Policy of 1994 and New Telecom Policy of 1999. Before the economic reforms ‘teledensity’ was low, infrastructure growth was slow, and the lack of reforms restricted investments and adoption of new technologies. The existing legislative and regulatory environment needed major changes to facilitate growth in the sector. It was 1991 when the programme was undertaken to expand and upgrade India’s vast telecom network. The programme included: complete freedom of telecom equipment manufacturing, privatisation of services, liberal foreign investment and new regulation in technology imports. Simultaneously, the government-managed Department of Telecommunications (DoT) was restructured to remove its monopoly status as the service provider. The government programme was formalised on a telecom policy statement called National Telecom Policy 1994 on 12 May 1994. However the 1994 policy was not sufficient to make the India’s telecommunications sector fully open and liberalised. The incumbent monopoly (DoT) was indifferent in implementing the national telecom policy effectively due to its lack of commitment. This paved the way for designing a new policy framework for telecommunications which was called the New Telecom Policy 1999. The New Telecom Policy 1999 (NTP99) was developed after the reform process began in 1991. The interest of the government led to the new policy. As a result in addition to the sectoral caps, the government policy played a major role in the liberalization of the telecom sector. As a result a large number of private operators started operating in the basic/mobile telephony and Internet domains. Teledensity has increased, mobile telephony has established a large base, the number of Internet users has seen a steep growth, and large bandwidth has been made available for software exports and IT-enabled services, and the tariffs for international and domestic links have seen significant reductions. Total FDI in Telecommunications sector is over US $ 15 billion. The takeover of Hutch by Vodafone is one of the largest FDI deals for an amount of US $ 11 billion. Tariff 10 rates are the lowest in the whole world and there are more than 250 million users. The Retail sector in India: The retail industry in India is one of the fastest growing. Even without FDI driving it, the corporate owned retail sector is expanding at a furious rate. AT Kearney, the well-known international management consultancy, recently identified India as the ‘second most attractive retail destination’ globally from among thirty emergent markets. It has made India the cause of a good deal of excitement and the cynosure of many foreign eyes. With a contribution of 14% to the national GDP and employing 7% of the total workforce (only agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian economy. . Trade or retailing is the single largest component of the services sector in terms of contribution to GDP. Its massive share of 14% is double the figure of the next largest broad economic activity in the sector. The retail industry is divided into organised and unorganised sectors. Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. A simple glance at the employment numbers is enough to paint a good picture of the relative sizes of these two forms of trade in India – organised trade employs roughly 5 lakh people whereas the unorganized retail trade employs nearly 3. 95 crores. Given the recent numbers indicated by other studies, this is only indicative of the magnitude of expansion the retail trade is experiencing, both due to economic expansion as well as the ‘jobless growth’ that we have seen in the past decade. It must be noted that even within the organised sector, the number of individually-owned retail outlets far outnumber the corporate-backed institutions. Though these numbers translate to approximately 8% of the workforce in the country (half the normal share in developed countries) there are far more retailers in India than other countries in absolute numbers, because of the demographic profile and the preponderance of youth, India’s workforce is proportionately much larger. That about 4% of India’s population is in the retail trade says a lot about how vital this business is to the socio-economic equilibrium in India. 1 Arguments against adoption of FDI in India’s Retail sector: FDI driven modern retailing is labour displacing to the extent that it can only expand by destroying the traditional retail sector. Till such time we are in a position to create jobs on a large scale in manufacturing, it would make eminent sense that any policy that results in the elimin ation of jobs in the unorganised retail sector should be kept on hold. Studies suggest that about 5 crore jobs will be lost and only 20 lakhs new jobs will be created. With their incredibly high capital FDI driven retailing units such as Wal-Mart will be able to sustain losses for many years till its immediate competition is wiped out. This is a normal predatory strategy used by large players to drive out small and dispersed competition. This entails job losses by the millions. Even the organised retail sector may face serious problems and may eventually be wiped out. The FDI driven retail units will typically sell everything, from vegetables to the latest electronic gadgets, at extremely low prices that will most likely undercut those in nearby local stores selling similar goods. They would be more likely to source their raw materials from abroad, and procure goods like vegetables and fruits directly from farmers at pre-ordained quantities and specifications. This means a foreign company will buy big from India and abroad and be able to sell low – severely undercutting the small retailers. Once a monopoly situation is created this will then turn into buying low and selling high. Such re-orientation of sourcing of materials will completely disintegrate the already established supply chain. In time, the neighbouring traditional outlets are also likely to fold and perish, given the ‘predatory’ pricing power that a foreign player is able to exert. As Nick Robbins wrote in the context of the East India Company, â€Å"By controlling both ends of the chain, the company could buy cheap and sell dear† It is true that it is in the consumer’s best interest to obtain his goods and services at the lowest possible price. But this is a privilege for the individual consumer and it cannot, in any circumstance, override the responsibility of any society to provide economic security for its population. Clearly collective well-being must take precedence over individual benefits. The primary task of government in India is still to provide livelihoods and not create so called efficiencies of scale by creating redundancies. 12 Arguments in favour of adoption of FDI in India’s Retail sector: The main driver for adoption of Retail in India seems to be the recognition that the Indian economy faces serious supply-side constraints, particularly in the food-related retail chains. The government would like to improve back-end infrastructure, and ultimately reduce post-harvest losses and other wastage. There is also a general concern, highlighted by the persistence of food inflation, that intermediaries obtain a disproportionate share of value in this chain and farmers receive only 15% of the end consumer price. Now the farmers will be able to get a better price for their products. With easy credit availability through foreign direct investment the situation of farmer suicides in India will improve. With foreign capital flowing into the economy the current inflationary situation will be tamed. One key point is that we must differentiate between the interests of consumers, who constitute our population of nearly 115 crore, from the interests of retailers, who may number near five crore. The larger supermarkets, which tend to become regional and national chains, can negotiate prices more aggressively with manufacturers of consumer goods and pass on the benefit to consumers. Undoubtedly, lower prices psychologically propel buyers to spend more than they otherwise would. The resulting growth in private consumption creates jobs. The tax collection of the government will improve as it is mpossible to tax the unorganised retail sector. The revenue collected by the government can be used for infrastructure development. Also India has had several retailers with deep pockets and access to skills. That they have not been able to swamp the domestic small retailer says something about consumer behaviour and small retail’s resilience. The argument that the advent of FDI and super markets will displace a large number of kirana shops is similar to the argument used during the era of industrial licensing, which was meant to protect small-scale industries. But eventually the inefficiencies and quality standards of the protected small-scale companies become apparent even to socialist politicians and licensing was abolished. Even a modest chain of 200 supermarkets, to be set up all over India in selected towns and cities in the next three years, will require an investment of about Rs 2,000 crore (Rs 20 billion), at the rate of Rs 10 crore (Rs 100 million) per supermarket to cover the infrastructure and working capital. Each supermarket may take 2 or 3 years before it becomes profitable. There is a risk that a few of them may even fail. No Indian entrepreneur will be willing and able to commit this level of investment and undertake the risks involved. That is where the 13 international experience and skills that may come with FDI would provide the confidence and capital. Apart from this, by allowing FDI in retail trade, India will become more integrated with regional and global economies in terms of quality standards and consumer expectations. Supermarkets could source several consumer goods from India for wider international markets. India certainly has an advantage of being able to produce several categories of consumer goods, viz. fruits and vegetables, beverages, textiles and garments, gems and jewellery, and leather goods. The advent of FDI in retail sector is bound to pull up the quality standards and costcompetitiveness of Indian producers in all these segments. That will benefit not only the Indian consumer but also open the door for Indian products to enter the wider global market. Suggestive measures to eliminate the negative effects of FDI in India’s Retail sector: FDI in the retail sector should be accompanied by policy formulations that encourage the growth of manufacturing sector in India. A growing manufacturing sector can accommodate the people who will loose their jobs due to the adoption of retail in India. FDI should be aggressively promoted in case of relatively less sensitive sectors like entertainment, R etc. Moreover import duty should be imposed to protect domestic production units. Strict labour laws should be imposed to ensure that no management jobs are outsourced. The government should also ensure the local population gets competitive wages and the working environment is proper. Jobs should be reserved for the poor people. If the language of operation is English then it will act as a hindrance for job creation for the underprivileged people. Hence Hindi and local languages as a mode of operation should be encouraged. Cooperative societies should be formed for the farmers and other agricultural suppliers to take care of their rights and to ensure that they are getting a fair price from the FDI driven big retail units. Strict corporate governance should be ensured to prevent the acquisition of local business units by foreign firms and to promote investor friendly trade practices. The foreign retail units should be made to divest a certain percentage of their equity in the Indian financial markets. Only strict governance can ensure that the foreign firms adhere to competitive trade practices. Social infrastructure like schools, colleges and hospitals should be developed to promote human capital formation as several studies suggest that such initiatives could enhance the spillover effects of FDI. Furthermore it will help in creating 14 jobs in the high technology sectors and will put India in the global technology scenario. Social security should be ensured through different policy measures like pension plans, employment guarantee programmes and free health care. Strict environmental laws should be enforced to ensure that the foreign firms do not indulge in unsustainable trade practices. Conclusion: The growth rate of the Indian economy has been very high in the post reforms era. And hence India has become the cynosure of investment by foreign multinational enterprises. The relationship between FDI and other macro economic variables like growth rate, export, employment and productivity has been found to vary. It has been found that to gain a positive impact of technology spillovers via FDI the host country should achieve a basic minimum human capital threshold. Studies exist both in support and against the positive impact of FDI in the Indian economy. It is self conclusive that the growth of FDI in India is growth resultant and not growth stimulant. The positive impact of FDI has been felt in the high technology sectors like telecommunication and IT. The success story of the telecom sector is a real confidence booster in this regard. It is clearly visible that the MNEs are more interested in exploiting the Indian markets rather than investing in capital goods. The retail sector is one of the fastest growing sectors of India. It also employs a huge proportion of the population. Hence any measure regarding this sector such as approval of FDI in the Indian retail sector will have a gigantic impact on Indian economy. FDI in the Indian retail sector will work wonders in terms of controlling inflation, creating new jobs and increasing the efficiency and productivity of the Indian economy. But many believe that it may lead to wide scale unemployment, drainage of capital from the Indian economy and social inequity. Hence FDI in India’s retail sector should be accompanied by stringent policy measures on the part of the government so that the majority of the population can benefit from the positive spillover effects of FDI. Government should encourage FDI in the manufacturing sector along with the retail sector to compensate for the loss of jobs that will be created due to the advent of FDI in retail. Government should also build social infrastructure to enhance the human capital formation so that the positive spillover effects of FDI are greatly felt. 15 References †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ FDI in India’s Retail Sector More Bad than Good? By Mohan Guruswamy Kamal Sharma Jeevan Prakash Mohanty Thomas J. Korah Rethinking the linkages between foreign direct investment and development: a third world perspective By: Shashank P. Kumar India’s Economic Growth and the Role of Foreign Direct Investment: By Lakhwinder Singh 2006. India’s FDI inflows Trends and Concepts By K. S. Chalapati Rao Biswajit Dhar Impact of liberalization on FDI structure in India. By Dr. Gulshan Kumar. Impact of foreign direct investment on Indian economy: A sectoral level analysis. By Dr Maathai K. Mathiyazhagan. Foreign Direct Investment in Post-Reform India: Likely to Work Wonders for Regional Development? By Peter Nunnenkamp and Rudi Stracke. FDI in India in the 1990s. Trends and issues. By R Nagaraj. Economic Reforms, Foreign Direct Investment and its Economic Effects in India by Chandana Chakraborty Peter Nunnenkamp. March 2006. China and India: Any difference in their FDI performances? By Wenhui Wei. June 2005 Fact sheet on FDI in India by the Planning Commission. Data on GDP growth rate from the Planning Commisiion. Wikipedia. com Planningcommission. nic. in 16 How to cite Fdi Inindia Ananalysis on Theimpact of Fdi in Indias Retail Sector-, Papers