16-Dec-2011

Job Creation by FDI in Retail - Smoke and Mirrors

Prem Shankar Jha crunches some figures for us: Smoke and Mirrors

How many livelihoods are lost, will depend on the rate of growth of the economy and the speed of penetration by retailers.
At the centre of the storm of protest that arose over the cabinet’s decision to allow FDI in multi-brand retailing, lay one question: will it cause a loss of employment, not to mention the investment made in about 15 million stores and kiosks by the petty bourgeoisie? 
The government knew this would arise. For in  2004 the Delhi-based Centre for Policy Analysis had estimated that if FDI were to take over 20 per cent of retail trade in India, around 8 million people could lose their livelihoods. It, therefore heralded  the lifting of the ban with an unprecedented  blast of propaganda. 
For reasons that are explained below, the CPA’s estimate is greatly exaggerated. But the threat of a loss of employment is real.
He comes up with a minimum figure of 4-5 million jobs being lost.  That is only in the retail trade itself, leaving out job losses due to any replacement of indigenous goods with imported consumer goods.  

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