New Delhi: In a regressive move guaranteed to dampen retail plans of organized retail corporations, Uttar Pradesh Government has ordered closure of modern organized retail chains in Lucknow and Varanasi, while setting up a five-member committee led by cabinet secretary Shashank Shekhar Singh to review all aspects governing such outlets.
Modern retail is growing at more than 30% in India and is projected to be a Rs1,10,000 crore business by the year 2010, employing an additional 8 million people.
The recent orders by UP government on the retail sector will have an adverse impact on the pace of India’s inclusive growth, according to CII.
Modern large-format retail, efficiently connects producers and consumers and is beneficial to both in the long term. In India wastage of fresh fruits and vegetables is as much as 24% to 40% of total production.
Against this scenario, large-format retail provides crucial infrastructure to carry farm produce to consumers with lower wastage, enabling farmers to get better returns and the consumer better quality and price.
UP government’s move will be detrimental on several grounds – lower returns for farmers, higher prices for consumers, reduced job opportunities and it will also erode investor confidence. Industry chamber, CII has urged the state government to reconsider the decision.
Since modern retail facilitates inclusive growth and facilitates the growth of other sectors, this step will deprive the state of the benefits of modern infrastructure in the form of cold chains, logistics, transport and retail outlets. Resultantly, several new jobs that have been created could be at stake.
A decision on the eventual fate of large-format retail stores across the rest of the state will be once the five-member Committee submits its report. The committee would include Principal Secretaries of housing, home, agriculture and health as members, and would also look into the law and order, health, sanitation and location aspects of the existing and proposed retail stores