New Delhi: Peeved by the treatment meted out to its retail venture by Uttar Pradesh and Orissa governments, Reliance Industries is understood to be shelving its estimated Rs13,000 crore roll out plans in the two states, putting at least 10,000 jobs at stake.
Reliance Retail had planned to invest around Rs8,000-Rs 10,000 crore in Uttar Pradesh for retail operation, including about 200 ‘Reliance Fresh’ stores in three years as also the back-end logistic chain. However, in the wake of state government asking it to shut down the outlets, the company has decided to put the plans on hold, sources said.
Similarly, the company is having a rethink on its strategy in Orissa, where it had planned to open an initial 14 stores in Bhubaneswar and Cuttack. The overall investment in the state is estimated to be about Rs3,000 crore.
Reliance suffered a setback in Orissa two days back, when it was forced to down shutters as soon as its three outlets were opened following protests by local traders.
When contacted, company officials declined to comment. It is, however, learnt that the company has decided to focus on states which are favourable to its retail venture.
Reliance’s move will put at stake about 10,000 direct and indirect jobs in Uttar Pradesh and Orissa. These people are involved in the company’s back-end as well as front-end operations, the sources said.
Already, about 1,000 people, 60% of whom are directly employed, have been sacked in the northern state as the company starts folding up its retail operations, they added.
Reliance Retail is understood to be awaiting the report of a Cabinet committee set up by the Mayawati government. The committee was asked to file its finding on the organised retail chains following protests by small traders.
Last month, Mayawati government had ordered to shut stores of Reliance and Spencers’ after these protests.
Currently, Reliance Fresh has 335 outlets in the country selling food items and vegetables. Of these, 318 are operational, while 17 of the total 20 in Uttar Pradesh have been shut.
Uttar Pradesh is the biggest retail market in the country by virtue of its population of more than 16 crore, but big retail chains have faced a number of closures in the recent past due to opposition from political and trader groups.
In Orissa, Reliance’s expansion evoked resistance from local traders with ‘Nikhil Orissa Utha Dokani and Khyudra Vyavashyi Mahasangha´ launching an agitation, saying it would hit the livelihood of seven lakh small traders and their family members.
While Reliance is facing stiff opposition in a number of states such as Uttar Pradesh, West Bengal, Orissa and Kerala, it appears to making up for the uncertainty with aggressive expansion plans in other states such as Madhya Pradesh.