New Delhi: No long term impact on kirana shops, significant benefits for farmers and higher consumer spending…these are some of the findings of the detailed report by Indian Council for Research on International Economic Relations (ICRIER), a New Delhi based think tank, on the impact of organized retailing on the unorganized sector.
The study does find some decline in employment in north and west regions but the net effect weakens over time.The rate of closure of unorganized retail shops in gross terms is around 4.2% per annum and that on account of competition is 1.7% annum. The more serious problem for small stores is the unavailability of credit.
According to the report only 12% of unorganized retailers have access to institutional credit and 37% felt need for better access to commercial bank credit. Among the positives, farmers will gain significantly from direct sales to organized retailers. Also for consumers in the lower income group, it means higher savings. The report, which may have a bearing on government policy, recommends a uniform licensing policy to “facilitate modern retailing”. The report further asks for facilitation of cash and carry outlets in organized retail for sale to unorganized stores.