Farmers gain from big retail, no loss to kirana stores: ICRIER

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New Delhi (PTI): Amid a debate on whether organised retail kill livelihood of mom and pop store owners, an official study on Monday said there was no real threat to neighbourhood 'kirana' stores from modern retail chains.

In fact, farmers as also consumers stand to gain from organised retail in terms of competitive pricing, says the government-sponsored study.

There is "no evidence of a decline in overall employment in the unorganised sector as a result of the entry of organised retailers," said the report by think tank ICRIER.

However, it admitted that initially, mom-and-pop stores located in the vicinity of big malls have seen drop in sales and profit, but the impact would disappear in the long run.

It said farmers benefit significantly from direct sales to organised retailers. "Profit realisation for farmers selling directly to organised retailers is about 60 per cent higher than that received from selling in the mandi."

At a time when inflation is impacting the household budget, consumers have "definitely gained" from organised retail on multiple counts. "While all income groups saved through the entry of the organised retail purchases, lower income consumers saved more," it said.

The much-awaited study has recommended nationwide uniform licensing policy to facilitate "modern retailing" which will help take India's total retail sector to a whopping 590 billion dollars in 2011-12.

The document which has been submitted to the Department of Industrial Policy and Promotion, however, did not deal with the impact of foreign direct investment on small retailers.

"This study has nothing to do with the impact of FDI on retail," ICRIER CEO and Director Rajiv Kumar said releasing the findings.

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