Thursday, August 30, 2007

UP move on large-format retail store

Following an attack on a few Reliance Fresh and Spencer Daily stores in Lucknow, the Uttar Pradesh Chief Minister Mayawati has ordered a closure of all large-format retail stores.

The hooliganism was organized by a sitting Rajya Sabha MP Banwari Lal Kanchal of the rival Samajwadi Party and his organization UP Udyog Vyapar Mandal.

There has been a lot of anger against large-format retail chains across several states. Some states have resorted to violence - most notably Ranchi in Jharkhand, near Kolkata in West Bengal, Indore in Madhya Pradesh. There have been several demonstrations in Tamil Nadu.

In West Bengal, the ruling partner AIFB has promised not to let Reliance Fresh in and has said it will demonstrate (and perhaps also indulge in violence) in front of Reliance Fresh stores.

For a while, I was under the impression that it is not possible for state governments to control who sets up what kind of shop and what can be sold there. I was wrong. An archaic and bad law in the form of Agriculture Produce Marketing Committee Act exists in all the states. This seems to be a state subject and hence you have roughly 30 variations of this act, state to state.

This act has primarily been used till now to determine to whom farmers can sell foodgrains. Vegtables, fruits and such have been left to open market purchase and resale. However, I fear this law can be (mis)used by left leaning governments to impact organized retail from selling agricultural produce.

This will affect shops like Reliance Retail from selling vegetables, fruits and may probably even be extended to cover milk. Such a retail shop then will be forced to only sell groceries and FMCG products.

The state variation in such a law can also determine where agricultural produce selling shops can be opened, the size of the shops, licenses for such shops etc. This will be an extremely retrograde step.

It may be worthwhile for the central government to enact a law which at best controls only foodgrains (even that should be avoided, if at all) and release the rest of the agricultural produce from the state list and abolish Agriculture Produce Marketing Committee Act across the states once and for all.


  1. Don't you know of Amar Singh's grudge with Mukesh Ambani.

    In an interview with NDTV, Amar Singh told 'I hate Mukesh Ambani, I distrust MA & I dislike MA. Banwari Lal Kanchal is a pawn.

    Mayawati had to bow down bcos she wants to be in power else opposition would withdrew support and govt. would fall.

  2. India has been a poliical and administrative entity for 60 years.
    There has been very little emotional unity among the people from different states. It is so hard for people to travel, or migrate from one part of India to another. Mainly because of the differences in the language spoken in different parts of India. I thought with the proliferation of national retail establishment and hotels people will feel more comfortable when they go from one place to another becasue they can eat , sleep and shop in the same type of establishment they are used to in their own cities. I have been living in the USA for nearly 40 years. I see there is so much at -easeness among Indians when they go from one place to another. That is because the language is the same , the houses look the same, the streets look the same. The shops are all the same. People feel so comfortable whether they live in one state or another. In the USA I feel comfortable among Indians who hailed from different parts of India I was hoping that the nationwide chain stores (of Indian origin) would make things better in India. If they are going to fight tooth and nail the establishment of Indian brands then India may be united not by Indian retail establishment but by American outfits like Pepsi, Coke, Pizza Hut, MCDonald, Baskin Robbins. There is only one thing that is common in life is change. If change is going to be fought and not welcomed when will we move forward?

    Indy Ram