By IANS
New Delhi : A leading industry lobby Friday said the decision by the Uttar Pradesh government to order large retail stores shut would have an adverse impact on pace of inclusive growth, even as another asked for a review of the policy.
“Modern large-format retail efficiently connects the producers and the consumers and is beneficial to both in the long run,” the Confederation of Indian Industry said in a statement.
“The Uttar Pradesh Government’s move will be detrimental on several grounds – lower returns for farmers, higher prices for consumers, reduced job opportunities and erode investor confidence,” the industry lobby added.
According to CII, 24-40 percent of the total produce of vegetables and fruits go waste and the large-format retail provides the all-important infrastructure to carry the farm produce to the consumers and thereby reduce wastage.
In a decision Thursday that shocked India Inc., Uttar Pradesh Chief Minister Mayawati ordered all retail chains in the state to be closed down, specifically those of Reliance Fresh and the RPG Group-owned Spencer’s.
Se said the decision was taken because of “law and order problem” as opposition was growing over the entry of large corporate houses into retail trade business. She, however, permitted retailers in malls to function for the time being.
“The decision of the state government will send adverse signals and might affect development in the state,” said the Associated Chamber of Commerce and Industry of India (Assocham).
“The decision seems to have been taken in haste and should be reviewed,” chamber president Venugopal Dhoot said and advised the government to annul the decision in the interest of state and its industrialisation.
CII said modern retail facilitates inclusive growth and several other sectors, including agricultural, expand along with it. While all sectors of the economy were modernising, the recent act was taking India back India by several steps.
“It will deprive the state of the benefit of modern infrastructure in the form of cold chains, logistics, transport and retail outlets. Such infrastructure takes several years to build. A single adverse decision affects these sectors.”
The chamber also said that the modern retail trade industry in India was growing at more than 30 percent and was projected to be a Rs.1,100-billion business by 2010, employing additional eight million people.
“The government move will deter industrial growth by eroding investor confidence and any brake on the growth in Uttar Pradesh will ultimately harm the country,” the chamber said.