Job Creation through Retail FDI

Job Creation through Retail FDI

 

 

The recent reforms push by the government is likely to have a positive impact on organized employment sector in the country and the retail sector alone is expected to see as many as 10 million jobs in the next 10 years’ time, experts believe.

 

Pursuant to FDI in the retail, international MNCs are likely to enter India either directly or through Indian companies and they in turn are going to recruit people for sales, customer service, back end logistics and IT, which would mean substantial job creation.

 

According to experts, FDI in retail can create 3 million jobs in three years including both direct and indirect jobs. In the next 10 years’ time the figure could touch as much as 10 million, wherein 4 million would be direct jobs and around 5-6 million indirect jobs including contractual employees, says Indian Staffing Federation (ISF), an apex body of the flexi staffing industry in India.

 

“The reforms push will have a very good impact on the organised employment. If more retail happens then lot more jobs are going to get created,” Randstad India President (Staffing) Aditya Narayan Mishra told PTI.

 

According to ISF, FDI in retail will have a much wider impact on organised employment than what happened in IT, 12 years back as it shall open doors for less skilled and less educated people as well.

 

Moreover with the recent reforms push, foreign investors are showing renewed interest in India, which is likely to result in more investments and thus more number of jobs.

 

The government has taken a number of reform initiatives like opening the multi-brand retail sector to FDI, hiking diesel prices by over Rs. 5 a litre, capping the number of subsidised LPG cylinders to six per family a year, allowing foreign carriers to pick up stake in domestic airlines and liberalising FDI rules for broadcasting sector.

 

For the economy it is going to be good, lot more people are going to be enrolled in the organised field but it also brings new challenges, experts say.

 

“As the demand suddenly increases and the same could not be said for supply, which could put a pressure on salary and attrition… And hence retention efforts would become much more difficult and employer branding would become more challenging than what it is today,” Mishra said.

 

After the opening up of the retail sector the only challenge there will be is to create enough skilled workers to cater to the demand that shall follow, ISF said.

 

IIT Delhi, Professor and Head (retd) Department of Management Studies, Rajat K Baisya said: “India is a difficult market. In order to sustain and be a success they (Walmart and the like) will have to invest in supply chain, improve efficiency, reduce wastage, and that might help”.

 

firstpost.com



The Retail Giant Wall Mart: How far from India...?

The Retail Giant Wall Mart: How far from India...?

Retail giant Wal-Mart is looking to open its first outlets in India within 12 to 18 months as it would seek permission from states that have already indicated their willingness to allow foreign retailers to set up shop in India, Scott Price, president and CEO for Asia, said in an interview with The Wall Street Journal.

The move comes after the UPA government last week agreed to allow megastore retailers to enter the country through joint ventures.

Wal-Mart, the world’s biggest retailer, has not yet decided where or how many stores it would like to have in India, Price told the newspaper. Price added that the company expects to continue its current partnership with Bharti Enterprises in a chain of 17 cash-and-carry stores, but it is not in discussions with any other companies for a potential retail partnership.

Meanwhile, Anshuman Magazine, CMD, CB Richard Ellis told the Business Standard that purchasing power and consumption will be the biggest hurdle for foreign retailers in India. “Is there purchasing power to absorb the supply form the big retailers? Despite all the restriction of 1million population, foreign brands may be confined to major metros only, at least in the initial years,” Magazine told the paper.

Moreover, Local sourcing from small-scale companies, which also caused IKEA some second thoughts about the Indian market, will probably be the hardest part for Walmart and others–whose business success depends on ultra-efficient management of a global supply chain to drive down prices.