The government’s decision to allow FDI in retail In only towns with a population of over 10 lac ( One million ) is totally flawed . India has over 8000 towns and cities, and if only the 53 flourishing towns get FDI , it clearly indicates a few things ;
1. All retailers would anyways like to be present in towns where there is business – Government is simply conveying & supporting the business plans for these big retailers
2. All retailers would be willing to invest in such towns ( be it front end or back end ) and not in smaller towns where real infrastructure investment is needed
3. This policy will lead to more migration from smaller towns to these big 53 towns . So property / real estate will go up and so will the prices of major services and goods and drive inflation higher
4.In fact , these retailers must first prove their success in the smaller towns and not the bigger towns, and make investment in the infrastructure in smaller towns
The MNC retailers must not be allowed in bigger towns before they invest in smaller towns or let them have two- three small towns and one big town if at all the FDI has to be allowed
Automatically , the real interest of these retailers will come in open !