Saturday, March 17, 2007

Retail revolution: 2 links

Two pieces, perhaps diametrically opposite. The first one, which I got a link from The Acorn and the other in the Hindu Businessline. The latter mentions the problem where the former maintains (and I agree) that it is not the problem.

The second piece raises concern on some of the points, notably

Road-side vendors and hawkers also face the problem of zoning. Clearly, the important economic function and the substantial entrepreneurship provided by the wholesalers/retailers are neither recognised nor appreciated.

Last but not the least, let the reformers understand that the retail trader in his fifties with a low level of education and who is probably deep in debt does not have any interest in this revolution.

Well, obviously. But the point is that most of these hawkers are going to die hawking. They will never rise beyond the subsistence entrepreneurship that they are in.

In the first, there is a question,

Second, the whole issue of job losses must be put into proper perspective. India is poor because a large majority of her population is engaged in low-paying professions. Therefore, while we worry about the vegetable seller and the poor farmer, it would be prudent to remember that their income is barely enough to cover their minimum needs and that would always be so -- an ordinary vegetable seller will never be able to afford even a decent standard of living. Should jobs that guarantee perpetual poverty be such a holy cow?

Elsewhere, he says,

We are repeatedly told to remember that 69 percent of the Indian population are employed in the agricultural sector, a useful factoid but surely not something to be celebrated; rather it is a cause for worry. Imagine an India where you are no longer able to hire domestic help or keep a driver unless you are a millionaire.

This is already happening in places like Kerala and perhaps to a lesser extent in Bangalore. In some of the new areas getting a domestic help is a nightmare. (Enter the vacuum cleaner.)

The socialist mindset takes a narrow look at progress - because Reliance or Bharti will get rich - but they forget that in the process of getting rich, they pull many others out of poverty. Those who talk about India's IT revolution not doing much also miss the point. A good driver in Bangalore will not come for less than 5000 bucks a month (and it increases with experience, the type of car and so on). Why? Thanks to the zillions of cabs for BPO pick ups, drivers can aspire for a good life and education for their next generation.

As I never tire pointing out, my maids granddaughter goes to an English medium school. And what was the maid doing before she became a maid? She ran a roadside stall selling bhajiyas; trapped between the daily rental of the cart and the debt on the material incurred, she was in a vicious circle - until she discovered that she can work as a maid. Today, by my estimate she makes upwards of 4000 rupees a month. Her husband is a security guard for a, you guessed it, BPO firm. They are better off than they ever were. Try telling them that IT is bad for them.

Similarly look at the attendants in a Subhiksha or a Big Bazaar. Try telling them and their family members that the retail revolution is bad for them. Take away that option. Where would they work? In the neighbourhood grocer?


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