Group Discussion: Real account of GD; 'FDI in retail is a boon for India'

April 13, 2013 - PRLog -- MBAUniverse.com brings to you a series of real account of GD, PI, WAT round at Top B School for admission in the session 2013-15.

Real account of GD: ‘FDI in retail is a boon for India’

Prashant – Friends, I am up against the FDI in retail. This FDI is nothing but entry of multiple East India Companies in our country. They aim to kill our small farmers, traders and retailers. In fact, foreign capital will penetrate in the country and will seek ways to multiply itself with unthinkable application for profit. In the long run, given out socio-economic structure, it may cast doom and widen the gap between the rich and the poor.

Akhshay - Friends, in my view, it is always imperative to understand the topic before placing my views on it. FDI refers to capital inflows from abroad. This inflow is invested to enhance the production capacity of the economy. However, FDI in retail is different from the investment in corporate, manufacturing, or infrastructure sectors. Retail can be single or multi brand and may be described as a sale to the ultimate consumer at a margin of profit.  In a nutshell it is a retail store with a foreign direct Investment selling multiple brands under one roof. So it is the link between the producer/manufacturer and the individual consumer.

Srikant –I do not agree and oppose the FDI.  Country like America wants its citizens to be American and buy American, the President of USA Mr. Barack Obama has made his policy clear that he doesn’t favour outsourcing and would make all out efforts to stop outsourcing.  When such developed countries are afraid of slowdown in their economy, why shouldn’t we? Are we more developed than America?  Do we have higher GDP growth, higher per capita income or have abolished poverty from the country?  None of it.  Why then – are we thinking on such lines that we can’t afford? The foreign big guns like WalMart coming with huge investment may not procure material from the domestic producers and might import the same from international market. This will add to the woes of already crumbling Indian producers.

Rachna - FDI is not the solution to all the problems. The fear is rampant on the existence of small Enterprises with the introduction of FDI in India.  

Vikram – India lives in villages.  The rural India is the true reflection of its diversity. Low Income group and rural people depend on Public Distribution system for their foodgrain needs. The present Public Distribution System on which a larger urban and rural population depends will receive a set back and it will be difficult to procure and redistribute the material, once the dependence on FDI increases. I do not favour it.

Shilpi -FDI will improve the investment in logistics of the retail chain leading to an efficient market mechanism. India is one of the biggest producers of fruits and vegetables, it does not have a strong integrated cold-chain infrastructure with only around 5400 cold storages which have total capacity of about 24 million MT. FDI will become catalyst in avoiding this distress sale and erosion & wastage in quality and quantity of the produce.

Manoj -Yes Shilpi, I have read that in accordance to the provisions made, any company going for 51% partnership in retail, shall have to tie up with a local partner. This will improve the income levels of all concerned and will make economy flourish with quality branded products at a lower price.

Vikas – FDI will improve the overall economic scenario.  It will serve as an antidote to inflation. The producer will get direct payment from the retailer and the same will be higher than what he was getting earlier due to the foul play by the intermediaries.  

Expert Feedback

1. Prashant –Not recommended.

2. Akshay –Recommended with top ranking.

3. Shilpi –Rated 3rd in the group, if more than one or two are to be selected she can be third.

4. Srikant –Rated 2nd in the group.

5. Rachna- Not recommended

6. Vikram –Not recommended

7. Manoj- Not recommended.

8. Vikas- Not recommended.  

For more real account of GD, PI and WAT round visit the URL below:

Real account of GD round at top B-school for MBA admissions 2013 (http://www.mbauniverse.com/article.php?id=6806)

Real Account of GD: 'Activism is necessary for survival of democracy' (http://www.mbauniverse.com/article.php?id=6854)