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Licensing retail?

Aman Malik     August 10, 2007
Licensing retail?

The left is at it again. After successfully bullying the government into fixing norms for Special Economic Zones (SEZs), it now wants the government to license the retail in groceries, fruits and vegetables, ostensibly to prevent corporate monopoly and to protect the interests of the neighbourhood mom and pop stores. While retail outlets with a floor area in excess of 10,000 sq. ft may have to go in for a licence, those with an area greater than 50,000 sq. ft may be forced to operate from specified areas outside the main city. In fact, the Ministry of Urban Development has reportedly already finalised zonal plans for the same.

"All countries with developed organised retail markets regulate retailers," says Nilotpal Basu of the CPI(M), "so why should India be any different?" In fact, the party has already suggested a population-based criteria on which licences should be granted. It further proposes that the licence granting authority should have representation from local shopkeepers' associations and even street vendors. While this will be a major setback to the plans of corporate groups like Bharti, Future Group and Reliance Industries, it will also not augur well for farmers who receive less than half the retail price because of inefficient supply chain linkages, which account for annual losses of Rs 1,00,000 crore.

Aman Malik

Better deal for land oustees

Under fire from the opposition and the left, the government is considering a comprehensive resettlement and rehabilitation (R&R) package for people displaced by SEZs. The said package will include an amendment to the Land Acquisition Act, a rehabilitation policy and a rehabilitation law currently being worked out by the Ministry of Rural Development.

But differences of opinion persist within the appointed Group of Ministers (GoM) over the method of calculating compensation; the Finance Ministry and the Ministry of Rural Development are at loggerheads over the issue. The latter has also suggested that the government stay away from directly acquiring land for SEZs. Also under consideration is the setting up of an independent tribunal for out of court settlement of disputes.

Rishi Joshi

Delinking coal

India's coal market looks set for a major overhaul. A court-appointed committee of the Union government is considering a draft policy that will change the way the government allocates the 385 million tonnes of coal produced annually to various sectors and potentially end the hierarchical system of linkages being followed now. The policy, due to be finalised by the end of June (and then taken for Cabinet approval by Minister of State for Coal Dasari N. Rao), will, however, continue to prioritise regulated sectors such as power and fertilisers over unregulated sectors like cement and steel.

While Coal India (CIL) will meet 90 per cent of the demand of the former, it will be required to meet only 25 per cent of the latter's demand. The recommendations also include the setting up of an e-market to allow suppliers and consumers to settle on coal prices, which currently hover in the range of Rs 400-2,000 per tonne (up to 30 per cent below international prices), in sync with global market rates.

Aman Malik

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