The last 10 years have seen an extraordinary quantum of interest and debate on the benefits and dangers of modernisation of India’s retail sector, though never has this debate been shriller and more contentious than what has been seen in the past.
Unfortunately, no discussion has taken place even once in these years on the importance of the retail sector to India (not only just the 15+ million independent retailers and street hawkers), the need to make the producer to the consumer distribution system more efficient and less wasteful, and how to make these millions of independent retailers not only relevant for tomorrow but actually increase their numbers and enhance the economic and social vibrancy of their vocation. Sadly, much more attention has been misguidedly focused on just one single dimension of modernisation of the distribution and retail infrastructure namely “foreign direct investment”. And most of the rhetoric of recent years has largely been on emotional and sometimes incorrect factual positions.
Private consumption has long been the larger constituent of India’s economy and even today, it accounts for almost 60% of India’s GDP. Of this private consumption, more than 60% is what would constitute what we typically route through retail channels.
The fact is India’s retail story is not a zero sum game i.e. growth of new, modern, and sometimes larger in scale retail businesses has to come at the expense of decimation of the traditional, independent retail business owners. Even at a real growth of 6% per year and inflation of about 5% for the next 15 years, India’s nominal GDP will be about $8,000 billion in 2026. The size of India’s retail market would have also moved up from about $500 billion in 2011 to about $2,500 billion in 2026.
Traditional retail currently accounts for as much as about $475 billion of this market. Even if modern retail attracts as much as $150 billion in fresh direct and indirect investment (from within India and overseas) over the next 15 years (i.e., $10 billion per year), the size of modern retail business in India is not likely to cross $300-350 billion by 2026, implying that traditional retail will account for as much as $2,150-2,200 billion in revenues (or more than four times of their current size).
Accounting for inflation and some increase in productivity of traditional retailers, it can be very confidently assumed that in the most optimistic of all scenarios as far as investment in modern retail is concerned, the numbers of independent retail outlets in India will more than double by 2026 rather than show any decline whatsoever. If these facts are understood , then what should India be doing to facilitate this retail consumption taking place in a planned, organised manner rather than seeing millions of illegal retail establishments sprouting all over ?
First, our politicians, our bureaucrats, and our urban planners must realise the need and relevance of providing for retail spaces in an integrated, holistic planned way. At the very least, about 10-12 square feet of retail space is needed for every urban inhabitant. Urban agglomerations such as NCR, Greater Mumbai, and Kolkata therefore require at least 200 million square feet each of legalised retail space .
1. Which of the following is/ are the major concern for India's retail sector ?
Private consumption has long been the larger constituent of India’s economy and even today, it accounts for almost 60% of India’s GDP. Of this private consumption, more than 60% is what would constitute what we typically route through retail channels.
The fact is India’s retail story is not a zero sum game i.e. growth of new, modern, and sometimes larger in scale retail businesses has to come at the expense of decimation of the traditional, independent retail business owners. Even at a real growth of 6% per year and inflation of about 5% for the next 15 years, India’s nominal GDP will be about $8,000 billion in 2026. The size of India’s retail market would have also moved up from about $500 billion in 2011 to about $2,500 billion in 2026.
Traditional retail currently accounts for as much as about $475 billion of this market. Even if modern retail attracts as much as $150 billion in fresh direct and indirect investment (from within India and overseas) over the next 15 years (i.e., $10 billion per year), the size of modern retail business in India is not likely to cross $300-350 billion by 2026, implying that traditional retail will account for as much as $2,150-2,200 billion in revenues (or more than four times of their current size).
Accounting for inflation and some increase in productivity of traditional retailers, it can be very confidently assumed that in the most optimistic of all scenarios as far as investment in modern retail is concerned, the numbers of independent retail outlets in India will more than double by 2026 rather than show any decline whatsoever. If these facts are understood , then what should India be doing to facilitate this retail consumption taking place in a planned, organised manner rather than seeing millions of illegal retail establishments sprouting all over ?
First, our politicians, our bureaucrats, and our urban planners must realise the need and relevance of providing for retail spaces in an integrated, holistic planned way. At the very least, about 10-12 square feet of retail space is needed for every urban inhabitant. Urban agglomerations such as NCR, Greater Mumbai, and Kolkata therefore require at least 200 million square feet each of legalised retail space .
1. Which of the following is/ are the major concern for India's retail sector ?
1) More attention is being paid to the possible role of FDI.
2) No efforts are made by the authority to enhance efficiency of retail distribution.
3) The retailers are not regulated.
4) The retail sector in India is a potential retail market for employment prospects.
5) Both 1) and 2)
2. What has/have been suggested by the author? Answer in the context of the passage.
(A) FDI should allowed only in a few restricted sectors.
(B) New players should not be allowed to invest funds.
(C) There should be proper planning for the developing of retail sectors.
1) Only (A)
2) Only (B)
3) Only (C)
4) Only (A) and (B)
5) Only (B) and (C)
3. What does the author mean by 'zero sum gain'?
2) No efforts are made by the authority to enhance efficiency of retail distribution.
3) The retailers are not regulated.
4) The retail sector in India is a potential retail market for employment prospects.
5) Both 1) and 2)
2. What has/have been suggested by the author? Answer in the context of the passage.
(A) FDI should allowed only in a few restricted sectors.
(B) New players should not be allowed to invest funds.
(C) There should be proper planning for the developing of retail sectors.
1) Only (A)
2) Only (B)
3) Only (C)
4) Only (A) and (B)
5) Only (B) and (C)
3. What does the author mean by 'zero sum gain'?
1) Gain of branded retailers at the cost of traditional retailers.
2) Loss of some best retailers at the gain of others.
3) The number of retailers remain the same over the period of time.
4) Both 1 and 2
5) All 1 , 2 and 3
4. Which of the following is not contextual according to the passage ?
2) Loss of some best retailers at the gain of others.
3) The number of retailers remain the same over the period of time.
4) Both 1 and 2
5) All 1 , 2 and 3
4. Which of the following is not contextual according to the passage ?
1) The modern retail will grow substantially but not relatively.
2) Traditional retailer will evaporate in the course of time.
3) Traditional retailer will grow relatively.
4) Inflation will be a factor to attribute growth
5) Other than given options
5. Choose the word which is MOST OPPOSITE in meaning to the word 'decimation' as used in the passage?
2) Traditional retailer will evaporate in the course of time.
3) Traditional retailer will grow relatively.
4) Inflation will be a factor to attribute growth
5) Other than given options
5. Choose the word which is MOST OPPOSITE in meaning to the word 'decimation' as used in the passage?
1) Annihilation
2) Devastation
3) Catastrophe
4) Holocaust
5) Establishment
6. Which of the following is true according to the passage ?
2) Devastation
3) Catastrophe
4) Holocaust
5) Establishment
6. Which of the following is true according to the passage ?
1) Retail market is the backbone of distribution system of the country.
2) Modernisation of India's retail sector is not that pious.
3) Retail management is required to work with wholesale market as well as Internet sales.
4) Independent retailer in the future market is a major concern.
5) Other than given options
7. Choose the word which is MOST OPPOSITE in meaning of the word 'sprouting' as used in the passage?
2) Modernisation of India's retail sector is not that pious.
3) Retail management is required to work with wholesale market as well as Internet sales.
4) Independent retailer in the future market is a major concern.
5) Other than given options
7. Choose the word which is MOST OPPOSITE in meaning of the word 'sprouting' as used in the passage?
1) Germinating
2) Burgeoning
3) Proliferating
4) Expanding
5) Subsiding
8. What is the central idea of the given passage ?
2) Burgeoning
3) Proliferating
4) Expanding
5) Subsiding
8. What is the central idea of the given passage ?
1) Impact of FDI on India's retail sector.
2) Growth in India's GDP.
3) Declining trend of traditional retail sector.
4) Issues related to management of modernisation of India's retail sector.
5) Other than given options
9. Give a suitable title to the above passage ?
2) Growth in India's GDP.
3) Declining trend of traditional retail sector.
4) Issues related to management of modernisation of India's retail sector.
5) Other than given options
9. Give a suitable title to the above passage ?
1) Retailing in India
2) Retail sector in India and growing e–commerce challenge
3) Retail sector in India growing at phenomenal pace
4) India's retail sector: Missing the wood for the trees
5) FDI in retail sector in India
10. Choose the word which is MOST SIMILAR in meaning to the word 'contentious' as used in the passage?
2) Retail sector in India and growing e–commerce challenge
3) Retail sector in India growing at phenomenal pace
4) India's retail sector: Missing the wood for the trees
5) FDI in retail sector in India
10. Choose the word which is MOST SIMILAR in meaning to the word 'contentious' as used in the passage?
1) Submissive
2) Complaisant
3) Netted
4) Controversial
5) Agreeable
Answer 2. 3
Answer 3. 4
Answer 4. 2
Answer 5. 5
Answer 6. 5
Answer 7. 5
Answer 8. 4
Answer 9. 4
Answer 10. 4
2) Complaisant
3) Netted
4) Controversial
5) Agreeable
Answer Key –
Answer 1. 5Answer 2. 3
Answer 3. 4
Answer 4. 2
Answer 5. 5
Answer 6. 5
Answer 7. 5
Answer 8. 4
Answer 9. 4
Answer 10. 4
