Friday, December 08, 2006

More on how the retail industry will revolutionalize India

Read this very interesting article on the Economic Times on how the retail industry will affect the two lagging industries in India.

Quoting from the article..

In the first phase of the retail revolution, the focus of entrepreneurs has been largely on capturing the consumers’ attention and providing them with a new shopping experience. However, the retail revolution is not just about the new shopping ambience. Going forward, the rising scale of organised retail distribution network and increasing competition will force players to focus on restructuring the whole supply chain to improve productivity and provide a better deal to customers. The retail revolution will restructure the economy’s two lagging segments including agriculture and manufacturing by small- and medium-scale enterprises. For the first time since India initiated its liberalisation programme in 1991, there is now a potential for reforming these two important sectors of the economy which can increase productive job opportunities for the middle class.

The agriculture related supply chain segment suffers from maximum inefficiency. Cumulative wastage in this supply chain is estimated to be about $11 billion, or 9.8% of agriculture component of GDP. Over the years, owing to government intervention in the input and output pricing, there has been little incentive for farmers to improve efficiency. Moreover, in the past few years, public investment in agriculture as a percentage of GDP has also been gradually declining. The archaic infrastructure for reaching the agricultural produce from farm-gate to consumers has meant huge losses in transit and large markups in pricing due to extra layers of intermediation.

I'd love to see this happen. That way the agriculture and the manufacturing sectors won't be left behind in this great Indian revolution. Undoubtedly the best thing to happen to India in a while now!

Read the article here


Post a Comment

<< Home