Organic Growth - Your opinion please Yes or No

07 July 2007 |

Two news items that caught my attention this week, the first one in Japan and second one is India. They are

  1. Japan takes aim at regional jet market: Mitsubishi estimates the world’s carriers will order 5,000 regional jets over the next 20 years, as developing countries expand their air networks and airlines shift to smaller, less fuel-thirsty planes.

    “This isn’t just about a single project. Our goal is to take Japan’s aerospace in­dustry to the next level of development,” says Masakazu Niwa, general manager of Mitsubishi’s aerospace division.
  2. Kerala govt mulls ban on organised retail: The Kerala Government is all set to bring in legislation to prevent multinational companies and larger Indian companies from entering the retail sector.

    The Left Government says that opening up of the retail sector would harm consumers in Kerala and also affect the strong PDS network.
I was wondering, how can a organised development harm the national interests. Japan knows that it is far behind its competitors in aviation industry and it has now taken initiative to aim on small aircraft market. The government is supporting the industry initiatives so that in next 20 -50 years Japan will not be behind China which has started its own program a year ago.

In contrast, in India, there is still discussion about organised retailing whether it will be good for indian consumers. We lost out to China and Taiwan in 1980s when there were chances of setting up hardware industry in India. Luckily India managed to attract services industry in 1990s because of English speaking ability.

Reading from various sources, we find that MNCs and Indian corporate houses are interested to set up retailing across India. The most affected that we read from media are small retailers or shops. However no one seems to take into account large Indian consumers who have been paying more and abused right from the beginning. Is it not true operations in large scale brings economy ? Do we still believe in cottage industry ?

The encouragement from Japanese government will help the Japanese aerospace industry to take risks and reach to the next level.

In India, we have Investors are willing to pump in capital and expertise. Its time to encourage the home growth corporates so that they help in rapid growth in this sector. A known logic - distinction from ownership and management will bring in good corporate practises and government will be benefitted by steady growth of tax revenues which in turn will fuel overall development of the country.

Management Accountants ... share your thoughts on organised retailing in India... with examples how it will affect overall consumers and nation as a whole.

Regards,

Santosh Puthran
AICWA

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