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Indian retail policy attacked

Indian political think tank feels that large retailers will put small shop owners out of business. In the past as well as present these small shop owners make huge profits without a healthy competition and evade taxes by selling without invoice.

Don't you feel that Indian consumers should be treated fairly and government get the tax revenue..

One of the reason the taxation is quite high is probably there is so much tax evasion. When the business is organised, there is a seperation of ownership and management which promotes good corporate governance and accounting. The checks and balance will make it difficult to evade taxes.

A healthy competition with both Indian and foreign players would be beneficial for Indian consumers who have been suffering and paying more because of non competitive retail sector.


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Management Accountants ... Share your thoughts.

Cheers,

Santosh Puthran



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Comments

raghu said…
Some Interesting issues u have raised.
1.Threat to small vendors due to economies of scale and supply chain.
2.Tax evasion.
3.Unorganised market.
4.Treating consumers fairly from over invoicing.
Let me answer point wise:
1.The threat is real if we view from population engagement perspective.
If we feel that economies of scale passes on to the consumers we are in the fancy world of business and business at the Top end is more exploitative than at the bottom Oligopoly is the order of the day and cornering of goods and dictating terms were never so easy in an unorganised sector.Though there was an element of backward integration(Veggie Dadas)ruling unorganised sector.
2.Tax evesion is an issue not vendor specific,so letus not address it with vengence it is a culmination of various factors including tax collectors.we need to put in place an effective system.
3.Un organised market is not unorganised end to end as we see infact they too run on an invisible supply chain probably more efficient.
4.Sermon on the mount an enemy to good business deals.
Santosh Puthran said…
As the corporations grow large, they have to be regulated, that is where the role of government comes in. Indian consumers should get the best and at competitive price. In countries like UK, large supermarket have virtually finished the small vendors and shopkeepers but it has benefitted the consumers.

Large corporations have improved the economy tremendously. The people who had vision have made these companies large and now they are growing internationally. Tesco started with £30 investment in early 20th century.

In India,look at our Taxi/Rickshaws on the roads. They are worst maintained and at any moment they are there to rip you. If they were companies, they would have organised better for services to the consumer. And also paid taxes to government.

Large supermarkets will bring in itself pros-cons... but over a period of time, we will be moving towards a skilled economy.... Management Accounting role will be vital.

More important.. how can government collect all the taxes from unorganised sector. Then who pays for it.... the organised one. Then it is better to have organised retailer for the benefit of the country.

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