Shop Poverty (at discounted prices)

Yahiya Hamsa July 24, 2011

Image Credit: peterblanchard


In the wake of rising prices, the Government is seeking desperately for measures to tackle inflation. One of the recommendations put forward by an Inter-ministerial Group (IMG) on inflation was to allow Foreign direct Investment (FDI) in multi-product retail and thereby, bring down the prices and also, cut-down the margin between farm gate and retail prices. This is the first instance of a formal recommendation by a government panel to allow FDI in the retail sector which is highly sensitive and tightly policed.

The present market mechanism is inefficient because of the lack of investment in the logistics of the retail chain. India has a very limited integrated cold-chain infrastructure. As per some industry estimates – 25-30 percent of fruits and vegetables and 5-7 percent of food grains in India are wasted 1. Though FDI is permitted in cold-chain to the extent of 100 percent, through the automatic route; in the absence of FDI in retailing, FDI flow to the sector has not been significant.

By bringing in technical know-how and capital, FDI can induce competition in the retail industry. Improvement in supply chain infrastructure, investment in technology, up-gradation in agriculture, manpower and skill development, improvement in the overall productivity are some of the advantages that we expect from FDI in multi brand retailing.

Advocates of FDI in multi-brand retailing say that, through the removal of structural inefficiencies, farmers will benefit significantly from the option of direct sales to organized retailers. It means the profit realization by farmers selling directly to the organized retailers is expected to be much higher than that received from selling in the mandis. Consumers will also benefit as they can get products of better quality at lower prices.

An argument in favor of retail FDI is made in terms of investment needed for cold chain infrastructure in order to reduce wastage in the fruit and vegetable sector. The experience of domestic players in cold storage chain infrastructure sector shows that if the returns are not significant they will not invest in building this infrastructure or will withdraw as quickly as they invest. Today, in Gujarat there is only one chain left in the market. Others have wound up their procurement and retail operations as fast as they started them.

Investments (for cold chain storage for fruits and vegetables that accounts for a small part of farm production) that are expected in this sector by opening up the sector for foreign investment will take place only if they find it profitable. Since the supermarkets cannot sell products at a higher price than the present market price they have to cover up their cost of building up the infrastructure by giving less to farmers. So the comparison between the commission levied by the middle men from the farmers in the present scenario and the profit margin required by the foreign supermarkets to cover up their cost of building the infrastructure needs to be considered before opening up the sector for foreign investors. It is expected that foreign supermarkets remove traditional middlemen from trading. But in reality they will be replaced by well dressed middlemen with fancy positions like quality controller, certification agencies, packaging industry, processors, wholesalers.

It is expected that the foreign players will help the farmers to become economically viable. But it has not happened in the US where the world’s biggest retailer Walmart is based, instead farmers are supported by the subsidies given by the government (12.5 lakh crore US$ subsidy for a period of 1995 to 2005). A report published by the Organisation for Economic Cooperation and Development for the year 2010 show a rise in farm subsidies from 21 per cent in 2008 to 22 per cent in 2009 clearly indicating that the situation is more or less similar in Europe.

When FDI in other sectors creates employment, FDI in multi-brand retailing will have an adverse effect on employment. One of the principal reasons behind the explosion of retail in India is the fact that retailing is probably the primary form of disguised unemployment and underemployment in the country. Given the already over-crowded agriculture sector, and the stagnating manufacturing sector, and the hard nature and relatively low wages of jobs in both, it is almost a natural decision for an individual to set up a small shop or store, depending on his or her means and capital. And thus, a retailer is born, seemingly out of circumstance rather than choice. This phenomenon quite aptly explains the millions of kirana shops and small stores. The explosion of retail outlets in the more busy streets of Indian villages and towns is a visible testimony to this.

Stephan J. Goetz on his paper2 ‘Wal-Mart and country wide poverty in US’, found that the counties which had Wal-mart stores initially in 1987, with more additions of stores between 1987 and 1998 experienced greater increases (or smaller decreases) in family poverty rates during the 1990s economic boom period (after accounting for other factors determining changes in the poverty rate over time), he points out possible reasons for the same. The first and perhaps most direct effect is the demise of existing mom-and-pop-type operations that is caused by the arrival of Wal-Mart in a community.

Poverty rates will rise if retail workers displaced from existing mom-and-pop type operations work for Wal-Mart at lower wages because they have no alternatives. Arrival of the chain also forces other local retailers to reduce wages in order to remain competitive. Wal-Mart jobs may be part-time as opposed to full-time, leading to lower family incomes, all else equal. demise of mom-and-pop stores leads to the closing of local businesses that previously supplied those stores: wholesalers, transporters, logistics.

In a paper by David Neumark 3, Junfu Zhang 4, and Stephen Ciccarella 5, the effects of walmart on local labour market had been studied. On average, Wal-Mart store openings reduce retail employment by about 2.7 percent, implying that each Wal-Mart employee replaces about 1.4 employees in the rest of the retail sector. Driven in part by the employment declines, retail earnings at the county level also decline as a result of Wal-Mart entry, by about 1.5 percent. It is harder to draw any firm conclusions regarding the effects of Wal-Mart on wages, as the data does not provide any indication that retail earnings per worker have been affected by Wal-Mart openings. Note that the estimated adverse effects on retail employment do not imply that the growth of Wal-Mart has resulted in lower absolute levels of retail employment. Like in all studies of this type, the estimates are relative to a counter-factual of what would have happened to retail employment in the absence without the effects of Wal-Mart.

In US the displaced people from retail sector could be accommodated in other sectors like manufacturing and other service sector. But in a country like India where retail sector is the livelihood option for a large section of people, and the manufacturing sector and agriculture sector is not in a position to absorb the displaced people, the decline in employment will be huge and there can be an absolute decrease in employment.


The author is pursuing his dual degree B.Tech/M.Tech at IIT Madras in Civil Engineering discipline.


  1. Annual Report 2006-07, Ministry of Agriculture, Department of Agriculture and Cooperation 

  2. http://cecd.aers.psu.edu/pubs/PovertyResearchWM.pdf 

  3. Department of Economics, UCI, 3151 Social Science Plaza, Irvine, CA 92697, USA 

  4. Department of Economics, Clark University, 950 Main St., Worcester, MA 01610, USA 

  5. Department of Economics, 404 Uris Hall, Cornell University, Ithaca, NY 14853, USA 

Development, FDI, unemployment, Globalisation, Neo-liberalism, Note, Poverty Share this Creative Commons Attribution-ShareAlike 3.0 Unported

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Problems with the arguments

Well written article, but I believe there are some flaws in the arguments presented here...

  1. "The experience of domestic players in cold storage chain infrastructure sector shows that if the returns are not significant they will not invest in building this infrastructure or will withdraw as quickly as they invest. Today, in Gujarat there is only one chain left in the market. Others have wound up their procurement and retail operations as fast as they started them."

Walmart is, arguably, an expert in creating and maintaining its own supply chains and storage facilities. The problem with other domestic players has been the absence of the capital and/or the scale required to operate such facilities over the time periods required to ensure return on investment. In any case, what's the problem in giving them an opportunity to create this infrastructure?

  1. "Investments (for cold chain storage for fruits and vegetables that accounts for a small part of farm production) that are expected in this sector by opening up the sector for foreign investment will take place only if they find it profitable. Since the supermarkets cannot sell products at a higher price than the present market price they have to cover up their cost of building up the infrastructure by giving less to farmers."

"small part"??!! Agro-production in India (2005-06 statistics) - Rice - 91.8 Million Tonnes (MT) Wheat - 69.4 MT Fruits - 54.4 MT Vegetables - 113.5 MT

Walmart is not going to achieve market dominance overnight, and if it offers less to farmers, they can just refuse to sell to Walmart. Walmart will expect a return on investment over a period of a number of years. In any case, a retail chain must necessarily satisfy the needs of both consumers and suppliers. Pushing your suppliers out of business and into poverty is not a sustainable business model. Walmart knows that as well...

  1. "It is expected that foreign supermarkets remove traditional middlemen from trading. But in reality they will be replaced by well dressed middlemen with fancy positions like quality controller, certification agencies, packaging industry, processors, wholesalers."

The difference - Walmart will only maintain the "new middlemen" if it feels that they are adding to the efficiency of the supply chain, and their wages will depend on the value added to the retailer.

  1. "It is expected that the foreign players will help the farmers to become economically viable. But it has not happened in the US where the world’s biggest retailer Walmart is based, instead farmers are supported by the subsidies given by the government (12.5 lakh crore US$ subsidy for a period of 1995 to 2005). A report published by the Organisation for Economic Cooperation and Development for the year 2010 show a rise in farm subsidies from 21 per cent in 2008 to 22 per cent in 2009 clearly indicating that the situation is more or less similar in Europe."

This particular argument is especially interesting given the debate and controversy surrounding agricultural subsidy in the US and in Europe. Please check - http://en.wikipedia.org/wiki/Common_Agricultural_Policy#Criticism_of_the... and http://en.wikipedia.org/wiki/Agricultural_policy_of_the_United_States#In... for an introduction to this subject.

To summarize - subsidy in Europe is primarily meant to promote efficient farming practices. Subsidy in the US is a historical relic which is being artificially and unnecessarily sustained by lobbying (and the result of such subsidies is harming farmers in developing countries like our own). http://en.wikipedia.org/wiki/Agricultural_subsidy#Impact_of_subsidies

I believe there are flaws in the remaining arguments as well. Will continue with my critique in another comment...

marker error

Please excuse the use of 1. as a marker for points in the previous comment (editing error)

hmmm

I see you make a point thre from a capitalist economic point of view. Whether capitalism is good or not lets forget for the time being.

But what troubles me is the effort to advovate Walmart blindly by making statements such as Walmart will do that, walmart will not do that, walmart is not a fool to do that etc.

If Walmart comes to India their intention would be to expand their market and make more profit nothing more. If they are not able to make profit well they might go against your expectations of what they will do or they wont do. Business is just business and a capitalist's behavior evolves over time for their own intereset . It is India's (read it as govt , or ministry or whatever) duty to dictate terms as what they should do and what they should not in case they are allowed to invest in India. Then it is their discretion whether to invest in India or not following govt regulations.

So it is definitely the constituencies is responsibilty to study the implications of opening its market for Walmart and then do decide what all needs to be taken care by govt, what rules and regulations need to be implemented before taking decision to open market, if not to decide not to open the market at all!

excuse me for bad english in

excuse me for bad english in the above comment, its difficult even for me to read it :( but i hope you are able to understand what i meant to say.

Trust only in profit motive

My perspective is based on the assumption that Walmart will work only on the basis of its profit motive. My statements regarding what Walmart is likely to do is based on my readings of Walmart's business model and its activities in the pursuit of profit.

In the process of creating a profitable business in India, Walmart, in order to maximize its profits, is likely to create a more efficient supply chain infrastructure including the much needed cold storage facilities. Although this would probably affect the small scale retail sector in an adverse manner, it would also, in all probability, bring down prices for the common man (Walmart targets BOP customers and it makes profits by winning price wars). The "adverse" effects of Walmart's business strategy on farmers can easily be prevented, if necessary, via minimum price regulations, but they'll only be necessary if Walmart actually achieves market dominance.

I believe it's more sensible to let in foreign capitalists whose business interests serve our social interests, rather than protecting domestic capitalists (the existing multi-brand retail chains) or professional (small scale retail) lobby groups whose activities haven't able to serve those social interests.

// "The experience of

// "The experience of domestic players in cold storage chain infrastructure sector shows that if the returns are not significant they will not invest in building this infrastructure or will withdraw as quickly as they invest. Today, in Gujarat there is only one chain left in the market. Others have wound up their procurement and retail operations as fast as they started them."

Walmart is, arguably, an expert in creating and maintaining its own supply chains and storage facilities. The problem with other domestic players has been the absence of the capital and/or the scale required to operate such facilities over the time periods required to ensure return on investment. In any case, what's the problem in giving them an opportunity to create this infrastructure?//

It was not a conclusive statement. It is just an introduction to my next argument in next para. I didnt say that walmart shouldn't be given a chance here. Domestic players weren't successful because they didn't find it profitable. By that para I wanted to convince the readers that the cost of building/operate this infrastructure is huge as the big domestic players find it difficult to build/operate it. So if walmart invests in such an infrastructure, the only way they could cover up their investment cost is giving less to the farmers (long run ). So a comparative study between the charges levied by middle men in the present scenario with walmart's additional profit requirement to cover up their investment in cold chain infrastructure is required before arriving at a conclusion. The para you have pointed out is just an introduction for the next para.

//"small part"??!! Agro-production in India (2005-06 statistics) - Rice - 91.8 Million Tonnes (MT) Wheat - 69.4 MT Fruits - 54.4 MT Vegetables - 113.5 MT//

I repeat it is fruits and vegetables which require cold storage system forms a small part of our total farm production. Total value of production in agricultural and allied activities in 2005-06 year is 63569440 lakhs. The share of vegetables+fruits+meat+fish which require cold storage facility is just 25% (15931881 lakhs) of total farm production. The implicit question there was, is it justified to open up our retail trading just because of this argument (cold storage for fruits and vegetables). I have pointed out that the other arguments put forward by the advocates of fdi in multibrand retailing doesn't make any sense by quoting scientific studies by experts and logical reasoning.

http://www.mospi.nic.in/dwh/searchtbl.asp

//Walmart is not going to achieve market dominance overnight, and if it offers less to farmers, they can just refuse to sell to Walmart. Walmart will expect a return on investment over a period of a number of years. In any case, a retail chain must necessarily satisfy the needs of both consumers and suppliers. Pushing your suppliers out of business and into poverty is not a sustainable business model. Walmart knows that as well...//

All my arguments are valid for long run. Please read about predator prey strategy by giant players in markets. You will get to know how could they give less to farmers.

//The difference - Walmart will only maintain the "new middlemen" if it feels that they are adding to the efficiency of the supply chain, and their wages will depend on the value added to the retailer.//

I put this argument to disprove the advocates of fdi in multibrand retailing who say that fdi will help farmers to realise better prices by displacing middle men. What fdi will bring is a new set of middle men replacing old traditional ones. What is the difference it makes ? First of all the issue of middle men in the present system is not because of the nature of existing retail system. so why to change the nature of retail system to displace middle men ? What we need is a government intervention/law that can minimise the involvement of middlemen in the present system, not FDI.

//This particular argument is especially interesting given the debate and controversy surrounding agricultural subsidy in the US and in Europe. Please check - http://en.wikipedia.org/wiki/Common_Agricultural_Policy#Criticism_of_the... and http://en.wikipedia.org/wiki/Agricultural_policy_of_the_United_States#In... for an introduction to this subject.

To summarize - subsidy in Europe is primarily meant to promote efficient farming practices. Subsidy in the US is a historical relic which is being artificially and unnecessarily sustained by lobbying (and the result of such subsidies is harming farmers in developing countries like our own). http://en.wikipedia.org/wiki/Agricultural_subsidy#Impact_of_subsidies//

What are you trying to prove here ? Please elaborate.

So if walmart invests in such

So if walmart invests in such an infrastructure, the only way they could cover up their investment cost is giving less to the farmers (long run ).

Wrong. Return on capital can be achieved by the greater efficiency that would be achieved in the system. The infrastructure would provide an advantage to Walmart (A simple way of looking at it - the produce they buy won't be wasted, they'll have greater produce to sell at lower costs in times of shortage). Let me put it this way, Walmart will not be building this infrastructure as a good will gesture. They'll build it only because it makes business sense to build such infrastructure. It pays for itself.

The share of vegetables+fruits+meat+fish which require cold storage facility is just 25% (15931881 lakhs) of total farm production.

I'm sorry but "just" 25% ?!

Please read about predator prey strategy by giant players in markets. You will get to know how could they give less to farmers.

Predatory pricing is only applicable if a player achieves a near monopoly in the market or by a group of players who have formed an oligopoly. Also predatory pricing in grain crops would not be possible given existing price control policies. If predatory pricing is a concern then similar policies can be implemented for other crops as well, instead of preventing FDI.

What is the difference it makes ? First of all the issue of middle men in the present system is not because of the nature of existing retail system. so why to change the nature of retail system to displace middle men ? What we need is a government intervention/law that can minimise the involvement of middlemen in the present system, not FDI.

As I stated earlier, the difference is the value added by these people you're calling middle men. In the existing supply chains the number of middle men involved implies that there is an artificially bloated margin between market and farm prices. Walmart, in it's own interest, will reduce that margin, it will try to make the system more efficient and reduce the prices so as to increase its market share and thus its volume and profitability.

I believe your stance in this case is based on a blind faith in the government, and an opposition to the concept of FDI. We can all depend on the government and say that we "need" the government to do many things, but the devil lies in the details. How should the government do it? And, even if a strategy exists, will the government do it?

What are you trying to prove here ? Please elaborate.

As I'd clearly outlined in the original comment my statements were a critique of this paragraph from your article - "It is expected that the foreign players will help the farmers to become economically viable. But it has not happened in the US where the world’s biggest retailer Walmart is based, instead farmers are supported by the subsidies given by the government (12.5 lakh crore US$ subsidy for a period of 1995 to 2005). A report published by the Organisation for Economic Cooperation and Development for the year 2010 show a rise in farm subsidies from 21 per cent in 2008 to 22 per cent in 2009 clearly indicating that the situation is more or less similar in Europe."

I was trying to convey with the references that your use of the US and European agricultural subsidy statistics in the argument to prove that farmers in these places are "supported" by subsidies is flawed. Please refer to the links for a better understanding of US and European agricultural policy.

xxxxxxxxxxxxxxxxxx

//Wrong. Return on capital

//Wrong. Return on capital can be achieved by the greater efficiency that would be achieved in the system. The infrastructure would provide an advantage to Walmart (A simple way of looking at it - the produce they buy won't be wasted, they'll have greater produce to sell at lower costs in times of shortage). Let me put it this way, Walmart will not be building this infrastructure as a good will gesture. They'll build it only because it makes business sense to build such infrastructure. It pays for itself.//

first of all there is no absolute wastage. All agri. products are sold in market (but its value decreases). first of all agricultural products form a small part of the products that are sold through retail system (say, walmart). In that just 25% forms the part that require cold storages. So how can you say that walmart can cover up the huge cost of investment just through efficiency building (avoiding wastage).?

//the difference is the value added by these people you're calling middle men. In the existing supply chains the number of middle men involved implies that there is an artificially bloated margin between market and farm prices.//

but what is the difference between these two when it comes to farmers. Both eat up their money.

//How should the government do it? And, even if a strategy exists, will the government do it?//

It is the responsibility of the govt to control the influence of middle men by revamping existing mandi system and invest money in building infrastructure for the same. It is very simple.

//I was trying to convey with the references that your use of the US and European agricultural subsidy statistics in the argument to prove that farmers in these places are "supported" by subsidies is flawed. Please refer to the links for a better understanding of US and European agricultural policy.//

please explain how those arguments are flawed by stating what you have understood by reading those wiki pages.

I'll make it shorter (if not

I'll make it shorter (if not sweeter) this time -

All agri. products are sold in market (but its value decreases). first of all agricultural products form a small part of the products that are sold through retail system (say, walmart). In that just 25% forms the part that require cold storages. So how can you say that walmart can cover up the huge cost of investment just through efficiency building (avoiding wastage).

You do not realize that a depreciation in the value of the produce is a loss that can be avoided by investing in (please note, investing, not donating) cold-storage infrastructure.

You also fail to realize the absurdity of your claim that 25% is not a significant fraction of our agricultural productivity.

but what is the difference between these two when it comes to farmers. Both eat up their money.

If somebody eats up my money but provides a service which has an equivalent value in return or which lets me earn more money overall, then I think such an intermediary is better than one who eats up my money and provides a lesser value in return. Again isn't that obvious?

It is the responsibility of the govt to control the influence of middle men by revamping existing mandi system and invest money in building infrastructure for the same. It is very simple.

Wow. Simple indeed from your perspective. Let's just stop thinking about or discussing any of our country's problems. After all, it's the responsibility of the government to solve them. :)

please explain how those arguments are flawed by stating what you have understood by reading those wiki pages.

I did, in my first comment. :)

Problems with the arguments (part 2)

I'll continue my critique of the article from where I left off in my previous comment. In this comment I'll discuss the first of the 2 papers referenced in the article -

"Stephan J. Goetz on his paper ‘Wal-Mart and country wide poverty in US’, found that the counties which had Wal-mart stores initially in 1987, with more additions of stores between 1987 and 1998 experienced greater increases (or smaller decreases) in family poverty rates during the 1990s economic boom period (after accounting for other factors determining changes in the poverty rate over time), he points out possible reasons for the same. The first and perhaps most direct effect is the demise of existing mom-and-pop-type operations that is caused by the arrival of Wal-Mart in a community."

A glance at the paper points out the limitations or possible flaws in the study conducted in the same (most of these limitations have been mentioned in the paper). I quote -

"Of course, one key factor that our study does not capture is that Wal-Mart lowers prices paid by consumers in the community, at least in the short to medium-run."

"First is the obvious fact that poverty rates will rise if retail workers displaced from existing mom-and-pop type operations work for Wal-Mart at lower wages because they have no alternatives (this assertion has been contested in the literature), all else equal."

To take the last quote, a glance at the literature study section of the paper shows that the conclusions such as the one presented in the study have been the subject of extensive debate and there are a number of papers supporting both sides of the argument.

With regards to this particular study, other possible causes for the observed results need to be examined. Walmart stores in the US are often regarded as NIMBY buildings, because of their aesthetics as well as the crowd and traffic associated with such stores. Thus such stores often tend to bring down the land valuations in the surrounding neighborhoods (please note that it is highly likely that the opposite would be true in India). Thus in the US the presence of a Walmart store might over time cause more affluent families to move out from the neighborhood. Thus ceteris paribus, Walmart would "cause" an increase in poverty rate in the county, but for reasons that are probably specific to the US.

And that brings us to the most glaring problem associated with this paper. It tries to draw conclusions regarding the effect of Walmart on poverty in the US - a developed country with a totally different socio-economic background, and also one which had well developed agricultural supply chains and cold storage facilities even before Walmart was founded. We cannot just use the results of the same as an indicator of the effects Walmart might have on the Indian economy.

@anubhav Please read the

@anubhav

Please read the entire paper when you get time. You cannot prove a point with just reading conclusion/limitations. It is mentioned that a regression analysis has not been made to quantify that walmart gives lesser wages. But it is proved logically with a news paper report in the same paper.

'BusinessWeek reports that the average wage for an “associate” in 2001 was $8.23 per hour, for an annual income of $13,861, which was below the federal poverty line for a family of three at that time.'

//It tries to draw conclusions regarding the effect of Walmart on poverty in the US - a developed country with a totally different socio-economic background, and also one which had well developed agricultural supply chains and cold storage facilities even before Walmart was founded. We cannot just use the results of the same as an indicator of the effects Walmart might have on the Indian economy.//

Effect of walmart on a country like India will be worse than US. Your argument itself proves that point. If a country like US - a developed country with a totally different socio-economic background, and also one which had well developed agricultural supply chains and cold storage facilities even before Walmart was founded faced such problems, think of a country like India whose immediate goal is to eradicate poverty (displaced retailers will be more in India compared to US, giving less reward to Indian workers).

@ Yahiya - please read the entire paper

I did read the entire paper and the conclusions are the ones I mentioned in my original comment. The news report just indicates that a family of 3 with only one working member working only at Walmart will not be able to cross the poverty line in the US. I hope you realize that this won't be a common scenario. In any case, I think it's important to understand and appreciate the entire article including limitations and acknowledgements of contradictory results. Anything less would mean that we are ignoring the complexity of the issues involved.

"Effect of walmart on a country like India will be worse than US."

That is what you are assuming by extrapolating from the conclusions of the paper. It is an assumption because it is not backed by any data or the content of any other study.

I believe the opposite to be the case. Given India's poor infrastructure, Walmart's entry and investment in the same is likely to have a greater effect of prices than in the US. Also any investment in such facilities or supply chains will require people to operate the same. Given that labor in India is much cheaper than in the US, Walmart would be better off if it makes it Indian supply chains more labor intensive. Thus the employment opportunities created in the same would have a much higher probability of compensating the displacement from small scale retail. Overall the positive effect of Walmart's entry in India would be much more pronounced than in the US, both in terms of prices, and in terms of non-retail employment growth.

//The news report just

//The news report just indicates that a family of 3 with only one working member working only at Walmart will not be able to cross the poverty line in the US. I hope you realize that this won't be a common scenario//

It can of course be the common scenario. People who are involved in retail sales do enjoy much better economic situation than they work for a wage which is lesser than poverty line.

//I believe the opposite to be the case. Given India's poor infrastructure, Walmart's entry and investment in the same is likely to have a greater effect of prices than in the US. Also any investment in such facilities or supply chains will require people to operate the same. Given that labor in India is much cheaper than in the US, Walmart would be better off if it makes it Indian supply chains more labor intensive. Thus the employment opportunities created in the same would have a much higher probability of compensating the displacement from small scale retail. Overall the positive effect of Walmart's entry in India would be much more pronounced than in the US, both in terms of prices, and in terms of non-retail employment growth.//

When walmart enter into an economy, they create their own procurement/supply chain. In US they did the same, and they weren't able to create more employment (they need labour to operate the supply chain there also). In India a statistical analysis on their effect on employment is possible only after their entry into the economy. So I have quoted an article based on US scenario where it increase poverty and increased unemployment rate. So, if you feel they will create more employment, it is your responsibility to prove with numbers (where it has created more ecployment) with the help of any paper (whether in US, China or Mexico etc).

yahiya...nice article,citing

yahiya...nice article,citing everything correctly..

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