Government's decision to allow FDI in multi-brand retail will help increase productivity and ensure an efficient foodgrain distribution

network to tackle high food prices, RBI Deputy Governor Subir Gokarn said here today. "The ultimate solution to high food prices is very simply more production of things that people consume more. You might debate the merits and demerits of FDI in (multi-brand) retail. But let's focus on the basic problem. We need to increase productivity and distribution efficiency", Gokarn said at a function here. Observing that India has a low foodgrains productivity and inefficient distribution, he said increasing the scale of investments in organised retail is one way to increase productivity and distribution efficiency. "FDI is an enabler of that. Whether you accept the argument that FDI will do this or not, we have low productivity, we have inefficient distribution (mechanism)", Gokarn said at the 102nd AGM of Southern Indian Chamber of Commerce and Industry. He called for solutions to take the country's economy towards a strong growth momentum. "We have to look at the stress points. What are the stress points?. We have to look at the sources of imbalances in the macro-economic situation and we have to find solutions that will provide robust responses to these constraints", he said. The Deputy Governor also pointed out that if food prices keep on increasing, it would impact wages and subsequently lead to inflationary pressures. "It is also important to recognise that if food prices keep growing, that impacts wages, which impacts expectations and in turn feeds into the inflationary process", he said.

He said RBI has been trying to play a "balancing act" to maintain credibility and meet expectations of various stakeholders "without putting undue disproportionate pressure on the growth momentum." Gokarn said the demand for two-wheelers, television sets and cellphones had grown by "leaps and bounds" in the last 10-15 years, but there was not as much demand growth for food products. "Why should we not expect to see the same for food and people moving beyond rice and wheat to other items?" he asked. He said the supply of two-wheelers, television sets and washing machines or air-conditioners was growing in multiples of 20 or 30 on their output.

"This is not matched or not seen in the food sector, where productivity of many things has remained quite stagnant. Persistent imbalances in demand-supply have resulted in this very strong and structural inflationary pressure", he said. Observing that India has a "fiscal problem" and there is a need to find a solution to it, he said, "no solution will work with any effectiveness unless the (government's) subsidy is addressed because it is by far the largest single burden on government finances". He said global and domestic developments would have an influence on the "economy's" growth and, in particular, to the inflation trajectory. Later, speaking to reporters, Gokarn said the balance of risks towards growth and inflation would determine the outcome of policy changes that have happened recently. He said RBI would meet the Indian Banks' Association later this week, on the requirement in some policy changes.

"We will take everything that has happened over the last several weeks into account and will formulate decision. The process to reach that decision is just beginning. We will have the first such meeting on Friday, with the IBA and from there on, we will consult a variety of stakeholders and will take a decision", Gokarn said. To a query on inflation, he said, "In our last projection we have said it would remain above five (per cent) till the end of the year. Certainly, we will revise those projections in our next review. I cannot really comment. That number is yet to be in front of us." On RBI's regulation towards banks lending loans against gold jewellery, Gokarn said, "I think what we have been focused on is that the risks in lending towards gold are controlled. That is the basis for our actions with respect to gold loan companies from some months ago. We are not here to discourage or encourage anything. But we are sure that it should not build up into a systemic risk". On the recent revision of diesel prices by Oil Marketing Companies, he said, "We have recognised the likely short-term impact of diesel price revision on inflation numbers. But we have to look at it, in terms of the (growth) trajectory and to the extent of helping to contain the fiscal deficit". Gokarn added, "Let's not forget that if you see a hike in diesel prices along with the hike in electricity prices, both of these will impact the index. "But (if) more power becomes available from the grid, then people will use less diesel to generate power and the average cost of electricity might go down. So that is going to have an impact on the overall inflation numbers as we go forward. We have to be little sensitive to

these various adjustments that might take place." Ahead of their second Quarter Review of Monetary Policy slated for October 30, Gokarn said RBI would take everything into account over the last six weeks into consideration. "(It will be) based on the impact of growth risks and inflation risks. It will be a holistic perspective", he said.

The report begins with the market overview section that gives an insight into the retail market in India, its market size and growth, along with the share of major retail segments. Low organised retail penetration indicates huge growth potential of this market. This is followed by the major segments in the retail market, where food and grocery occupies the largest share. The various market entry strategies available for foreign retailers, franchising, cash and carry wholesale trading, strategic license agreements, joint ventures, manufacturing, distribution, have also been highlighted. A comparison of the traditional retail supply chain with the modern retail supply chain has also been given. The section also includes an overview of the various organised retail formats, hypermarkets, cash-and-carry, department stores, supermarkets, shopin-shop, specialty stores, category killers, discount stores and convenience stores. Additionally, an analysis of Porters Five Forces provides an insight into the competitive intensity and attractiveness of the market. An analysis of the drivers and challenges explains the factors leading to the growth of the market including low organised retail penetration, rising income levels and consumerism, growing retail space and mall boom, increasing availability of credit and changing demographics and consumer behaviour. Strong opportunity exists in the market due to low organised retail penetration in India. This coupled with the fact that income level and consumerism are rising, will drive the retail market. The key challenges identified are insufficiencies in supply chain, shortage of skilled manpower and real estate issues. Key trends in the market have also been analysed which includes emergence of innovative retail formats, online and rural retailing and integration of various business strategies. This is followed by a section on the FDI scenario of the retail market in India which includes evolution of retail FDI policy, current FDI scenario in retail, single brand retailing and multi brand retailing in India. A section on the investment scenario of this market is also highlighted, including investment and expansion plans, mergers and acquisitions, and partnership agreements in the retail sector. The competition section provides an overview of the competitive landscape in the market and includes a detailed profile of the major players. It begins with a matrix showing the various retail formats under which the players operate in India. A bubble chart for the public companies, depicting their relative positions in the market with respect to total income, net profit/loss and market capitalization is included. Similarly, a bubble chart for the private players is also included with respect to their total income, net profit/loss and total assets. This section also includes list of products and services, key people, financial snapshot, key ratios and key recent developments for all companies, along with key business segments and key geographic segments for public companies. The report concludes with a section on strategic recommendations which comprises of an analysis of the growth strategies of the retail market in India.

The Consumer Protection Act, 1986 (here in after to be referred to as the Act) is one of the benevolent social legislation intended to protect the large body of consumers from exploitation. The Act has come as a panacea for consumers all over the country and has assumed the shape of practically the most important legislation enacted in the country during the last few years. It has become the vehicle for enabling people to secure speedy and in-expensive redressal of their grievances. With the enactment of this law, consumers now feel that they are in a position to declare "sellers be aware" whereas previously the

consumers were at the receiving end and generally told "buyers be aware". The Act postulates establishment of Central Consumer Protection Council and the State Consumer Protection Councils for the purpose of spreading consumer awareness. Central Council is headed by Minster-in-charge of the Consumer Affairs in the Central Government and in the State it is the Minister-in-charge of the Consumer Affairs in the State Government who heads State Council. To provide cheap, speedy and simple redressal to consumer disputes, quasi-judicial machinery is set up at each District, State and National levels called District Forums, State Consumer Disputes Redressal Commission and National Consumer Disputes Redressal Commission respectively.

GENERAL INSTRUCTIONS TO CONSUMERS 1. The Consumer must demand or obtain bill after purchase of any product. 2. He must take Warranty as well as Guaranty for the product obtained by him. 3. He must check the Date of Manufacturing Date as well as Manufacture and expiry Date of the products before purchasing of the product 4. In case of purchasing of any property like site, building i.e. house, apartment he must go through title deed of property, other documents related to land or building. 5. In case of Chits, he must go through the terms & Conditions of the chit and other things.