Multi-product retail will improve supply chain: Economic advisor

November 4th, 2011 - 11:43 pm ICT by IANS  

Kolkata, Nov 4 (IANS) The Indian government’s Chief Economic Advisor Kaushik Basu Friday batted for allowing big multi-product retail companies to enter India’s market to improve the supply chain to control high food prices.

“I do believe that you need modern systems of products being bought at the level of farmers and being made available to the consumers through modern chains management techniques, which means opening India’s door to multi-product retail big companies,” Basu said during a programme organised by the Heritage Group of institutions here.

He said allowing foreign companies to handle multi-product retail will lead to farmers getting better prices for their products and consumers will have to pay lower prices.

He, however, said the country should have a regulatory system to ensure that the big foreign companies will not have a monopoly in the market.

“If you allow the big companies in retail chain, you will have to have a regulatory system. So that you force them to compete with our small traders who also run the same kind of business. These big companies will keep a pressure on small companies and the small traders also keep a pressure on big companies to keep prices under control,” he stated.

“Once you do this, I think our supply chain will be going to improve vastly. And the middle man gap between the farm price and the consumer price in India, which is one of the highest in the world, is going to go down,” he said.

He, however, said supply chain improvement will take time.

“So right now we have to concentrate on demand management (to control high food inflation) which the Reserve Bank of India and the ministry of finance are doing collectively,” Basu added.

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