New Delhi, November 25
Apex industry bodies have said the government's decision to allow 51 per cent foreign direct investment in multibrand retail and 100 per cent in single brand formats will boost organized retail, bring in investments and control inflation.

According to Confederation of Indian Industry (CII) director general Chandrajit Banerjee, the biggest beneficiary of FDI in retail would be small farmers, who will be able to improve productivity and realize higher remuneration by selling directly to large organized players and thereby shorten the chain from farm to consumers.

Harsh Mariwala, president of the Federation of Indian Chambers of Commerce & Industry (FICCI). said the move would have positive implications for various segments like food processing, farming and SMEs. “It’s expected to bring more investments, not only in front-end but also in the backend infrastructure, which would result in reduced wastage and would also help in addressing the issue of inflation over a period of time”, he added.

Meanwhile, Assocham said FDI in the retail sector would inject competition and efficiencies, create hundreds of thousands of new jobs across the country and reduce considerable difference in farm gate prices, wholesale prices and retail prices.

The country's retail sector is set to ride on the consumption wave that continues to be one of the most significant components of GDP, according to Assocham. "The share of retail trade in GDP is likely to reach 22% this year, up from 8-10% in 2007”, said the chamber’s secretary general, DS Rawat. "The Indian consumer market is likely to grow four times by 2025 and rank as the fifth largest globally”, he said

According to a retail report — Building a New India —authored by Boston Consulting Group, India (BCG) and CII, the current size of organized retail in the country stands at close to US$ 28 billion or 6-7% of total retail. The total retail market is estimated to grow to $1,250 billion by 2020, of which 21% would be organized. With added capital investments from key overseas players, the sector would have the potential to significantly impact the Indian economy.

According to the study, farmers in India today receive a relatively small share of the end consumer price. As an example for tomatoes, farmers in India earn only 30% of consumer prices while in more developed markets it is in the 50-70% range.

The study further says organized retail has the potential to drive efficiencies in the supply chain by increasing price realization for farmers by 10-30% through sourcing directly or closer to the farm, reducing handling and wastage by 25-50% through consolidation as well as investments in technology.

CII said opening the retail sector to foreign investors could be a game changer for the Indian economy. “It will enable the sector to reach $260 billion sales by 2020 and shift the benefits to smaller towns and cities. Large subsectors like food and grocery, which have been lagging, would see greater penetration”, it said.

The beneficiaries of this move would include all stakeholders in the retail value chain — producers, consumers and employees. The study estimates an aggregate rise in income of $35-45 billion per year for all producers combined; 3 to 4 million new direct jobs and around 4-6 million new indirect jobs in the logistics sector, contract labour in the distribution and repackaging centers, housekeeping, and security staff in the stores. From the consumers' point of view, savings can total 5-10% of spending in specific categories, leading to an aggregate savings of $25-30 billion. This translates to almost 0.5% of GDP per year.

Canberra, November 25
Australia's government approved on Friday SABMiller's A$11.5 billion (US $11.2 billion) deal to acquire Foster's Group Ltd under foreign acquisitions laws, but imposed conditions requiring the company to keep brewing operations in Australia.

The government approval is the final regulatory condition to be cleared ahead of the Foster's shareholders vote set for December 1, which is expected to pass the deal.

Treasurer Wayne Swan, who also approved acquisition of the remaining 50% of Pacific Beverages now owned by Coca-Cola Amatil, said SABMiller must keep management of the iconic Australian beer brand in Australia.

SABMiller must also continue to invest in Foster's, the maker of Victoria Bitter, Carlton Draught and Pure Blonde, and not shift any of Foster's existing brewing facilities offshore to produce beer for the Australian domestic market, he said.

"SABMiller has agreed to a number of undertakings which recognize the significance of Foster's to our economy and to our community, and support Australian jobs," Swan said in a statement. — Reuters

New Delhi, November 25
Domestic retail players like Bharti Walmart and others, while welcoming the opening up of multibrand retail in India, have said organized retail and kirana (mom-and-pop) stores could coexist side by side.

Raj Jain, CEO & MD of Bharti Walmart, said organized retail and kiranas could very easily co-exist, as they do in both developed and developing economies around the world. Rakesh Biyani, Joint MD, Pantaloon Retail too said mom-and-pop stores would benefit from a better backend and larger product offering.

He said Bharti will invest in backend infrastructure that will help reduce wastage of farm produce, improve the livelihood of farmers, lower prices of products and ease supply-side constraints that contribute to inflation.

While the bourses were down, stocks of retail firms like Pantaloon, Shoppers Stop, Trent, Koutons jumped on hopes that these chains would tie up with foreign players.

The announcement on retail has also signaled a new vigour in reforms. Sanjiv Goenka, group chairman of the RP Sanjiv Goenka group, said with this announcement, the government had sent strong signals that reforms are back on the agenda. “This is positive for the economy”, he said.

Thomas Varghese, CEO, Aditya Birla Retail, said the move would open up significant opportunities in India for expansion of organized retail and allow substantial investment in backend infrastructure like cold chains, warehousing, logistics, expansion of contract farming and development of small and medium enterprises.

He said various conditions had been stipulated for FDI retail, like establishment of stores only in cities with one million population, so as to avoid any adverse impact on small retailers in smaller cities and towns. State governments would have the final right of granting or denying a proposal.

Varghese said in the organized retail space the cash and carry format, in which some of the significant players are already involved, was actually serving the purpose of supplying to small retailers at wholesale prices.

Rakesh Bharti Mittal, vice chairman of Bharti Enterprises, said FDI in multi brand retail can be a game changer, in making Indian agriculture more competitive by addressing our infrastructural constraints and reducing losses across the value chain.

He said the limited experience of retail sales by the private sector had shown not only did the consumer stand to benefit by availability of good quality farm produce, but also that farmers had greatly benefited due to an assured market and extension support.

Rakesh Biyani, joint MD of Pantaloon Retail, said retail sources more than 50% of its products from within the country. “Thus, new jobs will be created in front- end & backend leading to a positive impact in regional economy. With better integration from farm to fork, reduction in supply chain times, costs & wastage prices will come down over a period”, he said.

New Delhi, November 25
Prime Minister Manmohan Singh will hold a meeting with chiefs of all Indian airlines tomorrow to discuss the situation being faced by the cash-strapped carriers and other related issues.

Civil Aviation Minister Vayalar Ravi said Friday air carrier operators had sought a meeting with the PM. Noting the airline sector in the country was running at loss posing a "problem", he said.

“The PM is concerned about it”, declining to comment on any special package for the beleaguered industry.

Manmohan had on November 12 said the government would explore “ways and means” to help the private airlines. “I have not applied my mind to Kingfisher's problems. When I get back, I’ll talk to Ravi and we’ll explore ways and means in which the airlines can be helped,” he had said when asked about the Kingfisher crisis. Singh at the same time had said that private sector airlines should be managed efficiently.

New Delhi, November 25
India Inc is among the world's lowest paying employers in the information technology space, with their mid-to-senior level staff getting an average salary of US$36,120 (about Rs 18.5 lakh) per annum — less than one-fourth of the IT pay package at globally top-paying Swiss companies.

Salaries in the IT sector are highest in the world in Switzerland at an average of $167,890 (about Rs 87 lakh) per annum, as per a study titled World wide IT Salary 2011.

The study, conducted by global recruitment service provider MyHiringClub.com, found India is ranked seventh on a list of the 10 worst IT paymasters globally.

On the other hand, Switzerland stands at the top spot among the top-paying nations in the IT sector. The study took into account the average salaries for people with six and more years of experience for the Indian and other firms.

The report compared the total annual cash compensation and total remuneration information for IT staff in more than 6,000 companies across 41 different countries and found that employers in western Europe are the best paymasters.

It also found compensation in developed countries focus more on variable factors, such as bonus schemes, to attract staff. At the same time, the emphasis remains on cash compensation in the lower-paying countries.

"The impact of outsourcing and off-shoring on IT roles in North America and Western Europe helps explain the pattern of global pay. Lower-level roles are being moved to regions where talent is cheaper," MyHiringClub.com CEO Rajesh Kumar said.

"India continues to be amongst the leading destinations for IT development, given its cost advantage. However, salary inflation and talent shortage could emerge as major challenges in maintaining this position in future," he added.

IT managers in India, however, fare better than their peers in Vietnam, Bulgaria, Philippines, Indonesia, Thailand and Malaysia, where the average annual salaries were even lower at $28,940, $32,560, $32,980, $33,000 and $35,870, respectively.

Also, large pay gaps exist between the junior and senior career streams in India, Indonesia, Chile, Brazil and Vietnam, the survey said. — PTI

Mumbai, November 25
Reliance Industries has mutually agreed to end negotiations with Bharti Enterprises to buy its stakes in two insurance joint ventures with France's AXA, the two Indian companies said Friday.

Reliance said the negotiations to acquire Bharti's 74 percent stakes in the life insurance and general insurance joint ventures were terminated as it was "unable to reach agreement on the long-term vision and joint governance of the ventures" with AXA.

Reliance, India's largest-listed company, had said in June that it would buy out Bharti's stakes, as it sought to build on moves beyond its core energy business. The parties had not disclosed financial details of the transaction.

Reliance had planned to own, along with associate Reliance Industrial Infrastructure Ltd, 57 percent and 17 percent, respectively, in each insurance venture, it had said in June.

With growth in its core energy business below expectations over the past year, Reliance has been keen to diversify and has ventured into areas such as telecoms and financial services, as well as tried to build up its presence in retail.

Bharti Enterprises, which controls leading Indian telecoms firm Bharti Airtel, had set up the ventures — Bharti AXA Life Insurance and Bharti AXA General Insurance — with AXA, Europe's second biggest insurer, in 2006.

The company had earlier said the business did not fit in with its long-term plans, but on Friday said the two joint ventures will continue to develop their operations in India. — Reuters