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Big retailers get Mayawati's axe

Big retailers get Mayawati's axe

Author | Source: Business Standard | Friday, Aug 24,2007 10:05 AM

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Big retailers get Mayawati's axe

Opposition to big retail grew stronger today with the government in Uttar Pradesh, India’s most populous state, ordering a statewide closure on all large-format retail stores. This comes a day after stores run by Reliance and the RPG Group’s Spencer’s were attacked by members of the UP Udyog Vyapar Mandal, a trader organisation affiliated to the Samajwadi Party and headed by Rajya Sabha MP Banwari Lal Kanchal.

Addressing a press conference soon after a cabinet meeting here today, Chief Minister Mayawati said the government will permit new retail stores to open only after each proposal is examined.

The state government has also constituted a committee of secretaries headed by Cabinet secretary Sashank Shekhar Singh to investigate Wednesday’s attacks and study all aspects of the impact of organised retail chains. The committee comprises secretaries of home, housing and agriculture and has been asked to furnish its report in a month.

Activists of the UP Udyog Vyapar Mandal ransacked two retail outlets of Reliance Fresh and several of Spencer’s Daily in Lucknow and Varanasi. Reliance was to inaugurate 10 stores in the state capital and planned to open 14 in Varanasi on August 27.

Kanchal, who led the agitation in the state capital, said traders would not allow retail chains to function in Uttar Pradesh. ''We are against the entry of Reliance and other big companies in the retail sector since it will directly affect about 40 million people in the state,'' he said. Traders would intensify their agitation if the government continues to favour big retail companies in the state, he added.

Yesterday’s incidents were not the first time big retail has drawn local opposition. Earlier this year Reliance Retail has seen attacks on its stores in Ranchi and Indore.

This week, a yet-to-be-opened Reliance outlet at Uttarpara outside Kolkata was also attacked by alleged Trinamool Congress and Forward Bloc supporters. In Kerala, the Left Democratic Front (LDF) government threatened to introduce a law banning corporate retailers, Indian and multinational, in the state.

Industry seeks reopening of retail stores

Apex industry chambers today expressed concern over the Uttar Pradesh government's decision to close organised retail stores and asked the state to reconsider the move and create conditions for reopening of the stores.

"The UP government should (have a) relook at the decision and let the stores open again as the organised retail players will only help the agriculture sector without affecting local vendors," FICCI said.

It said the Mayawati government should recognise the positive contribution made by organised retail players as they were able to provide large scale employment and facilities like cold chain storage.

Chief Minister Mayawati today said her government had decided to order the stores closed as they were causing law and order problems. She was referring to an attack on Reliance Fresh and Spencer's stores by a group of traders in Lucknow and Varanasi yesterday.

Echoing FICCI's sentiments, Assocham condemned the decision, stating that the move would send adverse signals among investors and affect development of the state.

"The decision seems to have been taken in haste and therefore should be reviewed," Assocham President Venugopal Dhoot said.

However, Delhi-based Confederation of All India Traders welcomed the decision of the UP government.

"The order of the UP Chief Minister has vindicated our stand that retail stores of corporate houses will affect livelihood of not only more than five crore traders in the country but also affect the hawkers," its Secretary General Praveen Khandelwal said.

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