90% + graduates from India's IIMs take up jobs with the corporate world. 95% of entrepreneurs (most working in the so-called unorganized sector) are guys who would definitely not be among the top 10% of India's wealth (who will collectively hold 90% + of India's wealth)
Vijay Mallya runs a so-called risky business where his personal fortune is perfectly hedged. Apparently for every Re 1 that Kingfisher loses, assorted creditors and banks lose Rs. 14. Your vegetable vendor borrows Rs. 1000 at the beginning of the week, buys vegetables & fruits, makes Rs. 1600 -ish through the week, repays Rs. 1100 and then keeps Rs. 500 for himself (If everything works out).
In a rational world, we would see well-off people taking more risk and the less well-off settling for steady-income jobs. In India, the setting is the exact opposite. The well-off fall in two categories - 1) ones that are happy with a steady role and see enormous wealth-accumulation opportunity in that and 2) ones those find themselves in a position to take healthy risk with other people's money.
The poorer ones, on the other hand, are forced to take risk on an everyday basis. They take every kind of risk - business risk, financial risk, life risk (have you seen how our buses/trains overflow), health risk, etc. etc. The organized sector shuns these because they lack polish and good communication skills, they do not have inherited wealth and make a choice to run their own vegetable shop rather than being someone's office boy. Many take the route to Dubai or East Asia. (very risky options).
Now, what has this got to do with FDI in retail? Everything. Forget the big shops, forget the consumer benefits, forget how the big western guys can scr*w the happiness of dear Reliance retail. Expansion of organized retail can de-risk India's working class. And it is worth pursuing for that reason alone. A week's effort from a vegetable vendor can be erased if one small scooter runs into his tricycle by mistake. If you have seen the utter look of horror on the face of a vendor when they see looming clouds on the horizon, you can get a sense of what I am getting at here. What is 2 hours of pain for most of the salaried-class is a debt-crisis for the vegetable vendor. Especially, when you keep in mind how tough it is to maintain vegetables and fruits fresh during rains.
A lot of chatter has been seen on how Mom and pop stores can get squeezed out by giant discount stores. This is irrelevant. Lets face it, our mom and pop stores are not great entrepreneur stories anyway. Lot of these stores are being run because the people who are running them could not get "other" jobs. If these people could get employed at a big store, stay in AC store rooms for 10 hours, get paid a salary, get 15 days off a year and get trained on consumer-handling, it is going to be great for them. They no longer need to worry about their mini-store getting flooded when rain crosses 12 cms level in Chennai. For the love of god, someone should be selling the idea of this de-risking. Instead of saying this is Satan by another name.
Quite inevitably, India being India, either the Ambanis or Ruias or Mallyas will get into some JV with some global player and make tons of money for just existing. But for all this, if retail chains come through and convert India's hapless unorganized sector into salaried class, it is worth pursuing.
India's poor are exposed to way too many risks than they care about. If trickle down can make their life more steady, even if not richer, that alone is worth pursuing. India's poverty cannot be eradicated in 10 years. If we can create a setting where the next generation has hope, that is something to shoot for. Reduce risk, give people good salaries and bend over backwards to convince them that this is the better option for them. Instead of doing all this, we are protesting against organized retail.