Speaking on the sidelines of a panel discussion on 'The Historic Visit of President George W Bush Jr. to India: New Directions in US-India Relations' organised by the American Centre, Calcutta, Sarkar explained that entry of major global players like Wal-Mart in the Indian market will bring competition in the market thereby benefiting consumers.
Meanwhile, the presence of global players will in no way harm the marginal small retailers.
"The common notion that entry of global players will extinguish small players in India is perhaps not correct as these people have a separate customer base to serve. If any category is open to a negative hit, it is the 'large' domestic players. Customers at large will be significantly benefited," Sarkar claimed.
Moreover, it is likely to benefit farmers also. "Marketing has always been a problem for Indian farmers and is highly dominated by handful of private traders. Once a major international player comes into the picture and starts procuring for local farmers, the welfare loss that arises from the presence of traders will cease," he explained.
At the same time, the presence of a strong retail chain would lead to an increase in consumer demand and the linkage effect would be enormous, hoped Sarkar.
Prices of goods could also see significant decline with the advent of foreign players, he hinted. Sarkar said he does not feel that India is ready yet for full capital account convertibility.
"Even without full CAC, inflow of capital into India is significant. Countries who have adopted full CAC have not seen substantial increase in their economic growth. It does not seem to be necessary for India to have full CAC," he said.
He also pointed that there still lacks complete trust in Indian capital market among the foreign institutional investors and given such a scenario full CAC might not be necessary.
