FDI in retail will create quality jobs: Montek Singh

Planning Commission Deputy Chairman Montek Singh Ahluwalia has sought to justify opening up the Indian retail sector to foreign direct investment (FDI) saying it will create better quality jobs.

Speaking to Karan Thapar on Devil's Advocate, Ahluwalia said that it was a complete misreading of reports that the FDI in retail would lead to job losses. It would instead lead to GDP growth and create more jobs in other sectors, he said.

Below is an edited transcript of the excerpt from the interview.

Karan Thapar: Retail is the second biggest employer in India. It generates 44 million jobs. Business Line has published a study which says that if international retailers acquire 20 per cent of the Indian market which they easily can do, 8 million jobs will be lost.

Montek Singh Ahluwalia: This is complete misreading because you need to look at whether you want the modernisation of the retail sector or not. If you want modernisation of the retail sector, you want an upward pressure in the quality of employment. Modern retail produces better quality jobs than traditional.

Karan Thapar: But far fewer jobs. That's the problem.

Montek Singh Ahluwalia: My point is that if labour growth is going down to 1 per cent and GDP is growing at 8-9 per cent, jobs will be created in many different sectors.

Karan Thapar: Except for the fact that you have a population where the demands for jobs is increasing like something like 10 million a year. Second biggest employer, the retail sector, is actually shrinking in terms of the jobs you can provide. You are creating a problem in terms of the availability of the jobs.

Montek Singh Ahluwalia: Let me be very clear about one thing. Please look at studies at what is the quality of the jobs in the traditional retail... particularly those employed as opposed to the self-employed. The quality of those jobs is very low. The young people with education who are joining the labour force are probably quite happy working in modern retail than being employed in traditional retail, that's the problem.