Reliance fresh may just end up removing these vendors when consumer start buying in trolleys to avail all the discounts they can. Recently Economic Times reported how the big retail chains were selling cheap fruits and vegetables amid such food crises deliberately, and off-setting their losses by gaining on non-food items that the hawkers cant sell.

Such retail outlets have had to face ire not only in states like Uttar Pradesh, Orissa and Jharkhand but also in America, the father of such chains. America, the home to Wal-mart the biggest company in terms of revenues and having more than 5000 stores across the world but also in controversies about suppressing their employees from associating and for a dismal employee welfare record besides others.

This may be expected of a monopoly and since the ball is set rolling in India, we should try and avoid any such ills. There are many players in food retailing business – such as Subiksha, Big Apple, Spinach, Big Bazaar and the mammoth Reliance Fresh, but competition is still not present. These guys are also protected by preventing foreign direct investors.

Well why not open up retail for the foreign guys if it has to exist at all. With competition we may just avoid the short coming of a monopoly, shouldn’t we? In fact, organized retailing would be nice in the new developing centers such as New-Mumbai!

The dream is to make big profits on the basis of “farm-to-fork theory” and economies of scale the justification. To supply directly from the farms to the consumers, removing every one in between.

Economies of scale resulting from lower transaction cost of bulk handling, removal of middle-men and increased specialization, eventually bringing down prices. So when someone buys chocolates he may get a kilo-gram of wheat free!

In India, most of the employment and production comes from the un-organized sector which is usually looked down on. Imagine the impact of this, on small farmers and small food vendors.

Inequality is widespread, increasing and such a fuss. A lot many throats get choked; screaming inequality, a lot of time is spent, discussing inequality, a lot of guns battle, fighting inequality. But if we take a look around we can easily conclude that our wealth or income is simply determined by what we have to sell! Bread or diamonds, management skills or casual labour. This explains it all but do we understand?

Organized food retailing would sweep away millions of people involved in selling fruits and vegetables. It would simply displace them all from the only means they have for a livelihood along with their labour leaving them alone with casual labour.

On the contrary, governments draft No-hawking laws which only gives the cops to collect bribes, called hafta in common parlance, meaning weekly bribes from the poor street vendors.

Economies of scale may bring efficiencies in our economic system but there are many efficient points. And to decide on one is just a matter of value judgment and not only of the elite class. Economies of scale also need’s to weighed against distributional effects.