DEA’s monthly review cites an e-commerce report from Commerce Min

The August economic review by the Department of Economic Affairs (DEA) of the Ministry of Finance cited a study on the e-commerce sector, which was extensively discussed by Commerce Minister Piyush Goyal last month. The Pahle India Foundation’s report came under heavy criticism from the minister, who described it as a compilation of “lies, bloody lies and statistics”.

The DEA’s 26-page monthly economic review for August, released on September 26, cites a page and a half of that report’s findings on “the e-commerce industry’s role in creating jobs and increasing benefits.”

The review said: “India’s e-commerce industry has emerged as a dominant player in driving service sector growth in recent years,” and referred to an excerpt from the foundation’s report on the performance of the e-commerce industry.

Announcing the release of the report in August, Goyal said: “I would like to completely disassociate myself from this report. I want to make it clear that I do not agree with any of these findings.”

During the same event, the Minister of Trade and Industry also accused Amazon of “predatory prices”. His comments came after news that Amazon’s parent company is investing another $1 billion in its India operations to offset massive losses. “I don’t see it as something to be proud of. This is a huge problem,” he said of the huge injection of funds. Expressing concern about the impact on the very survival of mom and pop stores, the minister raised the possibility that half of the Indian market will become part of e-commerce networks within the next decade.

According to a report by the Pahle India Foundation, e-commerce is widely accepted in Indian cities, with over 90 percent of participants spending more than an hour online each week. The report shows that more than 40 percent spend more than 10 hours at work. The report shows that this online activity has boosted the e-commerce market, with 85 percent of users shopping online every week.

The report also highlighted the role of the e-commerce sector in job creation, revealing that online retailers have created 1.58 crore jobs across skill levels and functions in retail. “Online retailers employ on average 54 percent more workers and almost twice as many women compared to offline retailers,” the report says.

Goyal had a different opinion, saying that e-commerce business is a more complex topic. “There is a need for a thorough assessment of the sector and its impact on mom-and-pop stores, but it should not be lauded on the basis of a one-sided report that only sheds light on job creation,” Goyal said.

The Pahle India Foundation report is based on a pan-India survey of 2,062 online sellers, 2,031 offline sellers and 8,209 consumers of products from e-commerce websites across 35 cities across 20 states and Union Territories.

Citing the report, the Monthly Economic Review said the e-commerce sector encourages competition by providing more choice and increasing consumer confidence. On the other hand, the minister said that the e-commerce sector uses predatory prices and is responsible for disrupting the operations of small retail stores. “E-commerce is consuming high-value, high-margin products from small retailers,” he said.