In an indication that the government is gearing up to build consensus on 51 per cent foreign direct investment (FDI) in multi-brand retail, Commerce and Industry Minister Anand Sharma has written to the Punjab, Uttar Pradesh and Odisha Chief Ministers, seeking their support for this policy move. Though the Union Cabinet on November 24, 2011 approved 51 per cent FDI in multi-brand retail and 100 per cent FDI in single brand, the government has kept the move in abeyance following strong opposition from the main UPA ally, Trinamool Congress, and the BJP-ruled States.
Mr. Sharma has now initiated a move to seek the support of big States in order to roll out the 51 per cent FDI in multi-brand retail, possibly after the presidential polls in July. The government will now have to only notify the new guidelines on multi-brand retail and need not go back to the Cabinet for approval.
Job opportunities
In identical letters to the three Chief Ministers Parkash Singh Badal (Punjab), Akhilesh Yadav (U.P.) and Naveen Patnaik (Odisha), Mr. Sharma has said opening up FDI in multi-brand retail will bring in much needed investments, technologies and efficiencies to unlock the true potential of the agricultural value chain. “The policy mandates a minimum investment of $100 million with at least half going towards back-end infrastructure including cold chains, refrigerated transportation, and logistics. We have also stipulated a mandatory 30 per cent sourcing from small industry, which will encourage local value addition and manufacturing. It will also unfold immense employment opportunities for rural youth and make them stakeholders in the entire agri business chain from farm to fork. We have taken a conscious decision of leaving the implementation decision to the States and the FDI policy, cleared by the Cabinet, will be an overarching enabling policy framework and the State governments will be free to take appropriate decision on its implementation,” the letter states.
Food security
“We were also mindful of the imperative of ensuring food security for the poorest of the poor and have therefore retained the first right of procurement of foodgrains to rest with government for the public distribution system. Concerns have been expressed that the multinational companies will resort to predatory pricing techniques to drive away small retail. You are aware that the Competition Commission of India has been established by law to ensure that such practices receive great scrutiny. The Indian consumers will undoubtedly gain significantly from this step as they will be afforded much greater choice, better quality and lower prices.”
