With the issue of allowing 51 per cent foreign direct investment (FDI) in multi-brand retail rocking Parliament on Monday, India Inc was seen speaking in different voices although in support of the issue.
FICCI secretary general, Rajiv Kumar, at a press conference, extended all-out support to the government move while on the other hand Confederation of Indian Industry (CII) called for a calibrated approach in introducing FDI in the retail sector in terms of the percentage and minimum capitalisation requirements.
Mr. Kumar said opening of the retail sector would create big employment opportunities in the country. He said those industry associations which are opposing the foreign direct investment in multi-brand retail have a vested interest. "This is just a fear that has been created for some vested interest. FDI in retail will be a game-changer like telecom. I see only positive impact on employment," he remarked.
However, CII said while it strongly supports the introduction of FDI in multi-brand retail trading, it recommends a calibrated approach for introducing FDI in the retail sector in terms of the percentage and minimum capitalisation requirements.
Some traders' associations are arguing that about 40 million employed in this sector would loose their earnings because of opening of big foreign retail stores. "In fact, foreign stores will generate employment and that will be higher quality employment. Small stores would also increase their employment to compete with the big retailers," he said.
CII said FDI in multi brand retail will give a boost to the organised retail sector, which positively impacts several stakeholders including - producers, workers, employees and consumers and Government and hence, the overall economy. Opening up of FDI can increase organised retail market size to $260 billion by 2020. This would result in an aggregate increase in income of $35-45 billion per year for all producers combined; 3–4 million new direct jobs and around 4–6 million new indirect jobs in the logistics sector, contract labour in the distribution and re-packaging centres, housekeeping and security staff in the stores.
FICCI FDI will bring about the development of a robust supply chain which in turn will integrate farmers and small and medium size enterprises into the modern trade process, resulting in knowledge and skills transfer, ensuring farmers and SMEs receiving higher prices for their produce/supplies, providing a more transparent mechanism for pricing, helping in planning their supplies.
This article has been corrected for a typographical error in the photo-caption