Despite being a predominantly farm economy, Punjab is yet to witness a thorough debate on the decision to allow FDI in multi-brand retail. The noises have, so far, remained within the realm of political rhetoric. It is, however, all set to throw up new issues for the farm economy.

Punjab has already experienced FDI, in the wholesale sector. Walmart in collaboration with telecom major Bharti has been operating at least half a dozen of its Best Price Modern Wholesale cash-and-carry stores. Similarly German retailer, Metro has received the green signal to begin operations in Punjab. Earlier, the State witnessed an influx of large Indian business houses in the retail sector.

However, Punjab did not witness any protest against FDI in wholesale trade in commodities. These stores equipped with ‘state-of-the-art’ facilities did not provide major employment, or spur diversification in agriculture, although some farmers sold their produce directly to Bharti Walmart.

After having allowed FDI in wholesale, the opposition by the ruling Shiromani Akali Dal to FDI in retail raised eyebrows. It was seen as a tactic dictated by coalition compulsions. Most Akali factions including fringe groups and farmers' organisations, and the Congress have supported FDI, touting it as a panacea for all economic ills.

Apart from the successful shut down on September 20, there has been no major protest against the Union government’s decision. Rather, Akali Dal leaders say in private that the Centre could free itself from ongoing hassles if it adopted the ‘Punjab Model’ of FDI in wholesale which protected the interests of small retailers.

FDI proponents say that it could provide an impetus to crop diversification by creating new demand, and reduce the area under paddy, a crop blamed for many ills including a receding water table.


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