Union Commerce Minister Anand Sharma on Monday said the Centre’s decision on foreign direct investment (FDI) in multi-brand retail was final, has been taken keeping in view the ground realities and therefore ruled out any scope of second thought on it.
Addressing a rally organised by Congress workers at Delhi Chief Minister Sheila Dikshit’s residence, barely a couple of kilometres from Jantar Mantar where former UPA alliance partner Mamata Banerjee of the Trinamool Congress addressed a rally during the day against the Government’s decision, Mr. Sharma said the decision would in its wake bring about many benefits.
The Union Minister insisted that it has been taken to ensure development in villages, provide relief and better remuneration to farmers, prevent wastage of food and to increase employment and productivity. He claimed that FDI in retail would also benefit the consumers as they would get access to greater variety of products at cheaper rates.
Kirana stores to benefit
As for the general grocers or kirana stores, Mr. Sharma said, their interests have also been safeguarded since the Government has made it compulsory for the mega retailers to have 30 per cent of their sales through small retailers. “The kirana stores can further directly benefit from buying from cities and selling them in smaller towns.”
On how the economy would benefit, Mr. Sharma said the Government has made it compulsory for the foreign companies to invest at least 50 per cent of their funds for developing backend infrastructure such as cold storages and food grain banks. The Government has also made it mandatory for the mega brand multi retailers to procure at least 30 per cent of its produce from small and medium entrepreneurs.
Mr. Sharma also spoke of how the FDI will bring in strong competition amongst the retailers, eliminate middlemen, prevent hoarding of stocks, reduce the supply constraint and help pass the benefits of low procurement cost directly to consumers. All this would also go towards reducing food-based inflation.
The biggest beneficiary of FDI in retail, however, will be the farmers, he said, explaining how big retail would buy their produce directly from the farmers, thus providing them at least 15 to 20 per cent more for their produce.
Mr. Sharma also pointed out that past experience across the globe suggests that all countries which opened up multi-brand retail to FDI also generated huge employment. In India, he said, about one million jobs are expected to be generated through the initiative which would cover 53 cities with over one million population initially.
Noting that the only one to lose would be the middlemen, Mr. Sharma questioned the logic behind the NDA now opposing the move though it had itself prepared a Cabinet note during its regime for making 100 per cent provision in FDI.
Ms. Dikshit stated FDI in retail was for the benefit of the common man as it would lead to saving about 40 per cent of all food, grains, fruits and vegetables which used to earlier rot. Moreover, she said, people would get quality goods at cheaper rates. She acknowledged that the presence of nearly 25,000 people at the rally, organised by her Parliamentary Secretary Mukesh Sharma, was testimony to how people had taken the decision.