A day after an official in the Department of Industrial Policy and Promotion revealed in New Delhi that the Karnataka Government had decided to allow Foreign Direct Investment (FDI) in multi-brand retail, Chief Minister Siddaramaiah confirmed the move.
Addressing the media at a Meet-the-Press programme at the Bangalore Press Club on Thursday, Mr. Siddaramaiah said that he had written to the Union Commerce Minister Anand Sharma about this. “There is no need for alarm,” Mr. Siddaramaiah said.
Meanwhile, a top official in the State Industries Department told The Hindu that the “letter of concurrence” was sent “a few days ago.”
“It was a simple, two-line letter, expressing our intent to implement the policy,” said M.N. Vidya Shankar, Principal Secretary, Department of Commerce and Industries.
“More details of the policy are likely to feature in the State Budget that is due in July,” Mr. Vidya Shankar said. “Inflows of FDI will establish linkages with agriculture,” he added.
Mr. Siddaramaiah justified the shift in policy stance, pointing out that inviting FDI in retail was a policy of the Congress-led United Progressive Alliance at the Centre. Referring to the opposition to the policy, he said the BJP was opposing it for the sake of opposing it. “In the last 10 years no jobs have been lost because of Metro Cash and Carry’s operations,” he pointed out.
Mr. Siddaramaiah claimed that the move would create more jobs locally and help in controlling prices. He denied that it would threaten livelihoods of local traders. He pointed out that 30 per cent of the procurement of these ventures would have to sourced locally.
Opposing the reversal of the stand that the Bharatiya Janata Party had taken when it was in office, the party said that the entry of FDI in retail would result in the loss of jobs. “We have opposed the policy since the beginning,” BJP State Media In-charge S. Prakash told The Hindu.
“We had opposed FDI in retail even when we were in power in the State and we continue to stick to such a stand even now,” Mr. Prakash said. The entry of foreign retailers would affect small traders and retailers, besides leading to large-scale unemployment. “The self-employed would become unemployed due to FDI in retail,” he said.
‘Debate in House’
Commenting on the manner in which the State government made the announcement, Leader of Opposition in the Assembly H.D. Kumaraswamy said, “Bringing FDI in multi-brand retail was not a small issue, the government should have allowed a debate on the issue in the legislature before making the announcement.”
Protest on July 1
Opposing the government’s consent to FDI, Communist Part of India (CPI), State unit, has planned to stage a State-wide protest on July 1 against the move.