<p>"I don't think that it is government's view that the present inflation cannot be brought under control without FDI in multi-brand retail. We can bring inflation under control," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.<br /><br />He was speaking at the Annual General Meeting of industry body Ficci here. The government has been toying with the idea of opening the sector for foreign direct investment (FDI).<br /><br />The industry ministry's discussion paper on liberalising the multi-brand retail argues that foreign investment in the sector could help tame inflation. Permitting foreign investment in food-based retailing is likely to ensure adequate flow of capital into the country and its productive use, in a manner likely to promote the welfare of all sections of society, particularly farmers and consumers, the paper said.<br /><br />India's retail sector is dominated by mom & pop stores (kirana shops). Inflation, particularly in the food segment, has become a cause of serious concern for the government. Food inflation, which had touched 18.32 per cent in end-December, has moderated to 11.49 per cent in mid-February. However, prices of vegetables, especially onion, and protein- based items continued to remain costly.<br /><br />At present 100 per cent FDI is allowed in cash and carry wholesale trading, while it is prohibited in multi-brand retail. Up to 51 per cent FDI has been allowed in single-brand retail since 2006.<br /><br />"Government is not ruling out FDI in multi-brand retail. We have said that it is a sensitive area. Many ministries have supported it. This is viewed as sensitive area," Ahluwalia said.<br /><br />Allaying fears over small stores losing their business, Ahluwalia said, "If economy grows by over 9 per cent the size of the retail sector would be doubled in 7 years. People in India are looking for jobs in organised retail sector and not in Kirana shops."<br /><br />India's retail sector that has been anticipating some good news on allowing FDI in the multi-brand segment is left disappointed after Budget 2011-12 as Finance Minister Pranab Mukherjee made no mention of it in his speech.<br /><br />Multi-brand global retail giants like Wal-Mart, Metro and Tesco have shown interest to invest in the segment in the country.</p>
<p>"I don't think that it is government's view that the present inflation cannot be brought under control without FDI in multi-brand retail. We can bring inflation under control," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.<br /><br />He was speaking at the Annual General Meeting of industry body Ficci here. The government has been toying with the idea of opening the sector for foreign direct investment (FDI).<br /><br />The industry ministry's discussion paper on liberalising the multi-brand retail argues that foreign investment in the sector could help tame inflation. Permitting foreign investment in food-based retailing is likely to ensure adequate flow of capital into the country and its productive use, in a manner likely to promote the welfare of all sections of society, particularly farmers and consumers, the paper said.<br /><br />India's retail sector is dominated by mom & pop stores (kirana shops). Inflation, particularly in the food segment, has become a cause of serious concern for the government. Food inflation, which had touched 18.32 per cent in end-December, has moderated to 11.49 per cent in mid-February. However, prices of vegetables, especially onion, and protein- based items continued to remain costly.<br /><br />At present 100 per cent FDI is allowed in cash and carry wholesale trading, while it is prohibited in multi-brand retail. Up to 51 per cent FDI has been allowed in single-brand retail since 2006.<br /><br />"Government is not ruling out FDI in multi-brand retail. We have said that it is a sensitive area. Many ministries have supported it. This is viewed as sensitive area," Ahluwalia said.<br /><br />Allaying fears over small stores losing their business, Ahluwalia said, "If economy grows by over 9 per cent the size of the retail sector would be doubled in 7 years. People in India are looking for jobs in organised retail sector and not in Kirana shops."<br /><br />India's retail sector that has been anticipating some good news on allowing FDI in the multi-brand segment is left disappointed after Budget 2011-12 as Finance Minister Pranab Mukherjee made no mention of it in his speech.<br /><br />Multi-brand global retail giants like Wal-Mart, Metro and Tesco have shown interest to invest in the segment in the country.</p>