JOIN USIntra-govt differences may hit FDI in retail
While the Ministry of Commerce and Industry is understood to be keen to move fast to open up the $ 450 billion sector for the multi-national giants like Wal-Mart or Tesco, the Ministry of Food and Consumer Affairs is insisting on ensuring adequate safeguards for the small traders, particularly the ones in rural areas, before allowing the same.
The Minister of State (Independent Charge) for Food and Consumer Affairs K V Thomas on Wednesday said: “The issue is not about the percentage of the FDI to be allowed. There are many small shops in rural areas in the country. We are concerned as to how to protect the interests of small farmers and retailers once FDI is allowed.” He indicated that hisMinistry might insist on necessary measures to protect the interests of small traders before opening up the sector.
“There are some differences among the ministries on the FDI in multi-brand retail,” he said, adding the Food Ministry would finalise within a week its stand on the issue. He said that the ministry would also outline the checks and balances, which should be put in place before opening up the retail sectors for FDI.
Prime Minister Manmohan Singh on Tuesday told journalists onboard his special aircraft that the FDI in retail was under consideration for quite some time. “But there are worries in certain circles like the trading community. It is our task to go about it in a manner, in which the nation enjoys the benefits of more FDI in retail trade, without hurting our domestic interests. I can assure that we will do nothing which will hurt the essential interests of the small Indian trade community,” Singh said, while returning from New York to New Delhi.
A committee of secretaries had recommended allowing FDI up to 51 per cent in multi-brand retail, albeit with stiff riders, like the foreign investors being asked to commit at least $ 100 million investment in infrastructure and to ensure that 50 per cent of the investments and jobs should go to rural areas. Another condition proposed would require multinational retail giants to procure 30 per cent products from micro, small and medium enterprises.
Officials in the Ministry of Commerce and Industry also said that the issue was not put on backburner and the Government was moving fast to take a decision on opening up the sector to FDI.