Under political attack, the government on Friday put out a strong defence of its decision to allow up to 51 per cent foreign direct investment in multi-brand retail and up to 100 per cent in single-brand retail.

The move, it said, would generate about 10 million jobs over three years and help farmers get more for their produce, while dampening the prices of products. Among those who have refused to go along is the Trinamool Congress, whose members are part of the Union council of ministers.

Commerce & industry minister Anand Sharma told reporters the implementation guidelines would be issued in a week. He said those opposing the decision were not thinking of India’s interests, particularly of farmers. He said the move had been customised to suit India’s interests, reiterating the conditions allowed, such as a minimum investment of $100 million, with half to be invested in back-end operations such as cold storages and 30 per cent of the sourcing to be done from micro, small and medium enterprises (MSMEs).

He noted that as much as half of all perishable farm produce rots away, post-harvest, due to lack of cold storage. This and a multi-layer of intermediaries result in farmers getting only a third of the price of the final products in the case of foodgrains and just 12-15 per cent in the case of fruits and vegetables.

It is interesting to note here that the Shiromani Akali Dal, with a strong base in rural Punjab, has broken ranks with the other opposition parties on the issue and has supported the government move.

Where, he asked, came the notion that small retail traders would be wiped out? China, Indonesia, Thailand, Malaysia, Russia, Brazil, Argentina and Chile all have a booming small-scale retail sector, and they’d opened FDI to 100 per cent several years earlier. “You visit Beijing, Kuala Lumpur, Jakarta and find that markets are full of small retail players,” he said. .

Source: Business Standard

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