FDI in multi-brand retail will reduce prices, says RBI
November 26th, 2011 - 7:33 pm ICT by IANS
Jaipur, Nov 26 (IANS) The government’s decision to allow foreign players in multi-brand retail will help bring down prices, thus sobering inflation, said a senior Reserve Bank of India (RBI) official here Saturday.
“In multi-brand retail, the things can be shipped at a cheaper rate from the producer to the consumer,” the central bank’s deputy governor Kamalesh Chandra Chakrabarty told reporters on the sidelines of an industry event here.
“So, if you are able to pass on the benefit to the customer, then the price comes down and if prices are reduced, so will inflation. Globally it has been seen to have happened,” Chakrabarty said.
The union cabinet in a meeting Thursday evening chaired by Prime Minister Manmohan Singh decided to allow 51 percent foreign direct investment (FDI) in multi-brand retail, stating that it would help bring down inflation, reduce wastage and improve farmer productivity.
The cabinet also allowed 100 percent equity in single brand retailing.
According to Chakrabarty, the model, if implemented effectively, is known to lead to decline in prices.
“Globally, it is considered if effectively implemented, prices decline. The difference in the price between producers and consumer gets narrowed, if implemented in a correct manner,” he said.
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- India opens doors to global retail chains (Roundup) - Nov 24, 2011
- India's 'bold' retail opening will reduce prices: US body - Nov 25, 2011
- FDI in multi-brand retail will help curb inflation: Basu - May 27, 2011
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- FDI pause wins peace in parliament, disappoints India Inc. (Roundup) - Dec 07, 2011
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Tags: bank of india, benefit, chakrabarty, chandra, correct manner, deputy governor, fdi, foreign direct investment, inflation, jaipur, manmohan, manmohan singh, prime minister manmohan, prime minister manmohan singh, producers, productivity, rbi, reserve bank of india, sidelines, union cabinet