Recall of retail FDI regressive, disappointing: India Inc (Roundup)December 7th, 2011 - 9:30 pm ICT by IANS
New Delhi, Dec 7 (IANS) Indian industry’s euphoria over the government’s decision to throw open the country’s retail trade to foreign companies gave way to despair Wednesday after Finance Minister Pranab Mukherjee announced suspension of the plans owing to political pressure from both within the ruling coalition and outside.
India Inc, which had hailed the decision taken last month as one that signalled a movement forward in the reforms process and that would help farmers, consumers, and small and medium enterprises, felt let down and said it sent wrong signals overseas.
“The government decision to hold back up to 51 percent FDI in multi-brand retail and 100 percent in single brand retail is deeply disappointing,” said Harsh Mariwala, president, Federation of Indian Chambers of Commerce and Industry (FICCI).
“It is a highly regressive move. For the growth of this vital sector of the economy which is likely to result in strong linkages with the farm sector and for the economy as a whole, it is imperative that the reforms like these should take place,” Mariwala said.
Mukherjee said in parliament that the government was holding back its decision to allow 51 per cent FDI in multi-brand retail.
In a decision taken on Thanksgiving Day, (Thursday, Nov 24), a meeting of the cabinet presided over by Prime Minister Manmohan Singh had decided to allow up to 51 percent foreign equity in multi-brand retail and enhance the cap on single-brand format to 100 percent.
But with stiff opposition from both within the ruling United Progressive Alliance (UPA), notably the Trinamool Congress and the DMK, as also the logjam in parliament due to an unrelenting opposition, the decision was “suspended” pending consensus.
“It is unfortunate that such an important and much needed economic reform has been suspended,” said Rajan Bharti Mittal, chairman of Bharti-Walmart.
“Allowing FDI in multi-brand retail will benefit India immensely as it will bring investments into development of complete back-end infrastructure such as cold chain and supply chain that will further enhance efficiencies in the food chain, reduce enormously high levels of wastage, and help contain food inflation,” Mittal said.
“More importantly, it will benefit farmers in the form of better realisation for their produce as well as better prices for the consumer,” he added.
Expressing disappointment over the issue, Chandrajit Banerjee, director general, Confederation of Indian Industry (CII), said the decision to hold back FDI in retail would have a strong negative impact on investors’ sentiment.
“FDI in multi-brand retail would have multifarious advantages to farmers, micro, small and medium enterprise, consumers and government alike,” he said.
Banerjee expressed hope that there would not be any rollback and a “quick consensus” will be built on the issue. “FDI in multi-brand retail is an important reform agenda and this offers India a great opportunity,” he said.
“Holding back the cabinet decision on foreign direct investment (FDI) in retail due to political opposition is a clear case of missed opportunity that will dent the country’s image as a global investment destination,” leading industry lobby Assocham said.
“It is a clear case of missed opportunity that would have created over 10 million of new jobs in three years, curbed agricultural wastage, benefited farmers with better prices for their produce and brought down prices of many commodities for consumers.”
- Industry feels let down with recall of FDI in retail - Dec 07, 2011
- FDI pause wins peace in parliament, disappoints India Inc. (Roundup) - Dec 07, 2011
- Industry lauds decision to allow FDI in multi-brand retail - Nov 24, 2011
- Comments from India Inc. on foreign equity in retail trade - Nov 25, 2011
- FDI will help create 1 crore new jobs in retail: Government - Sep 21, 2012
- FDI in multi-brand retail will reduce prices, says RBI - Nov 26, 2011
- 'Efforts on to allow FDI in multi-brand retail' - Mar 16, 2012
- Mariwala takes over as FICCI president - Mar 03, 2011
- Farmer association supports FDI in retail - Dec 22, 2011
- Top retailers seek 51 percent FDI in multi-brand retail - Aug 12, 2010
- India opens doors to global retail chains (Roundup) - Nov 24, 2011
- India Inc welcomes 100 percent foreign equity in single-brand retail - Jan 10, 2012
- FDI in retail could help consumers, farmers - Feb 25, 2011
- Don't roll back reform measures: FICCI - Sep 19, 2012
- FDI will revolutionise retail sector: Government - Nov 27, 2011
Tags: bharti walmart, chambers of commerce, chambers of commerce and industry, farm sector, finance minister, government decision, india inc, indian chambers of commerce, logjam, manmohan singh, pranab mukherjee, prime minister manmohan, prime minister manmohan singh, progressive alliance, small and medium enterprises, stiff opposition, thanksgiving day, trinamool congress, vital sector, walmart