Amit Mitra shifts stand on FDI in retail

November 28th, 2011 - 9:19 pm ICT by IANS  

Manmohan Singh New Delhi, Nov 28 (IANS) West Bengal Finance Minister Amit Mitra, who as the head of one of India’s oldest and largest industry chambers had pushed hard for foreign equity in the $450-billion Indian retail sector, appears to have changed sides.

In line with the opposition from his party, Trinamool Congress, Mitra Monday strongly criticised the move saying India’s multi-brand retail sector was not prepared for foreign equity investment and the decision would hurt small retailers and small and medium enterprises.

“We are deeply concerned about the decision of allowing 51 percent FDI in retail, remember it is majority equity,” said Mitra.

The cabinet headed by Prime Minister Manmohan Singh last week gave green signal to allow up to 51 percent foreign direct investment in multi-brand retail and raised the limit in single-brand retail from 51 percent to 100 percent.

Mitra said Indian markets cannot be compared with advanced economies that have a monetised system.

“There are deep concerns regarding the small and medium enterprises. What is the model of their integration,” he said.

After heading the Federation of Indian Chambers of Commerce and Industry (FICCI) for almost two decades, Mitra joined politics early this year and became the finance minister of West Bengal.

Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee has also opposed the move.

Only two cities in West Bengal - Kolkata and Asansol - are eligible for allowing foreign equity investment in multi-brand retail.

As per the policy document, foreign equity investment will be permitted only in the cities that have over 1 million population. In West Bengal, only Kolkata and Asansol have over 1 million population.

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