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Monday, November 28, 2011

Anand Sharma writes to parties clarifying FDI stance

Anand Sharma writes to parties clarifying FDI stance


2011-11-28 17:40:00
Last Updated: 2011-11-28 18:05:08


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A trolley laden with fresh and processed food sits parked in an aisle as customers shop at a supermarket in Mumbai May 30, 2011.  REUTERS/Vivek Prakash/Files
A trolley laden with fresh and processed food sits parked in an aisle as cu...

New Delhi: The government was conscious of the 'livelihood concerns' of small retailers, Commerce and Industry Minister Anand Sharma told political leaders Monday in an effort to clear the air over the decision to allow 51 percent foreign direct investment in multi-brand retail and 100 percent in single-brand retail.

Amid the continuing deadlock on the issue, Sharma addressed a letter to leaders of major political parties and chief ministers who are opposed to the FDI in retail.

'I felt it my duty to dispel some apprehensions expressed by certain political parties. In formulating this policy, we were conscious of the livelihood concerns of millions of small retailers,' Sharma said in the letter addressed to senior leaders, including the leaders of opposition in both houses of parliament.

The minister has sent the letter to Leader of Opposition in the Lok Sabha Sushma Swaraj, Leader of Opposition in the Rajya Sabha Arun Jaitley, Left leaders Sitaram Yechuri and D. Raja, Trinamool Congress' Sudip Bandyopadhyay, Rashtriya Janata Dal (RJD) chief Lalu Prasad and the DMK's T.R. Baalu, among others.

The letter was also sent to chief ministers of prominent states who are opposing the FDI in retail, including Bihar's Nitish Kumar, Odisha's Naveen Patnaik, Tamil Nadu's J. Jayalalithaa, Uttar Pradesh's Mayawati and West Bengal's Mamata Banerjee.

The cabinet headed by Prime Minister Manmohan Singh last week gave the 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.

The issue has created a political storm. The Rajya Sabha and the Lok Sabha were adjourned for the day Monday as a united opposition and some key constituents of the ruling United Progressive Alliance (UPA) cornered the government on this issue.

Calling for support of the political parties, Sharma said: 'Policy initiatives taken in larger national interest demand political leadership to rise above partisan politics to create a healthy bipartisan consensus. This has been the strength of Indian democratic traditions.'

The minister said opening up of multi-brand retail sector for overseas equity investment 'will bring in much needed investments, technologies and efficiencies to unlock the true potential of the agricultural value chain'.

He said the government had taken the decision after intense consultation with a wide section of stakeholders, including farmers' associations, traders, consumer organisations, industry leaders and economists. 'There is an overwhelming case for introducing this policy.'

The minister pointed out that in other developing economies like China, Brazil, Argentina, Singapore, Indonesia and Thailand, where FDI is permitted up to 100 percent, local retailers have found innovative ways to co-exist along with organised retail and are integral to the organised retail chain.

'In Indonesia, even after several years of emergence of supermarkets, 90 percent of the fresh food and 70 percent of all food continues to be controlled by traditional retailers,' he said.

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