Industry feels let down with recall of FDI in retail
Wednesday December 07, 2011 03:16:20 PM,
IANS
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New Delhi: The euphoria
over the decision to open up India's retail trade industry to
foreign companies turned into despair after the suspension of the
decision Wednesday owing to political pressure from both within
and outside the ruling coalition.
India Inc, which had hailed the decision taken last month as one
that signals movement forward in the reforms process and one that
will help farmers, consumers and small and medium enterprises,
felt let down and said it also sends 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.
Earlier this week the Confederation of Indian Industry (CII) hoped
that there will be early consensus among the political parties on
the FDI in retail issue as it felt the move would be in the
national interest and create jobs and benefit farmers as well as
consumers.
"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," a 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
wastages, benefited farmers with better prices for their produce
and brought down prices of many commodities for consumers."
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 retailing 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 persistent logjam in parliament due to an unrelenting
opposition, the decision was "suspended" pending consensus.
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