Open retail in one go: Planning Commission

The Planning Commission is in favour of opening up the retail sector in one go instead of in specific segments, as is being contemplated by the government. The panel, however, favours a cap on the number of outlets that retailers may open in the first few years.

In it's views, that have been conveyed to the Prime Minister's Office (PMO), the plan body has also advocated allowing 49 per cent FDI in the retail sector in the initial stage and enhancing it to 74 per cent later.

The Planning Commission is preparing a detailed note on the issue, which will be forwarded to the commerce and industry ministry.

It is also preparing a paper on the benefits of FDI in the retail sector as part of the follow up action to the mid-term appraisal of the tenth five year plan.

Commerce and Industry Minister Kamal Nath has already had one round of meetings with Prime Minister Manmohan Singh on this issue and has been asked to prepare presentations to convince the Left parties.

Food processing is being held up as a segment where FDI may raise the standards of the domestic industry and encourage exports. It is also being argued that contract farming for big retailers will provide an element of security to farmers.

In the issue of FDI in the food processing segment, the commerce and industry ministry has not favoured any specific cap.

"It could be 100 per cent, if the government is able to build a consensus. No minimum limit is being proposed for food retail," an official said.