DIPP silent on Sonia move, invites PMO ire

The Prime Minister's Office has pulled up the Department of Industrial Policy and Promotion for not responding to Congress President Sonia Gandhi's concern over the impact of "transnational supermarkets" on the livelihood of small-scale retailers.

In a letter to the PMO last month, Gandhi had wanted an assessment study to be undertaken for this purpose.

The PMO has now instructed the department to immediately commission a reputed research or academic institution to study the likely impact of the entry of large-scale retail companies, Indian business houses or transnational supermarkets, on the sector's economic growth as well as small-scale retailers and vendors, farmers, consumers, manufacturers and prices.

"The terms of reference should lead to results that could be a guide to policy making in this sector. The time frame for the completion of the study should be reasonable so that it can help in policy making in future," the letter said.

Commerce and Industry Minister Kamal Nath said, as of now, no committee would be set up to study the impact of multilateral chains.

"At the moment, FDI is not allowed in multi-brand retail and there are no plans to do so in the near future. As and when we decide to introduce FDI in retail, we will consider the study," Nath said, after meeting Wal-Mart Vice-Chairman Mike Duke, Bharti Enterprise's CMD Sunil Mittal and Joint Managing Director Rajan Bharti Mittal.

Commenting on the letter, Nath said, "The letter is just an exercise to look at the impact of expansion in the economy. There is nothing new in this."

Nath added that if the proposed joint venture between Wal-Mart and Bharti Enterprise conforms to regulatory measures in the cash-and-carry business, it would be allowed.

In the meeting, Nath asked Duke to increase the procurement from India from the present level of $600 million.