The foreign direct investment (FDI) in retail is a non-issue which is being milked for political mileage, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said.
"We are doing now [opening FDI in retail] what China did 20 years ago. These issues become controversial and in a democratic process, whatever becomes controversial is milked for whatever it's worth," Ahluwalia, a votary of foreign investment in modern retail, said.
He said the fear that jobs would be lost because of the entry of global retailers is misplaced.
"There is simply no basis to that. I am quite confident," he said at a SKOCH event here.
Parliament has been paralysed for past three days as opposition parties joined by UPA allies Trinamool Congress and DMK have demanded rollback of Centre's decision to allow 51% FDI in multi-brand retail.
Ahluwalia said there is a strong case for making our distribution chains efficient. "It should be modernised," he said.
Indian corporate players are already into retail trade in the country and their presence has not affected the small kirana stores.
"Everybody says that [FDI in multi-brand retail] is going to hurt small traders. But that is [also] an argument against modern retail. This is not a new issue. This is just a pending left over thing in the pipeline from the bottom of the barrel," he said.
Ahluwalia said it is often said that traders are making huge profits while farmers get nothing. "That implies that there is usual inefficiency in the value chain. If you try to modernise the value chain then immediately everybody says [no-no] that is terrible, that is going to hurt everybody."
Asked about the economic slowdown, he said, "This year is not a good year. Everybody in world economy has downgraded their growth prospects."
He said there is no cause for worry if there is a slippage in economic growth this fiscal.
"Whether it is 7.5% or 7%, it does not matter. In the current year economic growth will not be an indication of what medium term growth will be," he added.
However he said, "I don't expect current year growth to go down to that low [the level of 6.7% in 2008-09]."
He agreed that economic growth will not touch 9% mark, as targeted in the 12th Five-Year Plan (2012-17).
On inflation, he said it would start moderating from December this year.
