The proposal before the government to allow foreign direct investment (FDI) in the multi-brand retail sector has stirred political opinion.
The Congress, leading partner in the ruling United Progressive Alliance, is itself not sure how much it backs the move. While one section is for going ahead, there are those like Congress Working Committee member G Sanjeeva Reddy, also president of the Congress-led Indian National Trade Union Congress, who is vehemently opposed.
As for the major opposition grouping, the Bharatiya Janata Party, it is firmly opposed.
Congress spokesperson Manish Tewari told Business Standard, “The party is in sync with the government on bringing in FDI in the retail sector until there is empirical evidence to the contrary.” He added, “In fact, the government decision will help to strengthen the sector. We support anything that leads to the creation of back-end infrastructure in the form of warehouses or cold chains. It will bring in employment generation.”
Questioning the basis of those opposed to FDI in retail, Tewari says, “Let the naysayers bring in any empirical evidence to prove that such a move has led to the closure of mom-and-pop stores anywhere. Let not paranoia drive the debate.”
Sanjeeva Reddy replies: “FDI in retail is bound to create unemployment and kill small traders. The retail sector will be taken over by multinational corporations (MNCs).” Reddy says there are others in the party who, like him, disagree with any support for FDI in retail. He adds, though, that the dissenters are outnumbered.
As for the Left parties, they’ve consistently opposed any such opening of the retail sector. Says D Raja of the Communist Party of India, “It will adversely affect the employment of four crore people in the retail trade and ultimately their dependents and, therefore, affect close to 20 crore people.” And, he says, it would impact the 10 per cent of GDP contributed by retail sector.
Also opposed is Mulayam Singh Yadav’s Samajwadi Party. Party spokesperson Mohan Singh said, “The millions of small retailers in our country will be finished off with the entry of foreign players. In fact, MNCs will (then) get a stranglehold on our economy.”
The BJP is opposed to FDI in the multibrand retail sector in principle and would be opposing the government on this in the coming session of Parliament.
Those in the Congress who wish to go ahead would fund support from its ally, the Nationalist Congress Party (NCP) of agriculture minister Sharad Pawar. Says party spokesperson D P Tripathi, “The NCP supports competition and we support FDI in retail as well. However, we want studied and restricted levels of FDI and we need to protect the interests of small shopkeepers and retailers.” No party, either in the government or in the opposition, has said that FDI in retail could be a consumer-friendly move because competition would bring down prices, especially in the fresh food (fruit and vegetable) sector.
Nor is any political group overtly ready to court the young and upwardly mobile urban consumer in this regard.
