Punjab and Gujarat are in favour of foreign direct investment (FDI) in multi-brand retail in food items while many others have vehemently opposed the idea, a government official said today.
"Punjab has said FDI is necessary for economic growth. Some percentage of FDI should be allowed in retail business of foodgrains and vegetables as this will remove the middleman and help farmers get good prices," an official said.
Narendra Modi-led Gujarat government has also favoured the concept. "Multi-brand retail FDI should be allowed but the small retailers should not be affected."
The Consumer Affairs Ministry, which monitors retail businesses, has invited suggestions from states on allowing FDI in multi-brand retail.
So far, 13 states have responded, of which only Punjab and Gujarat are in favour of allowing FDI in multi-brand retail in foodgrains and vegetables while Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka are yet to reply, the official said.
Earlier, a Parliamentary Standing Committee on Commerce had given a 11-point suggestion mannual to the Consumer Affairs Ministry on the retail sector. These include imposing a blanket ban on domestic corporate heavyweights and foreign retailers from entering into retailing of groceries, fruits and vegetables.
The other recommendations are setting up of a retail regulatory authority, the Shopping Mall Regulation Act, Commission to study problems of retail sector, reservation policy for small and medium retail enterprises and financial assistance scheme for small retailers.
At present, India does not allow FDI in multi-brand retail, but permits up to 51 per cent in single brand retail while FDI of up to 100 per cent is allowed in wholesale cash-and-carry trade.
