Retail FDI comes closer as government launches discussion paper
08 Jul 2010
The policy on foreign direct investment (FDI) in the multi-brand retail sector will see the light of the day soon as it is aimed at creating jobs and securing better returns for farmers, commerce and industry minister Anand Sharma said in Kuala Lumpur on Wednesday.
The government on Tuesday released a discussion paper on FDI in multi-brand retail. Sharma, who is leading a business delegation on a visit to Malaysia, said the discussion paper has clearly linked FDI in retail with development of back-end infrastructure like processing plants and cold storages to augment farmers' income. ''When value will be added, jobs will be created.''
The entire process, he said, will add value in the post-harvest food management and lead to creation of jobs in rural areas. At present, India is the second largest producer of fruits and vegetables in the world. But 35 per cent of the production goes waste because of inadequate processing and cold-storage facilities. Opening up of the sector will bring efficiency, which will help both the consumer as well as the producer, Sharma said.
He added that the discussion paper has outlined a scenario to promote investment in the rural sector. It has been proposed that at least 50 per cent of the jobs in the retail outlets should be reserved for the rural youth.
The release of the discussion paper is aimed at inviting views from various stakeholders, which will help remove several apprehensions about allowing FDI in the multi-brand retail sector. Sharma said that apprehension like it would lead to loss of jobs as small 'kirana' shops will be closed down, is totally unfounded.
He said the retail segment is growing fast in the country with increase in the size of the middle class. As the economy is growing fast, disposable income of the middle-income group is also growing. So expansion of the multi-brand organised retail sector in the country will not affect the local retail shops.
