The Commerce Minister, Mr Anand Sharma, played pitchman for the Government on Friday, claiming the move would help create millions of jobs and bring in “billions” of dollars in foreign investment.
Mr Sharma's defence came in the backdrop of strong opposition from other political parties, including the ruling Congress party's allies in the Government, as well as several State governments. Opposition uproar over the FDI (Foreign Direct Investment) policy resulted in Parliament being adjourned yet again on Friday.
Jobs and dollars
But Mr. Sharma claimed that liberalisation of retail trade will help in generating around 10 million jobs in three years. It will also attract investments worth “billions of dollars”.
The Cabinet had on Thursday permitted 51 per cent FDI in multi-brand retail with Government approval and 100 per cent FDI in single-brand retail. The existing policy had prohibited FDI in multi-brand retail and allowed only 51 per cent FDI in single-brand retail.
Press Note
The Centre will issue a Press Note next week to lay down the guidelines of the policy on FDI in single-brand and multi-brand retail. It expects fresh investment proposals in retail trade soon after that and these proposals will be considered by the Foreign Investment Promotion Board. Then the companies will have to approach the States for the requisite licences to begin operations.
“My initial estimates are that it will create over 4 million jobs in the country and in logistics about 5-6 million jobs in three years,” Mr Anand Sharma told newspersons.
The jobs will be created in agro and food-processing industries, packaging, bottling, canning, containerising, as well as transport sectors.
Better returns
On the reason for liberalising the FDI policy on retail trade, Mr Sharma said, “Unless and until this is done, we will have a situation where the farmer bleeds and the consumer is fleeced.”
The new policy will result in better returns for farmers, cheaper options for consumers as well as help attract the latest technology in retail infrastructure, in cold chain and in value-addition, he said.
Denying that allowing more FDI in the retail sector would result in big players resorting to predatory pricing to push out small stores, he said in this regard discussions are on “at the highest level” to further strengthen the Competition Commission of India.
Employment potential
Meanwhile, an official statement said on Friday, “Industry estimates suggest employment of one person per 350-400 sq.ft of retail space, about 1.5 million jobs will be created in the front-end alone in the next five years.