Foreign Direct Investment in multi-brand retail is not essential to control inflation, the Deputy Chairman of Planning Commission, Mr Montek Singh Ahluwalia, said on Tuesday.
“There's a perception in the Government and a very valid perception that FDI in multi-brand retail is a sensitive issue. The Government is not of the view that the present inflation cannot be brought under control without FDI in multi-brand retail. We can bring inflation under control and we will,” Mr Ahluwalia said at the 83rd Annual General meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI).
Even if FDI is opened up for the sector, it will take a couple of years before foreign players come in and start to set up linkages between the farm and shop-floor which will not take care of immediate inflation, Mr Ahluwalia said.
He went on to add, “If economy grows by over 9 per cent the size of the retail sector would be doubled in seven years. People in India are looking for jobs in organised retail sector and not in
“Personally, I am in favour of bringing foreign direct investment in retail. I do not see any logic in saying that FDI should be kept out of retail,” Mr Ahluwalia said.
He further stated that the Government has not ruled out FDI in multi-brand retail. The Planning Commission Deputy Chairman pointed out that for FDI in multi-brand retail to be a success support at the State-level was required.
“Many States have said they don't have a problem (with FDI in retail), while some have a problem. There are both kinds of views. The Commerce Ministry will have to resolve the issues and take a decision soon,” said Mr Ahluwalia.
The Economic Survey 2010-11 also supported the call for FDI in multi-brand retail. “At any rate, we are at a juncture where foreign direct investment in multi-product retail is worth considering. It could enable farmers to get higher prices and consumers to have to pay less,” the survey had said.