Leading luminaries of India Inc, Mr Ashok Ganguly, the former Chairman of Hindustan Unilever and member of the Rajya Sabha, and Mr Deepak Parekh, Chairman of HDFC, on Sunday urged the Government not to roll back its decision to allow 51 per cent foreign direct investment (FDI) in retail.
This comes in the backdrop of West Bengal Chief Minister Ms Mamata Banerjee's statement on Saturday indicating that the Government had put the decision on hold.
In a strongly-worded joint statement, the corporate honchos said, opposing investment in modern retail for the sake of it is only defending vested interests to the detriment of the vast majority.
For instance, the letter said, in a district which grows the largest quantity of potatoes, more than 50 per cent rot in the fields due to inadequate cold storage facilities and supply chain, to the utter distress of farmers and at a cost to the end-consumer.
“It is completely deluded to argue that kirana shops will be wiped out with the onslaught of FDI in retail. What do hurt the kirana shops are them having to down shutters to support bandhs,” it said.
THIN MARGIN
It is illusory to believe that the market will be flooded with FDI. Retailing is not an easy business – margins are thin, large parcels of real estate are not easily available and the supply chain logistics, ranging from warehousing, cold storage and transportation pose a major challenge.
More important, the central Government's role in retail FDI is minimal. The greater onus is on State Governments, as a maze of laws ranging from the Shops and Establishments Act to the APMC Act, amongst several others, falls within the State's domain.
KEEP HOPES ALIVE
The fruits of organised retailing will not happen overnight, but will take several years, said the communication. FDI in retail is an idea that has been toyed with for over 14 years.
There are 32 Bills in this winter session of Parliament for consideration and passing, many of which are of far greater consequence and importance than FDI in retail. The protests on FDI in retail are misconceived and unfortunate, it said, adding hopes on salvaging this situation should not be lost.
During the year, sections of Corporate India, together with the common man have voiced their misgivings about governance. Many concerned with the prospects of Corporate India said ‘stem the slowdown, increase investments, bring in new reforms'.
“No one objected till then. But, when the Government began to act, what have we, but chaos and adjournments over a decision to allow FDI in retail,” said the letter.
Today, there is concern over India's overall economic slowdown. From ambitions of double-digit GDP growth rates, the slide has been swift. A slowing economy seems to pale in comparison to the larger crisis at hand – that of a Parliament that is completely unable to function in the way these sacred institutions were set up to be.
“So, as the nation interminably and unproductively quarrels about ‘India's tryst with destiny', the more important question is how some semblance of order should be restored in Parliament?” it asked.