Government may relax the FDI in Retail
The commerce and industry ministry is working on a concept note to allow up to 51 per cent FDI in multi-brand retail other than primary goods (foods, groceries and vegetables), but with some stiff riders.What I like about this approach is that the Government is planning to use this as a means to their end of inclusive growth and that is a good plan. FDI which will flow into the sector can surely create a good logistics infastructure which is a key hurdle to India's growth. More so it can help create jobs and give opportunites to rural India too. Some key ideas which I surely find promising are:
The ministry is also keen to permit FDI in retail of foodgrain as well as other essential commodities to create a parallel network to the public distribution system, which has become notorious for its leakages.
The core of the plan is to allow FDI in retail, provided the retail stores are located in cities with a minimum population of one million. The move aims to protect vendors in small cities.
The ministry may also suggest minimum capitalisation norms for companies investing in retail, in addition to a minimum built-up area rule for their retail outlets.
A few days back the Government had given a jolt to the International retailer houses and their Indian partners. On that backdrop this is a welcome move. Though this is just a concept paper open for debate, this act itself is encouraging. The UPA government needs to use capitalism to get inclusive growth rather than leaning towards the left.
Hoping to see the international retailers in India soon and helping India grow rather than profiteering alone.
