BJP set to block multi-brand retail FDI Bill

PNS | New Delhi
Manmohan Singh Government’s move to open up multi-brand retail for Foreign Direct Investment (FDI) will face a major challenge from the Opposition with the BJP on Wednesday expressing its reservation to the proposal being actively considered by the Centre.

BJP’s decision will come as major setback for the Government, which was pinning its hope on possible support from the principal Opposition party against the backdrop of the Left objection to FDI in multi-brand retail.

“We are opposed to FDI in multi-brand retail. This is going to kill self-employment opportunities, which is the single largest creator of jobs. This will also hit the manufacturing sector in a big way, which would eventually lead to job losses,” Leader of Opposition in the Rajya Sabha Arun Jaitley told The Pioneer here on Wednesday.

Jaitley said the Government should give a rethink to find out if the Indian economy was in a state to allow FDI in such a key sector at this point of time.

Sources claimed that with the Left’s known opposition to FDI in this sector, the Government had attempted to reach out to the principal Opposition seeking its support to a related Bill that it intends to introduce in the next session of Parliament.

The Committee of Secretaries (CoS) headed by Cabinet Secretary Ajit Kumar Seth is meeting here on July 22 to prepare a blueprint for allowing FDI in multi-brand retail and to resolve inter-ministerial differences on issues like cap on the foreign investment and regulatory frameworks.

While the Department of Industrial Policy and Promotion (DIPP) is in favour of allowing 51 per cent FDI in the sector, the Department of Consumer Affairs wants to cap the foreign direct investment at 49 per cent. The Government feels FDI in retail would help bring down prices in the long run.

“With rising prices of real estate in metro cities, the multinationals would venture into smaller cities, thereby squeezing self-employment opportunities and dealing death blows to small shopkeepers. Moreover, with their strong network across globe, the multinationals would also hit the manufacturing sector by importing their products from across the world,” Jaitley said.

The former Commerce Minister also feared the agenda of multinationals would be to buy cheap and sell at higher prices after they eliminate competition from market by initially offering products at a price cheaper than the market rate.

The Cabinet is expected to take a call on the issue before the forthcoming Monsoon session. However, with the BJP and the Left getting on the same page, the Bill is unlikely to be cleared in the Rajya Sabha, where the ruling alliance is in minority.
(Source: The Pioneer)