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BJP leader Yashwant Sinha warns UPA govt against FDI in multi-brand retail

Posted by on August 4, 2011 0 Comment

The BJP on Wednesday came down heavily on the government for its plan to allow FDI in retail, warning that such a move was fraught with dangerous consequences for the economy.

Former finance minister Yashwant Sinha said the entry of companies such as Wal-Mart Stores Inc, Tesco Plc and Carrefour SA would wipe out the smaller family-run stores. He also warned the government against succumbing to US pressure on the issue.

“The argument that it would bring down prices is bogus. There is no empirical evidence to prove it,” Sinha said. He recalled how global retail chains ruined the Mexican economy.

A committee of secretaries, headed by Cabinet secretary Ajit Kumar Seth, had recently recommended allowing 51% FDI in multi-brand retail. Government leadership has been indicating that it will soon take a decision on the issue. The decision, it be noted, can be taken through an executive order. In other words, sanction of Parliament is not required for allowing FDI in retail.

Sinha, who asked political parties across the aisle to mount pressure on the government to desist from such a move, said FDI in retail would only compound the woes of the common man. “Along with price rise, unemployment has been increasing in this country. 50% of our population, comprising of small traders, street-vendors and the self-employed, sustain themselves through retail businesses. The UPA government wants to deprive them of livelihood by allowing FDI in multi-brand retail,” the former finance minister said.

Sinha said the government should discuss the issue with all stakeholders. “The standing committee report had stated that FDI should not be allowed in (multibrand) retail as small shopkeepers would be affected.”

Meanwhile, Commerce Minister Anand Sharma told the Rajya Sabha that the government will take an early decision on opening up of multi-brand retail sector for FDI, after it formally gets minutes of the recommendations of top secretaries on the issue. “Policy formulation is a calibrated exercise… Once recommendations formally reach my table…we will take early and appropriate policy decision,” the minister said. Economic Times

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