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Resource centre on India's rural distress
 
 

A new beginning

-The Indian Express

Push on FDI in multibrand retail could be the trigger for UPA 2’s image makeover

For a government with its back to the wall and pretty much nowhere to go, it’s time to simply get on with it. Now that the Parliament’s budget session is over, the presidential candidate has been announced and the next round of state elections is still some way off, the government is beginning to show some signs of shaking off the policy slumber. On the issue of allowing FDI in multibrand retail, Commerce and Industry Minister Anand Sharma has stepped up efforts to build a broad-based consensus by writing to the chief ministers of three non-Congress states — Uttar Pradesh, Orissa and Punjab.

The Centre is trying to emphasise the point that while individual states are well within their rights to not implement the policy in their respective jurisdictions, the rights of states that find merit in this policy must be respected. While the cabinet had last year cleared the proposal to allow 51 per cent FDI in multibrand retail, stiff resistance from the Trinamool Congress put paid to the government’s plans. While a broad-based consensus looks tough without taking on board key allies, the appeal for a healthy bipartisan consensus on multibrand retail makes absolute sense as unwilling states have the option of staying out and watching from the sidelines how those choosing to implement it are faring. The commerce minister has already wrapped up consultations with stakeholders, including farmers’ associations, traders, consumer organisations, industry leaders and economists. Broadly, the battlelines have been drawn, with the kirana stores on one side and farmers and consumers on the other — the latter two seen as the biggest gainers from the move. Also, states such as West Bengal that are unwilling to play ball will face off against a long list of supporters, including opposition-ruled Gujarat and Punjab that have indicated tacit or even overt support to the proposal. With multi-brand retail majors waiting in the wings for the sector to open up, the logical thing to do is to allow willing states to go ahead.

On balance, the benefits of further opening the retail market far outweigh the costs, perceived or otherwise. And a positive decision on FDI in retail could give the Centre the stomach to push through other key pending reforms and be the trigger for the image makeover the government so desperately needs.