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LATEST NEWS UPDATES | Centre makes fresh bid to woo states on retail FDI by Sidhartha

Centre makes fresh bid to woo states on retail FDI by Sidhartha

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published Published on Dec 1, 2011   modified Modified on Dec 1, 2011

The commerce & industry ministry has decided to make fresh efforts to get state governments on board on the issue of allowing foreign direct investment ( FDI) in retail trading. In addition, commerce & industry minister Anand Sharma is also expected to meet trade and farmer bodies over the next few days in a bid to garner their support for the controversial move. 

Officials said industry secretary P K Chaudhery is writing to state chief secretaries on last week's Cabinet decision and explaining the rationale behind the move that has turned into a political headache for the government with even Congress members and allies questioning the decision. 

In fact, several of them have even accused the government of pushing ahead with the proposal without stakeholder consultation. The government has, however, refuted the charge and said the issue was discussed for more than 12 months. 

Several states, including Uttar Pradesh, Tamil Nadu, West Bengal, Gujarat and Bihar have made it clear that they will not permit global retail chains, who can now own up to 51% stake in Indian joint ventures, to set up shop. As a result, more than half the 28 cities with over one million population would remain out of bounds to global giants. Chaudhery's letter to chief secretaries will be the second such attempt to reach out to state governments within a span of a week. On Sunday, Sharma had written to CMs and prominent political leaders explaining the rationale, safeguards and consultation process followed by the government before the Cabinet approved the proposal last week. 

The letter to chief secretaries is expected to be an attempt to convince states to drop their opposition to the move, something that Chaudhery sought to push during a meeting with journalists on Thursday. During the interaction, he made it clear that the government did not intend to go back on the move but also did not provide a timeframe on when the rules would be notified. 

Asked if government will seek public comments before formulating the rules, he said there was no such plan. 

"If my answer to you was yes, that means I am conceding that we will revisit the policy. No," he said. Sources also said there were attempts to meet farmer groups on Friday to get some support from them.

The Times of India, 2 December, 2011, http://timesofindia.indiatimes.com/india/Centre-makes-fresh-bid-to-woo-states-on-retail-FDI/articleshow/10952478.cms


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