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FDI in retail: Govt may fast-track Walmart entry to showcase benefits to aam admi

After notifying FDI in retail, top echelons of the UPA government want to operationalise it on a fast track basis in some states to ensure its benefits are visible.

Saurabh Shuklaand Kay Benedict | September 25, 2012 | Updated 10:55 IST

Goodies from Walmart and Carrefour may be closer than you think.

After notifying foreign direct investment (FDI) in retail, top echelons of the UPA government want to operationalise it on a fast track basis in some states to ensure its benefits are visible.

Sources said the idea is that people should see the benefits on the ground and this can be showcased to whittle down the opposition and roll it in other states.

Although nine chief ministers are believed to have supported FDI in retail and want to implement it, Delhi, Haryana, Uttarakhand and Jammu and Kashmir have been identified where it will be suggested to the retail chains that they roll out sourcing centres so the farmers can sell their produce directly.

Cold chains may also be developed.

In essence, this strategy is part of a well calibrated thought from the government that entails sending out a message that its decision to allow FDI in retail is for the aam aadmi (common man) and the farmers and they should experience it first hand.

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Insiders say the Congress brass believes now that the government has taken the bold step even at the cost of risking its rural vote base, it must go full throttle to ensure that the promised benefits are out in the open. Other states may also jump on to the FDI bandwagon once they see the tangible benefits, sources said.

While the idea is good, it is unlikely that without an active push from the leadership, it will be implemented without red tapism.

Besides, the retail giants may also be averse to investing in Jammu and Kashmir which still faces bouts of terrorism.

Another impediment may be that global corporations usually take months and years to roll out such big ventures and a fast track retail unit may take time given the clearances and infrastructure required.

Officially, the government doesn't want to comment on the plans.

"We are still waiting for a proposal which will then be taken to the foreign investment promotion board. The 50 per cent investment in back end infrastructure will benefit people, but we will facilitate their entry as per the provisions of the guidelines," Saurabh Chandra, secretary, department of investment promotion, said.

"We have to read between the lines, fast tracking will help provide the states implement it in letter and spirit," a senior executive of a European retail major said.

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Congress spokesperson Manish Tewari made the UPA government's intentions clear.

"The intention of the government has been very clear that there should be an all-round development in the country. Employment avenues should be evolved, the rate of growth should be increased and the common man should get the benefit of the economic development and the initiatives of the government," Tewari said.

Referring to BJP leader L.K. Advani's blog in which he alluded to a statement of then commerce minister Arun Shourie to testify to their opposition to FDI in multi-brand retail, Tewari said: "What Advaniji forgot to mention was that on May 14, 2002, a note which has been very widely reported across the media now was moved by the commerce ministry not to permit 51 per cent FDI in multi-brand retail but to permit 100 per cent FDI in multi-brand retail."

But Shourie was cagey on the prospects of FDI in retail. "It would neither help nor harm. The big retail giants would not get the fabled cold chains," he said.

Congress chief Sonia Gandhi has convened a meeting of the Congress working committee on Tuesday to endorse the government's reforms agenda.

The meeting will be attended by several top leaders including Prime Minister Manmohan Singh, Finance Minister P. Chidambaram and Defence Minister A. K. Antony among others.

Party sources said the meet is intended to send a message that the party is fully behind the government on its reforms initiative.

Courtesy: Mail Today

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