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Can’t let politics block FDI in retail: Pranab

New Delhi: Farmers and consumers will be the casualties if foreign equity in retail trade is prevented for narrow political gain, Finance Minister Pranab Mukherjee said Friday, yet hoping to convince all stakeholders on the benefits of the new policy.

Speaking at the Hindustan Times Leadership Summit here, the finance minister said global experience showed how organised retail, with integrated supply chains, cuts post-harvest wastage and gets remunerative returns to farmers and competitive prices to the consumer
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“But that needs appropriate technology and investment in a large scale,” he said.

“Yet, despite this recognition, often narrow political gains take precedence over early implementation of a policy framework, even when it is being done in a calibrated and sensitive manner,” Mukherjee said, referring to opposition over foreign retailers.

“I do hope ultimately we will be able to persuade all those who are opposing it.”

According to him, such policies were needed for an emerging economy like India to ensure improvement in efficiencies to vigorously pursue and sustain high growth that can also be equitable across states and between urban and rural areas.

“But in the absence of timely action or no action at all, it is the farmer and consumer who will suffer as the nation would miss out on an opportunity,” he warned.

Opposition parties have stalled functioning of parliament since the cabinet, at a meeting presided over by Prime Minister Manmohan Singh last week, approved up to 51 percent foreign equity in multi-brand retail and 100 percent in single brand format.

Even some constituents of the the ruling United Progressive Alliance (UPA), such as West Bengal Chief Minister Mamata Banerjee-led Trinamool Congress and former Tamil Nadu Chief Minister M. Karunanidhi’s DMK, have opposed the move.

The finance minister lamented that despite being the leader of house in the Lok Sabha, he was unable to express his views inside parliament, especially on the fact that the authority of states was not being undermined deciding on foreign equity in retail.

“Essentially, one has to keep in mind that this (not allowing foreign retailers) can be done by the states, because they have the authority to issue licences. As per law, they have the authority to provide land and other facilities,” he said.

“At the same time, our request is you can exercise your authority within the territorial limits. But don’t stand in the way of the others who want to implement it,” Mukherjee added.

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