Hyderabad|India|November'2011: Lok Satta Party President Dr. Jayaprakash Narayan has said the Union Government move to permit foreign direct investment in the multi-brand retail sector is “great news and long overdue”. It will benefit the farmer and the consumer, and stimulate the economy, Dr. JP said in a media statement issued here.

The Union Cabinet is expected to approve the note prepared by the Department of Industrial Policy and Promotion (DIPP) on allowing 51 percent FDI in the retail sector. The Union Finance Ministry has cleared the proposal.

Dr. JP said the fears that foreign retail chains will displace grocery stores and street vendors are misplaced. Experience the world over shows that foreign retail chains did not displace mom & pop stores.

“Retail trade grows faster than the economy in early stages. The new business goes to retail chains, leaving traditional vendors their share.”
Dr. JP recalled that sections of employees had opposed computerization of banks for decades saying it would lead to large-scale displacement of employees. “Now we know these fears had no basis.”

Dr. JP pointed out that under the present dispensation the farmer gets a low price for his produce even as the consumer pays a high price. Both the farmer and the consumer will gain with the advent of multi-brand retail chains.

“Now a farmer gets Rs.18 a kg for the rice he produces while a consumer pays Rs.30 – 35 a kg. A farmer gets only 35% of the consumer price of vegetables & fruits.

“Retail chains will remove middlemen, add value, eliminate wastage and shortages, ensure stable prices and help farmers and consumers. Let us shed fears and welcome FDI in the retail sector.”

-Nov 2011